Company Quick10K Filing
MongoDB
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 56 $6,861
10-Q 2019-12-10 Quarter: 2019-10-31
10-Q 2019-09-05 Quarter: 2019-07-31
10-Q 2019-06-07 Quarter: 2019-04-30
10-K 2019-04-01 Annual: 2019-01-31
10-Q 2018-12-06 Quarter: 2018-10-31
10-Q 2018-09-07 Quarter: 2018-07-31
10-Q 2018-06-07 Quarter: 2018-04-30
10-K 2018-03-30 Annual: 2018-01-31
10-Q 2017-12-15 Quarter: 2017-10-31
8-K 2020-03-14 Earnings, Officers, Exhibits
8-K 2020-02-06 Officers, Exhibits
8-K 2020-01-08 Enter Agreement, Off-BS Arrangement, Sale of Shares, Other Events, Exhibits
8-K 2019-12-09 Earnings, Exhibits
8-K 2019-11-19 Officers
8-K 2019-08-28 Earnings, Officers, Exhibits
8-K 2019-07-10 Shareholder Vote
8-K 2019-06-05 Earnings, Exhibits
8-K 2019-03-13 Earnings, Exhibits
8-K 2018-12-21 Shareholder Rights, Other Events
8-K 2018-12-04 Earnings, Officers, Exhibits
8-K 2018-10-16 Other Events, Exhibits
8-K 2018-10-09 Enter Agreement, Other Events, Exhibits
8-K 2018-09-05 Earnings, Exhibits
8-K 2018-07-12 Shareholder Vote
8-K 2018-06-25 Enter Agreement, Off-BS Arrangement, Sale of Shares, Other Events, Exhibits
8-K 2018-06-06 Earnings, Exhibits
8-K 2018-03-13 Earnings, Officers, Exhibits
MDB 2019-10-31
Part I-Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part Ii-Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 mdb-103119x10qxex311.htm
EX-31.2 mdb-103119x10qxex312.htm
EX-32.1 mdb-103119x10qxex321.htm
EX-32.2 mdb-103119x10qxex322.htm

MongoDB Earnings 2019-10-31

MDB 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
MFGP 7,557 16,781 8,989 0 0 0 0 7,170 0%
CDAY 7,310 5,436 3,583 602 270 80 92 6,953 45% 75.7 1%
HUBS 6,559 1,479 851 633 511 -55 -22 6,325 81% -293.8 -4%
ESTC 6,666 767 334 342 243 -148 -141 6,359 71% -45.0 -19%
AYX 7,563 1,239 853 351 317 13 2 6,919 90% 2,848.5 1%
MDB 6,619 735 516 298 208 -113 -91 6,467 70% -71.3 -15%
PLAN 6,867 618 324 250 183 -113 -100 6,556 73% -65.5 -18%
MDSO 5,643 1,024 363 685 504 44 70 5,497 74% 78.2 4%
AVLR 6,080 725 261 275 192 -35 -22 5,633 70% -250.8 -5%
RP 6,189 2,292 1,143 733 548 44 138 6,060 75% 43.8 2%

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________
FORM 10-Q
___________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to         
Commission File Number: 001-38240
___________________
MONGODB, INC.
(Exact Name of Registrant as Specified in its Charter)
___________________
Delaware
 
26-1463205
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
1633 Broadway
38th Floor
 
 
New York
NY
 
10019
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: 646-727-4092
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Class A Common Stock, par value $0.001 per share
 
MDB
 
The Nasdaq Stock Market LLC
 
 
(Nasdaq Global Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ  No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  þ  No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
þ
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes       No þ
As of December 5, 2019, there were 47,744,886 shares of the registrant’s Class A common stock and 8,998,700 shares of the registrant’s Class B common stock, each with a par value of $0.001 per share, outstanding.
 



Table of Contents
 
 
 
Page
 
 
 
 
 
 
 
 
 




Table of Contents

PART I—FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS.
MONGODB, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
 
October 31, 2019
 
January 31, 2019
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
151,307

 
$
147,831

Short-term investments
274,560

 
318,139

Accounts receivable, net of allowance for doubtful accounts of $2,213 and $1,539 as of October 31, 2019 and January 31, 2019, respectively
67,506

 
72,808

Deferred commissions
19,717

 
15,878

Prepaid expenses and other current assets
12,531

 
11,580

Total current assets
525,621

 
566,236

Property and equipment, net
59,418

 
73,664

Operating lease right-of-use assets
12,151

 

Goodwill
55,484

 
41,878

Acquired intangible assets, net
36,982

 
15,894

Deferred tax assets
2,206

 
1,193

Other assets
43,123

 
34,611

Total assets
$
734,985

 
$
733,476

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
2,124

 
$
2,153

Accrued compensation and benefits
31,335

 
25,982

Operating lease liabilities
4,180

 

Other accrued liabilities
29,094

 
14,169

Deferred revenue
137,789

 
122,333

Total current liabilities
204,522

 
164,637

Deferred rent, non-current

 
2,567

Deferred tax liability, non-current
114

 
106

Operating lease liabilities, non-current
9,044

 

Deferred revenue, non-current
14,601

 
15,343

Convertible senior notes, net
226,690

 
216,858

Other liabilities, non-current
61,179

 
69,399

Total liabilities
516,150

 
468,910

Commitments and contingencies (Note 8)


 


Stockholders’ equity:
 
 
 
Class A common stock, par value of $0.001 per share; 1,000,000,000 shares authorized as of October 31, 2019 and January 31, 2019; 47,583,572 and 36,286,573 shares issued and outstanding as of October 31, 2019 and January 31, 2019, respectively
48

 
36

Class B common stock, par value of $0.001 per share; 100,000,000 shares authorized as of October 31, 2019 and January 31, 2019; 9,194,461 and 18,134,608 shares issued as of October 31, 2019 and January 31, 2019, respectively; 9,095,090 and 18,035,237 shares outstanding as of October 31, 2019 and January 31, 2019, respectively
9

 
18

Additional paid-in capital
825,577

 
754,612

Treasury stock, 99,371 shares (repurchased at an average of $13.27 per share) as of October 31, 2019 and January 31, 2019
(1,319
)
 
(1,319
)
Accumulated other comprehensive income (loss)
189

 
(174
)
Accumulated deficit
(605,669
)
 
(488,607
)
Total stockholders’ equity
218,835

 
264,566

Total liabilities and stockholders’ equity
$
734,985

 
$
733,476

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

Table of Contents

MONGODB, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 
 
Subscription
$
103,827

 
$
66,604

 
$
281,977

 
$
167,759

Services
5,614

 
5,178

 
16,220

 
13,773

Total revenue
109,441

 
71,782

 
298,197

 
181,532

Cost of revenue:
 
 
 
 
 
 
 
Subscription
26,497

 
13,248

 
73,465

 
35,434

Services
5,694

 
4,510

 
17,100

 
12,567

Total cost of revenue
32,191

 
17,758

 
90,565

 
48,001

Gross profit
77,250

 
54,024

 
207,632

 
133,531

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
57,015

 
36,080

 
156,659

 
105,814

Research and development
39,387

 
23,179

 
107,395

 
63,254

General and administrative
19,562

 
14,986

 
50,541

 
38,467

Total operating expenses
115,964

 
74,245

 
314,595

 
207,535

Loss from operations
(38,714
)
 
(20,221
)
 
(106,963
)
 
(74,004
)
Other income (expense):
 
 
 
 
 
 
 
Interest income
1,986

 
2,459

 
6,520

 
4,936

Interest expense
(4,813
)
 
(4,358
)
 
(14,442
)
 
(5,652
)
Other expense, net
(283
)
 
(400
)
 
(994
)
 
(1,424
)
Loss before provision for income taxes
(41,824
)
 
(22,520
)
 
(115,879
)
 
(76,144
)
Provision (benefit) for income taxes
559

 
(33
)
 
(2,920
)
 
680

Net loss
$
(42,383
)
 
$
(22,487
)
 
$
(112,959
)
 
$
(76,824
)
Net loss per share, basic and diluted
$
(0.75
)
 
$
(0.43
)
 
$
(2.03
)
 
$
(1.49
)
Weighted-average shares used to compute net loss per share, basic and diluted
56,411,779

 
52,702,526

 
55,600,484

 
51,431,021

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

Table of Contents

MONGODB, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
 
2019
 
2018
 
2019
 
2018
Net loss
$
(42,383
)
 
$
(22,487
)
 
$
(112,959
)
 
$
(76,824
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Unrealized gain (loss) on available-for-sale securities
219

 
9

 
298

 
(43
)
Foreign currency translation adjustment
302

 
(49
)
 
65

 
(178
)
Other comprehensive income (loss)
521

 
(40
)
 
363

 
(221
)
Total comprehensive loss
$
(41,862
)
 
$
(22,527
)
 
$
(112,596
)
 
$
(77,045
)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Table of Contents

MONGODB, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)
 
Class A and
Class B
Common Stock
 
Additional Paid-In Capital
 
Treasury Stock
 
Accumulated Other Comprehensive Loss
 
Accumulated Deficit
 
Total Stockholders’ Equity
 
Shares
 
Amount
 
 
 
 
 
Balances as of January 31, 2019
54,321,810

 
$
54

 
$
754,612

 
$
(1,319
)
 
$
(174
)
 
$
(488,607
)
 
$
264,566

Cumulative effect of accounting change

 

 

 

 

 
(4,103
)
 
(4,103
)
Stock option exercises
831,901

 
1

 
6,437

 

 

 

 
6,438

Repurchase of early exercised options
(3,981
)
 

 

 

 

 

 

Vesting of early exercised stock options

 

 
127

 

 

 

 
127

Vesting of restricted stock units
126,346

 

 

 

 

 

 

Stock-based compensation

 

 
14,009

 

 

 

 
14,009

Unrealized gain on available-for-sale securities

 

 

 

 
58

 

 
58

Foreign currency translation adjustment

 

 

 

 
13

 

 
13

Net loss

 

 

 

 

 
(33,240
)
 
(33,240
)
Balances as of April 30, 2019
55,276,076

 
55

 
775,185

 
(1,319
)
 
(103
)
 
(525,950
)
 
247,868

Stock option exercises
665,543

 
1

 
4,913

 

 

 

 
4,914

Repurchase of early exercised options
(209
)
 

 

 

 

 

 

Vesting of early exercised stock options

 

 
70

 

 

 

 
70

Vesting of restricted stock units
206,587

 

 

 

 

 

 

Stock-based compensation

 

 
17,662

 

 

 

 
17,662

Issuance of common stock under the Employee Stock Purchase Plan
90,619

 

 
6,394

 

 

 

 
6,394

Unrealized gain on available-for-sale securities

 

 

 

 
21

 

 
21

Foreign currency translation adjustment

 

 

 

 
(250
)
 

 
(250
)
Net loss

 

 

 

 

 
(37,336
)
 
(37,336
)
Balances as of July 31, 2019
56,238,616

 
56

 
804,224

 
(1,319
)
 
(332
)
 
(563,286
)
 
239,343

Stock option exercises
232,389

 
1

 
1,933

 

 

 

 
1,934

Repurchase of early exercised options
(542
)
 

 

 

 

 

 

Vesting of early exercised stock options

 

 
53

 

 

 

 
53

Vesting of restricted stock units
208,199

 

 

 

 

 

 

Stock-based compensation

 

 
19,367

 

 

 

 
19,367

Unrealized gain on available-for-sale securities

 

 

 

 
219

 

 
219

Foreign currency translation adjustment

 

 

 

 
302

 

 
302

Net loss

 

 

 

 

 
(42,383
)
 
(42,383
)
Balances as of October 31, 2019
56,678,662

 
$
57

 
$
825,577

 
$
(1,319
)
 
$
189

 
$
(605,669
)
 
$
218,835

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



4

Table of Contents


MONGODB, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)
(in thousands, except share data)
(unaudited)
 
Class A and
Class B
Common Stock
 
Additional Paid-In Capital
 
Treasury Stock
 
Accumulated Other Comprehensive Loss
 
Accumulated Deficit
 
Total Stockholders’ Equity
 
Shares
 
Amount
 
 
 
 
 
Balances as of January 31, 2018
50,575,571

 
$
51

 
$
638,680

 
$
(1,319
)
 
$
(159
)
 
$
(389,596
)
 
$
247,657

Stock option exercises
40,723

 

 
183

 

 

 

 
183

Repurchase of early exercised options
(19,395
)
 

 

 

 

 

 

Vesting of early exercised stock options

 

 
533

 

 

 

 
533

Vesting of restricted stock units
125

 

 

 

 

 

 

Stock-based compensation

 

 
7,577

 

 

 

 
7,577

Unrealized loss on available-for-sale securities

 

 

 

 
(82
)
 

 
(82
)
Foreign currency translation adjustment

 

 

 

 
(33
)
 

 
(33
)
Net loss

 

 

 

 

 
(26,555
)
 
(26,555
)
Balances as of April 30, 2018
50,597,024

 
51

 
646,973

 
(1,319
)
 
(274
)
 
(416,151
)
 
229,280

Stock option exercises
1,150,864

 
1

 
7,894

 

 

 

 
7,895

Repurchase of early exercised options
(14,000
)
 

 

 

 

 

 

Vesting of early exercised stock options

 

 
302

 

 

 

 
302

Vesting of restricted stock units
75,478

 

 

 

 

 

 

Stock-based compensation

 

 
9,009

 

 

 

 
9,009

Issuance of common stock under the Employee Stock Purchase Plan
275,874

 

 
5,626

 

 

 

 
5,626

Equity component of convertible senior notes

 

 
81,683

 

 

 

 
81,683

Purchase of capped calls

 

 
(37,086
)
 

 

 

 
(37,086
)
Unrealized gain on available-for-sale securities

 

 

 

 
30

 

 
30

Foreign currency translation adjustment

 

 

 

 
(96
)
 

 
(96
)
Net loss

 

 

 

 

 
(27,782
)
 
(27,782
)
Balances as of July 31, 2018
52,085,240

 
52

 
714,401

 
(1,319
)
 
(340
)
 
(443,933
)
 
268,861

Stock option exercises
1,348,725

 
1

 
9,506

 

 

 

 
9,507

Repurchase of early exercised options
(2,168
)
 

 

 

 

 

 

Vesting of early exercised stock options

 

 
210

 

 

 

 
210

Vesting of restricted stock units
63,209

 

 

 

 

 

 

Stock-based compensation

 

 
10,264

 

 

 

 
10,264

Issuance of common stock under the Employee Stock Purchase Plan
1,243

 

 

 

 

 

 

Unrealized gain on available-for-sale securities

 

 

 

 
9

 

 
9

Foreign currency translation adjustment

 

 

 

 
(49
)
 

 
(49
)
Net loss

 

 

 

 

 
(22,487
)
 
(22,487
)
Balances as of October 31, 2018
53,496,249

 
$
53

 
$
734,381

 
$
(1,319
)
 
$
(380
)
 
$
(466,420
)
 
$
266,315

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

Table of Contents

MONGODB, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Nine Months Ended October 31,
 
2019
 
2018
Cash flows from operating activities
 
 
 
Net loss
$
(112,959
)
 
$
(76,824
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
9,824

 
3,334

Stock-based compensation
51,038

 
26,850

Amortization of debt discount and issuance costs
9,833

 
4,233

Amortization of finance right-of-use assets
2,982

 

Amortization of operating right-of-use assets
2,055

 

Non-cash interest on finance lease liabilities
1,823

 
659

Deferred income taxes
(4,541
)
 
(351
)
Accretion of discount on short-term investments
(3,619
)
 
(2,567
)
Change in operating assets and liabilities:
 
 
 
Accounts receivable
5,123

 
3,783

Prepaid expenses and other current assets
189

 
(1,451
)
Deferred commissions
(12,205
)
 
(9,585
)
Other long-term assets
(148
)
 
(33
)
Accounts payable
(152
)
 
(165
)
Deferred rent

 
1,258

Accrued liabilities
16,176

 
7,184

Operating lease liabilities
(1,979
)
 

Deferred revenue
14,898

 
11,166

Other liabilities, non-current
740

 

Net cash used in operating activities
(20,922
)
 
(32,509
)
Cash flows from investing activities
 
 
 
Purchases of property and equipment
(2,350
)
 
(3,698
)
Acquisition, net of cash acquired
(38,629
)
 

Proceeds from maturities of marketable securities
410,000

 
206,000

Purchases of marketable securities
(363,530
)
 
(369,736
)
Net cash provided by (used in) investing activities
5,491

 
(167,434
)
Cash flows from financing activities
 
 
 
Proceeds from exercise of stock options, including early exercised stock options
13,283

 
17,631

Proceeds from the issuance of common stock under the Employee Stock Purchase Plan
6,394

 
5,626

Repurchase of early exercised stock options
(35
)
 
(327
)
Principal repayments of finance leases
(798
)
 

Proceeds from borrowings on convertible senior notes, net of issuance costs

 
291,145

Payment for purchase of capped calls

 
(37,086
)
Proceeds from tenant improvement allowance on build-to-suit lease

 
633

Net cash provided by financing activities
18,844

 
277,622

Effect of exchange rate changes on cash, cash equivalents and restricted cash
62

 
(101
)
Net increase in cash, cash equivalents and restricted cash
3,475

 
77,578

Cash, cash equivalents and restricted cash, beginning of period
148,347

 
62,427

Cash, cash equivalents and restricted cash, end of period
$
151,822

 
$
140,005

Supplemental cash flow disclosure
 
 
 
Noncash investing and financing activities:
 
 
 
Construction in progress related to build-to-suit lease obligations
$

 
$
11,683

Reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets, end of period, to the amounts shown in the statements of cash flows above
 
 
 
Cash and cash equivalents
$
151,307

 
$
139,490

Restricted cash, non-current
515

 
515

Total cash, cash equivalents and restricted cash
$
151,822

 
$
140,005

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

Table of Contents
MONGODB, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.
Organization and Description of Business
MongoDB, Inc. (“MongoDB” or the “Company”) was originally incorporated in the state of Delaware in November 2007 under the name 10Gen, Inc. In August 2013, the Company changed its name to MongoDB, Inc. The Company is headquartered in New York City. MongoDB is the leading, modern, general purpose database platform. The Company’s robust platform enables developers to build and modernize applications rapidly and cost-effectively across a broad range of use cases. Organizations can deploy the Company’s platform at scale in the cloud, on-premise, or in a hybrid environment. In addition to selling its software, the Company provides post-contract support, training and consulting services for its offerings. The Company’s fiscal year ends January 31.
2.
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying interim condensed consolidated balance sheet as of October 31, 2019, the interim condensed consolidated statements of stockholders’ equity for the three and nine months ended October 31, 2019 and 2018, the interim condensed consolidated statements of operations and of comprehensive loss for the three and nine months ended October 31, 2019 and 2018 and the interim condensed consolidated statements of cash flows for the nine months ended October 31, 2019 and 2018 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position as of October 31, 2019, its statements of stockholders’ equity as of October 31, 2019 and 2018, its results of operations and of comprehensive loss for the three and nine months ended October 31, 2019 and 2018 and its statements of cash flows for the nine months ended October 31, 2019 and 2018. The financial data and the other financial information disclosed in the notes to these interim condensed consolidated financial statements related to the three and nine-month periods are also unaudited. The results of operations for the three and nine months ended October 31, 2019 are not necessarily indicative of the results to be expected for the fiscal year ending January 31, 2020 or for any other future year or interim period.
The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. The condensed balance sheet data as of January 31, 2019 was derived from the Company’s audited financial statements, but does not include all disclosures required by U.S. GAAP. Therefore, these interim unaudited condensed consolidated financial statements and accompanying footnotes should be read in conjunction with the Company’s annual consolidated financial statements and related footnotes included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2019 (the “2019 Form 10-K”).
Effective February 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). All amounts and disclosures in this Quarterly Report on Form 10-Q have been updated to comply with the new revenue standard.
Use of Estimates
The preparation of the interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include, but are not limited to, revenue recognition, allowances for doubtful accounts, stock-based compensation, legal contingencies, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, fair value of property and equipment and accounting for income taxes. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates.

7

Table of Contents
MONGODB, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


Significant Accounting Policies
There have been no changes to the Company’s significant accounting policies as described in the Company’s 2019 Form 10-K other than the adoption of the new accounting guidance related to leases and stock-based compensation, effective February 1, 2019, as discussed in “Recently Adopted Accounting Pronouncements” below. Further disclosures with respect to the Company’s leases are also included in Note 7, Leases.
Related Party Transactions
All contracts with related parties are executed in ordinary course of business. There were no material related party transactions in the three and nine months ended October 31, 2019 and 2018. As of October 31, 2019 and January 31, 2019, there were no material amounts payable to or amounts receivable from related parties.
Recently Adopted Accounting Pronouncements
Leases. In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02, codified as Accounting Standards Codification 842 (“ASC 842”), which requires lessees to record the assets and liabilities arising from all leases, with the exception of short-term leases, on the balance sheet. Under ASC 842, lessees will recognize a liability for lease payments and a right-of-use asset. This guidance retains the distinction between finance leases and operating leases and the classification criteria for finance leases remains similar. For finance leases, a lessee will recognize the interest on a lease liability separate from amortization of the right-of-use asset. In addition, repayments of principal will be presented within financing activities, and interest payments will be presented within operating activities in the statement of cash flows. For operating leases, a lessee will recognize a single lease cost on a straight-line basis and classify all cash payments within operating activities in the statement of cash flows.
The Company adopted the new lease accounting standard effective February 1, 2019 using the additional transition method described in ASU No. 2018-11, Leases – Targeted Improvements, which was issued in July 2018. Under the additional transition method, the Company recognized the cumulative effect of initially applying the guidance as an adjustment to the operating lease right-of-use assets and operating lease liabilities on its condensed consolidated balance sheet on February 1, 2019 without retrospective application to comparative periods. The adoption of ASC 842 resulted in recognition of right-of-use assets of $53.7 million, which included the impact of existing deferred rents of $2.9 million and lease liabilities of $70.2 million, along with a cumulative impact of $4.1 million on the opening accumulated deficit, as of February 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which allowed the Company to carry forward its historical assessments of whether contracts are or contain leases, lease classification and initial direct costs. See Note 7, Leases, for additional details.
The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are disclosed separately on the condensed consolidated balance sheets and the finance lease is included in property and equipment, net, other accrued liabilities and other liabilities, non-current. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the consolidated balance sheet. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company’s incremental borrowing rate is used based on the information available at commencement date in determining the present value of future payments. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred and are not included within the lease liability and right-of-use assets calculation. The Company accounts for lease components and non-lease components as a single lease component.
Stock-Based Compensation. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees, with certain exceptions. The new guidance was effective for the Company for fiscal year beginning February 1, 2019 and the adoption had no material impact on its condensed consolidated financial statements.
New Accounting Pronouncements Not Yet Adopted
Goodwill Impairment. In January 2017, the FASB issued ASU No. 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new standard simplifies the measurement of goodwill by eliminating

8

Table of Contents
MONGODB, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


step two of the two-step impairment test. Step two measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance requires an entity to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new guidance becomes effective for the Company for the fiscal year beginning February 1, 2020, though early adoption is permitted. The Company does not expect the adoption of the new accounting standard to have a material impact on its condensed consolidated financial statements.
Cloud Computing. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset and which costs to expense. ASU No. 2018-15 becomes effective for the Company for the fiscal year beginning February 1, 2020, with early adoption permitted, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements.
Credit Losses. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, which includes the Company's accounts receivables, certain financial instruments and contract assets. ASU No. 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. For available-for-sale debt securities, credit losses should be recorded through an allowance for credit losses. ASU No. 2016-13 becomes effective for the Company for the fiscal year beginning February 1, 2020 and requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements.
3.
Fair Value Measurements
The following tables present information about the Company’s financial assets that have been measured at fair value on a recurring basis as of October 31, 2019 and January 31, 2019, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):
 
Fair Value Measurement at October 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
Financial Assets:
 
 
 
 
 
 
 
Cash and cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
98,183

 
$

 
$

 
$
98,183

Short-term investments:
 
 
 
 
 
 
 
U.S. government treasury securities
274,560

 

 

 
274,560

Total financial assets
$
372,743

 
$

 
$

 
$
372,743

 
Fair Value Measurement at January 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
Financial Assets:
 
 
 
 
 
 
 
Cash and cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
88,015

 
$

 
$

 
$
88,015

Short-term investments:
 
 
 
 
 
 
 
U.S. government treasury securities
318,139

 

 

 
318,139

Total financial assets
$
406,154

 
$

 
$

 
$
406,154


The Company utilized the market approach and Level 1 valuation inputs to value its money market mutual funds and U.S. government treasury securities because published net asset values were readily available. As of October 31, 2019 and

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January 31, 2019, gross unrealized gains and unrealized losses for cash equivalents and short-term investments were not material, and the contractual maturity of all marketable securities was less than one year.
In addition to its cash, cash equivalents and short-term investments, the Company measures the fair value of its outstanding Notes (as defined below) on a quarterly basis for disclosure purposes. The Company considers the fair value of the Notes at October 31, 2019 to be a Level 2 measurement due to limited trading activity of the Notes. Refer to Note 6, Convertible Senior Notes, to the condensed consolidated financial statements for further details.
4.
Business Combinations
The Company acquired all of the issued and outstanding capital stock of Tightdb, Inc. (“Realm”) on May 7, 2019 (the “Acquisition Date”) for a purchase price of $39.0 million in cash, subject to working capital, cash, debt, transaction expenses and other closing adjustments. Realm, based in San Francisco, California, offers a mobile database, as well as a platform with real-time data synchronization between mobile applications and cloud databases.
The Company used the acquisition method to account for the purchase of Realm, which met the definition of a business. As of October 31, 2019, the Company had finalized the working capital, cash, debt, transaction expenses and other closing adjustments and identified and recorded the fair value of the assets and liabilities acquired, as well as the residual value to goodwill. The allocation of the purchase price was based on available information and assumptions at the time of the initial valuation and may be subject to change within the measurement period.
The total merger consideration, after closing adjustments, was $38.8 million, which included adjustments for cash and working capital. The following table represents a summary of the purchase price (in thousands):
 
Amounts
Purchase price pursuant to the merger agreement
$
39,000

Estimated cash amount
115

Downward closing working capital adjustment
(352
)
Total purchase price to be allocated
$
38,763


The following table summarizes the purchase price allocation fair values of the assets acquired and liabilities and the value of goodwill assumed at the Acquisition Date (in thousands):
 
Estimated Fair Value
Financial and tangible assets, net
$
43

Identifiable intangible asset - developed technology
27,300

Identifiable intangible asset - customer relationships
1,700

Deferred revenue
(350
)
Goodwill (excluding deferred tax liability impact)
10,070

Total purchase price
$
38,763


Financial and tangible assets, net primarily include the cash acquired and accounts receivable, net of existing Realm obligations as of the Acquisition Date.
Developed technology includes both the Realm mobile database and the Realm Object Server, which together automatically synchronize data between mobile applications and cloud databases, including MongoDB Atlas. The Company determined the economic useful life to be five years based on expected time period that the asset would contribute to the Company’s future cash flows without significant upgrades. The fair value of developed technology was estimated using the reproduction cost method (Level 3), which utilized assumptions for the cost to replace, such as the workforce, timing and resources required, as well as a theoretical profit margin and opportunity cost.
Customer relationships represent the fair value of projected subscription revenue that is expected to be generated from existing customers of Realm as of the Acquisition Date. The Company determined the economic useful life to be five years and the fair value of customer relationships was estimated using the replacement cost approach (Level 3), which utilized

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


assumptions for sales and marketing expenses to determine the estimated cost to acquire a Realm customer. Other assumptions include a theoretical profit margin and opportunity costs.
These two intangible assets acquired are being amortized over their estimated useful lives using the straight-line method of amortization, which approximates the distribution of the economic value of the identified intangible assets. See Note 5, Goodwill and Acquired Intangible Assets, Net, for further details
Deferred revenue was estimated at fair value under the cost build-up method (Level 3), which was determined based on estimated direct and indirect costs to support and fulfill the subscription obligation plus an assumed operating margin. Deferred revenue will be recognized based on the revenue criteria set forth in Note 2, Summary of Significant Accounting Policies, in the Company’s 2019 Form 10-K.
Goodwill related to the acquisition, which represents the difference between the purchase price and fair values of identifiable net assets, is primarily attributable to assembled workforce, as well as expected synergies of the combination. The goodwill is not tax deductible for U.S. income tax purposes. In addition to the goodwill recorded through the purchase price allocation disclosed in the table above, the Company recorded an additional $3.5 million to goodwill resulting from deferred tax liabilities associated with the acquired intangible assets. Refer to Note 12, Income Taxes, for further discussion of the tax impact of the acquisition.
The Company incurred acquisition-related costs for the Realm acquisition of $0.6 million during the nine months ended October 31, 2019. These acquisition-related costs were included in general and administrative expenses in the Company’s condensed consolidated statements of operations.
The Company included Realm’s estimated fair value of assets acquired and liabilities assumed in its condensed consolidated balance sheet beginning on the Acquisition Date. The results of operations for Realm subsequent to the Acquisition Date have been included in, but are not material to, the Company's condensed consolidated statements of operations for the three and nine months ended October 31, 2019. The pro forma results of operations for the Realm acquisition have not been presented because they were not material to the Company’s condensed consolidated statements of operations for the three and nine months ended October 31, 2019 and 2018.
5.
Goodwill and Acquired Intangible Assets, Net
The following table summarizes the changes in the carrying amount of goodwill during the periods presented (in thousands):
Balance, January 31, 2019
$
41,878

Increase in goodwill related to business combinations
13,606

Balance, October 31, 2019
$
55,484


Refer to Note 4, Business Combinations, for further details on the addition to goodwill.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


The gross carrying amount and accumulated amortization of the Company’s intangible assets are as follows (in thousands):
 
October 31, 2019
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Book Value
Developed technology
$
34,700

 
$
(10,058
)
 
$
24,642

Domain name
155

 
(145
)
 
10

Customer relationships
15,200

 
(2,870
)
 
12,330