Shares of MongoDB surged by 18.34% today, propelled by a stellar second-quarter earnings report that surpassed expectations in both revenue and profit. The company also revised its annual forecast upwards, boosting investor confidence. By 10:11 a.m. ET, the stock had climbed 14% on this positive development.
MongoDB’s Comeback
Following a downturn after its first-quarter earnings release in the spring, MongoDB, a leader in NoSQL database software, made a strong comeback with its latest results. The company’s quarterly revenue increased by 13% to $478.1 million, surpassing the anticipated $464.1 million. A significant contributor to this success was the robust performance of its cloud-based Atlas segment, which saw a 27% revenue increase and now constitutes 71% of the total revenue. Conversely, the on-premises business saw a decline as clients increasingly opted for cloud solutions.
The customer base expanded from over 49,200 in the first quarter to more than 50,700, with 52 new customers spending at least $100,000 annually. However, the gross margin slipped from 75% to 73%, and the operating loss widened on a GAAP basis due to operating expenses outpacing revenue growth. The company’s adjusted earnings per share dropped from $0.93 to $0.70, although this was still above the consensus estimate of $0.49, with the dip in profits likely linked to heightened investments in artificial intelligence (AI).
CEO Dev Ittycheria noted that the company experienced “strong new workload acquisition and better-than-expected Atlas consumption trends.”
Additionally, MongoDB advanced its product offerings by launching the MongoDB AI Applications Program. This initiative provides a comprehensive AI technology stack, integrating with generative AI companies like Anthropic and major cloud infrastructure platforms.
Future Outlook for MongoDB
Looking forward, MongoDB has projected third-quarter revenue to be between $493 million and $497 million, marking a 17% increase at the midpoint and indicating an acceleration from the previous quarter. The company anticipates adjusted earnings per share to range from $0.65 to $0.68, down from $0.96 in the same quarter last year.
Moreover, the full-year revenue forecast has been raised to between $1.92 billion and $1.93 billion, with expected adjusted EPS of $2.33 to $2.47, surpassing analyst predictions.
Despite concerns over declining earnings, MongoDB is expected to return to profit growth in the upcoming quarters as it moves beyond its current investment phase. In light of this, the recent stock gains appear to be a relief rally, reflecting the company’s faster-than-anticipated progress following the previous downturn.
