MongoDB, Inc. Announces Third Quarter Fiscal 2020 Financial Results
NEW YORK, Dec. 9, 2019 /PRNewswire/ -- MongoDB, Inc. (NASDAQ: MDB), the leading, modern general purpose database platform, today announced its financial results for the third quarter ended October 31, 2019.
"MongoDB's terrific third quarter results are the latest example of how the powerful combination of our modern data platform and sophisticated go-to-market efforts are driving increased adoption by both new and existing customers," said Dev Ittycheria, President and Chief Executive Officer of MongoDB. "The rapid growth of Atlas, which now comprises 40% of our business, is a clear demonstration that customers of all sizes recognize the value and flexibility of a managed cloud database-as-a-service."
"As we look ahead, Atlas's growing scale provides a tremendous opportunity to develop even closer relationships with our customers and enhance our value proposition. Our focus is to continue delivering new innovations on our data platform while ensuring our go-to-market efforts make it increasingly easy for customers to consume Atlas."
Third Quarter Fiscal 2020 Financial Highlights
-- Revenue: Total revenue was $109.4 million in the third quarter fiscal
2020, an increase of 52% year-over-year. Subscription revenue was $103.8
million, an increase of 56% year-over-year, and services revenue was
$5.6 million, an increase of 8% year-over-year.
-- Gross Profit: Gross profit was $77.3 million in the third quarter fiscal
2020, representing a 71% gross margin, compared to 75% in the year-ago
period. Non-GAAP gross profit was $79.3 million, representing a 72%
non-GAAP gross margin.
-- Loss from Operations: Loss from operations was $38.7 million in the
third quarter fiscal 2020, compared to $20.2 million in the year-ago
period. Non-GAAP loss from operations was $14.3 million, compared to
$7.8 million in the year-ago period.
-- Net Loss: Net loss was $42.4 million, or $0.75 per share, based on 56.4
million weighted-average shares outstanding in the third quarter fiscal
2020. This compares to $22.5 million, or $0.43 per share, based on 52.7
million weighted-average shares outstanding, in the year-ago period.
Non-GAAP net loss was $14.6 million or $0.26 per share. This compares to
$6.9 million or $0.13 per share in the year-ago period.
-- Cash Flow: As of October 31, 2019, MongoDB had $426.4 million in cash,
cash equivalents, short-term investments and restricted cash. During the
three months ended October 31, 2019, MongoDB used $11.5 million of cash
from operations, $0.8 million in capital expenditures and $0.8 million
in principal repayments of finance leases, leading to negative free cash
flow of $13.1 million, compared to negative free cash flow of $9.7
million in the year-ago period.
We adopted the new revenue recognition accounting standard Accounting Standards Codification ("ASC") 606 effective as of January 31, 2019 and applied as of February 1, 2018, on a full retrospective basis. All amounts and disclosures in this press release have been updated to comply with the new revenue recognition standard.
A reconciliation of each Non-GAAP measure to the most directly comparable GAAP measure has been provided in the financial statement tables included at the end of this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
Third Quarter Fiscal 2020 and Recent Business Highlights
-- Continued product innovation and expanded capabilities of the MongoDB
data platform. Added auto-scaling, a major new feature for MongoDB
Atlas, which brings fully automated capacity management to customers'
managed MongoDB databases. When enabled, Atlas will autonomously adjust
instance sizes up or down as needed by using predictive modeling and
proven practices developed from managing tens of thousands of MongoDB
deployments.
-- Continued to expand our global partner ecosystem with the announcement
of a new partnership with Alibaba Cloud, the data intelligence backbone
of Alibaba Group. MongoDB enjoys enormous global popularity with
developers and China has been one of the countries with the most MongoDB
downloads for the past several years. Now, users in China have access to
an authorized MongoDB-as-a-Service for the first time. Customers of
Alibaba Cloud are able to use the managed offering from Alibaba Cloud's
data centers globally.
-- Deepened our leadership bench with the addition of Francisco (Frank)
D'Souza to the Board of Directors and the promotion of Sahir Azam to
Chief Product Officer. D'Souza co-founded Cognizant, one of the world's
leading professional services companies, and served as its CEO during a
period of tremendous growth to $16 billion in revenue. D'Souza adds
strong experience scaling a global technology company with a large
market opportunity. Azam previously served as Senior Vice President of
MongoDB's cloud offerings, including MongoDB Atlas, which has grown to a
$175M+ run-rate business with more than 14,200 customers in just three
years. In his new role, Azam will oversee management of MongoDB's entire
product portfolio.
Business Outlook
Based on information as of today, December 9, 2019, MongoDB is issuing the following financial guidance for the fourth quarter and full year fiscal 2020.
Fourth Quarter Fiscal 2020
Full Year Fiscal 2020
Revenue
$109.0 million to $111.0 million
$407.2 million to $409.2 million
---
Non-GAAP Loss
from Operations
$(16.5) million to $(15.5) million
$(58.2) million to $(57.2) million
---
Non-GAAP Net
Loss per Share
$(0.29) to $(0.27)
$(1.04) to $(1.02)
---
Reconciliation of non-GAAP loss from operations and non-GAAP net loss per share guidance to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
Conference Call Information
MongoDB will host a conference call today, December 9, 2019, at 5:00 p.m. (Eastern Time) to discuss its financial results and business outlook. A live webcast of the call will be available on the "Investor Relations" page of MongoDB's website at https://investors.mongodb.com. To access the call by phone, dial 888-317-6016 (domestic) or 412-317-6016 (international). A replay of this conference call will be available for a limited time at 877-344-7529 (domestic) or 412-317-0088 (international). The replay conference ID is 10137152. A replay of the webcast will also be available for a limited time at https://investors.mongodb.com.
About MongoDB
MongoDB is the leading modern, general purpose database platform, designed to unleash the power of software and data for developers and the applications they build. Headquartered in New York, MongoDB has more than 15,900 customers in over 100 countries. The MongoDB database platform has been downloaded over 80 million times and there have been more than one million MongoDB University registrations.
Forward-Looking Statements
This press release includes certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements concerning our financial guidance for the fourth fiscal quarter and full year fiscal 2020, our future growth, the potential of MongoDB Atlas, our ability to transform the global database industry and to capitalize on opportunities and the anticipated impact of our go-to-market, growth and product strategies. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "project," "will," "would" or the negative or plural of these words or similar expressions or variations. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control including, without limitation: our limited operating history; our history of losses; failure of our database platform to satisfy customer demands; the effects of increased competition; our investments in new products and our ability to introduce new features, services or enhancements; our ability to effectively expand our sales and marketing organization; our ability to continue to build and maintain credibility with the developer community; our ability to add new customers or increase sales to our existing customers; our ability to maintain, protect, enforce and enhance our intellectual property; the growth and expansion of the market for database products and our ability to penetrate that market; our ability to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions; our ability to maintain the security of our software and adequately address privacy concerns; our ability to manage our growth effectively and successfully recruit and retain additional highly-qualified personnel; the price volatility of our common stock; and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in our Securities and Exchange Commission ("SEC") filings and reports, including our Annual Report on Form 10-K filed on April 1, 2019 and our Quarterly Report on Form 10-Q filed on September 5, 2019, as well as future filings and reports by us. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.
Non-GAAP Financial Measures
This press release includes the following financial measures defined as non-GAAP financial measures by the SEC: non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share and free cash flow. Non-GAAP gross profit and non-GAAP gross margin exclude stock-based compensation expense. Non-GAAP loss from operations, non-GAAP net loss and non-GAAP net loss per share exclude:
-- stock-based compensation expense;
-- accelerated charges associated with the New York City office move in the
third quarter fiscal 2019;
-- amortization of intangible assets for the acquired technology and
acquired customer relationships associated with the purchase of Realm,
as well as for the prior acquisitions of mLab and WiredTiger;
-- amortization of the founder holdback associated with the mLab purchase
that was deemed to be compensation expense for GAAP purposes;
-- acquisition costs associated with the purchase of Realm in fiscal 2020
and mLab in fiscal 2019; and
-- in the case of non-GAAP net loss, non-cash interest expense related to
our convertible senior notes and a non-recurring income tax benefit
associated with the acquisition of Realm intangible assets.
MongoDB uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating MongoDB's ongoing operational performance. MongoDB believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in MongoDB's industry, many of which present similar non-GAAP financial measures to investors.
Free cash flow represents net cash used in operating activities less capital expenditures, principal repayments of finance lease liabilities and capitalized software development costs, if any. MongoDB uses free cash flow to understand and evaluate its liquidity and to generate future operating plans. The exclusion of capital expenditures, principal repayments of finance lease liabilities and amounts capitalized for software development facilitates comparisons of MongoDB's liquidity on a period-to-period basis and excludes items that it does not consider to be indicative of its liquidity. MongoDB believes that free cash flow is a measure of liquidity that provides useful information to investors in understanding and evaluating the strength of its liquidity and future ability to generate cash that can be used for strategic opportunities or investing in its business in the same manner as MongoDB's management and board of directors.
Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In particular, other companies may report non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share, free cash flow or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, as presented below. This earnings press release and any future releases containing such non-GAAP reconciliations can also be found on the Investor Relations page of MongoDB's website at https://investors.mongodb.com.
Investor Relations
Brian Denyeau
ICR for MongoDB
646-277-1251
ir@mongodb.com
Media Relations
Mark Wheeler
MongoDB
866-237-8815 x7186
communications@mongodb.com
MONGODB, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
October 31, 2019
January 31, 2019
Assets
Current assets:
Cash and cash equivalents $151,307 $147,831
Short-term investments 274,560 318,139
Accounts receivable, net of allowance for doubtful accounts of $2,213 and $1,539 as of
October 31, 2019 and January 31, 2019, respectively 67,506 72,808
Deferred commissions 19,717 15,878
Prepaid expenses and other current assets 12,531 11,580
Total current assets 525,621 566,236
Property and equipment, net 59,418 73,664
Operating lease right-of-use assets 12,151 -
Goodwill 55,484 41,878
Acquired intangible assets, net 36,982 15,894
Deferred tax assets 2,206 1,193
Other assets 43,123 34,611
Total assets $734,985 $733,476
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $2,124 $2,153
Accrued compensation and benefits 31,335 25,982
Operating lease liabilities 4,180 -
Other accrued liabilities 29,094 14,169
Deferred revenue 137,789 122,333
Total current liabilities 204,522 164,637
Deferred rent, non-current - 2,567
Deferred tax liability, non-current 114 106
Operating lease liabilities, non-current 9,044 -
Deferred revenue, non-current 14,601 15,343
Convertible senior notes, net 226,690 216,858
Other liabilities, non-current 61,179 69,399
Total liabilities 516,150 468,910
Stockholders' equity:
Class A common stock, par value of $0.001 per share; 1,000,000,000 shares authorized as of
October 31, 2019 and January 31, 2019; 47,583,572 and 36,286,573 shares issued and
outstanding as of October 31, 2019 and January 31, 2019, respectively 48 36
Class B common stock, par value of $0.001 per share; 100,000,000 shares authorized as of
October 31, 2019 and January 31, 2019; 9,194,461 and 18,134,608 shares issued as of
October 31, 2019 and January 31, 2019, respectively; 9,095,090 and 18,035,237 shares
outstanding as of October 31, 2019 and January 31, 2019, respectively 9 18
Additional paid-in capital 825,577 754,612
Treasury stock, 99,371 shares (repurchased at an average of $13.27 per share) as of
October 31, 2019 and January 31, 2019 (1,319) (1,319)
Accumulated other comprehensive income (loss) 189 (174)
Accumulated deficit (605,669) (488,607)
Total stockholders' equity 218,835 264,566
Total liabilities and stockholders' equity $734,985 $733,476
MONGODB, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
Three Months Ended October 31, Nine Months Ended October 31,
2019 2018 2019 2018
Revenue:
Subscription $103,827 $66,604 $281,977 $167,759
Services 5,614 5,178 16,220 13,773
Total revenue 109,441 71,782 298,197 181,532
Cost of revenue(1):
Subscription 26,497 13,248 73,465 35,434
Services 5,694 4,510 17,100 12,567
Total cost of revenue 32,191 17,758 90,565 48,001
Gross profit 77,250 54,024 207,632 133,531
Operating expenses:
Sales and marketing(1) 57,015 36,080 156,659 105,814
Research and development(1) 39,387 23,179 107,395 63,254
General and administrative(1) 19,562 14,986 50,541 38,467
Total operating expenses 115,964 74,245 314,595 207,535
Loss from operations (38,714) (20,221) (106,963) (74,004)
Other loss, net (3,110) (2,299) (8,916) (2,140)
Loss before provision for income taxes (41,824) (22,520) (115,879) (76,144)
Provision (benefit) for income taxes 559 (33) (2,920) 680
Net loss $(42,383) $(22,487) $(112,959) $(76,824)
Net loss per share, basic and diluted $(0.75) $(0.43) $(2.03) $(1.49)
Weighted-average shares used to compute net loss per share, basic and diluted 56,411,779 52,702,526 55,600,484 51,431,021
____________________
(1) Includes stock?based compensation expense as
follows:
Three Months Ended October 31, Nine Months Ended October 31,
2019 2018 2019 2018
Cost of revenue-subscription $1,274 $555 $3,476 $1,403
Cost of revenue-services 793 335 2,107 800
Sales and marketing 6,844 3,090 17,728 7,437
Research and development 6,879 3,131 17,513 8,241
General and administrative 3,577 3,153 10,214 8,969
Total stock?based compensation expense $19,367 $10,264 $51,038 $26,850
MONGODB, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended October 31, Nine Months Ended October 31,
2019 2018 2019 2018
Cash flows from operating activities
Net loss $(42,383) $(22,487) $(112,959) $(76,824)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 3,793 1,711 9,824 3,334
Stock-based compensation 19,367 10,264 51,038 26,850
Amortization of debt discount and issuance costs 3,335 3,139 9,833 4,233
Amortization of finance right-of-use assets 994 2,982 -
Amortization of operating right-of-use assets 936 2,055 -
Non-cash interest on finance lease liabilities 659 1,823 659
Deferred income taxes (309) (398) (4,541) (351)
Accretion of discount on short-term investments (868) (1,497) (3,619) (2,567)
Change in operating assets and liabilities:
Accounts receivable (1,097) (2,686) 5,123 3,783
Prepaid expenses and other current assets 314 (611) 189 (1,451)
Deferred commissions (5,159) (6,230) (12,205) (9,585)
Other long-term assets (175) (79) (148) (33)
Accounts payable (592) 229 (152) (165)
Deferred rent 341 1,258
Accrued liabilities 7,891 5,227 16,176 7,184
Operating lease liabilities (895) (1,979) -
Deferred revenue 2,565 4,810 14,898 11,166
Other liabilities, non-current 740 740 -
Net cash used in operating activities (11,543) (7,608) (20,922) (32,509)
Cash flows from investing activities
Purchases of property and equipment (754) (2,137) (2,350) (3,698)
Acquisition, net of cash acquired (38,629) -
Proceeds from maturities of marketable securities 130,000 88,000 410,000 206,000
Purchases of marketable securities (154,505) (69,269) (363,530) (369,736)
Net cash provided by (used in) investing activities (25,259) 16,594 5,491 (167,434)
Cash flows from financing activities
Proceeds from exercise of stock options, including early exercised stock options 1,933 9,525 13,283 17,631
Proceeds from the issuance of common stock under the Employee Stock Purchase Plan 6,394 5,626
Repurchase of early exercised stock options (4) (18) (35) (327)
Principal repayments of finance leases (798) (798) -
Proceeds from borrowings on convertible senior notes, net of issuance costs (2,016) 291,145
Payment for purchase of capped calls (37,086)
Proceeds from tenant allowance related to build to suit lease 257 633
Net cash provided by financing activities 1,131 7,748 18,844 277,622
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 295 (18) 62 (101)
Net increase (decrease) in cash, cash equivalents, and restricted cash (35,376) 16,716 3,475 77,578
Cash, cash equivalents, and restricted cash, beginning of period 187,198 123,289 148,347 62,427
Cash, cash equivalents, and restricted cash, end of period $151,822 $140,005 $151,822 $140,005
MONGODB, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except share and per share data)
(unaudited)
Three Months Ended October 31,
Nine Months Ended October 31,
2019 2018 2019 2018
Reconciliation of GAAP gross profit to non-GAAP gross profit:
Gross profit on a GAAP basis $77,250 $54,024 $207,632 $133,531
Gross margin (Gross profit/Total revenue) on a GAAP basis 71% 75% 70% 74%
Add back:
Stock-based compensation expense: Cost of Revenue-Subscription 1274 555 3476 1403
Stock-based compensation expense: Cost of Revenue-Services 793 335 2107 800
Non-GAAP gross profit $79,317 $54,914 $213,215 $135,734
Non-GAAP gross margin (Non-GAAP gross profit/Total revenue) 72% 77% 72% 75%
Reconciliation of GAAP loss from operations to non-GAAP loss from operations:
Loss from operations on a GAAP basis $-38,714 $-20,221 $-106,963 $-74,004
Add back:
Stock-based compensation expense 19,367 10,264 51,038 26,850
Amortization of intangible assets and Founder Holdback associated with acquisitions 5,027 221 13,625 663
Accelerated charges associated with the New York City office move 1,450 1,450
Acquisition costs 63 510 641 510
Non-GAAP loss from operations $-14,257 $-7,776 $-41,659 $-44,531
Reconciliation of GAAP net loss to non-GAAP net loss:
Net loss on a GAAP basis $-42,383 $-22,487 $-112,959 $-76,824
Add back:
Stock-based compensation expense 19,367 10,264 51,038 26,850
Amortization of intangible assets and Founder Holdback associated with acquisitions 5,027 221 13,625 663
Accelerated charges associated with the New York City office move 0 1,450 0 1,450
Acquisition costs 63 510 641 510
Non-cash interest expense related to convertible senior notes 3,335 3,139 9,833 4,233
Non-recurring income tax benefit associated with the acquisition of Realm intangible assets
$ -
$ - $-3,536
$ -
Non-GAAP net loss $-14,591 $-6,903 $-41,358 $-43,118
Reconciliation of GAAP net loss per share, basic and diluted, to non-GAAP net loss per share, basic and diluted:
Net loss per share, basic and diluted, on a GAAP basis $-0.75 $-0.43 $-2.03 $-1.49
Add back:
Stock-based compensation expense 0.34 0.19 0.92 0.52
Amortization of intangible assets and Founder Holdback associated with acquisitions 0.09 0.01 0.25 0.01
Accelerated charges associated with the New York City office move 0 0.03 0 0.03
Acquisition costs 0 0.01 0.01 0.01
Non-cash interest expense related to convertible senior notes 0.06 0.06 0.18 0.08
Non-recurring income tax benefit associated with the acquisition of Realm intangible assets
$ -
$ - $-0.06
$ -
Non-GAAP net loss per share, basic and diluted $-0.26 $-0.13 $-0.74 $-0.84
The following table presents a reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP measure, for each of the periods indicated (unaudited, in thousands):
Three Months Ended October 31, Nine Months Ended October 31,
2019 2018 2019 2018
Net cash used in operating activities $-11,543 $-7,608 $ - 20,922 $-32,509
Capital expenditures -754 -2,137 -2,350 -3,698
Principal repayments of finance lease liabilities -798 -798
Capitalized software
Free cash flow $-13,095 $-9,745 $-24,070 $-36,207
MONGODB, INC.
CUSTOMER COUNT METRICS
The following table presents certain customer count information as of the periods indicated:
10/31/2017
1/31/2018
04/30/2018
7/31/2018
10/31/2018
1/31/2019
04/30/2019
7/31/2019
10/31/2019
Total Customers 4,900+ 5,700+ 6,600+ 7,400+ 8,300+ 13,400+ 14,200+ 15,000+ 15,900+
Direct Sales Customers(a) 1,400+ 1,450+ 1,550+ 1,600+ 1,700+ 1,750+ 1,800+ 1,850+ 1,900+
MongoDB Atlas Customers 2,600+ 3,400+ 4,400+ 5,300+ 6,200+ 11,400+ 12,300+ 13,200+ 14,200+
Customers over $100K(b) 320 354 394 438 490 557 598 622 688
(a) Direct Sales Customers are
customers that were sold through
our direct sales force and
channel partners.
(b) Represents the number of
customers with $100,000 or
greater in annualized recurring
revenue ("ARR") and annualized
monthly recurring revenue
("MRR"). We define ARR as the
subscription revenue we would
contractually expect to receive
from customers over the following
12 months assuming no increases
or reductions in their
subscriptions. ARR excludes self-
service products, including
MongoDB Atlas not sold on a
commitment basis. ARR also
excludes professional services.
For customers who utilize our
self-service offerings, we
measure the annualized MRR, which
is calculated by annualizing
their usage of our self-serve
products in the prior 30 days and
assuming no increases or
reductions in their usage.
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SOURCE MongoDB, Inc.
