MongoDB, Inc. Announces Third Quarter Fiscal 2019 Financial Results
Source: Nasdaq GlobeNewswire / 04 Dec 2018 16:05:12 America/New_York
Third Quarter Fiscal 2019 Total Revenue of $65.0 million, up 57% Year-over-Year
Over 8,300 Customers at October 31, 2018, up 69% Year-over-Year
MongoDB Atlas Revenue 22% of Total Q3 Revenue, up over 300% Year-over-Year
NEW YORK, Dec. 04, 2018 (GLOBE NEWSWIRE) -- MongoDB, Inc. (NASDAQ: MDB), the leading, modern general purpose database platform, today announced its financial results for the third quarter ended October 31, 2018.
“MongoDB delivered terrific third quarter results that reflect our growing position as the modern database platform of choice,” said Dev Ittycheria, President and Chief Executive Officer of MongoDB. “We are seeing strong demand internationally and from customers in traditionally conservative markets and industries, which reflects our opportunity to continue generating strong growth.”
Ittycheria added, “MongoDB Atlas, which now represents 22% of revenue, had another incredible quarter as customers embraced the ease of use and flexibility of a fully managed modern cloud database service. We also continue to extend the differentiation of our database platform with the recent release of MongoDB Mobile and enhancements to MongoDB Stitch, which enables developers to innovate much faster than they can on alternative platforms.”
Third Quarter Fiscal 2019 Financial Highlights
- Revenue: Total revenue was $65.0 million, an increase of 57% year-over-year. Subscription revenue was $60.1 million, an increase of 59% year-over-year, and services revenue was $4.9 million, an increase of 36% year-over-year.
- Gross Profit: Gross profit was $47.2 million, representing a 73% gross margin, consistent with the year-ago period. Non-GAAP gross profit was $48.1 million, representing a 74% non-GAAP gross margin.
- Loss from Operations: Loss from operations was $29.1 million, compared to $24.1 million in the year-ago period. Non-GAAP loss from operations was $16.8 million, compared to $18.4 million in the year-ago period.
- Net Loss: Net loss was $31.3 million, or $0.59 per share, based on 52.7 million weighted-average shares outstanding. This compares to $24.2 million, or $1.39 per share, based on 17.4 million weighted-average shares outstanding, in the year-ago period. Non-GAAP net loss was $16.0 million, or $0.30 per share, based on 52.7 million weighted-average shares outstanding. This compares to $18.5 million, or $0.44 per share, based on 41.7 million non-GAAP weighted-average shares outstanding, in the year-ago period.
- Cash Flow: As of October 31, 2018, MongoDB had $522.7 million in cash, cash equivalents, short-term investments and restricted cash. During the three months ended October 31, 2018, MongoDB used $7.6 million of cash in operations and $2.1 million in capital expenditures, leading to negative free cash flow of $9.7 million, compared to negative free cash flow of $10.4 million in the year-ago period.
A reconciliation of each Non-GAAP measure to the most directly comparable GAAP measure has been provided in the financial statement tables included at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
Third Quarter Fiscal 2019 and Recent Business Highlights
- Released several new products to give developers a uniform way to work with data wherever they need to, including the general availability of MongoDB Mobile and enhancements to the serverless platform, MongoDB Stitch. MongoDB Mobile allows developers to build faster and more responsive applications that can take advantage of the power of the document model for data held on the mobile device. The addition of Stitch Mobile Sync lets developers automatically synchronize data changes between data held locally on a mobile device and a backend database.
- Acquired mLab, a pioneer in the database-as-a-service market. mLab has developed a strong reputation among developer-centric startup communities and has grown its business through a self-serve model. The acquisition of mLab is an attractive opportunity to continue to scale MongoDB Atlas and add deep technical and domain expertise to MongoDB.
- Introduced the Server Side Public License, or SSPL, a new licensing model for open source development in the public cloud era. MongoDB is in a unique position because the company owns the full copyright of all underlying MongoDB database code, which gives it full control over the licensing of its software. MongoDB created this new license for Community Server to make explicit the conditions for providing MongoDB as a service.
Based on information as of today, December 4, 2018, MongoDB is issuing the following financial guidance for the fourth quarter and full year fiscal 2019. Please note that our guidance includes the impact of mLab for the fourth quarter, which is expected to be approximately $5 million in revenue and neutral in terms of non-GAAP loss from operations and non-GAAP net loss per share.
Fourth Quarter Fiscal 2019 Full Year Fiscal 2019 Revenue $73.0 million to $74.0 million $243.7 million to $244.7 million Non-GAAP Loss from Operations $(21.0) million to $(20.0) million $(81.1) million to $(80.1) million Non-GAAP Net Loss per Share $(0.39) to $(0.38) $(1.53) to $(1.52)
Reconciliation of non-GAAP loss from operations and non-GAAP net loss per share guidance to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
Conference Call Information
MongoDB will host a conference call today, December 4, 2018, at 5:00 p.m. (Eastern Time) to discuss its financial results and business outlook. A live webcast of the call will be available on the “Investor Relations” page of MongoDB’s website at https://investors.mongodb.com. To access the call by phone, dial 800-289-0438 (domestic) or 323-794-2423 (international). A replay of this conference call will be available for a limited time at 844-512-2921 (domestic) or 412-317-6671 (international). The replay conference ID is 8582961. A replay of the webcast will also be available for a limited time at https://investors.mongodb.com.
MongoDB is the leading modern, general purpose database platform, designed to unleash the power of software and data for developers and the applications they build. Headquartered in New York, MongoDB has more than 8,300 customers in over 100 countries. The MongoDB database platform has been downloaded over 45 million times and there have been more than one million MongoDB University registrations.
This press release includes certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements concerning our financial guidance for the fourth fiscal quarter and full year fiscal 2019, our market opportunity, our go-to-market and growth strategies, the potential advantages of our new products and enhancements, our ability to expand our leadership position and drive revenue growth, and the anticipated benefits from our acquisition of mLab. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words or similar expressions or variations. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control including, without limitation: our limited operating history; our history of losses; failure of our database platform to satisfy customer demands; the effects of increased competition; our investments in new products and our ability to introduce new features, services or enhancements; our ability to effectively expand our sales and marketing organization; our ability to continue to build and maintain credibility with the developer community; our ability to add new customers or increase sales to our existing customers; our ability to maintain, protect, enforce and enhance our intellectual property; the growth and expansion of the market for database products and our ability to penetrate that market; our ability to maintain the security of our software and adequately address privacy concerns; our ability to manage our growth effectively and successfully recruit additional highly-qualified personnel; the price volatility of our common stock; and those risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings and reports, including our Annual Report on Form 10-K filed on March 30, 2018 and our Quarterly Report on Form 10-Q filed on September 7, 2018, as well as future filings and reports by us. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.
Non-GAAP Financial Measures
This press release includes the following financial measures defined as non-GAAP financial measures by the SEC: non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share and free cash flow. Non-GAAP gross profit and non-GAAP gross margin exclude stock-based compensation expense. Non-GAAP loss from operations and non-GAAP net loss exclude stock-based compensation expense, accelerated charges associated with the New York City office move, acquisition costs associated with the purchase of mLab and, in the case of non-GAAP net loss, non-cash interest expense related to our convertible senior notes and change in fair value of warrant liability. Non-GAAP net loss per share is calculated by dividing non-GAAP net loss by the weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted, and for periods prior to and including the period in which we completed our initial public offering, giving effect to the conversion of preferred stock at the beginning of the period. MongoDB uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating MongoDB’s ongoing operational performance. MongoDB believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in MongoDB’s industry, many of which present similar non-GAAP financial measures to investors.
Free cash flow represents net cash used in operating activities less capital expenditures and capitalized software development costs, if any. MongoDB uses free cash flow to understand and evaluate its liquidity and to generate future operating plans. The exclusion of capital expenditures and amounts capitalized for software development facilitates comparisons of MongoDB’s liquidity on a period-to-period basis and excludes items that it does not consider to be indicative of its liquidity. MongoDB believes that free cash flow is a measure of liquidity that provides useful information to investors in understanding and evaluating the strength of its liquidity and future ability to generate cash that can be used for strategic opportunities or investing in its business in the same manner as MongoDB’s management and board of directors.
Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In particular, other companies may report non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share, free cash flow or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, as presented below. This earnings press release and any future releases containing such non-GAAP reconciliations can also be found on the Investor Relations page of MongoDB’s website at https://investors.mongodb.com.
ICR for MongoDB
MONGODB, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (unaudited) October 31, 2018 January 31, 2018 Assets Current assets: Cash and cash equivalents $ 139,490 $ 61,902 Short-term investments 382,681 217,072 Accounts receivable, net of allowance for doubtful accounts of $1,434 and $1,238 as of October 31, 2018 and January 31, 2018, respectively 37,497 46,872 Deferred commissions 19,143 11,820 Prepaid expenses and other current assets 8,653 5,884 Total current assets 587,464 343,550 Property and equipment, net 73,191 59,557 Goodwill 1,700 1,700 Acquired intangible assets, net 965 1,627 Deferred tax assets 701 326 Other assets 6,649 8,436 Total assets $ 670,670 $ 415,196 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 1,942 $ 2,261 Accrued compensation and benefits 21,615 17,433 Other accrued liabilities 12,169 8,423 Deferred revenue 136,609 114,500 Total current liabilities 172,335 142,617 Deferred rent, non-current 2,183 925 Deferred tax liability, non-current 42 18 Deferred revenue, non-current 17,229 22,930 Convertible senior notes, net 213,692 - Other liabilities, non-current 67,944 55,213 Total liabilities 473,425 221,703 Stockholders’ equity: Class A common stock, par value of $0.001 per share; 1,000,000,000 shares authorized as of October 31, 2018 and January 31, 2018; 35,189,254 and 13,303,028 shares issued and outstanding as of October 31, 2018 and January 31, 2018, respectively 35 13 Class B common stock, par value of $0.001 per share; 100,000,000 shares authorized as of October 31, 2018 and January 31, 2018; 18,406,366 and 37,371,914 shares issued as of October 31, 2018 and January 31, 2018, respectively; 18,306,995 and 37,272,543 shares outstanding as of October 31, 2018 and January 31, 2018, respectively 18 38 Additional paid-in capital 734,381 638,680 Treasury stock, 99,371 shares (repurchased at an average of $13.27 per share) as of October 31, 2018 and January 31, 2018 (1,319 ) (1,319 ) Accumulated other comprehensive loss (380 ) (159 ) Accumulated deficit (535,490 ) (443,760 ) Total stockholders’ equity 197,245 193,493 Total liabilities and stockholders’ equity $ 670,670 $ 415,196 MONGODB, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2018 2017 2018 2017 Revenue: Subscription $ 60,090 $ 37,885 $ 157,588 $ 99,603 Services 4,895 3,603 13,109 9,875 Total revenue 64,985 41,488 170,697 109,478 Cost of revenue(1): Subscription 13,248 7,904 35,434 21,669 Services 4,510 3,167 12,567 8,789 Total cost of revenue 17,758 11,071 48,001 30,458 Gross profit 47,227 30,417 122,696 79,020 Operating expenses: Sales and marketing(1) 38,116 28,050 109,885 77,087 Research and development(1) 23,179 16,588 63,254 45,414 General and administrative(1) 14,986 9,829 38,467 26,533 Total operating expenses 76,281 54,467 211,606 149,034 Loss from operations (29,054 ) (24,050 ) (88,910 ) (70,014 ) Other income (loss), net (2,299 ) 170 (2,140 ) 846 Loss before provision for income taxes (31,353 ) (23,880 ) (91,050 ) (69,168 ) Provision (benefit) for income taxes (33 ) 336 680 817 Net loss $ (31,320 ) $ (24,216 ) $ (91,730 ) $ (69,985 ) Net loss per share, basic and diluted $ (0.59 ) $ (1.39 ) $ (1.78 ) $ (4.74 ) Weighted-average shares used to compute net loss per share, basic and diluted 52,702,526 17,421,642 51,431,021 14,749,500 (1) Includes stock-based compensation expense as follows: Three Months Ended October 31, Nine Months Ended October 31, 2018 2017 2018 2017 Cost of revenue—subscription $ 555 $ 183 $ 1,403 $ 503 Cost of revenue—services 335 123 800 292 Sales and marketing 3,090 1,704 7,437 4,400 Research and development 3,131 1,505 8,241 4,072 General and administrative 3,153 2,184 8,969 5,799 Total stock‑based compensation expense $ 10,264 $ 5,699 $ 26,850 $ 15,066 MONGODB, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2018 2017 2018 2017 Cash flows from operating activities Net loss $ (31,320 ) $ (24,216 ) $ (91,730 ) $ (69,985 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,711 929 3,334 2,789 Stock-based compensation 10,264 5,695 26,850 15,066 Amortization of debt discount and issuance costs 3,139 - 4,233 - Non-cash interest on office financing lease 659 - 659 - Deferred income taxes (398 ) 101 (351 ) 163 Change in fair value of warrant liability - - - (101 ) Change in operating assets and liabilities: Accounts receivable 1,238 (3,007 ) 9,267 (4,653 ) Prepaid expenses and other current assets (2,108 ) 822 (4,018 ) (2,120 ) Deferred commissions (4,194 ) (1,848 ) (5,514 ) (2,217 ) Other long-term assets (79 ) (36 ) (33 ) (670 ) Accounts payable 229 675 (165 ) 687 Deferred rent 341 (275 ) 1,258 (85 ) Accrued liabilities 5,227 918 7,184 2,163 Deferred revenue 7,683 9,942 16,517 21,794 Net cash used in operating activities (7,608 ) (10,300 ) (32,509 ) (37,169 ) Cash flows from investing activities Purchases of property and equipment (2,137 ) (88 ) (3,698 ) (1,714 ) Proceeds from maturities of marketable securities 88,000 10,000 206,000 74,230 Purchases of marketable securities (69,269 ) (4,125 ) (369,736 ) (72,879 ) Net cash provided by (used in) investing activities 16,594 5,787 (167,434 ) (363 ) Cash flows from financing activities Proceeds from exercise of stock options, including early exercised stock options 9,525 2,217 17,631 8,201 Proceeds from the issuance of common stock under the Employee Stock Purchase Plan - - 5,626 - Repurchase of early exercised stock options (18 ) (75 ) (327 ) (149 ) Proceeds from borrowings on convertible senior notes, net of issuance costs (2,016 ) - 291,145 - Payment for purchase of capped calls - - (37,086 ) - Proceeds from tenant allowance related to build to suit lease 257 - 633 - Proceeds from the IPO, net of underwriting discounts and commissions - 205,494 - 205,494 Proceeds from exercise of redeemable convertible preferred stock warrants - - - 1 Payment of initial public offering costs - (1,167 ) - (2,344 ) Net cash provided by financing activities 7,748 206,469 277,622 211,203 Effect of exchange rate changes on cash, cash equivalents, and restricted cash (18 ) 22 (101 ) 182 Net increase in cash, cash equivalents, and restricted cash 16,716 201,978 77,578 173,853 Cash, cash equivalents, and restricted cash, beginning of period 123,289 41,287 62,427 69,412 Cash, cash equivalents, and restricted cash, end of period $ 140,005 $ 243,265 $ 140,005 $ 243,265 MONGODB, INC. RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (in thousands, except share and per share data) (unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2018 2017 2018 2017 Reconciliation of GAAP gross profit to non-GAAP gross profit: Gross profit on a GAAP basis $ 47,227 $ 30,417 $ 122,696 $ 79,020 Gross margin (Gross profit/Total revenue) on a GAAP basis 73% 73% 72% 72% Add back: Stock-based compensation expense: Cost of Revenue—Subscription 555 183 1,403 503 Stock-based compensation expense: Cost of Revenue—Services 335 123 800 292 Non-GAAP gross profit $ 48,117 $ 30,723 $ 124,899 $ 79,815 Non-GAAP gross margin (Non-GAAP gross profit/Total revenue) 74% 74% 73% 73% Reconciliation of GAAP loss from operations to non-GAAP loss from operations: Loss from operations on a GAAP basis $ (29,054 ) $ (24,050 ) $ (88,910 ) $ (70,014 ) Add back: Stock-based compensation expense 10,264 5,699 26,850 15,066 Accelerated charges associated with the New York City office move 1,450 - 1,450 - Acquisition costs 510 - 510 - Non-GAAP loss from operations $ (16,830 ) $ (18,351 ) $ (60,100 ) $ (54,948 ) Reconciliation of GAAP net loss to non-GAAP net loss: Net loss on a GAAP basis $ (31,320 ) $ (24,216 ) $ (91,730 ) $ (69,985 ) Add back: Stock-based compensation expense 10,264 5,699 26,850 15,066 Accelerated charges associated with the New York City office move 1,450 - 1,450 - Acquisition costs 510 - 510 - Non-cash interest expense related to convertible senior notes 3,139 - 4,233 - Change in fair value of warrant liability – - - (101 ) Non-GAAP net loss $ (15,957 ) $ (18,517 ) $ (58,687 ) $ (55,020 ) Reconciliation of GAAP net loss per share, basic and diluted, to non-GAAP net loss per share, basic and diluted: Net loss per share, basic and diluted, on a GAAP basis $ (0.59 ) $ (1.39 ) $ (1.78 ) $ (4.74 ) Add back: Stock-based compensation expense 0.19 0.33 0.52 1.02 Accelerated charges associated with the New York City office move 0.03 - 0.03 - Acquisition costs 0.01 - 0.01 - Non-cash interest expense related to convertible senior notes 0.06 - 0.08 - Change in fair value of warrant liability - - - (0.01) Impact of additional weighted-average shares giving effect to conversion of preferred stock at the beginning of the period - 0.62 - 2.38 Non-GAAP net loss per share, basic and diluted $ (0.30 ) $ (0.44 ) $ (1.14 ) $ (1.35 ) Reconciliation of GAAP weighted-average shares outstanding, basic and diluted, to non-GAAP weighted-average shares outstanding, basic and diluted, used to compute net loss per share: Weighted-average shares used to compute net loss per share, basic and diluted, on a GAAP basis 52,702,526 17,421,642 51,431,021 14,749,500 Add back: Additional weighted-average shares giving effect to conversion of preferred stock at the beginning of the period - 24,316,192 - 26,045,352 Non-GAAP weighted-average shares used to compute net loss per share, basic and diluted 52,702,526 41,737,834 51,431,021 40,794,852
The following table presents a reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP measure, for each of the periods indicated (unaudited, in thousands):
Three Months Ended October 31, Nine Months Ended October 31, 2018 2017 2018 2017 Net cash used in operating activities $ (7,608 ) $ (10,300 ) $ (32,509 ) $ (37,169 ) Capital expenditures (2,137 ) (88 ) (3,698 ) (1,714 ) Capitalized software - - - - Free cash flow $ (9,745 ) $ (10,388 ) $ (36,207 ) $ (38,883 )