The quarterly earnings of the company MongoDB (MDB) R3 2023

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Dev Ittycheria, CEO of MongoDB

Adam Jeffery | CNBC

MongoDB Shares rose 27% in extended trading Tuesday after the database software maker swung to a profit.

Here’s how the company did it:

  • Employment: 23 cents per share, adjusted, vs. a loss of 17 cents per share as analysts had expected, according to Refinitiv.
  • Income: $333.6 million, vs. $303.4 million as analysts expected, according to Refinitiv.

MongoDB’s revenue rose 47% year over year in the quarter that ended Oct. 31, according to a statement. Its net loss widened to $84.8 million, compared to a net loss of $81.3 million in the year-ago quarter.

The company said it had 39,100 customers at the end of the quarter, better than the average estimate of 38,900 among analysts surveyed by StreetAccount. MongoDB’s cloud database service called Atlas represents 63% of total revenue.

“The strength of our business was driven by improved Atlas consumption trends and continued strength in new business activity,” CEO Dev Ittycheria said in a statement. Sequential gains in the mid-market and at enterprises in Europe came in a move seasonality that appears, said Michael Gordon, chief operating officer and chief financial officer of MongoDB, on a conference call with analysts.

The outperformance is welcome news for software investors, who have seen troubling data points recently. This past week, Sales force clients said they are becoming more cautious in preparing for worsening economic conditions. The company broke from tradition and avoided giving a forecast for the coming year.

During the quarter, MongoDB said it would make it easier for developers to use pay-as-you-go pricing for the company’s cloud database on at Microsoft White clouds.

Executives raised their outlook for the full fiscal year 2023. They now see adjusted net income of 29 cents to 31 cents per share, compared with previous guidance that called for a loss of 35 cents to 28 cents per share. For revenue, MongoDB called around $1.26 billion, compared to the previous expectation of $1.2 billion. Analysts polled by Refinitiv had expected an adjusted net loss of 31 cents per share on $1.21 billion in revenue.

Gordon said the company expects Atlas consumption growth to slow as a result in the fourth fiscal quarter.

Before the after-hours jump, MongoDB shares were down 73% this year, underperforming the S&P 500 index, which has declined 17% over the same period.

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