Comment by skolsuper | Hacker News Reader

Comment by skolsuper | Hacker News Reader

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https://www.prnewswire.com/news-releases/mongodb-inc-announc...

- Revenue: Total revenue was $150.8 million in the third quarter fiscal 2021, an increase of 38% year-over-year. Subscription revenue was $144.1 million, an increase of 39% year-over-year, and services revenue was $6.7 million, an increase of 19% year-over-year.

- Gross Profit: Gross profit was $104.7 million in the third quarter fiscal 2021, representing a 69% gross margin, compared to 71% in the year-ago period. Non-GAAP gross profit was $108.6 million, representing a 72% non-GAAP gross margin.

- Loss from Operations: Loss from operations was $58.1 million in the third quarter fiscal 2021, compared to $38.7 million in the year-ago period. Non-GAAP loss from operations was $16.0 million, compared to $14.3 million in the year-ago period.

- Net Loss: Net loss was $72.7 million, or $1.22 per share, based on 59.4 million weighted-average shares outstanding in the third quarter fiscal 2021. This compares to $42.4 million, or $0.75 per share, based on 56.4 million weighted-average shares outstanding, in the year-ago period. Non-GAAP net loss was $18.2 million or $0.31 per share. This compares to $14.6 million, or $0.26 per share, in the year-ago period.

- Cash Flow: As of October 31, 2020, MongoDB had $966.8 million in cash, cash equivalents, short-term investments and restricted cash. During the three months ended October 31, 2020, MongoDB used $8.1 million of cash from operations, $5.6 million in capital expenditures and $1.2 million in principal repayments of finance leases, leading to negative free cash flow of $14.9 million, compared to negative free cash flow of $13.1 million in the year-ago period.

MongoDB Atlas's business model seems very, very odd to me. The prices for hosted Mongo are so high that I really find myself asking who is paying for this and what the target market is. In particular I wonder how they can possibly be losing money when charging such insane markups unless they have virtually no customers.

For a dedicated database that has 32 GB of RAM, 8 virtualised CPUs, and only 160GB of storage you will pay $2 an hour! That's $17,520 a year for a database with the same level of compute and far less storage than my laptop.

I realise a big part of their target market is firms who are convinced they either can't hire skilled sysadmins or are convinced their time is worth more than the US President but at $17,520/yr for a tiny database it only takes two or three of those before you could, in fact, hire a full time sysadmin in a cheap location. And there's no way that maintaining these things would require an FTE, it's not even close to being a full time job. So how do the economics of this work out? Can anyone explain to me?

My best guess is that Atlas customers are companies that are totally price insensitive and have some sort of "everything must be cloud managed without exception" rule imposed from the top down. As Mongo is licensed such that only they can run a hosted service, such customers would find themselves forced by internal policy into paying whatever price Atlas charges. This would also explain their very low services revenue. But I don't know that, it's just a guess.

> So how do the economics of this work out? Can anyone explain to me?

Idk, but maybe the engineers don't fully trust it, so they outsource the liability of running it with some contractual guarantees. And at the moment, this probably looks more fashionable, so no one dares question it in fear of seeming backwards.

Don’t you get a replica set for that $? That's three of your laptops. And if any of them fail, a free replacement. And that FT sysadmin of yours is willing to work 24x7? Cool!

I'm always kind of amazed at the low services number on MongoDB earnings reports. It's 4-5%. This seems unusually low for enterprise database companies.

As percentage of total revenue, MongoDB service revenue is about half compared to what Oracle generates. My guess is customer churn is much higher for MongoDB.

Hmmm. Isn't customer churn public? Anyways, my guess is that the product is 1) much easier to use (less bells and whistles) 2) mongodb provides more configuration etc without charging for it.

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