Yes, really great quarter and outlook.
Several really positive quotes from the earnings call, saying things like “Firing on all cylinders” and “Strength across the board”
There was some great discussion a few weeks back on this board pointing out some of Mongo’s risks and competitive challenges, and I admit, it had me temper my expectations a bit going into earnings today. But after this quarter and the guidance, I’m right back to feeling that MongoDB will continue to be one of my best winners, potentially for years to come
The CEO sounded really optimistic on the call. As Ron noted, a lot of the story will continue to be Atlas. +83% YOY and now 56% of total revenue!
Sequentially Atlas was up just about +20% from Q1 from $92m to $111m. Atlas is now nearly at a half of a billion dollar run rate and still growing at more than eighty percent! However management did warn on the call that there is a little bit of seasonality in Q2 that heped with the sequential growth, and they also reminded that the second half of the year will have tougher comps than in the first half (although based on the guidance, I’m not too worried about that).
This quote just jumped right off the page to me on the press release (bolding is mine)
The adoption of MongoDB continues to rise as we recently surpassed 200 million cumulative downloads from our website. Moreover, we had more than 75 million downloads over the last 12 months alone, which is greater than the cumulative downloads in the first 11 years of MongoDB’s existence. The pace of downloads further underscores the popularity of MongoDB.
I mean, that’s just crazy, right?
They increased customers by more than 8% this quarter alone, since the end of Q1, going from 26,800 at 4/30/21 to over 29,000 at 7/31/21. And that’s despite their recent focus on bigger key clients.
They’ve consistently beat revenue guidance the past few quarters by about ten percentage points (PY = prior year, CY = current year):
Q3PY Q4PY Q1CY Q2CY Q3CY
guide (top end) 27% 27% 30% 32% 35%
actual 38% 38% 39% 44%
beat 11% 11% 9% 12%
Revenue growth has been accelerating in calendar 2021 (which is fiscal 2022). The beat this quarter was a little bit bigger than it has been in a while. And the new guidance for Q3 of +35%, on the top end, is stronger than it has been since pre-pandemic. So if they beat by a typical 10-11% or so, revenue is likely to continue accelerating next quarter to +45-46%
On the call they said they are getting audiences with more and more C-suite executives, targeting key clients, and it has been resulting in faster wins than even they expected. They’ve been adding resources to take advantage of growing opportunities.
The self-serve products are yielding “promising results”
They’ve had several recent significant product announcements that have made getting started on, and using, Atlas even easier.
New features enable upgrading MongoDB version without having to update the applications that run on it. They said that at their annual event, this feature got the most enthusiastic resonse.
Fedramp ready status now enables them to capture more govenment business.
Jetblue is now using MDB for customer ticketing applications
Pipeline - “we’re seeing more and more demand”. Land and expand
One analyst remarked that the Atlas adoption curve has been even more agressively positive than expected. Management responded that Atlas is becoming more and more a “mission critical platform” especially as new enterprise features get added. We should expect Atlas gross margin to continue to grow.
They still have a ton of cash after the raise this year. More than $1.8 Billion of cash and short term investments on the balance sheet at the end of Q2.
The CEO said their win rates are “very very high”. He said the ones that keep them up at night are the deals that go down that MDB wasn’t aware of and didn’t get an opportunity to bid on.
He also said that real time analytics is one of the biggest opportunities going forward and MDB keeps addressing more and more use cases.
The quarterly release cycle on Atlas/cloud allows them to add features and bug fixes much faster on Atlas vs historically on on-prem products that had version upgrades only once per year.
They talked about geographic performance in response to one question. Many parts of western europe are growing particularly great and they have been trying to hire more people there “as fast as we can”
Asia has also been doing well. Specifically India they mentioned their expectations weren’t that high but have had very strong growth there too.
Latin America is still a less mature market for their products so they are trying to deploy more resources there too but haven’t seen the acceleration there just yet.
Much like the first two posters above, I am very comfortable with my 15% allocation to MDB (will likely be higher tomorrow). My original purchases in 2018 were already up 500%+ and I’m glad that I’ve opportunisitically added to the position when the valuation has been good in recent years.
Congrats to all MongoDB owners!