01—Abstract
Summary
Summary of the 10-K filed March 30, 2018. Cited figures are marked; the original filing is the authoritative source.
MongoDB, Inc. reported its Form 10-K for the fiscal year ended January 31, 2018, following its October 2017 IPO on Nasdaq under the symbol MDB.
Total revenue rose to $154.5 milliona from $101.4 million in fiscal 2017 and $65.3 million in fiscal 2016, with subscription revenue of $141.5 million (92% of total) and services revenue of $13.0 million. Gross margin was 72%, but the company remained deeply unprofitable: net loss was $96.4 million, compared with $86.7 million in fiscal 2017, and the accumulated deficit reached $443.8 million. Operating cash flow was negative $44.9 million and free cash flow was negative $47.0 million.
The company is investing heavily for growth rather than profitability. Sales and marketing expense was $109.9 millionb, or 71% of revenue, and headcount rose to 962 employees. MongoDB Atlas, the cloud database-as-a-service offering launched in June 2016, grew to 7% of total revenue in fiscal 2018 from 1% in fiscal 2017, and represented 11% of revenue in the fourth quarter.
The company reported a net ARR expansion rate above 120% for each of the last 12 fiscal quarters and more than 5,700 customers. The IPO raised net proceeds of $201.6 millionc, and cash, cash equivalents, short-term investments and restricted cash totaled $279.5 million at year end. Investors should weigh several risks.
Class B shares carry 10 votes per share, and holders of Class B stock held approximately 97%d of voting power, so public Class A holders have limited influence. The company is an emerging growth company, and a lock-up on pre-IPO holders expires in April 2018.
Revenue is recognized ratably, so changes in new sales take time to show in results. The company also expects the new revenue standard (ASC 606) to cause unearned subscription revenue to decline significantly upon adoption.
02—Key points
Key Highlights
- Total revenue grew to $154.5 million in fiscal 2018 from $101.4 million in fiscal 2017, with subscription revenue at $141.5 million (92% of total).
- Net loss widened to $96.4 million from $86.7 million, and the accumulated deficit reached $443.8 million; operating cash flow was negative $44.9 million.
- MongoDB Atlas, the cloud DBaaS offering, represented 7% of total revenue in fiscal 2018, up from 1% in fiscal 2017, and 11% in the fourth quarter.
- Net ARR expansion rate has been over 120% for each of the last 12 fiscal quarters; the company had over 5,700 customers as of January 31, 2018.
- IPO closed in October 2017 at $24.00 per share, with 9.2 million Class A shares and net proceeds of $201.6 million; year-end cash and short-term investments totaled $279.0 million.
- Class B shares with 10 votes each represented approximately 97% of voting power, and directors and officers together held about 56%, limiting Class A holders' influence.
- Sales and marketing expense of $109.9 million was 71% of revenue, reflecting heavy investment in growth, and headcount grew to 962 employees.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2018, MongoDB lost $0.51.
- Revenue$166.0M100.0%
- Cost of revenue−$42.9M25.8%
- Gross profit$123.2M74.2%
- Operating costs−$208.1M125.3%
- Operating income−$84.9M51.1%
- Interest, other & tax$908,0000.5%
- Net income−$84.0M50.6%
04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 30, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $166.03M$114.81M | +44.6% |
| Cost of Revenue | $42.86M$29.87M | +43.5% |
| Gross Profit | $123.17M$84.94M | +45.0% |
| R&D Expenses | $62.20M$51.77M | +20.1% |
| Operating Expenses | $208.05M$154.27M | +34.9% |
| Operating Income | -$84.88M-$69.33M | −22.4% |
| Interest Expense | $8K$9K | −11.1% |
| Net Income | -$83.97M-$70.06M | −19.9% |
| EPS (Basic) | $-3.54$-5.74 | +38.3% |
| Shares Outstanding (Basic) | 23.72M12.21M | +94.2% |
05—Questions
Frequently Asked Questions
How fast is MongoDB's revenue growing and what drives it?
Total revenue was $154.5 million in fiscal 2018, up from $101.4 million in fiscal 2017, an increase of $53.2 million or 52%. Subscription revenue rose $50.3 million, including $17.6 million from new customers, and the remainder came from existing customers expanding their subscriptions.
Is MongoDB profitable?
No. The company reported a net loss of $96.4 million for fiscal 2018, compared with $86.7 million in fiscal 2017 and $73.5 million in fiscal 2016. It has an accumulated deficit of $443.8 million and expects to continue incurring operating losses as it invests in sales, marketing and product development.
What is MongoDB Atlas and why does it matter?
MongoDB Atlas is the company's cloud-hosted database-as-a-service offering, introduced in June 2016. It represented 7% of total revenue for fiscal 2018, up from 1% in fiscal 2017, and 11% of revenue in the three months ended January 31, 2018. The company says it is a key part of its growth strategy, and it is offered on AWS, Google Cloud Platform and Microsoft Azure.
How much control do public Class A shareholders have?
Limited control. Class B common stock carries 10 votes per share versus one vote for Class A, and as of January 31, 2018, Class B holders represented approximately 97% of the voting power. Directors, executive officers and their affiliates together held approximately 56% of voting power.
What are the main risks flagged in the filing?
Key risks include intense competition from legacy database providers such as IBM, Microsoft and Oracle, and from cloud providers; reliance on Community Server users converting to paid subscriptions; the AGPL license possibly being unenforceable; security incidents; and the expected revenue-recognition change under ASC 606, which the company expects to reduce unearned subscription revenue significantly upon adoption. Pre-IPO holder lock-ups also expire in April 2018.
06—Continue