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MONGODB, INC.

(MDB)
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Delayed Nasdaq  -  04:00 2022-11-30 pm EST
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MONGODB, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-Q)

09/02/2022 | 04:46pm EST
Unless the context otherwise indicates, references in this report to the terms
"MongoDB," "the Company," "we," "our" and "us" refer to MongoDB, Inc., its
divisions and its subsidiaries. The following discussion and analysis of our
financial condition and results of operations should be read in conjunction with
(1) our interim unaudited condensed consolidated financial statements and
related notes appearing elsewhere in this Quarterly Report on Form 10-Q and (2)
the audited consolidated financial statements and the related notes and the
discussion under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in our Annual Report on Form 10-K
for the fiscal year ended January 31, 2022 (the "2022 Form 10-K"). All
information presented herein is based on our fiscal calendar year, which ends
January 31. Unless otherwise stated, references to particular years, quarters,
months or periods refer to our fiscal years ended January 31 and the associated
quarters, months and periods of those fiscal years.

This Quarterly Report on Form 10-Q contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These statements are often identified by the use
of words such as "anticipate," "believe," "continue," "could," "estimate,"
"expect," "intend," "may," "plan," "project," "will," "would" or the negative or
plural of these words or similar expressions or variations, including our
expectations regarding our future growth opportunity, revenue and revenue
growth, investments, strategy, operating expenses and the anticipated impact of
the global economic uncertainty and financial market conditions, caused by the
ongoing COVID-19 pandemic and the macroeconomic environment, on our business,
results of operations and financial condition. Such forward-looking statements
are subject to a number of risks, uncertainties, assumptions and other factors
that could cause actual results and the timing of certain events to differ
materially from future results expressed or implied by the forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, those identified herein, and those discussed in the
section titled "Risk Factors," set forth in Part 2, Item 1A of this Quarterly
Report on Form 10-Q. You should not rely upon forward-looking statements as
predictions of future events. Furthermore, such forward-looking statements speak
only as of the date of this report. Except as required by law, we undertake no
obligation to update any forward-looking statements to reflect events or
circumstances after the date of such statements.

Our corporate website is located at www.mongodb.com. We make available free of
charge, on or through our corporate website, our annual, quarterly and current
reports, and any amendments to those reports, as soon as reasonably practicable
after electronically filing such reports with, or furnishing such reports to,
the Securities and Exchange Commission ("SEC"). Information contained on our
corporate website is not part of this Quarterly Report on Form 10-Q or any other
report filed with or furnished to the SEC.

Overview


MongoDB is the leading modern, general purpose database platform. Our robust
platform enables developers to build and modernize applications rapidly and
cost-effectively across a broad range of use cases. Organizations can deploy our
platform at scale in the cloud, on-premise, or in a hybrid environment. Through
our unique document-based architecture, we are able to address the needs of
organizations for performance, scalability, flexibility and reliability while
maintaining the strengths of legacy databases. Software applications continue to
redefine how organizations across industries engage with their customers,
operate their businesses and compete with each other. A database is at the heart
of every software application. As a result, selecting a database is a highly
strategic decision that directly affects developer productivity, application
performance and organizational competitiveness. Our platform addresses the
performance, scalability, flexibility and reliability demands of modern
applications while maintaining the strengths of legacy databases. Our business
model combines the developer mindshare and adoption benefits of open source with
the economic benefits of a proprietary software subscription business model.
MongoDB is headquartered in New York City and our total headcount increased to
4,240 as of July 31, 2022, from 2,934 as of July 31, 2021.

We generate revenue primarily from sales of subscriptions, which accounted for
96% of our total revenue for each of the three and six months ended July 31,
2022 and July 31, 2021.

MongoDB Atlas is our hosted multi-cloud database-as-a-service ("DBaaS") offering
that includes comprehensive infrastructure and management, which we run and
manage in the cloud. During the three and six months ended July 31, 2022,
MongoDB Atlas revenue represented 64% and 62%, respectively, as compared to 56%
and 54% of our total revenue during the three and six months ended July 31,
2021, respectively, reflecting the continued growth of MongoDB Atlas since its
introduction in June 2016. We have experienced strong growth in self-serve
customers of MongoDB Atlas. These customers

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are charged monthly in arrears based on their usage. In addition, we have also
seen growth in MongoDB Atlas customers sold by our sales force. These customers
typically sign annual contracts and pay in advance or are invoiced monthly in
arrears based on usage.

MongoDB Enterprise Advanced is our proprietary commercial database server
offering for enterprise customers that can run in the cloud, on-premise or in a
hybrid environment. MongoDB Enterprise Advanced revenue represented 28% and 31%
of our subscription revenue for the three and six months ended July 31, 2022,
respectively, and 36% and 38% of our subscription revenue for the three and six
months ended July 31, 2021, respectively. We sell subscriptions directly through
our field and inside sales teams, as well as indirectly through channel
partners. The majority of our subscription contracts are one year in duration
and are invoiced upfront. When we enter into multi-year subscriptions, we
typically invoice the customer on an annual basis.

Many of our enterprise customers initially get to know our software by using
Community Server, which is our free-to-download version of our database that
includes the core functionality developers need to get started with MongoDB
without all the features of our commercial platform. Our platform has been
downloaded from our website more than 300 million times since February 2009 and
over 100 million times in the last 12 months alone. We also offer a free tier of
MongoDB Atlas, which provides access to our hosted database solution with
limited processing power and storage, as well as certain operational
limitations. As a result, with the availability of both Community Server and
MongoDB Atlas free tier offerings, our direct sales prospects are often familiar
with our platform and may have already built applications using our technology.
A core component of our growth strategy for MongoDB Atlas and MongoDB Enterprise
Advanced is to convert developers and their organizations who are already using
Community Server or the free tier of MongoDB Atlas to become customers of our
commercial products and enjoy the benefits of either a self-managed or hosted
offering.

We also generate revenue from services, which consist primarily of fees
associated with consulting and training services. Revenue from services
accounted for 4% of our total revenue for each of the three and six months ended
July 31, 2022 and July 31, 2021. We expect to continue to invest in our services
organization as we believe it plays an important role in accelerating our
customers' realization of the benefits of our platform, which helps drive
customer retention and expansion.

We believe the market for our offerings is large and growing. According to IDC,
the worldwide database software market, which it refers to as the data
management software market, is forecast to be approximately $85 billion in 2022
growing to approximately $138 billion in 2026, representing a 13% compound
annual growth rate. We have experienced rapid growth and have made substantial
investments in developing our platform and expanding our sales and marketing
footprint. We intend to continue to invest heavily to grow our business to take
advantage of our market opportunity rather than optimizing for profitability or
cash flow in the near term.

Impact of the Ongoing COVID-19 Pandemic


The ongoing COVID-19 pandemic has continued to impact the United States ("U.S.")
and the world. The full extent of the impact of the ongoing COVID-19 pandemic on
our future operational and financial performance will depend on certain
developments, including the duration and spread of the outbreak and the impact
of new variants of the virus that cause COVID-19; the public health measures
taken by authorities and other entities to contain and treat COVID-19; the
actions taken to effect a widespread, global roll-out of the available vaccines
and the efficacy and durability of such vaccines; and the impact of the COVID-19
pandemic on the global economy and on our current and prospective customers,
employees, vendors and other parties with whom we do business, all of which are
uncertain and cannot be predicted.

In 2020, we adopted several measures in response to the COVID-19 pandemic,
including temporarily requiring employees to work remotely, suspending
non-essential travel by our employees, and replacing in-person marketing events
(including our annual developer conference) with virtual events. In 2021, we
began to re-open our offices in the United States and certain other locations
globally for employees to voluntarily return. In April 2022 we moved forward
with our return to office plan, which encompasses a hybrid approach to in-office
attendance based on the different needs of teams across the company. Business
travel resumed during 2021 on a voluntary basis and we started to hold in-person
marketing events. During the three months ended July 31, 2022, we experienced an
increase in business travel, in-person marketing events, and office-related
costs. We expect these and other costs to increase during the year ended January
31, 2023 and result in higher charges compared to the prior year. We continue to
monitor the developments of the COVID-19 pandemic and we may adjust our policies
as may be required or recommended by federal, foreign, state or local
authorities.

We also continue to evaluate the nature and extent of the impact of COVID-19 on
our business. For further discussion of the potential impacts of the ongoing
COVID-19 pandemic on our business, operating results, and financial condition,
see
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the section titled "Risk Factors" included in Part II, Item 1A of this Quarterly Report on Form 10-Q. Other factors affecting our performance are discussed below, although we caution you that the ongoing COVID-19 pandemic may also impact these factors.

Key Factors Affecting Our Performance

Growing Our Customer Base and Expanding Our Global Reach


We are intensely focused on continuing to grow our customer base. We have
invested, and expect to continue to invest, heavily in our sales and marketing
efforts and developer community outreach, which are critical to driving customer
acquisition. As of July 31, 2022, we had over 37,000 customers across a wide
range of industries and in over 100 countries, compared to over 29,000 customers
as of July 31, 2021. All affiliated entities are counted as a single customer
and our definition of "customer" excludes users of our free offerings.

As of July 31, 2022, we had over 5,400 customers that were sold through our
direct sales force and channel partners, as compared to over 3,600 such
customers as of July 31, 2021. These customers, which we refer to as our Direct
Sales Customers, accounted for 86% and 87% of our subscription revenue for the
three and six months ended July 31, 2022, respectively, and 84% of our
subscription revenue for both the three and six months ended July 31, 2021. The
percentage of our subscription revenue from Direct Sales Customers increased
during both the three and six months ended July 31, 2022, in part due to
existing self-serve customers of MongoDB Atlas becoming Direct Sales Customers.
We are also focused on increasing the number of overall MongoDB Atlas customers
as we emphasize the on-demand scalability of MongoDB Atlas by allowing our
customers to consume the product with minimal commitment. We had over 35,500
MongoDB Atlas customers as of July 31, 2022 compared to over 27,500 as of
July 31, 2021. The growth in MongoDB Atlas customers included new customers to
MongoDB and existing MongoDB Enterprise Advanced customers adding incremental
MongoDB Atlas workloads.

In an effort to expand our global reach, in October 2019, we announced a
partnership with Alibaba Cloud to offer an authorized MongoDB-as-a-service
solution allowing customers of Alibaba Cloud to use this managed offering from
their data centers globally. We expanded our reach in China in February 2021
when we announced the launch of a global partnership with Tencent Cloud that
allows customers to easily adopt and use MongoDB-as-a-Service across Tencent's
global cloud infrastructure.

Increasing Adoption of MongoDB Atlas


MongoDB Atlas, our hosted multi-cloud offering, is an important part of our
run-anywhere strategy. To accelerate the adoption of this database-as-a-service
offering, we provide tools to easily migrate existing users of our Community
Server offering to MongoDB Atlas. We have also expanded our introductory
offerings for MongoDB Atlas, including a free tier, which provides limited
processing power and storage in order to drive usage and adoption of MongoDB
Atlas among developers. Our MongoDB Atlas free tier offering is available on all
three major cloud providers (Amazon Web Services ("AWS"), Google Cloud Platform
("GCP") and Microsoft Azure) in North America, Europe and Asia Pacific. In
addition, MongoDB Atlas is available on AWS Marketplace, making it easier for
AWS customers to buy and consume MongoDB Atlas. Our business partnership with
GCP provides deeper product integration and unified billing for GCP customers
who are also MongoDB Atlas customers and offers GCP customers a seamless
integration between MongoDB Atlas and GCP. The availability of MongoDB Atlas on
the Microsoft Azure Marketplace offers unified billing for joint customers of
MongoDB Atlas and Microsoft and makes it easier for established Azure customers
to purchase and use MongoDB Atlas.

We have also expanded the functionality available in MongoDB Atlas beyond that
of our Community Server offering. We expect this will drive further adoption of
MongoDB Atlas as companies migrate mission-critical applications to the public
cloud. The enterprise capabilities that we have introduced to MongoDB Atlas
include advanced security features, enterprise-standard authentication and
database auditing. We have invested significantly in MongoDB Atlas and our
ability to drive the adoption of MongoDB Atlas is a key component of our growth
strategy.

Retaining and Expanding Revenue from Existing Customers


The economic attractiveness of our subscription-based model is driven by
customer renewals and increasing existing customer subscriptions over time,
referred to as land-and-expand. We believe that there is a significant
opportunity to drive additional sales to existing customers, and expect to
invest in sales and marketing and customer success personnel and activities to
achieve additional revenue growth from existing customers. If an application
grows and requires additional

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capacity, our customers increase their usage of our platform. Growth of an
application is impacted by a number of factors including the macroeconomic
environment. During the three and six months ended July 31, 2022, we believe we
experienced a negative impact from the macroeconomic environment on the growth
of existing applications, which affected our revenue growth. We expect the
macroeconomic environment to continue to negatively impact our revenue growth
for the remainder of the year. In addition, our customers expand their
subscriptions to our platform as they migrate additional existing applications
or build new applications, either within the same department or in other lines
of business or geographies. Also, as customers modernize their information
technology infrastructure and move to the cloud, they may migrate applications
from legacy databases. Our goal is to increase the number of customers that
standardize on our database within their organization. Over time, the
subscription amount for our typical Direct Sales Customer has increased.

We calculate annualized recurring revenue ("ARR") and annualized monthly
recurring revenue ("MRR") to help us measure our subscription revenue
performance. ARR includes the revenue we expect to receive from our customers
over the following 12 months based on contractual commitments and, in the case
of Direct Sales Customers of MongoDB Atlas, by annualizing the prior 90 days of
their actual consumption of MongoDB Atlas, assuming no increases or reductions
in their subscriptions or usage. For all other customers of our self-serve
products, we calculate annualized MRR by annualizing the prior 30 days of their
actual consumption of such products, assuming no increases or reductions in
usage. ARR and annualized MRR exclude professional services. The number of
customers with $100,000 or greater in ARR and annualized MRR was 1,462 and 1,126
as of July 31, 2022 and 2021, respectively. Our ability to increase sales to
existing customers will depend on a number of factors, including customers'
satisfaction or dissatisfaction with our products and services, competition,
pricing, economic conditions or overall changes in our customers' spending
levels.

We also examine the rate at which our customers increase their spend with us,
which we call net ARR expansion rate. We calculate net ARR expansion rate by
dividing the ARR at the close of a given period (the "measurement period"), from
customers who were also customers at the close of the same period in the prior
year (the "base period"), by the ARR from all customers at the close of the base
period, including those who churned or reduced their subscriptions. For Direct
Sales Customers included in the base period, measurement period or both such
periods that were self-serve customers in any such period, we also include
annualized MRR from those customers in the calculation of the net ARR expansion
rate. Our net ARR expansion rate has consistently been over 120% demonstrating
our ability to expand within existing customers.


Components of Results of Operations

Revenue


Subscription Revenue. Our subscription revenue is comprised of term licenses and
hosted as-a-service solutions. Subscriptions to term licenses include technical
support and access to new software versions on a when-and-if available basis.
Revenue from our term licenses is recognized upfront for the license component
and ratably for the technical support and when-and-if available update
components. Associated contracts are typically billed annually in advance.
Revenue from our hosted as­a­service solutions is primarily generated on a usage
basis and is billed either in arrears or paid upfront. The majority of our
subscription contracts are one year in duration. When we enter into multi-year
subscriptions, we typically invoice the customer on an annual basis. Our
subscription contracts are generally non-cancelable and non-refundable.

Services Revenue. Services revenue is comprised of consulting and training services and is recognized over the period of delivery of the applicable services. We recognize revenue from services agreements as services are delivered.


We expect our revenue may vary from period to period based on, among other
things, the timing and size of new subscriptions, customer usage patterns, the
proportion of term license contracts that commence within the period, the rate
of customer renewals and expansions, delivery of professional services, the
impact of significant transactions and seasonality of or fluctuations in usage
for our consumption­based customers.

Cost of Revenue


Cost of Subscription Revenue. Cost of subscription revenue primarily includes
third-party cloud infrastructure expenses for our hosted as-a-service solutions.
We expect our cost of subscription revenue to increase in absolute dollars as
our subscription revenue increases and, depending on the results of MongoDB
Atlas, our cost of subscription revenue may increase as a percentage of
subscription revenue as well. Cost of subscription revenue also includes
personnel costs, including salaries, bonuses and benefits and stock-based
compensation, for employees associated with our subscription arrangements
principally related to technical support and allocated shared costs, as well as
depreciation and amortization.

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Cost of Services Revenue. Cost of services revenue primarily includes personnel
costs, including salaries, bonuses and benefits, and stock­based compensation,
for employees associated with our professional service contracts, as well as,
travel costs, allocated shared costs and depreciation and amortization. We
expect our cost of services revenue to increase in absolute dollars as our
services revenue increases.

Gross Profit and Gross Margin

Gross Profit. Gross profit represents revenue less cost of revenue.


Gross Margin. Gross margin, or gross profit as a percentage of revenue, has been
and will continue to be affected by a variety of factors, including the average
sales price of our products and services, the mix of products sold, transaction
volume growth and the mix of revenue between subscriptions and services. We
expect our gross margin to fluctuate over time depending on the factors
described above and, to the extent MongoDB Atlas revenue increases as a
percentage of total revenue, our gross margin may decline as a result of the
associated hosting costs of MongoDB Atlas.

Operating Expenses


Our operating expenses consist of sales and marketing, research and development
and general and administrative expenses. Personnel costs are the most
significant component of each category of operating expenses. Operating expenses
also include travel and related costs and allocated overhead costs for
facilities, information technology and employee benefit costs.

Sales and Marketing. Sales and marketing expense consists primarily of personnel
costs, including salaries, sales commission and benefits, bonuses and
stock­based compensation. These expenses also include costs related to marketing
programs, travel­related expenses and allocated overhead. Marketing programs
consist of advertising, events, corporate communications, and brand­building and
developer­community activities. We expect our sales and marketing expense to
increase in absolute dollars over time as we expand our sales force and increase
our marketing resources, expand into new markets and further develop our
self-serve and partner channels.

Research and Development. Research and development expense consists primarily of
personnel costs, including salaries, bonuses and benefits, and stock­based
compensation. It also includes amortization associated with intangible acquired
assets and allocated overhead. We expect our research and development expenses
to continue to increase in absolute dollars, as we continue to invest in our
platform and develop new products.

General and Administrative. General and administrative expense consists
primarily of personnel costs, including salaries, bonuses and benefits, and
stock­based compensation for administrative functions including finance, legal,
human resources and external legal and accounting fees, as well as allocated
overhead. We expect general and administrative expense to increase in absolute
dollars over time as we continue to invest in the growth of our business, as
well as incur the ongoing costs of compliance associated with being a
publicly-traded company.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest income, interest expense, gains and losses on investments and gains and losses from foreign currency transactions.

Provision for Income Taxes

Provision for income taxes consists primarily of state income taxes in the United States and income taxes in certain foreign jurisdictions in which we conduct business.


We account for income taxes and the related accounts under the liability method.
Deferred tax liabilities and assets are determined based on the difference
between the financial statement and tax bases of assets and liabilities, using
enacted rates expected to be in effect during the year in which the basis
differences reverse.

We regularly assess the need for a valuation allowance against our deferred tax
assets. In making that assessment, we consider both positive and negative
evidence related to the likelihood of realization of the deferred tax assets to
determine, based on the weight of available evidence, whether it is more likely
than not that some or all of the deferred tax assets will not be realized. We
have maintained a valuation allowance on U.S., U.K. and Ireland net deferred tax
assets, as it is more likely than not that some or all of the deferred tax
assets will not be realized.

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We continue to monitor and interpret the impact of proposed and enacted global
tax legislation, such as the U.S. Tax Cuts and Jobs Act of 2017 ("Tax Act"). To
date, based on the net operating losses and full valuation allowances against
our two most significant tax jurisdictions, the United States and Ireland, the
impact of global enacted and proposed legislation has not had an impact on the
tax provisions of the financial statements. We continue to monitor to ensure
both our financial results and our related tax disclosures are in compliance
with any tax legislation.

Three and Six Months Ended July 31, 2022 Summary


For the three months ended July 31, 2022, our total revenue increased to $303.7
million as compared to $198.7 million for the three months ended July 31, 2021,
primarily driven by an increase in subscription revenue from our Direct Sales
Customers. Our net loss increased to $118.9 million for the three months ended
July 31, 2022 as compared to $77.1 million for the three months ended July 31,
2021, as improvement in gross profit was offset by higher sales and marketing
spend and research and development costs during the three months ended July 31,
2022.

For the six months ended July 31, 2022, our total revenue increased to $589.1
million as compared to $380.4 million for the six months ended July 31, 2021,
primarily driven by an increase in subscription revenue from our Direct Sales
Customers. Our net loss increased to $196.2 million for the six months ended
July 31, 2022 as compared to $141.1 million for the six months ended July 31,
2021, primarily driven by increased sales and marketing and research and
development costs during the three months ended July 31, 2022.

Our operating cash flow was $(33.1) million and $(9.5) million for the six months ended July 31, 2022 and 2021, respectively.

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Results of Operations

The following tables set forth our results of operations for the periods
presented in U.S. dollars (unaudited, in thousands) and as a percentage of our
total revenue. Percentage of revenue figures are rounded and therefore may not
subtotal exactly.

                                                      Three Months Ended July 31,                    Six Months Ended July 31,
                                                        2022                  2021                   2022                    2021
Consolidated Statements of Operations Data:
Revenue:
Subscription                                     $       291,607          $ 191,381          $      566,188              $  365,951
Services                                                  12,053              7,366                  22,919                  14,444
Total revenue                                            303,660            198,747                 589,107                 380,395
Cost of revenue:
Subscription(1)                                           71,435             50,955                 136,004                  96,357
Services(1)                                               16,842              9,747                  30,488                  18,873
Total cost of revenue                                     88,277             60,702                 166,492                 115,230
Gross profit                                             215,383            138,045                 422,615                 265,165
Operating expenses:
Sales and marketing(1)                                   181,598            109,377                 331,866                 207,267
Research and development(1)                              108,037             72,396                 204,409                 137,147
General and administrative(1)                             40,591             28,803                  77,123                  54,728
Total operating expenses                                 330,226            210,576                 613,398                 399,142
Loss from operations                                    (114,843)           (72,531)               (190,783)               (133,977)
Other expense, net                                          (973)            (3,064)                 (1,181)                 (6,986)
Loss before provision for income taxes                  (115,816)           (75,595)               (191,964)               (140,963)
Provision for income taxes                                 3,049              1,538                   4,195                     162
Net loss                                         $      (118,865)         $ (77,133)         $     (196,159)             $ (141,125)




(1)  Includes stock­based compensation expense as follows (unaudited, in
thousands):

                                                    Three Months Ended July 31,                 Six Months Ended July 31,
                                                      2022                  2021                 2022                  2021
Cost of revenue-subscription                    $        5,009          $   3,399          $        9,476          $   6,389
Cost of revenue-services                                 2,560              1,465                   4,772              2,952
Sales and marketing                                     35,653             21,082                  66,187             39,958
Research and development                                40,642             23,687                  76,125             44,022
General and administrative                              12,690              8,072                  23,560             15,298

Total stock­based compensation expense $ 96,554 $ 57,705 $ 180,120 $ 108,619




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                                                Three Months Ended July 31,                  Six Months Ended July 31,
                                                2022                  2021                  2022                  2021
Percentage of Revenue Data:
Revenue:
Subscription                                         96  %                 96  %                 96  %                 96  %
Services                                              4  %                  4  %                  4  %                  4  %
Total revenue                                       100  %                100  %                100  %                100  %
Cost of revenue:
Subscription                                         23  %                 26  %                 23  %                 25  %
Services                                              6  %                  5  %                  5  %                  5  %
Total cost of revenue                                29  %                 31  %                 28  %                 30  %
Gross profit                                         71  %                 69  %                 72  %                 70  %
Operating expenses:
Sales and marketing                                  60  %                 55  %                 56  %                 55  %
Research and development                             36  %                 36  %                 35  %                 36  %
General and administrative                           13  %                 14  %                 13  %                 14  %
Total operating expenses                            109  %                105  %                104  %                105  %
Loss from operations                                (38) %                (36) %                (32) %                (35) %
Other expense, net                                    -  %                 (2) %                  -  %                 (2) %
Loss before provision for income taxes              (38) %                (38) %                (32) %                (37) %
Provision for income taxes                            1  %                  1  %                  1  %                  -  %
Net loss                                            (39) %                (39) %                (33) %                (37) %


Comparison of the Three Months Ended July 31, 2022 and 2021

Revenue

                                    Three Months Ended July 31,                   Change
(unaudited, in thousands)               2022                  2021             $            %
Subscription                  $      291,607               $ 191,381      $ 100,226        52  %
Services                              12,053                   7,366          4,687        64  %
Total revenue                 $      303,660               $ 198,747      $ 104,913        53  %


Total revenue growth reflects increased demand for our platform and related
services. Subscription revenue increased by $100.2 million primarily due to an
increase of $90.9 million from our Direct Sales Customers, inclusive of Direct
Sales Customers who were self-serve customers of MongoDB Atlas in the prior-year
period. The increase in services revenue was driven primarily by the increased
delivery of consulting services.

Cost of Revenue, Gross Profit and Gross Margin Percentage


                                     Three Months Ended July 31,            

Change

(unaudited, in thousands)            2022                      2021            $            %
Subscription cost of revenue   $      71,435               $  50,955       $ 20,480        40  %
Services cost of revenue              16,842                   9,747          7,095        73  %
Total cost of revenue                 88,277                  60,702         27,575        45  %
Gross profit                   $     215,383               $ 138,045       $ 77,338        56  %
Gross margin                              71   %                  69  %
Subscription                              76   %                  73  %
Services                                 (40)  %                 (32) %


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The increase in subscription cost of revenue was primarily due to a
$16.2 million increase in third­party cloud infrastructure costs, including
costs associated with the growth of MongoDB Atlas, although we continue to
realize efficiencies in our third-party cloud infrastructure costs as we scale
MongoDB Atlas. In addition, subscription cost of revenue was higher due to a
$3.1 million increase in personnel costs and stock-based compensation associated
with increased headcount in our support organization. The increase in services
cost of revenue was primarily due to a $4.3 million increase in personnel costs
and stock-based compensation associated with increased headcount in our services
organization, and a $1.4 million increase in costs driven by an increase in the
volume of consulting and training services. Total headcount in our support and
services organizations increased 38% from July 31, 2022 to July 31, 2021.

Our overall gross margin increased to 71%. Our subscription gross margin benefited from efficiencies realized in managing our third-party cloud infrastructure costs, offset by the negative impact from the increasing percentage of revenue from MongoDB Atlas. The impact of higher services personnel costs and stock based compensation and lower utilization rate resulted in a lower services gross margin.

Operating Expenses

Sales and Marketing

                                    Three Months Ended July 31,                  Change
(unaudited, in thousands)               2022                  2021            $            %
Sales and marketing           $      181,598               $ 109,377      $ 72,221        66  %


The increase in sales and marketing expense included $38.1 million from higher
personnel costs and stock-based compensation, driven by an increase in our sales
and marketing headcount to 2,159 as of July 31, 2022 from 1,380 as of July 31,
2021, which includes non-quota-carrying hires in sales operations, customer
success and marketing. Sales and marketing expense also increased $24.9 million
from costs associated with our higher headcount, including higher travel costs
related to in-person events, higher commissions expense and higher computer
hardware and software expenses. In addition, sales and marketing expenses
increased by $7.0 million due to increased spending on marketing programs,
including the return to in-person attendance for our MongoDB World event.

Research and Development

                                     Three Months Ended July 31,                  Change
(unaudited, in thousands)                2022                   2021           $            %
Research and development      $       108,037                $ 72,396      $ 35,641        49  %


The increase in research and development expense was primarily driven by a
$29.1 million increase in personnel costs and stock-based compensation as we
grew our research and development headcount by 31%. Research and development
expense also increased due to higher computer hardware and software expenses,
higher travel costs and higher office-related expenses driven by higher
headcount. Travel costs and office-related expenses increased also due to the
easing of restrictions related to the COVID-19 pandemic.

General and Administrative

                                     Three Months Ended July 31,                  Change
(unaudited, in thousands)                2022                   2021           $            %
General and administrative    $       40,591                 $ 28,803      $ 11,788        41  %


The increase in general and administrative expense was due to higher costs to
support the growth of our business and to maintain compliance as a public
company. In particular, these higher costs were driven by an increase in general
and administrative personnel headcount resulting in an increase of $9.0 million
in personnel costs and stock-based compensation. In addition, general and
administrative expense increased due to higher professional services fees and
higher travel costs. The increase in travel costs was primarily driven by higher
headcount and the easing of restrictions related to the COVID-19 pandemic.

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                                 MONGODB, INC.

Other Expense, Net

                                     Three Months Ended July 31,                  Change
(unaudited, in thousands)                2022                   2021           $           %
Other expense, net            $       (973)                  $ (3,064)     $ 2,091       (68) %

Other expense, net for the three months ended July 31, 2022 decreased primarily due to higher interest income from our short-term investments.

Provision for Income Taxes

                                     Three Months Ended July 31,                   Change
(unaudited, in thousands)                 2022                   2021           $           %
Provision for income taxes    $        3,049                   $ 1,538      $ 1,511        98  %


The provision for income taxes during the three months ended July 31, 2022 was
primarily due to global income and the associated foreign taxes as the Company
continues its global expansion. The provision for income taxes during the three
months ended July 31, 2021 was primarily due to foreign taxes as we continued
our global expansion.


Comparison of the Six Months Ended July 31, 2022 and 2021

Revenue

                                    Six Months Ended July 31,                   Change
(unaudited, in thousands)              2022                 2021             $            %
Subscription                  $      566,188             $ 365,951      $ 200,237        55  %
Services                              22,919                14,444          8,475        59  %
Total revenue                 $      589,107             $ 380,395      $ 208,712        55  %


Total revenue growth reflects increased demand for our platform and related
services. Subscription revenue increased by $200.2 million primarily due to an
increase of $182.8 million from our Direct Sales Customers, inclusive of the
impact from Direct Sales Customers who were self-serve customers of MongoDB
Atlas in the prior-year period. The growth in services revenue was driven
primarily by the increased delivery of consulting services.

Cost of Revenue, Gross Profit and Gross Margin Percentage


                                     Six Months Ended July 31,              

Change

(unaudited, in thousands)            2022                   2021             $            %
Subscription cost of revenue   $    136,004             $  96,357       $  39,647        41  %
Services cost of revenue             30,488                18,873          11,615        62  %
Total cost of revenue               166,492               115,230          51,262        44  %
Gross profit                   $    422,615             $ 265,165       $ 157,450        59  %
Gross margin                             72   %                70  %
Subscription                             76   %                74  %
Services                                (33)  %               (31) %


The increase in subscription cost of revenue was primarily due to a
$31.2 million increase in third­party cloud infrastructure costs, including
costs associated with the growth of MongoDB Atlas. The increase in third-party
infrastructure costs was partly offset by continued cost efficiencies realized
as we scale MongoDB Atlas. In addition, subscription cost of revenue was higher
due to a $6.1 million increase in personnel costs and stock-based compensation
associated with increased headcount in our support organization. The increase in
services cost of revenue was primarily due to a $7.3 million increase in
personnel costs and stock-based compensation associated with increased headcount
in our services organization, and a $2.5 million increase in costs driven by an
increase in the volume of consulting and training services. Total headcount in
our support and services organizations increased 38% from July 31, 2021 to
July 31, 2022.

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                                 MONGODB, INC.

Our overall gross margin improved to 72%. Our subscription gross margin increased to 76% as efficiencies realized in managing our third-party cloud infrastructure costs more than offset the negative margin impact from the increasing percentage of revenue from MongoDB Atlas. The impact of higher services personnel costs and stock-based compensation and lower utilization rate resulted in negative services gross margin.

Operating Expenses

Sales and Marketing

                                    Six Months Ended July 31,                   Change
(unaudited, in thousands)              2022                 2021             $            %
Sales and marketing           $      331,866             $ 207,267      $ 124,599        60  %


The increase in sales and marketing expense included $70.4 million from higher
personnel costs and stock-based compensation, driven by an increase in our sales
and marketing headcount to 2,159 as of July 31, 2022 from 1,380 as of July 31,
2021, which includes non-quota-carrying hires in sales operations, customer
success and marketing. Sales and marketing expense also increased $41.1 million
from costs associated with our higher headcount, including higher commissions
expense, higher travel costs related to in-person events and higher computer
hardware and software expenses. In addition, sales and marketing expenses
increased by $9.6 million due to increased spending on marketing programs
including the return to in-person attendance for our MongoDB World event.

Research and Development

                                    Six Months Ended July 31,                  Change
(unaudited, in thousands)              2022                 2021            $            %
Research and development      $      204,409             $ 137,147      $ 67,262        49  %


The increase in research and development expense was primarily driven by a
$56.1 million increase in personnel costs and stock-based compensation as we
increased our research and development headcount by 31%. Research and
development expense also increased $9.5 million due to higher computer hardware
and software expenses, increased third-party infrastructure costs and higher
travel costs driven by higher headcount. Travel costs increased also due to the
easing of restrictions related to the COVID-19 pandemic.

General and Administrative

                                    Six Months Ended July 31,                  Change
(unaudited, in thousands)               2022                 2021           $            %
General and administrative    $      77,123               $ 54,728      $ 22,395        41  %


The increase in general and administrative expense was due to higher costs to
support the growth of our business and to maintain compliance as a public
company. In particular, these higher costs were driven by an increase in general
and administrative personnel headcount resulting in $16.5 million higher
personnel costs and stock-based compensation. In addition, general and
administrative expense increased due to higher professional services fees and
higher travel costs. The increase in travel costs was primarily driven by higher
headcount and the easing of restrictions related to the COVID-19 pandemic.

Other Expense, Net

                                    Six Months Ended July 31,                  Change
(unaudited, in thousands)               2022                 2021           $           %
Other expense, net            $      (1,181)              $ (6,986)     $ 5,805       (83) %


Other expense, net, for the six months ended July 31, 2022 decreased primarily
due to gain on investments, related to our non-marketable securities, higher
interest income from our short-term investments, as well as lower interest
expense following the redemption of convertible securities.

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Provision for Income Taxes

                                      Six Months Ended July 31,                     Change
(unaudited, in thousands)                  2022                   2021          $            %
Provision for income taxes    $          4,195                   $ 162      $ 4,033        2490  %


The provision for income taxes during the six months ended July 31, 2022 was
primarily due to global income and the associated foreign taxes as the Company
continues its global expansion. The provision for income taxes during the six
months ended July 31, 2021 was primarily the result of an increase in global
income and the associated foreign taxes partially offset by the release of the
valuation allowance as a result of goodwill recorded associated with an
immaterial business combination and the impact from the adoption of ASU 2020-06.

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                                 MONGODB, INC.

Liquidity and Capital Resources


As of July 31, 2022, our principal sources of liquidity were cash, cash
equivalents, short­term investments and restricted cash totaling $1.8 billion.
Our cash and cash equivalents primarily consist of bank deposits and money
market funds. Our short­term investments consist of U.S. government treasury
securities, and our restricted cash represents collateral for our available
credit on corporate credit cards. We believe our existing cash and cash
equivalents and short­term investments will be sufficient to fund our operating
and capital needs for at least the next 12 months.

We have generated significant operating losses and negative cash flows from
operations as reflected in our accumulated deficit and historical consolidated
statements of cash flows. As of July 31, 2022, we had an accumulated deficit of
$1.4 billion. We expect to continue to incur operating losses, may continue to
experience negative cash flows from operations in the future and may require
additional capital resources to execute strategic initiatives to grow our
business. Our future capital requirements and adequacy of available funds will
depend on many factors, including our growth rate and any impact on it from
global macroeconomic conditions, including rising interest rates and inflation,
the timing and extent of spending to support development efforts, the expansion
of sales and marketing and international operation activities, the timing and
size of new subscription introductions and customer usage of our platform, the
continuing market acceptance of our subscriptions and services and the impact of
the ongoing COVID-19 pandemic on the global economy and our business, financial
condition and results of operations. As the impact of the ongoing COVID-19
pandemic on the global economy and our operations continues to evolve, we will
continue to assess our liquidity needs. We may in the future enter into
arrangements to acquire or invest in complementary businesses, services and
technologies, including intellectual property rights. We may be required to seek
additional equity or debt financing. In the event that additional financing is
required from outside sources, we may not be able to raise it on terms
acceptable to us or at all. If we are unable to raise additional capital when
desired, our business, operating results and financial condition would be
adversely affected.

The following table summarizes our cash flows for the periods presented
(unaudited, in thousands):

                                                                       Six Months Ended July 31,
                                                                       2022                   2021
Net cash used in operating activities                            $      (33,097)         $    (9,541)
Net cash provided by (used in) investing activities                     196,115             (136,923)
Net cash provided by financing activities                                16,883              878,263


Operating Activities

Cash used in operating activities during the six months ended July 31, 2022 was
$33.1 million. This was primarily driven by our net loss of $196.2 million,
which was partially offset by non­cash charges of $180.1 million for stock­based
compensation, $7.7 million for depreciation and amortization, $6.4 million for
lease-related charges and $4.1 million for accretion of discount on our
short-term investments. In addition, the continuing growth of our sales and our
expanding customer base led to an increase in accounts receivable of $19.5
million and deferred commissions of $16.6 million.

Cash used in operating activities during the six months ended July 31, 2021 was
$9.5 million. This was primarily driven by our net loss of $141.1 million, which
was partially offset by non­cash charges of $108.6 million for stock­based
compensation, $6.6 million for depreciation and amortization, $5.2 million for
lease-related charges, $3.0 million for accretion of discount on our short-term
investments and $2.3 million for debt issuance costs. In addition, our cash
collections decreased our accounts receivable by $16.3 million and increased our
deferred revenue by $9.8 million, reflecting the overall growth of our sales and
our expanding customer base. Partially offsetting these benefits to our
operating cash flow were decreases of $16.5 million in deferred commissions, due
to commissions paid during the period.

Investing Activities


Cash provided by investing activities during the six months ended July 31, 2022
was $196.1 million, primarily due to proceeds from maturities of marketable
securities, net of purchases, of $202.4 million. The proceeds were partially
offset by $5.2 million of cash used for purchases of property and equipment and
$1.1 million of additional investment in non-marketable securities.

Cash used in investing activities during the six months ended July 31, 2021 was
$136.9 million, primarily due to cash used to purchase marketable securities,
net of maturities, of $129.0 million, and $4.5 million of net cash used for an
immaterial acquisition.

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Financing Activities

Cash provided by financing activities during the six months ended July 31, 2022
was $16.9 million, due to proceeds from the issuance of common stock under the
Employee Stock Purchase Plan and exercises of stock options, partly offset by
principal repayments of finance leases.

Cash provided by financing activities during the six months ended July 31, 2021
was $878.3 million, primarily due to net proceeds of $889.2 million from our
June 2021 equity offering, which resulted in our issuance of 2,500,000 shares of
common stock at an offering price of $365 per share, the issuance of common
stock under the Employee Stock Purchase Plan, and exercises of stock options,
partly offset by cash used to repay a portion of our 2024 convertible notes upon
redemption.

Seasonality

We have in the past and expect in the future to experience seasonal fluctuations
in our revenue and operating results from time to time. We may experience
variability and reduced comparability of our quarterly revenue and operating
results with respect to the timing and nature of certain of our contracts,
particularly multi-year contracts that contain a term license. We may also
experience fluctuations as MongoDB Atlas revenue is recorded on a consumption
basis and varies with usage, including due to seasonal factors. As MongoDB Atlas
revenue continues to increase as a percentage of total revenue, these
fluctuations may have a greater impact on our results of operations. We believe
that seasonal fluctuations that we have experienced in the past may continue in
the future.

Contractual Obligations and Commitments


During the six months ended July 31, 2022, there were no material changes
outside the ordinary course of business to our contractual obligations and
commitments from those disclosed in our 2022 Form 10-K. Refer to Note 6, Leases
and Note 7, Commitments and Contingencies, in our Notes to Unaudited Condensed
Consolidated Financial Statements included in Part I, Item 1 of this Quarterly
Report on Form 10-Q for further details.

Critical Accounting Estimates


Our financial statements are prepared in accordance with GAAP. The preparation
of these financial statements requires us to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, expenses and
related disclosures. We evaluate our estimates and assumptions on an ongoing
basis. Our estimates are based on historical experience and various other
assumptions that we believe to be reasonable under the circumstances. Our actual
results could differ from these estimates.

There have been no material changes in our critical accounting estimates from
those disclosed in Part II, Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" of the 2022 Form 10-K.

Recent Accounting Pronouncements

None.

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