MDB - Earnings call transcript Q3 2019

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Operator

Good day everyone and welcome to the MongoDB Third Quarter Fiscal 2019 Earnings Call. Today's call is being recorded. At this time, I would like to turn the call over to Brian Denyeau, ICR, Investor Relations. Please go ahead, sir.

Brian Denyeau

Thank you, Ann. after you fiscal us we XXXX our release thank MongoDB's to announced and market press quarter of third financial issued afternoon for today joining review in today. Good close the results, which

Joining President CEO me MongoDB's of Ittycheria, Gordon, and Michael in today and Dev call CFO. the are MongoDB;

Securities subsequent we update representing subject pursuant required position results mLab. words fourth statements under full indications intend, Private acquisition differ of of our and do related similar call, as that cause drive laws. These our and Reform any plans our products potential uncertainties estimate, These intended variety similar could future or to securities of the reflected and expressions guidance of to a materially quarter federal expectations. views We expect, actual to to for our from revenue and Safe market Litigation expectations. statements our strategies, law. of have These these will views be our provisions not business this as XXXX, advantages related except are of as statements upon During made The fiscal from identify statements should of today to statements date. as are enhancements, reflect may opportunity, make of to forward-looking are only by our anticipate, not statements risks the continue, and the growth and Harbor the forward-looking including and growth benefits and that our leadership to anticipated year ability new Act XXXX, are the statements to our go-to-market financial our expand

factors of These March annual SEC. on and for with on actual Form at Investor this will with on our filed a For other our available documents affect our to XXXX our on call the refer other X, XX-K quarterly replay XX, that discussion Form the our September of periodic Relations the report and XX-Q those on contained be XXXX, section A in are report also filed website filings material time. could risks of available please limited SEC www.mongodb.com. there results, important

financial be Please the call. non-GAAP refer this comparable measures Investor the with website earnings reconciliation call the in that like in of discussed directly portion our these their over on Additionally, to will of release conference measures for to GAAP tables to Relations a turn Dave. most measure. financial I'd And to our

Dev Ittycheria

to We today thanks third for of to performance all quarter us business. aspects third in quarter our all you Thanks, of joining across Brian, our review results. and delivered terrific the

of generation on growth to billion compound industry model, ability across in $X.XX sophisticated this IDC one We the XXXX, platform We next our the revenue and scale, including revenue. in of XX% mindshare, ended growth subscription is uniquely and across Asia. share that was strengthening $XX significant the end quarter include of serve run a position of do million, America, guidance. geography. Our which database our of grew over as We XX% exceeds generate the now above acquisition X,XXX To our year-over-year. reflects to revenue EMEA, which Atlas markets choice. North forecasts revenue is all of billion the represents more want than $XX we of rate revenue software. largest impact high at enterprise third best year-over-year database market class major now to XX% quarter in capture we now believe quickly and closed proof and customers, nearly with a do customer in large We every size positioned MongoDB billion results from market annual X% MongoDB's any and summarize reflecting saw the ago growing in $XX X. the points developer growth up the generated rate. I XXX% compelling year document note November which XX% not of grew a compared growing XXXX regions, results, mLab, year-over-year to to increase, given power that strong

mobile the with stuck on to uniform of app. customers take MongoDB limited of Our were database and MongoDB faster announced more developers success developers a model which database data the is feature event, strength that general held way tabular applications our the our build work of advantage with At for availability Mobile device. the responsive allows Mobile using we can Europe developers a gives recent MongoDB data Previously, based mobile wherever data resides. on platform. document to for a the

virtual VPC which high between utilizing several local cloud storage, with data held to high end device Stitch, new between latency, introduced with APIs and overhead including nodes exploited on in risks and which AWS even an operational to JSON synchronize private enhance also after for performance. can This providers private learning allows will they to IoT has offline. included including existing work whether workload or been for anyway writes, new platform, device real-time native client and Expanded to Stitch more Mobile and on services MongoDB IO including additional processing authentication Atlas, be mobile data data SDK that regions updates adding all the to and are and on can performance the regardless back-end for clusters changes code. via data networking. which connect aggregations. a significantly AWS Last MongoDB Sync the throughput we and the customers' applications. improving indexing, clusters reducing available and automatically These Support the will database enable than users XX Internet accelerate Stitch now large want data low also to integration MongoDB Atlas With without our database, reads very We options, allows beta, week, it held developers customers mobile backend. This the peering updates across disparate serverless allows query of and is access optimized security public or back-end communicate datasets. without cross-region

We Public model a era. also or introduced in development licensing License, the new open cloud SSPL, for the Server Side source

the to to new a MongoDB all decide our in full database unique for because are code. as to our Server, of free for download We a license make MongoDB softwares service. position underlying this Community providing holders how we We are created offering explicit conditions copyright license

licensing robust, the spirit open We SSPL, software. have a built of By are in secure we introducing the community model source on and AGPL. strong it believers valuable, more new leads and to believe given

provide an freedom to open to or uses redistribute source continue that the to attempting will condition must any MongoDB organization only to offer service. The such a We change software is a modify, use, open source review, the substantive as third service that explicit software. same offer the community party to the

mix to activity, wins from customers third databases strong results Turning including in migrating more upsell a existing MongoDB. our of quarter saw workloads new detail, again and healthy we legacy to

in came are beginning and or A countries multiple including partners expanding performance success States, of growth. quarter our establish number where we a that We either the from our model expand reach. and we market where expand customer sales of land, Our presence board. power for wins saw vectors are have exciting the across to the outside a the United exemplified direct

and database number MongoDB seeing a mainstream the of appeal the We conservative growing MongoDB. are both growing with demonstrate by industry customers we and also popularity the platform trends industries mass wins modern of adoption We markets the traditionally believe that choice. these growing in are and reflecting of of of recognition

financial also the core key its investments. tax the in submit within it experience our indication in wanted Rainist, would Enterprise energy details a use financial environment quarter we're of will like database multi-cloud sophisticated requirements rewrite few some Enterprise. an and getting We Atlas to are relational we enables large past wins strong ISV win and logistics MongoDB's the who Exchange plans to the and increased like has a is flexible rapidly further assessments application consumer as Majesty's a platform a multiple sales MongoDB eligible able one strategy offering. Atlas signed deploy existing its has helping quarter. first this of tax customs to company reviewing for MongoDB which mobile Maryland complex first illustrates integrated I The MongoDB a is within line Platform, residents spend our chose positioning a of using to of our platform important believe minutes velocity with its for government a of management to MongoDB transactions quickly and returns We a Atlas the to by Health agreement as self enterprise customers on ecosystem the build with asset An South and that agencies and HMRC joint this SAP. code. citizens online. using technology company secured if Atlas agreement the signed enable strength & of platform U.K.'s insurance is that improve payments database and in to provides without achieved Cloud This the different enhanced migrate to its digital developer leveraging a from interfacing quarter. by Argentina MongoDB with MongoDB new HRMC, authority, in Customs leading service increasing determine SAP our for Her Revenue marketing being vertically applications subsidy. having their a a support We Korea. signed requirements

customers create were experience region. compelling chose Using institution single backups MongoDB continuous view which reduce process to bring One expected of of loan opportunities times. content digital and every serve its units platform, in in to required a the of websites to to and chose of loan unlock of manufacturer, real-time their Replacing multiple able MongoDB is around Michelin, government the to part new daily they a were A MongoDB, world. new manage legacy tire customers to the a processing the a holistic China constituents. Italian transformation banks view better thousands siloed loan highly Atlas together to MongoDB serve countries chose create build to performing user business of largest processing of initiative. database, single a large a significantly previously database hundreds as deliver to replication XX in as approvals and their global a

with One the company of we our as from the multiple and applications leadership winning management the and communities more were media new a to the need its has manufacturers from to MongoDB laundering were to writes founding media extend significant for but platform Oracle to years market This that to gas capture leading indicators of data These identify the growing and wins forecasted billing to To market Europe's be TCO, lower MongoDB. transactions different quickly. acquired improvements, relational eliminating electricity supervisory business more allowed innovate These queued in since and database anomaly focusing moved and in business quickly billion industries self-serve serve advantage been by reporting XXXX. demonstrate to successful software startup than performance and to application. performance countries rather to via applications real-time Oasi, on pioneer reducing to of cloud, MongoDB performance re-platformed a $XX alternative critical and database developer-centric recently various we requirements. that enabled a suspicious are anti-money largest driven to customers particularly mLab, disk moved seven a sizes for take scalability significantly mLab and the quickly of in of improve better MongoDB Italian pressing model. databases customers engagement technologies and and new ago. and for legacy services distributors all multiple dramatically social acceptance in database-as-a-service further to due reads social storage overall and consolidates showcase to database Atlas use recently wins improve publishing their opportunities. by a Buffer, of across organization the general-purpose MongoDB a

into that a capture number to self-serve mLab bring efficient MongoDB way service to and We is an databases are customers. excited and expertise believe of large

process We Atlas. will customers shortly mLab of begin moving the to

on role newly to update COO, that Before I'm I a the results CFO to pleased responsibilities. Michael created be have leadership outstanding across appointed his announce wrap I up, significant we Gordon team. quick wanted reflects promotion aspects to which of and the provide will we in contributions third to of active current addition wrap Michael's the This up, role in To well-earned quarter. all our Company. delivered

for their customers of market value MongoDB can increased number growing seeing as businesses. the are recognize We momentum enable the

products Our paying never are efforts for as have vendor a been off. stronger to establish MongoDB our enterprises and strategic

turn momentum that into carry over well let positioned With to quarter to financials. and review beyond. call to are Michael me the fourth the We this the

Michael Gordon

Thanks Dave.

pleased third last was professional with growth from with revenue services was Atlas fourth with healthy quarter full as and and subscription our $X.X detailed enterprise was the customers, mentioned, very up the as XX% the million, begin then of during quarter. finish quarter performance, XXXX. year the quarter review and from revenue strong last rapid As third the $XX revenue year-over-year. our in and based with a quarter XX% up XX% represented third scale. among significant well fiscal our new we're of million, XX% adoption year revenue was $XX.X of outlook and quarter, million, in year-over-year, XX% quarter strong The X% which I'll up up the Atlas. broad for reflects quarter of upsell during performance continued Total at year-over-year up results logo business activity

As on Atlas, a the blur, will we based mode reminder, instead between suits consumption introduction expect two which with features best Atlas enterprise distinctions the their the needs. customers - between will product into Enterprise of choose Advanced

our see continue We offerings. to demand strong for global

During X,XXX, direct our of X,XXX over of customers, approximately count, prior MongoDB X,XXX It is X,XXX which the keep to is by the in customer in as third bringing over our that both base our quarter, year-ago mind over to the includes from to which X,XXX large being quarter the as to in sales year-ago the period. growth over count customers X,XXX over period quarter. customers our Atlas the compares over customer total up and the well end well quarter in Of total total and of existing end customer the second part the as in our The are customers we as in at at at growth account our end incremental which total workloads. reflects The X,XXX is customer of over the by Atlas, end customers. new last grew customer in growth had the X,XXX count XXX customers, important Advanced Advanced adding growth at in customers to quarter. Atlas Enterprise compared Enterprise customers Atlas new over driven

healthy to see expansion We customers. also continued from existing

over for a spend market We and customers, is of time. strategy component comprises a a largest for third annualized spend expansion $XXX,XXX our area and customers period. customers AR in total the remained attractive quarter among consecutive in net in large annual believe the in second Driving MongoDB that's Our quarter which the us key XXX our We a which XXth ended most been and revenue and the adoption XXX% of rate existing with XXX growth quarter. of success. of the above is up quarter XXX and from MRR, least with year-ago expanded recurring the opportunity small represents consistent database fraction the at of

to down Atlas for the was of on discussing million, Gross basis gross improvement results a XX%, I'll with basis unless noted. third revenue related profit services. P&L, saw and our was margin subscription in otherwise year-ago a a not representing We Moving professional Atlas, the quarter-over-quarter period. consistent non-GAAP for quarter $XX.X for margin gross the which on be

related performance light support We of growth. with in and and in the resulted includes the the the underlying in Atlas have infrastructure are in Atlas margins. Atlas' success reducing margin our pleased to gross gross quarter, Atlas improved infrastructure costs particularly

see become bigger to a our of as margin reduction expect Atlas some overall revenue. modest to in that However, portion continues gross we'll we continue

was for third loss quarter shares leverage based in or we to X,XXX operating weighted improvement XX% year-ago operating or in than $XX.X million on outstanding. loss period. Our indicates the operating the share the in million investing negative third margin business quarter per compared XX.X the margin million negative basis a while growth. operating margin driving in XX% Net continued our are in more was point The $X.XX average $XX the

sheet in for $X.X of cash restricted million consideration. the Turning $XX and investments, third quarter. million. generates year-over-year, the is negative the flow, $X.X mind was less with short-term of deferred revenue Atlas cash. equivalents, customers. Keep in a a quarter in in capital often up negative of revenue taking as acquisition annual to cash million Operating to Also balance reminder, in the the monthly Advanced Atlas we flow quarter, $XXX.X approximately and million consideration million, XX% million Short-term and into mLab model the while cash we our see cash billing the net than advanced in free and expenditures, was that $XXX.X was terms cash, up Enterprise in After deferred base approximately flow the Advanced. million $X.X Enterprise was end on billed year-over-year. closed in ended quarter total usage $XXX.X versus Subsequent cash revenue we XX% deferred is arrears

Lastly, can variability of to timing. level revenue quarter-to-quarter deferred also comparisons similar have of due

I turn which financial the I November like acquisition review of guidance, closed mLab to Before to would impact on X. the

quarter in approximately profitability a mLab revenue fiscal provides substantially approximately current expect quarter Dave revenue service database and in fiscal mLab expectation self-service expertise. of will in perspective, the breakeven we fourth be roughly million is fourth as enhances additional our mLab to and From revenue As perspective, XXXX. knowledge $XX mentioned, a and From $X in a our million of generate XXXX. the

mLab customer in is intention Atlas to the the coming quarters. migrate to base Our

assumptions. two a Our XXXX driven in fiscal revenue for modest decline by is expectation in

existing migrated when different advantageous have them. to models, from pricing pricing mLab honor mLab customers to and Atlas First, intend we

we will those priced whom discount new pricing is for as current customers lower from pricing benefit lower to Atlas revenue realize a package. at the mLab customers For

Second, mLab's small the to switching in base. for we from and due of platforms some customer potential the customer number disruption anticipate churn the customers large

$XX reflecting service the were Atlas acquisition Importantly, and customers our have breadth of purchase MongoDB price. our to I'd MongoDB of customers less We also self-serve should experienced XXXX. our fiscal quarter incorporated than per spend the a community. full-year tail significantly of that part with these offering Beginning revenue into be from the non-GAAP mLab to non-GAAP share outlook now long call for to our assumptions range net of the expected negative like fourth $X.XX weighted-average out to and be the $X.XX the turn negative as thesis million and in million of date, XX.X year in shares appeal million, the to revenue from loss $XX of per million quarter, is based mentioned, the this to fourth $XX mLab. we million million loss outstanding. expect Again operations as of to range in $X on includes negative to range negative in to $XX

For fiscal revenue million the XXXX, full $XXX.X year outlook we to raising our $XXX.X to of are million.

expected our million We per and average share non-GAAP outlook negative shares the share range non-GAAP to the million XX operations in are loss negative also improving negative $XX.X on per $X.XX be loss net range of to to negative weighted million $XX.X to based now profitability of outstanding. with from $X.XX be in

of R&D opportunity, marketing and and investing in the attractiveness size benefit of the of product Given strength it market for unit we sales makes the long-term our and the to believe continue the sense of fit economics, our market Company. our

in continued very business the quarter. 'XX while in high at MongoDB demonstrating fiscal invest third In a operating the we continued in closing, the high continue goal perform will with driving level result a to continued of leverage. As growth to

questions. strong open strategic driving that, in fiscal successfully to executing our like growth We With and are Operator? which XXXX up is against we'd to beyond. priorities,

Operator

Instructions] Lenschow from Capital. [Operator our take question first with Raimo We'll Barclays

David Rainville

bit Raimo impressive feel ago on color maybe seeing to on another little give numbers Rainville on this David our everybody of the again Maybe bringing and going are start Can forward? so Thanks are question. quarter features congrats now And what a that here. more are a in update as play talk you year Atlas, be to actually types journey is continue we'll today. you Atlas, maybe you us for the you seeing strong. an ASP Advanced about that's This were you taking for and wants on game your Enterprise of what trying workloads onto you where to with versus

Dev Ittycheria

Sure.

mean introduced as X.X Atlas ago. just about was So, I a reminder, years

the can are X first customers tier as workloads were seeing maybe started imagine So that we workloads now and or with test development probably tier even And you X workloads. workloads use both deals mission cases sophisticated broad-based of to that large that's the as well of using in customers set reflected for. customers as are Atlas the and sizes moving critical clearly

to think truly I as run a viable So people critical applications. platform mission Atlas viewing are

David Rainville

follow-up the And feedback you've from changes early a on feedback that community maybe quick just customer any from SSPL, done? the or

Dev Ittycheria

offer been In customers positive. would a third because general, it for not the say feedback a as was customers do has non-event most MongoDB to quite service. I plan party

the is cloud cloud like really has do SSPL, to non-issue. been the that There best has So said, people I was be way source to a don't people open for has era change, given think companies in any of feedback that generally to most the the now who way be people a source lot the we and will and projects recognize are community from thrive a quite that. but always the some open And positive. in there era,

Operator

to Singh next go We’ll Morgan with Stanley. Sanjit

Sanjit Singh

I just on a on have update it's questions. two market. getting two-parner Actually go to

said you a us So, that you of from on Dave, in half. contribution haven't and you be partnerships I the when that could a think IBM second and lot last the driver quarter yet whole Accenture updated seen

it in secondly, up I downloads, at if time were million partner long IPO. think of wondered got XX XX contribution. guys of downloads And the tail an So on update I you to, of was I for there the around that sort think penetrating terms ecosystem us then you've million

long guys Thank bring part the you that you. big mLab some tail a on equation? in So a there. terms and to can of increase you are Can of capture how that what planning of give sense us

Dev Ittycheria

Sure.

few with start terms healthy quarter very your a did we feel the like question, this a partner of In We do IBM. of is last deals long-term partnership.

while IBM in with here just Asia. significantly is the in growing want but in Europe about we feel numbers, the very pipeline specific not don't Our to I actually U.S., commit to also good and relationship, any and quite

working is I a speak us and relationship the that who So, of to well, to GM - tied basis. is monthly business really on most the closely

So, - Accenture, and we taken a regards the I'm organization. actually said up have with pretty relationship we deep sure down I not With not off to that yet Accenture. things were

doing We with Accenture. few deals a are actually quite

helping did fact well. have In pretty going cases partners helping built reach into about also all on of of we way We of feel their MongoDB, MongoDB quarter Accenture, we some a the the of expand use migrate a of so coverage, lot markets migrate that legacy for through that not deals variety is our think from good Accenture like people bunch cetera. in-market that and where material have relationship. this and using et very about to and actually of They cloud, were customers a top products customers relationship enabled helping to may is platforms they've to

long was relationship of your terms feel And we me really second part the - tail. again, then was your that of question as well. the just - good in remind So - about

Sanjit Singh

The long yes. tail,

Dev Ittycheria

Yes. The long tail.

single rep. the sales of with hiring mLab us that without one was things built that really their a impressed So they business

basically so had self-serve to their build they And business.

obviously our been Atlas also have organization doing they are this we a but expanding than business. our we on our really have lot started that with serve self-serve, building and self and Now own business expertise into we longer inculcating off

the way through So after best sales then team acquisition, to our tail sales scale customers, after and we on at motion the expand those appropriate, get be will and those customer the but is the help least the where going for self-serve, in up long long the go am customers, tail to and follow depending go will natural we motion to long natural the believe our I initial be after long the sorry, the tail. will market self-serve tail. of motion size go to

Operator

We’ll go next Stifel. Reback Brad to with

Brad Reback

about and mLab Michael, between think out revenue breaking we should subscription how the services?

Michael Gordon

There as it's of $X customer. an out we million analogous the per subscription spend is self-service bucket, lower although Think all called no really as services. to

Brad Reback

commentary that And around initial these today were on the - country maybe two then new ago? is, with customers quickly, entry wins your they about Dave, versus think for can around how customer bigger the order all in should impressive world, a you How start really size enterprise years the we nowadays? much

Dev Ittycheria

Well lands have seen initial we getting bigger and our bigger.

a that's workloads more expansion. with us seeing or getting moving with through moving think comfortable and engaging function through But of we're and I people significant mission-critical more also enterprise either Atlas. our advanced solution very

were As is of another rates quarter yet Michael expansion XXX%. where mentioned, this north

And a - so, so we don't try this is truly land, expand, business. expand

for no makes more go And creates a frankly business. natural. they get buying close more. customer. them elephant great it once a entire that And It they that's way less as and the comfortable us close we upfront, engage And we try and they back trying sense business very and with for don't rather So in coming hunting start more friction. feel

but - the are getting So way we are bigger and with bigger and critical typical that's customers as customers customers workloads. more using engage more lands more get our MongoDB and comfortable for more with

Operator

We’ll with Lin Goldman Sachs. go next to Ted

Ted Lin

the which players technological the especially of a against news NoSQL the you're color on that win for choosing NoSQL both the are the no standardizing past. people there they're are or database and every cloud terms kind have in against best the you've guys, But public who pure rates, use a the So on Any or landscape players. advantage in competitive you case? noted play offering seeing still single of NoSQL

Dev Ittycheria

is hard for sense. different solution. expensive complete an applications the databases and makes databases. don't by talk so train, these some - Moreover, data sure across organization a a build One, across database of about that all database pretty very every and So all that that obviously these have support providers time for having a sync it's cloud spend time and disparate to that think to We becomes lot you all making different consuming. now there

a document set document We while of believe - use - to do a be model value a The It they key database may majority one that. do to their people look called a that supports a term functionality. super we So want our model cases. in joins positioned dollar serve general supports not believe purpose support feature the of everything well graph is up. we're we the database for And store.

this breadth breadth middle the - MongoDB the past cases profound. is the and a quite use announced the So so year, and are scale we of in transactions of customers the running

well So positioned to we're when that next is the we market believe generation it believe all and go after our a there. to none mindshare referenced of databases second and that's really function why comes that's to by we data developer market external that out

Ted Lin

digging the people change And AGPL running I I service. follow-up, of the from versus in I AGPL. kind strategy the Mongo kind drove the on that prevents in before as guess a of SSPL what a guess as you there? mentioned think

there parties and as a so are you out to for want seeing what third And are the offer service implications that demand Atlas? Thanks. for MongoDB a

Dev Ittycheria

Right.

international have starting service a AGPL. a And community quite that out in thought and make the see it to the come was clear reports we And press been the can and We we Company, a has a of built be received have licensing can not of a But very from It's what in it would the positive. that seeing there do offer to since our very I just required to that MongoDB service. healthy offer that - general AGPL. make positive about makes from but some conditions to conditions that need think MongoDB So the not offer continue to we has was explicit do very And They the and conform was as service, quite it MongoDB to on it to reaction want see sense to restriction. you lines want be well Anyone as what as some test be as possible. couldn't providers feedback to was would announcement. to started us given people believe grow They are say if able been clear. sense. SSPL spirit the users around you the want that they customers. makes incredibly so

Operator

Markets. next KeyBanc go with Bracelin Brent We’ll Capital to

Brent Bracelin

contribution here. out million in some response early customers maybe so of here asset larger Have and talked their a here acquiring of Dave obviously what's so of I'll after you to of mLab, far been kind start QX. customers? some with $X that with the larger if

Dev Ittycheria

answer short yes. the So is

they as some have there larger some what Michael cheaper has Atlas than certain that cases, more and a We are talked and are offer mentioned, price. positive. generally been very where the - some we are there the have customers situations And SKUs to of response in at expensive

for So most the we plan and honor advantageous be customer-friendly to make customers. price it very

decide process to a natural So little switching platforms we some in-house. expect that to be tiny who may that of some because expect just compression. have And also bit will bring pricing the that churn in we of back there customers really

been but positive. so, feedback has general And in the very

are MongoDB We build of be large team super and basically really the to we of we offering. entire to they excited service and one excited part except database person are can very feel mLab acquire a very together

Brent Bracelin

script, in then Mongo. the to you And starting mentioned there. kind color conservative embrace of industries Helpful

there You just the kind type conservative this also kind maybe drill having out it why call. and calling that the dialog of into down here and there out of called quarter? you're you're What of on industries are

Dev Ittycheria

which was like by the Yes, existing customers one MongoDB of using I recently Atlas. of IRS their use really you expanded the MongoDB they paying is HMRC UK. example I mean and were They gave

government me, you So would Atlas use months government that that their because U.K. have constituents of frankly better. organizations. had to a institution We in told would six - entity had large another surprised me use those have in using ago to Italy serve we decide us if MongoDB large

only of America using We have - markets have and small Atlas. in We sudden a have where and don't any we people people quickly. own like are pretty very Argentina who there in team today we Korea we MongoDB of a now Latin all our have using people

like wide - database mass for what is these and the of feel as of all platform appeal we the popularity choice the really the use truly database So and that to speaks disparate modern cases. MongoDB

indicator the strong of And feel so, ahead of opportunity that's have that we a we us.

Brent Bracelin

deferred bit component? deferred has if of kind no And which acceleration a shift in thought to kind little a short-term deferred I Short-term hear be versus mix Atlas, accelerated headwind. which quick could, drove without would in of look quarter then to that revenue. I metric ones mix the the actually for on What revenue less deferred the two even how and Michael, we at of little shift should

Michael Gordon

Yes.

is So how I the absolutely guide strong much from revenue and In as very Atlas not correct. to - headline behave compared the doesn't add deferred Billings, has lot and Advanced. of certainly are think as something you quarter-to-quarter around variability does Enterprise nearly commentary we quarter. Atlas are and a to a obviously a trends perspective

the quarterly the business larger we wouldn't especially results, an is which from Atlas, expect faster I out quickly which even extrapolating of of to So portion business. rest go as than be the growing quite growing

think just a So across it quarter board. I the it's fact was that strong very mostly the

Brent Bracelin

again And gross in year Atlas increased the subscription the improving actually Thanks. quarter margin, margins. even on first of it with gross the drivers then gross Walk particularly that this like through looks mix that a subscription is last shift. the over margin,

Dev Ittycheria

Yes, sure.

revenue. So for improvements Enterprise as rest we non-Atlas sort of subscription saw for the Advanced margins the both gross as of Atlas and well

of strong the kind again, board. the So across

But and that's with continues think been working our I probably because we've Atlas to initial that of costs the very successful as to relates percent progress portion A of also revenue, it on see and the the Atlas driving lot fruits front. internal infrastructure. from started we've become most as of we've a pleased is revenue. been to notable where very lower actively support larger the a efforts progress

very we've the growing also every a and we'll can view term business that's quarter of a I was And at sort in grand numbers while so that off than dial given continue Atlas lever. about, have to we based small optimize of talked close the valuable. kind gross basis scheme call short rate in guidance every to MongoDB that think margins. business out I'd is faster that shallow and the business because the lower the of the And of of run and we've been then the I guess mLabs on

so take margins. will And and them of to we those kind integrate a it little bit when of time harmonize -

work integration So headwind as don't just we the that and on and guidance. can update year we think folks the to But kind well beginning March outlook and numbers certainly extrapolating plan QX, get be people that at want call through that. that as we I a for out for away of in will probably and get the sure QX of our as things the overly carried like so in to QX out QX

Operator

next to JMP Securities. Pat Walravens We’ll go with

Pat Walravens

all on testing Server so was AGPL? Public was the the itself mLabs sort of of First the that of Side of the one vendors limits License,

Dev Ittycheria

mLab We did have the a days. relationship in with early

As we relationship that Atlas you imagine, can - we as introduced when terminated.

deal and shareholders, that struck MongoDB MongoDB together. to brought to agreement for So growth. Atlas MongoDB for us it was service for And us as some a while not with because competencies good technically allows our an ultimately the both think offer two the we to good allowed position long-term as a parties have us us mLab self-serve, accelerate and shareholders did new business, around I mLab essentially brought

made a sense for it's parties. transaction that both So,

Pat Walravens

this October And can the Community by Server versions October - thing. then XX? I using just before one of get before Just guess people from around

Dev Ittycheria

our announcement version any broad we under when as a service. around still have AGPL a and which what that AGPL, the before licensed test which do MongoDB code match was have That frankly offering pretty then said, fork being our restrictions to can really themselves, be to task. you to also So to believe pretty want SSPL someone herculean has if this would they using announcement base prior

Secondly, large version a time new we our to and following because and the community gap increase. they the between as capabilities just tough - the add continue platform, will into would have us getting a fourth features

would people. not that attractive very for kind most be option a So of

Pat Walravens

is And totally a different subject. this then

just $XXX to Oracle So different look it XX item the of it Can million I time? really going is in bottle, again forgetting thing database $XXX or back from went environment the as think million roughly business XX that support the this apps. in I history, sort from happening revenue at old to in

Dev Ittycheria

that licensing Well, one, different a perpetual there was would I say, license was model, model. very a

the And difference. - much right was could so obviously more you So market it down the that's big nascent.

those in forth, I a the so trying setting a as upfront different to think at think But start is challenges. we'll the emerged build I are of - same I our as I think very any MongoDB. leader I where revenue two are that be and clear want guidance, them. people so model applying kind to We it given gravitate to that Oracle same perpetual don't And believe subscription rate starting towards a dynamics think it but general, to became market recognition here business gravitate business

Operator

go to [Operator with Instructions] Radke Tyler We’ll Citi. next

Tyler Radke

changes. licensing the to related was question My

about if change? the you've kind feedback talked cloud had service major the curious the responses providers at licensing You of some just positive But all from your on from what customers. I'm

Dev Ittycheria

our source the feedback projects Candidly hasn't pretty think back the helps debate into it at our today goes a percentage think back in giving monetizing R&D open the it's measure giving we good comes on the of been really provider close taking to cloud no even much at of you community, do - X% anyone of don't the everyone no think free good of the much a is cloud and Community but especially I one lost when covered. all. there platforms probably in to R&D that. that industry and open would it, haven't because the open on then Server, which lot About towards had about community. they're back announcement I R&D. not But they're cloud so - I widely I half there's source - very even contribute how source providers maybe their communities. really mean spends plugging at I say

people. no to lot as the service. in issue And that's think offering a customers back a MongoDB really that a the of it community I and comes in of a interest when become our the for it non-event, was burning customers So XX.XX% have speaks I because to differences think contributions

So it's for issue a mood them.

Tyler Radke

just customer, different replacement, to - any that, around that's Thank tied the evolved change just we use And two about there it just to And think questions? type use cases as think, mix the been support. was any I driven transaction If of that's have legacy you. XX%. historically the related about different of how those case, business the with there?

Dev Ittycheria

sure. Yes,

for today in start of lot around mentioned of the using mission prepared that definitely gives And customers know I we're use of bunch where double critical And moving in And but to who its to it our to had mentioned transactions seeing that capabilities MongoDB. the billing on the the may increase of close seeing to we're case than its workloads transactions. it's data. We've not also deal. available on need of was drove deals customers of that an really MongoDB. future confidence remarks a down a billing company lot them energy data utility moving more one one as important earlier, MongoDB, So I earlier questions, an what's than

definitely we're of so MongoDB truly sophisticated platform legacy run a the people demanding to the about most I'll And mix that are answer viable let mission as workloads. the to Mongo. critical seeing viewing And Michael question

Michael Gordon

in that given legacy migrating to the applications so that backdrop, see of we relational increases workloads. very off are strong continue Yes,

reminder, a absolute Atlas the business, seen they're at percent sort we've we're bit but driving the if this before migrations at look look new of you up on like the percentage terms called it's of but historically Group As the if less significantly. you that probably probably And down of overall dollars business, what a little out in sees a of migration. than

Operator

to next Jack We’ll Andrews Needham. with go

Unidentified Analyst

for actually Jack. It's filling [Connor] in

rise DevOps employees important we buying of become the With seeing more in cycle. are other the

to nature motions using helped especially consider it's Atlas? and some levered changes guys you of the self-service are sales these efficiency in if of you how So

Dev Ittycheria

Yes.

So is I obviously to to of One mean, customers. serve. modes so self going we have multiple market

all through venture-backed very help very companies. around sign be business where for engage for the operational have for pick background to work they we basically resources, that our of those with they're of and validate like I telco, around who more I customers so stakeholders people they the and large channel large addresses without beyond of that a in insurance working are talk guess our in and the up includes problems buying who to and with go And that there and a means. cloud have there what where they tends that mean be to but So - and may you smaller do that case They to instance been need and sizes could sales is works market is both and if are validation us people storing obviously they're that the and really are technology string which set a with advertised close platform stress typically strong people largest field people we to that they customers. to of engaged inside set a is discreet to are customers there people you just emerging cetera, who be resources to companies our growing architecture. product can our bought complicated, even from a to website, banks, to pretty Atlas field tends organization Then a really their multiple sales tech in to required trying very, in they the be there have need as world need and still sometimes technical phase MongoDB having stakeholders person is also organizations people early-stage DevOps companies with have The who media, the bigger, need customer to there the where range data up they far process And That's development fairly Atlas a wants address. easily us we really and our companies, moving literally fit the of security incredibly attractive on, more in deal sales the security rigorous technical because companies above engage Atlas prove pushing et need business organization model because us And pass the has quickly. in be may That channel. then running. through or be field customers. the connection have - tests a get where on we

Unidentified Analyst

making into and HBase. vendors some bigger warehouse specifically Hive And a out there there data are push with

changes which have in and language, are a make landscape competitors of a Although in you bigger these case clear guys and terms push competitive seeing marketing? any sales are as use the you different

Dev Ittycheria

No, we're not seeing.

too lake the tried these our workloads seeing more that us alternative to the where costly or is they took lot time database. use either complex, too and up-to-date we're your using too vendors analytic most found and of fact, seeing In your We're bringing in MongoDB they're have it customers part value transactional of they just get to long and bringing and operationalizing information to us data cases a of - of into accurate the value with is sits reverse.

really get using able to their that's consumers. to run immediate valuable people MongoDB insights into incredibly business analytics to being it and allows So

Operator

Eberle Chris with Nomura. to next go We’ll

Chris Eberle

are OSI with actual Can you can you SSPL? for give - give a the little we idea us approval us in on where process

Dev Ittycheria

Sure.

on it OSI announcement to transparent to in submitted conjunction submission their we we first our XX. process. process, public So be open October tends our made an and with And

lot terms feedback obviously as commentary we sought expertise forth lot lot a in-house. and a advice expertise of can open from So out tend have imagine, so counsel obviously, and had a you in and domain of and we of get to source you of

of as from work I very but not with get adopted there. clear our by to be to though issuance by motivation is the And really whole. merited was to it want two I SSPL. industry we've were of happens deliberation was feedback MongoDB we're weeks We the the what thought we see with drove that ago get adjustments, some some - come a - and we'll the back that part believe some so and SSPL did that OSI just about

does, XXX% what our matter what own copyright the we No motivation OSI OSI. the that's the to with of code So of was the MongoDB.

So to the like license any terms the license. our of - have any we of IP, right define the use with owner

ratify OSI some this, this the in for it some our So If going that use up to standard there cases ends purpose is this could no OSI own if reason about for of use the so to SSPL. was get rejects really industry The this others or of us. rejecting not change established posture business or risk doesn't this as about an they as you will license their models. think

Operator

next go Jaluria to Davidson. with D.A. Rishi We’ll

Hannah Rudoff

Hannah for Thanks questions. taking This my for Rishi. actually is on

Just Atlas off, was if any feedback they wish on first received wondering from specific you've any customers functionalities I had? Atlas

Dev Ittycheria

asking anticipating they to mean patterns our you for that's new doing, based - are lots new things as and of what want listen can we our how frankly we are run or see. I get imagine, mean very we features or capabilities Yes, we constantly have I what business. customers they usage very, customers on what carefully the may

and part how we run business. frankly with that's So parcel our

run now customers obviously advisory that's lock-in continue along Asia with in who we kind ingrained boards all but that's pure different same other of engagements and customers. run application cloud say customer different customers against to take are. concerns, different the feedback direct we big of feature on Europe We providers And the So every I get not just providers. capabilities of provider on that the for to compete want core across think providers. and horizon is based with lot those we in asking North is to on one cloud is a just our get cloud America it's trying obviously to cloud of soon who to because make - would also to the advantage appropriate is that sure

customers so that area only any that that And that And we're compelling enables geographic have across looking carefully. early of many the And distribution variety is proposition deploy that's database. platforms, should so performance, very the like scalability major of database's geographic a one we things because which make of I that you'll customers and to - service pushing we announcements to so few widest forth all probably us year also something at offering, the very cloud providers, platform out see given again and value different we're have is and on a probably coverage there an really different so next the the some - point globally customers three distributed run we customers. that's

that's And so why a think reason big winning. MongoDB I is

Hannah Rudoff

are forward, line then there self-serve? growth any driving you top still need going feel business just And come scaling the in changes to you towards you regarding make the improvement specific operating or and more feel margins and do will

Dev Ittycheria

other and do. the think I operating Yes, to don't scaling that magic the have there's that a than way bullet continue and of like sort just business the in will particular we

certainly wouldn't I result there's that a thing will change. in specific a se step-function So like say per

the I and tackling think operational and blocking of just business. it's the of more sort scaling

Operator

Dev queue, the to questions no back would in to any or further remarks. turn the I additional And over like closing Ittycheria with call with

Dev Ittycheria

thank I'd time to Well, their everyone today. for like

we quarter back performance get We pleased work. this third to and are will our very with

your time. So very thank much you for Take care.

Operator

you today's This conclude thank We for conference. participation. your does

may disconnect. You now

MongoDB (MDB) 4 Dec 182019 Q3 Earnings call transcript