“While sentiment can change quickly, the underlying trends don’t change as fast”
Database company MongoDB has taken a bold stab at quantifying the likely financial impact of the coronavirus outbreak on its business over the forthcoming year, predicting a $15 million – $25 million hit from the pandemic in its fiscal 2021.
New York-based MongoDB, which provides a non-relational database used by the likes of Adobe, AstraZeneca, Barclays, Cisco, eBay, Google and SAP, now expects fiscal 2021 revenues of $510 million to $530 million. It reported FY earnings this week.
Pushed by analysts on an earnings call about how it reached the figure, CEO Dev Ittycheria said it had been based on anticipation of a sharp slowdown in overall economic activity in the first half of the year and recovery in the second; a position that may yet prove to be somewhat optimistic: as reported by Computer Business Review, global B2B trade deals crashed 62 percent in the second week of March.
But the CEO, an entrepreneur and venture capitalist who sold BladeLogic – the data centre automation specialist he co-founded – to BMC for $800 million in 2008 said the company is “trying to take a step back from an overall perspective, we, as a management team, have very long-term orientation.
He added: “We’re very, very early on in the stage of trying to capitalise on our opportunity. We will continue to invest, as we see good rates of return on the investments that we’re making. We see that in both the R&D side as well as in the sales and marketing side. Certainly, if there were to be macroeconomic factors that would change or other sides that sort of eroded or degraded those investment opportunities, we would modulate the levels of investment appropriately.”
He told Stifel’ Brad Reback on an earnings call late Tuesday: “I’m old enough, Brad, to tell you that I also lived through 2000 and 2001 as well the 2008 financial crisis]. So, I was a public company officer then, and I was a public company officer in 2008-2009. And so, I would tell you that we believe that, while sentiment can change quickly, the underlying trends don’t change as fast.”
“So, deals in progression typically still happen. It’s maybe deals, who start early in the sales cycle that may have — end up having more approvals required, and so, sales cycles may start lengthening. We see minimal impact right now. But prudence dictated that based on our judgment experience and having seen this before, that some impact, given the macroeconomic environment, was warranted.”
MongoDB reported total revenue of $421.7 million for the full year fiscal 2020, an increase of 58 percent year-on-year. Subscription revenue rose 61 percent. Net losses widened to $175 million, from $99 million the previous year. MongoDB reported that its co-founder and CTO Eliot Horowitz would step down as CTO and director as of July 10, 2020. He will remain as a technical advisor to MongoDB.