MongoDB Shares EXPLODE As Wall Street Scrambles to Find The Brakes After Earnings…

RIP to Mongo shorts…

Sometimes Wall Street is so drunk on its own self-righteousness, that it forgets what a proper earnings call should look like when things go well. And yet, MongoDB just gave a slapstick reminder to every earnings short seller from Palo Alto to Park Avenue. 

(Source: Giphy) 

In short, MongoDB legit stunted on every analyst imaginable as Q1 revenue clocked in at $549 million. That’s 21.9% growth year-over-year, and a $22 million smack upside analysts’ heads. Wall Street’s estimate? $527.5 million. Missed it by a mile, boys. As for billings, they came in at $509.4 million, up 23.3%. Translation: Not only is MongoDB pulling in more sales, but customers are basically handing over suitcases of cash up front. For a B2B software company, that’s about as close to a “cash cannon” as you get. 

However, operating margin was still negative, but only -9.8% this time. Last year it was -21.8%, which is less “startup tire fire” and more “mildly concerning.” Free cash flow margin is the real eye-popper: 19.3%, a quadruple jump from last quarter’s 4.2%. Turns out MongoDB has figured out how to actually keep some money from vaporizing the second it lands in the bank account. Which is something most of Silicon Valley isn’t able to say. 

(Source: Yahoo Finance) 

On the other hand, the technical faceplant came with adjusted EPS…. which was -$0.46 and completely missed the $0.66 positive Wall Street was dreaming about. Not ideal, but when you’re pulling in record sales and customers are lining up like it’s a Supreme drop, nobody gives a d*mn about a bean counting error. Especially when operating income body-bagged the Street’s targets by 55%, with an $87.43 million landing. 

“bUt wHAt aBoUT tHe gUiDanCe?!” Glad you asked. Full-year revenue guidance got a microscopic bump to $2.27 billion (midpoint), but the real fireworks are in the adjusted EPS forecast: up nearly 20% from last time to $3.03. Meaning, management is making it rain optimism, and for once, the numbers back it up. Customer count exploded to 57,100, up 2,600 from last quarter, which is MongoDB’s best sequential add in over a year. In summary: more clients, more money, fewer excuses. 

(Source: Giphy) 

Oh, and if you’re the kind of person who cares about sector trends, consider this: MongoDB’s three-year compounded sales growth is 29.1%. The cloud database market is a knife fight, and these guys are still walking away with someone else’s lunch money. Meanwhile, the rest of the SaaS sector is busy “streamlining operations” (translation: layoffs and layoffs). 

As for the stock, shares absolutely mooned… 14.3% post-earnings and almost 15% after hours. Which again, is exactly what happens when you torch expectations and then light the guidance on fire for good measure. So yeah, bigly win for the Bongos. And the best part, is they did what everyone expects earnings to look like: a company reminding everyone what happens when your company is a grower and a shower. 

(Source: Giphy) 

As a result, Wall Street rewards you with a vertical chart and a hall pass to ignore your earnings misses. Bigly. Now obviously, do what you will with this information and place your bets accordingly. Don’t go YOLOing into Mongo just because of the earnings. But, with that said, don’t dismiss it either… This is a BFD for the database company. So keep your eyes open. Until next time, friends… 

Stocks.News does not hold positions in companies mentioned in the article.