MongoDB (NASDAQ:MDB) reported a significant beat on its fourth-quarter earnings but saw its shares drop sharply by 8.98% due to its weaker-than-expected guidance for the fiscal year 2025. The company's Q4 adjusted EPS came in at $0.86, surpassing the analyst estimate of $0.46. Revenue for the quarter was also above expectations at $458 million, compared to the consensus estimate of $437.18 million, marking a 27% increase YoY.
Despite the strong fourth-quarter performance, MongoDB's guidance for the fiscal year 2025 and the first quarter of the same fiscal year fell short of expectations. The company forecasts an adjusted EPS range of $2.27 to $2.49 for the full year, below the consensus of $3.54. Revenue guidance for FY2025 is set between $1.9 billion and $1.93 billion, which is also lower than the expected $2.03 billion. For Q1 2025, MongoDB anticipates an adjusted EPS of $0.34 to $0.39, compared to the consensus estimate of $0.62, and revenue projections of $436 to $440 million, which is less than the consensus of $447.5 million.
MongoDB's President and CEO, Dev Ittycheria, highlighted the company's strong finish to fiscal 2024, with a 34% growth in Atlas revenue and operating margin improvement. He attributed the success to MongoDB's platform becoming increasingly standard for modern application development. Ittycheria also emphasized the company's plans to invest in product development and go-to-market initiatives to capitalize on long-term growth opportunities, especially as organizations look to leverage artificial intelligence in application development.
For the full fiscal year 2024, MongoDB reported a total revenue of $1.68 billion, a 31% increase YoY, and a non-GAAP gross margin of 77%. The company improved its operating results, with a non-GAAP income from operations of $270.4 million, compared to $62.0 million in the previous year. MongoDB ended the fiscal year with a strong balance sheet, boasting $2.0 billion in cash, cash equivalents, and short-term investments.
Investors reacted negatively to the guidance miss, leading to the nearly 9% drop in MongoDB's share price. The company's forward-looking statements indicate a cautious approach to the upcoming fiscal year, despite the robust results achieved in the last quarter of fiscal 2024.
Despite the share price decline following the report, analysts at DA Davidson upgraded MDB from Neutral to Buy, raising the price target from $405 to $430 per share.
The firm said the company's guidance was conservative, but "the implied level of Atlas deceleration in the guide is very, very conservative, and we see significant upside as likely."
Elsewhere, analysts at Needham & Company said they are buyers of MDB following the stock price weakness. The firm maintained a Buy rating on the stock but cut the price target to $465 from $495 per share.
"MongoDB has traditionally provided conservative initial full-year guidance, and we believe its FY25 outlook is consistent with this philosophy," wrote the firm. "The surprise revelation from the earnings call was that MongoDB recognized $80 Million-plus in FY24 Revenue, evenly split between unused Atlas commitments and multi-year licensing deals for EA, which are not expected to recur in FY25.
"We see the impact to Atlas as a one-time event as the company has de-prioritized upfront commitments in favor of acquiring new workloads; Atlas growth will normalize in FY26."