Lowered Guidance and Assumptions
Q: What are you assuming in your guidance after lowering it?
A: We observed lower consumption growth than expected in March and April, which persisted into May. We've assumed this same level continues throughout the year, without expecting recovery or further deterioration. Additionally, the slower expansion in Q1 and a smaller new business cohort in Atlas have led to a lower starting Q2 ARR, which compounds over the year. Although Enterprise Advanced outperformed in Q1, we saw fewer multiyear deals, which we expect to be a headwind due to the current macro environment. These factors are baked into our updated fiscal '25 guidance.

Macro Impact on Consumption
Q: Is the slowdown due to macro factors affecting customer usage?
A: Yes, the macro environment has impacted us across customer sizes, industries, geographies, and customer tenure. The consumption weakness is due to end applications seeing less usage, which reflects our customers' businesses slowing down. We believe this broad-based slowdown indicates a macro issue rather than company-specific factors.

Sales Execution and Slow Start
Q: How much did internal factors contribute to the slow start in new business?
A: The slower start was due to internal factors. Delays in analyzing workload data and finalizing quotas impacted our ability to organize effectively. While we almost caught up by the end of the quarter, we recognize the need to improve our planning process to prevent this in the future. We remain confident in our ability to win new business, with strong win rates and competitiveness.

Adjusting Sales Incentives
Q: Are you changing incentives to focus on higher-growth workloads?
A: Yes, we're fine-tuning our incentive system to emphasize the quality of workloads over sheer volume. By incentivizing our sales teams to prioritize higher-growth workloads, we're working closely with customers to identify critical applications that have greater growth potential. This adjustment aims to ensure our resources are directed toward workloads that drive more significant expansion.

Continued Investment Amid Macro Challenges
Q: Will you continue investing in sales and marketing despite the macro softness?
A: We plan to maintain a consistent investment model, continuing to grow our productive capacity. We're focusing on increasing the productivity of our sales teams, targeting the higher end of the market, and selling more top-down by emphasizing legacy application modernization and AI initiatives. We believe in the long-term growth prospects and are investing accordingly to capitalize on the large market opportunity ahead.

Competition with Hyperscalers
Q: Are hyperscalers taking market share from you?
A: No, we don't see issues with losing deals to any particular vendor, including hyperscalers. The growth reported by hyperscalers is largely due to reselling GPU capacity for AI model training, not necessarily impacting our database business. Our relationships with AWS, Azure, and GCP are strong, with increased collaboration on deals. Our high win rates affirm our competitive position in the market.

Leveraging AI for Application Modernization
Q: How are you using AI to aid application modernization?
A: We're utilizing AI to reduce the time, cost, and effort required to migrate legacy applications to MongoDB. By automating the conversion of application code and building required test suites, we lower the barriers for customers to modernize their critical applications. This initiative has generated significant interest, offering access to senior decision-makers and positioning us favorably for future growth.

New Product Announcements and Customer Response
Q: What is the customer reaction to your recent product announcements?
A: Customers are highly receptive to our new products. Our stream processing product has positive feedback from hundreds of testers, especially since processing JSON-based data in motion aligns with our platform strengths. The upcoming 8.0 release excites customers due to its performance gains. Additionally, making features like full-text search and vector search available in the community version allows developers to adopt our products early in their project lifecycle, enhancing overall enthusiasm.

Pipeline and Future Growth Outlook
Q: Is your sales pipeline improving for the rest of the year?
A: While we got off to a slow start, we feel good about our new business opportunities for the rest of the year. Our sales leadership is confident, with high win rates and strong competitiveness. The pipeline isn't necessarily improving but remains robust, supporting our growth expectations moving forward.

Focus on Existing Customers and New Logos
Q: How are you balancing efforts between existing customers and acquiring new ones?
A: Our biggest growth opportunities lie in expanding workloads within our existing customer base, which includes many 8-figure and 7-figure accounts. However, we continue to focus on acquiring new enterprise logos, especially at the higher end of the market. This dual approach ensures we capitalize on underpenetrated opportunities while also expanding our market reach.