MongoDB, Inc. (NASDAQ:MDB) Q2 2021 Earnings Conference Call - Final Transcript

Sep 02, 2020 • 05:00 pm ET

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MongoDB, Inc. (NASDAQ:MDB) Q2 2021 Earnings Conference Call - Final Transcript

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Presentation
Executive
Michael Gordon

the rate of growth of our existing Atlas customers. While the trend still remains below historic levels, the improvement we experienced in Q2 increases our confidence that the slower-than-historical growth is simply a macro phenomenon.

Overall, Atlas's strong performance continued to be the biggest contributor to our growth. Atlas grew over 66% in the quarter and now represents 44% of total revenue compared to 37% in the second quarter of fiscal 2020 and 42% last quarter.

During the second quarter, we grew our customer base by over 1,800 customers sequentially, bringing our total customer count to over 20,200, which is up from over 15,000 in the year ago period. Of our total customer count, over 2,500 are direct sales customers, which compares to over 1,850 in the year ago period. The growth in our total customer count is being driven in large part by Atlas, which had over 18,800 customers at the end of the quarter compared to over 13,200 in the year ago period. It's important to keep in mind that the growth in our Atlas customer count reflects new customers to MongoDB in addition to existing EA customers adding incremental Atlas workloads.

We had another quarter with our net AR expansion rate above 120%, despite the impact of the macroeconomic environment. We ended the quarter with 118 customers, at least $100,000 in ARR and annualized MRR, which is up from 622 in the year ago period.

Moving down the P&L, I'll be discussing our results on a non-GAAP basis, unless otherwise noted. Gross profit in the second quarter was $99.7 million, representing a gross margin of 72% compared to 73% last quarter and 72% in the year ago period. Overall, we are pleased with our gross margin performance, which reflects greater efficiency and scale in our Atlas business. However, we continue to expect that we'll see some modest reduction in overall company gross margin, as Atlas continues to be a bigger portion of our revenue.

Our operating loss was $10.2 million or a negative 7% operating margin for the second quarter compared to a negative 15% margin in the year ago period. Our outperformance versus our operating loss guidance was in part driven by revenue outperformance, but also by the timing of certain expenses that we now expect to incur in the second half of the year.

Net loss in the second quarter was $12.7 million or $0.22 per share based on 58.4 million weighted average shares outstanding. This compares to a loss of $0.26 per share on 55.6 million shares outstanding in the year ago period.

Turning to the balance sheet and cash flow. We ended the quarter with $975.4 million in cash, cash equivalents, short-term investments, and restricted cash. Operating cash flow in the second quarter was negative $10 million. After taking into consideration approximately $5 million in capital expenditures and principal repayments of finance lease liabilities, free cash flow was negative $15 million in the quarter. This compares to negative free cash flow of $13.8