MongoDB Inc at UBS Global TMT Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Good, good. Well, maybe, Michael, I'll start with you. You guys obviously put up a big print, but it's been a crazy week with all kinds of conferences. So to the extent anybody listening in might have missed the details. You want to just take a few minutes and summarize what you thought were the highlights. And to the extent that you and Serge are getting like repeated questions of any sort, maybe take a minute to address them.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Okay. That's a good summary. And yes, we will get to those early renewals later anyway. So maybe before we dive into the quarter and the numbers and interpretation, maybe I'll start with some broader questions for you. So I think in terms of identifying what the secular trends that MongoDB is tied to, it seems to me there are 3 major ones, but I'd love your take. So one, obviously, given that Atlas runs on the major public clouds, you're tethered to that broader migration of workloads to the big 3 cloud providers. Secondly, Mongo has always had a developer focus. And it does feel as if there's an impetus on the part of enterprises to equip developers these days with modern technology and the tools of their choice, sort of the similar trend that developer tool vendors like Atlassian and GitLab might be tethered to. And then lastly, it does seem that all the data companies, be it Snowflake or Mongo or Confluent or Databricks are all part of a broader secular trend. So am I hitting on the big 3? And is there one in particular that you would point to?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Okay. Perfectly clear. And maybe a second question I wanted to ask you. One thing we as a team are trying to figure out in a little bit more detail, and I think tech investors more broadly are is how the COVID crisis may have accelerated a lot of these modernization efforts. And the flip REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 08, 2021 / 2:00PM, MDB.OQ - MongoDB Inc at UBS Global TMT Conference (Virtual) side and negative of it is that it may have created a little bit of a bubble and spend for some vendors. I'm not just talking Zoom, DocuSign, but for others that are now facing, sort of, tough comps, because that bubble in spending can't persist at these levels. I don't think that's the case with Mongo because you're not putting up numbers that would suggest that you're bumping up against tough comps or decelerating. But maybe you could address the, sort of, the arc of investment spending post-COVID and into 2022, how straight line that is? Or do you think actually maybe you're looking back over the last 12 months, you're coming off of an unusually robust demand environment?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Okay. That's very clear and supported by the numbers. So maybe the last broader question I'll ask before we dive into some of those numbers. It's just on the competitive backdrop. I guess, we now have Couchbase as a public, next-gen database company. I'm actually doing a fireside chat with the CEO of DataStax in a couple of hours. More are hitting the radars of investors, and that always runs the risk of creating a little bit of confusion as to who's doing what, how they compete. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 08, 2021 / 2:00PM, MDB.OQ - MongoDB Inc at UBS Global TMT Conference (Virtual) It feels like, Michael and Serge, everybody's calling themselves a general-purpose database and rushing into the cloud. So how could you -- what's the framework that you can advise investors to parse through what appears to be similar messages from multiple database companies?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Perfect. Okay. That's very helpful. Let's dive in a little bit into the numbers. You flagged it, Michael, earlier on. But one of the interesting things about the quarter didn't really affect revenues, but was the big bump in DR and billings as a small handful of very large Atlas customers elected to renew early, make large multiyear commitments. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 08, 2021 / 2:00PM, MDB.OQ - MongoDB Inc at UBS Global TMT Conference (Virtual) Now I wanted to ask you about how to interpret that, because if it's merely a few Atlas customers essentially chasing lower price points, and it's kind of one-offish, that's one thing. But if it's sort of the start of something wonderful, where you might see this from a broader swath of customers, and there's more strategic reasons why they're doing this, that's a different thing. So maybe you could walk us through how to interpret it and why it's happening now.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : And I guess we'll see the evidence of this also in the RPO number when your Q comes out, right?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Okay, perfect. Thanks, guys.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. So if these early renewals really didn't have an effect on Atlas revenues in the quarter, maybe you could talk a little bit about the Atlas growth you did put up. 84% growth was phenomenal. You've described in an earlier question and answer some of the broader trends that you're tethered to. Was there anything particular about the Atlas growth in the October quarter to call out as being a driver. any kind of unique shifts, maybe a new workload types, anything that you would flag or just steady as she goes, similar drivers to prior quarters?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Okay. Perfect.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Let's talk about the EA business. To me, this is like the little brother who keeps getting overshadowed by the prolific older brother who gets all the trophies. But it was actually the EA business that, at least relative to our model, had more upside actually. So let's shine the spotlight a little bit on the EA business. And maybe you could describe why you saw an acceleration to 20% growth from mid-teens in the last couple of quarters? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 08, 2021 / 2:00PM, MDB.OQ - MongoDB Inc at UBS Global TMT Conference (Virtual)

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Yes. Got it. And what about more tactical reasons why it might have had a little bit of a better quarter. Maybe the renewal base was a little bit higher. Maybe you guys did a better job upselling. Anything like that?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Okay. Well, maybe this is a good segue to talk about 4Q. Tell me if this is a reasonable way to assess the 4Q guide. So if I -- if I look at your 4Q guide and calculate what sequential total revenue growth it implies relative to the actual 3Q you put up, for this quarter, it's about a 7% sequential increase. If I look at 4Q last year, your guidance implied a 4% sequential increase. And if I look at 2 years ago, your 4Q guide implied a 1% sequential increase. So it feels like this is a "strong" guide. Now maybe that's influenced by the fact that Atlas is a larger portion of the mix. But maybe you could comment on whether that interpretation of 4Q guide feeling pretty robust relative to priors is appropriate.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Okay, great.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Makes sense. I'll ask you one more, and then we'll turn to questions. The last -- the other thing that struck me about the quarter was the improvement in your non-GAAP operating margins, negative 1.5%. You guys are finally an inch away from hitting that breakeven. It's tempting perhaps to extrapolate from the last couple of quarters into next year. But Michael and Serge, what are -- I know you haven't provided guidance yet, but what are a couple of reasons, perhaps why it might be inaccurate to extrapolate linearly?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. We've got to -- we only have a couple of minutes, but we have 2 questions. Why don't I ask them and maybe we could hit them rapid fire.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : One of the investors is asking what is the typical lag between landing a customer and then hitting your customer metrics and usage ramping up and recognizing revenues? And is that different for different sized customers?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Last one is, why is application usage growth coming at the high end of observed ranges? What's going on with apps that the usage growth is so strong now?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Okay. Got it. Michael and Serge, we're up against time, but thanks for carving out time to help UBS' clients understand the MongoDB story a little bit better. And thanks for participating. And if we don't chat, happy holidays to both of you.