MongoDB, Inc 10-Q for FY2021 Q2

MongoDB, Inc. (MDB)

10-Q 2020-09-03 For: 2020-07-31

Added on April 09, 2026

About this 10-Q

MongoDB, Inc filed this 10-Q on September 3, 2020, covering the quarter ended July 31, 2020 (FY2021 Q2).

Headline figures

Quarter ended July 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $138.28M; up 39.2% from $99.37M a year earlier
Net loss: $64.53M; compared with a net loss of $37.34M a year earlier

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Delaware		26-1463205
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1633 Broadway,	38th Floor
New York,	NY	10019
(Address of principal executive offices)		(Zip Code)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.001 per share	MDB	The Nasdaq Stock Market LLC
Class A Common Stock, par value $0.001 per share	MDB	(Nasdaq Global Market)



Large accelerated filer	þ	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐



		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets as of July 31, 2020 and January 31, 2020	1
	Unaudited Condensed Consolidated Statements of Operations for the three and six months ended July 31, 2020 and 2019	2
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended July 31, 2020 and 2019	3
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended July 31, 2020 and 2019	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3.	Defaults Upon Senior Securities	67
Item 4.	Mine Safety Disclosures	67
Item 5.	Other Information	67
Item 6.	Exhibits	68
Signatures		69



	July 31, 2020			January 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	469,492		$	706,192
Short-term investments	505,404			280,326
Accounts receivable, net of allowance for doubtful accounts of $4,368 and $2,515 as of July 31, 2020 and January 31, 2020, respectively	87,193			85,554
Deferred commissions	27,453			24,219
Prepaid expenses and other current assets	15,281			16,905
Total current assets	1,104,823			1,113,196
Property and equipment, net	62,154			58,316
Operating lease right-of-use assets	40,481			11,147
Goodwill	55,830			55,830
Acquired intangible assets, net	30,525			34,779
Deferred tax assets	744			615
Other assets	60,606			54,684
Total assets	$	1,355,163		$	1,328,567
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,631		$	2,849
Accrued compensation and benefits	43,377			41,427
Operating lease liabilities	4,863			3,750
Other accrued liabilities	24,625			26,860
Deferred revenue	176,165			167,498
Total current liabilities	252,661			242,384
Deferred tax liability, non-current	826			821
Operating lease liabilities, non-current	38,873			8,113
Deferred revenue, non-current	18,851			23,281
Convertible senior notes, net	935,292			911,075
Other liabilities, non-current	60,509			60,035
Total liabilities	1,307,012			1,245,709
Commitments and contingencies (Note 7)
Stockholders’ equity:
Class A common stock, par value of $0.001 per share; 1,000,000,000 shares authorized as of July 31, 2020 and January 31, 2020; 58,957,104 shares issued and 58,857,733 shares outstanding as of July 31, 2020; 48,512,090 shares issued and outstanding as of January 31, 2020	59			48
Class B common stock, par value of $0.001 per share; no shares and 100,000,000 authorized as of July 31, 2020 and January 31, 2020, respectively; no shares issued and outstanding as of July 31, 2020; 8,969,824 shares issued and 8,870,453 shares outstanding as of January 31, 2020	—			9
Additional paid-in capital	836,293			752,127
Treasury stock, 99,371 shares (repurchased at an average of $13.27 per share) as of July 31, 2020 and January 31, 2020	(1,319		)	(1,319		)
Accumulated other comprehensive income	69			225
Accumulated deficit	(786,951		)	(668,232		)
Total stockholders’ equity	48,151			82,858
Total liabilities and stockholders’ equity	$	1,355,163		$	1,328,567


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Three Months Ended July 31,						Six Months Ended July 31,
	2020			2019			2020			2019
Revenue:
Subscription	$	132,478		$	94,156		$	257,334		$	178,150
Services	5,803			5,212			11,276			10,606
Total revenue	138,281			99,368			268,610			188,756
Cost of revenue:
Subscription	33,973			24,373			64,598			46,968
Services	8,331			5,829			15,383			11,406
Total cost of revenue	42,304			30,202			79,981			58,374
Gross profit	95,977			69,166			188,629			130,382
Operating expenses:
Sales and marketing	75,078			53,524			144,203			99,644
Research and development	49,255			37,140			94,887			68,008
General and administrative	21,424			16,174			41,359			30,979
Total operating expenses	145,757			106,838			280,449			198,631
Loss from operations	(49,780		)	(37,672		)	(91,820		)	(68,249		)
Other income (expense):
Interest income	1,032			2,231			3,759			4,534
Interest expense	(13,950		)	(4,940		)	(27,745		)	(9,629		)
Other expense, net	(845		)	(296		)	(1,470		)	(711		)
Loss before provision for (benefit from) income taxes	(63,543		)	(40,677		)	(117,276		)	(74,055		)
Provision for (benefit from) income taxes	982			(3,341		)	1,216			(3,479		)
Net loss	$	(64,525	)	$	(37,336	)	$	(118,492	)	$	(70,576	)
Net loss per share, basic and diluted	$	(1.10	)	$	(0.67	)	$	(2.04	)	$	(1.28	)
Weighted-average shares used to compute net loss per share, basic and diluted	58,393,894			55,647,707			58,025,799			55,186,945



	Class A and Class B Common Stock				Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balances as of January 31, 2020	57,382,543		$	57	$	752,127	$	(1,319	)	$	225		$	(668,232	)	$	82,858
Cumulative effect of accounting change	—		—		—		—			—			(227		)	(227		)
Stock option exercises	373,394		1		2,994		—			—			—			2,995
Repurchase of early exercised options	(79	)	—		—		—			—			—			—
Vesting of early exercised stock options	—		—		42		—			—			—			42
Vesting of restricted stock units	241,569		—		—		—			—			—			—
Stock-based compensation	—		—		30,567		—			—			—			30,567
Conversion of 2024 convertible senior notes	8		—		—		—			—			—			—
Unrealized gain on available-for-sale securities	—		—		—		—			848			—			848
Foreign currency translation adjustment	—		—		—		—			(75		)	—			(75		)
Net loss	—		—		—		—			—			(53,967		)	(53,967		)
Balances as of April 30, 2020	57,997,435		58		785,730		(1,319		)	998			(722,426		)	63,041
Stock option exercises	471,269		1		4,050		—			—			—			4,051
Repurchase of early exercised options	(881	)	—		—		—			—			—			—
Vesting of early exercised stock options	—		—		25		—			—			—			25
Vesting of restricted stock units	305,428		—		—		—			—			—			—
Stock-based compensation	—		—		37,525		—			—			—			37,525
Issuance of common stock under the Employee Stock Purchase Plan	84,482		—		8,963		—			—			—			8,963
Unrealized loss on available-for-sale securities	—		—		—		—			(531		)	—			(531		)
Foreign currency translation adjustment	—		—		—		—			(398		)	—			(398		)
Net loss	—		—		—		—			—			(64,525		)	(64,525		)
Balances as of July 31, 2020	58,857,733		$	59	$	836,293	$	(1,319	)	$	69		$	(786,951	)	$	48,151



	Fair Value Measurement at July 31, 2020
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents:
Money market funds	$	392,950	$	—	$	—	$	392,950
Short-term investments:
U.S. government treasury securities	505,404		—		—		505,404
Total financial assets	$	898,354	$	—	$	—	$	898,354



	Fair Value Measurement at January 31, 2020
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents:
Money market funds	$	623,856	$	—	$	—	$	623,856
Short-term investments:
U.S. government treasury securities	280,326		—		—		280,326
Total financial assets	$	904,182	$	—	$	—	$	904,182



	July 31, 2020
	Gross Carrying Value		Accumulated Amortization			Net Book Value
Developed technology	$	34,700	$	(14,225	)	$	20,475
Domain name	155		(155		)	—
Customer relationships	15,200		(5,150		)	10,050
Total	$	50,055	$	(19,530	)	$	30,525



Years Ending January 31,
Remainder of 2021	$	4,250
2022	8,500
2023	8,500
2024	7,825
2025	1,450
2026	—
Total	$	30,525



	July 31, 2020
	2024 Notes			2026 Notes
Principal	$	90,001		$	1,150,000
Unamortized debt discount	(17,478		)	(271,701		)
Unamortized debt issuance costs	(1,408		)	(14,122		)
Net carrying amount	$	71,115		$	864,177


•	July 1, 2020 was the lease commencement date for the Company’s agreement, signed in October 2019, to lease an additional 21,000 square feet of office space in New York City for a term of 64 months with no renewal period. The total aggregate base rent payments for this operating lease are $8.4 million with payments beginning 4 months subsequent to the commencement date.


ITEM 1.	FINANCIAL STATEMENTS.


1.	Organization and Description of Business


2.	Summary of Significant Accounting Policies


6.	Leases



	July 31, 2020		January 31, 2020
Finance Lease:
Property and equipment, net	$	37,424	$	39,411
Other accrued liabilities	4,765		4,633
Other liabilities, non-current	56,841		59,257
Operating Leases:
Operating lease right-of-use assets	$	40,481	$	11,147
Operating lease liabilities (current)	4,863		3,750
Operating lease liabilities, non-current	38,873		8,113



Year Ending January 31,	Finance Lease			Operating Leases
Remainder of 2021	$	4,037		$	3,184
2022	8,073			7,888
2023	8,073			7,765
2024	8,073			6,714
2025	8,445			6,324
Thereafter	42,829			21,402
Total minimum payments	79,530			53,277
Less imputed interest	(17,924		)	(9,541		)
Present value of future minimum lease payments	61,606			43,736
Less current obligations under leases	(4,765		)	(4,863		)
Non-current lease obligations	$	56,841		$	38,873



	Allowance for Doubtful Accounts
Balance at January 31, 2020	$	2,515
Adoption of new accounting standard	50
Provision	2,635
Recoveries/write-offs	(832		)
Balance at July 31, 2020	$	4,368



	Shares		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Balance - January 31, 2020	6,178,999		$	7.60	5.7	$	965,860
Stock options exercised	(844,663	)	8.40
Stock options forfeited and expired	(72,029	)	8.43
Balance - July 31, 2020	5,262,307		$	7.46	4.8	$	1,166,252
Vested and exercisable - January 31, 2020	4,693,273		$	7.08	5.4	$	736,034
Vested and exercisable - July 31, 2020	4,442,122		$	7.04	4.5	$	986,312



	Shares		Weighted-Average Grant Date Fair Value per RSU
Unvested - January 31, 2020	3,281,431		$	102.30
RSUs granted	1,336,320		161.12
RSUs vested	(546,997	)	95.02
RSUs forfeited and canceled	(269,637	)	107.51
Unvested - July 31, 2020	3,801,117		$	123.66


⁽¹⁾	Includes stock‑based compensation expense as follows (unaudited, in thousands):



	Three Months Ended July 31,				Change
(unaudited, in thousands)	2020		2019		$		%
Subscription	$	132,478	$	94,156	$	38,322	41	%
Services	5,803		5,212		591		11	%
Total revenue	$	138,281	$	99,368	$	38,913	39	%


•	changes in actual and anticipated growth rates of our revenue, customers and other key operating metrics;


•	new product announcements, pricing changes and other actions by competitors;


•	the mix of revenue and associated costs attributable to subscriptions for our MongoDB Enterprise Advanced and MongoDB Atlas offerings (such as our non-cancelable multi-year cloud infrastructure capacity commitments, which require us to pay for such capacity irrespective of actual usage) and professional services, as such relative mix may impact our gross margins and operating income;


•	our ability to effectively expand our sales and marketing capabilities and teams;


•	our ability to retain customers and expand their usage of our software, particularly for our largest customers;


•	shelter-in-place or similar orders, private travel limitation, or business disruption in regions affecting our operations, stemming from actual, imminent or perceived outbreak of contagious disease, including the ongoing COVID-19 pandemic;


•	delays in closing sales, including the timing of renewals, which may result in revenue being pushed into the next quarter, particularly because a large portion of our sales occur toward the end of each quarter;


•	the mix of revenue attributable to larger transactions as opposed to smaller transactions;


•	changes in customers’ budgets and in the timing of their budgeting cycles and purchasing decisions;


•	customers and potential customers opting for alternative products, including developing their own in-house solutions, or opting to use only the free version of our products;


•	our ability to control costs, including our operating expenses;


•	the timing and success of new products, features and services offered by us and our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners;


•	significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our software;