MongoDB (MDB 36.46, +36.46, +0.00%) will report fiscal 2019 fourth quarter
(January) results this afternoon and management will host a call at 17:00.
MongoDB is a leading non-relational (or NoSQL) database platform that is heralded by developers. It is a next-generation database company whose ‘freemium' land and expand business model has led to explosive growth.
The company has beaten estimates and guided revenue above consensus in its first five quarterly reports as a public company since its IPO in October 2017. The stock is up some 340% from the IPO and 170% over the last year as the company continues to take market share and grow the top line over 50%.
MongoDB guided for accelerating revenue growth in the fourth quarter. The company guided for Q4 non-GAAP EPS of ($0.39-0.38) with revenue up 64% to $73-74 mln.
Analysts expect a similar adjusted net loss with revenue up 56% in the first quarter.
The Street expects the company to pare its net loss a bit on revenue growth of 42% in fiscal 2020, that would represent a slowdown from 59% growth in fiscal 2019.
Last quarter, revenue grew 57%, total customers grew ~12% q/q and 70% yr/yr to over 8,300. The net annualized recurring revenue (ARR) expansion rate grew over 120% for the 15th consecutive quarter. The number of customers with at least $100,00 in monthly recurring revenue grew 12% q/q and 53% yr/yr to 490.
MongoDB Atlas, the company's managed cloud database-as-a-service offering, added ~1,000 customers in the quarter. Atlas revenue was up over 300% yr/yr and represented 22% of total revenue for the quarter.
Last October, the company introduced a new licensing model (Service Side Public License) in order to ensure that public clouds offering MongoDB as a service allow code to be open sourced. In response, partner Amazon Web Services (AMZN) launched its own managed database offering DocumentDB to compete with Atlas and skirt the new stipulation for earlier versions of MongoDB. Red Hat, now owned by IBM (IBM), went further by dropping MongoDB from its Red Hat Enterprise Linux. These developments are worth monitoring, but the stock hasn't conveyed any serious concerns beyond an initial negative response.
MongoDB is trading near its all-time highs heading into this report. It's safe to say expectations are quite high. With a market cap of ~$5.7 bln, the stock trades at ~22x sales estimates or ~15x FY20 sales. That is an aggressive valuation for a company that is not expected to turn a profit anytime soon. The revenue multiple is toward the high end of more than two-dozen enterprise software stocks that trade with a double-digit sales multiples, but there are a handful that are more expensive. Investors are clearly focused on the company's disruption in a $45 bln database market that is dominated by software giants flush with cash.
Roughly 20% of the stock's 32 mln share float was recently sold short. The options market implies a near 10% move in the stock by Friday.
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