MongoDB: Alternative Database Provider with Strong Growth

Last Updated: 7. Dezember 2023By

MongoDB’s stock has seen an impressive surge in the last few months. Although the stock weakened slightly after the release of the latest financial figures, the development is still impressive. The papers have gained around 170% in value over the past 12 months. After the latest surge, the market value is back at around 29 billion dollars.

MongoDB could revolutionize the database landscape. Although the stock now has a considerable market capitalization, it is likely to be known only to technology-oriented investors in this country. But the company wants nothing more than to revolutionize the traditional database world. Consider this: The market leading database products are still based on a concept that is more than 40 years old. Even today, this is the basis for data storage in most software applications.

All these established systems are based on the fact that the data is arranged in a certain schema in tables and then read or processed with the query language SQL. But now, especially new real-time applications are pushing the classic relational databases to their limits.

NoSQL is the future. The traditional SQL databases can only process complex data structures that need to be processed at the highest speed to a limited extent. This is where so-called NoSQL databases come into play. Non-relational databases (NoSQL) have the advantage of speed when processing large amounts of data. MongoDB’s database solution is accordingly in great demand.

MongoDB also benefits from the fact that more and more classic software applications are no longer operated in their own data center in the future, but switched to a cloud-based solution.

Meanwhile, the US company has 46,400 customers in over 100 countries. Rivals include companies such as Oracle, Microsoft and Redis.

Revenue climbs nearly 30% higher. The past few years show it: MongoDB is growing strongly. Since 2016, revenues have multiplied from $65.3 million to $1.28 billion in the last financial year. In the third quarter of the current financial year, revenues climbed to $432.9 million. This was 29.8% higher than the comparable prior year quarter and $28.9 million above the expectations of analysts (Source: Seeking Alpha). However, the growth dynamics compared to the previous quarter (+39%) decreased.

According to the company, the number of customers at the end of the quarter was over 46,400. This is 7,300 customers more than in the comparable prior year quarter. The number of customers with an annual recurring revenue (ARR) of more than $100,000, meanwhile, increased from 1,545 to 1,972. The cloud database service of MongoDB, called Atlas, accounted for 66% of total revenue and increased revenue in the third quarter by 36%.

Loss is reduced. However, the open source software company is still writing red numbers. In the last quarter, a net result of minus $29.2 million was in the books. Compared to the previous year quarter (-$84.8 million), the loss has improved noticeably. The adjusted result was 96 cents per share, significantly above the analysts‘ forecasts. These had only expected 50 cents per share prior to the figures.

Management raises forecast – valuation remains sporty. For the rest of the year, the company is confident and raises its expectations. The US database software specialist expects sales to increase by up to 29% to a range of $1.654 to $1.658 billion for the current financial year. So far, management had only expected a sales increase of 25%.

For the adjusted earnings per share, an annual range of $2.89 to $2.91 is expected. This is also above the previous forecast range ($2.27 to $2.35). However, the price-earnings ratio, which is currently at 138 after the price rally (despite the forecast increase), is also remarkable.