Unless the context otherwise indicates, references in this report to the terms "MongoDB ," "the Company," "we," "our" and "us" refer toMongoDB, Inc. , its divisions and its subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our interim unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and (2) the audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year endedJanuary 31, 2020 (the "2020 Form 10-K"). All information presented herein is based on our fiscal calendar, which endsJanuary 31 . Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years endedJanuary 31 and the associated quarters, months and periods of those fiscal years. This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements are often identified by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "project," "will," "would" or the negative or plural of these words or similar expressions or variations, including our expectations regarding our future growth opportunity, revenue and revenue growth, investments, strategy, operating expenses and the anticipated impact of the global economic uncertainty and financial market conditions caused by the COVID-19 pandemic on our business, results of operations and financial condition. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled "Risk Factors," set forth in Part 2, Item 1A of this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Our corporate website is located at www.mongodb.com. We make available free of charge, on or through our corporate website, our annual, quarterly and current reports, and any amendments to those reports, as soon as reasonably practicable after electronically filing such reports with, or furnishing such reports to, theSecurities and Exchange Commission ("SEC"). Information contained on our corporate website is not part of this Quarterly Report on Form 10-Q or any other report filed with or furnished to theSEC . OverviewMongoDB is the leading modern, general purpose database platform. Our robust platform enables developers to build and modernize applications rapidly and cost-effectively across a broad range of use cases. Organizations can deploy our platform at scale in the cloud, on-premise, or in a hybrid environment. Software applications are redefining how organizations across industries engage with their customers, operate their businesses and compete with each other. A database is at the heart of every software application. As a result, selecting a database is a highly strategic decision that directly affects developer productivity, application performance and organizational competitiveness. Our platform addresses the performance, scalability, flexibility and reliability demands of modern applications, while maintaining the strengths of legacy databases. Our business model combines the developer mindshare and adoption benefits of open source with the economic benefits of a proprietary software subscription business model.MongoDB is headquartered inNew York City and our total headcount was 2,020 as ofApril 30, 2020 , an increase from 1,331 as ofApril 30, 2019 . We generate revenue primarily from sales of subscriptions, which accounted for 96% and 94% of our total revenue for the three months endedApril 30, 2020 and 2019, respectively. Our primary subscription package is MongoDB Enterprise Advanced, which represented 49% and 54% of our subscription revenue for the three months endedApril 30, 2020 and 2019, respectively. MongoDB Enterprise Advanced is our comprehensive offering for enterprise customers that can be run in the cloud, on-premise or in a hybrid environment, and includes our proprietary commercial database server, enterprise management capabilities, our graphical user interface, analytics integrations, technical support and a commercial license to our platform. Many of our enterprise customers initially get to know our software by using Community Server, which is our free-to-download version of our database that includes the core functionality developers need to get started withMongoDB without all the features of our commercial platform. As a result, our direct sales prospects are often familiar with our platform and 20
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may have already built applications using our technology. We sell subscriptions directly through our field and inside sales teams, as well as indirectly through channel partners. Our subscription offerings are generally priced on a per server basis, subject to a per server RAM limit. The majority of our subscription contracts are one year in duration and invoiced upfront. When we enter into multi-year subscriptions, we typically invoice the customer on an annual basis. We introduced MongoDB Atlas inJune 2016 . MongoDB Atlas is our hosted multi-cloud database-as-a-service ("DBaaS") offering that includes comprehensive infrastructure and management, which we run and manage in the cloud. During the three months endedApril 30, 2020 and 2019, MongoDB Atlas revenue represented 42% and 35% of our total revenue, respectively, reflecting the continued growth of MongoDB Atlas since its introduction. We have experienced strong growth in self-serve customers of MongoDB Atlas. These customers are charged monthly based on their usage. In addition, we have also seen growth in MongoDB Atlas customers sold by our sales force. These customers typically sign annual commitments and pay in advance or are invoiced monthly based on usage. Given our platform has been downloaded from our website more than 110 million times sinceFebruary 2009 and over 40 million times in the last 12 months alone, a core component of our growth strategy for MongoDB Atlas is to convert developers and their organizationswho are already using Community Server to become customers of MongoDB Atlas and enjoy the benefits of a managed offering. We also generate revenue from services, which consist primarily of fees associated with consulting and training services. Revenue from services accounted for 4% and 6% of our total revenue for the three months endedApril 30, 2020 and 2019, respectively. We expect to continue to invest in our services organization as we believe it plays an important role in accelerating our customers' realization of the benefits of our platform, which helps drive customer retention and expansion. We believe the market for our offerings is large and growing. According to IDC, the worldwide database software market, which it refers to as the data management software market, is forecast to be$62 billion in 2020 growing to approximately$89 billion in 2024, representing an 9% compound annual growth rate. We have experienced rapid growth and have made substantial investments in developing our platform and expanding our sales and marketing footprint. We intend to continue to invest heavily to grow our business to take advantage of our market opportunity rather than optimizing for profitability or cash flow in the near term. Impact of the COVID-19 Pandemic InMarch 2020 , theWorld Health Organization declared the outbreak of COVID-19 a pandemic. This pandemic continues to spread throughout theU.S. and the world and has resulted in authorities implementing numerous measures to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns. The full extent of the impact of the COVID-19 pandemic on our future operational and financial performance will depend on certain developments, including the duration and spread of the pandemic, related public health measures, their impact on the global economy and their impact on our current and prospective customers, employees, vendors and other parties with whom we do business, all of which are uncertain and cannot be predicted. We have adopted several measures in response to the COVID-19 pandemic, including temporarily requiring employees to work remotely, suspending non-essential travel by our employees, and replacing in-person marketing events (including our annual developer conference) with virtual events. While the broader implications of COVID-19 on our results of operations and overall financial performance remain uncertain, we currently expect our revenue to be negatively impacted by the slowdown in activity associated with the COVID-19 pandemic and global uncertainty at least through fiscal 2021. In addition, we recorded a higher allowance during the three months endedApril 30, 2020 due to the potential adverse impact the COVID-19 pandemic may have on factors that affect our estimate of current expected credit losses, including possible financial difficulties faced by a portion of our customers, in accordance with the recently adopted accounting standard for credit losses. During the three months endedApril 30, 2020 , we experienced a decrease in our travel costs due to global travel restrictions and stay-at-home or similar orders in effect as a result of the COVID-19 pandemic. We expect those lower travel costs to continue in the near-term. We intend to invest a portion of these expected savings in additional marketing program spend and research and development headcount. We will continue to evaluate the nature and extent of the impact of COVID-19 on our business. For further discussion of the potential impacts of the COVID-19 pandemic on our business, operating results, and financial condition, see the section titled "Risk Factors" included in Part II, Item 1A of this Quarterly Report on Form 10-Q. Other factors affecting our performance are discussed below, although we caution you that the COVID-19 pandemic may also further impact these factors. 21
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Key Factors Affecting Our Performance Growing Our Customer Base and Expanding Our Global Reach We are intensely focused on continuing to grow our customer base. We have invested, and expect to continue to invest, heavily in our sales and marketing efforts and developer community outreach, which are critical to driving customer acquisition. As ofApril 30, 2020 , we had over 18,400 customers across a wide range of industries and in over 100 countries, compared to over 14,200 customers as ofApril 30, 2019 . All affiliated entities are counted as a single customer. Our customer count as ofApril 30, 2020 includes customers acquired fromObjectLabs Corporation ("mLab") andTightdb, Inc. ("Realm"), which acquisitions closed onNovember 1, 2018 andMay 7, 2019 , respectively. Our definition of "customer" excludes (1) users of our free offerings, (2) users acquired from mLabwho spend$20 or less per month with us and (3) self-serve users acquired from Realm. The excluded mLab and Realm users collectively represent an immaterial portion of the revenue associated with users acquired from those acquisitions. As ofApril 30, 2020 , we had over 2,200 customers that were sold through our direct sales force and channel partners, as compared to over 1,800 such customers as ofApril 30, 2019 . These customers, which we refer to as our Direct Sales Customers, accounted for 79% and 77% of our subscription revenue for the three months endedApril 30, 2020 and 2019, respectively. We are also focused on increasing the number of MongoDB Atlas customers as we emphasize the on-demand scalability of MongoDB Atlas by allowing our customers to consume the product with minimal commitment. After launching inJune 2016 , we had over 16,800 MongoDB Atlas customers as ofApril 30, 2020 . The growth in MongoDB Atlas customers included customers from mLab and Realm, as described above, as well as new customers toMongoDB and existing MongoDB Enterprise Advanced customers adding incremental MongoDB Atlas workloads. In an effort to expand our global reach, inOctober 2019 , we announced a partnership with Alibaba Cloud to offer an authorizedMongoDB -as-a-service solution allowing customers of Alibaba Cloud to use this managed offering from their data centers globally. Increasing Adoption of MongoDB Atlas MongoDB Atlas, our hosted multi-cloud offering, is an important part of our run-anywhere strategy. and allows us to generate revenue from Community Server, converting users of the free-to-download version of our database to customers. To accelerate adoption of this DBaaS offering, in 2017, we introduced tools to easily migrate existing users of our Community Server offering toMongoDB Atlas. We have also expanded our introductory offerings for MongoDB Atlas, including a free tier, which provides limited processing power and storage in order to drive usage and adoption of MongoDB Atlas among developers. OurMongoDB Atlas free tier offering is now available on all three major cloud providers (Amazon Web Services ("AWS"),North America ,Europe andAsia Pacific . In addition, MongoDB Atlas is available onAWS Marketplace , making it easier for AWS customers to buy and consume MongoDB Atlas. Our business partnership with GCP provides deeper product integration and unified billing for GCP customerswho are also MongoDB Atlas customers and offers GCP customers a seamless integration between MongoDB Atlas and GCP. In 2019, we announced an expanded relationship with Microsoft. The new availability of MongoDB Atlas on theMicrosoft Azure Marketplace will offer unified billing for joint customers of MongoDB Atlas and Microsoft and will make it easier for established Azure customers to purchase and use MongoDB Atlas. In addition,MongoDB will be part of Microsoft's strategic partner program. We have also expanded the functionality available in MongoDB Atlas beyond that of our Community Server offering. We expect this will drive further adoption of MongoDB Atlas as companies migrate mission-critical applications to the public cloud. The enterprise capabilities that we have introduced to MongoDB Atlas include advanced security features, enterprise-standard authentication and database auditing. We have invested significantly in MongoDB Atlas and our ability to drive adoption of MongoDB Atlas is a key component of our growth strategy. Retaining and Expanding Revenue from Existing Customers The economic attractiveness of our subscription-based model is driven by customer renewals and increasing existing customer subscriptions over time, referred to as land-and-expand. We believe that there is a significant opportunity to drive additional sales to existing customers, and expect to invest in sales and marketing and customer success personnel and activities to achieve additional revenue growth from existing customers. If an application grows and requires additional capacity, our customers increase their subscriptions to our platform. In addition, our customers expand their subscriptions to our platform as they migrate additional existing applications or build new applications, either within the same department or 22
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in other lines of business or geographies. Also, as customers modernize their information technology infrastructure and move to the cloud, they may migrate applications from legacy databases. Our goal is to increase the number of customers that standardize on our database within their organization, which can include offering centralized internal support or providingMongoDB -as-a-service internally. Over time, the average subscription amount for our Direct Sales Customers has increased. In addition, self-service customers have begun to increase their consumption of our products, particularly MongoDB Atlas. We calculate annualized recurring revenue ("ARR") and annualized monthly recurring revenue ("MRR") to help us measure our subscription revenue performance. ARR includes the revenue we expect to receive from our customers over the following 12 months based on contractual commitments and, in the case of Direct Sales Customers of MongoDB Atlas, by annualizing the prior 90 days of their actual consumption of MongoDB Atlas, assuming no increases or reductions in their subscriptions or usage. For all other customers of our self-serve products, we calculate annualized MRR by annualizing the prior 30 days of their actual consumption of such products, assuming no increases or reductions in usage. ARR and annualized MRR exclude professional services. The number of customers with$100,000 or greater in ARR and annualized MRR was 780 and 598 as ofApril 30, 2020 and 2019, respectively. Prior toJanuary 31, 2020 , ARR related to Direct Sales Customers of MongoDB Atlas was based on their contractual commitments, regardless of their actual consumption. To better reflect actual customer behavior, we modified our ARR calculation related to Direct Sales Customers of MongodDB Atlas to incorporate their prior 90 days of actual consumption. The impact of this change on prior reported periods is immaterial. Our ability to increase sales to existing customers will depend on a number of factors, including customers' satisfaction or dissatisfaction with our products and services, competition, pricing, economic conditions or overall changes in our customers' spending levels. Components of Results of Operations Revenue Subscription Revenue. Our subscription revenue is comprised of term licenses and hosted as-a-service solutions. Subscriptions to term licenses include technical support and access to new software versions on a when-and-if available basis. Revenue from our term licenses is recognized upfront for the license component and ratably for the technical support and when-and-if available update components. Revenue from term licenses is typically billed annually in advance. Revenue from our hosted asaservice solutions is primarily generated on a usage basis and is billed either in arrears or paid up front. The majority of our subscription contracts are one year in duration and are invoiced upfront. Our subscription contracts are generally non-cancelable and non-refundable. When we enter into multi-year subscriptions, we typically invoice the customer on an annual basis. Services Revenue. Services revenue is comprised of consulting and training services and is recognized over the period of delivery of the applicable services. We recognize revenue from services agreements as services are delivered. We expect our revenue may vary from period to period based on, among other things, the timing and size of new subscriptions, the proportion of term license contracts that commence within the period, the rate of customer renewals and expansions, delivery of professional services, the impact of significant transactions and seasonality of or fluctuations in usage for our consumptionbased customers. Cost of Revenue Cost of Subscription Revenue. Cost of subscription revenue primarily includes personnel costs, including salaries, bonuses and benefits, and stockbased compensation, for employees associated with our subscription arrangements principally related to technical support and allocated shared costs, as well as depreciation and amortization. Our cost of subscription revenue for our hosted asaservice solutions includes third-party cloud infrastructure expenses. We expect our cost of subscription revenue to increase in absolute dollars as our subscription revenue increases and, depending on the results of MongoDB Atlas, our cost of subscription revenue may increase as a percentage of subscription revenue as well. Cost of Services Revenue. Cost of services revenue primarily includes personnel costs, including salaries, bonuses and benefits, and stockbased compensation, for employees associated with our professional service contracts, as well as travel costs, allocated shared costs and depreciation and amortization. We expect our cost of services revenue to increase in absolute dollars as our services revenue increases. Gross Profit and Gross Margin Gross Profit. Gross profit represents revenue less cost of revenue. 23
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Gross Margin. Gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by a variety of factors, including the average sales price of our products and services, the mix of products sold, transaction volume growth and the mix of revenue between subscriptions and services. We expect our gross margin to fluctuate over time depending on the factors described above and, to the extent MongoDB Atlas revenue increases as a percentage of total revenue, our gross margin may decline as a result of the associated hosting costs of MongoDB Atlas. Operating Expenses Our operating expenses consist of sales and marketing, research and development and general and administrative expenses. Personnel costs are the most significant component of each category of operating expenses. Operating expenses also include travel and related costs and allocated overhead costs for facilities, information technology and employee benefit costs. Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, sales commission and benefits, bonuses and stockbased compensation. These expenses also include costs related to marketing programs, travelrelated expenses and allocated overhead. Marketing programs consist of advertising, events, corporate communications, and brandbuilding and developercommunity activities. We expect our sales and marketing expense to increase in absolute dollars over time as we expand our sales force and increase our marketing resources, expand into new markets and further develop our self-serve and partner channels. Research and Development. Research and development expense consists primarily of personnel costs, including salaries, bonuses and benefits, and stockbased compensation. It also includes amortization associated with intangible acquired assets and allocated overhead. We expect our research and development expenses to continue to increase in absolute dollars, as we continue to invest in our platform and develop new products. General and Administrative. General and administrative expense consists primarily of personnel costs, including salaries, bonuses and benefits, and stockbased compensation for administrative functions including finance, legal, human resources and external legal and accounting fees, as well as allocated overhead. We expect general and administrative expense to increase in absolute dollars over time as we continue to invest in the growth of our business and incur the costs of compliance associated with being a publicly traded company. Other Income (Expense), net Other income (expense), net consists primarily of interest income, interest expense and gains and losses from foreign currency transactions. Provision (Benefit) for Income Taxes Provision for income taxes consists primarily of state income taxes inthe United States and income taxes in certain foreign jurisdictions in which we conduct business. As ofJanuary 31, 2020 , we had net operating loss ("NOL") carryforwards for federal, state, Irish andUnited Kingdom income tax purposes of$659.7 million ,$475.3 million ,$258.8 million and$7.2 million , respectively, which begin to expire in the year endingJanuary 31, 2028 for federal purposes andJanuary 31, 2020 for state purposes.Ireland ,U.K. and theU.S. federal NOLs for the years afterJanuary 31, 2018 are allowed to be carried forward indefinitely. The deferred tax assets associated with the NOL carryforwards in each of these jurisdictions are subject to a full valuation allowance. Under Section 382 of theU.S. Internal Revenue Code of 1986 (the "Code"), a corporation that experiences an "ownership change" is subject to a limitation on its ability to utilize its pre-change NOLs to offset future taxable income. Utilization of the federal NOL carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Code, as amended and similar state provisions. The annual limitation, should the Company undergo an ownership change, may result in the expiration of federal or state net operating losses and credits before utilization, however the Company does not expect any such limitation to be material. Three Months EndedApril 30, 2020 Summary For the three months endedApril 30, 2020 , our total revenue was$130.3 million as compared to$89.4 million for the three months endedApril 30, 2019 . Our net loss was$54.0 million for the three months endedApril 30, 2020 as compared to$33.2 million for the three months endedApril 30, 2019 . 24
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Our operating cash flow was$(5.9) million and$3.2 million for the three months endedApril 30, 2020 and 2019, respectively. Our free cash flow was$(8.5) million and$2.8 million for the three months endedApril 30, 2020 and 2019, respectively. See the section titled "Liquidity and Capital Resources-Non-GAAP Free Cash Flow" below. Results of Operations The following tables set forth our results of operations for the periods presented in dollars (unaudited, in thousands) and as a percentage of our total revenue. Percentage of revenue figures are rounded and therefore may not subtotal exactly. Three Months Ended April 30, 2020 2019 Consolidated Statements of Operations Data: Revenue: Subscription$ 124,856 $ 83,994 Services 5,473 5,394 Total revenue 130,329 89,388 Cost of revenue: Subscription(1) 30,625 22,595 Services(1) 7,052 5,577 Total cost of revenue 37,677 28,172 Gross profit 92,652 61,216 Operating expenses: Sales and marketing(1) 69,125 46,120 Research and development(1) 45,632 30,868 General and administrative(1) 19,935 14,805 Total operating expenses 134,692 91,793 Loss from operations (42,040 ) (30,577 ) Other expense, net (11,693 ) (2,801 ) Loss before provision for income taxes (53,733 ) (33,378 ) Provision (benefit) for income taxes 234 (138 ) Net loss$ (53,967 ) $ (33,240 )
(1) Includes stockbased compensation expense as follows (unaudited, in
thousands): Three Months Ended April 30, 2020 2019 Cost of revenue-subscription $ 1,827$ 988 Cost of revenue-services 1,146 593 Sales and marketing 10,823 4,940 Research and development 11,759 4,520 General and administrative 5,012 2,968 Total stockbased compensation expense$ 30,567 $ 14,009 25
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Table of Contents Three Months Ended April 30, 2020 2019 Percentage of Revenue Data: Revenue: Subscription 96 % 94 % Services 4 % 6 % Total revenue 100 % 100 % Cost of revenue: Subscription 23 % 25 % Services 5 % 6 % Total cost of revenue 29 % 32 % Gross profit 71 % 68 % Operating expenses: Sales and marketing 53 % 52 % Research and development 35 % 35 % General and administrative 15 % 17 % Total operating expenses 103 % 103 % Loss from operations (32 )% (34 )% Other expense, net (9 )% (3 )% Loss before provision for income taxes (41 )% (37 )% Provision (benefit) for income taxes - % - % Net loss (41 )% (37 )% Comparison of the Three Months EndedApril 30, 2020 and 2019 Revenue Three Months Ended April 30, Change (unaudited, in thousands) 2020 2019 $ % Subscription$ 124,856 $ 83,994 $ 40,862 49 % Services 5,473 5,394 79 1 % Total revenue$ 130,329 $ 89,388 $ 40,941 46 %
Total revenue growth reflects increased demand for our platform and related
services. Subscription revenue increased by
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Cost of Revenue, Gross Profit and Gross Margin Percentage
Three Months Ended April 30, Change (unaudited, in thousands) 2020 2019 $ % Subscription cost of revenue$ 30,625 $ 22,595 $ 8,030 36 % Services cost of revenue 7,052 5,577 1,475 26 % Total cost of revenue 37,677 28,172 9,505 34 % Gross profit$ 92,652 $ 61,216 $ 31,436 51 % Gross margin 71 % 68 % Subscription 75 % 73 % Services (29 )% (3 )%
The increase in subscription cost of revenue was primarily due to a
Three Months Ended April 30, Change (unaudited, in thousands) 2020 2019 $ % Sales and marketing$ 69,125 $ 46,120 $ 23,005 50 %
The increase in sales and marketing expense included
Three Months Ended April 30, Change (unaudited, in thousands) 2020 2019 $ % Research and development$ 45,632 $ 30,868 $ 14,764 48 % The increase in research and development expense was primarily driven by a$13.5 million increase in personnel costs and stock-based compensation as we increased our research and development headcount by 37%. General and Administrative Three Months Ended April 30, Change (unaudited, in thousands) 2020 2019 $ % General and administrative$ 19,935 $ 14,805 $ 5,130 35 %
The increase in general and administrative expense was due to higher costs to support the growth of our business and to maintain compliance as a public company. In particular, these higher costs were driven by an increase in general and
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administrative personnel headcount resulting in higher personnel costs and stock-based compensation. The prior-year period included$0.3 million of costs associated with our acquisition of Realm, with no comparable costs for the three months endedApril 30, 2020 . Other Income (Expense), net Three Months Ended April 30, Change (unaudited, in thousands) 2020 2019 $ % Other expense, net$ (11,693 ) $ (2,801 ) $ (8,892 ) 317 %
The increase in other expense, net for the three months ended
Three Months Ended April 30, Change (unaudited, in thousands) 2020 2019 $ %
Provision (benefit) for income taxes
The provision for income taxes during the three months endedApril 30, 2020 was primarily due to an increase in foreign taxes as we continued our global expansion. The benefit during the three months endedApril 30, 2019 was primarily due to stock option exercises, which generated excess tax deductions in theUnited Kingdom . Liquidity and Capital Resources As ofApril 30, 2020 , we had cash, cash equivalents, shortterm investments and restricted cash totaling$977.5 million . Our cash and cash equivalents primarily consist of bank deposits and money market funds. Our shortterm investments consist ofU.S. government treasury securities and our restricted cash represents collateral for our available credit on corporate credit cards. We believe our existing cash and cash equivalents and shortterm investments will be sufficient to fund our operating and capital needs for at least the next 12 months. We have generated significant operating losses and negative cash flows from operations as reflected in our accumulated deficit and condensed consolidated statements of cash flows. As ofApril 30, 2020 , we had an accumulated deficit of$722.4 million . We expect to continue to incur operating losses and negative cash flows from operations in the future and may require additional capital resources to execute strategic initiatives to grow our business. Our future capital requirements and adequacy of available funds will depend on many factors including our growth rate, the timing and extent of spending to support development efforts, the expansion of sales and marketing and international operation activities, the timing of new subscription introductions, the continuing market acceptance of our subscriptions and services and the impact of the COVID-19 pandemic on the global economy and our business, financial condition and results of operations. As the impact of the COVID-19 pandemic on the global economy and our operations evolves, we will continue to assess our liquidity needs. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition would be adversely affected. The following table summarizes our cash flows for the periods presented (unaudited, in thousands): Three Months EndedApril 30, 2020 2019
Net cash provided by (used in) operating activities
3,212 587 Net cash provided by (used in) financing activities (2,290 ) 6,407 28
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NonGAAP Free Cash Flow
To supplement our interim unaudited condensed consolidated financial statements,
which are prepared and presented in accordance with generally accepted
accounting principles in
Three Months EndedApril 30, 2020 2019
Net cash provided (used in) operating activities
(1,505 ) (389 ) Principal repayments of finance leases (1,135 ) - Capitalized software - - Free cash flow$ (8,518 ) $ 2,825 Operating Activities Cash used in operating activities during the three months endedApril 30, 2020 was$5.9 million primarily driven by our net loss of$54.0 million and was partially offset by noncash charges of$30.6 million for stockbased compensation,$12.0 million for the amortization of our debt discount and issuance costs,$2.9 million for depreciation and amortization and$2.4 million for lease-related non-cash charges. In addition, our cash collections decreased our accounts receivable by$3.6 million and increased our deferred revenue by$3.3 million , reflecting the overall growth of our sales and our expanding customer base. Partially offsetting these benefits to our operating cash flow were decreases of$3.1 million in deferred commissions and$2.8 million in accrued liabilities, primarily from commissions and bonuses paid during the three months endedApril 30, 2020 . Cash provided by operating activities during the three months endedApril 30, 2019 was$3.2 million primarily driven by cash collections, which decreased our accounts receivable by$11.0 million and increased our deferred revenue by$6.3 million , reflecting the overall growth of our sales and our expanding customer base. Also, our accrued liabilities increased$3.3 million , primarily from commissions accrued as ofApril 30, 2019 . In addition, our net loss of$33.2 million included noncash charges of$14.0 million for stockbased compensation,$3.2 million for the amortization of our debt discount and issuance costs and$2.3 million for depreciation and amortization. Partially offsetting these benefits to our operating cash flow were an increase of$3.0 million in deferred commissions and an increase of$0.3 million in prepaid expenses. Investing Activities Cash provided by investing activities during the three months endedApril 30, 2020 and 2019 of$3.2 million and$0.6 million , respectively, resulted from the maturities of marketable securities, partially offset by purchases of marketable securities and property and equipment. 29
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Financing Activities Cash used in financing activities during the three months endedApril 30, 2020 was$2.3 million primarily due to issuance costs related to ourJanuary 2020 offering of 0.25% convertible senior notes due 2026 that had been accrued as ofJanuary 31, 2020 , as well as principal repayment of finance leases, partially offset by the proceeds from the exercise of stock options. Cash provided by financing activities during the three months endedApril 30, 2019 was$6.4 million primarily due to the proceeds from the exercise of stock options. Seasonality We have in the past and expect in the future to experience seasonal fluctuations in our revenue and results from time to time. In addition, as a result of the adoption of Accounting Standards Update No. 201409, Revenue from Contracts with Customers (Topic 606), we may experience greater variability and reduced comparability of our quarterly revenue and results with respect to the timing and nature of certain of our contracts, particularly multi-year contracts that contain a term license. Off Balance Sheet Arrangements As ofApril 30, 2020 , we did not have any relationships with any entities or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating offbalance sheet arrangements or other purposes. Contractual Obligations and Commitments During the three months endedApril 30, 2020 , there have been no material changes outside the ordinary course of business to our contractual obligations and commitments from those disclosed in our 2020 Form 10-K. Refer to Note 6, Leases and Note 7, Commitments and Contingencies, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details. Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. There have been no material changes in our critical accounting policies from those disclosed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2020 Form 10-K. Recent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements, including our adoption of the new credit loss standard under Accounting Standards Codification 326. 30
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