6 Metrics That Show Why MongoDB Soared After Its Earnings Report
Expectations were mixed going into MongoDB's (NASDAQ: MDB) fiscal 2019 fourth-quarter report. After the stock skyrocketed more than 180% last year, there were concerns that it might have gotten ahead of itself. Another factor weighing on the minds of investors is the threat posed by Amazon and its recent introduction of a competing database service. MongoDB showed that for now, at least, its growth is still on track.
MongoDB provided a better-than-expected performance across a variety of metrics that gave shareholders cause to celebrate, which sent the stock soaring. Let's review six of the more important measures that illustrate the strength of MongoDB's quarter.
1. Revenue jumped 71%
MongoDB has smashed expectations quite often, and this quarter was another notch in its belt. The company generated revenue of $85.5 million, its best quarter ever. This far exceeded both analysts' consensus estimates and the high end of management's guidance range, which both topped out at $74 million. This was an acceleration from the 57% growth MongoDB produced last quarter.
2. Adjusted loss per share improved 59%
While losing money isn't anything to write home about, a steadily improving financial position is. MongoDB reported an adjusted loss per share of $0.17, a significant uptick from a loss of $0.27 in the prior-year quarter. It was also far better than the loss per share in a range of $0.38 to $0.39 anticipated by management and the $0.38 loss per share expected by analysts.
3. Subscription revenue climbed by 87%
For investors tracking results for a subscription-based business, recurring sales as a percentage of revenue can be an important indicator of future success. Subscription revenue grew to $78.3 million, up 87% year over year. Even more importantly, it grew to 94% of total revenue, up from 91% in the prior-year quarter.
4. MongoDB Atlas revenue soared 400%
Atlas, MongoDB's cloud-database-as-a-service offering, didn't even debut until mid-2016, but it is quickly becoming one of the company's top moneymakers. Revenue from Atlas climbed to $27 million, up 400% compared to the year-ago quarter. It now represents 32% of MongoDB's total revenue, up from just 10% this time last year.
5. Customer base grew 130%
The ability to expand its customer base has become a hallmark of MongoDB's success, and this quarter was no different. The company now serves 13,400 customers, up 130% year over year. To break that down further, 11,400 are Atlas customers, of which 4,200 came with the company's recent acquisition of mLab. Even discounting for the acquisition, its organic customer base grew by more than 61% year over year.
6. An expansion rate above 120%
For those not familiar with the concept, MongoDB's growth strategy has been to get a foot in the door and demonstrate the utility of its products, then upsell customers on additional products and services -- a process known as "land and expand." The company's net AR expansion rate, which tracks the rate at which existing customers spend more, remained above 120% for the 16th consecutive quarter.
On the company's earnings conference call, Michael Gordon, chief operating officer and chief financial officer, pointed out that MongoDB ended the quarter with 557 customers that spent at least $100,000 in annual recurring revenue (ARR) and annualized monthly recurring revenue (MRR), up from 490 in the last sequential quarter and up from 354 in the year-ago quarter. The company has also seen a significant increase in the number of customers spending more than $1 million annually, to 39, up from 22 this time last year.
MongoDB continues to deliver on all the metrics that matter. The company not only is adding new customers at a healthy clip but also is getting more money out of its existing customer base. It's hard to argue with success like that.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Amazon and MongoDB. The Motley Fool owns shares of and recommends Amazon and MongoDB. The Motley Fool has a disclosure policy.