MongoDB Inc shares fell sharply despite the American database platform developer announcing third quarter (Q3) financial results it described as “significantly ahead of expectations”.
MongoDB (NASDAQ: MDB) stock dived $59.23 (16.92%) to close at $290.90 (A$454.53), in trading interpreted as profit-taking after a 25% rally over the three prior weeks and the resignation of Chief Operating Officer and Chief Financial Officer Michael Gordon.
The company said third quarter revenue increased 22% compared with the same period a year earlier to $529.4 million with subscription revenue rising also rising 22% to $512.2 million and services revenue gaining 18% to $17.2 million.
It said non-GAAP income from operations increased to $101.5 million from $78.5 million, the loss from operations narrowed to $27.9 million from $45.2 million a year earlier and the net loss fell to $9.8 million from $29.3 million.
“MongoDB's third quarter results were significantly ahead of expectations on the top and bottom line, driven by better-than-expected EA (early access program) performance and 26% Atlas (cloud database) revenue growth,” MongoDB said in a statement.
It also said Gordon would step down at the end of the fiscal year on 31 January 31 2025 and serve as an advisor to ensure a smooth transition.
President and Chief Executive Officer Dev Ittycheria said MongoDB continued to expect to win new business due to the superiority of its developer data platform in addressing a wide variety of mission-critical use cases.
He said the company continued to invest in its legacy app modernization and AI offerings because its document model and distributed architecture were well suited to customers looking to build highly-performant, modern applications.
“MongoDB is in a great position to be a central pillar of the emerging AI tech stack and benefit from the next wave of application development in the years ahead," Ittycheria said in the statement.
MongoDB shares had opened at $322.43 and touched $323.57 prior to the Q3 announcement before selling off to $289.46, just below the closing price.
The company is capitalised at $21.5 billion at the closing price.