Summary
MongoDB reported second quarter fiscal 2022 revenue of $198.7 million, up 44% year over year. Gross profit was $138.0 million, and gross margin was 69.5%, flat with the prior-year quarter. The company still posted a loss from operations of $72.5 million. Net loss was $77.1 million, or $1.22 per diluted share. Operating margin was negative 36.5%, down 0.5 percentage points from the prior-year quarter. The top line grew quickly, but spending on sales and marketing and research and development kept profitability under pressure. Total revenue growth reflects increased demand for the platform and related services. The company said it will continue to invest heavily to grow the business rather than optimize for profitability or cash flow in the near term.
Operating cash flow was negative $19.8 million for the quarter. For the six months, operating cash flow was negative $9.5 million, an improvement from the prior-year period. Capital expenditures were $1.7 million, down 55.0% from the prior-year quarter. Deferred revenue was $249.3 million, up 27.8% year over year. Remaining performance obligations were $280.6 million, up 26.9%. Free cash flow was negative $22.7 million for the quarter, compared with negative $15.0 million in the year-ago period. The company said its existing cash and short-term investments should fund operating and capital needs for at least the next 12 months.
MongoDB Atlas revenue grew 83% year over year and represented 56% of total second quarter revenue. Total customers surpassed 29,000 as of July 31, 2021, up from over 20,200 a year earlier. Direct Sales Customers exceeded 3,600, compared with over 2,500. MongoDB Atlas customers exceeded 27,500. Customers with $100,000 or greater in annualized recurring revenue and annualized monthly recurring revenue reached 1,126, up from 819. The net ARR expansion rate remained over 120%. The company reported more than 200 million cumulative downloads, including over 75 million in the last 12 months. Management said the downloads over the last 12 months alone exceeded cumulative downloads in the first 11 years of MongoDB's existence. Headcount rose to 2,934 from 2,169.
Product momentum included the general availability of MongoDB 5.0, a preview of serverless databases in MongoDB Atlas, Live Resharding, Versioned API, and native time series support. MongoDB Atlas for Government received FedRAMP Ready for Agency Authorization. Management said the adoption of MongoDB continues to rise and that the platform is becoming a strategic technology partner for customers. The company also expanded Atlas Search, Atlas Data Lake, and Realm.
Guidance for the third quarter of fiscal 2022 calls for non-GAAP loss from operations of $(25.0) million to $(23.0) million and non-GAAP net loss per share of $(0.42) to $(0.39). For the full fiscal year 2022, guidance is non-GAAP loss from operations of $(67.0) million to $(62.0) million and non-GAAP net loss per share of $(1.20) to $(1.13). The company also issued revenue guidance for the third quarter and the full fiscal year. The company said the COVID-19 pandemic continues to create uncertainty and could negatively affect revenue in the near term. MongoDB has a history of losses and expects to keep incurring operating losses and negative cash flows. Gross margin may decline as Atlas revenue increases because of third-party cloud infrastructure costs. The filing also noted pressure in services gross margin. Other risks include competition, the need to manage growth, expand the sales and marketing organization, retain personnel, and maintain security. The company may require additional capital resources to execute strategic initiatives.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $198.7M | $181.6M | +9.4% | $138.3M | +43.7% |
| Gross profit | $138.0M | $127.1M | +8.6% | $96.0M | +43.8% |
| Gross margin | 69.5% | 70.0% | -0.5 pp | 69.4% | +0.0 pp |
| Research & development | $72.4M | $64.8M | +11.8% | $49.3M | +47.0% |
| Sales & marketing | $109.4M | $97.9M | +11.7% | $75.1M | +45.7% |
| General & administrative | $28.8M | $25.9M | +11.1% | $21.4M | +34.4% |
| Total operating expenses | $210.6M | $188.6M | +11.7% | $145.8M | +44.5% |
| Operating income (loss) | -$72.5M | -$61.4M | -18.0% | -$49.8M | -45.7% |
| Operating margin | -36.5% | -33.8% | -2.7 pp | -36.0% | -0.5 pp |
| Net income (loss) | -$77.1M | -$64.0M | -20.5% | -$64.5M | -19.5% |
| Net margin | -38.8% | -35.2% | -3.6 pp | -46.7% | +7.8 pp |
| Customers | 268,610 | 130,329 | +106.1% | 188,756 | +42.3% |
Risks
MD&A states MongoDB currently expects revenue to continue to be negatively impacted by the slowdown in activity, global uncertainty and other challenges associated with the COVID-19 pandemic in the near term. Risk factors also cite the Delta variant, remote work and hybrid return-to-office challenges that could reduce productivity and employee retention.
MongoDB faces significant competition from legacy database providers such as IBM, Microsoft and Oracle and from public cloud providers such as AWS, GCP and Microsoft Azure. Larger competitors can bundle competing products, offer low or no cost products and withstand technology spending reductions better than MongoDB.
MongoDB derives substantially all revenue from its database platform, and subscription revenue accounted for 96% of total revenue for each of the three and six months ended July 31, 2021. Failure of the platform to satisfy customer demands could materially harm results.
MongoDB Atlas revenue represented 56% and 54% of total revenue for the three and six months ended July 31, 2021, up from 44% and 43% in the prior-year periods. If Atlas fails to achieve market adoption, or if its growth lowers gross margin because of third-party cloud infrastructure costs, business and financial condition could be harmed.
Risk factors note that industry publications have reported ransomware attacks on MongoDB instances, which MongoDB believes were due to Community Server users failing to enable recommended security settings. Remote work has also increased phishing and social engineering attempts.
The conditional conversion feature of the 2024 Notes and 2026 Notes was triggered during the three months ended July 31, 2021, making them currently convertible at holder option from August 1, 2021 through October 31, 2021. Conversion could require cash payments and adversely affect liquidity.
MongoDB has a history of losses and expects to continue incurring operating losses and negative cash flows. Net loss widened to $77.13 million for FY2022 Q2 from $64.52 million in FY2021 Q2, and accumulated deficit was $1.0 billion as of July 31, 2021.
The sales cycle is generally three to nine months and can extend beyond a year for some customers, making timing of sales and revenue recognition difficult to predict. A large portion of sales occur toward the end of each quarter, which can push revenue into the next quarter.
MongoDB plans to continue expanding its sales and marketing organization and faces significant competition for experienced sales professionals. New hires require significant training and may not become productive as quickly as expected, including because of COVID-19 and remote work arrangements.
Community Server is offered under the SSPL, a new license not interpreted by courts and not approved by the Open Source Initiative or included in the Free Software Foundation list. Uncertainty around the SSPL may harm adoption of Community Server and reduce paying customers.
MongoDB depends on customers renewing subscriptions and expanding usage, and a majority of subscription contracts were one year in duration in fiscal year 2021. Customers have no obligation to renew, and failure to renew or expand on favorable terms would harm results.
MongoDB is subject to evolving privacy and data protection laws, including the CCPA, CPRA, GDPR and cross-border transfer restrictions following the invalidation of the EU-US Privacy Shield. Compliance may require additional safeguards and increase costs or limit customer adoption.
SaaS KPIs
All quarters →Total Customers
MongoDB Atlas Customers
Direct Sales Customers
Free Cash Flow
Net ARR Expansion Rate
Customers over $100K ARR
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from MongoDB, Inc.'s SEC filings for Q2 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.