Delivering top- and bottom-line value to customers. Focusing on innovation. Making no excuses. Those are common threads among four companies on the Cloud Wars Horizon that delivered better than expected results in recent earnings reports.
The companies: MongoDB, UiPath, Couchbase, and Cloudflare.
There certainly are examples of companies that have consistently outperformed the market (among tech buyers, Walmart and Kroger are prime examples), but these cloud four enterprise software companies share key traits: Their software is addressing the economic pressures that companies face, they are deemed to be non-expendable when costs get cut, and they are aligning their value closely to customers’ current requirements.
Behind MongoDB’s Blowout Quarter
All four cloud enterprise software vendors featured in this analysis delivered impressive results, but MongoDB had the most impressive results.
The cloud database software developer blew away forecasts for revenue and adjusted earnings and raised full-year guidance. Revenue was $333.6 million, compared to an expected figure of $303.4 million. That was a 47% year-over-year increase. The company’s Atlas cloud database service now represents 63% of total revenue.
Adjusted earnings per share (non-generally accepted accounting principles or GAAP) were 23 cents, vs. an expected loss of 17 cents per share. The company’s (GAAP) net loss increased to $84.8 million vs. $81.3 million one year earlier.
MongoDB raised its full-year revenue forecast to $1.257 billion to $1.26 billion from the $1.20 billion to $1.21 billion range. It now expects adjusted earnings of 29 cents to 31 cents per share for the full year, whereas analysts had anticipated a 31-cents-per-share loss.
CEO Dev Ittycheria said the company’s products and architecture are resonating with developers and information technology (IT) leaders alike. “MongoDB continues to be the most popular modern data platform with developers. In the last 12 months alone, our open-source community server has been downloaded more than 150 million times from our website, which is more than in our entire company history through the beginning of 2020.”
He added, “IT decision-makers are also increasingly interested in consolidating vendors. By virtue of MongoDB’s broad support for a wide variety of use cases as a general-purpose platform, customers can run most workloads on MongoDB rather than a disjointed set of narrow point solutions that increase the cost and complexity of their data architecture.”
The company touted an impressive set of customer wins or expansions that include:
- Toyota Financial Services
- Ulta Beauty
- Vodafone
- Schwarz Group (Europe’s largest retail company)
- Okta
- Cisco
- Washington Post
Customers of that ilk go a long way toward producing a blowout quarter.
UiPath Cites Industry Successes
UiPath, the big automation vendor, said revenue grew 19 percent year-over-year to $262.7 million for its third fiscal quarter of 2023. Annual recurring revenue, or ARR, grew 36% to $1.11 billion. Earnings of 5 cents per share dramatically exceeded estimates of 4 cents per share of loss.
Once the current quarter closes, UiPath expects to report revenue of about $278 million and ARR of $1.175 billion as of Jan. 31. The outlook was bumped up from previous guidance.
Co-CEO Rob Enslin cited growth in sales to larger customers as a key contributor: The total number of customers delivering ARR over $100,000 grew to over 1,700, which includes over 200 customers at over $1 million.
Enslin said the company is seeing particular success in healthcare, telecommunications, and federal government verticals and said UiPath is aligning sales teams around verticals including healthcare and financial services.
He also noted the company is increasingly focused on selling to the C-suite, with particular focus on the CIO — in so doing, it aims to define business outcomes that resonate with top executives and accelerate customer time to value.
In another indicator of UiPath’s expanding reach, the company announced earlier this month that Orica, a mining and infrastructure solutions provider, will use UiPath’s Test Suite solution for application testing Orica will be deploying the UiPath Test Suite solution to automate application testing, allowing quality assurance (QA) teams to identify and address any underlying issues before deployment, without impacting existing workflows. This transforms testing from a cost center to a value center, allowing Orica to rapidly deliver value on its software investments, while minimizing the cost and risk associated. Orica is also planning to migrate and scale its existing enterprise automation program with UiPath and utilize Test Suite to enable successful upgrades of its SAP S4 HANA software.
Couchbase Rides Capella Cloud Database
The developer of cloud database software reported quarterly revenue of $38.6 million, up 25% year over year, as well as subscription revenue of $35.7 million, up 23%. Total ARR (annual recurring revenue) was $151.7 million, an increase of 24%, or 28% on a constant currency basis. Remaining performance obligation, or RPO (which tracks future revenue from current contracts), was $159.6 million, up 28% year over year.
Couchbase‘s quarterly loss of 22 cents per share was significantly better than the forecast 33 cents per share.
The company is projecting full-year 2023 revenue of $151.5 million and total ARR of $161.5 million at the midpoint.
“We exited the quarter with 658 customers, an increase of 26 from Q2 and saw meaningful new logo contribution from Capella, the company’s flagship Cloud database,” CEO Matt Cain said in prepared remarks.
“Despite a more challenging macroeconomic environment, we are well on our way to achieving what we laid out to do this year — accelerate growth, grow our cloud mix, improve our go-to-market efficiency and drive operational leverage,” Cain added.
Cloudflare’s Strengths
Cloudflare develops cloud security and management software and operates a content delivery network or CDN. Its Q3 2022 results were robust.
Revenue totaled $253.9 million, a 47% increase from one year earlier and, for the first time, the company surpassed $1 billion in annualized revenue. Net loss of $42.5 million remains steep but was dramatically improved from $107 million one year ago. Non-GAAP net income was $19.1 million, compared to $1.4 million in the third quarter of 2021.
The company secured 159 new customers spending over $100,000 per year for a total of 1,908. Those customers have increased 51% year over year.
The number of customers with over $500,000 in annual spend grew 88% year over year. And customers over $1 million grew 63% year over year.
For the full year fiscal 2022, Cloudflare said it now expects total revenue of $974.0 to $975.0 million and non-GAAP net income per share of 11 cents to 12 cents.
CEO Matthew Prince painted an optimistic picture based on the total addressable market for Cloudflare: “Even as we achieve $1 billion, we have penetrated less than 1% of our identified market for products we already have available today. That’s why we’re confident we’re on the path to organically achieved $5 billion in annualized revenue over the next five years,” he said.
“And while today’s global economy will continue to present headwinds in quarters ahead, as we look further out, we are confident we have the products already in market to get us there.”
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