MDB Q4 2020 CC Notes

Hi all

It wasn’t a bad quarter, was actually sort of reasonable (I thought). Due to a miscalculation (Thanks Bear for picking that up) I thought the drop in revenue guidance was better than it was. They’re guiding for 35% growth in Q1 and 26% for the full year so Bear and others are concerned (quite rightly) that their hypergrowth days are over. Customers numbers are going up, Atlas is expanding at 80% yoy and is now 41% revenue. So that all seems reasonably strong to me.

They are continuing to increase their S&M spend, as you would expect if you believe their opportunity is as massive as they say.

I sold out of MDB a while back. My issue was two-fold:

  1. It’s a scalable database. Not that many applications actually need the scalability provided by MDB (although if its there you might as well use it?). Relational databases are perfectly adequate for a wide number of scenarios. However, the influx of Internet of Things, Edge data may change that scenario.
  2. It’s only a database. They’re starting to build analytics, search etc., but at the moment the (more or less) only product is the database. They’ve also added Data Lakes to Atlas (So you can have your historical data accessible at a similar level to your transactional data).

Unfortunately (currently) I chose ESTC to put the funds into so shows what I know :wink: Doh. I’ll continue to watch MDB.


Q4 2020

18 Mar 2020

Sauls board

Revenue growth too slow, organic might be <40%.
Others state non-GAAP net loss growing.

“While MDB may only grow thirty something percent this year, I do think their chances of stabilizing there for an extended period, or even re-accelerating growth a year or two from now are high.”


Q: What is revenue doing yoy?
A: 71782 85484 89388 99368 109441 123500 121000. 67% 71% 78% 67% 52% 44% 35% {GD: steadily decreasing. Some noise from mLab etc. Not awesome}

Q: What is cashflow doing yoy?
A: -12.63m 2.83m -13.80m -12.30m… they state they’re investing for the opportunity so no surprise here.

ESTC for example -9.88m, -20.88m, -3.28m, -1.35m (but EndGame acquisition).

Q: What are customers doing q-1?
A: 8300 13400 14200 15000 15900 17000 - steady +7% qoq increase seems pretty good.

A: 120%

Q: Revenue per customer up or down (either revenue/customers or ARR)?
A: Revenue per customer seems to be steadily increasing… (this is just quarterly revenue/customers)
5357 6020 5959 6250 6438

Q: Expenses as percent of revenue going up or down (ie, any sign of leverage)?
A: Expenses as percent of revenue:

Q4 2019 Q1 Q2 Q3 Q4 2020
R&D 26,600 30,868 37,140 39,387 41638
31% 35% 37% 36% 34%
S&M 42,482 46,120 53,524 57,015 67234
50% 52% 54% 52% 54%
G&A 14,596 14,805 16,174 19,562 20763
17% 17% 16% 18% 17%

Not much evidence of leverage, steadily increasing spend to “capture the opportunity”.

CC Summary

Q4 Revenue $123.5m +44% yoy above high end
– Subscription +46%
– Atlas +80% 41% of revenue
FY 20 Revenue $421.7m +58% yoy
– Subscription +61%
– Atlas
Customers >17k

“new companies emerge as generational leaders. To this end, our belief is that the best way to maximize long-term shareholder value is to make key investments that will position us as one of those leaders.”

2 fundamental insights

  1. Inflexibility and lack of scalability of relational databases - impediment.
  2. Building modern apps dramatically increases burden… (of development) → Atlas, automatic provisioning, management of distributed database.
    3!. Future applications will enable continuous engagement and access to massive amounts of real time data among key constituents, be it users, customers, partners or suppliers.
  • real time analytics incorporated into operational workloads.
  • data on the edge continues to explode
  • one unified interface {GD: ESTC premise…}

Atlas Data Lakes - brings transactional and analytical use cases together - query both operational and archive data.

Integration of Realm and Stitch - edge to core data sync.


+80% yoy, 41% revenue, $200m ARR


Square Enix - async multiplayer features across video games.
Software AG’s Cumulocity IoT - MDB as operational data store
Unqork - no code app platform - MDB as primary cloud database platform (2017) - expanded
Radar labs - Atlas for geolocation platform (25m devices) ->“MDB startup platform”

{GD: These seem… apart from Squre Enix, a bit underwhelming…? maybe thats just me}

CTO (cofounder) leaving

Becoming Technical advisor


Michael Gordon

Revenue $123.5m +44% yoy
– Subs $117.8m +46% yoy
– Prof Serv rev $5.7m +17% yoy
Atlas +80% yoy 41% total vs 40% q-1
Customers >17000 +1100 vs 13400 yoy
— Direct sales 2000 vs 1750 yoy
— Atlas 15400 vs 11400 yoy
Customers >$1m ARR and? AMRR 62 vs 39 yoy
Customers >$100k ARR and? AMRR 751 vs 557 yoy
Net ARR expansion rate >120%
GP $91.2m
Gross margin 74% vs 72%q-1 and 71%yoy - benefited from large customer (below)
Operating Loss -$12m
Operating Margin -10% vs -11% yoy
Net loss -$14.5m
Net loss per share $0.25 vs $0.17 yoy
WA Shares 56.9m 53.8m yoy
Cash $987m
OCF -$8.6m
FCF -$10.9m vs -$12.6m Q4 2019

"one large multiyear Enterprise Advanced deal with a Fortune 50 customer drove $3.5 million of our outperformance. "

“…growth in our Atlas customer base reflects new customers to MongoDB in addition to existing customers, adding incremental Atlas workloads.”

Guidance Q1
Revenue $119-$121m
non-GAAP op loss -$14m to -$12m
non-GAAP op loss per share -$0.25 to -$0.22
Shares 57.5m
FY 2021
Revenue $510m to $530m
non-GAAP op loss -$78m to -$68m
non-GAAP op loss per share -$1.4 to -$1.23
Shares 57.9m

Covid 19

Q1 impact = -$1m to $2m
FY 21 = -$15m to -$25m


“Funding high-priority projects”

  1. Growing sales capacity
  2. Marketing team to drive Atlas
  3. R&D enhancements

Question-and-Answer Session

  1. Strong results in Q4. Covid impact methodology - imagining slowdown in 1st half, sensitivity analysis. Normalisation of activity in 2nd half. No meaningful impact to date. We have a diverse portfolio of customers, geographies and industries.

“Very early in stages of trying to capitalise on opportunity”. Want to be prudent allocators of capital. {GD: lots more investment}
Sales cycles may start lengthening.
Atlas - database sticky. Atlas we handle management, unlikely to bring back in-house when cutting costs.

Managing in downturn - invest a lot of time in customers. Atlas insights - are they using it properly?
2. Self-hosted enterprise advanced outlook - positioning and outlook? Believe growth will be strong - customers want on-premise or in certain datacenters. Run MDB anywhere {GD: ESTC proposition}.
3. Atlas growth down a bit? underlying growth rate - first quarter mLab in the base, cohorts contracting. Also lifecycle of some consumption related apps.
4. Linearity over months in quarter, eg: month 1 vs 3. Enterprise software want to get as much leverage as possible, quarters backend loaded. MDB has a very rigorous culture of qualification in our sales process.
5. F50 customer deal - long term relationship, meaningful expansion. We’re the non-relational platform going forward.
6. >$1m customers +60% yoy. Usecases? Very diversified, land and expand and over time people end up standardising on MDB. Healthy mix of Atlas and EA.
7. Legacy migrations - {GD: hard}, SI partners to help rewrite the application, migration toolkits. If we can make it easier, will accelerate.
8. Autoscaling - customers dont have to worry. Don’t have to pay when utilisation drops.
9. Total cost of ownership lower than legacy {GD: I don’t really know what this means. You can use RDS etc although they don’t autoscale}.
10. MDB making developers life easier, scalability, general purpose platform. Development led.
11. MongoDB World going virtual, not a pipeline acceleration conference. Educational focus. How to make it appealing?
12. CTO leaving - No plans to recruit outside CTO - strong bench.