Management of MongoDB (NASDAQ:MDB), the high-priced database software stock, posted slower first-quarter growth than investors are accustomed to and offered disappointing second-quarter guidance. At the same time, adjusted profits also fell during the quarter.
As a result, the stock was down 25.1% as of 11:44 a.m. ET.
Mongo is doing badly
MongoDB, the leading independent provider of NoSQL database software, has a history of generating staggering growth every quarter, but that growth rate is coming back down to earth. Overall revenue in the quarter increased 22% to $450.6 million, beating overall estimates of $439.6 million, but still its highest revenue growth slow as a publicly traded company.
Growth was driven by MongoDB Atlas, its cloud-based database software option, which grew 32% during the quarter, but that was also a notable slowdown from previous periods. Atlas accounted for 70% of total revenue, indicating that on-premises revenue growth remained almost flat during the quarter.
Ultimately, the company remains loss-making based on generally accepted accounting principles (GAAP), with a loss of $98.2 million, compared to $68.5 million in the previous quarter. Adjusted operating profit also declined, from $43.7 million to $32.8 million.
Adjusted earnings per share were $0.51, down from $0.56 a year ago, but still above the consensus of $0.40.
CEO Dev Ittycheria acknowledged that the company had a slower start to the year than expected, with weakness in both Atlas’ consumption growth and new customer acquisition. In particular, growth in its higher-value on-premises customer segment has slowed significantly in recent quarters.
Can MongoDB bounce back?
Management said the weak first quarter would impact performance over the remainder of the year, and the company’s guidance was disappointing.
Its guidance for second-quarter and full-year results fell short of estimates, so it’s no surprise that a high-priced growth stock would tank on such news. The company now only expects revenue growth of 13% for the full year.
MongoDB’s growth story is certainly not over, but the company needs to find a way to reaccelerate revenue growth or reach GAAP profitability for the stock to rebound.
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Jeremy Bowman holds positions in MongoDB. The Motley Fool posts about and recommends MongoDB. The Motley Fool has a disclosure policy.
Why MongoDB Stock Plunged Today was originally published by The Motley Fool
News Source : finance.yahoo.com
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