MongoDB, Inc. (NASDAQ:MDB) Citi’s 2022 Global Technology Conference September 8, 2022 1:45 PM ET
Company Participants
Michael Gordon – COO and CFO
Serge Tanjga – SVP, Finance
Conference Call Participants
Tyler Radke – Citi
Tyler Radke
Good afternoon, everybody. Thanks for joining. My name is Tyler Radke. I co-head software sector here at Citi. Welcome to day two of our conference and we’re happy to have some locals and frequent attenders of our competence here. Did you walk or–?
Michael Gordon
No, I didn’t walk from the office. I came from the apartment.
Tyler Radke
Okay, there you go. Well, I appreciate you guys coming as always. We’re happy to have the MongoDB team. We have the CFO, COO, Michael Gordon; and Serge Tanjga, the Head of Finance, Investor Relations, and many other titles. Thank you both for joining and for the audience here.
Michael Gordon
Thanks for having me.
Question-and-Answer Session
Q – Tyler Radke
I thought we would start off with the last quarter. Certainly, eventful one last week. Second quarter numbers, I think were very strong across the board. The guidance was where I think most of the questions were on just the steeper deceleration in the second half, macro impacts seemed a bit worse. Atlas consumption slowing down. Could you just level set some of the biggest puts and takes on the quarter? Maybe given the big share price decline, is there anything you want to address that you think that was maybe misinterpreted?
Michael Gordon
Sure. Yes. No. And thanks, again, for having us. Great to be here. Great to see everyone at a bunch of great meetings and look forward to the afternoon ones. Yes, so we reported last week, very strong Q2, results, revenue little over $300 million, growing north of 50% [ph], so very strong.
As Tyler mentioned, a lot of questions and conversation around the guide, which we’re happy to walk through. I think maybe one of the things that’s most helpful is to take a little bit of a step back and talk about how we’ve approached, kind of, communication with rather than fairly high level of granularity to help people understand, what we’re thinking about, how we’re viewing the business, mostly to give you all as much information to make your own points of view around things.
So, if you think about the big picture, on the June call, the results in Q1, were also quite strong. But what we’d seen was sort of some initial potential macroeconomic-related weakness, particularly in the self-service channel. And so what we did in the June call is we looked out and we said, look, it seems unrealistic or we can at least come up with a credible reason why that slower growth would only be contained to the self-serve channel. So, we had to kind of look out, peer into our non-existing crystal ball, and try and come up with a framework for what we thought would happen.
And so we walked folks through that, we projected out what we thought would happen, both by channel sort of, from the — working from the bottom, from self-serve to the mid-market up to the enterprise, and also added a kind of a geographic flavor, because most of the weakness that we’ve seen was in Europe.
Relative to that, I think in terms of kind of Q2 and going forward, in general, we were more right than wrong with plenty of puts and takes. The quick summary is self-serve was actually a little stronger than we had expected and midmarket weaker, and the enterprise sector stronger in the U.S., weaker in Europe. So, the kind of two cross-cutting themes, given I’ve just painted a bunch of different boxes and a matrix for you is, Europe, generally weaker, I think people understand that, not a big surprise.
Mid-market weaker than we expected and so when you come to the guide, the future results strong nevertheless. EA, which is the other main product; Atlas, which is our databases, and service offering is about 64% of revenue. And so that’s — and that’s where a lot of this granularity and dynamics come from.
It happened also to be a very strongly enterprise advanced quarter, enterprise advanced beat our expectations as well, all that contributing to the strong Q2 performance and beat relative to our guide.
But as you mentioned, obviously a lot of talk around the back half. We’ll spend some more time going through that detail. But that’s sort of a quick summary of where we are.
The other thing that I’d spend time on and I think this is really important for folks to understand, and I think it’s maybe intuitive, but not what investors go to first blush. So, to your point about like, what — we need to make sure people really understand is, if you think about the market that we’re competing in, and which is so large, and our relative share, which is so small, we’re still quite early on.
So, the most important factors are our ability to succeed in the medium to long-term is our success with new workloads, right and new customers and winning new applications. All of that is going incredibly well. We have not seen any of the macroeconomic-related factors around elongating sales cycles. We haven’t seen increasing deal approvals or thresholds, we haven’t seen deal slippage. We haven’t seen any of those kinds of things.
We continue to be sort of at the top of the priority queue and in fact, in Q2, we had a record number of direct sales, customer additions. So, very, very strong on the front end and those are the big governors of the medium to long-term outcomes. And all those signals are going quite well.
In the shorter term, it’s much more about how does the existing portfolio of applications expand. And that’s what’s growing more slowly, because we are so closely related to the underlying value that our customers get in terms of the underlying usage. And so just sort of reinforcing that with folks, I think has been helpful. Why don’t I stop there? I’m sure there have been different questions, but I’ll pause there.
Tyler Radke
Okay, great. So, you talked about some of the moving pieces between your various channels self-serve, enterprise stronger in the U.S., offset by a bit of weakness in Europe, and then the mid-market weaker. I think that the comment that you got asked a lot about was this digital native customer cohort?
Can you just talk about, perhaps, why they started? Why you think they — you saw this quarter instead of last quarter when you started to see some other challenges? And obviously, there’s other companies that kind of called out digital native customers, even a quarter ago. So, maybe we could just help understand sort of what is digital — what do you mean by digital native and any way to quantify that segment?
Michael Gordon
Yes, well let’s run through a couple of things, and I’ll say some stuff and Serge, obviously, feel free to jump in. But if you think broadly what we’ve tried to do, as I mentioned at the beginning, is sort of lay out like a very clear framework, we thought it was important and valuable to kind of score ourselves relative to the framework that we laid out in June. So, maybe that’s driven by one of our company values, which is called intellectual honesty, or maybe just trying to help you all understand the business as well as possible to make your own points of view.
And so the one piece that I think struck [ph] us is deserving extra-explanation was the mid-market, right. Self-serve better than expected, marginally great; enterprise worse in Europe. We get Europe, we understand that, but why is the middle. And so we looked at it, the thing that seemed relevant and interesting is that this sort of disproportionate exposure in the mid-market to newer companies, digital natives, not necessarily all consumer companies, just to be clear, although obviously, inclusive of some consumer companies.
And because those kinds of companies tend to grow rapidly and because our business value is so directly linked to the underlying value our customers get, we were seeing slower growth with that cohort of customers. And so we thought that was additive to help explain what was happening.
In terms of the numbers or kind of, scale it or give it some quantitative characterization, in addition to the qualitative characterization, the mid-market channel, in general, is about in line with our self-serve channel or self-serve channel, we report publicly, it’s about 14% of the business. And so it’s a relatively small — mid-markets, relatively small piece of the business. And then this sort of digital native again, which is not just includes consumer, but includes some consumer folks as well, is minority, I mean, less than half, but a significant minority, but a minority of the mid-market general overall. So, that’s when we were sort of talking about fraction-by-fraction and other things.
And this big, huge driver. We weren’t highlighting it to give it outsized influence, it was more out of this desire to be as transparent and explain as much as possible. You know, about the underlying dynamics. I don’t there’s anything you want to add, or–
Tyler Radke
Great. Right. Okay. And — so now turning to kind of what you’re assuming for the back half of the year. I think the implied Q4 number is a pretty surprising number to a lot of investors. It actually implies sub-20% year-over-year growth compared to the mid-50%s we saw earlier this year.
Can you just frame for us how much? That is just incremental conservatism? I mean, given what you’ve kind of seen a couple quarters of things worsening? Or should we maybe interpret that as — hey, this is what we’re actually seeing. There’s more volatility in our consumption model. And maybe there were tougher comps in the back half of that of Q4 that’s actually driving that to be more of a realistic outcome?
Serge Tanjga
Yes. So, let me take that — and actually, let me start with where you — at the very end. So, we have very tough comps in the back half of the year and prior to any macro slowdown, even in original fiscal year 2023 guide that we provided in March, we wanted to call out the fact that the business would on a year-over-year basis decelerate as we went through the year, because of the tough compare.
So, just to remind, we had to two of our strongest EA year-over-year growth quarters in Q3 and Q4 of last year. And that is because we’ve seen a meaningful number of large deals come in for some of our what we call focus accounts, those are our best accounts that we invest more resources with and we’ve seen that incremental investment pay out in the back half of last year and then we got several large deals in both Q3 and Q4 and then when you add 606 dynamics and the term license component, that really kind of benefits immediately as opposed to some of our best outlets accounts that accrues through consumption over time So, that’s the EA story.
And we generally find that because EA tends to be a lumpy and investors no 606, we feel that people understand sort of the tough EA compare the one that might be more difficult to wrap your head around just how hard the Atlas compare was going to be in any environment.
So, if you go back to Q3 of last year, when w reported and we had very strong results. We called out that we saw exceptional consumption growth in that quarter. And it was very broad base, it was across the board, it was meaningfully outside of our normal ranges to the positive. And at the time, investors were very excited about that and thought that was the beginning of some new trend, we were simply saying, look, there’s always variability in consumption, this just seems to be a quarter in which things really went our way and that proved to be the case.
And that strong growth in Q3 does two things benefits your Q3 growth — your Q3 revenue, obviously, but also sets you up for a strong sequential revenue growth in q4. And that’s what we saw. So, now we get to comp that. And so the starting point, again been both EA compare and Atlas compare being tough was a denominator was significant as we sort of approach the back half of the year. And that was always going to be the challenge.
Now, layer on top of that the macro slowdown. So, Mike will walk you through the puts and takes, let me sort of kind of jump off of that into the forward looking. So, what we’ve said is that we’ve seen a slowdown in consumption in Q2, but a reasonably consistent performance within the quarter. And we also said that August, the first month of our current quarter was consistently Q2 trends. So, that new slower level of growth, just to repeat it is growth, it’s just slower level, is what we’re assuming is going to continue for the rest of the year on the Atlas side?
And then if you think about by the time you get to the fourth quarter, you will have now had — there’ll be a third quarter of slower than historic growth in Atlas. And not only does that mean that like in that quarter, you’re going to grow less, but you’re starting the quarter with a lower base than you would be otherwise.
So, your numerator is sort of compressed because of the macro, the denominator was always the challenge. And that sort of results in the outcome that you see, when it comes to the guide. You mentioned conservatism was sort of guidance, philosophy, none of that has changed.
We’re just trying to sort of give you the latest view in terms of the trends of the of the in the business, how we think about what’s implied going forward and that’s what results in the guide.
Now, there is a macro assumption in what I just said. We are assuming that current slower growth continues. You can make an argument that it’s too pessimistic, you can make an argument it’s too optimistic. Again, we try to be transparent in sort of arm the investors, so they can make their own conclusions. But that’s the assumption that we assume for the rest of the year and that’s what’s driving the year-over-year compare in Q4.
Michael Gordon
I think the one other thing just to sort of underscore, I know you’re all very good at math and everything, but just to sort of like walk through this is, even if we could snap our fingers and magically have kind of the historic growth rates of expansion of existing applications return as of November 1st, 2022, which would be the start of our Q4.
The Q4 number would still be lower than what we would have expected the beginning of the year because the starting ARR at the beginning of that period is impacted by the lower than normal expansion in the preceding quarters, right. And that sort of compounds.
And so even if you could restore the growth rate to a normalized growth rate, you will be applying that growth rate against a depressed number. And that would show up in the numerator, not to mention that the denominator surge mentioned is already affected by the tough compare and so that’s what sort of yields the results there.
And basically what we’re seeing in Q4 of this year, what we’re looking at and sort of forecasting is sort of the reverse of the positive feedback loop that we saw in the year ago period, just in the opposite direction.
Tyler Radke
Okay. Okay. So, maybe if we take a step back from the numbers for a second, and just kind of think about maybe why some of these things are happening? I guess first on the EA side, why do you think last year was so strong? Was there a bit of a, you have a bit of a renewal cycle? That’s a factor I know, you go back three years ago in essentially, Q3, Q4 of what would it be FY 2020. I think you had kind of the business start to accelerate Q3, Q4, so it was that Was there a renewal cycle factor at play? Or was this just deal timing, maybe acceleration out of COVID just help us understand what drove that strong EA growth last year.
Serge Tanjga
So, most of our deals with EA and Atlas are one year in duration. So, the multi-year and when it’s relevant, we call it out, right? Like when it’s like a meaningful number of multi-year deal hits, because then you recognize three years of license upfront and that creates lumpiness. But there’s always a little bit of that
But like, the main thing to remember about EA is just that we had a very strong back half new business because of some of the largest deals and the new focus accounts that we’ve gotten. And that’s impacting obviously, this year’s compare.
Well, you are talking about though is important, just as you think about more blocking and tackling for the rest of the year. Renewal base is very important indicator of new business, because EA is mostly an upsell business, expand business to existing customers, we don’t acquire many new EA customers, and usually the opportunity to acquire new workloads is add the renewal.
So, that’s why we talk about renewal based in the context of sequential EA guides, because it’s a good indicator of how EA will behave sequentially. But that’s if you think about a year-over-year basis, it’s more just the real sort of fundamental strength that we saw in the business backup last year.
Michael Gordon
And I know we say this often, but if you’re newer to the story, while we provide a lot of detail around the product mix, and it’s relevant, particularly in terms of the different revenue recognition between the two, we really manage the business on a channel basis. And so ultimately, any customer, right? So think about Citibank, your IT team has a point of view about which applications they want to manage and run on prem, which one they want to run on the cloud. And some MongoDB salesperson or anyone else telling them no do this do that isn’t really what governs it. So, our goal is just to make money to be easy to consume, kind of regardless of where the customer is along their cloud journey.
Tyler Radke
Got it. And then going to the usage headwind, specifically, my understanding, it’s mostly expansions you’re calling out, obviously, net new customers were really strong. But if we kind of unpack that a little bit, is it primarily existing applications are growing slower, which is driving fewer consumption? Or is it customers are building existing customers or building fewer new applications just help us understand kind of the primary driver of the usage headwinds that you’re seeing.
Michael Gordon
You want me to go?
Serge Tanjga
So, I’ll take the first cry. the existing application. So, if you sort of think about in any given quarter, I find the best way to think about our business in sort of two pieces. One is the portfolio of applications that we have on our Atlas platform when you enter the core. And that’s across industries, across geographies, across customer sizes, and those existing applications will grow.
And then on top of that we’ll add new application, those will either be from net new logos to the first ever application in a customer, or the 10, 15, whatever application in an existing customers.
New application start very small, because they’re mostly new. So, there’s very little consumption at the beginning. They grow obviously, very nicely off of their low base. But in any given quarter and frankly, over several quarters, they tend to not move the needle. The needle is really the existing portfolio and what happens with that portfolio throughout the quarter.
And so what do we know or what have we learned about sort of the growth of that existing portfolio and what have we specifically learned over the last quarter? The first and the most important thing I would say is we are very well aligned with our customer because what we see is that the growth of the underlying usage of those applications correlates very nicely with how much they spend with us.
So, as applications grow, customers spend more with us, because there’s more interactions with the database, if you will, and therefore need for a larger cluster, larger instance, larger deployment. And we benefit from that over time and that’s great, because we’re alive with our customer, because they want to see their application grow.
They’ve invested money and resources and people to build that application and it’s — if it’s successful and growing, yes, they’re paying us more. But overall, we’re aligned and they’re happy. What we’ve seen is across the board, the underlying usage of that portfolio of applications slowing down. We call that some puts, and thanks mostly for transparency, but frankly, the message is mostly that we’re seeing a broad based macro slowdown that began at the end of Q1 and really expanded everywhere in Q2 and we’re expecting that to continue. But it’s really driven by what’s happening in the market for our customers.
The other thing that often comes up and has come up in a number of our meetings here today is this idea of optimization. Are the customers coming to you and say, I’m spending $100, I’m going to figure out a way to spend $75.
And the answer is no, that doesn’t really happen because customers tend to be optimized, they tend to grow in line with what they need. If the application were to decline, if the usage of the application was really going to fall, then yes, their spend will also decline but as long as the applications continue growing, which they do, they just are growing more slowly than before. So, will their spend and it’s all very tightly aligned, there’s no sort of disconnect or ability to sort of somehow dramatically change that relationship.
Tyler Radke
Got it. Okay. So, in other words, customers are not slowing down the pace they’re building new applications; it just as existing footprints aren’t expanded?
Michael Gordon
It’s really more about existing applications. And if you think about, if there was a normalized curve that they would be on, where their growth rate looks like, and they would need to expand and upgrade to the next instance size, because they’re growing more slowly. It just takes longer to reach that, right.
Tyler Radke
Okay. Okay. So, if we think about MongoDB’s consumption relative to others out there, call it, Snowflake, I think we go back 90 days ago, the view was application-oriented database consumption is more durable, it’s more resilient, because while you may be cutting a discretionary marketing campaign, or something that’s more ad hoc, query-driven for an analytical application, like — you’re not taking down this mission-critical thing.
Obviously, Snowflake had better than then feared numbers. Well, you don’t necessarily need to comment on their numbers, but I guess it’s — the question is like, why are you seeing this now? Why is there — I guess is there a bit more of a delayed reaction in your model, given that you are application-oriented, or perhaps the way that you collect revenue monthly?
Michael Gordon
So, I’ll say a couple of things and then Serge, feel free to jump in. But the consumptions obviously is a more frequent topic and it’s a word that comes up and I understand all of you are experts at pattern recognition. And so you hear the same word and so you lump things together and everything else.
The reality is, consumption is simply just a revenue recognition methodology. It’s not actually like a business model, right? Your business model is like, what do I charge people for? And why do I — why do they pay me? The benefit and the promise of the cloud is I only pay for what I use, right. And so that’s a great thing.
The rev rec that’s associated with that is this sort of consumption methodology. So, the benefit and the beautiful position that we’re in is, as Serge has outlined earlier, is we have this very tightly linked relationship between the value that a customer is paying or getting out of their application versus what we are charging them, right.
And I would just go back to, sort of, an amplification of what Serge was sort of getting at earlier is, if I’ve gone ahead and I built an application, right? Whether I’m Citibank, some startup, or whatever it might be, one of my most precious resources, is my software engineers, is my developers. And so it is a problem if my usage isn’t going up, it means I’ve wasted these developer cycles, right, which is, again, one of my most precious and scarce resources. And so with my business person’s hat on, like, that’s a problem.
Obviously, people would always prefer to pay less than more, but fundamentally, the value relationship and the alignment of that value in our model is so strong, that that’s one of the things that that we benefit from, where it shows up in terms of sort of some of the macroeconomic piece is because the underlying, you know, usage is so correlated to the end usage or the end user activity of the application, the underlying consumption and usage of MongoDB is really just a second order effect of that. And because we’re broad base, because we’re general purpose, we tend to more broadly mirror some of the macroeconomic factors that are put.
Serge Tanjga
And the only thing I would add is, you mentioned that delayed effect with us, I would argue that we see it almost as soon as it happens, because of this tight coupling, right, as soon as the activity slows down, you know, across 37,000 customer base. So it is the growth in our spend, and we sort of see seen a little bit of it in Q2, hold for it to expand and pretty much that’s played out.
Michael Gordon
Well, I mean, another way to process that, it’s just simply that the — in any kind of sort of, pay for what you use model, you’re seeing a real-time expression articulation of demand, ours happens to be directly correlated to the underlying user activity. But if you were a traditional SaaS company, you maybe sell a bunch of seats, or if you’re a traditional licensed company, maybe sold for licenses, and you wouldn’t actually have that real-time read on demand.
You’d only find out at renewal, they had all these seats that were unused, or all these licenses that they don’t need. And so in some ways, the cloud model actually gives you more real time information. Because it’s so paired with this pay for what you use mindset and relationship.
Tyler Radke
Yes, yeah. Okay. Great. So, during to some bright spots in the quarter, the direct customer ads were really strong, I think up over 50% year-over-year, kind of a record, record high. Maybe just frame for us, the driver that what are you doing differently that’s helping drive this growth or maybe just more sales capacity, which you also have?
Michael Gordon
Yes, so I think it’s a bunch of different things. Specifically, in the sales capacity point, we can tackle that first. We’re still quite thin relative to our footprint coverage, and relative to the opportunity, so the market overall is $85 billion in 2022, growing to $138 billion in 2026. So, massive, massive market opportunity.
Our quota-carrying headcount, measured in the hundreds of people, right, versus our competitors that are in the thousands, or tens of thousands. Even so, yes, we’re continuing to invest, to build out that coverage.
The other thing that we’ve done is we’ve tried to find any ways that we can to effectively synthetically expand the reach or impact of that salesforce. So, a couple of years ago, we talked about reducing friction in the sales process. We’ve continued to try and do that. We have such confidence in the platform, we have enough cohort data, it’s incredibly sticky. And so we can see the key thing is just to get the application on MongoDB. You shouldn’t, if you’re a salesperson, you shouldn’t be spending all this time upfront, negotiating over what’s the biggest possible commitment that I can get the customer to give. Instead, what I should really do is just get them using the platform and the consumption and the usage, kind of, will follow thereafter.
In terms of the overall value prop, to the point of the discussion, it continues to resonate, I think that the value that we provide, the ability to allow people to innovate more quickly, is valuable in any market and maybe particularly valuable in more difficult market times.
And so I think we’ve been very successful. We’ve seen that value proposition resonate. You hear it holistically, when you hear about, you know, non-technology companies talking about having more engineers than leading technology companies. You hear it in phrases like, software eating the world and things like that. And those are all shorthand for the fact that customer — companies today are competing on the basis of their technology, which really means their software, and almost definitionally, it has to be their internally developed software, because if it just packaged software, I can buy off the shelf. That’s not really a competitive advantage.
And so what we enable, what we allow is for people to innovate more quickly, drive whether it’s new lines of revenue, whatever it might be. And so that continues to be in demand that continues to be top of the stack for IT decision makers. Certainly, the mindshare we have the developers is extraordinary. And so to the point that we said at the very beginning, we haven’t seen any of these elongating sales cycles or any other challenge, but the value proposition continues to resonate.
Tyler Radke
Okay, great. So, maybe we can talk a little bit about the go-to-market components, obviously, you kind of have your enterprise overlay and your mid-market and self-serve. So, I guess overall, just high level, you recently hired Peder Ulander from AWS as your Chief Marketing Officer. What are kind of your goals — or his goals on some of the go-to-market and just awareness strategies for the company?
Michael Gordon
Yes, one of the things we talked about internally, which may not be perfectly visible or maybe even a little counterintuitive externally, is the need to make sure that we have people, developers, in particular, up-to-date on what MongoDB can do, right. And Peder sort of has this phrase that I think has been really helpful internally and kind of captured the sentiment things is there’s a difference between being well known and known well. Those two things are different.
MongoDB is quite well known among developers, but shockingly not that known well. And part of the reason is because we started early on open source technology, developers are opinionated, you can download it, use it for free in a very uncurated experience. And a number of years ago, we’ve made so many investments in the product over time that you could have tried to use the product — in certain scenarios, use cases and it wouldn’t have performed as well as it does today.
We deliver much better now and over the last few years than we did on the kind of a general purpose nature of what we did, versus kind of many, many years ago. And so trying to help educate or reeducate the developer population and get them contemporary on all the skills and capabilities that we have in MongoDB. I think it’s probably one of the biggest challenges is sort of what I brought the lump under awareness and perception.
I as a non-marketer, I’ve sort of likened it to a number of years ago, Oldsmobile ran this campaign about like, not your father’s Oldsmobile and so like there’s some version of like, grabbing the developer by the hoodie and like helping them understand the ways in which MongoDB has changed maybe from when they use it because when you — if you talk to folks or if you sample folks who have outdated or negative perceptions, or they say, MongoDB can’t do this, or that, you ask them like, well, what was the last version you used, they give some incredibly stale version, that that was probably true at that point in time, but we’ve invested so much in the product and so dramatically increased the capability that we haven’t done as good a job of kind of getting the word out and making sure people are clear on that as we have on the raw underlying technological accomplishments.
Serge Tanjga
And just sort of in terms of how we intend to achieve that or what you will see more out of us is, if Peder were here, he would say that the customer speak for you. That’s so much more credible, and carries then lastly, finding our own where. So, we have such amazing breadth of use cases and depth in terms of how customers are using us. And just putting those stories out there more because that’s what companies respond to, when you hear that — when your competitor is doing something with MongoDB, you’re far more likely to make the call. And we have such great stories [indiscernible], you’ll just hear us and see us do more of that.
Tyler Radke
Got it. One of the metrics that you give out quarterly in your filings is the community downloads and obviously, Mongo has been downloaded — I forget the number now, I’m sure it’s hundreds of millions or tens of millions of times–
Michael Gordon
It’s more than 300 million.
Tyler Radke
Yes, yes. So, now that growth, obviously, on a large base has been slowing down a little bit. So ,how do you — I guess, given that we are in a much more cloud dominant world, and Atlas is over 50% of your business? Like how, how relevant is that metric? Do you view kind of the open source community is still a very good, top of funnel motion, just walk us through where you’re finding these incremental new developers who you’re targeting?
Serge Tanjga
Yes, so we’ve reported in the last quarter that we had over 300 million of life-to-date downloads and the 100 million in the last 12 months alone. And so that is more than in the first 11 or 12 years as a company.
So, despite us being around for a long time, and despite to Michael’s point that developers have along the way, had an opportunity to play with the product, that’s the beauty of an open source offering, we continue to see growth in adoption, we continue to see growth in awareness and it accrues to our benefit.
To your point, it’s no longer the only way. And it’s not only — or right now, you can engage with us through a free download, where you can become a free tier Atlas customer, which we have 1.5 million.
And so what we want to do is make it easier for you as a developer, to play with our technology, because if you do, you will like it. And yes, that of course means that if you play with our technology, seven, 10 years ago, you’re outdated — you might have an outdated version of it and developers like all of us are opinionated.
But nonetheless, we always get the next shot at the apple. And we always just want to make it easier and frictionless for the developer to find our product, whether that’s whether that’s a free download, which by the way, doesn’t just come from sources where we count them, there’s many other places where you can download.
And then on top of that, obviously, the free tier Atlas, but we believe that ultimately — the generational game that we’re playing here is making sure that developers continue innovating with technology, and we will never change sort of our approach to making it easier for them to wear.
Tyler Radke
Okay, great. I’m turning to a couple other go-to-market areas. The one I wanted to hit on is just the partnerships with the hyperscalers AWS Azure, Google Cloud. I guess first one — I think you called out specifically stronger Azure Cloud sales in the quarter, which, obviously, AWS is by far your biggest partner, if you go to reinvent, you guys post a number of events there. And a lot — one of the biggest booths. So, where are we at in terms of that Azure relationship? And then yeah, if you want to comment on the overall, hyper scalar–
Michael Gordon
Let me start. So, as a general rule, we’ve seen a, sort of in the pendulum between competition and cooperation, we’ve seen the pendulum swing in the direction of cooperation, I would say, over the last few years with the cloud providers. And so if they, if I think back to like two years ago, it was sort of very distinct, right? It was Google, who was trying to who’s coming from behind and whose goal was to capture the likes or compete in the underlying infrastructure market, and they were choosing the partner best-in-class class strategy. And we worked well with them. And we, we’ve always worked over them.
And then you have Azure and AWS, who were sort of, more in the mixed back category, right? They like to partner with us, but they also have a number of proprietary offerings, and they each themselves, tried to sell to the customers and would prefer to sell to the customers.
And then on top of that you have, the e-channel [ph] like a clone offering, like a MongoDB imitation that was maybe making things incrementally more difficult for us to partner with them. So, if you fast forward now, what appears to us that they this happened is that they’ve seen the underlying popularity that we continue growing very rapidly, but also most importantly, because they’re economically motivated actors.
The multiplier effect that when they get a MongoDB customer for all the ancillary services, not just ready to compute, but everywhere else they buy from them to be highly accretive.
And so that more than anything has resulted in sort of a clear shift with both AWS and Azure and maybe AWS has been longer on that journey than Azure, but they’re both on their journey of partnering better in the field. And we’re not just talking like exact level contract, we’re talking execution on the field, we’re talking alignment of incentives.
Also a very small base, but we’re starting to see them finding deals for us, which is very, very — what used to be a very, very rare and it’s still rare, but it’s growing. And so that speaks to the fact that it’s an enormous market, the one that they are ultimately all concerned about is even larger, the underlying infrastructure market, and to the extent that they can partner closely with us, getting more of our customers on their platform that accrues to their fundamental goal, as opposed to the parochial goal of any single one of their points solution.
Michael Gordon
I think they’re all quite strong competitors, but we’ve mostly been able to work effectively with all three on the partnering side. And I think that they — I think they understand, certainly what I can tell you I hear from customers is customers are very concerned about vendor lock in, particularly at the database layer, recognizing that, you know, the, the database is at the heart of the application, right, and that level of stickiness. And so the idea for most customers about building an application on a proprietary cloud database is very concerning, because it basically limits my future portability, whereas Atlas is the most widely available databases and service offering.
I’ve lost track of how many, it’s over 80 regions, I think, across all three cloud players, and so I’ve got — dramatically, I have no cloud vendor lock in issues. I address that I resolved that, I can only assume that the big cloud players know that that’s a customer hot button. We know from our side from when the deals that we’re in when we’re against them, are win rates are incredibly high, I assume they can see that as well.
And ultimately, they recognize, they’re in battle with each other and so if we can be an effective tool and an effective differentiator, that’s worked out quite well for both of us. I think we’re — we stay vigilant that there are competitors as well. And so I think you can never kind of rest on your laurels. But I think we’ve been very pleased with the progress across the three.
Tyler Radke
Great. I know we’re running out of time, but I figured it could just leave this one open ended. But if there’s anything you wanted to cover or highlight or just kind of give some closing thoughts on how we should be thinking about your top priorities for the rest of the year.
Serge Tanjga
Yes, so I think the most useful sort of framework to kind of procure to in perspective is that what you can control versus what you cannot control what we can control in terms of direct new additions in terms of winning new workloads based on new business and EA, engagement and morale of our salesforce, honestly, we feel very good about all of it.
And that gives us not just incremental confidence for the long-term, but that gives us incremental confidence to sort of continue investing in the business, sort of, in the near to medium term.
The flipside is we cannot control and we spend a lot of time here today, and in our meetings today as well talking about consumption. And it’s the meaning it’s I was 64% of revenue, it’s all consumption, consumption of existing workloads is the majority of that growth in the near-term, vast majority of that growth in the near-term, like we just discussed, and that we have less control over that. And that’s a macro phenomenon, one that we’ve now seen for a quarter expect to continue for a while, but doesn’t ultimately change the long-term opportunity. And we’re sort of as long as we keep focusing on what we can control, we feel very good about the business.
Michael Gordon
Yeah, I would just — I know we’re out of time, but I would just iterate to tie it back to what I said at the beginning things that are in our control, are not only all going well, but those are the things that dictate the outcomes in the medium to long-term things that we can’t control or more won’t affect the short-term. So, we’ll just leave at that.
Q – Tyler Radke
Great way to end it. Thank you so much.
Michael Gordon
Thanks for having us.
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