MongoDB, Inc.
CEO : Mr. Dev C. Ittycheria
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2025 Q3 | 22.3% YoY | -38.3% | -548.8% | 2024-12-09 |
Dev Ittycheria says,
Q3 Financial Performance
- Revenue for Q3 was reported at $529 million, marking a 22% year-over-year increase and surpassing the high end of the guidance.
- Atlas revenue grew by 26% year-over-year, constituting 68% of the total revenue.
- The company achieved a non-GAAP operating income of $101 million, corresponding to a 19% non-GAAP operating margin.
- The customer base expanded to over 52,600 customers by the end of the quarter.
Strategic Initiatives and Investments
- The company is increasing investment in the enterprise channel, focusing on expanding the strategic account program.
- Reallocation of resources is directed from mid-market to up-market opportunities.
- Significant focus is placed on legacy app modernization using AI, with early pilots showing a more than 50% reduction in modernization cost.
- Investments are directed toward AI tech stack advantages, focusing on MongoDB’s capabilities in handling complex data structures.
Product and Technology Updates
- Introduction of MongoDB 8.0, reported as the fastest version yet, with 20%-60% performance improvement against industry benchmarks.
- Consolidation of Atlas serverless offerings into Atlas Flex, aiming for simplicity and elasticity.
- Deprecation of less successful products like Atlas Device Sync to concentrate on core platform development.
Customer Adoption and Use Cases
- Successful case studies include Victoria’s Secret, Allianz, Paylocity, and NerdWallet who migrated or utilized MongoDB for various strategic projects.
- Examples highlighted include cost savings and enhanced scalability, such as Paylocity reducing costs by five times.
- MongoDB’s Atlas Vector search and AI-enriched applications show increased traction and efficiency.
Leadership Changes
- Michael Gordon, the CFO, is set to leave the company by January 31st, transitioning to an Advisor post.
- If a successor isn’t named by fiscal year-end, Serge Tanjga will serve as Interim CFO starting February 1st.
- Cedric Pech is promoted to President Worldwide Field Operations, overseeing customer-facing and go-to-market teams.
| Category | Key Metric | Performance |
|---|---|---|
| Revenue | Year-over-Year Growth | 22% |
| Atlas Revenue | Year-over-Year Growth | 26% |
| Operating Income | Non-GAAP Operating Margin | 19% |
Michael Gordon says,
Third Quarter Financial Performance
- Total revenue for Q3 was $529.4 million, which represents a 22% year-over-year increase and exceeded the high end of the company’s guidance.
- Atlas revenue grew by 26% year-over-year, now accounting for 68% of total revenue.
- Non-Atlas revenue performed significantly above expectations, boosted by large multi-year deals, with a $15 million increase in multi-year license revenue compared to Q3 of the previous year.
- Net income for the quarter was $98.1 million or $1.16 per share, compared to $79.1 million or $0.96 per share in the previous year.
Customer and Revenue Growth
- The customer base grew by approximately 1,900 sequentially, totaling over 52,600 customers, compared to 46,400 from the year prior.
- Direct sales customers increased to over 7,400 from 6,900 in the previous year.
- The net ARR expansion rate was approximately 120%, with 2,314 customers having at least $100,000 in ARR.
Cash Flow and Profitability
- Gross profit for Q3 was $405.7 million, with a gross margin of 77%.
- Operating income stood at $101.5 million, resulting in a 19% operating margin, up from 18% the previous year.
- Operating cash flow was $37.4 million, with a free cash flow of $34.6 million.
- The balance sheet closed with $2.3 billion in cash, cash equivalents, short-term investments, and restricted cash.
Outlook for Q4 and Fiscal Year 2025
- Q4 revenue is expected to be between $515 million and $519 million.
- Non-GAAP income from operations is projected between $55 million and $58 million, with net income per share between $0.62 and $0.65.
- Fiscal Year 2025 revenue is anticipated to be in the range of $1.973 billion to $1.977 billion.
- The company plans to incur expenditures of $20 million to $25 million related to the purchase of IPV4 addresses this fiscal year.
Strategic Changes and Impact
- The reallocation of go-to-market resources is expected to slow mid-market direct sales growth but is believed to drive higher long-term revenue growth.
- The introduction of Atlas Flex clusters will result in a one-time reduction in customer count due to the migration of low-spending serverless customers.
- Continued emphasis on capturing opportunities in the software market, with secular tailwinds such as AI supporting growth efforts.
Q & A sessions,
Overview of AI Integration and Product Advancements
- MongoDB is uniquely positioned to handle complex data relationships, essential for AI applications.
- Integration with leading AI frameworks, providing enterprise-grade security and compliance.
- Expansion in search capabilities, incorporating tech search and vector search within one experience.
- Product uptake has been significant in areas like Atlas Search and Vector Search with notable client use cases in banking and media.
Financial Performance and Multi-Year Deals
- Q3 saw a positive impact of more than $15 million from multi-year deals, surpassing expectations.
- Strong performance despite anticipated $40 million headwind in fiscal ’24 due to multi-year benefits observed at the year’s start.
- Revenue growth facilitated by unexpected multi-year deals from large accounts.
Run Anywhere Strategy and Regional Cloud Adoption
- MongoDB’s strategy allows for flexibility between on-premise and cloud deployments.
- Regional variations observed with European banks preferring on-premise solutions and Asian markets moving towards cloud adoption.
- The run-anywhere strategy caters to diverse industry needs, enhancing MongoDB’s market position.
Partnerships with Hyperscalers
- Strong partnerships with AWS, Azure, and GCP with significant deal closures in the past quarter.
- Azure partnership has strengthened, with MongoDB becoming one of Azure’s largest marketplace partners.
- GCP adjustments in compensation have favorably impacted co-sales efforts, with a focus on large deal closures in Q4.
Legacy Application Migration and Future Growth
- Increasing interest in migrating from legacy applications due to high maintenance costs and regulatory pressures.
- GenAI aids in reducing the time required for application migration, enhancing MongoDB’s attractiveness as a modern platform.
- MongoDB’s flexibility and performance are key advantages in migrating legacy systems to a more modern tech stack.
| Feature | Impact/Benefit | Notable Use Cases |
|---|---|---|
| Atlas Search | Improved search scalability | World’s largest bank’s customer-facing app |
| Vector Search | Reduced memory requirements by up to 96% | AI fraud detection, User recommendation engines |
No bad stock 