Release Date: December 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MongoDB Inc (MDB, Financial) reported a strong quarter with revenue of $529 million, a 22% year-over-year increase, exceeding the high end of their guidance.
- Atlas revenue grew 26% year over year, representing 68% of total revenue, indicating strong performance in their cloud-based offerings.
- The company ended the quarter with over 52,600 customers, showing continued growth in their customer base.
- MongoDB Inc (MDB) is investing in strategic initiatives such as enterprise channel expansion and AI-driven legacy app modernization, which are expected to drive long-term growth.
- The company is leveraging its technical advantages in AI applications, positioning itself as a key component of the emerging AI tech stack.
Negative Points
- Atlas consumption growth, while slightly better than expected, remains lower on a year-over-year basis, indicating potential challenges in sustaining high growth rates.
- The company anticipates a sequential decline in non-Atlas revenue in Q4 due to the non-recurrence of large multiyear deals that benefited Q3.
- MongoDB Inc (MDB) is reallocating resources from the mid-market to the enterprise channel, which may result in slower direct sales customer growth.
- The introduction of Atlas Flex clusters is expected to negatively impact customer count as low-spending serverless customers may not transition.
- The company is in the early stages of scaling its legacy app modernization capabilities, which may take time to significantly impact growth.
Q & A Highlights
Q: What has been driving the improvement in Atlas consumption over the past two quarters?
A: Michael Gordon, CFO and COO, explained that while Atlas consumption has been slightly better than expected, it is still down on a year-over-year basis. The improvement is primarily due to the underlying usage of applications, rather than a significant change in sales execution or end-user activity.
Q: How is MongoDB positioned as an operational data store for AI applications?
A: Dev Ittycheria, CEO, highlighted that MongoDB is well-suited for AI applications due to its ability to handle rich and complex data structures. This is crucial for AI models that require understanding relationships and patterns within data. MongoDB's integrated search and vector search capabilities, along with its multi-cloud and on-premise deployment options, provide a competitive advantage.
Q: Can you elaborate on the strength of the non-Atlas business this quarter?
A: Michael Gordon noted that the non-Atlas business exceeded expectations due to strong EA new business and incremental workloads from existing customers. The quarter also benefited from a few large multiyear deals, which contributed over $15 million more in revenue compared to the same period last year.
Q: What are the strategic investments MongoDB is making, and how might they impact margins?
A: Dev Ittycheria mentioned that MongoDB is investing in upmarket opportunities, legacy app modernization, and AI applications to drive long-term growth. While specific margin impacts were not detailed, these investments are expected to support MongoDB's strategic initiatives and growth potential.
Q: How is MongoDB's relationship with hyperscalers evolving, especially in the context of AI?
A: Dev Ittycheria stated that partnerships with AWS, Azure, and GCP remain strong. MongoDB is integrated with new products like AWS's Q and Bedrock, and Azure's OpenAI studio. These collaborations are crucial as hyperscalers bundle their database offerings with AI solutions, and MongoDB's performance and flexibility make it a preferred partner.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
