MongoDB Inc - Class A

MongoDB is a leading database software provider for modern, cloud-native applications. Recent results exceeded expectations, although the relatively stable growth in its core Atlas cloud database continued to trail elevated investor expectations. Management highlighted continued demand from enterprise customers and AI-related workloads, while its Enterprise Advanced self-managed product remained an important contributor to growth. However, our recent work suggests that AI is also increasing medium-term competitive risks by reducing switching costs and placing greater pricing pressure on the database layer. We reduced the position throughout the quarter and ultimately exited as we reassessed the long-term competitive landscape.

MongoDB is a leading database software provider for modern, cloud native applications that handle unstructured data. The company reported results that were ahead of expectations, though growth for its key Atlas product modestly decelerated and guidance came in below elevated investor expectations, reflecting a more measured near-term growth outlook. Shares declined on the lack of near-term estimate upside, and we maintained the position, given our view that MongoDB will continue to gain share with rising enterprise adoption, expanding AI-related use cases and improving financial performance.

MongoDB is a leading database software provider for modern, cloud-native applications that handle unstructured data. The company reported results ahead of expectations; however, growth in its key Atlas product modestly decelerated, and guidance fell short of elevated investor expectations, reflecting a more measured near-term outlook. Despite this, we maintained the position, given our view that MongoDB will continue to gain share with rising enterprise adoption, expanding AI-related use cases and improving financial performance.

Montaka believes that MongoDB is a competitively advantaged company that has been sold off too harshly in the recent market downturn. Despite the decline in stock prices, the manager emphasizes that the underlying earnings power of MongoDB remains strong, and they have the patience to hold onto such businesses. The portfolio's weighted look-through revenues, which include MongoDB, continue to show consistent double-digit annual growth, indicating that the fundamentals of the business are intact and poised for long-term success.

In Q3, we added a new position in MongoDB, Inc. as we believe it has strong long-term secular growth opportunities. The company is well-positioned within the technology sector, which continues to show robust growth fundamentals. Our focus remains on companies like MongoDB that are driving innovation and growth in areas such as AI infrastructure, which we see as critical for future expansion.

We sold our position in MongoDB (MDB) to fund higher-conviction opportunities within technology. The company remains a leader in zero-trust network security with strong execution and margin expansion, but much of this strength now appears reflected in the current price.