MongoDB (NASDAQ:MDB) Delivers Impressive Q3, Stock Jumps 17%

Adam Hejl /
2021/12/06 4:32 pm EST
Add to Watchlist

Database software company MongoDB (MDB) reported Q3 FY2022 results topping analyst expectations, with revenue up 50.4% year on year to $226.8 million. Guidance for next quarter's revenue was surprisingly good, being $240.5 million at the midpoint, 5.69% above what analysts were expecting. MongoDB made a GAAP loss of $81.2 million, down on its loss of $72.6 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) Q3 FY2022 Highlights:

  • Revenue: $226.8 million vs analyst estimates of $205.1 million (10.5% beat)
  • EPS (non-GAAP): -$0.11 vs analyst estimates of -$0.38
  • Revenue guidance for Q4 2022 is $240.5 million at the midpoint, above analyst estimates of $227.5 million
  • Free cash flow was negative $9.2 million, compared to negative free cash flow of $22.6 million in previous quarter
  • Customers: 31,000, up from 29,000 in previous quarter
  • Gross Margin (GAAP): 69.8%, up from 69% same quarter last year

"MongoDB delivered another fantastic quarter, highlighted by 84% Atlas revenue growth and increasing our customer count to over 31,000. Our continued success reflects the adoption of our application data platform by customers who need to innovate faster to compete in today's marketplace," 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.

There are many types of databases and they each have their tradeoffs and can be useful for different purposes, but the overall need to store data has been growing consistently for many years.

Sales Growth

As you can see below, MongoDB's revenue growth has been impressive over the last year, growing from quarterly revenue of $150.7 million, to $226.8 million.

MongoDB Total Revenue

This was another standout quarter with the revenue up a splendid 50.4% year on year. On top of that, revenue increased $28.1 million quarter on quarter, a very strong improvement on the $17 million increase in Q2 2022, and a sign of re-acceleration of growth, which is very nice to see indeed.

Analysts covering the company are expecting the revenues to grow 28.3% over the next twelve months, although estimates are likely to change post earnings.

There are others doing even better than MongoDB. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 400% since the IPO in December. You can find it on our platform for free.

Customer Growth

You can see below that MongoDB reported 31,000 customers at the end of the quarter, an increase of 2,000 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 Q3 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on MongoDB’s balance sheet, but we note that with a market capitalization of $29.7 billion and more than $1.8 billion in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by how strongly MongoDB outperformed analysts’ revenue expectations this quarter. And we were also excited to see the really strong revenue growth. Zooming out, we think this was a great quarter and shareholders will likely feel excited about the results. The company is up 17% on the results and currently trades at $501 per share.

MongoDB may have had a good quarter, so should you invest 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.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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