Why MongoDB Stock Surged Today
The database software company beat its low bar in its earnings report.
stock of MongoDB (MDB 15.98%) The cloud software company’s stock soared today after it reported better-than-expected second-quarter earnings, topping both revenue and earnings estimates and upping its outlook for the year.
As of 10:11 a.m. ET, the news sent shares up 14%.
Image credit: Getty Images.
MongoDB bounces back
The NoSQL database software company plunged after reporting its first-quarter earnings report in the spring, but its shares rebounded after the company reported results on Friday.
Quarterly revenue rose 13% to $478.1 million, beating estimates of $464.1 million, and the company saw strong growth in its cloud-based Atlas segment, which grew revenue 27% to now account for 71% of revenue. Meanwhile, its on-premises business continued to decline as customers transitioned to cloud versions.
Customer base grew from 49,200 in the first quarter to more than 50,700, and the company added 52 customers with annual spending of more than $100,000.
Gross margin fell from 75% to 73%, and operating expenses grew faster than revenues, widening the operating loss on a generally accepted accounting principles (GAAP) basis. Finally, the company’s adjusted earnings per share fell from $0.93 to $0.70, but missed consensus of $0.49. The profit decline appears to be related to increased investment in artificial intelligence (AI).
CEO Dev Ittycheria said the company had seen “strong new workload acquisitions and better-than-expected Atlas consumption trends.”
The company also made progress on the product side, launching the MongoDB AI Applications Program, which provides an end-to-end AI technology stack that includes generative AI companies like Anthropic and major cloud infrastructure platforms.
What’s next for MongoDB?
Going forward, MongoDB expects revenues of $493 million to $497 million for the third quarter, up 17% from the midpoint and representing an acceleration from Q3. Adjusted earnings per share are expected to be $0.65 to $0.68, down from $0.96 in the year-ago quarter.
It also raised its full-year revenue forecast to a range of $1.92 billion to $1.93 billion, and now expects adjusted earnings per share (EPS) of $2.33 to $2.47, above analyst consensus.
While the revenue decline is concerning, MongoDB is on track to return to bottom-line revenue growth in the coming quarters as it moves through its investment cycle. In that context, today’s earnings look like a relief rally after the previous downturn, as the company is making progress faster than expected.
