MongoDB (MDB) Soars on Narrower Q2 Loss, Firms Raise PTs on Accelerating Sales and Atlas Growth
Shares of MongoDB (NASDAQ: MDB) are trading 13.4% higher in pre-open Friday after the software company smashed analyst estimates for Q2.
MongoDB reported a loss of $0.24 per share, narrower than a loss of $0.39 expected from analysts. Sales for the quarter came in at $198.7 million versus the consensus estimate of $184.2 million.
"MongoDB's second quarter results were exceptionally strong across the board, highlighted by Atlas revenue growth of 83%. Our performance reflects the desire of nearly every business to use a modern application data platform that enables them to accelerate the pace of their digital innovation agenda," said Dev Ittycheria, President and Chief Executive Officer of MongoDB.
On the outlook front, the company is calling for a Q3 loss of $0.42 per share to $0.39 per share, worse than the consensus of a $0.37 loss. Revenue for the quarter is projected between $202 million and $204 million, higher than the consensus of $98.3 million.
Full-year EPS is expected in the range of negative $1.20 to $1.13, better than the analyst consensus of negative $1.29. Sales on a full-year basis are projected at $808 million versus the consensus of $786.06 million.
Goldman Sachs analyst Kash Rangan reiterated a Buy rating and raised the price target to $475.00 per share from $385.00 per share.
“We continue to see a long runway ahead for durable growth as Atlas mixes higher (now 56% of revenue) underscored by continued enterprise traction in the quarter, with customers generating over $100k in ARR growing 37% yoy to 1,126. With strong developer mindshare, an expanding platform, and continued cloud momentum, we believe MongoDB remains well positioned to capitalize on rising NoSQL adoption and database cloud migrations, both of which remain in relatively early stages,” Rangan said in a client note.
“As digital transformation and public cloud adoption remain top priorities, we believe MongoDB is well positioned to capitalize on growth from net new workloads and re-platforming of legacy applications. Moreover, recent changes in the company’s go-to-market motion, notably reducing friction in new customer acquisition, have begun to bear fruit, which should continue to translate to healthy consumption and subscription revenue growth. With Atlas now reaching over 56% of revenue and accelerating for the third consecutive quarter, we continue to see the potential for durable, sustained growth over the medium-term and the potential to drive $6bn+ in revenue longer-term,” Rangan added.
Morgan Stanley analyst Sanjit Singh reiterated an Overweight rating and raised the price target to $480.00 per share from the prior $410.00.
“After sustaining a +52% total revenue CAGR and a +189% cloud revenue CAGR from CY17-CY20 and with actual CY20 revenue results coming in a full 70% higher than our original IPO model, it is clear to us that MongoDB is one of the most proven and tested business models in software among companies with less than $1 billion in revenue. 2Q22 results did not disappoint either with total revenue coming in 9% ahead of consensus and accelerating to +44% YoY while Atlas growth accelerated for the third quarter in a row to +83% YoY. The growing realization on the part of enterprises that to sustain growth and market share and better serve end customers, new innovative capabilities must be brought quickly to market,” Singh commented in a note sent to clients.