MongoDB (MDB 0.81%) reported the financial results of its fiscal 2020 fourth quarter after the market close on Tuesday, and the company continued to deliver outstanding results. Revenue grew 44% year over year to $123.5 million, resulting in a non-GAAP (adjusted) net loss per share of $0.25. Both metrics were better than analysts' consensus estimates for revenue of $111 million and a loss per share of $0.28.
The cloud database company also announced that co-founder Eliot Horowitz would step down as chief technology officer effective July 10. The stock initially fell more than 9% on the news, but management reminded investors that MongoDB has been anticipating this move for some time. They noted the strong team that Horowitz assembled, particularly his two key lieutenants, who have been with the company for more than seven years and will be stepping in to fill his admittedly big shoes.
With the headline numbers and announcements out of the way, let's look at three metrics that show why MongoDB has a long runway ahead.
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1. A large and growing market
In the 10 quarters since the company went public, MongoDB has made significant strides in educating potential customers about the value of its cloud-based database platform, which is free from the constraints of the traditional databases, permitting the storage of messy, unstructured data.
This is one of the "largest and fastest-growing markets in all of software," according to CEO Dev Ittycheria. On the fourth-quarter conference call, he cited data from IDC that forecasts the database market will grow from $71 billion in 2020 to $97 billion by 2023.
Since the company has tapped less than 1% of the global database market, it still has a long and potentially lucrative runway ahead.
2. Use of Atlas is soaring
Even after generating impressive growth already this year, MongoDB continues to build on a solid foundation, even in the face of difficult comps. The continued strong growth of the company's cloud-based, fully managed, database-as-a-service product -- dubbed Atlas -- provides the clearest evidence of MongoDB's path forward.
In the fourth quarter, while overall revenue grew 44%, Atlas put up a much stronger performance, soaring 80% year over year and accounting for 41% of total revenue. That gives Atlas a $200 million annualized revenue run rate in Q4. What makes that even more impressive is that it comes on top of 400% growth in the prior-year quarter (albeit from a much smaller base) and just 32% of MongoDB's revenue.
These impressive results are being driven by strong customer growth, as MongoDB closed out the quarter with 17,000 customers. Atlas was the biggest growth engine, adding 4,000 new customers over the past year, bringing the total to 15,400 Atlas customers -- just 3.5 years after the platform was introduced.
3. Growing a solid base of recurring revenue
Not only is MongoDB adding new customers, but it is also increasing its business among its existing customer base. The company's annualized revenue rate (ARR) remained above 120% in the fourth quarter. MongoDB ended the quarter with 751 customers that provide at least $100,000 in ARR and annualized monthly recurring revenue (MRR), an increase of 35% compared with the prior-year quarter.
Even more importantly, the company ended the year with 62 customers that generate at least $1 million in ARR and annualized MRR, up a massive 59% year over year. This illustrates the significant adoption of MongoDB's solutions by a growing swath of large enterprise businesses.
A word on the coronavirus
It would be nearly impossible to find a company that hasn't been affected by the pandemic involving the COVID-19 coronavirus, and MongoDB is no different. CFO Michael Gordon addressed the issue on the conference call, saying that the situation is evolving rapidly and the current assumption is that COVID-19 will affect revenue to the tune of $1 million to $2 million for the first quarter. At this point, he said, MongoDB is "seeing minimal impact across our sales channels around the world, including closing transactions in the first quarter even in the countries hardest hit by COVID-19."
Gordon went on to say that the company anticipates a "more challenging economic environment in the coming weeks and months," so obviously things will likely change.
For long-term investors, MongoDB provides a compelling growth story and, as a result of the broader market downturn, is much more attractively priced than it was just a few short weeks ago.
