A Member of Pat McKeough’s Inner Circle recently asked for his advice on a startup company that sells software to help process and analyze large amounts of streaming data from apps, the Web, and other news sources
Pat notes that the company’s offerings continue to attract customers and its losses are shrinking. However, the onset of serious competition from much larger, established players could challenge future growth.
Q: Pat, can I get your recommendation on MongoDB? Thanks.
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MONGODB INC., (Symbol MDB on Nasdaq; www.mongodb.com) is a U.S. company that sells software to help its customers, including Metlife, eBay, and the New York Times, process and analyze large amounts of streaming data from apps, the Web, and other news sources. That data is considered unstructured, because formats such as video, audio files and app updates don’t fit neatly into rows and columns like traditional data.
MongoDB is headquartered in New York, but has more than 14,200 customers in over 100 countries. These include MetLife, eBay, Shutterfly, UPS and Facebook. The MongoDB database platform has been downloaded over 65 million times.
The company’s core offerings are: MongoDB Enterprise Advanced (Enterprise Server), which stores, organizes, and processes data and facilitates access and changes to the data; MongoDB Atlas aims to provide customers with a flexible, managed offering that includes automated provisioning and healing, comprehensive system monitoring, managed backup and restore, and default security; and Community Server is a free-to-download version of the database.
The company first sold shares to the public in an IPO in October 2017 at $24 a share. That was above its proposed initial range of $20 to $22. In its first day of trading, it gained 33.6%. The shares are now up 591%, or almost 700% of the original investment.
MongoDB was created by founders Dwight Merriman, Eliot Horowitz and Kevin Ryan in 2007. The trio developed the database platform to alleviate the problems traditional databases have when handling significant numbers of information files.
On April 24, 2019, MongoDB announced that it had acquired Realm for $39 million. That mobile database makes it easier for developers to work with data and accelerate innovation. The platform works complements MongoDB’s products. Realm is used by more than 100,000 active developers and has been downloaded more than two billion times.
Inner Circle: Revenues are up and losses shrink as competition grows
In the three months ended April 30, 2019, MongoDB’s overall revenue rose 78.3%, to $89.4 million from $50.1 million a year earlier. Subscription revenues during the quarter accounted for 94.0% of its total revenue.
In the latest quarter, excluding one-time items, the company lost $12.1 million, or $0.22 a share. That’s an improvement over the loss of $18.8 million, or $0.37 a share, a year earlier. The latest earnings beat the consensus estimate for a loss of $0.24.
MongoDB continues to add customers, and the ability of its programs to run across all major cloud services—including Amazon Web Services (AWS), Microsoft Azure and Alphabet’s Google Cloud—is a big plus.
However, intensifying competition from those same cloud-based database providers, such as Amazon DocumentDB, launched in January 2019, is a big risk factor.
Many tech companies are replacing Oracle database with Mongo because Mongo is more scaleable and is designed from the group up to integrate with cloud services.
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Many tech companies are replacing Oracle database with Mongo because Mongo is more scaleable and is designed from the group up to integrate with cloud services.