Yes, all looked quite good. My concern that they would run into a temporary slowdown on new business, potentially lowering their rev growth to the teens like AYX, was unfounded.
I listened to the call, and management sounded very confident and upbeat about the business going forward, without sounding like they were trying to sell you on it.
New Customers
One of the things they said they did, which I think was really smart, was to de-incentivize their sales people from pushing for bigger commitments for new customers. In the current environment, they felt that customers weren’t going to want to lock into huge future liabilities on a product they are just signing up on for the first time, so Mongo pushed really hard just to get in the door and sign customers for a short period, with the expectation that many of those customers will stay on and extend once they’ve been using it for a while.
Not only did this allow them to add a really nice number of new customers, it also actually shortened (improved) the sales cycle, because they said without trying to sell the customers on longer commitments, there was a lot less negotiation and new deals closed faster than usual.
Guidance
When one of the analysts asked about the guidance being light, management essentially said they were factoring in the current pandemic environment fully, which I more or less translated as them saying they were sandbagging and assuming a worst case scenario in the projection. They had a single huge $3 million sale to one customer in Q4 last year, which they don’t expect a repeat of, so the comp will make Q4’s (two quarters away) growth rate look lower, but will likely be an outlier.
Balance Sheet
They also only burned through $15 million of cash, and have more than a Billion dollars of cash and short term investments, so no concerns about liquidity anytime soon.
Final Thoughts
I already have about 10% of my port in MDB, but seeing that they were able to perform this well in this environment, and hearing how management sounded on the call, I’m tempted to add more. They aren’t going to grow at 100% anytime soon, but if they stay in the 30-40% range for the next 4-5 years, which I think is very possible given the nature of their product and business (and I won’t be surprised to see that accelerate at some point), I think Mongo will continue to be a big winner in coming years.
mfgd posted the OP above right when the stock hit the peak of the after hours highs, up about +12%, which settled down later this afternoon to +4%, and that is after they just hit an all time high yesterday. I’ll probably be patient, and see if there is a little bit of a pullback over the next couple of weeks, but right now I really like and am tempted to add to MDB, as well as DDOG, AYX, and TTD. Although seeing how well MDB performed this quarter, gives me a little more pause thinking about AYX’s recent underperformance, and whether I should be less excited about Alteryx. However, AYX’s price definitely already reflects an expectation that they aren’t going to crank up the growth in the immediate future, so the price is good if they do ultimately emerge from the pandemic back to growth rates they were realizing recently.
Overall tho, way to go MDB!
-mekong