MDB

what’s happening with Lyft and MongodB?
any credence to the rumor?
tj

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Unsure but I’m watching this closely as MDB is 6.7% of my holdings.

bjurasz

https://www.marketwatch.com/press-release/lyft-goes-all-in-o…

Lyft goes all in on AWS

  • I’m guessing AWS included the migration as part of the package. Probably a trend to watch

From the analyst who reported the dissatisfaction
https://thefly.com/permalinks/entry.php/id2870468/MDB;LYFT;A…

a research note to investors, Nomura Instinet’s Eberle said he recently discovered that Lyft is “quite dissatisfied” with MongoDB’s performance and believes the ride-sharing service operator is in the process of a “massive database migration,” highlighting pain points such as connection handling, back pressure, managing fall over, observability, and query planning.

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EquityBull posted this on the mongodb message board.

https://www.mongodb.com/blog/post/atlas-plus-azure-gets-more…

Price drop to customers by about 30%.

Which means they have to sell 50% more hours to get back to the same revenue (with Azure).

Potential to reduce revenue growth going forward if they don’t get the increase in usage from the cheaper price.

Lack of pricing power, potentially tougher to maintain rev. growth, I see increased risk here with MDB.

Jim

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I’m out…180% gain. I will take it.

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If if Lyft is in fact gone as a customer,

From the 10K on page 8:

Our Customers

As of January 31st, 2018 we had over 5,700 customers spanning a wide range of industries in more than 90 countries around the world. All affiliated entities are counted as a single customer. No single customer represented more than 10% of our revenue on fiscal year 2018.

Let’s watch but not panic yet. This isnt a Uber/Twilio situation.

Best,
Matt

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MDB earnings are due out on March 13 AMC. Should be an interesting call.

Lyft was inherited from the mLabs acquisition.

https://www.mlab.com/case-studies/lyft/

Darth

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A second thought occurred to me as well - If Lyft is moving to AWS, they will also have Vendor Lock-In. I guess they (Lyft)are ok with that for now, but I figure one of the many appeals to MDB, aside from the technology, is that there is no vendor lock in.

Matt

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10% down: do we see a classic overreaction or has the investment thesis changed by a marquee customer that is (apparently) leaving? MDB is 5.3% of my portfolio and gained exactly a 100% at this pricepoint. Need to take a step back and think what to do next.

I’ve exited as well, securing a big profit. Between the AMZN hit, and now this, I’m seriously doubting the business model. Making a profit on open source is not particularly easy, which is a big part of the reason MongoDB changed its licensing policy - to make it easier to monetize what they are doing. Seeing as how I’ve been a long skeptic of the open source business model I’ve decided I need to lock in this profit and move on. Mistake? Possibly… I mean look at how exiting NFLX has (not) done for me this year!

Regarding lock-in, I think that point is moot. Sure MDB might alleviate cloud provider lock-in, but you’re still locked into MDB. One way or another you can find yourself locked into SOMETHING.

Now what to do with my new funds…

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Price drop to customers by about 30%.

Which means they have to sell 50% more hours to get back to the same revenue (with Azure).

Potential to reduce revenue growth going forward if they don’t get the increase in usage from the cheaper price.

Thanks, Jim. I agree, too many bad signs – and this one broke the camel’s back for me. I don’t completely understand the pricing, but I’m scared enough that I sold. Seems very likely that guidance could disappoint.

I might be totally wrong, but too complicated for me.

Bear

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Which means they have to sell 50% more hours to get back to the same revenue (with Azure).

Assuming no change in cost basis … but the reason given for the change was a change in cost basis.

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Looks like they are in dynamodb. Could it be that they were a large user of dynamodb and small user of mlab?

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Tamhas,

Cost basis doesn’t affect revenue, only profit.

If you were selling a widget for $1, and it cost you 50 cents to make it, your profit is 50 cents.

If your cost basis goes down to 20 cents, and you drop your price to 70 cents, your profit is still 50 cents.

But your Revenue just went from $1 to 70 cents per widget.

And when you compare to the year before for the revenue growth of the company, you now have to sell 50% more widgets to break even on revenue.

Since MDB isn’t profitable, their most important metric is sales growth, and it just became much harder to show growth, unless the price drop creates a bunch more demand.

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the reason given for the change was a change in cost basis.

tamhas, where did you find this? I don’t see it mentioned in the referenced Mongo article. Or are you assuming that the hardware upgrade lowered their net cost?

Thanks,
banjr

My memory was that the cost was mentioned in the hardware change.

Cost basis doesn’t affect revenue, only profit.

And when you compare to the year before for the revenue growth of the company, you now have to sell 50% more widgets to break even on revenue.

Since MDB isn’t profitable, their most important metric is sales growth, and it just became much harder to show growth, unless the price drop creates a bunch more demand.

To me this is an example of investing in a company versus investing in a stock.

If you’re invested in MongoDB and its future then a slight drop in revenue (or slowdown in revenue growth) accompanied by a larger increase in profits would be a welcome development.

The most obvious metric might be revenue growth but for the company the most important metric is long term profitability or the ability to “print cash”.

If just going by the headlines and press release blurbs one might see slowing revenue growth as a bad sign. But if it’s accompanied by an increase in margin and/or free cash flow then as someone invested in the company I would be happy.

In your example, the profit margin went from 50% to 70%.

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Ever hear of elasticity of demand? I am sure that google can lead you to Wikipedia in regard.

Along with the Azure discount MDB also has added two higher tier offerings as well. Will these add to revenues as these are premium tiers?

Dunno.

Tinker

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AWS is famous for consistently, proactively reducing pricing… and in the process nullifying competition.
This is part of the cloud game, seems like MDB seems to be playing it the right way…

May be too much cool-aid but I can’t believe this being negative, no company will post open pricing reduction like this if they didn’t believe price elasticity will actually increase their revenue and margins.

I don’t believe this is any threat… if anything, I read it as MSFT enabled lower cost of hosting MDB on Azure… and this MSFT sees MDB as very critical part of its offering.

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