While waiting for next week’s HYPERSCALERS to report, followed by some of our stocks the week after, I’ve been thinking more about my positions. One that I think is under-appreciated, but is quickly growing appreciation, is MongoDB (MDB).
Well, first off, the numbers look FANTASTIC. Accelerating growth at a VERY stead pace.
YoY growing from 38% to 56% in 4 quarters. QoQ clocking 14.2 & 17.4% the past two quarters. Oh, those are annualized rates of 70 & 90%!! The guide they gave indicates this quarter will be another acceleration YoY but the QoQ will be weaker (seasonality). The year ago’s comp was 6.2 QoQ.
Second, MDB is the ideal database solution for distributed workloads. Think about this as a “closer to the edge” database. Its not quite on the edge but can be distributed across geographic locations. Mobile apps (even video games). We live in an increasingly more and more mobile world. I think this segment of the database market will grow much faster than the traditional operational databases (OLTP as opposed to analytical databases, referred to as OLAP).
Another situation that MDB excels in is a database where there are a TON of writes. It is much faster to write to MDB than a traditional SQL based database. Again, this is ideal for mobile workloads, video games, IoT (monitoring the health of devices around the world).
Not to be forgotten, there is a very large subset of databases, more like a majority of databases, where the workloads are light enough that even a sub-optimally selected database platform will work fine. For these, developer preference will often win out.
When Mongo pivoted away from the pure open source into the Atlas world, everything changed and we knew it. ATLAS now makes up 58% of total revenue AND is growing MUCH faster. So it will continue to make up more and more overall revenue. This means ALL the metrics will continue to get better (revenue, GM, DBNRR).
Another thing to throw into this is something that ExponentialDave brought up in his video discussion of MDB. The DBNRR they report is for the company as a whole. The ATLAS DBNRR is likely much closer to 150! It is likely second ONLY TO SNOWFLAKE among our companies!!
Now, throw in there the fact that MDB basically has no competitors. They have won this market segment. The article Saul referenced that Peter wrote is a prime example. The Hyperscalers have anointed MDB as the preferred offering! ON TOP OF THIS, the part Peter points out where the MDB acceleration coincides with when the Hyperscalers started HELPING to sell Mongo instead of focusing on competing! The capitulation of the Hyperscalers to MDB being the de-facto offering.
I re-iniated my MDB position a couple months or so ago after having it at the top of my watch list for several months. My conviction in it is very high. It is currently my 4th biggest position at around 12.5%. I’d like to up it but… well, I’d have to sell something else. Haha.