MongoDB, Inc. (MDB) FY 2025 MD&A
This page reproduces the company's own Item 7 MD&A text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K. All information presented herein is based on our fiscal calendar. 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.
Overview
MongoDB is the developer data platform company whose mission is to empower developers to create, transform, and disrupt industries by unleashing the power of software and data. The foundation of our offering is the world’s leading, modern general purpose database. Organizations can deploy our database at scale in the cloud, on-premises, or in a hybrid environment. Built on our unique document-based architecture, our database is designed to meet the needs of organizations for performance, scalability, flexibility and reliability while maintaining the strengths of relational databases. In addition to the database, our developer data platform includes a set of, tightly integrated, capabilities such as search, time series, data lifecycle, application-driven analytics and stream processing that allow developers to address a broader range of application requirements. Our business model combines the developer mindshare and adoption benefits of open source with the economic benefits of a proprietary software subscription business model.
We generate revenue primarily from sales of subscriptions, which accounted for 97% of our total revenue for each of the years ended January 31, 2025 and 2024 and 96% for the year ended January 31, 2023.
MongoDB Atlas is our hosted multi-cloud database-as-a-service (“DBaaS”) offering, which we run and manage in the cloud, and includes comprehensive infrastructure and management, as well as a host of additional features, such as MongoDB Atlas Search, Vector Search, time series, data lifecycle, application-driven analytics, and stream processing. During the year ended January 31, 2025, MongoDB Atlas revenue represented 70% of our total revenue, as compared to 66% in the prior year, 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, which are charged monthly in arrears based on their usage. We have also seen growth in MongoDB Atlas customers sold by our sales force, which typically sign annual contracts and pay in advance or are invoiced monthly in arrears based on usage. Customers sold by our sales force may also sign contracts that remain in effect until terminated and are invoiced monthly in arrears based on usage. We expect to continue to see a higher portion of our MongoDB Atlas contracts to be billed monthly in arrears based on usage without requiring upfront commitments.
MongoDB Enterprise Advanced is our proprietary commercial database server offering for enterprise customers that can run in the cloud, on-premises or in a hybrid environment. MongoDB Enterprise Advanced revenue represented 24%, 26% and 29% of our subscription revenue for the years ended January 31, 2025, 2024 and 2023, 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, the customer is typically invoiced on an annual basis or pays upfront.
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 500 million times since February 2009. 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 3% of our total revenue for each of the years ended January 31, 2025 and 2024 and 4% for the year ended January 31, 2023. 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.
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We believe the market for our offerings is large and growing. 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 to grow our business to take advantage of our market opportunity.
Macroeconomic and Other Factors
Our operational and financial performance is subject to risks including those caused by the adverse macroeconomic environment and the geopolitical landscape.
Adverse macroeconomic conditions include slower or negative economic growth, higher inflation and higher interest rates. During the year ended January 31, 2025, the macroeconomic environment negatively impacted our business. For instance, we experienced slower than historical growth rates for our existing MongoDB Atlas applications. While the impact of these macroeconomic conditions on our business, results of operations and financial position remain uncertain over the long term, we expect to experience macroeconomic headwinds on growth rate for our existing MongoDB Atlas applications in the short term.
We continue to monitor the developments of the macroeconomic environment and the geopolitical landscape. As these factors develop and we evaluate their impact on our business, we may adjust our business practices accordingly. For further discussion of the potential impacts of these factors on our business, operating results, and financial condition, see the section titled “Risk Factors” included in Part I, Item 1A of this Form 10-K. Other factors affecting our performance are discussed below.
Factors Affecting Our Performance
Extending Product Leadership and Maintaining Developer Mindshare
We are committed to delivering market-leading products to continue to build and maintain credibility with the global software developer community. We believe we must maintain our product leadership position and the strength of our brand to drive further revenue growth. We intend to continue to invest in our product offerings with the goal of expanding the functionality and adoption of our developer data platform. During 2024, we introduced MongoDB version 8.0 enhancing enterprise-grade security, resilience and availability for a wide variety of applications. We added additional features to Queryable Encryption, an encrypted search scheme, to support equality and range searches. We also added additional capabilities such as Atlas Stream Processing, as well as expanded availability of Atlas Search Nodes in more cloud regions, which now provide dedicated infrastructure for search use cases so customers can scale independently of their database to manage their workloads with greater flexibility and operational efficiency.
We intend to continue to invest in our engineering capabilities and marketing activities to maintain our strong position in the developer community. We have spent $2.5 billion on research and development since our inception. Our results of operations may fluctuate as we make these investments to drive increased customer adoption and usage.
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, in our sales and marketing efforts and developer community outreach, which are critical to driving customer acquisition. As of January 31, 2025, we had over 54,500 customers across a wide range of industries and in over 100 countries, compared to over 47,800 customers and over 40,800 customers as of January 31, 2024 and 2023, respectively. All affiliated entities are counted as a single customer and our definition of “customer” excludes users of our free offerings.
As of January 31, 2025, we had over 7,500 customers that were sold through our direct sales force and channel partners, as compared to over 7,000 and over 6,400 such customers as of January 31, 2024 and 2023, respectively. These customers, which we refer to as our Direct Sales Customers, accounted for 88% of our subscription revenue for each of the years ended January 31, 2025 and 2024 and 87% for the year ended January 31, 2023. The percentage of our subscription revenue from Direct Sales Customers increased, 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 53,100 MongoDB Atlas customers as of January 31, 2025. The growth in MongoDB Atlas customers included new customers to MongoDB and existing MongoDB Enterprise Advanced customers adding incremental MongoDB Atlas workloads.
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Retaining and Expanding Revenue from Existing Customers
The economic attractiveness of our subscription-based model is demonstrated 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 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 year ended January 31, 2025, we believe we experienced a negative impact from the macroeconomic environment on the growth of existing Atlas applications, which affected our revenue growth. We expect the macroeconomic environment to continue to negatively impact our revenue growth. In addition, our customers add incremental workloads or 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 platform within their organization, as well as add new workloads with new and existing customers. 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 usage 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 usage 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 2,396, 2,052 and 1,651 as of January 31, 2025, 2024 and 2023, 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. As of January 31, 2025, our net ARR expansion rate was approximately 118%. Historically, our net ARR expansion rate has been over 120%. The decline versus most historical periods is attributable to a smaller contribution from expanding customers. Our net ARR expansion rate may fluctuate in future periods due to a variety of factors, including the volume and type of workloads that we onboard, growth rate of historical workloads on our platform and changes in the macroeconomic environment.
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.
Investing in Growth and Scaling Our Business
We are focused on our long-term revenue potential. We believe that our market opportunity is large and we will continue to invest in scaling across all organizational functions in order to grow our operations both domestically and internationally. Any investments we make in our sales and marketing organization will occur in advance of experiencing the benefits from such investments, so it may be difficult for us to determine if we are efficiently allocating resources in those areas. We have increased our sales and marketing headcount to 2,542 employees as of January 31, 2025 from 2,338 employees and 2,249 employees as of January 31, 2024 and 2023, respectively.
Components of Results of Operations
Revenue
Subscription Revenue. Our subscription revenue is comprised of term licenses and database-as-a-service solutions. Revenue from our MongoDB Atlas database-as-a-service offering is primarily generated on a usage basis and is billed either
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monthly in arrears or paid upfront. 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. The majority of our subscription contracts are one year in duration. When we enter into multi-year subscriptions, the customer is typically invoiced on an annual basis or pays upfront. 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 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 from our MongoDB Atlas customers.
Cost of Revenue
Cost of Subscription Revenue. Cost of subscription revenue primarily includes third-party cloud infrastructure expenses for our database-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.
Cost of Services Revenue. Cost of services revenue primarily includes personnel costs, including salaries, bonuses and benefits and stock-based 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 stock-based compensation. These expenses also include costs related to marketing programs, travel-related expenses and allocated overhead. Marketing programs consist of advertising, events, corporate communications, and brand-building and developer-community 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 stock-based 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 developer data platform and develop new products.
General and Administrative. General and administrative expense consists primarily of personnel costs, including salaries, bonuses and benefits, and stock-based compensation for administrative functions including finance, legal, human
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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 financial instruments, net 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. As of January 31, 2025, we had net operating loss (“NOL”) carryforwards for U.S. federal and state, Irish and U.K. income tax purposes of approximately $2.1 billion, $2.0 billion, $834.3 million and $52.9 million, respectively, which begin to expire in the year ending January 31, 2028 for U.S. federal purposes and January 31, 2026 for state purposes. Operating losses in the United States, for years after January 31, 2019, in Ireland and the U.K. may be carried forward indefinitely. The deferred tax assets associated with the NOL carryforwards in each of these jurisdictions are subject to a full valuation allowance. Under Section 382 of the U.S. Internal Revenue Code of 1986 (the “Code”), a corporation that experiences an “ownership change” is subject to a limitation on its ability to utilize its pre-change NOLs to offset future taxable income. We also have U.S. federal and state research credit carryforwards of $178.1 million and $16.3 million, respectively, which begin to expire in the year ending January 31, 2029 for federal purposes and January 31, 2026 for state purposes. Beginning in fiscal year 2023, provisions in the U.S. Tax Cuts and Jobs Act of 2017 require the Company to capitalize and amortize research and development (“R&D”) expenditures rather than deducting the costs as incurred. As the result of the new R&D capitalization effective in fiscal year 2023, the capitalized amounts resulted in a decrease of the current year net operating loss. Capitalized R&D expenditures are deductible as amortized in future periods. Therefore, the Company recorded a deferred tax asset for the capitalized R&D expenditures.
Utilization of the federal NOL carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Code, as amended and similar state provisions. The annual limitation, should we undergo an ownership change, may result in the expiration of U.S. federal or state net operating losses and credits before utilization; however we do not expect any such limitation to be material.
Highlights for the Years Ended January 31, 2025, 2024 and 2023
For the years ended January 31, 2025, 2024 and 2023, our total revenue was $2,006.4 million, $1,683.0 million and $1,284.0 million, respectively. The increase in total revenue was primarily driven by an increase in subscription revenue from our Direct Sales Customers. Our net loss was $129.1 million, $176.6 million and $345.4 million for the years ended January 31, 2025, 2024 and 2023, respectively, driven primarily by higher sales and marketing spend and research and development costs. Our operating cash flow was $150.2 million, $121.5 million and $(13.0) million for the years ended January 31, 2025, 2024 and 2023, 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 (in thousands) and as a percentage of our total revenue. Percentage of revenue figures are rounded and therefore may not subtotal exactly.
| Years Ended January 31, | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2023 | ||||||||||||||||||
| $ | % of Revenue | $ | % of Revenue | $ | % of Revenue | |||||||||||||||
| Consolidated Statements of Operations Data: | ||||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Subscription | $ | 1,943,864 | 97 | % | $ | 1,627,326 | 97 | % | $ | 1,235,122 | 96 | % | ||||||||
| Services | 62,579 | 3 | 55,685 | 3 | 48,918 | 4 | ||||||||||||||
| Total revenue | 2,006,443 | 100 | 1,683,011 | 100 | 1,284,040 | 100 | ||||||||||||||
| Cost of revenue: | ||||||||||||||||||||
| Subscription(1) | 441,404 | 22 | 345,233 | 20 | 284,583 | 22 | ||||||||||||||
| Services(1) | 93,892 | 5 | 79,252 | 5 | 64,721 | 5 | ||||||||||||||
| Total cost of revenue | 535,296 | 27 | 424,485 | 25 | 349,304 | 27 | ||||||||||||||
| Gross profit | 1,471,147 | 73 | 1,258,526 | 75 | 934,736 | 73 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Sales and marketing(1) | 871,148 | 43 | 782,760 | 47 | 699,201 | 54 | ||||||||||||||
| Research and development(1) | 596,837 | 30 | 515,940 | 31 | 421,692 | 33 | ||||||||||||||
| General and administrative(1) | 219,226 | 11 | 193,558 | 11 | 160,498 | 13 | ||||||||||||||
| Total operating expenses | 1,687,211 | 84 | 1,492,258 | 89 | 1,281,391 | 100 | ||||||||||||||
| Loss from operations | (216,064) | (11) | (233,732) | (14) | (346,655) | (27) | ||||||||||||||
| Other income, net | 84,465 | 4 | 70,216 | 5 | 13,401 | 1 | ||||||||||||||
| Loss before provision for (benefit from) income taxes | (131,599) | (7) | (163,516) | (9) | (333,254) | (26) | ||||||||||||||
| Provision for income taxes | (2,527) | (1) | 13,084 | 1 | 12,144 | 1 | ||||||||||||||
| Net loss | $ | (129,072) | (6) | % | $ | (176,600) | (10) | % | $ | (345,398) | (27) | % |
(1) Includes stock-based compensation expense as follows (in thousands):
| Years Ended January 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2023 | ||||||||
| Cost of revenue—subscription | $ | 29,548 | $ | 23,677 | $ | 19,682 | ||||
| Cost of revenue—services | 13,917 | 12,733 | 10,565 | |||||||
| Sales and marketing | 161,317 | 159,907 | 143,073 | |||||||
| Research and development | 226,367 | 198,927 | 159,099 | |||||||
| General and administrative | 62,791 | 61,663 | 49,035 | |||||||
| Total stock-based compensation expense | $ | 493,940 | $ | 456,907 | $ | 381,454 |
Comparison of the Years Ended January 31, 2025 and 2024
Revenue
| Years Ended January 31, | Change | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2025 | 2024 | $ | % | ||||||||||
| Subscription | $ | 1,943,864 | $ | 1,627,326 | $ | 316,538 | 19 | % | ||||||
| Services | 62,579 | 55,685 | 6,894 | 12 | % | |||||||||
| Total revenue | $ | 2,006,443 | $ | 1,683,011 | $ | 323,432 | 19 | % |
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Total revenue growth reflects increased demand for our platform and related services. Subscription revenue increased by $316.5 million primarily due to an increase of $269.4 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.
Cost of Revenue, Gross Profit and Gross Margin Percentage
| Years Ended January 31, | Change | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2025 | 2024 | $ | % | ||||||||||
| Subscription cost of revenue | $ | 441,404 | $ | 345,233 | $ | 96,171 | 28 | % | ||||||
| Services cost of revenue | 93,892 | 79,252 | 14,640 | 18 | % | |||||||||
| Total cost of revenue | 535,296 | 424,485 | 110,811 | 26 | % | |||||||||
| Gross profit | $ | 1,471,147 | $ | 1,258,526 | $ | 212,621 | 17 | % | ||||||
| Gross margin | 73 | % | 75 | % | ||||||||||
| Subscription | 77 | % | 79 | % | ||||||||||
| Services | (50) | % | (42) | % |
The increase in subscription cost of revenue was primarily due to a $71.6 million increase in third‑party 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, cost of revenue was higher due to a $16.7 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 $6.7 million increase in personnel costs and stock-based compensation associated with headcount in our services organization, and a $6.1 million increase in third-party consultant costs related to the delivery of consulting and training services. Total headcount in our support and services organizations increased 23% from January 31, 2024 to January 31, 2025.
Our overall gross margin declined to 73%. Our subscription gross margin declined to 77% due to an increase of third-party cloud infrastructure costs which was primarily driven by the growth of MongoDB Atlas revenue as a percent of total revenue. Services gross margin declined due to the impact of higher third-party consultant and training costs, services personnel costs and stock-based compensation.
Operating Expenses
Sales and Marketing
| Years Ended January 31, | Change | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2025 | 2024 | $ | % | ||||||||||
| Sales and marketing | $ | 871,148 | $ | 782,760 | $ | 88,388 | 11 | % |
The increase in sales and marketing expense was primarily driven by a $38.8 million increase in personnel costs and stock-based compensation, a $22.5 million increase in spend on in-person events and marketing programs and a $20.5 million increase in commission expense. Our headcount was 2,542 as of January 31, 2025 compared to 2,338 as of January 31, 2024.
Research and Development
| Years Ended January 31, | Change | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2025 | 2024 | $ | % | ||||||||||
| Research and development | $ | 596,837 | $ | 515,940 | $ | 80,897 | 16 | % |
The increase in research and development expense was primarily driven by a $67.0 million increase in personnel costs and stock-based compensation as we grew our headcount by 8%. In addition, research and development expense increased by $10.6 million due to higher third-party infrastructure expenses related to development costs of our MongoDB Atlas offering.
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General and Administrative
| Years Ended January 31, | Change | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2025 | 2024 | $ | % | ||||||||||
| General and administrative | $ | 219,226 | $ | 193,558 | $ | 25,668 | 13 | % |
The increase in general and administrative expense was primarily driven by an increase in headcount resulting in $15.4 million higher personnel costs and stock-based compensation, a $7.3 million increase related to value-added tax expense and a $2.8 million increase due to higher consulting costs.
Other Income, Net
| Years Ended January 31, | Change | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2025 | 2024 | $ | % | ||||||||||
| Other income, net | $ | 84,465 | $ | 70,216 | $ | 14,249 | 20 | % |
Other income, net, for the year ended January 31, 2025 improved primarily due to higher interest income from our short-term investments.
Provision for (Benefit From) Income Taxes
| Years Ended January 31, | Change | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2025 | 2024 | $ | % | ||||||||||
| Provision for (benefit from) income taxes | $ | (2,527) | $ | 13,084 | $ | (15,611) | (119) | % |
The decrease in the provision for income taxes during the year ended January 31, 2025 was primarily due to the release of our U.K. valuation allowance.
Comparison of the Years Ended January 31, 2024 and 2023
For a discussion of our results of operations for the year ended January 31, 2024 as compared to the year ended January 31, 2023, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K filed with the SEC on March 15, 2024.
Liquidity and Capital Resources
As of January 31, 2025, our principal sources of liquidity were cash, cash equivalents, short-term investments and restricted cash totaling $2.3 billion. Our cash and cash equivalents primarily consist of bank deposits and money market funds. Our short-term 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 short-term investments will be sufficient to fund our operating and capital needs for at least the next 12 months.
During the three months ended April 30, 2024, the Company elected to cash settle its Capped Calls associated with the 2024 Notes. In June 2024, the Capped Calls associated with the 2024 Notes settled and the Company received $170.6 million in cash. For further discussion on the Capped Calls, please refer to Note 6, Convertible Senior Notes, in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
In October 2024, the optional redemption feature of the 2026 Notes was satisfied as the last reported sale price of our common stock was more than or equal to 130% of the conversion price for at least 20 trading days in the period of 30 consecutive trading days. On October 16, 2024, we issued a notice of redemption (the “Redemption Notice”) for all aggregate principal amount outstanding of our 2026 Notes. Approximately $1.1 billion aggregate principal amount was converted to 5,662,979 shares of the Company’s common stock with $0.4 million settled in cash. For further discussion on the 2026 Notes, please refer to Note 6, Convertible Senior Notes, in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
We have generated significant operating losses as reflected in our accumulated deficit of $1.8 billion as of January 31, 2025. While we generated positive cash flows from operations in recent years, we have generated negative cash flows from operations in the past as reflected in our historical consolidated statements of cash flows. We expect to continue to incur
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operating losses, may 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, 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 developer data platform, the continuing market acceptance of our subscriptions and services and the impact of the macroeconomic conditions on the global economy and our business, financial condition and results of operations. As the impact of macroeconomic conditions on the global economy and our operations continues to evolve, we will continue to assess our liquidity needs. In the future, we may 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 (in thousands):
| Years Ended January 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2023 | ||||||||
| Net cash provided by (used in) operating activities | $ | 150,191 | $ | 121,477 | $ | (12,970) | ||||
| Net cash provided by (used in) investing activities | (657,440) | 188,019 | (33,308) | |||||||
| Net cash provided by financing activities | 202,060 | 38,241 | 30,200 |
Operating Activities
Cash provided by operating activities during the year ended January 31, 2025 was $150.2 million, driven primarily by an increase in our cash collections reflecting the overall growth of our sales and expansion of our customer base. Accordingly, our accounts receivable increased by $69.2 million. In addition, our net loss of $129.1 million, includes non‑cash charges of $493.9 million for stock‑based compensation and $11.8 million for depreciation and amortization. Our accrued liabilities increased by $25.3 million reflecting our increase in expenses and timing of payments. Partially offsetting these benefits to our operating cash flow were amortization of premium and accretion of discount on short-term investments, net of $25.1 million, an increase in deferred commissions of $69.1 million, an increase in prepaid expenses and other current assets of $24.8 million, an increase in other long-term assets of $30.7 million and other net non-cash charges of $32.8 million.
Cash provided by operating activities during the year ended January 31, 2024 was $121.5 million driven primarily by an increase in our cash collections reflecting overall growth of our sales and expansion of our customer base. Our net loss of $176.6 million, included non‑cash charges of $456.9 million for stock‑based compensation and $18.9 million for depreciation and amortization. Our accrued liabilities increased by $39.5 million reflecting our increase in expenses and timing of payments. Partially offsetting these benefits to our operating cash flow were a decrease in deferred revenue of $82.4 million, accretion of the discount on our short-term investments of $44.6 million and an increase in deferred commissions of $41.8 million, accounts receivable of $41.6 million, driven by continued growth of our sales and our expanding customer base and other net non-cash charges of $6.8 million.
Investing Activities
Cash used in investing activities during the year ended January 31, 2025 was $657.4 million, due to purchases of marketable securities, net of maturities and sales, of $616.6 million, cash used for investments in non-marketable securities of $11.3 million and purchases of property, equipment and other assets of $29.6 million.
Cash provided by investing activities during the during the year ended January 31, 2024 was $188.0 million, primarily due to proceeds from maturities of marketable securities, net of purchases, of $211.1 million, $6.1 million of cash used for purchases of property and equipment and $2.1 million of additional investment in non-marketable securities. In addition, on September 27, 2023, we used $15.0 million of net cash to acquire the assets of Grainite, Inc.
Financing Activities
Cash provided by financing activities during the year ended January 31, 2025 was $202.1 million, due to proceeds from the settlement of capped calls and other of $170.2 million, proceeds from the issuance of common stock under the
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Employee Stock Purchase Plan and exercises of stock options of $38.0 million, partly offset by principal payments of finance leases of $6.2 million.
Cash provided by financing activities during the year ended January 31, 2024 was $38.2 million, due to $36.9 million of proceeds from the issuance of common stock under the Employee Stock Purchase Plan and $6.8 million exercises of stock options, partly offset by $5.5 million of principal repayments of finance leases.
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Contractual Obligations and Commitments
The following table summarizes our contractual obligations as of January 31, 2025 (in thousands):
| Payments Due by Period | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total | Less Than 1 Year | 1 to 3 Years | 3 to 5 Years | More Than 5 Years | ||||||||||||||
| Finance lease obligations | 42,829 | 8,711 | 17,422 | 16,696 | — | |||||||||||||
| Operating lease obligations | 42,192 | 11,851 | 15,674 | 9,910 | 4,757 | |||||||||||||
| Purchase obligations | 945,306 | 379,846 | 560,460 | 5,000 | — | |||||||||||||
| Total | $ | 1,030,327 | $ | 400,408 | $ | 593,556 | $ | 31,606 | $ | 4,757 |
At January 31, 2025, our material short-term and long-term cash requirements for various contractual obligations and commitments consisted of the following:
•our purchase obligations under non-cancelable agreements for cloud infrastructure capacity commitments and subscription and marketing services;
•our finance and operating lease obligations under non-cancelable leases for office space expiring through 2032; and
•accounts payable and accrued liabilities on our consolidated balance sheet (primarily short-term in nature).
For further details of our contractual obligations and lease agreements, refer to our Notes to Consolidated Financial Statements, within Part II, Item 8, Financial Statements and Supplementary Data of this Form 10-K, specifically Note 6, Convertible Senior Notes, Note 7, Leases and Note 8, Commitments and Contingencies.
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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.
The critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our consolidated financial statements are described below.
Revenue Recognition
We derive our revenue from two sources: (1) the sales of subscriptions, which includes the usage-based database-as-a-service offering, term license and post-contract customer support (“PCS”); and (2) services revenue comprised of consulting and training arrangements. We recognize revenue when our customer obtains control of promised goods or services in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under each of our agreements, we perform the following steps:
i.Identification of the contract, or contracts, with a customer. We determine we have a contract with a customer when the contract is approved, each party’s rights regarding the products or services to be transferred is identified, the payment terms for the services can be identified, we have determined the customer has the ability and intent to pay and the contract has commercial substance. We apply judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit, reputation and financial or other information pertaining to the customer. At contract inception, we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation.
ii.Identification of the performance obligations in the contract. Performance obligations promised in a contract are identified based on the services or products that will be transferred to the customer that are both (1) capable of being distinct, whereby the customer can benefit from the service or product either on its own or together with other resources that are readily available from third parties or from us and (2) distinct in the context of the contract, whereby the transfer of the services or products is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services or products, we apply judgment to determine whether promised services or products are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised services or products are combined and accounted for as a single performance obligation.
iii.Determination of the transaction price. The transaction price is determined based on the consideration to which we expect to be entitled in exchange for transferring services and products to the customer. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur. We apply the practical expedient to not evaluate contracts of one year or less for the existence of a significant financing component. None of our contracts contain a significant financing component.
iv.Allocation of the transaction price to the performance obligations in the contract. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. For contracts that contain multiple performance obligations, we allocate the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) basis. We also consider if there are any additional material rights inherent in a contract and if so, we allocate a portion of the transaction price to such rights based on SSP. We determine each SSP based on multiple factors, including past history of selling such performance obligations as standalone products. We estimate SSP for performance obligations with no observable evidence using adjusted market, cost plus and residual methods to establish the SSPs. In cases where directly observable standalone sales are not available, such as when the term license is not sold separately, we consider all observable data points including competitor pricing for a similar or identical product, market and industry data points and our pricing practices to establish the SSP.
v.Recognition of revenue when, or as, we satisfy a performance obligation. We recognize revenue at the time the related performance obligation is satisfied when control of the services or products are transferred to the customers,
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in an amount that reflects the consideration we expect to be entitled to in exchange for those services or products. We record our revenue net of any value added or sales tax.