Revenue Unicorn Club: MongoDB

Research & Frameworks
Revenue Unicorn Playbook

MongoDB Joins Revenue Unicorn Club

Congratulations to MongoDB as it crosses $1 Billion in annual revenue and joins the software Revenue Unicorns!

Let's see what we can learn from MongoDB's journey...

Revenue Growth

MongoDB demonstrated resilient growth at scale on the path to $1 Billion in revenue. Revenue growth consistently remained above 40% and accelerated in recent years.

Gross Margin

MongoDB maintained gross margins in the low to mid 70s throughout its journey. We see this as a sign of consistency in their operating model. Revenue Unicorns that similarly displayed steady gross margins in their own journeys include Atlassian, Datadog, Palo Alto Networks, Twilio, and Unity.

Sales & Marketing

MongoDB started the journey from $100 Million to $1 Billion with a higher investment in sales and marketing costs as compared to the median Revenue Unicorns (62% for MongoDB versus 49% for the median Revenue Unicorn). The company then demonstrated operating leverage by bringing the S&M expense in line with the median Revenue Unicorn through much of its journey. Investment again ramped as the company approached the $1 Billion in revenue threshold.

Research & Development

MongoDB invested more in research and development than the median Revenue Unicorn as a percentage of revenue throughout its journey. The highest levels of R&D investment occurring between $100 Million and $500 Million in revenue. Other Revenue Unicorns with heavy R&D investment as a percentage of revenue include Atlassian, Crowdstrike, Datadog, Dropbox, Nutanix, Snowflake, Unity, Wix, and Workday.

General & Administrative

MongoDB's general and administrative expense starter higher than the median Revenue Unicorn and subsequently scaled in-line with the median as the business neared $1 Billion in revenue.

Stock Based Compensation

MongoDB had a higher SBC expense as a percentage of revenue compared to the Revenue Unicorn median. The company’s SBC expense as a percentage of revenue has only gone through a 2x increase instead of the median 3x increase from $100 Million to $250 Million when compared to the $1 Billion+ revenue range.

Free Cash Flow

MongoDB is nearly free cash flow breakeven. MongoDB's higher total operating expenses ex-SBC contributed to lower free cash flow than the Revenue Unicorn median. The company has displayed a directional path to positive free cash flow at scale.

Time to Reach $1 Billion in Revenue

MongoDB reached $1 Billion in revenue after 14.5 years. This is longer than the median time of 11.25 years it took other Revenue Unicorns to reach the $1 Billion mark. Other Revenue Unicorns that took a similar amount of time to achieve the $1 Billion revenue threshold include Wix (14.25 years), Splunk (13.5 years), and ZenDesk (13 years).

Other Revenue Unicorns founded around the same time as MongoDB (2007 founding) include Wix (2006), Veeva (2007), and Twilio (2008). This set of companies took a median of 11.75 years to achieve $1 Billion in revenue (Wix at 14.25 years, Veeva at 11.75 years, and Twilio at 10.75 years).

The Journey to $100 Billion of Revenue

For those of you that love data as much as we do, below is the full data set used for this analysis.

Again, congratulations to the MongoDB team! Stay tuned for the next Revenue Unicorn update.

Note: The complete list of Revenue Unicorns used in the comparison can be found in the presentation here.

About MongoDB

As per the company's materials, MongoDB is a leading modern, general purpose database platform. The company was founded in 2007 by Eliot Horowitz, Dwight Merriman, and Kevin Ryan. MongoDB’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 platform at scale in the cloud, on-premise, or in a hybrid environment. Through MongoDB’s unique document-based architecture, the company is able to address the needs of organizations for performance, scalability, flexibility and reliability while maintaining the strengths of legacy databases. MongoDB’s business model combines the developer mindshare and adoption benefits of open source with the economic benefits of a proprietary software subscription business model.

The company reported $304 Million in second quarter revenue for the period ended July 31, 2022. Combined with results from the preceding quarters, this recent performance boosts MongoDB across the $1 Billion in annual revenue threshold as measured on a last twelve month basis to become the latest software Revenue Unicorn.

About the Revenue Unicorn Playbook

The Revenue Unicorn Playbook is an analytical guide that explores the growth of public software companies from $100 Million to $1 Billion in revenue. The goal of the Playbook is to offer founders and company leaders a framework to examine their growth and investments as they scale. You can find the original Revenue Unicorn article here and presentation here.