MongoDB beats Q3 expectations as sales change pays off

It’s been another successful quarter for NoSQL database provider MongoDB, which beat analyst expectations during Q3. The vendor saw third quarter revenue grow 38% year-over-year, to $150.8 million. 

 

It also grew its subscription revenue 39% year-over-year and its Atlas cloud revenue grew 61% year-over-year. Atlas now represents 47% of the company’s total revenue, edging ever close to that 50% milestone.  

Another noteworthy point is that MongoDB grew its customer base by over 2,400 customers sequentially, bringing its total customer count to over 22,600 - up from over 15,900 in the same period a year ago. 

CEO Dev Ittycheria explained during an analyst call that MongoDB’s previous adjustments to how it carries out sales are working in the company’s favour. Last quarter Ittycheria outlined how sales reps will no longer require a commitment from buyers up front, with the idea being that once they are on the platform they will grow from there - taking away the need for a minimum commitment requirement. 

In addition to this, MongoDB has enhanced its self service options for customers, which have resulted in significant net wins for Atlas this quarter. Ittycheria said: 

We're very pleased by our third quarter performance against a difficult and uncertain macroeconomic backdrop. We saw another record quarter of customer additions both in our direct sales and self-serve channels. As we discussed in the past, given the strong product market fit of Atlas, we decided to make a number of changes that make it easier for new customers to get on to our platform. 

We continued to reap the benefits of these adjustments in Q3 with record customer growth and strong net ARR expansion. On the self-serve side, our continued efforts to broaden our digital marketing funnel have resulted in over 2,000 net Atlas customer additions in Q3. As a reminder, our self-serve business is increasingly not just an important revenue generator in its own right, but also a source of leads for our sales force. Strong self-serve net additions in Q3 indicates that this flywheel effect will continue in the future.

Pillars of growth 

Ittycheria said that from speaking to customers across a wide range of industries and geographies, it’s clear that companies are under more pressure than ever to innovate quickly and respond to new threats. The pandemic has also exacerbated the need to urgently move to the cloud. He explained: 

When evaluating technologies, customers want solutions that provide a seamless migration path from on-premise to the cloud. They need mission-critical platforms that can massively scale and customers now recognize they have to simplify their tech stack to ensure agility and speed. 

Furthermore, the resiliency of the computing platforms and the ability to serve customers easily no matter where they are based has never been more important. As a result, customers are fundamentally rethinking their technology strategy and the debate is not if or when, but how to accelerate the modernization of their legacy applications as well as to build new apps to address the new business requirements.

Ittycheria said that MongoDB is being viewed as a core platform for buyers, when undertaking these tech decisions. The company, he added, has three core pillars that are enabling this. These include: 

• Technological - Ittycheria said that the best database will win and that MongoDB’s document model has proven itself as the most productive way for developers to work with data, allowing applications to scale cost effectively. 
• Developer mindshare - Ittycheria said that MongoDB has garnered incredible developer enthusiasm and that the MongoDB community of developers is large, global and continues to grow every day. This is an asset that is difficult to replicate, he added. 
• Platform independence - Multi-cloud for Atlas gives MongoDB customers the ability to run an application across multiple public clouds, simultaneously. 

Ittycheria said that these three pillars stand MongoDB in good stead to take advantage of the opportunity with buyers, which are making long-term decisions under COVID-19 pressure. He said:

The combination of our unique value proposition and multi-faceted go-to-market model puts us in a great competitive position. We see our strong third quarter and year-to-date results in an unprecedented environment as an indication that our differentiation resonates in the marketplace. The strength in the quarter was broad based across geographies and customer segments.”