MongoDB added 800 new logos in its second quarter to bring the total customer count to 15,000, essentially double where the firm was at this time last year.
Financially, Q2 revenue was up 67% year-on-year, while the operating loss was halved year-on-year to $14.8 million. Subscription revenue was $94.2 million, up 71% year-on-year, while professional services revenue was $5.2 million, up 15% year-on-year.
But it was to the customers that CEO Dev Ittycheria pointed as proof points of ongoing successful growth, arguing that:
The breadth and depth of MongoDB's deployments around the world demonstrates our success as the modern data platform of choice.
He cited a number of exemplars:
[Mobile payment service] Venmo has experienced tremendous growth over the past few years and has decided to partner with MongoDB because of our ability to provide the scale they needed for their growing platform. Venmo is leveraging MongoDB's Enterprise Advanced offering to streamline operations and to drive automation.
Halliburton Energy Services, a leading oilfield services company, is adopting MongoDB to modernize its high performance rig technology. The Halliburton Edge platform connects digital operations of the field, orchestrating multiple inbound and outbound data streams and applications to optimize execution. The ease of use and flexible schema of MongoDB enabled the developers to quickly iterate and drive innovation and modernization at the rig site.
An important example of MongoDB's international reach, technology leader Hitachi signed an agreement to embed MongoDB in their new products. After evaluating several other database platforms, they chose MongoDB for a consistent reputation for reliability, scalability and performance.
Dreamus, a subsidiary of SK Telecom, the number one telco in Korea, recently replaced MySQL with MongoDB for their new mobile music service flow. Dreamus made the decision to switch to MongoDB, because of the limitations of its relational database to scale and MongoDB's flexible schema of data model as well as their future plans for a managed cloud service.
Conrad Electric, a European retailer of electronic products based in Germany and one of Europe's top 10 online shops, was self managing MongoDB community in the cloud, but recently decided to move their MongoDB environment to Atlas. They're not only saving on overall infrastructure cost, but can also focus their developers time on high value tasks instead of database management.
Adoption of the Atlas Database-as-a-Service offering now accounts for 37% of total revenue, up from 18% a year ago. Ittycheria said:
One of the key competitive differentiators is the freedom to run anywhere, and our cloud partnerships enable customers that choose MongoDB Atlas to take advantage of the benefits of each major cloud provider as they see it fit. We're off to a strong start with our partnership with GCP. We expanded our relation with Microsoft by launching the availability of Atlas on Microsoft Azure Marketplace, which will simplify billing for joint customers. Furthermore, we have joined Microsoft Strategic Partner reported ACR co-sell program, and this was yet another record quarter for Atlas on AWS.
He added that MongoDB is seeing demand for Atlas at enterprise level:
In some cases, they'll actually commit upfront for a certain amount of spend in a particular year over a multi-year period and that's driven by either new workloads that they're building and they want to just run in the cloud because of a particular use case reasons. Or they're migrating, say, a community workload on-premise to the cloud because the cost benefit of Atlas is that much more compelling.
Typical enterprise customers include banks, insurance firms and tech companies, he said, companies that are attracted to the ability to run Atlas on multiple cloud platforms:
Either they want to leverage specific expertise or services or capabilities with a particular cloud provider or they want to make sure that they have a diversity of workloads across different cloud providers. And so running that on Atlas preserves their optionality because they can do that very easily without having to rewrite the application.
MongoDB now has partnerships with Amazon Web Services (AWS), Google Cloud Platform (GCP) and Microsoft Azure, he noted:
We started in 2016 on AWS first and then a year later we added GCP and Azure. I would say Atlas, the deployments of Atlas, in some ways mirrors the broader market share of the larger cloud providers. That being said, I would say that we've been really pleased with the traction we're getting with Google and that's really starting to accelerate even though the partnership we announced in May has not had a lot of time to gestate. But activity level is very strong and we've closed a number of deals with Google.
The announcement we made with Microsoft basically incentivizes their salespeople to basically get paid on Atlas deals. Moreover, customers can get a unified bill when they buy Atlas via the marketplace and they can apply their Azure commitments towards Atlas, which means that they don't have to go find other dollars to fund the workload on Atlas. So all round, it's a win-win for the customer, win-win for Microsoft salespeople and absolute win-win for us.
Spreading the platform bet is clearly wise in an increasingly competitive space. AWS launched its own Database-as-a-Service offering back in January in the shape of Amazon DocumentDB. Ittycheria is diplomatic about the potential challenge from a hitherto partner:
They've tried to emulate MongoDB using a very different architecture. So that has severe consequences in terms of both features as well as performance, and we've heard in many situations where customers have tried to use DocumentDB and it hasn’t really been right for their use case.
So we don't see any headwinds in terms of competition. It is a big market. There's a lots of people out there. But we feel really good about our competitive differentiation, as evidenced by our growth rates, as evidenced by some of the most sophisticated customers in the world choosing MongoDB for some very, very mission critical workloads. And they don't have lack of access to options.We feel really good about our positioning.
Another quarter of solid growth from MongoDB with results that beat Wall Street expectations. That said, the share price actually dipped slightly on the results announcement, reflective I suspect less of any MongoDB specific concerns and more about the longer term plans of Amazon in this space. The way to counter this by MongoDB is to keep doing what Ittycheria has been doing - point to the customers and let them be the evidence that what you’ve got is worth having. That’s diginomica 101.