Customer momentum continues for MongoDB despite COVID-19 - and sometimes because of it

MongoDB warned investors several months ago that COVID-19 would impact on its growth, but in the event the open source database firm turned in Q1 numbers that comfortably beat market expectations. 

Revenues of $109.4 million were up 45.5% year-on-year with subscription revenues of $124.6  million making up 95.8% of that total, up 48.3% year-on- year. Net loss for the quarter was $54.0 million.  Revenue from Atlas - MongoDB’s database-as-a-service offering -  was up 75% year-on-year and now represent 42% of total revenue. The firm now has over 18,400 customers, up from 14,200 a year ago. 

While the numbers pleased Wall Street, CEO Dev Ittycheria (pictured)  pointed to the ongoing uncertainties in the market caused by COVID-19, but added that he saw customers still being committed to digital transformation initiatives: 

Businesses of all kinds, even the most technology cautious, recognize their future is powered by software. Consequently, they need to continue to invest in their digital future despite the near-term economic uncertainty. During Q1, we saw customers in even some of the most negatively impacted industries, double down on their digital transformation journeys.

For example, we closed a 7-figure deal with one of the largest global auto companies. The company is making a MongoDB as a service available to internal users on their private cloud. There are currently more than 1,000 MongoDB servers in production, supporting critical use cases within the various areas of the company's digitization strategy, including their connected car initiative.

He argued: 

What COVID and the pandemic is basically causing everyone to recognize, even the most technically conservative or cautious customers, is that just staying [on] legacy technology is not the place to be. What people need is the ability to move quickly, and they need to be able to change directions quickly, too. So they need to be able to respond to new threats or seize new opportunities.

That need for speed and agility is evident, Ittycheria added: 

Our customers want to move fast to quickly seize new opportunities or respond to new threats. They want to easily bring new features to market and leverage data effectively, while being able to operate at almost unlimited scale. This increased need for speed and agility plays squarely into MongoDB's core strengths. For example, one of the world's most popular consumer video chat applications was built on MongoDB technology and was able to withstand 120x increase in concurrent users of the weekend of March 14th. 

Current conditions will only accelerate a shift to cloud delivery, he predicted:

COVID-19 has made it abundantly clear that doing the undifferentiated work of database management is not only inefficient, but can in fact make it harder to address users' ever-increasing expectations. Customers want to de-risk their operations and devote all their energy to doing work that has high impact on the business, as opposed to managing and maintaining their own infrastructure. In Q1, we expanded our Atlas relationship with a leading North American airline. Their strategic focus is to accelerate their move to the cloud in order to modernize their applications and reduce their dependence, on the mainframe. MongoDB is helping them build an operational data layer in the cloud.

And it’s not just cloud, it’s multi-cloud that is of interest, he concluded: 

Since the pandemic has started, all cloud providers have seen spikes in usage that have impacted their performance and availability in certain regions. In addition, cloud providers have limited certain features to avoid bottlenecks. Given the increasing likelihood of infrastructure constraints, having a data platform such as MongoDB that makes it easy to use multiple cloud providers is becoming even more important. A Canadian security company recently migrated its mobile security platform from {Amazon] DocumentDB to MongoDB Atlas. In addition to reducing costs by 60% and being able to leverage all the features of MongoDB, the key objective was to create a global multi-cloud foundation to rapidly scale IoT, AI and transactional workloads.

COVID use cases

Despite fearing that COVID-19 might inhibit growth, the pandemic has actually thrown up some use cases that are driven by the current crisis. Ittycheria cited:

Grocery delivery wholesale or boxed, has seen soaring demand for the goods and services due to the pandemic. With the availability of essential supplies changing on a daily basis, they needed a highly scalable database platform to manage their supply chain in real time. They doubled down on MongoDB Atlas and started using MongoDB Charts to help with capacity planning and to ensure they could scale to meet the extreme increases in customer demand.

Bingel, the leader in interactive and personalized online learning for the Belgian primary school children, turned to MongoDB on March 13 to handle the increase in demand when the government shut down all schools because of COVID-19. The company, part of Sanoma Learning, immediately became part of the country's critical infrastructure and realized it needed Atlas in order to scale to meet the needs of the country's children. Bingel rapidly migrated services and now sees and effortlessly handles more than 12 million online exercises a day.

Zomato, one of the largest restaurant discovery and food delivery service in the world with over 80 million monthly active users in 24 countries, recently increased its commitment to MongoDB to power its logistics application, an essential piece of the last mile in the food delivery chain. This helps Zomato ensure that they are able to keep up with increased demand, efficiently map their food delivery orders to the right delivery partner, track their journey and ensure on-time deliveries.

Woolworths Group, one of the largest retailers in Australia and New Zealand, decided to start offering digital receipts to its 11.7 million reward customers in order to minimize human contact during COVID-19. The retailer used Atlas to create a new platform to ingest all of its point-of-sale data, more than 350 transactions per second and serve it out to customers in real time. MongoDB was able to help them get the system up and running in under three weeks.

My take

We do recognize that, obviously, the current macro-environment is not great, but our long-term view on the business is very bullish.

A stronger than expected report from MongoDB, albeit couched with the inevitable uncertainties around guidance for the coming months. But a good note on which the company can kick off its MongoDB World Live conference - now, of course, a virtual event - this week.