MongoDB (MDB 1.87%) continued its terrific year with its recent third-quarter earnings report. The upstart database company continued to post explosive growth figures, while also highlighting customer wins across a wide range of businesses and geographies.
As the company continues to develop new feature sets on its database platform, MongoDB continues to win business not just from start-ups but also from large enterprises and government agencies that you'd think might be hesitant to utilize new technology. Still, MongoDB has made great strides toward winning over these types of customers since its IPO just over a year ago.
Here are highlights from MongoDB's recent quarter.
Image source: Getty Images.
Booming growth
MongoDB continued to post terrific growth numbers and improving operating profit margins last quarter, though the company still operates at a loss.
|
Metric |
Q3 2018 |
Q3 2017 |
YOY Growth |
|---|---|---|---|
|
Total revenue |
$65 million |
$41.5 million |
56.6% |
|
Subscription revenue |
$60.1 million |
$37.9 million |
58.6% |
|
Customers |
8,300 |
4,900 |
69% |
|
Gross margin (adjusted) |
74% |
74% |
none |
|
Operating margin |
(26%) |
(44%) |
1,800 bps |
Data source: MongoDB. Dollar figures in thousands. bps = basis points.
This strong growth was fueled by a mix of new customer wins and the company's 15th straight quarter of 120%-plus net revenue expansion with existing customers.
Winning over "conservative" clients and industries
One of the main points management wanted to highlight was its wins in traditionally "conservative" industries. As a relatively young company with a product based on a new technological standard, winning over customers in older industries could be a challenge. Yet management highlighted wins in heavily regulated industries and functions, such as government and financial businesses.
Notably, MongoDB won business from Her Majesty's Revenue and Collections -- essentially what it called the IRS of the UK. "If you had told me six months ago that we would have a large government entity in UK using Atlas, that frankly would have surprised me," CEO Dev Ittycheria said during the company's conference call with analysts. MongoDB also cited a win with "a large government institution" in Italy, as well as the Maryland Health Exchange.
In financial institutions, MongoDB said it won a contract with one of the largest banks in China on its new loan processing platform, as well as South Korean financial asset management mobile app company Rainist.
Helping these efforts are new partnerships. Last quarter, MongoDB inked a partnership with SAP, which integrates MongoDB with SAP's cloud software offerings. That partnership followed similar partnerships with IBM and Accenture earlier this year. The acceptance shown by these large enterprise tech consulting and software firms speaks to the standing MongoDB has achieved in the enterprise marketplace.
New features
Also powering MongoDB's customer growth is its increasing feature set, especially for the company's Atlas offering, which is MongoDB-as-a-service through the cloud. In the most recent quarter, the company unveiled Mobile Sync, which syncs up data on an end device with that on a back-end database. MongoDB also announced new high-throughput clusters on AWS, which basically increases the processing speed for large data sets stored on Atlas. MongoDB also developed a function that allows Atlas to interface with data in customers' virtual private cloud securely over private networks, which should expand MongoDB for customers that have both public and private clouds.
In addition, MongoDB acquired downstream service provider MLab, which specializes in serving smaller customers. The acquisition is supposed to add another $5 million in revenue (and be neutral to profits) in the upcoming quarter, as well as boost MongoDB's capabilities serving the long tail of smaller customers it may not have the resources to service itself.
The future
Looking ahead to next year, MongoDB management hinted at more innovation for large enterprises. Notably, management said customers were interested in utilizing features across all of the large, multiple public cloud providers. In addition to preventing customer lock-in, management explained that many customers wanted to take advantage of the different unique features each large cloud company provides. In that respect, MongoDB's "cloud-neutral" positioning continues to be an advantage, even as it competes with the very same cloud companies that have their own database offerings.
In all, it was another strong quarter for MongoDB, which remains well-positioned in the new age of cloud databases. The overall database industry is expected to grow from $59 billion today to $84 billion by 2022. With just a tiny $243.7 million to $244.7 million in revenue projected for this fiscal year, MongoDB's opportunity to expand remains quite large.
