Mongodb Inc (NASDAQ:MDB) reported another strong quarter on Tuesday afternoon, which was boosted by a large deal. Growth has slowed dramatically over the last year (+49% in Q4 vs. +85% growth peak in the fourth quarter of the prior year) but the company has now lapped a headwind from mLab customers in the Atlas business (which still grew 80% to a 40% mix).
Note, MDB was a monster outperformer in the cloud boom last year. Uncertainty related to the COVID-19 outbreak weighed on the company’s FY 2021 outlook, as you might expect. The cloud stocks are the poster boy of overvaluation, but they are also not at ground zero of the current meltdown. If anything, cloud technology may actually benefit from “operation social distancing” now in play for much of the world.
That said, Mongodb is guiding for a pretty significant slowdown in revenue growth: +23% in FY21 vs. +58% in FY20. We are assuming the outlook is conservative, preserving the beat and raise story going forward; a guarded outlook is the prudent move given the macro uncertainty.
The company also guided for a wider net loss this year. Investors didn't mind downside earnings guidance from COUP, but investors aren't usually keen on losses increasing. It's a growth story, but investors do get turned off by a lack of operating leverage at some point. This story is still being written. But the stock is broadly outperforming, and we would see the guidance in play as an opportunity in front of next quarter’s numbers.
Mongodb Inc (NASDAQ:MDB) operates as a general purpose database platform worldwide.
The company offers MongoDB Enterprise Advanced, a subscription package for enterprise customers to run in the cloud, on-premise, or in a hybrid environment; MongoDB Atlas, a cloud-hosted database-as-a-service solution; and Community Server, a free-to-download version of its database, which includes the functionality that developers need to get started with MongoDB.
It also provides professional services, such as consulting and training.
Our MDB Earnings Summary:
-
Reports Q4 (Jan) loss of $0.25 per share, excluding non-recurring items, $0.03 better than the S&P Capital IQ Consensus of ($0.28); revenues rose 48.6% year/year to $123.5 mln vs the $110.66 mln S&P Capital IQ Consensus.
-
Gross Profit: Gross profit was $88.7 million in the fourth quarter fiscal 2020, representing a 72% gross margin, compared to 70% in the year-ago period. Non-GAAP gross profit was $91.2 million, representing a 74% non-GAAP gross margin.
-
Co issues guidance for Q1, sees EPS of ($0.25) - ($0.22), excluding non-recurring items, vs. ($0.24) S&P Capital IQ Consensus; sees Q1 revs of $119-121 mln vs. $115.14 mln S&P Capital IQ Consensus.
-
Co issues guidance for FY21, sees EPS of ($1.40) - ($1.23), excluding non-recurring items, vs. ($0.78) S&P Capital IQ Consensus; sees FY21 revs of $510-530 mln vs. $525.62 mln S&P Capital IQ Consensus.
-
Upside first quarter revenue guidance of $120 mln at midpoint compared to the $115 mln consensus and included a $1-2 mln assumed headwind from the COVID-19 outbreak.
Our MDB Conference Call, Analyst, and Research Notes:
-
Monness Crespi & Hardt lowers their MDB tgt to $150 from $190. Analyst Brian White said, "MongoDB reported excellent 4Q:FY20 results, served up a healthy 1Q:FY21 outlook and initiated conservative FY:21 guidance. We believe the strong secular demand for next-gen databases remains firmly in place; however, the macro environment is now a prisoner to the COVID-19 crisis. We are reducing our estimates and lowering our 12-month price target to $150 from $190."
-
FY21 revenue guidance of $520 mln at midpoint came in below the $526 mln consensus, including a $15-25 mln impact anticipating weaker bookings in the first half and assuming things will normalize in the second half of the year. "we are seeing minimal impact across our sales channels around the world, including closing transactions in the first quarter, even in the country's hardest hit by COVID-19. However, as a management team, we believe that it is now prudent and responsible to incorporate that into our outlook, that we expect what could be a much more challenging economic environment in the coming weeks and months."
-
Co-founder and CTO Eliot Horowitz is also stepping down.
