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MongoDB, Inc. (MDB) Q1 2022 Earnings Call Transcript

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MDB earnings call for the period ending March 31, 2021.

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MongoDB, Inc. (MDB 0.76%)
Q1 2022 Earnings Call
Jun 03, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, and welcome to the MongoDB first-quarter fiscal year 2022 earnings conference call. All participants will be in a listen-only mode. [Operator instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brian Denyeau from ICR.

Please go ahead, sir.

Brian Denyeau -- ICR

Thank you, Chuck. Good afternoon, and thank you for joining us today to review MongoDB's first-quarter fiscal 2022 financial results, which we announced in our press release issued after the close of the market today. Joining me on the call today are Dev Ittycheria, president and CEO of MongoDB; and Michael Gordon, MongoDB's COO and CFO. During this call, we will make forward-looking statements, including statements related to our market and future growth opportunities, the benefits of our product platform, our competitive landscape, customer behaviors, our financial guidance, our planned investments, and the anticipated impact of the COVID-19 pandemic on our business and results of operations as well as on our clients in the macroeconomic environment.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from our expectations. For a discussion of material risks and uncertainties that could affect our actual results, please refer to those described in our SEC filings, including our most recent annual report on Form 10-K. Any forward-looking statements made on this call reflect our views only as of today, and we undertake no obligation to update them. Additionally, we will discuss non-GAAP financial measures on this conference call.

Please refer to the tables in our earnings release on the Investor Relations portion of our website for reconciliation of these measures to the most directly comparable GAAP financial measure. With that, I'd like to turn the call over to Dev.

Dev Ittycheria -- President and Chief Executive Officer

Thanks, Brian, and thank you to everyone for joining us today. I will start by reviewing our first-quarter results before giving you a company update. Looking quickly at our first-quarter financial results. We generated revenue of $181.6 million, a 39% year-over-year increase and above the high end of our guidance.

We grew subscription revenue 40% year over year. Atlas revenue grew 73% year over year and now represents 51% of revenue. And we had another strong quarter of customer growth, ending the quarter with over 26,800 customers. June marks the fifth anniversary of launching Atlas, our MongoDB Database-as-a-Service offering.

In Q1, Atlas reached a remarkable milestone, becoming the majority of revenue in just under five years. Deployed in over 80 regions around the world across AWS, Azure, and GCP, Atlas is now a nearly $400 million revenue run rate business growing over 70% year over year. While we are proud of how quickly we have grown this business since its inception, we are confident that we've only scratched the surface of the opportunity ahead of us. As we look back at the first five years of Atlas, we see a story of innovation, aggressive investment, and demonstrated ability to take smart risks, some of which seem quite controversial at the time.

We launched Atlas in June of 2016 as a self-serve-only offering on AWS. Although in retrospect, the decision to launch an independent Database-as-a-Service business seemed like a no-brainer, it wasn't obvious at the time. There was a fair amount of skepticism in the market that an independent company could build a successful cloud service while both partnering and competing with the hyperscale cloud vendors. A year later, we launched Atlas on Azure and GCP.

Even though it was more work and added more expense to support all three cloud providers, we made this a priority, as you understood from the outset that as the cloud became mainstream, customers would want a multi-cloud solution. Due to the strong initial reception of Atlas in our direct sales channel, we invested aggressively to achieve feature parity between Enterprise Advanced and Atlas. We reached that milestone in mid-2018, ahead of our original schedule and since then, have led with innovation on Atlas. Our ability to quickly ship new features and get customer feedback has not only allowed us to innovate faster but has also benefited our Enterprise Advanced customers.

From an outsider's perspective, one of the more controversial decisions we made was to change our license from AGPL to SSPL in 2018. Our objective was to remain true to our open-source roots while ensuring that we could build a meaningful Database-as-a-Service business in the cloud era. While some suggested this will limit the adoption of MongoDB, we had conviction that we could better serve customers with this change. MongoDB's popularity with developers has only continued to grow after adopting SSPL.

Given the success of Atlas, a number of open-source companies have now switched to similar license structures. Around the same time, we acquired mLab, which not only increased our scale in the cloud but also increased our expertise in the self-serve channel. We uncovered a virtuous cycle between our field sales organization, our inside sales team, our customer success organization, and our self-serve channel. Investments in any one area led to the acceleration for the entire cycle, and this virtuous cycle has been a key enabler of our growth.

To give you some context, the majority of Atlas revenue was originally sourced by our self-serve channel but the majority of growth has come through the direct sales channel. In 2019, we acquired Realm, the world's leading independent mobile database, announced beta versions of Atlas Search and Atlas Data Lake. With these actions, we took the first steps to move from offering a database to becoming a comprehensive application data platform. Our expanded product vision was driven by our customers' desire to leverage MongoDB more broadly across their organization.

In 2020, we continue to make changes that made it easier for customers to start using Atlas. These changes resulted in a big uptick in new customers, resulting in over 25,000 customers of almost every size and from nearly every geography and industry using Atlas today. Looking back at the first five years of Atlas, we see a few key lessons learned. First, while innovation, strong execution, and unconventional thinking contributed to the growth of Atlas, none of this would have been possible without MongoDB's outstanding product-market fit in a massive market, which is estimated by IDC to be $73 billion in 2021.

With 175 million cumulative downloads, of which over 70 million were in the last 12 months, MongoDB continues to be the world's most popular modern general-purpose database. The popularity of MongoDB is the foundational pillar for the success of Atlas. Second, given the choice, customers would rather focus resources on building new applications and shipping new features quickly than spend time and resources on the undifferentiated heavy-lifting of managing their distributed application data infrastructure. Third, multi-cloud is proving to be even more important than we originally imagined.

Customers have experienced firsthand that cloud providers do have outages, so building resilience across cloud providers is critical for many customers. Moreover, as cloud providers differentiate among themselves, being able to leverage different services from different cloud providers is something customers want to do. Finally, customers value solutions that make it easy to move from one cloud provider to another, reducing lock-in with any one cloud vendor. As we look to the future, there are a number of reasons why we are bullish about our long-term prospects.

First, we are seeing increased adoption -- enterprise adoption of Atlas. In the first quarter, approximately two-thirds of new business won by our field sales team was Atlas, more than doubled the percentage from two years ago. Not only are customers choosing more of Atlas, they are building or moving mission-critical workloads onto Atlas, which is the biggest driver of growth of our more than 1,000 six-figure customers. Second, cloud partners are recognizing the value that MongoDB and Atlas bring to their own businesses.

Using Q1 as an example, we had a record co-sell quarter with AWS, GCP, and Alibaba. We are seeing increasing opportunities to expand ways we partner with cloud providers through both technical integrations as well as go-to-market initiatives to enable more customers around the world to derive the benefits of using MongoDB. Finally, our C-level customer conversations indicate that our application data platform strategy is clearly resonating in the marketplace. Customers increasingly tell us that they prefer to standardize on a general-purpose platform rather than use a myriad of single-function databases that add more cost and increase the complexity of running workloads in the cloud.

Now I'd like to spend a few minutes reviewing some customer wins and interesting use cases from the first quarter. commercetools, the leading next-generation e-commerce platform, selected Atlas to power the world's most popular e-commerce sites. Used by over 200 leading global brands, such as Audi, AT&T, and Tiffany, commercetools is now able to scale its platform and flexible API-first approach to support the world's biggest retailers so they can design unique and seamless shopping experiences across all digital touchpoints. At the beginning of May, MongoDB and commercetools helped one of the world's largest toy companies launch a massive and highly anticipated campaign to millions of fans across the world without a hitch.

UiPath, a leading enterprise automation software company offering an end-to-end automation platform that combines robotic process automation with a full suite of capabilities to enable organizations to rapidly scale digital businesses -- business operations, chose MongoDB as their underlying data persistence platform to increase efficiency for its developers and accelerate time to market with new features and functionality. Leading provider of cloud-based compliance solutions, Avalara is migrating from SQL server to MongoDB to support its complex data requirements. With more than 30,000 customers in 95 countries, the company need a database to keep up with billions of transactions as it rapidly scales its platform to support new industries, geographies, and compliance services. One of the largest grocery chains in the world chose Atlas to strengthen its digital portfolio and scale its services across the e-commerce platform and in-store offerings.

The company, which has more than 2,000 stores, selected MongoDB to replace Cosmos DB after searching for a scalable solution with a flexible data model that will give its developers a richer feature set and better visibility into their data. Tapple, created by leading Japanese Internet company, CyberAgent, is a dating application with over 6 million registered users. The app, which has made over 200 million matches since inception, was deployed in Atlas for ease of use, the capacity to store 7.5 billion documents, and the ability to upgrade very large clusters while scaling to accommodate large user growth. In summary, we're off to a strong start in fiscal '22.

With that, I'll turn it over to Michael.

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Thanks, Dev. As mentioned, we delivered another strong performance in the first quarter, both financially and operationally. I'll begin with a detailed review of our first-quarter results and then finish with our outlook for the second-quarter and full fiscal year 2022. First, I'll start with our first-quarter results.

Total revenue in the quarter was $181.6 million, up 39% year over year. Subscription revenue was $174.6 million, up 40% year over year, and professional services revenue was $7.1 million, up 29% year over year. Overall, Atlas' strong performance continues to be the largest contributor to our growth. Atlas grew 73% in the quarter compared to the previous year and now represents 51% of total revenue compared to 42% in the first quarter of fiscal 2021 and 49% last quarter.

As Dev discussed, Atlas' continued strong growth at increasing scale reflected strong product-market fit, our large market opportunity, and the clear market shift among customers of all sizes toward a fully managed cloud database offering. Given that Atlas is now the majority of our revenue and that we continue to expect it to grow as a percent of revenue, I thought it would be helpful to remind everyone how Atlas impacts our reported financials. First, Atlas revenue is recorded on a consumption basis and therefore varies with usage, whereas Enterprise Advanced includes a term license component that is recognized upfront. So for a comparable dollar-sized contract, both Enterprise Advanced and Atlas will recognize the same amount of revenue over the contract term, but the Atlas contract will generate less initial revenue.

Second, self-serve Atlas customers and a growing portion of our direct sales Atlas customers do not pay us annually upfront as is customary for Enterprise Advanced customers. We believe that payment and commitment flexibility facilitate Atlas adoption and usage, which will ultimately maximize long-term revenues and cash flows. However, as a result, Atlas generates less deferred revenue and less upfront cash than Enterprise Advanced. To illustrate this point, as of Q1, nearly 40% of our total ARR had little or no impact on our deferred revenue.

Finally, Atlas has a lower overall gross margin than Enterprise Advanced because of its infrastructure component. That said, we've significantly reduced the margin difference between the two as Atlas has scaled. In addition, on an apples-to-apples functionality basis, Atlas is accretive to dollars of gross profit. As a reminder, we do not try to influence which of our products customers choose.

What we really care about is customers adopting and expanding their use of MongoDB. We're happy to have customers run MongoDB in whatever way best suits their IT strategy, and we expect that Enterprise Advanced will continue to grow, especially in regulated industries, such as financial services and healthcare, that are moving to the cloud at a more measured pace. During the first quarter, we grew our customer base by over 2,000 customers sequentially, bringing our total customer count to over 26,800 customers, which is up from over 18,400 in the year-ago period. Of our total customer count, over 3,300 are direct sales customers, which compares to over 2,200 in the year-ago period.

As a reminder, our direct customer count growth is driven by customers who are net new to our platform as well as self-service customers with whom we now have established a direct sales relationship. The growth in our total customer count is being driven in large part by Atlas, which had over 25,300 customers at the end of the quarter compared to over 16,800 in the year-ago period. It is important to keep in mind that growth in our Atlas customer count reflects new customers to MongoDB in addition to existing Enterprise Advanced customers adding incremental Atlas workloads. We had another quarter with our net ARR expansion rate above 120%.

We ended the quarter with 1,057 customers with at least $100,000 in ARR and annualized MRR, which is up from 780 in the year-ago period. The continued strong growth in customers with $100,000 or more in ARR is an indication of the success of our land and expand go-to-market strategy and the fact that we are increasingly becoming a strategic partner and a database standard for our customers. Moving down the P&L. I'll be discussing our results on a non-GAAP basis unless otherwise noted.

Gross profit in the first quarter was $131.6 million, representing a gross margin of 72%, which is consistent with last quarter, and down from 73% in the year-ago period. Overall, we are pleased with our gross margin performance, which is only seeing a modest impact from Atlas as it becomes a bigger portion of our revenue despite its infrastructure component. We've had good success driving greater efficiency as Atlas scales to minimize the gross margin impact. We continue to expect that we'll see some modest reduction in overall company gross margin as Atlas continues to grow as a percent of total revenue.

Our operating loss was $8.4 million or negative 5% operating margin for the first quarter compared to a negative 6% margin in the year-ago period. Our outperformance versus our operating loss guidance was driven primarily by revenue outperformance. Net loss in the first quarter was $9.5 million or $0.15 a share based on 61.4 million weighted average shares outstanding. This compares to a loss of $7.3 million or $0.13 a share on 57.6 million weighted average shares outstanding in the year-ago period.

Turning to the balance sheet and cash flow. We ended the quarter with $935.6 million in cash, cash equivalents, short-term investments, and restricted cash. Operating cash flow in the first quarter was positive $10.2 million driven by strong collections following record Q4 sales results. After taking into consideration approximately $1.8 million in capital expenditures and principal repayments of finance lease liabilities, free cash flow was positive $8.4 million in the quarter.

This compares to negative free cash flow of $8.5 million in the first quarter of fiscal 2021. Despite the stronger-than-expected Q1, we continue to expect that we will burn cash in full fiscal year 2022 as we continue to invest significantly in the business. I'd now like to turn to our outlook for the second-quarter and full-year fiscal 2022. For the second quarter, we expect revenue to be in the range of $180 million to $183 million.

We expect non-GAAP loss from operations to be $24 million to $22 million and non-GAAP net loss per share to be in the range of $0.43 to $0.40 based on 62.4 million weighted average shares outstanding. For the full fiscal year 2022, we now expect revenue to be in the range of $771 million to $784 million. For the full fiscal year 2022, we expect non-GAAP loss from operations to be $76 million to $68 million and non-GAAP net loss per share to be in the range of $1.38 to $1.25 based on 62.6 million weighted average shares outstanding. To summarize, MongoDB delivered excellent first-quarter results.

We are driving high levels of growth at scale driven by our exceptional product-market fit and customers' demand for a modern application data platform. We continue investing to capture the large opportunity ahead of us. We are seeing attractive returns on those investments and are excited about our positioning for the future. With that, we'd like to open it up to questions.

Operator? 

Questions & Answers:


Operator

Thank you. We will now begin the question-and-answer session. [Operator instructions] And the first question will come from Sanjit Singh with Morgan Stanley. Please go ahead.

Sanjit Singh -- Morgan Stanley -- Analyst

Thank you for taking the questions. Actually, I want to start with a pretty high-level question just given the traction that you're seeing with Atlas in the cloud and also in terms of the customer accounts. Dev, do you have a goal in mind in terms of where MongoDB can get to? I mean is 100,000 customers possible? If you look at some of the modern software companies, I think Atlassian is like north of 200,000. Datadog, which is a little bit younger company than you guys are, is sort of in the 15,000 to 20,000 -- spokes at 20,000.

What do you think from a customer base perspective MongoDB can ultimately get to?

Dev Ittycheria -- President and Chief Executive Officer

Yeah. As we've said many, many times, we're going after one of the largest markets in enterprise software. And while, obviously, most of the dollars per customer are in the kind of account what I'd call the Global 2000s, so obviously there's only 2,000 of those customers, there's a massive opportunity to grow the long tail. And so while I don't want to speculate on what the high end of the number could be, I think that number could easily be a lot higher than it is today and potentially even, you know, six figures.

But at this point, you know, we're not constrained by market. It's more about our operational capability and how quickly we can scale the business.

Sanjit Singh -- Morgan Stanley -- Analyst

Got it. And then as a follow-up, if we sort of get your latest views on the demand environment as we come out of pandemic, you guys did a really good job more or less sustaining growth in the back half of last year. Given what you're seeing in terms of new projects and digital, more applications being rolled out, is there a potential for growth to accelerate coming in the back half? Or is it more of a sustained growth framework that you're thinking about as we go into the rest of fiscal year '22?

Dev Ittycheria -- President and Chief Executive Officer

As Michael noted, you know, we're raising our guidance for the year. So we feel pretty good about the demand environment. We think that as customers recognize they need to be digital-first due to the pandemic, it's not like they're going to suddenly say, well, I'm going to go back to my more costly and more inefficient distribution channels. I think they're going to recognize that having a strong digital presence is critical to growing their business.

And when they step back and think about how they drive their business, every company is now thinking about using software and data as a competitive advantage. That means every company is thinking about how can they drive the productivity of their developers, and every company is thinking about how can I – you know, I can't buy my competitive advantage. I've got to build it. And so I think that positions us well for the future as people -- as customers and organizations come out of the pandemic.

Sanjit Singh -- Morgan Stanley -- Analyst

Excellent. Appreciate the thought, Dev.

Dev Ittycheria -- President and Chief Executive Officer

Thanks, Sanjit.

Operator

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

Raimo Lenschow -- Barclays -- Analyst

And congratulations from me as well. Amazing quarter. First question -- I have two questions. One was on the relationship between EA and Direct.

So if I look at this quarter, there was like lots and lots of momentum around direct, while EA is like kind of like a little bit in the background. Is that kind of where -- how you see this world playing out in the future? So in other words, have customers kind of fully realized they should be in the cloud and that's kind of the path forward? Or is there kind of a delay effect of EA potentially coming back a little bit more in the second half of the year and then next year? And then second question is on self-service. And as we're coming out of this pandemic, do you think self-service will start picking up again as kind of developers have a little bit more money? Or is it all going to be direct going forward? Thank you.

Dev Ittycheria -- President and Chief Executive Officer

Thanks, Raimo. So on the first part of your question about the relationship between our sales force and EA, I would just tell you that we are not prescriptive about what products to sell to customers. We basically want to serve the customers the best way that they want to be served. And so for some customers, it's -- they still have a very measured approach to moving to cloud.

Others are going much more aggressively to the cloud, and we obviously have offerings for both sets of customers. I would tell you that we clearly see, you know, the high end of the market getting very, very comfortable moving mission-critical workloads to the cloud and, in particular, to -- obviously to Atlas. And so one of the comments I made in the prepared remarks is that the majority of our six-figure customers are now -- those are Atlas-only accounts. And so that tells you a lot about the sophistication of our customers who are using Atlas at the high end.

And again, I think there's always going to be some seasonality in the mix between Atlas and EA, and we are still believers that EA is going to grow healthily over the long term. And then with regards to self-service, self-service is a very, very important channel. One of the things I -- one of the comments I made in the prepared remarks was to basically explain that the majority of source revenue for Atlas came from the self-serve channel, not just customers, but revenue. Now the majority of the growth came from our sales force.

So self-serve is a very healthy part of our business, and we see a nice flywheel effect between self-serve and direct sales. And so I don't want you to think that because what you -- when you look at the numbers, things like the self-serve business is not growing. What happens is that our sales force is now very adept at basically picking off the highest quality self-serve accounts and growing those accounts that much more quickly. So the self-serve channel is paying huge dividends for us, and we're investing in all parts of the business.

Raimo Lenschow -- Barclays -- Analyst

OK, perfect. Thank you, and congrats.

Operator

The next question will come from David Hynes with Canaccord. Please go ahead.

David Hynes -- Canaccord Genuity -- Analyst

Hey, thanks, guys. Great set of numbers here. Michael, I'm going to start with you. I feel silly asking this coming off of a 73% growth quarter, and I know it's clearly not contemplated in the guide.

But is it possible that Atlas could accelerate further from here as we lap quarters a year ago where expansion was coming under pressure during COVID?

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Yeah. No, thanks for the question. So when I think about it, I would go back to what Dev said in that we really think about the business from a channel basis. And I think that this is important to sort of underscore, especially for people who haven't been following the story closely.

And so when you think about the channel, we've got the self-serve channel, which is almost entirely Atlas and has dynamics, and we've got a bunch of disclosure around that. And then there's the direct sales channel. Direct sales channel, really, you can think of as having two main components, sort of a mid-market component and then a field component, higher enterprise component. What we've seen is that midmarket component is also almost entirely Atlas.

And one of the biggest factors, when you think about what will the Atlas trajectory look like over time, is how rapidly does the field enterprise channel adopt public cloud, right? And we've sort of said for a while, that's the biggest swing factor overall in terms of the Atlas numbers. Clearly, you can see in the mix of results from Q1 in some of the vignettes that Dev shared in terms of the narrative, it was a very strong quarter for Atlas when you look at the mix of deals in the enterprise channel. Roughly two-thirds of the new business was coming from Atlas, which is a very significant kind of high-water mark. And so that has impact, as we talked about, in terms of the financials, in terms of not having term license revenue and other things like that sort of factors into the rest of the year.

And so I think that's how we have to think about it. It really ultimately will depend on what your assumption is around that. We do think over the long term, it will trend. But really in Q1, it's really more of a mix of deals issue.

David Hynes -- Canaccord Genuity -- Analyst

Yeah. Yeah. OK. That's helpful color.

And then, Dev, as a follow-up, as we think about the introduction of new functionality over time and how you take that to market, do you think there are capabilities that may come in the form of new SKUs? Or should we expect the innovation to be more aimed at kind of differentiating the core offering? You know, I think of like Realm and Lake and Search and what you did there. Just trying to think about kind of the longer-term monetization of R&D efforts.

Dev Ittycheria -- President and Chief Executive Officer

Yeah. So that's a great question, David. What I would tell you is today, our focus is really about innovating at the core. And then our new products are all about finding new ways to acquire new customers and as well as expanding the lifetime value of our existing customers.

And so today, the revenue does show up mainly in Atlas versus separate SKU, but you should not assume that that will be the case long term. We have a pretty aggressive innovative agenda -- innovation agenda. And so over time, you'll see us add more products and more SKUs.

David Hynes -- Canaccord Genuity -- Analyst

Yes, very helpful. Thanks, guys. Congrats.

Dev Ittycheria -- President and Chief Executive Officer

Thank you.

Operator

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

Brad Reback -- Stifel Financial Corp. -- Analyst

Great. Thanks very much. Dev, from a high level, is there any way to know how much of what your customers are spending with you is net new budget versus what's being reallocated from legacy relational databases?

Dev Ittycheria -- President and Chief Executive Officer

Well, I would say that as companies recognize that at the heart of their value proposition is how effectively they use software and data, I have to believe that their investments in building software applications is growing over time. Now we believe that applications have a certain lifespan. Depending on the application, could be as short as three, four years. It could be as long as 15, 20 years.

And so applications have its natural retirement rate. Now there could be situations where applications are just not serving the business or the end-users effectively. And so people may decide that there's been -- there's some changes that need to be made more quickly. And so it's hard for us to suss out all the time like are these net new budgets versus existing budgets.

What we recognize is that we have to make a compelling business case. And so our sales organization is quite adept at just making sure that as -- whenever you get a six-figure deal, someone's got to justify that expenditure. It's just no one's just going to hand someone a six-figure check. And so that either is about advancing the business forward or reducing costs in existing infrastructure, what have you.

And so we typically, you know, ensure that our -- that we've built a compelling business case for a customer decide to choose MongoDB. And so the business case is compelling. There'll be dollars available even if it's stealing dollars from existing budgets.

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Yes. I would say just -- I would just add, Brad. So away from budgets, because that's sort of a little bit hard for us to have perfect visibility on, we have pretty consistently seen that about a quarter of the Enterprise Advanced wins are relational migrations. That number is lower on Atlas because Atlas tends to be new applications as people are adopting the cloud, but that's been a pretty consistent number that we've seen.

Brad Reback -- Stifel Financial Corp. -- Analyst

Great. Thanks very much.

Dev Ittycheria -- President and Chief Executive Officer

Thanks, Brad.

Operator

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

Brent Bracelin -- Piper Sandler -- Analyst

Good afternoon and thanks for taking the question here. Dev, I wanted to drill down into kind of this five-year anniversary of Atlas. Clearly, you're messaging kind of a milestone shift in enterprise interest in the platform. Could you talk a little bit about maybe the number of $100,000 Atlas customers? Are you seeing any million-dollar-plus Atlas customers yet? Clearly, it sounds like it's starting to really resonate with enterprises, but any additional color you could talk about relative to the size of some of these Atlas enterprise deployments would be helpful.

And then one quick follow-up for Mike.

Dev Ittycheria -- President and Chief Executive Officer

Sure. The six-figure customer count grew quite handily from last quarter to this quarter, and a big driver of that was Atlas. And so we see a number of not only six-figure customers on Atlas, but we also see quite a large number of seven-figure customers in Atlas. So yes, you should be -- there should be no misunderstanding.

People are building and deploying very sophisticated, complex, mission-critical workloads on Atlas. And Atlas has really proven just by the ubiquity of its reach. We're in over 80 regions around the world. So we are, by definition, because we run across AWS, Azure and GCP, we're the most widely -- geographically widely available Database-as-a-Service offering in the market.

Some of the capabilities we recently introduced like global clusters, so customers can run the same workload across two different cloud providers, is something no one else can do. And there's a whole bunch of other capabilities around data partitioning, privacy and security, that not many people can do. So people run very, very sophisticated workloads on Atlas. And I think you're seeing the results of the enterprise and the high end of the market recognizing that and more workloads moving on to Atlas.

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

And Brent, Dev sort of alluded to this, but just to give you the stat so it's clear for everyone. 60% -- roughly 60% of our customers at that $100,000 or greater mark have Atlas spend above that level, right? So that doesn't mean that they have only Atlas spend. They may have Atlas and EA. But 60% of the customers over that $100,000 threshold have Atlas spend that would qualify them alone for above that level.

Brent Bracelin -- Piper Sandler -- Analyst

[Technical difficulty] for you on, I believe, you talked about record partner revenue contribution. I think it was from Alibaba. Was that just MongoDB as a Service? Was it predominantly Alibaba? Were there other MongoDB as a Service partners there? Just clarify what that record was and what you're referencing relative to kind of the strength you saw in Alibaba and others in the quarter.

Dev Ittycheria -- President and Chief Executive Officer

Yeah. We saw a huge increase in joint wins with -- to be clear, not just with Alibaba, but with Amazon and GCP as well. And with Alibaba, it is not Atlas because due to the regulatory environment in China, we cannot offer Atlas directly. So we partner with both Alibaba and Tencent.

We started with Alibaba first, and what we have done is repurpose some of our local sales team in China to really enable the Alibaba organization to more effectively position and articulate the value proposition of MongoDB. And that's -- we're seeing the results there get impacted quite positively very, very -- in the short time frame we've done that, so much so that even Alibaba is investing more in building a center of excellence around MongoDB. So we feel really good about what's happening with Alibaba. Tencent, we're in the early days, and our plan is to do the same there in terms of operationalizing their capabilities to sell MongoDB as a Service to their customers as well.

Brent Bracelin -- Piper Sandler -- Analyst

Helpful color, and good to see them around here. Thank you.

Dev Ittycheria -- President and Chief Executive Officer

Thank you, Brent.

Operator

The next question will come from Jason Ader with William Blair. Please go ahead.

Jason Ader -- William Blair -- Analyst

Thank you. Dev, you talked about your portability value proposition. And I'm just wondering, have you seen any noticeable change from your customer base on how they're viewing databases from cloud providers like AWS and Azure just in terms of that cloud lock-in risk? And then does it differ by the size of customer? In other words, larger customers tend to be more worried about it? Any color there would be great. 

Dev Ittycheria -- President and Chief Executive Officer

Yeah. So what I would tell you is that one of the compelling value props of MongoDB is you can run MongoDB anywhere. And what that really means is you don't have to rewrite one line of code whether you run it in your own data center, you manage it yourself in the cloud, or use it as a service across AWS, GCP, or Azure. And so that becomes a pretty compelling value proposition because as we all know, business conditions change.

Cloud providers are differentiating among themselves, offering price concessions or new capabilities that customers want to take advantage of. And what they don't want to do is be locked into any one environment. In terms of competition, we have been competing with offerings -- clone offerings from Amazon and from Azure. And obviously, all the cloud providers do offer some types of database services.

So there's also other competition available, and our win rates against them is exceptionally high. The clones are compromised because they're not built on the same architecture as MongoDB. They're built on relational back end, so they're compromised in terms of features and performance. And we will go toe-to-toe with any relational database because we know the superiority of our architecture, the scalability of our platform, and the ability for customers to move much more quickly on MongoDB versus any other solution.

So we feel pretty good about the competitive environment today.

Jason Ader -- William Blair -- Analyst

And a quick follow-up for Michael. Michael, the operating margin guidance for the year, does that assume that your expenses are going to be kind of back to normal as we come out of COVID?

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Yeah. We talked about in the March call was that we assumed a significant resumption of expenses that were not realized in the context of COVID, mostly sort of office and travel-related. And I think we'd quantified those in the back half of the year of roughly $20 million to $25 million. And so we see no reason for change on that based on kind of the global situation related to the pandemic.

Jason Ader -- William Blair -- Analyst

Great. Thank you, guys.

Operator

The next question will come from Kash Rangan with Goldman Sachs. Please go ahead.

Dev Ittycheria -- President and Chief Executive Officer

Hi, Kash. Operator, we might --

Operator

Perhaps you have been muted, sir. And the next question will come from Karl Keirstead with UBS. Please go ahead.

Karl Keirstead -- UBS -- Analyst

Oh, thank you. Maybe one for Dev, one for Michael. Dev, I'm just wondering if you could comment on the pace at which the firm was able to add quota-carrying reps during the quarter and whether the performance during the quarter has changed your hiring plans for the full year. And then maybe, Michael, when you were providing Q1 guidance three months ago, you did mention that I think it was on the EA side, a rev rec 606-related issue that might cause subscription revs to be down sequentially.

It clearly wasn't, but I'm wondering if -- whether that issue that was on your mind transpired and was simply offset by goodness elsewhere. Maybe you could comment on that. Thanks so much.

Dev Ittycheria -- President and Chief Executive Officer

So, Karl, I'll take the first question. Regarding the pace of hiring, we're trying to hire salespeople as fast as possible, the main reason being we're going after a really big market. And frankly, in enterprise sales, you have to show up to win, right? And so we know when we go head to head against the competitors, for the last question asked, that our win rates are exceptionally high, but you do have to show up to win. And there's many areas of the world that we're really underpenetrated.

And so we want to hire salespeople to make sure that we can go after those opportunities. But it's not just simply as hiring like 500 or 1,000 salespeople in one quarter. You have to make sure you have the right supporting infrastructure in place in terms of sales management, presales, technical skills, the right enablement, sufficient ramp time, etc. So there's a whole operation that we have to kind of make sure that we have the right support structure to make those salespeople successful, but we're being very aggressive in terms of hiring salespeople as fast as possible.

Michael, I think the second question was for you.

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Yeah. So on the variability, we will see variability quarter to quarter based on the mix of deals, and that does have revenue implications given the term license component under 606 for Enterprise Advanced. I would generally characterize the quarter as good for both EA and Atlas. EA had a particularly difficult compare given the lumpiness of the term license recognition in the base period.

But generally, it was a strong quarter on both products, and on EA, was a particularly good quarter on relational migrations.

Karl Keirstead -- UBS -- Analyst

Got it. OK, helpful. Thank you both.

Dev Ittycheria -- President and Chief Executive Officer

Thanks, Karl.

Operator

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

Tyler Radke -- Citi -- Analyst

Thanks for taking my question. It looks like you're starting to see a lot more success selling Atlas directly into your large customers. And Dev, I think you referenced a Cosmos DB deal that you displaced. I'm curious kind of how the competitive landscape may differ relative to EA when you are selling those Atlas deals to large enterprises.

Do you find you're displacing a cloud-native solution? And if so, kind of curious who you're running into most frequently.

Dev Ittycheria -- President and Chief Executive Officer

Well, obviously, you have to remember that if someone is going to choose Atlas, by definition, they have already chosen MongoDB because Atlas is the, obviously, the service offering that underlies MongoDB. What I will tell you is actually this is that one of the real advantages of MongoDB is the ability to scale your application through something that's called sharding. When customers try and do that themselves on their own premise, we find that some customers get intimidated by the fact that they can -- how quickly they can scale the environment or they may not have sufficient compute capacity to scale their environment as quickly as they want. When you move to the cloud and by definition, you now have elastic capacity, it becomes much easier to leverage the power of MongoDB in a cloud world, the distributed capabilities, the ability to easily shard data, the ability to use capabilities to partition data, whether it's for privacy and security regulations around data in different parts of the world or whether it's for performance, moving some data closer to end -- some end users in different parts of the world.

All these capabilities get far better exposed in Atlas than someone trying to do that in their own data centers. So that's the added benefit of customers -- that customers see by running these mission-critical workloads on Atlas.

Tyler Radke -- Citi -- Analyst

Great. And a follow-up maybe for Michael or you, Dev. So during the pandemic, you obviously invested pretty aggressively in sales headcount. I think in the first half of last year, sales and marketing headcount grew close to 60%.

I'm curious just how the ramp of those reps have gone. Obviously, it's probably a lot different getting those folks up and running in a remote environment. But maybe if you could just comment on the ramp time of the sales reps and kind of the percentage of your sales reps that are fully ramped at this point.

Dev Ittycheria -- President and Chief Executive Officer

Yeah. So what I would tell you is that we recognized very early on that once everyone is working in this virtual world, one of the biggest -- one of the most -- typically, one of the most fragile parts of any sales organization is your new reps. Those reps are ramping. They haven't closed any business, and they're obviously nervous about putting up numbers on the scoreboard.

We went out our way to really ensure that we provided the right level of enablement, the right level of support, and so on and so forth to help those reps ramp as quickly as possible. And in general, the ramping of the new reps is in line with our expectations, and we're putting a lot of focus there. We do that actually for employees across all functions, not just sales. But we have a particular focus on salespeople because, by definition, we need them to produce in a certain time frame.

And so there's a lot of focus on making sure that our reps are ramping. We have different levels of training, from boot camp to advanced sales training, to specialize product training, to ongoing product updates as well as a lot of inspection by sales leadership in terms of their activity and the quality of their pipeline and so on and so forth. So we have a lot of measures in place to ensure that we can really track is a sales rep ramping appropriately given their time and tenure in the field. The same -- we do the same thing for our inside salespeople.

We assume, obviously, a shorter ramp for inside salespeople. But in general, we've really instrumented our sales process to identify where people may be at risk and put in remediation, obviously, programs in place as soon as possible.

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Yeah. The only other thing I'd add, Tyler, is we're consistently looking to expand the sales force, to Dev's earlier comments, given how thin our footprint coverage is relative to the magnitude of our market opportunity, and we tend to be operationally constrained in terms of how much we can add. Obviously, if there are dislocations, pandemic or otherwise, where we can incrementally or opportunistically add even faster, we will go do that. But that's been sort of a long and I think will be a long focus area given the magnitude of our opportunity.

Tyler Radke -- Citi -- Analyst

Thank you.

Operator

[Operator instructions] Our next question will come from Jack Andrews with Needham. Please go ahead.

Jack Andrews -- Needham & Company -- Analyst

Thanks and congratulations on the results. Dev, I was wondering if you could provide an update in terms of how the global SIs might be helping you. You've talked in the past that a number of them have been building MongoDB practices. So could you maybe frame for us, is there -- what proportion of deals that they might be factoring in today? And I'm also just wondering, are they helping you to gain access to more of these C-level conversations you're having over time?

Dev Ittycheria -- President and Chief Executive Officer

Right. So there's quite a synergistic relationship between MongoDB and the SIs because in many cases, the SIs act as either the company's development arm or augment their existing development organization. So by definition, they're the developers of the applications, and they're the ones using MongoDB to build those applications. The SIs are also building cloud migration factories.

They have practices in that area to help customers migrate workloads from on-premise to the cloud. And so we're involved working with a number of large SIs, people like Accenture, TCS, Capgemini, Infosys, etc., working with them. They have different programs by the organization. The -- Accenture has their MongoDB accelerator program.

Capgemini and TCS have different programs focused on different verticals. We also work with, frankly, some boutique size who have expertise -- deep expertise in MongoDB or perhaps deep expertise in mobile or deep expertise in a particular vertical or a particular geography. And so we work with boutique SIs as well if the situation warrants. So I would say, in general, the SIs are -- that business overall is growing, but there's plenty more to do.

And one of the challenges working with these large SIs is that they're very decentralized. So even though you may have success in one geography or even one account doesn't mean that it translates very, very quickly across the entire organization. But as we get more credibility, as we have more wins, as our reputation gets stronger, we're seeing these SIs come to us to work with us on more and more of those opportunities.

Jack Andrews -- Needham & Company -- Analyst

Great. Thanks for the color.

Dev Ittycheria -- President and Chief Executive Officer

Thank you.

Operator

The next question will come from Fred Havemeyer with Macquarie. Please go ahead.

Fred Havemeyer -- Macquarie Group -- Analyst

OK. Thank you, Dev. Similar to the SI question but this time on ISVs, could you give us an update on how your ISV ecosystem is progressing? And then also, how you're seeing MongoDB adoption among ISVs trending between the adoption of either Atlas or other offerings. 

Dev Ittycheria -- President and Chief Executive Officer

Well, in the prepared remarks, we talked about commercetools, which is an ISV really helping retailers. And so we're having a lot of success with them. There's a number of other ISVs that we work with. We, in fact, have a dedicated sales team now that's pursuing ISVs, and it's really a two-step sales process.

One is a sell-to process where we get the -- either the CTO, the CEO or like the Chief Product Officer or their teams to think about building their new version of their product or replatform existing product off a legacy database on to MongoDB. And then the second step is then working with them to go close their first set of customers, and then we're the beneficiary of their growth. So that -- there's a team that's dedicated on doing that. And I don't have our ISV count in front of me, but it -- numbers in the hundreds.

And that's a big opportunity for us, and you're going to see us put more focus, time and resources serving ISVs.

Fred Havemeyer -- Macquarie Group -- Analyst

Thank you. And then just a follow-up. So during your prepared remarks, you also mentioned about how UiPath was using MongoDB persistence layer, and I'd like to dig into that in a little bit more depth here. We've seen tech companies talking about low-code, no-code a lot recently, something like 1,000% more than last year when we last measured it.

And we certainly picked up on a low-code and no-code company using MongoDB in addition to what UiPath is doing. Can you talk to us about why you think or why you're seeing low-code and no-code vendors choosing your database and generally what that means for your overall organization and go-to-market as these platforms kind of catch on or ramp up?

Dev Ittycheria -- President and Chief Executive Officer

Yeah. It -- I would say, in general, we see ISVs. And obviously, there's a segment of them being low-code or no-code vendors who are using -- choosing MongoDB, one, because of the data model. The document data model, we would argue quite convincingly, I would add, is that -- is the best way to work with data.

The flexibility of the data model allows you to really manage data the way developers think and code, also allows you to make changes very, very easily. So if you talk to anyone who's worked with relational databases, by the time the application gets past rev one or rev two, the data model gets very brittle, and it becomes much harder to make ongoing changes. You do not have that problem with MongoDB. The second point is that MongoDB is, by definition, the most distributed and scalable platform available.

It was built from the ground up to be a distributed data platform. And so ISVs really appreciate that because they serve a myriad of customers, and so they want a platform that can scale. And then the third thing is that the -- MongoDB can run anywhere. It's not a cloud-only platform.

It's not an on-premise-only platform. So depending on the ISV's business model, they can deploy it as ShrinkWrap software. They can offer it as a service in the cloud or anything in between. And so MongoDB enables them to maintain a whole host of options, and that's why I think you see ISVs choosing MongoDB.

Fred Havemeyer -- Macquarie Group -- Analyst

Thank you.

Operator

The next question will come from Kash Rangan with Goldman Sachs. Please go ahead.

Kash Rangan -- Goldman Sachs -- Analyst

Thank you very much. Congratulations on a wonderful quarter, especially the cloud traction you're getting. Dev, I wanted to just get your perspective on incrementally speaking, as the economy opens up, you've been very successful in operating and producing results in a virtual setting. As we open up, what are the incremental opportunities that MongoDB can take advantage of that you couldn't with the virtual setting during the pandemic? Thank you so much once again.

Dev Ittycheria -- President and Chief Executive Officer

Thanks, Kash. I think we said this last year and we said it, I think, even most recently in the last quarter, while we've done well during the pandemic, we do believe that COVID has been a slight headwind to our business. We know that there's still an enormous amount of deal scrutiny, especially on big deals. We know that approvals still take a long time to get done.

We know that if customers are worried about the health of their business, they'll be cautious about making investments in their business with new technologies. So as the world opens up, we believe that people have even more confidence and more conviction in using MongoDB. And we think we're well positioned because what the pandemic did tell us is that those companies who were adept at using software and data thrive because everyone had to become digital-first. And so proficiency in using software and data, and I've said in the past, you can't buy your competitive advantage.

You have to build it yourself. And so that means you need to be very proficient in building applications that truly transform your business, adding features quickly, being able to respond to new opportunities and new threats. And so MongoDB is a great platform for enabling you to do that in a very flexible and scalable way. So we think we're well positioned as the world opens up and people run their business leveraging software and data. 

Kash Rangan -- Goldman Sachs -- Analyst

Wonderful. Thank you so much. Congrats, again.

Dev Ittycheria -- President and Chief Executive Officer

Thanks, Kash. 

Operator

The next question will come from Pat Walravens with JMP Securities. Please go ahead.

Joey Marincek -- JMP Securities -- Analyst

Thank you so much. This is Joey Marincek on for Pat. Just one from us. It's great to see the momentum you're having with the cloud providers.

But I'm just curious, how do you think about the pace of adoption and penetration you can achieve in international markets with the traction you're seeing with Alibaba, partnership with Tencent, and the two new cloud partnerships that you announced as well who are both based outside the U.S.? Thank you.

Dev Ittycheria -- President and Chief Executive Officer

Yeah. So I just want to make it clear, Atlas is available in 80 regions around the world. It's not just domestic offering. So we leverage the points of presence of AWS, GCP, and Azure all around the world.

And so pretty much in almost every market except China, Atlas is available with a few other exceptions. And so we have a very wide global reach. What we do recognize is that certain regional players have deep customer relationships. Or in some cases like in China and other places like Russia, there may be regulatory issues where we can't offer Atlas directly.

And so by definition, we have to partner with a local provider to enable customers to derive the benefits of MongoDB. So I would say our international presence is very strong. We have thousands of international customers, and we partner with other providers when we don't believe we can serve the entire market ourselves through Atlas. And we've done that with people like OVH in Europe and the cloud provider in Korea and in other places around the world.

Any other questions?

Operator

And the next question will come from Matthew Broome with Mizuho Securities. Please go ahead.

Matthew Broome -- Mizuho Securities -- Analyst

Hi. Thanks very much. So just in terms of your Enterprise Advanced customers, to what extent are you thinking about potentially promoting or accelerating the migration of those accounts to Atlas where it makes sense to do so and thus enable them to start receiving the benefits of Database-as-a-Service?

Dev Ittycheria -- President and Chief Executive Officer

Yeah. So our philosophy is to enable customers to run MongoDB anywhere. And so it really depends on the customers' choice about where they want to run their workloads and why. And so for many reasons, customers are happy to self-manage MongoDB themselves using Enterprise Advanced, either managing those workloads in their own data center or self-managing those workloads in the cloud.

And so we're not trying to convince every customer that Atlas is the right solution. We're not at all prescriptive about how customers choose MongoDB. We just want to make sure that the needs get served the best way they see fit. And Atlas, obviously, has been a great boon to our business in terms of the growth.

And our ability to innovate on Atlas being a cloud service is that much easier because we can ship features more quickly and we can get feedback more quickly. And those -- the benefits of that innovation then get driven to our EA customers. So our EA customers also benefit from the innovations from Atlas.

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Yeah. I would just add, given that we are effectively sales capacity constrained, it is much better to have the sales folks be paying attention to winning new workloads rather than taking an existing workload that we've already won, moving it from EA to Atlas unless it's important to the customer and their IT strategy.

Matthew Broome -- Mizuho Securities -- Analyst

OK. I see. And then just as Atlas continues to scale, to what extent do you expect to be able to drive some upside to gross margins via sort of negotiating better economics with your hyperscale cloud partners?

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Yeah. So I think we've continued to do that over the last several years. And certainly, if you'd ask me at the time of the IPO and said Atlas would be the majority of the revenue, where do you think gross margins will be, I would have guessed a lower number. And so we've executed relative to sort of the plan and the expectations.

There still is a difference. We can't make the infrastructure component zero. So there will be a gross margin difference. But we have made good progress, and we'll continue to turn the various efficiency and optimization dials and levers that come across a number of flavors.

Matthew Broome -- Mizuho Securities -- Analyst

Perfect, thanks. Thanks very much.

Operator

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

Dev Ittycheria -- President and Chief Executive Officer

Thank you, Chuck. I just want to, again, summarize that we're off to a strong start in fiscal '22, again, with 39% year-over-year revenue growth driven by 73% growth in Atlas. We're seeing strong traction for Atlas in the enterprise channel as customers want a platform that enables them to innovate and scale quickly. And third, our application data platform strategy is resonating in the marketplace as customers see MongoDB's superior document data model as a viable solution for an increasing number of use cases.

So we feel very good about the future. So thank you for everyone for joining us, and we'll talk to you next quarter. Take care.

Operator

[Operator signoff]

Duration: 60 minutes

Call participants:

Brian Denyeau -- ICR

Dev Ittycheria -- President and Chief Executive Officer

Michael Gordon -- Chief Operating Officer and Chief Financial Officer

Sanjit Singh -- Morgan Stanley -- Analyst

Raimo Lenschow -- Barclays -- Analyst

David Hynes -- Canaccord Genuity -- Analyst

Brad Reback -- Stifel Financial Corp. -- Analyst

Brent Bracelin -- Piper Sandler -- Analyst

Jason Ader -- William Blair -- Analyst

Karl Keirstead -- UBS -- Analyst

Tyler Radke -- Citi -- Analyst

Jack Andrews -- Needham & Company -- Analyst

Fred Havemeyer -- Macquarie Group -- Analyst

Kash Rangan -- Goldman Sachs -- Analyst

Joey Marincek -- JMP Securities -- Analyst

Matthew Broome -- Mizuho Securities -- Analyst

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