MongoDB, Inc. — Q1 FY2025 Form 10-Q
Reporting period: Three months ended April 30, 2024; compared with the three months ended April 30, 2023. MongoDB provides a developer data platform, with subscription revenue primarily from MongoDB Atlas and other database subscriptions.
Financial performance and liquidity
| Metric | Q1 FY2025 | Q1 FY2024 | Change |
|---|---|---|---|
| Revenue | $450.6 million | $368.3 million | Up 22% |
| Subscription revenue | $436.9 million | $354.7 million | Up 23% |
| Gross profit / margin | $327.9 million / 73% | $270.8 million / 74% | Margin down 1 percentage point |
| Operating loss | $98.2 million | $68.5 million | Loss widened |
| Net loss / diluted loss per share | $80.6 million / $1.10 | $54.2 million / $0.77 | Loss widened |
| Operating cash flow | $63.6 million | $53.7 million | Up $9.9 million |
- MongoDB Atlas-related revenue was $313.9 million, compared with $237.8 million, and represented 70% of total revenue versus 65% a year earlier. Subscription revenue from other products was $123.0 million; services revenue was $13.7 million.
- Cash, cash equivalents, restricted cash and short-term investments totaled approximately $2.1 billion at April 30, 2024. Current assets were $2.65 billion and current liabilities $537.5 million.
- Convertible senior notes had $1.15 billion principal outstanding, due 2026, with a 0.25% coupon. Their disclosed fair value was approximately $2.0 billion; balance-sheet carrying value was $1.14 billion.
- Stock-based compensation was $120.8 million, up from $104.0 million. The company reported an accumulated deficit of $1.79 billion.
Material changes versus the prior-year quarter
- Revenue growth was primarily driven by subscriptions to Direct Sales Customers. Management attributed $71.1 million of the subscription revenue increase to Direct Sales Customers, including customers who had been Atlas self-serve users in the prior-year period.
- Operating expenses rose to $426.1 million from $339.4 million. Sales and marketing increased 20%, research and development 25%, and general and administrative 52%. G&A included higher personnel costs and $8.1 million of value-added tax expense related to certain non-U.S. operations.
- Subscription cost of revenue rose 29%, partly reflecting $16.7 million of higher third-party cloud infrastructure costs. Subscription gross margin declined to 77% from 78%; overall gross margin declined to 73% from 74%.
- Investing cash flow was a $48.1 million use, compared with $211.3 million provided in the prior-year quarter, primarily because purchases of marketable securities exceeded maturities. Deferred revenue fell to $340.1 million from $377.4 million at January 31, 2024.
Outlook, risks and unusual items
- The filing provides no specific financial guidance figures. Management said macroeconomic conditions negatively affected growth of existing Atlas applications in the quarter and expects those headwinds to continue for the remainder of the year. It also expects continued investment and operating losses, and says cash and short-term investments should fund operating and capital needs for at least 12 months.
- Remaining performance obligations were $586.5 million; approximately 56% was expected to be recognized as revenue over the next 12 months. This measure excludes qualifying contracts with durations of 12 months or less.
- The 2026 Notes became convertible at holders’ option from May 1 through July 31, 2024 after the stock-price conversion condition was met. Conversion or settlement could affect liquidity, working capital classification or dilution, depending on settlement choices and circumstances.
- MongoDB elected cash settlement of capped calls associated with the 2024 Notes. It recorded a $170.2 million derivative asset at quarter-end and expected to receive cash in June 2024.
- The company disclosed a December 2023 security incident involving unauthorized access to certain corporate applications, including applications used for customer support. It reported no evidence of access to MongoDB Atlas clusters, verified by third-party forensic experts, and no material financial or operational impact to date.
- Key risks include slower customer usage and IT spending, dependence on Atlas and customer renewals/expansion, intense competition, cloud-provider dependence, cybersecurity and privacy exposure, and the ability to reach sustained profitability. Management reported no known legal matters expected to have a material adverse effect as of April 30, 2024.
Most important facts for investors to verify
- Whether Atlas usage growth and customer expansion recover or remain constrained by macroeconomic conditions.
- Whether revenue growth can outpace rising operating expenses, cloud infrastructure costs and stock-based compensation.
- The outcome and cash or share implications of the 2026 Notes’ conversion window, and receipt of the capped-call settlement proceeds.
- Trends in deferred revenue, collections and remaining performance obligations, recognizing the RPO disclosure’s stated scope limitation.
- Any further developments concerning the disclosed security incident, customer trust, or material legal and regulatory contingencies.