01—Abstract
Summary
Summary of the 10-Q filed September 1, 2023. Cited figures are marked; the original filing is the authoritative source.
MongoDB, Inc. reported results for the three and six months ended July 31, 2023 in this Form 10-Q.
Total revenue for the quarter was $423.8 milliona, up from $303.7 million a year earlier, and subscription revenue was $409.3 million. Net loss narrowed to $37.6 million from $118.9 million, and loss from operations improved to $49.0 million from $114.8 million. For the six months, revenue was $792.1 million versus $589.1 million, and operating cash flow was $28.4 million compared with $(33.1) million in the prior-year period.
The company ended the quarter with cash and cash equivalents of $607.2 millionb and short-term investments of $1.29 billion, which the filing describes as total principal sources of liquidity of $1.9 billion. Its 0.25% convertible senior notes due 2026 carry a principal balance of $1.15 billion, and the filing states that the notes became convertible from August 1, 2023 through October 31, 2023 after the conditional conversion trigger was met.
Management said macroeconomic conditions created slower-than-historical growth for existing MongoDB Atlas applications and expects that headwind to continue for the remainder of the year. The filing also reports that the Federal Circuit affirmed the district court's dismissal in the Realtime Data patent litigation on August 2, 2023, and that the company reported 45,000 customers and 1,855 customers with $100,000c or greater in ARR as of July 31, 2023.
02—Key points
Key Highlights
- Total revenue rose to $423.8 million for the three months ended July 31, 2023, up from $303.7 million, with subscription revenue at $409.3 million.
- Gross margin improved to 75% for the quarter, compared with 71% a year earlier, and subscription gross margin reached 79%.
- Net loss narrowed to $37.6 million from $118.9 million, and loss from operations decreased to $49.0 million from $114.8 million.
- Operating cash flow was $28.4 million for the six months ended July 31, 2023, compared with $(33.1) million in the prior-year period.
- Cash, cash equivalents, short-term investments and restricted cash totaled $1.9 billion as of July 31, 2023.
- The 2026 convertible senior notes, with $1.15 billion principal, became convertible from August 1, 2023 through October 31, 2023 after the conditional conversion feature was triggered.
- Management reported slower-than-historical growth for existing MongoDB Atlas applications due to macroeconomic conditions and expects the headwind to persist in the short term.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2024, MongoDB lost $0.09.
- Revenue$423.8M100.0%
- Cost of revenue−$105.3M24.9%
- Gross profit$318.5M75.1%
- Operating costs−$367.5M86.7%
- Operating income−$49.0M11.6%
- Interest, other & tax$11.4M2.7%
- Net income−$37.6M8.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed September 1, 2023Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $423.79M$303.66M | +39.6% |
| Cost of Revenue | $105.34M$88.28M | +19.3% |
| Gross Profit | $318.45M$215.38M | +47.9% |
| R&D Expenses | $125.42M$108.04M | +16.1% |
| Operating Expenses | $367.46M$330.23M | +11.3% |
| Operating Income | -$49.00M-$114.84M | +57.3% |
| Interest Expense | $2.61M$2.43M | +7.5% |
| Net Income | -$37.60M-$118.86M | +68.4% |
| EPS (Basic) | $-0.53$-1.74 | +69.5% |
| Shares Outstanding (Basic) | 70.87M68.33M | +3.7% |
05—Questions
Frequently Asked Questions
How did MongoDB's revenue and losses change in the most recent quarter?
Total revenue for the three months ended July 31, 2023 was $423.8 million, up from $303.7 million a year earlier, driven primarily by subscription revenue from Direct Sales Customers. Net loss decreased to $37.6 million from $118.9 million, reflecting higher revenue partly offset by increased sales and marketing and research and development spending.
What is driving the company's gross margin improvement?
Gross margin rose to 75% from 71% for the quarter. The filing attributes the subscription gross margin increase to 79% primarily to efficiencies in managing third-party cloud infrastructure costs, while services gross margin declined due to higher services personnel costs and stock-based compensation.
Is MongoDB generating cash and does it have enough liquidity?
Operating cash flow was $28.4 million for the six months ended July 31, 2023, compared with $(33.1) million a year earlier. As of July 31, 2023, cash, cash equivalents, short-term investments and restricted cash totaled $1.9 billion, and management believes this is sufficient to fund operating and capital needs for at least the next 12 months.
What should investors know about the 2026 convertible notes?
The 2026 Notes have a principal balance of $1,149,972 thousand and a 0.25% interest rate. The conditional conversion feature was triggered for the quarter, so the notes are convertible from August 1, 2023 through October 31, 2023. Whether they remain convertible afterward depends on future satisfaction of the conversion conditions.
What macroeconomic risks does management highlight for future growth?
Management said that slower economic growth, higher interest rates and inflation slowed growth of existing MongoDB Atlas applications during the six months ended July 31, 2023. It expects these macroeconomic headwinds on growth rates for existing Atlas applications to continue in the short term.
06—Continue