MongoDB's outlook for the first quarter and fiscal year was lighter than expected even as its fourth quarter results were strong.
First, the good news. MongoDB reported a fourth quarter net loss of $55.5 million, or 77 cents a share, on revenue of $458 million, up 27% from a year ago. Non-GAAP earnings for the fourth quarter were 86 cents a share. MongoDB was expected to report fourth quarter earnings of 48 cents a share on revenue of $435.55 million.
As for the outlook, MongoDB projected first quarter revenue of $436 million to $440 million with non-GAAP earnings of 34 cents a share to 39 cents a share. Wall Street was looking for revenue of $449.08 million with non-GAAP earnings of 61 cents a share.
For fiscal 2025, MongoDB projected revenue of $1.9 billion to $1.93 billion, or $2.27 a share to $2.49 a share. Wall Street was expecting annual sales of $2.03 billion with non-GAAP earnings of $3.22 a share.
MongoDB's outlook landed a few days after Snowflake took a hit on its outlook and CEO change.
In a statement, MongoDB CEO Dev Ittycheria said the company "we will continue to invest in our key product development and go-to-market initiatives." The company ended its fourth quarter with more than 47,800 customers and 2,052 customers paying more than $100,000.
“MongoDB’s results reflect the belt tightening and slower growth we’re see across the mainstream IT market outside of the white-hot pockets tied to AI,” said Doug Henschen, VP and principal analyst at Constellation Research. “Nonetheless, MongoDB turned in another quarter of steady, double-digit growth and has plenty of relational migration and net new customer win opportunities to continue on its current healthy growth path.”
For fiscal 2024, MongoDB reported a net loss of $176.6 million, or $2.48 a share, on revenue of $1.68 billion, up 31% from a year ago. Non-GAAP earnings were $3.33 a share.
On a conference call with analysts, Ittycheria said he saw solid and stable growth for consumption.
"Overall we are pleased with our performance in the fourth quarter. We had a healthy quarter of your business led by continued strength and new workload acquisition within our existing Atlas customers. I see stable consumption growth going into next year. Consumption trends have been steady for several quarters now."
However, Ittycheria noted that it's early in the AI application buildout and enterprises need to move beyond pilots to ramp consumption at scale.
He laid out the progression.
"I strongly believe that AI will be a significant driver of long term growth for MongoDB. We are in the early days of AI akin to the dial-up days of the Internet era. To put things in context, it's important to understand that there are three layers to the AI stack. The first layer is the underlying compute and LLM. The second layer is the fine tuning of models and building of AI applications. And the third layer is deploying and running applications that end users interact with. MongoDB strategies to operate as a second and third layers."
Today, the vast majority of AI spend is happening the first layer that is investment in compute to train and run LLM neither are areas in which we compete. Our enterprise customers today are still largely in the experimentation and prototyping stages of building their initial AI applications.
We expect that will take time for enterprises to deploy production workloads at scale.
Platforms like MongoDB will benefit as customers build AI applications to drive meaningful operating efficiencies, create compelling customer experiences, and pursue new growth opportunities."
The short version is that MongoDB expects the fiscal 2025 consumption and adoption trends to be similar to fiscal 2024. Ittycheria said MongoDB will focus on workload acquisition, building out its go-to-market operations and hone its migration game from relational databases. "This year we are investing in a number of pilots leveraging AI for relational migrations paired with services to substantially simplify and scale the process," he said.