Summary
MongoDB's FY2021 Q3, ended October 31, 2020, produced total revenue of $150.77 million, up 37.8% from the prior-year quarter. Gross profit was $104.66 million, up 35.5%, and gross margin was 69.4%, down 1.2 percentage points from the prior-year quarter. Operating loss was $58.09 million, and the loss widened from the prior-year quarter. Net loss was $72.65 million, or $1.22 per diluted share, and both the net loss and loss per share widened from the prior-year quarter. On a non-GAAP basis, loss from operations was $16.0 million, compared with $14.3 million a year earlier, and net loss was $18.2 million, or $0.31 per share, compared with $14.6 million, or $0.26 per share.
Operationally, MongoDB Atlas represented 47% of total revenue in the quarter, with Atlas revenue up 61% year over year. The company said Atlas became the first and only cloud database to enable an application to run simultaneously across multiple cloud providers, using multi-cloud clusters across Amazon Web Services, Google Cloud, and Microsoft Azure. MongoDB was also approved and released on the DoD Enterprise Artifacts Repository, Iron Bank, and Tata Consultancy Services, Infosys, and Wipro joined its Modernization Toolkit program. Total customers reached over 22,600 as of October 31, 2020, up from over 15,900 a year earlier. Direct Sales Customers grew to over 2,800 from over 1,900, and MongoDB Atlas customers reached over 21,100. Customers with $100,000 or greater in annualized recurring revenue or annualized monthly recurring revenue totaled 898, up from 688. Headcount rose to 2,334 from 1,660.
Cash flow and backlog metrics were mixed. Operating cash flow was -$8.12 million, up from the prior-year quarter. Capital expenditures were $5.65 million, up sharply from the prior-year quarter. Free cash flow was negative $14.9 million, compared with negative $13.1 million a year earlier. Deferred revenue was $195.80 million, up 28.5% from the prior-year quarter, and remaining performance obligations were $217.70 million, up 15.9%.
Guidance for the fourth quarter of fiscal 2021 calls for a non-GAAP loss from operations of $(23.0) million to $(21.0) million and non-GAAP net loss per share of $(0.42) to $(0.39). For the full fiscal year 2021, guidance is a non-GAAP loss from operations of $(56.6) million to $(54.6) million and non-GAAP net loss per share of $(1.07) to $(1.04). Management said revenue is expected to continue to be negatively impacted by the slowdown in activity associated with the COVID-19 pandemic and global uncertainty in the near term. The company also flagged risks tied to the pandemic's duration and spread, its limited operating history, a history of losses, competition, expanding its sales and marketing organization, maintaining security, and managing growth. It recorded a higher allowance for credit losses during the nine months ended October 31, 2020 and believes existing cash and short-term investments will fund operating and capital needs for at least the next 12 months.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $150.8M | $138.3M | +9.0% | $109.4M | +37.8% |
| Gross profit | $104.7M | $96.0M | +9.0% | $77.3M | +35.5% |
| Gross margin | 69.4% | 69.4% | +0.0 pp | 70.6% | -1.2 pp |
| Research & development | $54.4M | $49.3M | +10.4% | $39.4M | +38.0% |
| Sales & marketing | $83.2M | $75.1M | +10.8% | $57.0M | +46.0% |
| General & administrative | $25.2M | $21.4M | +17.5% | $19.6M | +28.7% |
| Total operating expenses | $162.8M | $145.8M | +11.7% | $116.0M | +40.3% |
| Operating income (loss) | -$58.1M | -$49.8M | -16.7% | -$38.7M | -50.1% |
| Operating margin | -38.5% | -36.0% | -2.5 pp | -35.4% | -3.2 pp |
| Net income (loss) | -$72.7M | -$64.5M | -12.6% | -$42.4M | -71.4% |
| Net margin | -48.2% | -46.7% | -1.5 pp | -38.7% | -9.5 pp |
| Customers | 298,197 | 188,756 | +58.0% | 181,532 | +64.3% |
Risks
The ongoing COVID-19 pandemic has led to remote work through July 1, 2021, suspended travel and virtual events, and management expects revenue to continue to be negatively impacted by the slowdown in activity and global uncertainty in the near term. The company recorded a higher allowance during the nine months ended October 31, 2020 due to potential customer financial difficulties.
MongoDB has a history of losses and expects operating expenses to increase significantly. Net loss widened to $72.7 million for the quarter ended October 31, 2020 from $42.4 million in the prior-year quarter, and accumulated deficit was $859.6 million as of October 31, 2020.
The database market is highly competitive, with legacy providers IBM, Microsoft and Oracle and cloud providers AWS, GCP and Microsoft Azure having greater resources, broader offerings and the ability to bundle or offer low-cost or no-cost products. MD&A also notes intense competition and the risk of customers choosing bundled offerings.
MongoDB Atlas revenue represented 47% of total revenue for the three months ended October 31, 2020, up from 40% in the prior-year period. MD&A warns that gross margin may decline as Atlas revenue increases due to associated hosting costs, and reported gross margin declined 1.2 pp to 69.4% in the current quarter.
The conditional conversion feature of the 2024 Notes was triggered during the three months ended October 31, 2020, making them convertible at holders' option from November 1, 2020 through January 31, 2021. Any cash settlement could adversely affect liquidity, and other expense, net increased 338% for the quarter and nine months due to the 2026 Notes.
Industry publications have reported ransomware attacks on MongoDB instances, and remote work during COVID-19 has increased phishing, spam and social engineering attempts. A breach could lead to litigation, regulatory investigations, fines and reputational damage.
The sales cycle is generally three to nine months and can extend beyond a year, with customers often treating subscriptions as strategic decisions. COVID-19 remote work may delay contract execution and further disrupt the sales pipeline and bookings.
The SSPL for Community Server has not been approved by the Open Source Initiative or included in the Free Software Foundation list, which may harm adoption. If the AGPL or SSPL is held unenforceable, competitors may use MongoDB software in ways not subject to license restrictions.
Privacy laws including the GDPR, CCPA, CPRA and Brazil LGPD impose compliance costs and cross-border transfer restrictions. The invalidation of the EU-US Privacy Shield in July 2020 has cast doubt on transfers of personal information to the US, which could impede customer acquisition.
A majority of subscription contracts are one year in duration and customers have no obligation to renew. Failure to renew on same or more favorable terms or expand usage would harm results, and MD&A highlights land-and-expand as key to the subscription model.
SaaS KPIs
All quarters →Total Customers
MongoDB Atlas Customers
Direct Sales Customers
Free Cash Flow
Customers over $100K ARR
Non-GAAP Gross Margin
Non-GAAP Loss from Operations
MongoDB Atlas Revenue Growth YoY
Summary, forecast, risks and KPIs are extracted from MongoDB, Inc.'s SEC filings for Q3 FY2021 (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 2, 2026.