My Palo Alto Earnings Review was sent earlier today. Snowflake and Broadcom reviews are coming tomorrow! 35 more earnings reviews from this season on Nu, Spotify, AppLovin and so many more companies can be found here. My current portfolio & performance can be found here.
Table of Contents
a. Demand
Beat revenue estimate by 5.1% & beat guidance by 5.4%.
This was MongoDB’s fastest Y/Y growth rate in 10 quarters.
Fantastic 36% Y/Y Enterprise Advanced (EA; on-premise subscription revenue) wasn’t due to any single large deal. It was thanks to broad-based traction across a wide range of customers. That’s healthier.
Beat Atlas (cloud-based subscription revenue) revenue estimate by 2.3%.
Beat remaining performance obligation (RPO) estimate by 1.1%
b. Profits
GPM expansion was driven by on-premise revenue strength (higher GPM than Atlas).
Beat FCF estimate by 68%.
Beat EBIT estimate by 20% & beat guidance by 20.7%.
Beat $1.61 EPS estimate by $0.29 & beat guidance by $0.305.
EPS +90% Y/Y.
Beat $0.01 GAAP EPS estimate by $0.50.
When MongoDB outperforms on the top-line, especially with its higher margin on-premise segment, margins benefit dramatically.
c. Balance Sheet
$2.4B cash & equivalents.
No debt.
1% Y/Y dilution.
d. Guidance & Valuation
Raised annual revenue guidance by 2.4% which beat estimates by 1.7%.
Annual revenue guidance was raised by $70M with $40M of that raise coming from Q1 outperformance. The raise was mainly due to Atlas rather than EA.
New Atlas growth guidance represents 27% Y/Y growth. New EA growth guidance represents 11% Y/Y growth (thanks to Q1 and Q2 growth). This is the first time an annual MongoDB EA revenue growth guide has been over 10% in years.
Q2 revenue guidance was 2% ahead of estimates. At the same time, more of the revenue is coming from on-premise instead of cloud than analysts wanted. Atlas revenue growth is expected to be 26% Y/Y, which is below 28% Y/Y growth expectations. This means the Q2 outperformance came from on-premise strength. It also means Q4 Atlas growth guidance is around 24.5%, which marks a deceleration compared to the last several quarters.
Raised annual EBIT guidance by 5.9% which beat estimates by 7.8%.
They now see 250 bps of EBIT margin expansion for the full year compared to 150 as of their guidance last quarter.
Q2 EBIT guidance was 4% ahead of estimates.
Raised annual $6.05 EPS guidance by $0.43 which beat by $0.35.
Q2 $1.59 guidance was $0.08 ahead of estimates.
Annual FCF guidance beat estimate by 9.4%.
We used to see absolutely massive revenue outperformance from MongoDB. That was due to lack of Atlas predictability, which motivated overly prudent forecasts that they no longer feel are necessary amid increasing Atlas scale. Over the last couple periods, their next quarter Atlas revenue growth guidance has been intentionally conservative by only 2-3 points (the size of the Q3 Atlas growth guidance miss vs. consensus). That’s smaller than before. On the other hand, they continue to be even more cautious when guiding to periods further out into the future than a single quarter. They’ll always lean prudent here due to the uncertain nature of on-premise deployments and their consumption-based model. This is good to keep in mind when evaluating their 24.5% Atlas growth guidance for Q4.
MongoDB trades for 72x forward EPS. EPS is expected to grow by 23% this year and by 20% next year (before positive estimate revisions inevitably flow in).
e. Call & Release
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