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Database software company MongoDB (NASDAQ:MDB) announced better-than-expected revenue in Q3 CY2024, with sales up 22.3% year on year to $529.4 million. Guidance for next quarter’s revenue was optimistic at $517 million at the midpoint, 2.1% above analysts’ estimates. Its non-GAAP loss of $0.13 per share was significantly below analysts’ consensus estimates.
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MongoDB (MDB) Q3 CY2024 Highlights:
- Revenue: $529.4 million vs analyst estimates of $495.7 million (22.3% year-on-year growth, 6.8% beat)
- Adjusted EPS: -$0.13 vs analyst estimates of $0.69 (significant miss)
- Adjusted Operating Income: $101.5 million vs analyst estimates of $59.55 million (19.2% margin, 70.4% beat)
- Revenue Guidance for Q4 CY2024 is $517 million at the midpoint, above analyst estimates of $506.1 million
- Management raised its full-year Adjusted EPS guidance to $3.02 at the midpoint, a 25.8% increase
- Operating Margin: -5.3%, up from -10.4% in the same quarter last year
- Free Cash Flow was $34.56 million, up from -$4.00 million in the previous quarter
- Customers: 52,600, up from 50,700 in the previous quarter
- Billings: $512.3 million at quarter end, up 33.1% year on year
- Market Capitalization: $25.37 billion
Company OverviewStarted in 2007 by the team behind Google’s ad platform, DoubleClick, MongoDB offers database-as-a-service that helps companies store large volumes of semi-structured data.
Data Storage
Data is the lifeblood of the internet and software in general, and the amount of data created is accelerating. As a result, the importance of storing the data in scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand from analyzing simple, structured datasets to high-scale processing of unstructured data such as images, audio, and video.Sales Growth
A company’s long-term sales performance signals its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, MongoDB grew its sales at an excellent 35% compounded annual growth rate. Its growth beat the average software company and shows its offerings resonate with customers.This quarter, MongoDB reported robust year-on-year revenue growth of 22.3%, and its $529.4 million of revenue topped Wall Street estimates by 6.8%. Company management is currently guiding for a 12.9% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 13.1% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is healthy and suggests the market is factoring in success for its products and services.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.MongoDB’s billings punched in at $512.3 million in Q3, and over the last four quarters, its growth was fantastic as it averaged 26.2% year-on-year increases. This alternate topline metric grew faster than total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects.