MongoDB (MDB) is set to report Q1 results tonight after the close with a conference call to follow at 5pm ET.

Q1 S&P Capital IQ consensus stands at a loss of ($0.24) on Revenue of $83.5 mln.

Guidance

  • Q1 Outlook was for a loss of ($0.25)-($0.23) on revenues of $82-84 mln.

  • FY20 Outlook is for a loss in the range of ($1.06)-($0.98) and revenues in the range of $363-371 mln

  • MDB is expected to update its FY20 outlook and guide for Q2. Current Q2 S&P Capital IQ consensus stands at a loss of ($0.27) and revenue of $87.8 mln

Another highly valued cloud name that is ready to test its valuation in a market that highly skeptical of the space. MDB has been one of the best performers as its Atlas product (32% of total revenues in Q4), a cloud-hosted database-as-a-service solution has been well received in markets. This was evident in its Q4 earnings report when it saw revenue growth accelerate to 85% compared to 57% in Q3, 61% in Q2, and 49% in the prior year Q1. Current projections are pointing towards an increase of a healthy 72%. That still represents a 'deceleration' from Q4 but an envious top line growth. Valuation of course remains a concern as the stock is trading at approximately 28x Price to Sales.

  • Shares of MDB broke out following the beat and raise Q4 report, ripping above $105 and rallying as high as $154.74 on March 21. The stock has pulled back slightly and has spent the past few weeks bouncing around the $125-150 area over the past few weeks. We are seeing a small rally in the name ahead of the print. Certainly the broader market has helped push the name higher. We are also witnessing some front running ahead of the report given the company's history of beats and raises (MDB has beaten and guided above consensus in all six quarters since coming public) and probably some shorts hedging. 

  • The 36 mln float and 18% short interest highlight the potential volatility in the name. $150-155 will act as a resistance level for the initial reaction. A failure to impress, either via an in line report or weaker Q2 outlook, could lead to aggressive selling that would likely bring the $125 level into play.

Q4 Recap

  • MDB reported Q4 (Jan) loss of $0.17 per share, excluding non-recurring items, $0.21 better than the S&P Capital IQ Consensus of ($0.38). Revenues rose 84.7% year/year to $83.1 mln under ASC 605 vs. the $74.02 mln S&P Capital IQ Consensus. 

  • Over the past fiscal year, the number of customers with an annualized spend of more than $1 million grew by 77% to 39, and the number of six-figure customer relationships expanded by 57% to 557. MongoDB now has over 13,400 customers, up ~130% from last year, including over 11,400 Atlas customers (1/3 rev mix at $100M annualized run rate), of which ~4,200 were acquired from mLab.

  • Non-GAAP gross profit was $61.0 million, representing a 71% non-GAAP gross margin. 

  • During the three months ended January 31, 2019, MongoDB used $9.5 million of cash in operations and $3.2 million in capital expenditures, leading to negative free cash flow of $12.6 million, compared to negative free cash flow of $8.1 million in the year-ago period.

TECHS:

TRADE: MDB JUN7 170 OR JUN14 170C