MongoDB Q1 FY1/26

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Toast

I think that MDB might, in time, be toast. Sixteen years after the commercial launch of the database product, the company has just $2bn of TTM revenue and is maybe the 5th largest database provider by revenue (source - Wikipedia). It has very little in the way of deferred revenue, so if it stopped selling new stuff tomorrow, the revenue line’s time-to-live would be a lot shorter than it should be if they had an Oracle-like revenue model. And it still only makes 5% cashflow margins despite growing at just 19% pa. This is not what good looks like. 19% growth, how about 20%+ cashflow margins. 5% margins, how about 30-40% growth. 5 and 19, not good.

I think the company will be around a long time but I think it is going to be squeezed between a newly-resurgent Oracle (who finally relented on the cloud being a thing) and the next generation of database vendors that will come along to serve newer, more automated, less people-driven enterprise applications.

The stock has been in a downtrend since November 2021. Unlike the best of the tech sector, it didn’t make new highs in the 2023-4 bull market. There has been a bounce since the post-Liberation Day lows but I don’t see a redemption arc here, I see a bounce which at some point will run out of steam.

We move to Not Rated on the stock and this will be our last coverage note.

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Cestrian Capital Research, Inc - 6 June 2025