MongoDB, Inc.

Thank you for standing by and welcome to MongoDB's second quarter fiscal year 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session where you'll limit yourself to one question and one follow-up. To ask a question or raise your hand during the session, you will need to press star 1-1 on your telephone. I would now like to hand the call over to Brian Deneau of ICR. Please go ahead.

Thank you, Lateef. Good afternoon, and thank you for joining us today to review MongoDB's second quarter fiscal 2023 financial results, which we announced in our press release issued after the close of market today. Joining the call today are Dave Itacheria, President and CEO of MongoDB, and Michael Gordon, MongoDB's COO and CFO. During this call, we will make four booking statements, including statements related to our market and future growth opportunities, the benefits of our product platform, our competitive landscape, customer behaviors, our financial guidance, and our planned investments. These statements are subject to a variety of risks and uncertainties, including those related to the ongoing COVID-19 pandemic and its impact on our business, results of operations, clients, and the macroeconomic environment. They cause actual results to differ materially from our expectations. For discussion of the material risks and uncertainties that could affect our actual results, please refer to the risk described in quarterly report on Form 10-Q for the quarter ended April 30th, 2022, five of the SEC on June 3rd, 2022. Any forward-looking statements made in this call reflect our views only as of today, and we undertake no obligation to update them except as required by law. Additionally, we will discuss non-GAAP financial measures on this conference call. Please refer to the tables in our earnings release on the investor relations portion of our website for reconciliation of these measures to the most directly comparable GAAP financial measures. With that, I'd like to turn the call over to Dave.

Thanks, Brian, and thank you to everyone for joining us today. I will start by reviewing our second quarter results before giving you a broader company update. Let's start with our second quarter financial results. We generated revenue of $304 million, a 53% year-over-year increase and above the high end of our guidance. Atlas revenue grew 73% year-over-year, representing 64% of revenue, and we had another strong quarter of customer growth, ending the quarter with over 37,000 customers. Overall, we are pleased with our performance and execution in Q2 despite the challenging macro environment. Let me give you a bit more context on what we saw in Q2. The new business environment remains robust as evidenced by a record increase in direct sales customer account. We have seen no change in deal activity and sales cycles. We believe our strong new sales performance is a demonstration of the critical business value our developer data platform delivers and our superior go-to-market execution. As we have said in the past, nearly every organization uses software to drive their value proposition. Consequently, these organizations seek modern solutions that make their developers more productive. Furthermore, retention rates remain strong, further evidence that MongoDB is a non-discretionary spend for our customers. As expected, we did see the macro environment weigh on the growth of Atlas consumption. As we discussed last quarter, it's important to understand that the slower than historical consumption growth is a result of slower usage growth of our customers' underlying applications due to macro conditions. Our customers' spend on our platform is well aligned with the performance of their business. In the current environment, some businesses, and consequently their applications, are growing more slowly. Michael will address the second quarter consumption trends in more detail. Let me tell you how we are navigating the current environment. First, we are doubling down on velocity. As we discussed with you in the past, we are in the business of bringing new workloads onto our platform. and then focus on making those workloads successful. In the current environment, we are even more focused on removing friction in acquiring workloads from new and existing customers. The strength of our new business performance in the first half of the year demonstrates our success in this area. Second, we will continue to invest for the long term and will make investments in our growth initiatives and platform capabilities where we are generating strong returns. We have never taken a growth at all costs approach and we will remain vigilant and prioritize our highest return areas. We are confident that the recent consumption trends will improve as the macro environment normalizes over time. The value proposition of the MongoDB Developer Data Platform has never been stronger. Our conviction comes not only from our results, but also from the success our customers are having with our platform. Customers are very focused on removing complexity from the technology stack. They understand that complexity is a tax that increases expenses, creates risks, and slows down innovation. They're increasingly turning to our developer data platform to address this challenge. A multinational trillion-dollar financial services company chose MongoDB to power the next-generation trading platform to cover all of their various trading businesses with one solution. Since launching the new service, the customer has been able to decommission eight legacy trading systems and realize cost savings of almost $50 million in annualized expenses. A leading Canadian security provider migrated its IoT and AI security platform away from an open source relational database to Atlas. With the ability to use MongoDB's native sharding to distribute their database over lower cost instances, the company has been able to significantly reduce their database spend by 60%, which is particularly compelling given the open source nature of their prior solution. Another one of our customer priorities is to invest in their core competencies and outsource or eliminate everything else. They understand that clinging to the old ways of delivering innovation is not only time consuming, but also incredibly expensive. A global travel technology leader is in the process of getting out of the business of managing their own data centers. They turn to MongoDB in order to modernize a key legacy application and move it to the cloud. The monolithic application was originally built on Oracle and Elasticsearch, but the customer decided to migrate the application to Atlas because they couldn't meet their timeline and performance requirements with their existing solution. A Web 3.0 pioneer started off by building and managing their own computing infrastructure. However, the development team quickly reached a point where they were overwhelmed by day-to-day tasks of managing infrastructure. By migrating to MongoDB Atlas, the company saved three years in development time and reduced the need to hire 40 developers. Finally, in this environment, as any other, customers understand that high performance and scalability are critical to their success. A Fortune 500 consumer technology leader turned to MongoDB to replace its existing compliance platform as it needed to double the performance while lowering cost and enabling real-time visibility of operations. MongoDB was able to address the performance requirements while lowering cost by 70%. One of the world's largest healthcare companies, historically an Oracle shop, was unable to meet their desired performance expectations and had to spend tens of thousands of hours just to maintain their existing environment. Over the last few years, they have implemented MongoDB for the most demanding new projects, such as the COVID vaccine application, as well as their digital health app. Perhaps the best way to illustrate how the perception of MongoDB has changed is to review our relationship with one of the world's premier commercial investment banks. Four years ago, a senior executive at the bank told me that he didn't think MongoDB was ready to be declared a standard for their mission-critical applications. At the time, they had a myriad of relational and non-relational technologies deployed across their organization. Since then, not only did the bank become more focused on and confident in moving workloads to the cloud, but the bank's leadership team also observed how overwhelmingly popular MongoDB had become with their development teams across the organization. As a result, they decided to make MongoDB one of their enterprise standard offerings as part of their journey to the cloud. In the second quarter, they signed a multi-million dollar agreement as a sign of their desire to use MongoDB as a preferred platform for mission-critical workloads. Our customers are not only excited about our current product offering, but also by our roadmap. We received enthusiastic feedback at this year's MongoDB World about our developer data platform vision, as well as our product announcements. To highlight a few, We announced Queryable Encryption, an industry-first feature that allows customers to query data while it remains encrypted. Given the heightened focus on security and privacy, this announcement received a lot of attention from both customers and the academic community, and currently over 60 companies, the majority of whom are Fortune 500 customers, are in development with this feature. We also announced Relational Migrator, a product that simplifies the process of migrating workloads off relational databases and onto MongoDB. Our early access program is oversubscribed, and we're getting great customer feedback. Given most companies' increased focus on cost management, we believe this technology will accelerate customer confidence in replatforming applications off relational databases. We also received positive feedback related to our analytics announcements. Most notably, Atlas Data Federation and Atlas Data Lake Storage are seeing healthy early adoption and use cases related to the ingestion, data transformation, and querying of large volumes of data to provide greater insights from data generated by applications on Atlas. Now I'd like to spend a few minutes reviewing some additional customer wins and interesting use cases from the second quarter. Leading German retailer Conrad Electric built an online B2B marketplace on MongoDB. Turning to MongoDB for its simplicity as the marketplace grew, it moved from MongoDB Community Edition to Atlas for further scalability and to reduce management complexity. Conrad Electronics Database now hosts over 8 million active SKUs, which is estimated to reach 100 million SKUs by 2024. Locus Robotics, a leading warehouse robotics company, leverages Atlas to store data uploaded from their physical warehouses, including metadata, logs, configurations, and reports. Their Locus Cloud warehouse orchestration platform utilizes Atlas to store and access data for operation reports, ensuring seamless and reliable functionality for their customers. Locust Robotics selected MongoDB Atlas because they needed a fully managed data platform to allow them to build faster and handle vast amounts of data. In their efforts to improve their automation processes, e-commerce platform Renta Runway selected and implemented MongoDB Atlas as a database platform to streamline how garments were sorted and cleaned in their fulfillment centers. With Atlas, Render Runway is able to seamlessly extract data and real-time analytics from the robotic sorting arm and x-ray machines, resulting in a 67% decrease in processing time. In summary, I'm pleased with our execution in the second quarter. Despite macroeconomic uncertainty, we are focusing on what we can directly control, namely bringing new customers and new workloads onto our platform. The breadth of adoption across many use cases gives us continued confidence to judiciously invest across our business to best position ourselves to fully capitalize on a long-term market opportunity. With that, here's Michael.