Mongo DB Shares rose more than 25% on Tuesday after the company beat Wall Street expectations for the third quarter and revised its forecasts upward after its cloud database platform gained traction with customers.
The database software provider posted adjusted earnings of $1.32 per share on revenue of $628 million. This beat the adjusted estimates of analysts surveyed by LSEG of 80 cents per share and revenue of $592 million. Revenue increased 19% year over year.
MongoDB announced that its Atlas platform grew 30% year over year and accounted for 75% of total revenue in the quarter. The company announced that it expects to have more than 60,800 Atlas customers this quarter and expect platform revenue to increase 27% this quarter.
“The third quarter was an exceptional quarter driven by our continued go-to-market execution and broad demand seen across our businesses,” said CEO Chirantan “CJ” Desai in his first earnings call at the helm of the company.
Deb Itticheria, who ran the company for 11 years and took it public, resigned in November.
Desai believes trends in artificial intelligence, cloud and data have reached a “true inflection point” and the company is approaching a “once in a lifetime” opportunity. He told investors that the company will focus on building customer relationships and innovation in the coming months.
Because of these tailwinds, MongoDB has raised its full-year outlook for tailwinds from Atlas’ growth and continued demand for artificial intelligence. The company now expects revenue to be between $2.434 billion and $2.439 billion, up from its previous forecast of $2.34 billion to $2.36 billion.
Bernstein analysts raised their price target to $452, expecting the stock to continue to benefit from accelerating growth while other software companies struggle.
“We expect continued upward reratings in the near term due to strong consumer demand, potential upside from AI, and the benefit of an accommodative interest rate environment,” they wrote.
The stock has soared more than 40% this year.
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