Why MongoDB Stock Surged 30% Higher

MongoDB  (MDB) – Get Free Report investors are smiling today. After reporting first-quarter earnings results and guidance for the remainder of the year, shares in the cloud database solutions provider skyrocketed 30% on Friday morning.

MongoDB shares surged 30% higher after it beat first-quarter earnings estimates. Source: TheStreet

MongoDB’s Earnings Impress

Wall Street analysts projected first-quarter revenue and earnings per share of $347 million and $0.19. Instead, MongoDB reported sales of $368 million and EPS of $0.56. The strength in demand for its software-as-a-service database products allowed management to boost its outlook for this quarter and the entire year.

The results were good enough for the company to deliver its second consecutive quarter of better-than-expected earnings. MongoDB has met or exceeded Wall Street estimates in each of the past 12 quarters. 

That winning streak may continue, given MongoDB’s management now expects revenue of $388 million to $392 million in the second quarter, far above analysts’ expectations for $361 million. It also forecasted second-quarter EPS of $0.43 to $0.46, much higher than the $0.14 consensus estimate from industry watchers.

For the full year, MongoDB expects revenue of at least $1.52 billion and EPS of at least $1.42. Analysts were expecting $1.51 billion and $1.04 per share.

The company’s gross margin improved to 74% from 73% one year ago, and free cash flow was $51.8 million, up from $8.4 million last year.

Will AI Move MongoDB Next? 

Not to be left out of the AI parade, MongoDB said there’s an “emerging trend” to use its solutions to build and run new AI applications.

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Specifically, over 200 new customers of its Atlas solution were AI or ML companies in the quarter. Management believes AI will ease software bottlenecks caused by a tight labor market, allowing faster creation and deployment.

“We believe AI will be the next frontier of development productivity — developer productivity and will likely lead to a step-function increase in software development velocity,” said CEO Dev Ittycheria on the company’s conference call.

As more companies develop and operate AI-enabled applications using its solution, higher engagement with MongoDB’s platform will boost revenue and further embed the company within customers.

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