Management of MongoDB (MDB +4.87%), the high-priced database software stock, reported slower growth in the first quarter than investors are used to and offered disappointing guidance for the second quarter. Meanwhile, adjusted profits also fell in the quarter.
As a result, the stock was down 25.1% as of 11:44 a.m. ET.
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Mongo goes wrongo
MongoDB, the leading independent NoSQL database software provider, has a history of delivering breakneck growth each quarter, but that growth rate is coming back down to earth. Overall revenue in the quarter was up 22% to $450.6 million, which beat headline estimates at $439.6 million, but that was still its slowest revenue growth as a publicly traded company.
Growth was driven by MongoDB Atlas, its cloud-based database software option, which was up 32% in the quarter, but that was also a notable slowdown from earlier periods. Atlas made up 70% of total revenue, indicating that on-premise revenue growth was nearly flat in the quarter.
On the bottom line, the company remains unprofitable on a generally accepted accounting principles (GAAP) basis with a loss of $98.2 million, which expanded from $68.5 million in the quarter a year ago. Adjusted operating profit also fell from $43.7 million to $32.8 million.
Adjusted earnings per share were $0.51, down from $0.56 a year ago, but that still beat the consensus at $0.40.
CEO Dev Ittycheria acknowledged that the company had a slower-than-expected start to the year, with weakness in both Atlas consumption growth and new-customer wins. Notably, growth in its higher-value on-premise customer segment has slowed significantly in recent quarters.
NASDAQ: MDB
Key Data Points
Can MongoDB bounce back?
Management said the weakness in the first quarter would impact performance over the rest of the year, and the company's guidance underwhelmed.
Its forecasts for both the top and bottom lines for the second quarter and full year were below estimates, so it's not surprising for a high-priced growth stock to tumble on such news. The company now expects just 13% revenue growth for the full year.
MongoDB's growth story certainly isn't over, but the company needs to find a way to reaccelerate revenue growth or reach GAAP profitability for the stock to rebound.
