MongoDB (NASDAQ:MDB) Surprises With Strong Q2, Stock Soars

Anthony Lee /
2023/08/31 4:10 pm EDT

Database software company MongoDB (MDB) reported Q2 FY2024 results exceeding Wall Street analysts' expectations, with revenue up 39.6% year on year to $423.8 million. On top of that, next quarter's revenue guidance ($402 million at the midpoint) was surprisingly good and 3.95% above what analysts were expecting. Turning to EPS, MongoDB made a non-GAAP profit of $0.93 per share, improving from its loss of $1.74 per share in the same quarter last year.

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MongoDB (MDB) Q2 FY2024 Highlights:

  • Revenue: $423.8 million vs analyst estimates of $390.9 million (8.42% beat)
  • EPS (non-GAAP): $0.93 vs analyst estimates of $0.45 (106% beat)
  • Revenue Guidance for Q3 2024 is $402 million at the midpoint, above analyst estimates of $386.7 million
  • The company lifted its revenue guidance for the full year from $1.53 billion to $1.6 billion at the midpoint, a 4.57% increase
  • Free Cash Flow was -$27.3 million, down from $51.8 million in the previous quarter
  • Customers: 45,000, up from 43,100 in the previous quarter
  • Gross Margin (GAAP): 75.1%, up from 70.9% in the same quarter last year

"MongoDB delivered excellent results in the second quarter, highlighted by 40% revenue growth, continued strength in new workload acquisition and record operating margin. The ongoing success of our new business efforts for Atlas and Enterprise Advanced across our sales channels is a testament to the value of MongoDB's run anywhere strategy which enables customers of any size to innovate faster and more efficiently," 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 $198.7 million in Q2 FY2022 to $423.8 million this quarter.

MongoDB Total Revenue

Unsurprisingly, this was another great quarter for MongoDB with revenue up 39.6% year on year. On top of that, its revenue increased $55.5 million quarter on quarter, a very strong improvement from the $6.97 million increase in Q1 2024. This is a sign of acceleration of growth and great to see.

Next quarter's guidance suggests that MongoDB is expecting revenue to grow 20.5% year on year to $402 million, slowing down from the 47% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 12.8% over the next 12 months before the earnings results announcement.

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Customer Growth

MongoDB reported 45,000 customers at the end of the quarter, an increase of 1,900 from the previous quarter. That's a little slower customer growth than last quarter but in line with what we've observed in past quarters, suggesting that the company still has decent sales momentum.

MongoDB Customers

Key Takeaways from MongoDB's Q2 Results

With a market capitalization of $26.5 billion, a $1.9 billion cash balance, and positive free cash flow over the last 12 months, we're confident that MongoDB has the resources needed to pursue a high-growth business strategy.

We were impressed by how strongly MongoDB blew past analysts' revenue and non-GAAP operating profit expectations this quarter, driven first by a beat on total customers. We were also glad that next quarter's revenue guidance came in higher than Wall Street's estimates. Full year guidance was also raised across the board. Overall, we think this was a really good quarter that should please shareholders. The stock is up 8.48% after reporting and currently trades at $413.7 per share.

MongoDB may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

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