MongoDB (NASDAQ:MDB) Beats Q1 Sales Targets, Provides Encouraging Quarterly Guidance

Radek Strnad /
2022/06/01 4:12 pm EDT
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Database software company MongoDB (MDB) reported results ahead of analyst expectations in the Q1 FY2023 quarter, with revenue up 57.1% year on year to $285.4 million. Guidance for next quarter's revenue was $280.5 million at the midpoint, which is 1.24% above the analyst consensus. MongoDB made a GAAP loss of $77.2 million, down on its loss of $63.9 million, in the same quarter last year.

Is now the time to buy MongoDB? Access our full analysis of the earnings results here, it's free.

MongoDB (MDB) Q1 FY2023 Highlights:

  • Revenue: $285.4 million vs analyst estimates of $267.1 million (6.86% beat)
  • EPS (non-GAAP): $0.20 vs analyst estimates of -$0.10 ($0.30 beat)
  • Revenue guidance for Q2 2023 is $280.5 million at the midpoint, above analyst estimates of $277 million
  • The company lifted revenue guidance for the full year, from $1.16 billion to $1.18 billion at the midpoint, a 1.37% increase
  • Free cash flow of $8.44 million, down 49.8% from previous quarter
  • Customers: 35,200, up from 33,000 in previous quarter
  • Gross Margin (GAAP): 72.5%, up from 69.9% same quarter last year

"MongoDB began fiscal 2023 with terrific first quarter results, highlighted by revenue growth of 57% year-over-year, driven primarily by 82% Atlas growth. MongoDB enables developers to build mission-critical applications that drive better user experiences, enable new capabilities and improves operational efficiency, and our Q1 results give us increased confidence in our ability to capture the large market opportunity over the long term," said Dev Ittycheria, President and Chief Executive Officer of MongoDB.

Started in 2007 by the team behind Google’s ad platform DoubleClick, MongoDB offers database-as-a-service that helps companies store large volumes of semi-structured data.

Data is the lifeblood of the internet and software in general, and the amount of data created is growing at an accelerating pace. Likewise, the importance of storing the data in scalable and efficient formats continues to rise, especially as the diversity of the data and associated use cases expand from analyzing simple, structured data to high-scale processing of unstructured data, images, audio and video.

Sales Growth

As you can see below, MongoDB's revenue growth has been exceptional over the last year, growing from quarterly revenue of $181.6 million, to $285.4 million.

MongoDB Total Revenue

This was another standout quarter with the revenue up a splendid 57.1% year on year. But the growth did slow down compared to last quarter, as the revenue increased by just $18.9 million in Q1, compared to $39.6 million in Q4 2022. We'd like to see revenue increase by a greater amount each quarter, but a one-off fluctuation is usually not concerning.

Guidance for the next quarter indicates MongoDB is expecting revenue to grow 41.1% year on year to $280.5 million, in line with the 43.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 30.1% over the next twelve months.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Customer Growth

You can see below that MongoDB reported 35,200 customers at the end of the quarter, an increase of 2,200 on last quarter. That's in line with the customer growth we have seen over the last couple of quarters, suggesting that the company can maintain its current sales momentum.

MongoDB Customers

Key Takeaways from MongoDB's Q1 Results

With a market capitalization of $16.1 billion, more than $1.82 billion in cash and the fact it is operating close to free cash flow break-even, we're confident that MongoDB has the resources it needs to pursue a high growth business strategy.

We were impressed by the exceptional revenue growth MongoDB delivered this quarter. And we were also excited to see that it outperformed Wall St’s revenue expectations. Overall, we think this was a strong quarter, that should leave shareholders feeling positive. But the market was likely expecting more and the company is down 1.62% on the results and currently trades at $237.24 per share.

Should you invest in MongoDB right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.