MongoDB's stock set to tumble by a quarter as management voices caution

By Emily Bary

Outlook comes up well short of expectations

MongoDB Inc. took a cautious tone in discussing the year ahead, which is weighing heavily on its stock in Thursday's extended session.

Chief Executive Dev Ittycheria called out "a slower-than-expected start to the year for both Atlas consumption growth and new workload wins, which will have a downstream impact for the remainder of fiscal 2025." Atlas is a data-services offering for cloud databases.

He made the comments in MongoDB's (MDB) fiscal first-quarter earnings report out after Thursday's closing bell, which brought a downbeat outlook.

MongoDB expects revenue of $460 million to $464 million, along with adjusted earnings per share of 46 cents of 49 cents. Analysts were modeling $473 million and 58 cents, respectively.

The stock tumbled 26% in Thursday's extended session.

For the full fiscal year, the company anticipates $1.88 billion to $1.90 billion in revenue as well as $2.15 and $2.30 in adjusted earnings per share. The FactSet consensus was for $1.94 billion on the top line and $2.43 in adjusted earnings per share.

Total revenue in the latest quarter grew 22% to $450.6 million, while subscription revenue increased 23% to $436.9 million. Analysts were modeling $441 million and $426 million, respectively.

The company logged a net loss $80.6 million, or $1.10 a share, compared with a loss of $54.2 million, or 77 cents a share, a year earlier. On an adjusted basis, the company racked up 51 cents in adjusted earnings per share. That compared with the 38-cent consensus view.

MongoDB's management still saw a bright future beyond the current hiccups, especially when levered to the artificial-intelligence trend.

"MongoDB's document-based architecture is particularly well-suited for the variety and scale of data required by AI-powered applications," Ittycheria said. "We are confident MongoDB will be a substantial beneficiary of this next wave of application development."

Other consumption-based software stocks are falling as well in late trading. These include Snowflake Inc. (SNOW), down 3%, and Datadog Inc. (DDOG), down 4%.

-Emily Bary

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05-30-24 2021ET

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