MongoDB Sees Outstanding Beat Due to New Seasonality Trend; Shares Attractive Even as Stock Up 25%

No-moat MongoDB’s third quarter was an exceptional one, posting revenue and non-GAAP earnings per share far surpassing our forecasts and FactSet Consensus. MongoDB saw abundant improvement in the quarter compared with the second quarter as usage on their platform bounced back broadly, including in vulnerable Europe and the midmarket. Management expects this to be the result of an emerging seasonal effect, and thus had not initially baked this in. New seasonality trends aside, MongoDB’s seemingly unstoppable growth, even amid a tough backdrop, became clear with the level of expanding partnerships in the quarter, in both co-selling with major hyperscalers and independent software vendors. We think that major hyperscalers more prominently selling MongoDB is telling, as the three major cloud vendors have competing offerings. These developments only increase our confidence that MongoDB stands to be a large gainer in database management software market share to come based on exceptional technical abilities.