Shares of MongoDB Inc. rocketed more than 11% in after-hours trading after the provider of the leading NoSQL database for document management beat Wall Street revenue and profit projections for the third quarter.

The company also raised its guidance for the next fiscal year, providing investors confidence at an uncertain time for the economy.

The company’s quarterly revenue rose more than 52% year-over-year, to $109.4 million, well ahead of consensus estimates of $97.5 million. The loss of 26 cents per share was double the 13-cent loss of a year ago but better than consensus estimates of a loss of 28 cents.

Losses from operations grew from a year ago and gross margins shrunk, but executives stressed that the weaker numbers are part of a strategy. “Given our size and the early stage of our opportunity, our primary focus will be investing in the business,” said Chief Financial Officer Michael Gordon.

For the fourth quarter, MongoDB expects total revenue of between $109 million and $111 million with a net loss of about $16 million. The company raised its full-year 2020 revenue guidance to between $407 million and $409 million, up from previous guidance of $390 million to $395 million.

Executives attributed the momentum in the business to Atlas, the fully managed version of its flagship database that the company launched three years ago. Atlas now has 14,200 customers, more than double the 6,200 of a year ago, Gordon said.

In addition, legacy on-premises customers are expanding their cloud footprints, further fueling growth. The company said Atlas revenues grew 185% in the quarter and now account for 40% of MongoDB’s total revenue as well as a 20%-plus expansion of annual recurring revenue for the past six straight quarters.

The cloud offering has expanded MongoDB’s sales opportunities as well, said Chief Executive Dev Ittycheria (pictured). “Smaller and early-stage customers tend to want to go to the cloud as fast as possible, so Atlas has opened the aperture of customers we can go after and monetize,” he said. “We can monetize every interaction with every customers whether they’re a startup in a garage or a Fortune 500 company.”

Cloud-based self-service provisioning is also a major opportunity for the company because of the strong margins it provides, Gordon said. “If you look at the self-service behavior of customers signing up for Atlas, the expansion rate is even greater than in the direct sales channel,” he said.

Executives said they’re putting the pedal to the metal now that the company’s sales force has transitioned away from its previous focus on on-premises licensing to cloud subscriptions. “It took us a year to enable our sales force to sell a cloud service,” Ittycheria said. “In the second year we started seeing penetration into large and medium accounts. We’re now seeing a healthy mix” across all account sizes, he added.

Ittycheria said fears that Amazon Web Services Inc.’s rival DocumentDB database, which was launched early this year, would siphon away customers that run MongoDB on the AWS platform have failed to materialize. “Document DB failed about 65% of compatibility tests,” he said. “Customers didn’t get the value.”

Nevertheless, MongoDB is wasting no time in diversifying its cloud footprint. In October it announced a partnership with Alibaba Group Holding Ltd. that will give users in China access to an authorized cloud version of the database for the first time. Although Ittycheria said he’s “very excited” about the partnership with Alibaba, the company isn’t booking revenue from the deal as part of Atlas sales. “It’s still very early days,” he said.

The company is also on track to deliver general availability of full-text search and enterprise data lake features it announced last spring. “We’re feeling very bullish about both products,” Ittycheria said.

Photo: SiliconANGLE