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MongoDB (MDB) Q4 Loss Narrows, Revenues Up on Atlas Growth

Zacks Equity Research

MongoDB MDB reported fourth-quarter fiscal 2019 adjusted loss of 17 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 38 cents and year-ago quarter’s loss of 27 cents.

Revenues of $85.5 million surged 70.8% year over year and comfortably surpassed the consensus mark of $74 million.

MongoDB Atlas, the company’s fully managed global, multi-cloud database service, surpassed $100 million in annualized revenue run rate. The service achieved this milestone in less than three years from its launch, reflecting solid demand. Notably, Atlas expanded support to 60 regions across multiple public cloud networks in the reported quarter.

Atlas revenues surged more than 400% year over year and accounted for 34% of revenues.

MongoDB adopted the new revenue recognition accounting standard, ASC 606, effective as of Jan 31, 2019, and applied as of Feb 1, 2018, on a full retrospective basis.

Quarter Details

The year-over-year growth in revenues was driven by 73.4% jump in subscription revenues (94.3% of revenues) that totaled $80.6 million. Moreover, services revenues (5.7% of revenues) surged 36.6% year over year to $4.9 million.

At the end of fiscal 2019, MongoDB had more than 13,400 customers, up roughly 130% from fiscal 2018. The figure includes more than 11,400 Atlas customers, of which nearly 4,200 were acquired from mLab.
 

MongoDB, Inc. Price, Consensus and EPS Surprise

MongoDB, Inc. Price, Consensus and EPS Surprise | MongoDB, Inc. Quote

 

In the reported quarter, gross margin contracted 470 basis points (bps) to 71.4%.

While research and development (R&D) expenses jumped 58.4% to $26.6 million, sales and marketing (S&M) expenses surged 34.7% to $42.5 million. Moreover, general and administrative (G&A) expenses soared 42.5% to $14.6 million.

However, as percentage of revenues, S&M was 49.7% compared with 63% in the year-ago quarter. Also, as percentage of revenues, R&D and G&A expenses declined 240 bps and 340 bps, respectively.

Loss from operations narrowed to $9.7 million compared with the year-ago quarter’s loss of $14.5 million.

Balance Sheet & Cash Flow

As of Jan 31, 2019, MongoDB had $466.5 million in cash, cash equivalents, short-term investments and restricted cash.

In the reported quarter, MongoDB used $9.5 million of cash in operations and $3.2 million in capital expenditures. Free cash outflow was $12.6 million.

Guidance

For first-quarter fiscal 2020, MongoDB expects revenues between $80 million and $84 million. Non-GAAP loss from operations is expected to be $14-$13 million. Non-GAAP net loss is expected between 25 cents and 23 cents per share.

For fiscal 2020, MongoDB expects revenues between $363 million and $371 million. Non-GAAP loss from operations is expected to be $59-$55 million.

Non-GAAP net loss is expected between $1.06 and 98 cents per share.

Zacks Rank & Other Stocks to Consider

Currently, MongoDB carries a Zacks Rank #2 (Buy).

Alteryx AYX, eGain Corporation EGAN and Cadence Design Systems CDNS are stocks worth considering in the broader computer and technology sector. All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Alteryx, eGain Corporation and Cadence Design Systems are currently pegged at 15.4%, 30% and 12%, respectively.

 

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