MongoDB – Oracle’s Missed Opportunity

Database-as-a-Service provider MongoDB (Nasdaq: MDB) recently reported its third quarter results that surpassed market expectations. The stock gained 8% in reaction to the result announcement.

MongoDB’s Financials

MongoDB’s revenues for the third quarter grew 38% to $150.8 million, ahead of the market’s forecast by 8.88%. Adjusted loss of $0.31 per share was also ahead of the Street’s forecast of a loss of $0.46 per share.

By segment, Subscription revenues grew 39% to $144.1 million, and services revenues grew 19% to $6.7 million.

For the fourth quarter, MongoDB expects revenues of $155-$157 million with a net loss of $0.42-$0.39 per share. It expects to end the year with revenues of $574.4-$576.4 million and a net loss of $1.07-$1.04 per share. The market was looking for revenues of $145.46 million for the quarter with a net loss of $0.44 per share and revenues of $552.65 million with a net loss of $1.24 per share.

MongoDB’s Cloud Upgrades

During the quarter, MongoDB announced the general availability of its multi-cloud clusters in Atlas. The service enables customers to run an application simultaneously across multiple clouds. It will allow its customers to deploy a fully managed, distributed database across AWS, Google Cloud, and Microsoft Azure simultaneously.

With the release of the new service, organizations will be able to extend the geographic reach of their applications by replicating data across all three major cloud providers to any of the currently 79 supported cloud regions worldwide. Organizations will be able to benefit from deploying applications across multiple cloud providers without the added operational complexity of managing data replication and migration across clouds.

The product release makes MongoDB the first cloud database to enable an application to run simultaneously across multiple cloud providers. By becoming cloud platform agnostic, the service will be able to attract a bigger client base.

MongoDB today also announced the general availability of its Atlas Online Archive service that provides users with a service that enables data tiering. Data tiering allows users to archive older, less active data on lower-cost archival cloud storage such as Amazon S3, while active data that is more often accessed and queried remains in the primary database. MongoDB Atlas Online Archive will make it easier for organizations to use MongoDB to query data inside the database, as well as data that is outside of it.

MongoDB appears to be investing in product upgrades and R&D during the pandemic. Analysts expect these investments to help it generate more growth in the future.

A few years ago, I had recommended that Oracle look at acquiring MongoDB. MongoDB’s addition would have given Oracle the ability to add NoSQL capabilities and build a stronger defense against Amazon’s offering. At the time of the recommendation, MongoDB was trading at a capitalization of $4.3 billion. MongoDB’s valuation has roughly quadrupled since then. It is a golden opportunity that Oracle missed.

MongoDB’s stock is currently trading at a 52-week high of $319.06 with a market capitalization of $18.8 billion. It was trading at a 52-week low of $93.81 in March this year.

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