MongoDB, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended January 31, 2022; comparisons are with fiscal 2021, ended January 31, 2021. This annual filing reports full-year results, not standalone Q4 results. MongoDB sells database subscriptions, led by its hosted MongoDB Atlas service, and professional services.
Financial performance
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $873.8 million | $590.4 million |
| Revenue growth | 48% | 40% |
| Subscription revenue | $842.0 million | $565.3 million |
| Gross profit / margin | $614.3 million / 70% | $413.3 million / 70% |
| Operating loss | $289.4 million | $209.3 million |
| Net loss | $306.9 million | $266.9 million |
| Operating cash flow | $7.0 million | $(42.7) million |
| Cash used in investing activities | $852.1 million | $262.7 million |
| Cash provided by financing activities | $890.9 million | $27.6 million |
- Atlas revenue was $492.3 million, about 56% of total revenue, versus $270.8 million, about 46%, in FY2021. Other subscription revenue was $349.8 million; services revenue was $31.7 million.
- Subscription gross margin was 74%, flat year over year. Atlas growth drove higher cloud infrastructure costs, partly offset by scale efficiencies. Services gross margin was negative 31%, versus negative 27%.
- Operating expenses rose 45% to $903.7 million, exceeding revenue. Sales and marketing was $471.9 million, research and development $308.8 million, and general and administrative $122.9 million.
- Stock-based compensation expense increased to $251.1 million from $149.3 million. The net loss widened despite higher revenue; management attributed losses primarily to increased sales and marketing and R&D investment.
Liquidity, debt and commitments
- Cash, cash equivalents, short-term investments and restricted cash totaled approximately $1.8 billion at January 31, 2022, including $1.352 billion of short-term investments. Management said available cash and investments were expected to fund operating and capital needs for at least 12 months.
- Operating cash flow turned positive from negative $42.7 million. The company reported a $306.9 million net loss, with operating cash flow supported by noncash expenses and a $137.2 million increase in deferred revenue; increases in receivables and deferred commissions were offsets.
- Convertible senior notes due 2026 had $1.15 billion principal outstanding and a $1.137 billion net carrying value. The 0.25% notes were conditionally convertible at holders’ option from February 1 through April 30, 2022; the company stated its current intent was to settle principal in cash. The 2024 notes were redeemed or converted and were fully extinguished in December 2021.
- FY2022 financing included $889.2 million net proceeds from a July 2021 share offering. Outstanding shares increased to 67.44 million at year-end from 60.90 million.
- Contractual obligations totaled $2.546 billion, including $1.263 billion in purchase obligations. A cloud-provider agreement expanded in January 2022 included a non-cancelable $1.1 billion commitment over six years, beginning February 2022. Obligations also include leases and the 2026 notes.
Changes, outlook and risks
- Revenue growth accelerated to 48% from 40%; Atlas’s share of revenue increased materially. Direct sales customers accounted for 85% of subscription revenue, up from 82%, and customers with at least $100,000 of ARR or annualized MRR increased to 1,307 from 975. Net ARR expansion rate remained above 120%.
- Management said it would continue investing heavily in growth rather than optimizing near-term profitability or cash flow, and expected operating losses to continue. The 10-K does not provide a clear numerical revenue or earnings outlook.
- Product developments included MongoDB 5.0, native time-series support, enhancements to Atlas Search and a move to quarterly releases. Atlas represented the largest growth area; management cited ongoing investment in product development, sales, marketing and international expansion.
- Key disclosed risks include intense competition from legacy database vendors and cloud providers; dependence on the database platform and Atlas adoption; substantial ongoing losses; execution and hiring challenges from rapid growth; cybersecurity, service availability and privacy regulation; COVID-19 and economic uncertainty; and foreign exchange, tax and open-source licensing risks.
- Cloud infrastructure commitments may create costs irrespective of actual usage and could pressure margins as Atlas grows. Convertible-note conversions could require cash settlement and affect liquidity. The company reported a pending appeal by Realtime Data in a patent dispute; it said it had not accrued a material loss and was not aware of matters expected to have a material adverse effect.
- PwC issued unqualified opinions on the financial statements and internal control over financial reporting; management also concluded controls were effective. Revenue allocation among contracts with multiple performance obligations was identified as a critical audit matter because it requires judgment in estimating standalone selling prices.
Important facts for investors to verify
- Whether Atlas growth and cloud-cost efficiencies sustain subscription gross margin as Atlas becomes a larger revenue share.
- Whether customer expansion and new-customer acquisition continue to offset high operating expenses and deliver a path toward profitability and durable positive operating cash flow.
- The utilization, cost and remaining term of the $1.1 billion cloud capacity commitment, and its effect on cash flow and margins.
- The potential cash, dilution and balance-sheet effects of the 2026 notes, including conversion activity and the company’s settlement choice.
- Stock-based compensation and share dilution, deferred commission growth, and the quality and sustainability of operating cash flow.
- Developments in the Realtime Data appeal, cybersecurity and privacy matters, and other contingencies; the filing does not quantify a likely material loss for these matters.