MongoDB COO: GenAI Holds Long-Term Promise

MongoDB sees significant long-term opportunities from generative AI but acknowledges the near-term impact of macroeconomic headwinds on consumption growth, Chief Operating Officer Michael Gordon said Tuesday.

Speaking at the Citi Global TMT Conference, Gordon outlined three key areas where GenAI is poised to benefit MongoDB: increased developer productivity leading to more applications, a shift towards modern applications favoring MongoDB's platform, and accelerated migration from legacy systems.

"[GenAI] should allow developers to be more productive, [and] more applications will be created," said Gordon, adding that the company expects the overall database market to benefit.

However, he cautioned that widespread GenAI adoption will take time. "I don't think that will materially impact us in fiscal '25," Gordon explained. "I tend to think about it more as a three or five year time horizon."

Addressing recent business trends, Gordon acknowledged that MongoDB's Q1 performance was impacted by internal operational challenges, which the company has since addressed. While new business acquisition rebounded in Q2, consumption growth remains tied to macroeconomic factors.

"Where we have been really affected in macro is with the growth of existing workloads," Gordon stated. "[Our] underlying usage...is very closely tied to the end user activities...and mirrors economic activity."

Gordon expressed confidence in MongoDB's ability to navigate the current environment. The company's focus remains on winning new workloads, ensuring sales teams target high-growth opportunities, and capitalizing on the long-term potential of GenAI. The recent earnings beat and guidance raise suggest that MongoDB is successfully executing on these initiatives, even as it acknowledges the persistent challenges posed by the macroeconomic climate.

These comments came just days after MongoDB announced strong second-quarter results that surpassed analyst expectations. The company reported adjusted earnings of 70 cents per share on revenue of $478.1 million, exceeding consensus estimates of 49 cents and $464.1 million respectively. MongoDB also raised its full-year guidance, prompting a surge in its share price.

CEO Dev Ittycheria attributed the positive results to healthy new business wins and better-than-expected consumption of its Atlas cloud database service, despite ongoing macroeconomic uncertainties.

MongoDB's stock is now trading at $290, up approximately 25% since last week.