Good day, and welcome to the MongoDB Fourth Quarter and Full Year Fiscal 2020 Earnings Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Brian Denyeau from ICR. Please go ahead.

Thank you, Shaun. Good afternoon, and thank you for joining us today to review MongoDB's fourth quarter and full year fiscal 2020 financial results, which we announced in our press release issued after the close of the market today. Joining the call today are Dev Ittycheria, President and CEO of MongoDB; and Michael Gordon, MongoDB's COO and CFO. During this call, we may make statements related to our business that are forward-looking under federal securities laws. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our financial guidance for the first fiscal quarter and full year fiscal of 2021, the anticipated impact of the coronavirus disease or COVID-19 outbreak on our future operating and financial performance, the impact of ASC 606 revenue timing and mLab on our future results of operations, our market opportunity and prospects to increase our market share as a global database software market, the ability of our data platform strategy and R&D investments to drive sustained long-term growth, the opportunity created by availability of our go-to-market and growth strategies, our expectations regarding the impact of an opportunity presented by the shift to the cloud, the potential advantages, timing and likelihood, the success of our new products, product enhancements and plans integrations, such as around Stitch and anticipated impact of Atlas sales expansion on our gross margins, and other financial results. The words anticipate, continue, estimate, expect, intend, will and similar expressions are intended to identify forward-looking statements or similar indications of future expectations. These statements reflect our views only as of today and should not be construed as representing our views as of any subsequent date. We do not have plans to update these statements except as required by law. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to those contained in our quarterly report on Form 10-Q filed with the SEC on December 10, 2019, and the subsequent reports that we file with the SEC from time to time, including the annual report on Form 10-K that we intend to file in the near-term. These documents are available in the Investor Relations section of our website at www.mongodb.com. A replay of this call will also be available there for a limited time. Additionally, non-GAAP financial measures will be discussed on this conference call. Please refer to the tables in our earnings release on the Investor Relations portion of our website for a reconciliation of these measures to the most directly comparable GAAP financial measure. With that, I'd like to turn the call over to Dev.

Thanks, Brian, and thank you to everyone for joining us today. Let me start off by saying that we live in a time of unprecedented circumstances. The global spread of the COVID-19 virus has created an extreme health crisis and resulted in the disruption of the lives of billions of people. The first priority for MongoDB is the safety and wellbeing of our employees and our customers. And we have been managing the business to that effect. Michael will speak in more detail on how we expect this crisis to impact our financial performance. Our job as a management team is to keep steady amidst the turbulence while not losing sight of the long-term opportunity ahead of us. Let me now turn to our fourth quarter results. MongoDB delivered strong results, capping off an outstanding year for the Company. Our technology investments have further strengthened what was already the leading modern data platform. Our investments in sales and marketing have expanded our market reach to make MongoDB available to all customers of all sizes around the world. I'm proud of the performance of our team in fiscal 2020 and believe we are well on our way to establishing MongoDB as one of the primary winners as the database market moves to the cloud. Looking quickly at our fourth quarter results. In the fourth quarter, we generated revenue of $123.5 million, a 44% year-over-year increase and above the high end of our guidance. For the full year fiscal 2020, we generated $421.7 million in revenues, a 58% year-over-year increase and growth. We grew subscription revenue 46% year-over-year in the fourth quarter, and 61% for the full year. Atlas revenue grew over 80% year-over-year in the fourth quarter, and now represents 41% of revenue. And we had another strong quarter of customer growth, ending the quarter with over 17,000 customers. We believe our fourth quarter and full year fiscal 2020 results demonstrate that we have established ourselves as the modern data platform of choice. We continue to be pleased and encouraged by the breadth of adoption of our platform in terms of use cases, industry verticals and geographies. Our sales force is executing at a high level, and we saw meaningful productivity increases in both our enterprise and corporate channels. We also continued to be very pleased with the progress of a self-serve business, as evidenced by a record number of customer additions in Q4. And we continue to expand our self-serve operations to become a world class product-led growth engine. Entering fiscal 2021, we are pleased with our achievements in the two and a half years since becoming a public company, and we are more confident than ever about our long-term prospects. We are pursuing one of the largest and fastest growing markets in all the software. IDC projects the database market to be $71 billion in 2020, growing to $97 billion in 2023. We have less than 1% share of the global database market and a long runway for growth ahead of us. As we look ahead, we're keenly aware of the opportunity in front of us. We strongly believe that the database market is at the very beginning of a profound platform shift towards the cloud over the next decade. As the new and existing workloads migrate to the cloud, customers will be forced to examine and modernize their data architectures. Technology history teaches us that in times of such platform dislocation, new companies emerge as generational leaders. To this end, our belief is that the best way to maximize long-term shareholder value is to make key investments that will position us as one of those leaders. I want to spend more time today to explain how our platform strategy and the associated R&D investments are designed to drive our long-term growth. To start, let me provide some historical context. There have been two fundamental insights that have driven our business to-date. The first key insight that led to the founding of the Company was that the inflexibility and lack of scalability of relational databases were major impediments to organizations that desire to build modern apps quickly with performance and scale. MongoDB's document model and distributed data architecture address these problems, resulting in MongoDB's incredible popularity with developers everywhere. The second key insight was that the process of building modern apps was dramatically increasing the burden of undifferentiated work on development teams. As apps keep proliferating and apps themselves get decomposed into smaller distributed components due to the use of microservices, containers and other related technologies, the scope and complexity of managing apps and infrastructure grows exponentially. This undifferentiated work ends up crowding out the resources needed to invest in enhancing the application and ultimately the business. As a result, in 2012, we started building our tools to automate the provisioning, management and security led database. The logical progression was the introduction of Atlas in 2016, our fully managed databases service offerings that enabled organizations to avoid the hassle of managing distributed databases altogether. Today, Atlas continues to be a huge success for us, growing over 80% year-over-year, representing 41% of our revenue in Q4 and is at a $200 million annualized revenue run rate. Thanks to these two insights, we are the only modern database that is considered to be a true general purpose database, has been adopted by millions of developers around the world, and has generated meaningful commercial success, affording us the opportunity to sustain strong growth rates for years to come. Our success has enabled us to acquire over 15,000 Atlas customers in the past 3.5 years, giving us a unique perspective on how we can provide an even greater value to customers in the future. The productivity and economic benefits of the cloud such as real-time provisioning, almost unlimited scale and usage-based pricing are at this point well-known. However, we also see the challenges that the movement to the cloud has created. In the first decade, the cloud ecosystem largely involved moving existing technology stacks onto the new infrastructure paradigm. These forced developers to deal with a fragmented set of apps and infrastructure tied to discrete use cases, multiple APIs and data spread across many disparate silos. Developer productivity is impeded as they're unable to seamlessly leverage data for different needs. And these problems will only escalate as customers move more workloads to the cloud. This experience led us to a third key insight, the one that is informing our data platform strategy that the apps of the future will dramatically expand in their functionality and scope. Future applications will enable continuous engagement and access to massive amounts of real-time data among key constituents, be it users, customers, partners or suppliers. Availability of instantaneous operational data along with insight into that data will increasingly drive business decisions. That means traditional operational workloads will need to incorporate additional functionality, such as real-time analytics. In addition, as data on the edge continues to explode due to the increasing use of mobile and IoT apps, future applications will require the ability to effortlessly synchronize data between the edge and the core. Finally, rather than dealing with a large number of complex interfaces, developers will require one unified interface, designed to bring together data at massive scale to build these new applications more quickly and efficiently. We believe MongoDB is incredibly well-positioned to benefit from this emerging trend. We are an operational database, which puts us both at the core of the application we support and makes us a source of its real-time mission-critical data. We believe developers will credibly expect their core operational database to extend into a full data platform that provides the additional capabilities they need to expand an application's scope and functionality. Many of the exciting product announcements we have made over the past year demonstrate how we are already evolving our data platform for applications with greater functionality and scope. Atlas Data Lake brings transactional and analytical use cases together by allowing customers to query both operational and archived data. Atlas Search brings the previously separate search functionality into the operational database. Finally, the integration of Realm and Stitch will address the issue of edge-to-core data synchronization. These and other future products will leverage our powerful API to access large amounts of data easily to provide an unparalleled developer experience. We know that every enterprise’s future will be increasingly powered by software and that apps of the future will leverage data in even more sophisticated ways. Consequently, we're confident these investments designed to address even more complex use cases will further extend our position as the leading modern data platform and put us in an even better position to deliver strong long-term growth. Now, I’d like to spend a few minutes reviewing some customer wins and interesting use cases from the fourth quarter. Square Enix, producers of Tomb Raider, Dragon Quest, and Final Fantasy video games, chose MongoDB to support online suite of asynchronous multiplayer features across a wide range of video games. The company continues to invest in MongoDB Atlas for game production to provide the scalability needed for its growing global player base. Atlas allows Square Enix to scale elastically to meet the demands of the game regardless of the number of concurrent players. Software AG’s Cumulocity IoT, a leading IoT platform aimed at shifting to a truly connected world, chose MongoDB Enterprise Advanced as its operational data store. As data is the key to driving actual insights into an IoT-enabled business, MongoDB plays a critical role in helping Software AG customers transform connected device data into immediate value in a scalable and reliable manner. Unqork, a no-code application platform that helps large enterprises, healthcare providers, and government agencies build complex custom software faster, selected MongoDB Atlas as its primary cloud database platform in 2017. The company expanded its use of MongoDB last quarter because they wanted a data platform provider that was cloud agnostic, highly scalable, enterprise security ready, and trusted by Fortune 500 customers. Location-aware data infrastructure company Radar Labs chose MongoDB Atlas to power its geolocation platform, which currently runs on more than 25 million devices around the globe, processing billions of location data points each week. As an early member of MongoDB's startups program, the company continues to make big bets on MongoDB to help scale the delivery of its rich geolocation services so its developers can focus on the Company's goal of making every app on every device contextually aware. In summary, we are encouraged by attraction as evidenced by our strong Q4 results. The success and our track record of execution give us confidence to aggressively pursue our long-term opportunities. We believe the market is evolving in ways that will increasingly play to our core strengths and further establish MongoDB as the modern data platform of choice for developers. Before I turn over the call to Michael, I want to take this opportunity to personally thank our co-founder and CTO, Eliot Horowitz, for his vision and technical leadership for almost 13 years. I talked today about the foundational insight that Eliot and the co-founders had, namely that legacy database technology was not designed to address the needs of modern applications. Out of that insight came the document model, a query language, and the tremendous popularity of MongoDB in the developer community. Thanks to Eliot's vision and leadership, today MongoDB is the world's most popular modern database platform. It will cross $0.5 billion in revenues this year, has over 90 million downloads, and over 17,000 customers all around the world. The Company and, in particular, the team assembled by Eliot has never been in better shape. And there's a strong and deep leadership team ready to take the baton to further the vision of improving developers’ lives by making it so easy to work with data. We're excited that Eliot will continue to stay involved and become a technical adviser to MongoDB after leaving his full-time role. With that, let me turn the call over to Michael to review our financial results.

Our outlook for the first quarter and full fiscal year 2021 begins with a review of our fourth quarter results. Total revenue for the quarter was $123.5 million, an increase of 44% year-over-year. Subscription revenue reached $117.8 million, up 46% year-over-year, while professional services revenue was $5.7 million, up 17% year-over-year. Our strong performance this quarter was supported by solid growth in both Atlas and Enterprise Advanced. Notably, a significant multiyear Enterprise Advanced deal with a Fortune 50 customer contributed $3.5 million to our outperformance. It's important to remember that, due to revenue recognition standards under ASC 606, we recognize the term license revenue for all contract years upfront, rather than just the initial year. The rapid adoption of Atlas remains the primary driver of our growth, showing over 80% growth in the quarter and now making up 41% of total revenue, compared to 32% in the fourth quarter of fiscal 2019 and 40% last quarter. Atlas benefits from strong performance in both self-service and direct sales channels, although we experienced a growth challenge from our historical mLab customer base, which we anniversaried in the fourth quarter. In the fourth quarter, we added over 1,100 customers, bringing our total customer count to over 17,000, up from over 13,400 a year ago. Of these customers, over 2,000 are direct sales customers, compared to over 1,750 a year ago. The increase in our total customer count is largely driven by Atlas, which had over 15,400 customers at quarter's end, compared to over 11,400 a year ago. This growth includes not only new Atlas customers but also existing customers expanding their Atlas workloads. We are also seeing healthy expansion from our customers, which is a key part of our growth strategy. Our net annual recurring revenue expansion rate remained above 120% in the fourth quarter. We finished the quarter with 751 customers contributing at least $100,000 in annual recurring revenue, up from 557 a year ago. Additionally, we noted 62 customers with at least $1 million in annual recurring revenue, compared to 39 in the previous year. Moving on to our financial performance, I’ll focus on our results based on non-GAAP figures unless indicated otherwise. We have included further disclosures in our earnings release that detail the non-GAAP reconciliation of our operating expenses for your reference and modeling purposes. Our gross profit for the fourth quarter was $91.2 million, yielding a gross margin of 74%, which is an improvement from 72% last quarter and 71% in the same period last year. The gross margin improvement was aided by the significant multiyear EA license revenue from the Fortune 50 customer mentioned earlier. Overall, we are pleased with our gross margin performance, reflecting improved efficiency and scale in our Atlas business. However, we anticipate a slight decline in our overall gross margin as Atlas comprises an increasing proportion of our revenue. Our operating loss for the fourth quarter was $12 million, equating to a negative 10% operating margin, compared to a negative 11% margin from the previous year. The net loss for the fourth quarter was $14.5 million, or $0.25 per share, based on 56.9 million weighted average shares outstanding, compared to a loss of $0.17 per share on 53.8 million shares a year earlier. In terms of our balance sheet and cash flow, we concluded the quarter with $987 million in cash, cash equivalents, short-term investments, and restricted cash. Our operating cash flow for the fourth quarter was negative $8.6 million. Considering approximately $2.3 million in capital expenditures and principal payments on finance lease liabilities, our free cash flow for the quarter was negative $10.9 million, compared to negative free cash flow of $12.6 million in the same quarter last year. Now, let’s discuss our outlook for the first quarter and full fiscal year 2021. Our guidance incorporates our best current estimate of the anticipated effects of COVID-19 on our results. While the situation continues to evolve rapidly, we believe it’s important to factor in some anticipated impact. For the first quarter, we expect revenue to be between $119 million and $121 million. We project a non-GAAP loss from operations to be between $14 million and $12 million, and the non-GAAP net loss per share is expected to range from $0.25 to $0.22, based on 57.5 million weighted average shares outstanding. For the entire fiscal year 2021, we anticipate revenues to fall between $510 million and $530 million. We expect non-GAAP loss from operations to be between $78 million and $68 million, with non-GAAP net loss per share ranging from $1.40 to $1.23 per share, based on 57.9 million weighted average shares outstanding. To further clarify our guidance, let me provide additional context regarding the potential impact of COVID-19 on our business. Like many global organizations, we anticipate that our operations will be affected by the global slowdown in economic activity. Our fiscal ‘21 planning was finalized prior to the recent surge in the virus's spread, but the rapidly changing situation has prompted us to revise our forecast. We currently estimate that the disruption from COVID-19 will affect Q1 revenues by around $1 million to $2 million and impact fiscal ‘21 revenues by approximately $15 million to $25 million due to expected weaker bookings in the first half of the year. It's noteworthy that, so far, we have experienced minimal effects across our sales channels worldwide, including successfully closing transactions in the first quarter, even in regions severely impacted by the virus. Nevertheless, as a management team, we believe it is prudent to incorporate into our outlook the possibility of a significantly more challenging economic environment in the forthcoming weeks and months. Our guidance assumes a more normalized business environment in the latter half of the year. We will continue to monitor the situation regarding COVID-19 closely and evaluate its potential impact on our business. Regarding our overall investment strategy, we decided before the COVID-19 outbreak to proceed with aggressive investments in the business to seize our market opportunities. We are funding high-priority projects across the organization, which include expanding our sales capacity globally, an area that still requires significant growth. For perspective, even in the United States, we lack coverage in about a quarter of NFL cities and have only two or fewer representatives in half of these cities. Given our strong historical productivity, we believe that our organizational capacity is the primary limiting factor for our productive potential. Additionally, we are continuing to invest in our marketing organization, especially our product-led growth team, to promote our self-service Atlas business and overall Atlas adoption. Lastly, as Dev mentioned earlier, we are maintaining strong R&D investments to support our data platform vision and enhance our core products. Considering the attractive long-term opportunities that lie ahead, we believe it is vital to continue investing in these high-return areas. In summary, MongoDB has delivered impressive fourth-quarter results; our commitment to executing our product plans and expanding our reach in the market is driving significant growth at scale. The efforts we've made to position MongoDB as the leading modern general-purpose data platform position us for sustained long-term success. While we anticipate seeing short-term effects on our business from the COVID-19 situation, we remain dedicated to executing effectively to seize our long-term market opportunities. We are now ready to take your questions.

Thank you. Our first question will come from Sanjit Singh with Morgan Stanley. Please go ahead.

Thank you for the opportunity to ask questions and congratulations to the team on another strong year. It's great to see the solid results from Q4. Michael, I appreciate you providing the guidance; it was very informative. I would like to know more about how you arrived at the $1 million to $2 million impact for Q1 and the $15 million to $25 million for the full year. Specifically, how do you anticipate this impacting the business? Will it primarily be felt in sales, self-service, or professional services? Additionally, to what extent are you factoring in lower close rates? Any details you can share to help clarify the guidance would be appreciated.

Thank you for the question. I'm happy to provide the guidance. It's a rapidly changing situation, making it challenging to pinpoint with a specific estimate. However, we’ve analyzed the landscape to identify potential outcomes that could be relevant for our guidance. For the first half of the year, we anticipate a slowdown in overall economic activity that would affect sales and bookings, particularly in the direct sales area. The self-service side is less likely to be impacted in the same way. We focused on the regions most affected and performed sensitivity analyses based on various scenarios. As mentioned, we expect a normalization of activity in the second half of the year. If disruptions continue, we will need to reassess this outlook. Overall, we believe we are well-positioned in the market and haven't experienced significant impacts so far. Our diversified customer base across different geographies and industries works to our advantage. While some sectors are struggling, others are experiencing gains. We aimed to provide transparency about the situation as it evolves.

Thank you, Michael. That was super clear. So, my follow-up maybe for Dev. One of the things I’ve been trying to think through is self-hosted Enterprise Advanced and what's sort of the outlook for that? And clearly, this quarter with that large Fortune 50 deal, seems to underscore that this is going to continue to be a growth category, even as Atlas continued to post sort of leading growth in the company. Can you sort of give us your view on sort of positioning and the growth opportunity within Enterprise Advanced going forward?

Yes. Sure, Sanjit. We believe that the growth of EA will continue to be strong. Why? Because there are many customers who want to consume MongoDB on their own in terms of maintaining and managing their own database infrastructure, either because they have a lot of sunk costs, or there are regulatory requirements that require them to run EA on their premises or in certain data centers that they’re allowed to do business in. So, one of our key value propositions to our customers is the ability to run and use MongoDB anywhere. And so, we don't force every customer to consume it as a service in Atlas. Customers like that choice. And we have many customers who both procure EA as well as continue to invest in Atlas.

Our next question will come from Raimo Lenschow with Barclays. Please go ahead.

Congrats on the quarter, but also congrats for trying to kind of put an impact on the COVID situation for the business. Well done on that one. The two quick questions. So, first one is, can you talk a little bit about Atlas? The growth this quarter, if I look at organic, came down a little bit, but I do seem to remember that last year, we had not at mLab but I think there was some other factors in the fourth quarter. Could you just remind us because we're trying to understand like the underlying growth run rate a little bit better? And then, the follow-up is like, what's the trigger points that you guys are looking for in terms of like changing, in terms of maybe the investment cadence as this kind of situation unfolds around COVID-19. Thank you.

Yes, sure. So, it was another strong quarter. Thanks for the question, Raimo. It was another quarter for Atlas. To your point, I think the two things that are worth calling out are it was the first quarter where we had mLab in the base. And we have talked about the different growth profiles and those cohorts are contracting as we indicated and called out at the time of the acquisition. And also, you're correct that in fiscal '19 fourth quarter, we did come up specific over a consumption that was not seasonally related, but was typically related to the lifecycle of a couple of large apps that were in deployment. And so, I think we just start to neutralize or normalize for both of those. It was another very strong Atlas quarter. So, overall, we feel quite good about that. And then, in terms of the second question, in terms of investment, I think maybe just trying to take a step back from an overall perspective, we as a management team, have a very long-term orientation. We're very, very early on in the stages of trying to capitalize on our opportunity. We will continue to invest as we see good rates of return on the investments that we're making. We see that in both the R&D side, as well as in the sales and marketing side. Certainly, if there were to be macroeconomic factors that would change or other sides that sort of eroded or degraded, those investment opportunities we would modulate the levels of investment appropriately. And we've done that throughout the last many, several years. And so, we'll just continue to do that as we think about our role in balancing maximizing the long-term potential, but also making sure that it's not a growth-at-all-cost mindset, but instead sort of being prudent allocators of capital.

Thank you.

Our next question will come from Heather Bellini with Goldman Sachs. Please go ahead.

Thank you very much. I hope everyone in your families is doing well. I have a couple of questions. First, regarding the direct business, could you provide any insights into the typical revenue flow over a quarter? Specifically, how much revenue typically comes in during the first month compared to the third month? I'm particularly interested in your enterprise business, which usually has deferred revenue. This will help us understand the sales process in relation to the revenue. Additionally, Michael, you mentioned that Atlas is less likely to be affected by macroeconomic conditions. Can you share anything about the characteristics of an Atlas customer that might make them more resilient in this environment? Thank you.

Sure. So, I’ve been in enterprise software now for almost 20 years, and the lesson learned is that customers are trained to obviously try and get as much leverage as possible. And in every business I've been involved with, the quarters do tend to be back-end loaded. Obviously, there's nothing different about MongoDB. I would tell you that one of the things that really differentiates us is that we have a very rigorous culture of qualification and our sales process. So, the forecast that roll up to Michael and me, we have a lot of confidence in based on the rigor that the sales team puts in, in terms of forecast for business. So, our confidence in the forecast is a measure of the quality of the qualification process. And as you know, for 2.5 years as a public company, we've done a really good job. Michael, you want to handle the second question?

Yes. I think just to sort of make sure there's not any confusion. My comments about the likely impact on the business, at least from what we hypothesized are specifically focused on self-serve. Obviously, Atlas or EA, there’s the direct sales side of things. But when you think about some of the potential impacts on a direct sales model of not being able to go to customer sites, people being quarantined or cities being in virtual lockdown, that shouldn't really affect the self-service side of the business as much. Obviously, it's not immune to macroeconomic outcomes, but some of those specific things that we're starting to see rollout across the geographies have much more potential to directly affect the direct sales side of things.

Our next question will come from Brad Reback with Stifel. Please go ahead.

Dev, you mentioned your extensive experience in software and your experience during '08 and '09. What lessons from that time do you think apply to our current situation, and how might you approach positioning the business or organization now? Thank you.

Yes, so well, I'm old enough, Brad, to tell you that I also lived through 2000-2001. So, I was a public company officer then and I was a public company officer in 2008-2009. And so, I would tell you that we believe that while sentiment can change quickly, the underlying trends don't change as fast. So, deals in progression typically still happen, it’s maybe deals who start early in the sales cycle that may end up having more approvals required, and so sales cycles may start lengthening. As we said in the prepared remarks, we see minimal impact right now. But prudence dictated that based on our judgment experience, and having seen this before, some impact given the macroeconomic environment was warranted.

Our next question will come from Brent Bracelin with Piper Sandler. Please go ahead.

Dev, I wanted to revisit the Atlas business and gain a better understanding of its economic sensitivity, particularly in relation to databases and usage-based cloud models. How are you viewing this business? Are there specific aspects of cloud databases and modern applications that suggest stability, or could the new opportunities for Atlas be at risk? It would be helpful to frame Atlas in this light, especially since it’s new and we did not have usage-based transactional revenue streams during the previous downturn. Any insights on how you’re assessing the potential impact on Atlas would be greatly appreciated. I also have a quick follow-up for Michael if I may.

Sure. The Atlas business aligns with the overall database sector. Database software is highly dependable, as it forms the core of every software application. Users are unlikely to discontinue existing applications, services, or websites since they need to continue operating. With Atlas, customers have delegated the ongoing management of their database infrastructure to us. Therefore, when companies might look to reduce costs, it's improbable that they would choose to revert those workloads back in-house. In fact, they tend to appreciate the variable cost model offered by Atlas. Most workloads we observe have predictable usage patterns, with only a few exceptions like games or specific seasonal workloads related to the holiday retail period or events like Mother's Day. We are witnessing increased demand from customers in the cryptocurrency space and gaming companies, as many people are staying home and engaging in online gaming. Additionally, telcos and cable companies are also showing increased usage. Overall, the usage patterns are generally quite consistent, and since customers have transferred their database management to us through Atlas, those workloads remain very stable.

Super helpful. And then just as a follow-up for Michael. You did talk about a large EA deal with a Fortune 50 customer. Could you just give us a little more color? Was that a kind of database replacement opportunity? Was it tied to kind of a new application build? Any color there on why you won the deal, how competitive it was? And kind of the proof points that fits to the scale on your favor?

Yes. So we wouldn't normally like over-index on talking about any one customer but just given the magnitude, in fact, there was a long-term deal that has impacted the numbers, we just wanted to put that in context. We've had a long-term relationship with this customer, but this is a meaningful expansion. And effectively, we’re the platform going forward for non-relational workloads. Typically, what we would see is that there would be a mix of both new applications as well as migrations and scenarios like that.

Our next question will come from Tyler Radke with Citi. Please go ahead.

Hey, thanks very much for taking my question. I wanted to ask a couple on $1 million customers, which I think grew almost 60% year-over-year. I wonder if you could talk a little bit about some of the common use cases you're seeing. When you get to that type of deal, are you seeing more legacy replacement? I mean if you could give us a sense for how much of kind of those incremental $1 million customers are coming from EA versus Atlas and just how to think about $1 million customers on Atlas going forward? Thank you.

Yes. To clarify, our $1 million accounts increased from 39 to 62, and this group represents a highly diversified set of customers. Therefore, I wouldn't say there is a single predictable set of use cases. Even among these customers, we utilize a land and expand business model, meaning they are increasingly deploying MongoDB for various applications and workloads. It's not just one application growing rapidly. We are very encouraged by this trend, which we've discussed since going public: our business thrives on the land and expand model, and its durability isn't tied to any single application. Over time, customers tend to standardize on MongoDB, and as they recognize additional value from our platform, they begin using it for a wider range of workloads. Consequently, I wouldn’t pinpoint a particular use case or common theme among these $1 million accounts, other than the fact that most of them are classic land and expand customers. And do you have a sense just on the second part of the question around how much of those customers are on Atlas versus EA and maybe just what you'd expect that to look like going forward? That's also frankly a very healthy mix of both. So there's no one concentration of both EA or either EA customers or Atlas customers. And so, we've seen customers invest very, very aggressively in EA. But we're also seeing a lot of other customers invest aggressively in Atlas. And again, because, as an earlier question addressed, we have customers that do both. So, we got the best of both worlds, some workloads they want to maintain in-house, and other workloads that make more sense to use a fully managed service like Atlas.

Our next question will come from Jack Andrews with Needham. Please go ahead.

I was wondering if you could just provide an update to trends you're seeing around legacy migrations, especially since you announced some new partnerships that look to accelerate that trend?

We are observing significant interest from customers looking to replatform their legacy database infrastructure. A major challenge for them is not only migrating the data but also potentially having to rewrite their applications. In the past, we've mentioned collaborating with our system integrator partners, and now we’ve also announced additional partnerships that enable us to provide customers with migration toolkits. This will help reduce the workload and heavy lifting necessary for moving from relational databases to MongoDB. By simplifying this process and minimizing friction, we anticipate an increase in migrations from legacy systems to MongoDB.

Okay, thanks. And then just as a quick follow up, could you touch on your auto-scaling capability and how that may be impacting your own business and whether that's a source of margin leverage for you over time?

Yes. I mean, so auto-scaling is basically enabling customers to not worry. I mean, the whole premise for building MongoDB is to really get the database out of the way. And one of the classic challenges is doing capacity planning with the database because you want to ensure that you offer good service and good predictable performance to your end users. And so, with auto-scaling, we basically take that to the next level. As the performance demands of your application grow, the database scales elastically. And so this gives customers peace of mind in terms of not having to worry about having any degradation of performance for the users, customers, or partners with the ability to auto-scale. Typically, we find that this is also a win-win for customers, because they don't have to pay for some fixed utilization costs when the utilization drops. And so, it's a win-win for both customers and for us. And so, it means we can lead to more upscaling and also sometimes a little bit downscaling. But in general, it's a win-win and it allows us to build really healthy long-term relationships with customers.

Our next question will come from Patrick Walravens with JMP Securities. Please go ahead.

Great. I want to extend my congratulations on estimating the impact of COVID-19. I think you're the first to tackle it. So, Dev, what tools do you have to manage the business differently if we face a real economic slowdown? For instance, we hosted a call with Salesforce this morning, where they mentioned that during the last downturn, many offices focused on maintaining customer relationships, even if it meant adjusting contracts to lower pricing or significantly reduced values. The idea was that coming out of the downturn, it would be easier to expand with existing customers and re-establish ties. Are there similar tools you have in place for situations like this?

Yes. I would say that we approach forecasting with a lot of rigor because for us, a revenue forecast also serves as an expense forecast. The more accurate our forecast, the better we can determine the capacity of the business in relation to that forecast. We place significant emphasis on our forecasting process and are confident in the quality of the forecasts we receive from the sales team. Additionally, we invest considerable time with customers, and with Atlas, we have gained even more detailed data on how they are utilizing our platform. This helps us understand if they are using it correctly, encountering any issues, have their database configured properly, or experiencing performance issues. Since the database is crucial for every application, customers become concerned quickly if any problems arise. We focus on ensuring high levels of satisfaction and enjoyment from both MongoDB and Atlas. Generally, we do not see any immediate impact on the business. However, we are mindful that there may be some impact, which is why we provided the guidance we did. We will closely monitor this, including our sales pipeline and our self-service funnel, which remains very strong. If we notice any changes, we are prepared to respond swiftly.

Our next question will come from Richard Davis with Canaccord. Please go ahead.

I'm thinking, in a tough environment, one of the catches, if I was a salesman for you guys is I could offer kind of a hard dollar ROI. And I think you can pretty much offer that, just make sure I'm not mistaken. But can I walk in and go with it, you can get rid of your old systems? And it's not like one of these companies that say we're going to save everyone two minutes a day. Like, I don't even know what that means. Is that a fair assessment of the business model there? Thanks.

Oh! Absolutely. One of the compelling benefits of MongoDB and Atlas is the fact that you don't have to manage databases, the total cost of ownership of MongoDB is so much lower than legacy technology.

When you compete against various NoSQL database companies, is it often about performance benchmarking, or does developer mindshare and market share play a significant role? For instance, if I’m familiar with the user interface and transition from one company to another, I would choose your system or recommend it. Can you determine which aspect is more crucial, or is there a point where one surpasses the other? Thank you.

Yes, I would tell you that it's much more the latter than the former. In databases, it's historically, there's been a lot of benchmarks used, but a lot of the benchmarks are rigged with certain criteria or certain tests that make one vendor look better than another vendor. And customers and developers have become wise to that. What it is, is really all about making a developer's life easier. And one of the real hallmarks of MongoDB is that we can get customers and developers up and running very, very quickly. The document model, our query language, the fact that our database scales very, very easily, the fact that they can consume it as a service, the fact that they can use it for almost every particular use case because it's a true general-purpose platform, not some mixed solution, makes us a very, very compelling solution, which is why our business has grown so quickly, and it's all development led. And we're investing a lot in the business. We've made a lot of investments in expanding our developer relations, capabilities to engage with the developers and given everyone is now working virtually, we're going to see a lot more online seminars and education to get developers up to speed on all the latest features and benefits of MongoDB. On top of that, we continue to invest a lot in our self-serve business, where either developers sitting in the garage or developers from a large Fortune 500 organization can engage with MongoDB and get going very, very quickly.

Our next question will come from Rishi Jaluria with D.A. Davidson. Please go ahead.

Two quick points. I want to commend everyone for the effort in quantifying the financial impact of COVID in your guidance. This sets a strong example for other enterprise software companies. First, with MongoDB World being virtual this year, how should we assess its potential effect on new bookings and lead generation? Additionally, with Eliot stepping down, he has provided a great vision, but has been in more of an advisory capacity lately. What qualities or attributes will you be seeking in a CTO replacement? Thank you.

Sure. Let me address both questions. Firstly, regarding MongoDB World, I want to clarify that it was never intended to be a pipeline acceleration conference. It was meant to serve as an educational event for our community. In fact, the more technical and in-depth the content, the better it is. There's a significant investment from the organization, especially concerning the engineers building our capabilities. Developers prefer to spend time with those who are writing the code, asking detailed technical questions, and engaging with experts. Therefore, it was never really a pipeline acceleration event. While there may be opportunities to arrange meetings with senior-level stakeholders during the conference, past content has primarily focused on meeting the needs of MongoDB's technical community. We do not anticipate any adverse effects from transitioning MongoDB World to a virtual format. In fact, now that it’s virtual, we are reimagining the conference to reach more developers at once. In previous years, we only broadcasted keynotes, which attracted around 10,015 viewers. However, individual sessions were not streamed. We have restructured the conference to allow broader access so more people can stay updated on the latest advancements with MongoDB. Regarding Eliot, we are immensely thankful for his contributions and leadership over the past 13 years. He has built an exceptionally strong team, with two of his key team members having been with the company for over seven years, stepping into larger roles. Furthermore, Sahir, our Chief Product Officer, was appointed a few quarters ago, which was also part of preparing for this transition. We have a capable team in place under Eliot's leadership, and there are no current plans to hire a CTO externally. I am incredibly proud of our team as we face a significant opportunity ahead with a world-class group to help us achieve our goals.

This concludes our question-and-answer session. I would like to turn the conference back over to Dev Ittycheria for any closing remarks.

Well, again, I am very grateful for all of you who were able to listen to the conference. Obviously, my thoughts and prayers are with all of you and those affected by COVID-19. We hope we will get through this quickly. And obviously, we're focused as a business on serving the needs of our customers and employees. And we'll talk to you at our next earnings call. Thank you.

Thank you.

The conference is now concluded. Thank you for attending today's presentation. And you may now disconnect.