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:
- 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.
- 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 
Doh. I’ll continue to watch MDB.
cheers
Greg
Q4 2020
18 Mar 2020
Sauls board
(Bear)[https://discussion.fool.com/sold-mdb-34441638.aspx]
Revenue growth too slow, organic might be <40%.
Others state non-GAAP net loss growing.
(Mekong)[https://discussion.fool.com/mdb-thougths-and-recent-moves-344424…
“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.”
Checklist
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.
Q: DBNER?
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
| Q-1 | |||
|---|---|---|---|
| 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
- Inflexibility and lack of scalability of relational databases - impediment.
- 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.
Atlas
+80% yoy, 41% revenue, $200m ARR
Anecdotes
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
Finances
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
Growth
“Funding high-priority projects”
- Growing sales capacity
- Marketing team to drive Atlas
- R&D enhancements
Question-and-Answer Session
- 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.