MDB: A little perspective

Hi all,

so MongoDB just reported a quarter guiding for 25.7% growth for the next year. I think most who follow the stock would agree that’s not very exciting news. As expected, the stock dropped on the news and was around $95. I thought a down move was very justified. I was very surprised to see that shares are back up to above $120 only a few days later. Of course, that was on the back of a great “SaaS-day” but still, MDB’s outperformance made me think if I’m missing something that the market is seeing. This made me take a closer look at my numbers & notes and I came across some amazing quotes I collected over the last quarters. I just wanted to share them. I think it’s worth re-reading them once in a while (especially in times of doubt):

Q2 2019 CC: „Yes, I mean, we do not frankly see other NoSQL vendors in deals anymore. I mean, I’m sure that they’re getting deals, but we frankly see them less and less. I can’t remember the last time, I had a sales rep complain to me about a competitive situation with another NoSQL competitor. I think it’s become clear to everyone that we have become the de facto leader in the modern database space and now customers are just contemplating what workload should they move to the cloud and what new app should they build on MongoDB.“

Just good to remember that MDB is dominating their niche. They still are.

Q3 2019 CC: „There is some talk by the cloud providers about having a database - a different database for every solution. MDB doesn’t think that that makes complete sense. One, it’s very hard for an organization to train, support and build applications across all these disparate databases. Moreover, they would then have to spend a lot of time making sure all that data sync across all these different databases and so that becomes pretty expensive and time consuming. MDB believes that customers want a general purpose database to serve a majority of their use cases and MDB believes they’re well positioned to do that. MDB supports a breadth and scale of the use cases that most customers want. MDB believes that they’re well positioned to go after the market and that’s a function of why they believe their developer mindshare is really second to none when it comes to next generation databases and that’s referenced by all the external market data out there.“

Also, it’s good to remember that they have a very clear understanding of their customers and the importance of developer mindshare.

Q4 2019 CC: „The total number of MongoDB downloads from our website alone is now more than 60 million with more than 20 million occurred in the last 12 months, up from more than 12 million in fiscal 2018. It should be noted that there are between 20 to 25 million developers in the world today. Clearly, developers, customers and the broader market are now starting to understand what we at MongoDB have known for a long time that documents, not tables are the future of this market. Because of our enormous popularity, there are other solutions that now try to emulate MongoDB’s capabilities. However, none of these imitation databases are built on a true document architecture. Because there are fundamental architectural differences between MongoDB and these other imitation databases, customers have to deal with severe feature and performance trade-offs in addition to deep vendor lock-in with these imitation offerings. Using MongoDB dramatically increases developer productivity, enabling organizations to innovate more easily and deliver more value, more quickly to their own customers.

Of course, we always like to look at revenue growth (which isn’t that bad either – it was still +44% in a very tough comparable quarter) but just look at the number of downloads: 2017: 28 mil; 2018: 40 mil; 2019: 60 mil; 2020: just reported 90 million downloads, up 50% again! They are still the most relevant modern database and their relevancy is only increasing it seems.

And my favorite quote comes from this last call, Q4 2020 (I was a bit lazy this year taking notes in FY 2020…): “Sure. So I would just tell you, the Atlas business is consistent with data business as a whole. And that database software is incredibly sticky. Obviously, the database is the heart of every software application, and people are not going to shut down existing applications, existing services, existing websites, because they still have to come back to business. And so on top of that, with Atlas, they’ve essentially handed off the ongoing management of their database infrastructure to us. So in times when people may want to do a little bit of belt tightening, it’s very unlikely that they’ll decide to bring those workloads back in house. In fact, they will like the variable cost model associated with Atlas. On top of that it’s – most workloads we see have a pretty predictable usage pattern. It’s only a few workloads, like games or some very seasonal workloads related to say the Q4, retail environment et cetera, or some e-commerce environment, say on Mother’s Day et cetera. And so those kinds of events, you see some spike in usage. So in fact, we are seeing spikes in usage in – with customers who are in the cryptocurrency business, we’re seeing spikes in usage with gaming companies. Obviously a lot of people home playing online games. We’re seeing a lot of spikes in usage in terms of telcos and cable companies and their usage is going up. So I would say in general, though, the usage patterns tend to be fairly predictable. And on top of that, with the fact that people handed off the management of their database to us through Atlas, those workloads tend to be very, very sticky.”

And maybe to round it out, a great quote from Dev that may apply to many companies in the discussion here:

"Yes, so well, I’m old enough Brad to tell you that I also lived through 2000-2001. So I was a public company officer then and I was a public company officer in 2008-2009. And so, I would tell you that we believe that while sentiment can change quickly, the underlying trends don’t change as fast.

Take care, stay healthy and wash your damn hands!!! :wink: