BIG DATA

Shares of the database company MongoDB Inc. shot up both before and after the close of the regular trading session today following a solid first-quarter financial report that saw it blow past analysts’ expectations.

The company also posted solid guidance, in what was taken as another sign that fears of artificial intelligence killing the software industry are probably exaggerated.

MongoDB reported adjusted earnings of $1.32 per share, up from just $1 per share in the year-ago quarter and well ahead of Wall Street’s target of $1.19 per share. Revenue for the period increased 25% from a year earlier to $687.6 million, surpassing the analysts’ consensus estimate of $664.5 million by a comfortable margin. The company managed to eke out small profit too, with net income rising from a loss of $37.6 million in the year-ago quarter to $4.4 million today.

In terms of guidance, MongoDB said it’s looking for second-quarter earnings of between $1.51 and $1.61 per share on sales of $729 million to $734 million. If it can reach that target, it would be another crushing beat, as analysts are modeling earnings of just $1.29 per share on sales of $701 million.

MongoDB’s stock had advanced more than 10% during the regular trading session in anticipation of the report, and surged another 17% after-hours. Since the stock bottomed out in April, it has gained just over 44%. However, it’s still down 22% in the year to date amid broader pressure on software stocks.

Investors were likely also encouraged by MongoDB’s long term outlook, after it raised its forecast. For the full year, the company is looking for earnings of between $5.95 and $6.14 per share on sales of $2.92 billion to $2.96 billion. Previously, it was looking for an adjusted profit of $5.75 per share to $5.93 per share. Wall Street is targeting a full-year profit of $5.92 per share and revenue of around $2.9 billion.

Chief Executive CJ Desai (pictured) said the company raised its full-year guidance due to the strength it’s seeing with its multicloud database service, MongoDB Atlas. “We delivered better-than-expected first quarter results, as our go-to-market teams continue to execute well and capitalize on strong end-market demand for the MongoDB platform across enterprise use cases and emerging AI opportunities,” he said.

The company offers a document-oriented database service together with advanced capabilities such as vector search that are designed to support artificial intelligence applications. Desai told analysts on a conference call that although AI is not yet a material driver of revenue, “we are encouraged by the growth we are seeing with customers leveraging our AI capabilities.”

Constellation Research analyst Holger Mueller said the quarter marked the first time that MongoDB has been able to deliver a profit in sequential quarters, and that this bodes well for its future prospects. “The core driver is MongoDB Atlas, and it’s growing so well that Desai and his team are confident enough to raise already bullish guidance,” he said. “The platform-as-a-service layer has been a big winner in the agentic AI era, and MongoDB should benefit even more because enterprises increasingly want to consolidate their data platforms to support those agents.”

Today’s report follows a number of encouraging financial results from software companies this earnings season. Earlier this week, the customer relationship management software giant Salesforce Inc. delivered earnings results that crushed the Street’s expectations. Similarly, the financial services and human resources software maker Workday Inc. blew past analyst’s targets when it delivered its first-quarter results last week.

Software stocks finally appear to be rebounding following a prolonged selloff earlier in the year that was driven by fears of AI disruption. The iShares Expanded Tech-Software Sector ETF is up 28% since mid-April and now trading at its highest level since January, although it’s still down 10% in the year to date.