MDB - Here's Why MongoDB's Growth Will Slow Down
2023-09-03 07:55:00 ET
Database software provider MongoDB (NASDAQ: MDB) reported impressive revenue growth in the second quarter that was far ahead of analyst expectations. Total revenue soared 40% year over year to $423.8 million, despite a tough macroeconomic environment.
Investors shouldn't get too excited. The timing of multi-year contracts and the way those contracts are accounted for drove unusual revenue growth in MongoDB's non-cloud segment. Atlas, the company's managed cloud database offering , grew revenue by 38%. Atlas revenue is largely consumption-based, and consumption trends were negatively impacted by the state of the economy.
Atlas accounted for 63% of revenue in the second quarter, with most of the rest coming from MongoDB's Enterprise Advanced product. Typically, the former grows faster than the latter, but this wasn't the case in the second quarter. The benefit from this faster-than-usual growth will disappear in the third quarter, with MongoDB expecting total revenue to grow by a much slower 20%.
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Here's Why MongoDB's Growth Will Slow Down