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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: You're listening to Bloomberg Business Week with Carol Masser and

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Speaker 2: tim Stenoveek on Bloomberg Radio.

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Speaker 1: We've been watching shares of Mango dB in a record

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Speaker 1: drop for the stock. The company did report its latest result.

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Speaker 1: It gave a weaker than expected forecast for the full

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Speaker 1: year revenue and first quarter adjusted earnings. It is a

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Speaker 1: database software company. It's a space that we've been focusing

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Speaker 1: on that has come under some pressure because of the

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Speaker 1: AI scare trade or what people are calling at joining

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Speaker 1: us right now to talk about the company. Is Mango

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Speaker 1: DB's CEO CJ Decide, He joins us now investors are

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Speaker 1: weighing in. They're not happy, as we said, a record

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Speaker 1: drop for the stock. What can you tell us about

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Speaker 1: the outlook and the business?

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Speaker 3: So, Carol, we had fantastic que four and it was

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Speaker 3: two handle across the board from top line and bottom line,

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Speaker 3: so twenty seven percent revenue growth, twenty three percent operating margin.

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Speaker 3: Our Atlas which is our cloud business, grow twenty nine percent.

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Speaker 3: And so when I think about that and also add

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Speaker 3: net retention rate was one twenty one percent, as in,

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Speaker 3: our customers are expanding with us, So we exceeded top

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Speaker 3: range of our guidance across the top line and the

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Speaker 3: bottom line for Q four and going into fiscal twenty

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Speaker 3: seven as in the new fiscal yer we are in.

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Speaker 3: We feel very good about the business. The expectations were high,

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Speaker 3: and the expectations were high from the buy side, So

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Speaker 3: there was some sort of disappointment that is currently being

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Speaker 3: played out from the market reaction perspective. But I can

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Speaker 3: tell you being speaking to two hundred plus customers in

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Speaker 3: last one hundred days. I'm a CEO for last one

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Speaker 3: hundred days, and I feel very good about the strength

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Speaker 3: of our business. And we always guide fruiting for the

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Speaker 3: year and that's what we guided, and that's how markets

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Speaker 3: are reacting reacting.

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Speaker 1: CJ.

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Speaker 2: What are you hearing from those customers about agentic AI

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Speaker 2: and how they might be using that technology to disintermediate

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Speaker 2: or to you know, grabbing, like using open source adoption.

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Speaker 2: I'm curious about, like in an AI led world, how

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Speaker 2: you retain an advantage here and what message you have

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Speaker 2: for investors who are concerned that, yeah, AI is a

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Speaker 2: threat to this company.

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Speaker 3: So absolutely, Tim, Here's what I would start with first,

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Speaker 3: is we are infrastructure software and infrastructure software is an

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Speaker 3: extremely hard thing to build, and you cannot just use

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Speaker 3: your way to a coding agent to build infrastructure software.

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Speaker 3: And that's what you are seeing with our net retention

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Speaker 3: rate of world class one hundred and twenty one in

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Speaker 3: Q four. So that's one thing when you are infrastructure software,

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Speaker 3: not like other software that may be at the application layer,

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Speaker 3: which is where your concern is. What we are seeing

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Speaker 3: being played out with customers is like tail of two

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Speaker 3: positive cities. One I would say enterprises continue to build.

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Speaker 3: We use an example in our earnings remarks JP Morgan

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Speaker 3: Chase real time applications, many mission critical application including emerging

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Speaker 3: AI workloads are being built on Mango dB, and you

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Speaker 3: contrast that with AI native companies. I'm in Palo Alto today,

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Speaker 3: right here in Silicon Valley, and you see companies that

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Speaker 3: we mentioned like eleven Labs, which is crushing it now

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Speaker 3: at eleven billion dollar valuation. You guys are just talking

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Speaker 3: about companies going public, but eleven billion dollar valuation completely

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Speaker 3: built on Mongo dB. So whether it's AI native company

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Speaker 3: that is a disruptive force in the software market, or

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Speaker 3: whether it's a large bank or a large healthcare company

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Speaker 3: or a large retailer building agentic commerce. They are also

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Speaker 3: building on mango DB's so so far chain in customer conversations,

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Speaker 3: I do not hear, Hey, CJ, do we really need

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Speaker 3: mango dB. Our business is very strong, both for large

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Speaker 3: enterprises building AI workloads or AI companies where AI is

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Speaker 3: their business right here in Silicon Valley or maybe Seattle

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Speaker 3: or maybe New York City are also building on Mango dB,

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Speaker 3: from frontier model companies to domain specific AI companies that

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Speaker 3: are being built right now.

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Speaker 1: All right, So c do we get this like this

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Speaker 1: idea of mango dB as this foundational data platform for AI.

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Speaker 1: And this is part of why the acquisition of Voyage

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Speaker 1: AI also Atlas factor, sirch So what percentage of new

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Speaker 1: bookings are specifically AI related and and how are you

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Speaker 1: kind of measuring that native or AI native customer traction?

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Speaker 1: And when do you expect AI to become a material

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Speaker 1: revenue contributor and maybe that's what investors are looking for.

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Speaker 3: Yeah, Cal, you know this is the question I got

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Speaker 3: asked on the callbacks after our print, and as I stated,

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Speaker 3: we had a fantastic print and on the guidance we

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Speaker 3: also gave guidance according to our long range plan. Okay,

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Speaker 3: so that's what Given that in the large enterprises cal

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Speaker 3: we are still seeing a lot of experimentation done being

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Speaker 3: on AI, whether it's an airline or retailer or a

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Speaker 3: bank and so on. I haven't seen AI agents at scale,

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Speaker 3: and that's from my standpoint on behalf of Mango dB customers.

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Speaker 3: That is an upside to our guidance that when AI

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Speaker 3: really takes off at an airline or a bank, or

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Speaker 3: a retailer or a healthcare company, that would be a

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Speaker 3: tailwind because somebody is concerned about, hey, is Mango dB

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Speaker 3: relevant in AI? We are one hundred percent relevant in AI.

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Speaker 3: And then I look at AI native companies. What we

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Speaker 3: have stated is they are you know, most of the

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Speaker 3: AA native companies, including frontier model companies that are using

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Speaker 3: Mango dB today for key use cases. That is today

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Speaker 3: a small percent of our revenue, but growing very fast.

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Speaker 3: And I think the biggest lift we are going to

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Speaker 3: get is that when things are at scale from an

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Speaker 3: infront standpoint, and we would benefit and these companies would

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Speaker 3: benefit too.

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Speaker 2: I think some investors might have questions about organizational changes

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Speaker 2: at the company, like the appointment of Erica Velini as

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Speaker 2: chief customer officer. What specific changes are being made to

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Speaker 2: the sales organization? How are you thinking about compensation structure

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Speaker 2: differently customer segmentation strategy. How do you ensure execution continuity

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Speaker 2: during the transition?

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Speaker 3: Absolutely so, Tim, I'll start with the first principles. When

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Speaker 3: I think about first principles, Mango dB nailed two key transitions,

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Speaker 3: which makes us, from my standpoint, true AI winner number one.

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Speaker 3: They moved to cloud in twenty seventeen, starting with AWS

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Speaker 3: and all other hyperscalers followed. Okay, that was in twenty seventeen,

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Speaker 3: and about a couple of years ago they switched to

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Speaker 3: consumption model that you only pay what you use. Sales

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Speaker 3: reps only get paid when customer uses Mongo dB atlas

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Speaker 3: for example, or whatever data they put in Mango dB

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Speaker 3: atlas at a database layer. So these two transitions versus

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Speaker 3: a seed based model and other things is definitely a

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Speaker 3: great thing for us. We are cloud agnostic as well

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Speaker 3: as we are fully consumption based. Now on the organization,

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Speaker 3: our retention rate and this was very important to be

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Speaker 3: one one, it was percent, It was one twenty percent

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Speaker 3: before one nineteen percent the year ago. This improving just

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Speaker 3: shows the durability of our platform. Okay, Erica's focus is,

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Speaker 3: having worked at iconic companies in the past, is to

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Speaker 3: serve our customers at the highest level as they onboard

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Speaker 3: agentic workloads or core workloads, and making sure they get

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Speaker 3: the value out of Mango deb and are successful with

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Speaker 3: our platform. So that's one piece. We are also currently

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Speaker 3: searching for a chief revenue officer. However, Paul Paul is

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Speaker 3: going to be with us through end of quarter one

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Speaker 3: and help us transition through Q two while we do

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Speaker 3: the search. We are in the latter stages of the search. However,

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Speaker 3: the leadership team that Paul has for Americas, for Europe

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Speaker 3: and for Asia Pacific Japan, I have full confidence in

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Speaker 3: the team. I don't see disruption risk. We are set

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Speaker 3: already annual plans for every salesperson and no compensation changes.

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Speaker 1: CJ. Just to wrap up here and again, I'm looking

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Speaker 1: at shares. They were down as much as twenty nine

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Speaker 1: percent today, still down about twenty percent off their lows,

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Speaker 1: but nonetheless investors still overwhelmingly selling here. I'm just curious.

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Speaker 1: I want to go back to your conservative guidance because

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Speaker 1: maybe there is some clarification what level of conservative conservatism

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Speaker 1: is embedded in this fiscal year twenty twenty seven outlook,

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Speaker 1: and what are the key variables that could drive the upside,

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Speaker 1: because I think folks were surprised that this guidance, which

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Speaker 1: you say tends to be conservative, was on the back

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Speaker 1: of improved net revenue retention rates which approved one hundred

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Speaker 1: and twenty one percent in the fourth quarter versus one

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Speaker 1: nineteen one to twenty in the previous quarter. So I

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Speaker 1: think people are trying to square this that there was

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Speaker 1: improvement there and yet here's the conservativetism. So how much

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Speaker 1: how conservative are you being in this fiscal year outlet?

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Speaker 1: Maybe that might help in terms of clarifying some stuff

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Speaker 1: for investors.

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Speaker 3: Cal Thank you for asking that question. One of the

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Speaker 3: interesting things we saw was that when we guided, they

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Speaker 3: said the midpoint of our guidance was below consensus. Okay,

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Speaker 3: the midpoint of our guidance was below consensus. We thought

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Speaker 3: that they would look at our high range of the guidance,

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Speaker 3: which was righted consensus for fiscal year twenty seven. So

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Speaker 3: that's point number one. Point number two the visibility, of course,

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Speaker 3: in a consumption business, we have very good visibility for

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Speaker 3: next two quarters. And you know, as we plan out

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Speaker 3: the year, we feel pretty good about our forecasting. But

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Speaker 3: kel to answer your question, like the AI tailwinds. When

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Speaker 3: I say I tailwinds, AI companies are building on Mango

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Speaker 3: dB or enterprises are building agents on Mango dB, but

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Speaker 3: they are not scaling as in they're figuring out their

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Speaker 3: own on how we I can scale. But as they scale,

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Speaker 3: that benefit is not baked into our guidance. Okay, So

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Speaker 3: that's number one. And as we continue to execute, we

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Speaker 3: decided with what we just talked about with the sales

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Speaker 3: leadership change as well, to be prudent rather than over

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Speaker 3: our skills