MongoDB (MDB -0.09%) stock got destroyed Thursday morning, falling 20.3% through 10:20 a.m. ET despite "beating" on Q4 2024 earnings last night, after warning 2025 results may look a lot worse.
And I hate to say I told you so, but I did.
Heading into the quarter, analysts forecast MongoDB would earn $0.67 per share, non-GAAP (generally accepted accounting principles), on sales of $519.8 million. MongoDB beat both numbers, with sales of $548.4 million, and earnings nearly double what Wall Street predicted: $1.28 per share.
MongoDB Q4 earnings
So Q4 news was far from horrible. Q4 revenue increased 20% year over year, and full-year revenue grew 19%. Still, the gross profit margin declined to 73% in Q4, and while the company claimed a non-GAAP profit, its earnings as calculated according to GAAP were -$0.20 per share. That improved from the $0.77 lost in last year's Q2, but it was still a loss.
What concerns me most is that free cash flow fell by more than half to just $22.9 million in Q4. For the full year, the company still generated $114.5 million, which was more than the $109.9 million generated in fiscal 2024. The growth rate in FCF production, however, was nothing to brag about -- a meager 4%.
Is MongoDB stock a sell?
And yet, none of the above seems to be what investors are focusing most on today. As I warned last month, heading into Q4 2024 earnings, all eyes would actually be on MongoDB's guidance for 2025 -- and this is where the company really fell short.
Breaking it to you gently, MongoDB guided in line with expectations for Q1, with sales of $526 million, and non-GAAP earnings of $0.63 per share or better. For the full year, however, MongoDB said sales won't exceed $2.3 billion, and earnings could be a full third less than last year's $3.66 per share, ranging from $2.44 to $2.62.
That's the real reason MongoDB stock is down today: Its earnings are about to shift into reverse.
