01—Abstract
Summary
Summary of the 10-K filed March 27, 2020. Cited figures are marked; the original filing is the authoritative source.
MongoDB, Inc. reported fiscal 2020 (year ended January 31, 2020) total revenue of $421.7 milliona, up from $267.0 million in fiscal 2019 and $166.0 million in fiscal 2018, with a net loss of $175.5 million compared with $99.0 million the prior year.
Subscription revenue was $399.8 millionb and services revenue $21.9 million. MongoDB Atlas revenue represented 39% of total revenue, up from 23% in the prior year, while MongoDB Enterprise Advanced represented 47% of total revenue, down from 56%. Gross margin was 70% versus 72% in fiscal 2019, and operating expenses rose to $444.2 million from $291.2 million, with sales and marketing at 53% of revenue.
The company ended the year with over 17,000 customers and cash, cash equivalents, short-term investments and restricted cash of $987.0 millionc. The company's balance sheet changed materially during the year. In January 2020 it issued $1.15 billion of 0.25% convertible senior notes due 2026 and used $479.2 million of the proceeds to repurchase $210.0 million of its 0.75% notes due 2024.
Operating cash flow was negative $29.5 milliond and free cash flow was negative $35.0 million, compared with negative $42.0 million and negative $48.8 million in fiscal 2019. The company states it intends to keep investing heavily for growth rather than optimizing for profitability or cash flow, and it expects COVID-19 to negatively affect revenue in fiscal 2021.
Investors should also note the dual-class share structure, under which Class B shares carry 10 votes each and Class B holders controlled approximately 65% of voting power as of January 31, 2020. The filing also discloses a pending patent infringement lawsuit brought by Realtime Data, which is currently stayed, and a risk factor noting that the 2024 Notes were convertible at holders' option through April 30, 2020.
02—Key points
Key Highlights
- Total revenue rose to $421.7 million in fiscal 2020 from $267.0 million in fiscal 2019, and net loss widened to $175.5 million from $99.0 million.
- MongoDB Atlas revenue represented 39% of total revenue in fiscal 2020, up from 23% in fiscal 2019, while MongoDB Enterprise Advanced fell to 47% from 56%.
- Gross margin declined to 70% from 72%, which the company attributes to growth in Atlas and its third-party cloud infrastructure costs.
- Operating cash flow was negative $29.5 million and free cash flow was negative $35.0 million, improved from negative $42.0 million and negative $48.8 million in fiscal 2019.
- In January 2020 the company issued $1.15 billion of 0.25% convertible senior notes due 2026 and repurchased $210.0 million of its 0.75% notes due 2024 for $479.2 million in cash.
- Cash, cash equivalents, short-term investments and restricted cash totaled $987.0 million at January 31, 2020, and the company had over 17,000 customers.
- Class B common stock with 10 votes per share represented approximately 65% of voting power at January 31, 2020, concentrating control with pre-IPO holders.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2020, MongoDB lost $0.42.
- Revenue$421.7M100.0%
- Cost of revenue−$125.4M29.7%
- Gross profit$296.4M70.3%
- Operating costs−$444.2M105.3%
- Operating income−$147.9M35.1%
- Interest, other & tax−$27.7M6.6%
- Net income−$175.5M41.6%
04—Financials
Financial Highlights
Figures from 10-KFY2020filed March 27, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $421.72M$267.02M | +57.9% |
| Cost of Revenue | $125.36M$73.57M | +70.4% |
| Gross Profit | $296.36M$193.45M | +53.2% |
| R&D Expenses | $149.03M$89.85M | +65.9% |
| Operating Expenses | $444.23M$291.21M | +52.5% |
| Operating Income | -$147.87M-$97.77M | −51.2% |
| Interest Expense | $20.98M$10.29M | +103.9% |
| Net Income | -$175.52M-$99.01M | −77.3% |
| EPS (Basic) | $-3.14$-1.90 | −65.3% |
| Shares Outstanding (Basic) | 55.94M52.03M | +7.5% |
05—Questions
Frequently Asked Questions
How fast is MongoDB's revenue growing and is it reaching profitability?
Total revenue grew to $421.7 million in fiscal 2020 from $267.0 million in fiscal 2019, and to $166.0 million in fiscal 2018. The company is not yet profitable: it reported a net loss of $175.5 million in fiscal 2020 and an accumulated deficit of $668.2 million, and it states it expects to keep incurring losses while investing heavily in growth.
What is driving the shift in MongoDB's revenue mix?
MongoDB Atlas, the hosted multi-cloud offering, grew to 39% of total revenue in fiscal 2020 from 23% in fiscal 2019 and 7% in fiscal 2018. Enterprise Advanced's share fell to 47% from 56%. The company notes that the growth of Atlas may reduce subscription gross margin because of the third-party cloud infrastructure costs it incurs.
How is MongoDB funding its operations and what debt does it carry?
Financing activities provided $589.2 million in fiscal 2020, mainly from $1.1 billion of net proceeds from the 0.25% convertible senior notes due 2026, partly offset by $479.1 million used to repurchase part of the 0.75% notes due 2024. Convertible senior notes, net, were $911.1 million at January 31, 2020. The company believes existing cash and short-term investments will be sufficient for at least the next 12 months.
What risks does the dual-class share structure create for Class A shareholders?
Class B shares carry 10 votes each and Class A shares carry one. As of January 31, 2020, Class B holders represented approximately 65% of voting power, and directors, executive officers and their affiliates represented approximately 54%. Holders of Class B stock can therefore control matters submitted to stockholders, and the company notes that index providers may exclude companies with multiple-class share structures.
What is the effect of COVID-19 on MongoDB's outlook according to the filing?
The company states it expects its revenue to be negatively impacted by the slowdown in activity associated with the COVID-19 pandemic in fiscal 2021. It also says the full impact is unknown and that the pandemic may affect its sales pipeline, bookings, marketing activities and international expansion.
06—Continue