MDB - MongoDB Q1 Earnings Preview: Caution Ahead As Investor Optimism Remains Elevated

2024-05-26 11:16:00 ET

Summary

• MongoDB has underperformed the indices YTD. It will report its Q1 FY25 earnings on May 30, where it expects to generate $440M in revenue and $23.5M in non-GAAP operating income.
• The company reported strong revenue and earnings growth in its Q4 FY24 earnings report led by consumption trends and workload acquisition in its Atlas offering.
• For FY25, management is focused on driving product innovation to bring new workloads, while expanding its sales capacity to gain market share among enterprise customers.
• I believe we need to pay close attention to management’s commentary on consumption trends while assessing progress on gaining customers with $100K+ in ARR as the company expands sales capacity.
• There appears to be elevated investor confidence given the last four quarters of earnings outperformance, meaning risk-reward does not look attractive at current levels.

Introduction & Investment Thesis

MongoDB (NASDAQ: MDB ) is a document-oriented database provider that has underperformed the S&P 500 and Nasdaq 100 year-to-date. The company reported its Q4 FY24 earnings in March, where revenue and earnings grew 31% and 336% year-over-year, respectively, as it continued to see strength in its Atlas offering by adding new workloads given robust product innovation....

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