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MongoDB sees traction in the enterprise as Q3 revenues jump 50%

Derek du Preez Profile picture for user ddpreez December 7, 2021
MongoDB CEO Dev Ittycheria outlined during the Q3 earnings call that the company now has 31,000 customers.

MongoDB CEO Dev Ittycheria

MongoDB shares jumped in extended trading yesterday, as the document model database saw its third quarter revenue jump 50% year-over-year to $227 million. The company's CEO, Dev Ittycheria, also told analysts on an earnings call that MongoDB's core cloud offering - Atlas - now represents Atlas 58% of revenue and has reached a run rate of over $500 million.

Ittycheria noted that MongoDB has 31,000 customers, which is up 10X since the company went public four years ago. Ittycheria believes this is down to MongoDB becoming the ‘enterprise standard' for many of its customers. He said: 

Our third quarter results demonstrate that customers are increasingly choosing MongoDB to build modern apps that run their businesses. We had another strong quarter of customer additions led by a self-service channel. Both our field sales and inside sales teams again performed well. 

A key driver of results is the healthy expansion of our customers as many of them are meaningfully increasing their adoption of MongoDB…some of our largest customers made increased multi-year commitments to MongoDB in Q3.

Our performance is clear evidence that MongoDB is emerging as an enterprise standard in a growing number of accounts…as well as a confidence of two factors: secular trends that reinforce our technical advantages and our growing credibility and influence with customers.

Some of the highlights from the Q3 numbers are: 

  • Total revenue of $226.9 million, an increase of 50% year-over-year. Subscription revenue was $217.9 million, an increase of 51% year-over-year, and services revenue was $9.0 million, an increase of 35% year-over-year.

  • Net loss was $81.3 million, or $1.22 per share, up from $72.7 million in the same period last year. 

  • As of October 31, 2021, MongoDB had $1.8 billion in cash, cash equivalents, short-term investments and restricted cash.

  • Atlas now has over 29,500 customers, compared to 21,100 customers in the same period last year

Other points to note are that MongoDB has now moved to a quarterly release cycle (with MongoDB 5.1 being its first in Q3), bringing it in line with other leading cloud vendors, and that it recently hired Peder Ulander as its Chief Marketing Office (who was previously at AWS heading up Developer and Enterprise Marketing). 

The strategy is working

MongoDB now has over 1,200 customers with at least $100,000 in annual recurring revenue. COO and CFO Michael Gordon said that this is an indication of the success of MongoDB's ‘land and expand' go-to-market strategy and that the vendor is increasingly becoming a strategic partner for customers. 

CEO Ittycheria said that the increased penetration with buyers over time is down to a number of trends that are benefitting MongoDB. But central to all of this, he said, is that enterprises are "moving aggressively" to the cloud - and they are not just moving tertiary second tier apps, but mission critical workloads. 

The strategy of ‘land and expand' is also having the desired network effect. Ittycheria said: 

Customers want choice on where and how they deploy their applications. You can build and run MongoDB applications in a data center, in any cloud and at the edge. However, technical advantages are not enough unless there are customer proof points to validate these technical claims. 

As a disruptor of a massive market with a longstanding entrenched technology, we had to build our credibility one workload at a time. We usually land an account by identifying a pain point that simply cannot be addressed by legacy technology. We then leverage the success of the first workload to expand across divisional and geographic boundaries.

Eventually, we up the conversation to the C-suite and become a standard for future app development. While it's still early days, we believe the key driver of our success this year has been the growing trend of customers choosing MongoDB as an enterprise standard, which is having a positive impact on our ability to increase our penetration of these accounts over time. 

We have had tremendous success in acquiring customers from large global 2,000 organizations, to cutting edge startups across all major industries in most geographies. This creates a compelling social proof effect. When we are able to reference customers in particular industries or geographies who are aggressively adopting MongoDB, other customers in those same industries or geos are more interested in engaging with us.

My take

It's been interesting to watch MongoDB over the years. What started as a company that attracted developers that wanted to test new technologies to figure out ‘scale on the internet', is now becoming cemented in the enterprise buyer's long-term portfolio. In other words, for larger customers, it appears to be becoming strategic. I still think some work needs to be done to translate its benefits and uses to the C-suite, beyond its extensive advocacy network in the developer community. But that takes time. And as its land and expand strategy continues to take hold, so too will that awareness. 

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