MongoDB, Inc. Financial Performance Overview

Overview

MongoDB is a leading developer data platform company that empowers developers to create, transform, and disrupt industries through the power of software and data. The company’s core offering is the world’s leading modern general-purpose database, which can be deployed at scale in the cloud, on-premises, or in a hybrid environment. In addition to the database, MongoDB’s platform includes a suite of tightly integrated capabilities such as search, time series, and application-driven analytics.

MongoDB’s business model combines the developer mindshare and adoption benefits of open source with the economic benefits of a proprietary software subscription model. The company generates the majority of its revenue from subscription sales, with MongoDB Atlas, its hosted database-as-a-service offering, representing an increasing portion of total revenue.

Financial Performance Highlights

Three Months Ended July 31, 2024

• Total revenue increased 13% year-over-year to $478.1 million, driven by a 13% increase in subscription revenue.
• Net loss increased to $54.5 million, compared to $37.6 million in the prior-year period, primarily due to higher sales and marketing and research and development expenses.
• Operating cash flow was $62.2 million, compared to $28.4 million in the prior-year period.

Six Months Ended July 31, 2024

• Total revenue increased 17% year-over-year to $928.7 million, driven by an 18% increase in subscription revenue.
• Net loss increased to $135.1 million, compared to $91.8 million in the prior-year period, primarily due to higher sales and marketing and research and development expenses.
• Operating cash flow was $62.2 million, compared to $28.4 million in the prior-year period.

Key Factors Affecting Performance

Macroeconomic and Other Factors

MongoDB’s performance is subject to risks from the adverse macroeconomic environment, including slower economic growth, higher inflation, and higher interest rates. During the six months ended July 31, 2024, the macroeconomic conditions negatively impacted the company’s business, resulting in slower growth rates for existing MongoDB Atlas applications. MongoDB expects to continue experiencing macroeconomic headwinds on growth in the short term.

Growing Customer Base and Global Reach

MongoDB is focused on continuing to grow its customer base, which reached over 50,700 customers as of July 31, 2024, up from over 45,000 a year earlier. The company plans to invest in sales, marketing, and developer community outreach to drive customer acquisition.

Retaining and Expanding Revenue from Existing Customers

MongoDB aims to increase revenue from existing customers through renewals and expansion of subscriptions over time. The company’s net ARR expansion rate was approximately 119% as of July 31, 2024, down from historically over 120% due to a smaller contribution from expanding customers.

Revenue and Profitability Trends

MongoDB’s revenue growth has been driven by increased demand for its platform and related services. Subscription revenue, which accounts for the majority of total revenue, grew 13% and 18% in the three and six months ended July 31, 2024, respectively, compared to the prior-year periods.

However, the company’s profitability has been impacted by higher operating expenses, particularly in sales and marketing and research and development, as it continues to invest in growth. Net loss increased to $54.5 million and $135.1 million in the three and six months ended July 31, 2024, respectively, compared to $37.6 million and $91.8 million in the prior-year periods.

Strengths and Weaknesses

Strengths:

• Leading modern database platform with strong developer mindshare
• Growing customer base, including an increasing number of large enterprise customers
• Expanding suite of integrated capabilities beyond the core database
• Recurring revenue model with opportunities for land-and-expand growth

Weaknesses:

• Profitability impacted by ongoing investments in growth
• Exposure to macroeconomic headwinds affecting customer growth and expansion
• Reliance on cloud infrastructure providers, which can impact gross margins

Outlook

MongoDB expects to continue facing macroeconomic challenges in the short term, which may impact growth rates for existing MongoDB Atlas applications. However, the company remains focused on expanding its customer base, driving additional revenue from existing customers, and investing in product development and go-to-market initiatives to support long-term growth. While near-term profitability may be affected by these investments, MongoDB believes it is well-positioned to capitalize on the large and growing market opportunity for its developer data platform.