I just wanted to briefly weigh in here. There is no doubt that so far mongo has been a better investment. But i think we should look at which business is going to give us the best returns going forward. Using Duma’s numbers here with my addition in (), most recent quarter first. On the surface it looks like mongo is killing estc and estc is falling off.
ESTC 62.59% (68%), 69.95% 71.65% 79.00%
Mongo 85.37% 70.33% 56.64% 61.49%
I’d like to provide a bit of context though. Mongo acquired mlabs in october 2018 which is what valuted them from 56% growth up to the 70-80% range. Lets be clear though, the organic growth of MDB is still amazing and probably in the low 60% range.
Moving on to ESTC it looks like their growth has really slowed down. A little over 40% of their business is international. I couldn’t find corresponding figures for MDB. The dollar was quite strong last quarter so on a constant currency basis ESTC’s revenue growth was a pretty astounding organic 68%.
Listen, I like mongo a lot. It is my largest position. The business is kicking behind. THey are starting to show some operating leverage. It has been a fantastic investment. My new investment dollars are going into ESTC. THeir growth is downright amazing and their valuation has compressed dramatically. I’d argue that ESTC business is doing really well, they are taking over their space and sit in the middle of so many different industries. Their EV/s is 21 compared to MDB’s 31. Lots of other companies out there are “cheap” because of some execution hiccup (zuo, ntnx, pvtl) Those companies have continued to disappoint. ESTC is not in that situation. THey are growing like wildfire, taking over industries, moving strongly into security (i’ll post more on that later). How many more quarters of 60%+ growth will it take until the market realizes amazon isn’t going to be a major threat? I’d guess 1. The lock up expiration won’t be a question any more in a couple of days. All the FUD is falling away. We do need to keep an eye on expenses though.
best,
Ethan