MongoDB (NASDAQ:MDB) Surprises With Strong Q1, Stock Jumps 13.7%

Kayode Omotosho /
2023/06/01 4:08 pm EDT

Database software company MongoDB (MDB) reported Q1 FY2024 results topping analyst expectations, with revenue up 29% year on year to $368.3 million. On top of that, guidance for next quarter's revenue was surprisingly good, being $390 million at the midpoint, 8.1% above what analysts were expecting. MongoDB made a GAAP loss of $54.2 million, improving on its loss of $77.3 million, in the same quarter last year.

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MongoDB (MDB) Q1 FY2024 Highlights:

  • Revenue: $368.3 million vs analyst estimates of $347 million (6.12% beat)
  • EPS (non-GAAP): -$0.77 vs analyst estimates of $0.19 (-$0.96 miss)
  • Revenue guidance for Q2 2024 is $390 million at the midpoint, above analyst estimates of $360.8 million
  • The company lifted revenue guidance for the full year, from $1.5 billion to $1.53 billion at the midpoint, a 2.47% increase
  • Free cash flow of $51.8 million, up 117% from previous quarter
  • Customers: 43,100, up from 40,800 in previous quarter
  • Gross Margin (GAAP): 73.5%, up from 72.6% same quarter last year

"MongoDB began fiscal 2024 with strong first quarter results, highlighted by 40% Atlas revenue growth and the most net new customer additions in over two years. The continued strength in new business activity indicates the mission criticality of the MongoDB developer data platform and underscores that investments in innovation remain a top priority for customers," 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 impressive over the last two years, growing from quarterly revenue of $181.6 million in Q1 FY2022, to $368.3 million.

MongoDB Total Revenue

This quarter, MongoDB's quarterly revenue was once again up a very solid 29% year on year. But the growth did slow down compared to last quarter, as the revenue increased by just $6.97 million in Q1, compared to $27.7 million in Q4 2023. 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 28.4% year on year to $390 million, slowing down from the 52.8% 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 14.7% over the next twelve months.

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Customer Growth

You can see below that MongoDB reported 43,100 customers at the end of the quarter, an increase of 2,300 on last quarter. That is a fair bit better customer growth than last quarter and quite a bit above the typical customer growth we have seen lately, demonstrating that the business itself has good sales momentum. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is working very well.

MongoDB Customers

Key Takeaways from MongoDB's Q1 Results

Sporting a market capitalization of $20.7 billion, more than $1.9 billion in cash and with positive free cash flow over the last twelve months, we're confident that MongoDB has the resources it needs to pursue a high growth business strategy.

This was a "beat and raise" quarter. We liked seeing outperformance vs. Wall St’s expectations for all key metrics. We were also impressed by the optimistic revenue guidance MongoDB provided for the next quarter, which was above expectations. The company also raised full year guidance for revenue, non-GAAP operating income, and adjusted EPS. Management commentary highlighted how AI is a tailwind for the company as developers need MongoDB's database tools more than ever. Zooming out, we think this impressive quarter should have shareholders feeling very positive. The company is up 15.5% on the results and currently trades at $340 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.

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