MongoDB Swings to Q4 Profit, Outlook Misses

MongoDB (NASDAQ: MDB), a leading database software provider, reported its fourth-quarter fiscal 2025 financial results on Wednesday, March 5, 2025. The company swung to a profit in the quarter, but its outlook for the full year missed expectations, sending shares lower in after-hours trading. Here's a breakdown of the key takeaways from the earnings report and what it means for investors.

Q4 Results:

* Revenue: $548.4 million, up 20% year-over-year (YoY)
* Gross Profit: $399.4 million, representing a 73% gross margin
* Loss from Operations: $18.6 million, compared to a loss of $71.0 million in the year-ago period
* Net Income: $15.8 million, or $0.20 per share, compared to a net loss of $55.5 million in the year-ago period
* Cash Flow: $22.9 million, compared to free cash flow of $50.5 million in the year-ago period

Full Year Results:

* Revenue: $2.01 billion, up 19% YoY
* Gross Profit: $1.47 billion, representing a 73% gross margin
* Loss from Operations: $216.1 million, compared to a loss of $233.7 million in the year-ago period
* Net Loss: $129.1 million, or $1.73 per share, compared to a net loss of $176.6 million in the year-ago period
* Cash Flow: $150.2 million, compared to $121.5 million in the year-ago period

Outlook:

* Revenue: $1.90-$1.93 billion, representing a growth range of 13-15% YoY
* Gross Profit: $1.40-$1.43 billion, representing a gross margin of 73%
* Loss from Operations: $201-$211 million, representing a pro forma operating margin of 10%
* Net Loss: $129-$139 million, or $1.73-$1.88 per share

MongoDB's swing to a profit in the fourth quarter was driven by strong revenue growth and improved operational efficiency. However, the company's outlook for the full year missed expectations, with revenue growth expected to decelerate to the low teens. This slowdown in growth, coupled with a decline in operating margins, has raised concerns about the company's ability to maintain its profitability.

Investors should be cautious about MongoDB's valuation, which remains expensive despite the recent slide in share price. At current levels, MongoDB trades at an enterprise value (EV) of 13.1x its FY25 revenue guidance, which is a steep ask for a company facing decelerating growth and declining margins.

In conclusion, while MongoDB's Q4 results were encouraging, the company's outlook for the full year has raised concerns about its ability to maintain its profitability. Investors should be cautious about the company's valuation and monitor its progress closely as it navigates the challenges ahead.