Part I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Couchbase provides a leading cloud database platform for modern applications, simplifying development from cloud to edge - Couchbase's mission is to simplify the development, deployment, and consumption of modern applications across cloud and edge environments[21](index=21&type=chunk) - The database platform fuses relational database strengths (e.g., SQL transactions, ACID guarantees) with NoSQL flexibility and scalability[21](index=21&type=chunk)[24](index=24&type=chunk) - Couchbase Capella is a fully-managed database-as-a-service offering designed for quick, easy, and affordable deployment, reducing operational management efforts[21](index=21&type=chunk)[25](index=25&type=chunk)[28](index=28&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of net losses, intense competition, and various operational challenges - Couchbase has a history of net losses (**$68.5M in FY2023**, **$58.2M in FY2022**, **$40.0M in FY2021**) and an accumulated deficit of **$410.5M** as of January 31, 2023, with expectations of continued losses due to investments in growth[81](index=81&type=chunk) - The company faces intense competition from legacy database providers (Oracle, IBM, Microsoft), NoSQL providers (MongoDB), and cloud infrastructure providers (Amazon, Microsoft, Google)[88](index=88&type=chunk) - Risks include failure to cost-effectively acquire new customers or retain/expand existing ones, the evolving nature of the market for its products, and the need to continuously innovate to meet changing customer needs and technologies[91](index=91&type=chunk)[92](index=92&type=chunk)[95](index=95&type=chunk) [Item 1B. Unresolved Staff Comments](index=50&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments from the SEC - Not applicable[209](index=209&type=chunk) [Item 2. Properties](index=50&type=section&id=Item%202.%20Properties) The company leases all facilities, including its corporate headquarters in Santa Clara and various international offices - Corporate headquarters are in Santa Clara, California, leasing approximately **46,000 square feet** until March 2025[210](index=210&type=chunk) - Additional leased facilities are located in Austin, Texas; Tel Aviv, Israel; Bangalore, India; and London and Manchester, United Kingdom[210](index=210&type=chunk) - The company leases all its facilities and plans to expand as needed to accommodate growth[210](index=210&type=chunk) [Item 3. Legal Proceedings](index=51&type=section&id=Item%203.%20Legal%20Proceedings) Couchbase is not currently party to any material legal proceedings but may face future litigation in the ordinary course of business - The company is not currently involved in any legal proceedings deemed to have a material adverse effect on its business, financial condition, results of operations, or cash flows[211](index=211&type=chunk) - Future litigation may be necessary to defend intellectual property or other rights, which could be costly and time-consuming[211](index=211&type=chunk) [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[212](index=212&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=53&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details the company's common stock trading, holder information, dividend policy, and use of IPO proceeds - Common stock began trading on Nasdaq Global Select Market under 'BASE' on July 22, 2021[214](index=214&type=chunk) Holders of Record (As of January 31, 2023) | Metric | Count | | :----- | :---- | | Holders of Record | ~142 | - The company has never paid cash dividends and plans to retain future earnings for business operations and expansion[216](index=216&type=chunk)[209](index=209&type=chunk) - No unregistered equity securities were sold in fiscal year ended January 31, 2023[217](index=217&type=chunk) - No issuer purchases of equity securities were made during the three months ended January 31, 2023[218](index=218&type=chunk) - The IPO completed on July 26, 2021, raised **$214.9 million** net proceeds, used for general corporate purposes, including repaying **$25.0 million** debt under the Credit Facility in fiscal 2022[222](index=222&type=chunk) [Item 6. [Reserved]](index=53&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved[223](index=223&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operational results, revenue model, and key performance drivers for recent fiscal years Revenue and Net Loss (Fiscal Years Ended January 31) | Fiscal Year | Revenue (in millions) | Net Loss (in millions) | | :---------- | :-------------------- | :--------------------- | | 2023 | $154.8 | $(68.5) | | 2022 | $123.5 | $(58.2) | | 2021 | $103.3 | $(40.0) | Annual Recurring Revenue (ARR) (As of January 31) | Metric | 2023 (in millions) | 2022 (in millions) | | :----- | :----------------- | :----------------- | | ARR | $163.7 | $132.9 | - Subscription revenue constituted **92%**, **94%**, and **94%** of total revenue in fiscal 2023, 2022, and 2021, respectively, primarily from Couchbase Server and Mobile Enterprise Edition, with Capella revenue not yet material[228](index=228&type=chunk) - The company's business model relies on a 'land-and-expand' strategy, driven by direct sales to large enterprises and a 'buy-from' motion targeting application developers, supported by Couchbase Capella and free product offerings[229](index=229&type=chunk)[230](index=230&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=72&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements and accompanying notes for the last three fiscal years - The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, who issued an unqualified opinion[311](index=311&type=chunk) - The financial statements are prepared in conformity with GAAP and include the accounts of Couchbase, Inc and its wholly-owned subsidiaries[332](index=332&type=chunk) - Key financial statements include Consolidated Balance Sheets, Statements of Operations, Comprehensive Loss, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit), and Cash Flows[308](index=308&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=107&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[465](index=465&type=chunk) [Item 11. Executive Compensation](index=107&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2023 Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[466](index=466&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=107&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and related matters is incorporated by reference from the 2023 Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[466](index=466&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=107&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related transactions and director independence is incorporated by reference from the 2023 Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[466](index=466&type=chunk) [Item 14. Principal Accountant Fees and Services](index=107&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2023 Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[466](index=466&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=108&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K - The Annual Report on Form 10-K includes consolidated financial statements and an exhibit index[468](index=468&type=chunk) - The exhibit index details various corporate documents, including the Amended and Restated Certificate of Incorporation, Bylaws, Equity Incentive Plans, Indemnification Agreements, and other material contracts[469](index=469&type=chunk)[479](index=479&type=chunk) [Item 16. Form 10-K Summary](index=100&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[481](index=481&type=chunk)

Couchbase, Inc. (NASDAQ:BASE) Q4 2023 Earnings Conference Call March 7, 2023 5:00 PM ET Company Participants Edward Parker - ICR Capital Matthew Cain - Chairman, President & CEO Gregory Henry - SVP & CFO Conference Call Participants Raimo Lenschow - Barclays Bank Matthew Hedberg - RBC Capital Markets Kasthuri Rangan - Goldman Sachs Group Robert Oliver - Robert W. Baird & Co. Rudy Kessinger - D.A. Davidson & Co. Howard Ma - Guggenheim Securities Robert Galvin - Stifel, Nicolaus & Company Operator Greetings. ...

Financial Performance - For the nine months ended October 31, 2022, revenue was $113.2 million, representing a 28% increase from $88.5 million in the same period of 2021[128]. - Annual recurring revenue (ARR) as of October 31, 2022, was $151.7 million, up 24% from $122.3 million in 2021[128]. - The company reported a net loss of $51.9 million for the nine months ended October 31, 2022, compared to a net loss of $45.0 million in the same period of 2021, as it continues to invest in growth[128]. - Total revenue for the three months ended October 31, 2022, was $38,557 thousand, a 25.5% increase from $30,824 thousand in the same period of 2021[144]. - The net loss for the three months ended October 31, 2022, was $16.7 million, compared to a net loss of $15.9 million in the same period of 2021[166]. - For the nine months ended October 31, 2022, the company reported a net loss of $51.9 million, compared to a net loss of $29.1 million for the same period in 2021, reflecting an increase in losses of 78.5%[186]. Revenue Composition - Subscription sales accounted for 93% of total revenue for the nine months ended October 31, 2022, with the majority derived from the Enterprise Edition of the Couchbase platform[129]. - Revenue from services represented 7% of total revenue for the nine months ended October 31, 2022, highlighting the importance of professional services in customer success[129]. - Subscription revenue increased by $6.7 million, or 23%, during the three months ended October 31, 2022, driven by growth from existing customers and an increase in the customer base from 568 to 658[170]. - Services revenue rose by $1.0 million, or 56%, during the three months ended October 31, 2022, primarily due to an increase in professional services hours performed[171]. Customer Growth - The total number of customers increased to 658 as of October 2022, up from 568 in October 2021, representing a growth of approximately 15.8%[140]. - The dollar-based net retention rate has been over 115% in seven of the past eight quarters, indicating strong expansion within existing customers[134]. Expenses and Losses - Total operating expenses for the three months ended October 31, 2022, were $50.3 million, compared to $42.6 million in the same period of 2021, reflecting an 18% increase[166]. - General and administrative expenses increased to $8.8 million for the three months ended October 31, 2022, from $6.7 million in the same period of 2021[161]. - Sales and marketing expenses rose to $27.4 million for the three months ended October 31, 2022, compared to $22.8 million in the same period of 2021[166]. - Research and development expenses were $14.0 million for the three months ended October 31, 2022, up from $13.1 million in the same period of 2021[166]. Cash Flow and Liquidity - Cash used in operating activities for the nine months ended October 31, 2022, was $30.98 million, an improvement from $38.92 million used in the same period in 2021[185]. - Cash provided by financing activities for the nine months ended October 31, 2022, was $8.5 million, significantly lower than $190.8 million in the same period in 2021, primarily due to the IPO proceeds in 2021[189]. - The company incurred cash used in investing activities of $33.6 million for the nine months ended October 31, 2022, compared to $47.6 million for the same period in 2021[187]. - As of October 31, 2022, the company had cash and cash equivalents of $38.8 million and short-term investments of $138.5 million[198]. Future Outlook - Couchbase Capella, the fully-managed DBaaS, is expected to gain popularity due to its compelling pricing model and flexibility, contributing to future revenue growth[133]. - The company plans to continue investing in research and development to enhance its platform and expand its geographic presence[136]. - The company expects sales and marketing expenses to increase in absolute dollars as it expands its efforts to attract new customers[160]. - The company may pursue acquisitions of businesses, technologies, assets, and talent to support its growth strategy in the future[183]. Market Conditions - Macroeconomic conditions, including inflation and recession fears, have led to customers opting for shorter deals, impacting revenue predictability[132]. - The company is exposed to market risks primarily from fluctuations in interest rates and foreign currency exchange rates[197]. Internal Controls and Legal Matters - The company believes its disclosure controls and procedures are effective at the reasonable assurance level, but they cannot prevent or detect all errors and fraud[203]. - There were no changes in the internal control over financial reporting that materially affected the company during the reporting period[202]. - The company is not currently involved in any legal proceedings that would have a material adverse effect on its business or financial condition[205].

Couchbase, Inc. (NASDAQ:BASE) Q3 2023 Earnings Conference Call December 6, 2022 8:30 AM ET Company Participants Edward Parker - Head of Investor Relations Matt Cain - President and CEO Greg Henry - CFO Conference Call Participants Jason Ader - William Blair Raimo Lenschow - Barclays Rob Oliver - Baird Brad Reback - Stifel Kash Rangan - Goldman Sachs Ittai Kidron - Oppenheimer Matt Hedberg - RBC Capital Markets Sanjit Singh - Morgan Stanley Rudy Kessinger - D.A. Davidson Operator Hello and welcome to the Cou ...

Couchbase, Inc. (NASDAQ:BASE) Q2 2023 Results Conference Call September 7, 2022 5:00 PM ET Company Participants Edward Parker - Head of Investor Relations Matt Cain - President and CEO Greg Henry - CFO Conference Call Participants Sanjit Singh - Morgan Stanley Raimo Lenschow - Barclays Rob Oliver - Baird Param Singh - Oppenheimer Rudy Kessinger - D.A. Davidson Operator Thank you for standing by, and welcome to the Couchbase Second Quarter Fiscal 2023 Earnings Conference Call. [Operator Instructions] As a re ...

Couchbase, Inc. (NASDAQ:BASE) Q1 2023 Earnings Conference Call June 8, 2022 5:00 PM ET Company Participants Edward Parker - Head of Investor Relations Matt Cain - President and CEO Greg Henry - CFO Conference Call Participants Matt Hedberg - RBC Capital Markets Kash Rangan - Goldman Sachs Jason Ader - William Blair Sanjit Singh - Morgan Stanley Raimo Lenschow - Barclays Brad Reback - Stifel Operator Ladies and gentlemen, thank you for standing by, and welcome to Couchbase's First Quarter 2023 Earnings Call. ...

Part I [Special Note Regarding Forward-Looking Statements](index=4&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions investors that the Annual Report contains forward-looking statements subject to substantial risks and uncertainties, with actual results potentially differing materially - Forward-looking statements cover future **financial performance** (**revenue**, **costs**, **profitability**), **demand** for **products**/services, ability to attract/retain **customers** and partners, new **product** development (Couchbase Capella), competitive landscape, impact of COVID-19, regulatory compliance, **intellectual property**, and **expenses** as a public company[10](index=10&type=chunk) - Investors are cautioned against relying on forward-looking statements as predictions, as actual **results** may differ materially due to **risks** and uncertainties, including those detailed in the 'Risk Factors' section[10](index=10&type=chunk)[12](index=12&type=chunk) [Risk Factor Summary](index=5&type=section&id=Risk%20Factor%20Summary) This section summarizes principal risks including **net losses**, intense competition, **customer** acquisition challenges, market evolution, innovation needs, and operational, **intellectual property**, and regulatory **risks** - The company has a history of **net losses** and may not achieve or maintain **profitability**, with **revenue growth** potentially not keeping pace with historical **rates**[13](index=13&type=chunk) - Intense competition, challenges in **cost-effectively** acquiring new **customers** or securing renewals/expansions from existing ones, and the evolving market for **products** and services pose significant **risks**[13](index=13&type=chunk) - **Risks** include failure to innovate, limited operating history making future **results** difficult to predict, significant fluctuations in future **results**, and the impact of the global COVID-19 pandemic and economic downturns[13](index=13&type=chunk) - Operational **risks** involve real or perceived errors in **products**, interruptions in technology, inability to provide high-quality **customer support**, and reliance on internal, unverified operational **metrics**[13](index=13&type=chunk) - **Intellectual property risks** include challenges in monetizing and protecting **IP** due to open source licensing, potential litigation, and the ease with which competitors can enter the market[14](index=14&type=chunk) - **Security breaches**, non-compliance with **data protection** and **privacy laws**, and the complexities of selling to heavily regulated organizations are significant legal and regulatory **risks**[14](index=14&type=chunk) [Business Overview](index=6&type=section&id=Item%201.%20Business) Couchbase offers a modern, versatile database platform for mission-critical enterprise applications, combining relational and NoSQL strengths across diverse deployment environments - Couchbase offers a modern database for enterprise applications, emphasizing high **performance**, reliability, scalability, and agility for mission-critical operations[16](index=16&type=chunk) - The database is versatile, supporting cloud, multi-cloud, hybrid-cloud, on-premise, and edge environments, fusing relational database strengths with NoSQL flexibility[16](index=16&type=chunk) - Couchbase Capella is a fully-managed Database-as-a-Service (DBaaS) offering, simplifying database management and supporting a broad set of use cases[16](index=16&type=chunk) [Overview](index=7&type=section&id=Overview) Couchbase provides a leading modern database for mission-critical enterprise applications, combining relational and NoSQL strengths across diverse deployment environments to facilitate digital transformation - Couchbase's mission is to empower enterprises with a modern database for mission-critical applications, ensuring high **performance**, reliability, scalability, and agility[16](index=16&type=chunk) - The database architecture fuses relational database strengths (SQL transactions, ACID guarantees) with NoSQL flexibility and scalability, supporting cloud, multi-cloud, hybrid-cloud, on-premise, and edge deployments[16](index=16&type=chunk) - Couchbase Capella, their fully-managed DBaaS, simplifies database management and reduces the need for additional databases, facilitating a seamless transition from legacy systems[16](index=16&type=chunk) [Our Solution](index=7&type=section&id=Our%20Solution) Couchbase's modern database is purpose-built for high **performance** at scale in mission-critical enterprise applications, addressing digital transformation and emerging technology demands - Couchbase's modern database is purpose-built for high **performance** at scale, serving mission-critical enterprise applications[17](index=17&type=chunk) - The platform is designed to address the increasing **demands** of digital transformation and emerging trends such as self-driving cars, 5G edge computing, augmented reality, and blockchain[17](index=17&type=chunk) [Key Customer Benefits](index=8&type=section&id=Key%20Customer%20Benefits) Couchbase offers a fast, flexible, familiar, and future-proof database solution, enabling efficient and agile mission-critical applications across various deployment models - **Fast**: Achieves tens of **millions** of operations per second and sub-millisecond response times, with elasticity and automatic **data replication** for reliability[19](index=19&type=chunk) - **Flexible**: Supports agile development and CI/CD with a flexible JSON **data model**, allowing schema changes without downtime[19](index=19&type=chunk) - **Familiar**: Utilizes SQL++ query language, extending SQL for JSON, to minimize disruption for SQL-trained DBAs[19](index=19&type=chunk) - **Future Proof**: Designed for multi-cloud to edge deployment, offering Couchbase Capella as a fully-managed DBaaS for simplified operations[19](index=19&type=chunk) [Our Competitive Strengths](index=8&type=section&id=Our%20Competitive%20Strengths) Couchbase's competitive strengths include a powerful, future-proof architecture, effective 'land and expand' and dual go-to-market strategies, and a strong company culture - The platform is powerful for both enterprise architects and application developers, offering high availability, **performance** at scale, and agile development[20](index=20&type=chunk) - The 'land and expand' model allows easy initial deployment and subsequent expansion to mission-critical applications, making Couchbase a core system of record[20](index=20&type=chunk) - A 'flywheel' go-to-market motion combines a 'sell-to' strategy for enterprise architects with a 'buy-from' motion for application developers, enhancing market reach and **sales efficiency**[20](index=20&type=chunk) - The platform is architected for today and tomorrow, solving major computer science problems to provide high **performance**, reliability, scalability, and agility[20](index=20&type=chunk) - A strong company culture, emphasizing 'Be Valued, Create Value,' is considered a key asset for attracting and retaining top talent[20](index=20&type=chunk) [Our Growth Strategy](index=9&type=section&id=Our%20Growth%20Strategy) Couchbase's **growth strategy** focuses on innovation, expanding its **customer base** through direct and developer-led adoption, and investing in its partner and developer ecosystem - Focus on sustained differentiation and innovation for enterprise applications, with Couchbase Capella enabling easy management and consumption of the core platform[22](index=22&type=chunk) - Investments in Couchbase Capella include extending availability to additional cloud service providers and improving the developer experience[22](index=22&type=chunk) - Enhance the core platform (Couchbase Server, Couchbase Mobile) to provide agility, flexibility, and **performance**, eliminating the need for multiple point solutions[22](index=22&type=chunk) - Expand within the existing **customer base** by moving from initial application deployments to mission-critical systems of record[22](index=22&type=chunk) - Grow the **customer base** with new enterprises through a direct 'sell-to' motion targeting architects and a 'buy-from' motion targeting application developers[22](index=22&type=chunk) - Invest in growing the ecosystem of ISVs, cloud service providers, systems integrators, and the developer community to increase reach and mindshare[22](index=22&type=chunk) [Our Products](index=9&type=section&id=Our%20Products) Couchbase provides a modern database platform with key **products** including Couchbase Capella (DBaaS), Couchbase Server (NoSQL with SQL++), and Couchbase Mobile for diverse enterprise and edge needs - Couchbase Capella is a fully-managed, automated, and secure DBaaS that simplifies database management across cloud environments, offering SQL familiarity, developer agility, and industry-leading **price-performance**[24](index=24&type=chunk) - Couchbase Server is a full-featured, multi-service NoSQL database that combines relational database aspects (distributed ACID transactions) with modern database flexibility, including a comprehensive SQL-compatible query language (SQL++)[25](index=25&type=chunk) - Couchbase Mobile provides an embedded NoSQL database for mobile and edge devices, ensuring an always-on experience with high **data availability** even without internet connectivity, and includes a synchronization gateway[27](index=27&type=chunk) [Our Technology](index=10&type=section&id=Our%20Technology) Couchbase's technology features a memory-first, elastically scalable architecture with ACID transactions, distributed replication, and a unified platform integrating multiple services for mission-critical applications - Couchbase's core architecture is memory-first, leveraging fast memory and network for sub-millisecond latency and high availability, eliminating the need for a secondary in-memory **product**[30](index=30&type=chunk) - It supports elastic scalability through a shared-nothing distributed database, automatically redistributing **data** and replicas, and offering multi-dimensional scaling (MDS) for optimized resource use[33](index=33&type=chunk)[34](index=34&type=chunk) - The platform provides ACID transactions, distributed replication (including XDCR for disaster recovery), and a single unified platform integrating key-value, SQL++ query, indexing, full-text search, eventing, and analytics services[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - Technology enables developer agility, uniform programming models via SDKs, integration with big **data** ecosystems (Spark, Kafka, Elasticsearch), and cloud-native deployments with Kubernetes for autonomous database management and full-stack **security**[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[50](index=50&type=chunk) [Our Customers](index=13&type=section&id=Our%20Customers) As of January 31, 2022, Couchbase served **590** global **customers**, including cloud-native organizations, SMEs, and Fortune 100 companies across various industries - As of January 31, 2022, Couchbase had **590 customers** worldwide[51](index=51&type=chunk) - **Customers** range from cloud-native organizations to those undergoing digital transformation, including small and medium-sized enterprises and Fortune 100 companies[51](index=51&type=chunk) [Marketing, Sales and Partners](index=13&type=section&id=Marketing%2C%20Sales%20and%20Partners) Couchbase utilizes a dual go-to-market strategy, combining enterprise 'sell-to' and developer-led 'buy-from' motions, supported by a segmented **sales force**, 'land-and-expand' model, and a robust partner ecosystem - Couchbase uses a dual go-to-market strategy: an enterprise 'sell-to' motion for strategic **demands** and a developer-led 'buy-from' motion for adoption, including free trials and Community Editions[53](index=53&type=chunk) - Marketing efforts build brand reputation and generate **demand** among enterprise architects and application developers through awareness campaigns, digital **demand generation**, and community engagement[54](index=54&type=chunk) - Direct **sales force** is segmented by account size, geography, and industry, supported by **sales engineers** and a **customer success team** driving a 'land-and-expand' model[55](index=55&type=chunk)[56](index=56&type=chunk) - The PartnerEngage program fosters relationships with Cloud Service Providers, Independent Software Vendors, Systems Integrators, and Technology Partners to expand market reach and distribution[59](index=59&type=chunk)[60](index=60&type=chunk) [Human Capital Resources](index=14&type=section&id=Human%20Capital%20Resources) Couchbase's culture, built on 'Be Valued' and 'Create Value,' supports its **646 employees** across **25 countries**, fostering good employee relations and a strong workforce - Couchbase's culture is built on 'Be Valued' (Be a Good Human, Act with Uncompromising Integrity, Serve Your Family) and 'Create Value' (Attack Hard Problems, Play to Win, Make Tomorrow Better than Today)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - As of January 31, 2022, the company had **646 employees** across **25 countries**, with **280** in **sales** and marketing, **247** in **research and development**[66](index=66&type=chunk) - The company considers its relations with **employees** to be good and has not experienced any work stoppages[67](index=67&type=chunk) [Research and Development](index=15&type=section&id=Research%20and%20Development) Couchbase's **R&D organization**, with globally distributed small functional teams, drives platform and **product** innovation, design, and quality for agility and efficiency - The **R&D organization** is responsible for the research, design, architecture, development, testing, and quality of the platform and existing **products**[68](index=68&type=chunk) - Software development uses iterative releases with small functional teams for agility and **efficiency**[68](index=68&type=chunk) - **R&D personnel** are primarily located in the United States, the United Kingdom, and India, with a globally distributed workforce considered a strategic advantage[68](index=68&type=chunk) [Intellectual Property](index=15&type=section&id=Intellectual%20Property) Couchbase protects its **intellectual property** via patents, copyrights, trademarks, and trade secrets, while also managing **risks** associated with its use of and contributions to open source software - Couchbase protects its **intellectual property** through **patent applications**, copyrights, trademarks, **trade secrets**, and contractual agreements[69](index=69&type=chunk) - As of January 31, 2022, the company owned **one issued U.S. patent**, **five pending U.S. patent applications**, **four pending PCT applications**, **five registered U.S. trademarks**, and **19 registered non-U.S. trademarks**[69](index=69&type=chunk) - The company uses third-party open source software in its **products** and contributes to open source projects, which presents **risks** related to **intellectual property**[70](index=70&type=chunk) [Compliance with Government Regulation](index=15&type=section&id=Compliance%20with%20Government%20Regulation) This section directs readers to the 'Risk Factors' for detailed information on governmental regulations and associated business **risks** [Competition](index=15&type=section&id=Competition) Couchbase competes in a rapidly evolving market against legacy, NoSQL, and cloud providers, emphasizing platform functionality, deployment ease, and multi-environment flexibility, while acknowledging competitive **risks** - The market is competitive with rapid technological changes, evolving **customer requirements**, and frequent new **product** introductions[72](index=72&type=chunk) - Primary competitors include legacy database providers (Oracle, IBM, Microsoft), NoSQL providers (MongoDB), and cloud infrastructure providers (Amazon, Microsoft, Google)[73](index=73&type=chunk) - Key competitive factors include platform functionality (agility, flexibility, **performance** at scale), ease of deployment, multi-cloud/hybrid/mobile environment support, **data handling**, solution bundling, enterprise-class **security**/reliability, consumption models, **price**/TCO, **sales**/marketing, and brand reputation[73](index=73&type=chunk) - Couchbase believes it competes favorably but faces significant **risks** from increasing competition[74](index=74&type=chunk) [Corporate Information](index=16&type=section&id=Corporate%20Information) Couchbase, Inc., incorporated in Delaware in 2008, established its current name in 2011 after mergers, with principal executive offices in Santa Clara, California - Couchbase, Inc. was incorporated in Delaware in **2008** as NorthScale, Inc., changing its name to Membase, Inc. in **2010**, and then to Couchbase, Inc. in **2011** after merging with CouchOne, Inc[75](index=75&type=chunk) - The principal executive offices are located at 3250 Olcott Street, Santa Clara, California 95054[75](index=75&type=chunk) [Available Information](index=16&type=section&id=Available%20Information) Couchbase files SEC reports (10-K, 10-Q, 8-K) available on its investor relations and SEC websites, and disseminates material information via press releases, social media, and webcasts - Couchbase files its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments with the SEC[76](index=76&type=chunk) - These reports are available free of charge on the company's investor relations website (investors.couchbase.com) and the SEC's website (www.sec.gov)[76](index=76&type=chunk) - Material information is also announced through press releases, social media (Twitter, Facebook, LinkedIn), public conference calls, and webcasts to ensure broad distribution[78](index=78&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) This section details significant **risks** to Couchbase's business, **financial condition**, **results of operations**, and prospects, categorized by industry, third-party dependence, **intellectual property**, legal/regulatory environment, and governance [Risks Related to Our Industry and Business](index=17&type=section&id=Risks%20Related%20to%20Our%20Industry%20and%20Business) Couchbase faces industry and business **risks** including **net losses**, **growth rate** fluctuations, intense competition, **customer** acquisition challenges, market evolution, innovation needs, and impacts from **product** errors, service disruptions, and economic downturns - Couchbase has incurred **net losses** since inception (**$58.2M** in FY2022, **$40.0M** in FY2021, **$29.3M** in FY2020) and expects continued **losses** due to investments in platform development, **sales**, marketing, and infrastructure[80](index=80&type=chunk) Net Losses (Fiscal Years) | Fiscal Year | Net Loss (Millions USD) | |:------------|:------------------------| | 2022 | (58.2) | | 2021 | (40.0) | | 2020 | (29.3) | Revenue Growth (Fiscal Years) | Fiscal Year | Revenue (Millions USD) | |:------------|:-----------------------| | 2022 | 123.5 | | 2021 | 103.3 | | 2020 | 82.5 | - **Revenue growth rates** have fluctuated (**20%** in FY2022, **25%** in FY2021) and may decline due to slowing adoption, increased competition, market changes, or failure to capitalize on opportunities[81](index=81&type=chunk) - The company faces intense competition from legacy database providers (Oracle, IBM, Microsoft), NoSQL offerings (MongoDB), and cloud infrastructure providers (Amazon, Microsoft, Google), many of whom have greater **resources**[87](index=87&type=chunk)[88](index=88&type=chunk) - The market for Couchbase's **products** is relatively new and evolving, and its future **success** depends on market **growth** and widespread adoption against alternative solutions[100](index=100&type=chunk) - The global COVID-19 pandemic has negatively impacted business by delaying projects, reducing **IT spending**, restricting **sales**/marketing, delaying collections, and impacting professional services delivery[122](index=122&type=chunk) - Real or perceived errors, failures, or bugs in **products**, or interruptions/**performance problems**, could adversely affect **growth**, business, **financial condition**, and **results of operations**, especially as **products** support mission-critical applications[129](index=129&type=chunk)[132](index=132&type=chunk) [Risks Related to Our Dependence on Third Parties](index=32&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Couchbase's business depends on third-party partners for market reach and service providers for operations, with **risks** including partner relationship failures, service disruptions, and reliance on potentially inaccurate third-party information - Dependence on partners (CSPs, ISVs, SIs, technology partners) for market reach and distribution means failure to maintain these relationships or partners promoting competitors could harm the business[162](index=162&type=chunk)[163](index=163&type=chunk) - Reliance on third-party service providers for cloud hosting, CRM, **financial systems**, etc., means disruptions or failures from these providers could lead to increased **costs**, delays, and operational issues, especially with Couchbase Capella's hosted functionality[165](index=165&type=chunk)[167](index=167&type=chunk) - Publicly referenced estimates and information from third-party sources are not independently verified, and any inaccuracies could harm the company's reputation and business[168](index=168&type=chunk) [Risks Related to Our Open Source and Intellectual Property](index=33&type=section&id=Risks%20Related%20to%20Our%20Open%20Source%20and%20Intellectual%20Property) Couchbase faces **risks** from open source software use and its licensing model, including potential vulnerabilities, source code release requirements, and increased competition, alongside substantial **costs** and challenges in protecting its **intellectual property** - Use of third-party open source software and making core portions of its own source code available (historically open source, now BSL 1.1) could negatively affect **sales**, lead to litigation, and allow competitors to access and use its technology[169](index=169&type=chunk) - Open source licenses may require releasing proprietary source code for modifications or derivative works, potentially reducing competitive advantages and leading to significant legal **expenses** or re-engineering efforts[171](index=171&type=chunk)[173](index=173&type=chunk) - The open source/source-available model may lower technology barriers to entry, making it easier for new and existing competitors to compete, potentially leading to **price reductions** and **loss of market share**[176](index=176&type=chunk) - The decision to license certain source code under BSL 1.1 (not an open source license) may harm adoption and reduce brand awareness[178](index=178&type=chunk) - Substantial **costs** are incurred in obtaining, maintaining, protecting, defending, and enforcing **intellectual property rights** (patents, trademarks, **trade secrets**), and any failure could reduce the **value** of software and brand[179](index=179&type=chunk)[180](index=180&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - **Intellectual property disputes** are costly, time-consuming, and could result in significant liability, **damages**, or limitations on the ability to use certain technologies[185](index=185&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) [Risks Related to Our Legal and Regulatory Environment](index=37&type=section&id=Risks%20Related%20to%20Our%20Legal%20and%20Regulatory%20Environment) Couchbase navigates a complex legal and regulatory environment, facing **risks** from evolving **data privacy laws**, **security breaches**, litigation, export controls, and changes in **tax** and accounting policies, all potentially leading to significant liabilities and reputational harm - The business is subject to a wide range of evolving **laws** and regulations (**data privacy**, **security**, **IP**, employment, anti-bribery, export controls), with non-compliance leading to investigations, **fines**, and reputational harm[191](index=191&type=chunk)[193](index=193&type=chunk) - **Security breaches** or unauthorized access to **data** (including **customer data**) could interrupt operations, harm reputation, result in significant remediation **costs**, regulatory investigations, litigation, and **financial liabilities**[195](index=195&type=chunk)[196](index=196&type=chunk)[199](index=199&type=chunk) - Compliance with global **data protection laws** like GDPR, CCPA, VCDPA, and CPA is complex and rapidly evolving, imposing stringent obligations, potential **fines** (e.g., up to **20 million euros** or **4%** of global **revenue** under GDPR), and requiring modifications to **data practices**[202](index=202&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - Selling to heavily regulated organizations and governments is competitive, **expensive**, and time-consuming, with differing contract terms and compliance requirements that can increase liability and **costs**[222](index=222&type=chunk)[223](index=223&type=chunk) - Failure to comply with anti-bribery, anti-corruption, and anti-money laundering **laws** (e.g., FCPA) could result in sanctions, **fines**, and severe criminal or civil penalties[225](index=225&type=chunk)[227](index=227&type=chunk) - Governmental export control, **trade sanctions**, and import controls could impair international competitiveness or lead to liability for violations[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk) - Changes in **tax laws**, challenges to **transfer pricing policies**, and limitations on the use of **net operating losses** (**NOLs**) could materially affect **financial condition** and **results of operations**[232](index=232&type=chunk)[233](index=233&type=chunk)[237](index=237&type=chunk)[239](index=239&type=chunk) - Changes in GAAP or incorrect estimates related to critical accounting policies (e.g., **revenue recognition**, **stock-based compensation**) could adversely affect reported **financial results**[244](index=244&type=chunk)[246](index=246&type=chunk) [Risks Related to Ownership of Our Common Stock and Governance Matters](index=47&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock%20and%20Governance%20Matters) **Risks** related to **common stock** ownership and governance include public company **costs**, reduced disclosure as an 'emerging **growth company**,' concentrated control, **stock price volatility**, dilution from future issuances, anti-takeover provisions, and reliance on analyst coverage - Operating as a public company incurs substantial legal, accounting, and compliance **costs**, and **demands** significant management attention, especially for a newly public entity[254](index=254&type=chunk)[255](index=255&type=chunk) - As an 'emerging **growth company**,' Couchbase utilizes reduced disclosure requirements, which may make its **common stock** less attractive to some investors and lead to market **volatility**[256](index=256&type=chunk)[258](index=258&type=chunk) - Executive officers, directors, and holders of **5%** or more of **common stock** have substantial control, limiting other **stockholders'** ability to influence important transactions like changes in control[260](index=260&type=chunk) - The market **price** of **common stock** may be volatile due to various factors, including overall market fluctuations, company **performance**, competitor actions, and analyst coverage[261](index=261&type=chunk)[263](index=263&type=chunk)[265](index=265&type=chunk) - **Sales** of substantial amounts of **common stock** by existing **stockholders** or the perception of such **sales** could cause the market **price** to decline and impair the ability to raise **capital**[266](index=266&type=chunk) - Future issuances of additional **stock** for financings, acquisitions, or equity **compensation plans** will dilute existing **stockholders**[267](index=267&type=chunk) - Delaware **law** and company bylaws contain anti-takeover provisions that could discourage, delay, or prevent a change in control, potentially depressing the **stock price**[269](index=269&type=chunk)[270](index=270&type=chunk) - The company does not intend to pay **dividends** for the foreseeable future, requiring **stockholders** to rely on **stock price appreciation** for **returns**[275](index=275&type=chunk) [Unresolved Staff Comments](index=51&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item confirms the absence of unresolved staff comments from the SEC [Properties](index=51&type=section&id=Item%202.%20Properties) Couchbase leases its Santa Clara headquarters and other domestic and international facilities, with plans for future expansion and associated **expenses** - Corporate headquarters are in Santa Clara, California, leasing approximately **46,000 square feet** until March **2025**[276](index=276&type=chunk) - Additional leased facilities are located in Austin, Texas (U.S.), and Tel Aviv, Israel, Bangalore, India, and London and Manchester, United Kingdom (international)[276](index=276&type=chunk) - All facilities are leased, and the company plans to expand, anticipating additional **expenses** for new or expanded spaces[276](index=276&type=chunk) [Legal Proceedings](index=51&type=section&id=Item%203.%20Legal%20Proceedings) Couchbase may face ordinary course legal proceedings, but currently has no material adverse litigation, expensing legal fees as incurred and recording liabilities when probable and estimable - Couchbase may be subject to legal proceedings and claims in the ordinary course of business, including **intellectual property**, commercial, **product liability**, and employment litigation[277](index=277&type=chunk) - Legal fees and **costs** are **expensed** as incurred, and liabilities are recorded when a **loss** is probable and reasonably estimable[277](index=277&type=chunk) - Currently, there are no legal proceedings that, if determined adversely, would have a material adverse effect on the company's business, **financial condition**, **results of operations**, or **cash flows**[277](index=277&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Couchbase Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Couchbase's **common stock** began trading on Nasdaq in July **2021**, with **210 holders** of record as of January 31, 2022, and no **dividends** are expected, while **IPO proceeds** were used for general corporate purposes and **debt repayment** - Couchbase's **common stock** began trading on the Nasdaq Global Select Market under the symbol 'BASE' on July **22**, **2021**[280](index=280&type=chunk) - As of January 31, 2022, there were approximately **210 holders** of record of **common stock**[281](index=281&type=chunk) - The company has never declared or paid **cash dividends** and does not expect to in the foreseeable future, intending to retain **earnings** for business operations and expansion[282](index=282&type=chunk) - No equity securities were sold unregistered, and no issuer purchases of equity securities occurred during the three months ended January 31, 2022[283](index=283&type=chunk)[284](index=284&type=chunk) - The **IPO**, completed on July **26**, **2021**, generated **$214.9 million** in **net proceeds**, used for general corporate purposes, including **working capital**, operating **expenses**, **capital expenditures**, and repaying **$25.0 million** of outstanding **debt** under the **Credit Facility**[288](index=288&type=chunk) [Reserved](index=53&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Couchbase's **financial condition** and **results** for fiscal years 2020-2022, covering business overview, **revenue model**, COVID-19 impact, key **metrics**, non-GAAP measures, liquidity, and critical accounting policies [Overview](index=54&type=section&id=Overview) Couchbase offers a leading modern database for mission-critical enterprise applications, combining relational and NoSQL capabilities, achieving **$123.5 million revenue** in fiscal 2022 despite **net losses** - Couchbase offers a modern database for enterprise applications, emphasizing high **performance**, reliability, scalability, and agility for mission-critical operations across diverse environments[291](index=291&type=chunk)[292](index=292&type=chunk) - The platform combines relational database strengths with NoSQL flexibility, catering to enterprise architects and application developers[292](index=292&type=chunk) Key Financial Highlights (Fiscal Years) | Metric | FY2022 (Millions USD) | FY2021 (Millions USD) | FY2020 (Millions USD) | |:------------|:----------------------|:----------------------|:----------------------| | Revenue | 123.5 | 103.3 | 82.5 | | Net Loss | (58.2) | (40.0) | (29.3) | | ARR | 132.9 | 107.8 | N/A | - **Revenue growth rates** were **20%** for FY2022 and **25%** for FY2021. **ARR** grew **23%** from FY2021 to FY2022[295](index=295&type=chunk) [Our Business Model](index=55&type=section&id=Our%20Business%20Model) Couchbase's business model primarily relies on **subscription revenue** (**94%** in FY2022) from its Enterprise Edition and Capella DBaaS, complemented by services, employing a 'sell-to' and 'buy-from' go-to-market strategy with a 'land-and-expand' focus - **Subscription revenue** accounts for the substantial majority of **total revenue** (**94%** in FY2022, **94%** in FY2021, **93%** in FY2020)[296](index=296&type=chunk) - **Subscription revenue** is primarily from the Enterprise Edition (Couchbase Server, Couchbase Mobile), licensed per node based on computing power, memory, and service level (Platinum, Gold, Silver)[296](index=296&type=chunk) - Couchbase Capella is licensed via an on-demand consumption model or an annual **credit model**, offering flexibility and **volume discounts**[298](index=298&type=chunk) - Services **revenue** (**7%** in FY2020, **6%** in FY2021, **6%** in FY2022) is derived from professional services and training, supporting **customer success** and platform adoption[299](index=299&type=chunk) - Go-to-market strategy focuses on large enterprises with a 'sell-to' motion and application developers with a 'buy-from' motion, utilizing free Community Editions and trials[300](index=300&type=chunk)[302](index=302&type=chunk) - Employs a 'land-and-expand' model, with **sales** and **customer success teams** guiding **customers** to realize strategic use cases and drive greater platform adoption[304](index=304&type=chunk) [Impact of COVID-19](index=56&type=section&id=Impact%20of%20COVID-19) COVID-19 negatively impacted Couchbase through project delays and reduced **IT spending**, but also accelerated cloud modernization, with the company now seeing recovery and expecting **growth** as economic conditions improve - COVID-19 negatively impacted business by delaying digital transformation, reducing **IT spending**, restricting **sales**/marketing, delaying collections, and delaying professional services delivery[305](index=305&type=chunk) - **Customers** in COVID-19 impacted industries (travel, hospitality, retail) reduced or failed to expand platform usage[306](index=306&type=chunk) - The pandemic has the potential to accelerate cloud modernization and re-architecture of mission-critical applications, benefiting Couchbase's platform due to TCO benefits[307](index=307&type=chunk) - **Cost savings** were realized from reduced business travel, deferred hiring, and virtualized events[309](index=309&type=chunk) - Signs of recovery include increased **spending** from COVID-19 impacted **customers** and improved **sales productivity**, with expectations for accelerated **growth**[310](index=310&type=chunk) [Factors Affecting Our Performance](index=57&type=section&id=Factors%20Affecting%20Our%20Performance) Couchbase's **performance** is driven by new **customer acquisition**, expansion within existing **customers** (evidenced by a **dollar-based net retention rate over 115%**), and continuous investment in offerings and infrastructure - **Growth** is driven by acquiring new **customers**, influenced by **sales cycles**, marketing, and modern application adoption, with Couchbase Capella expected to be a key driver[311](index=311&type=chunk) - Expansion within existing **customers** is a significant **growth driver**, achieved through increased deployment scale and new use cases, supported by professional services[312](index=312&type=chunk) - **Dollar-based net retention rate** has been **over 115%** in **seven** of the past **eight quarters**, indicating successful expansion within existing **customers**[312](index=312&type=chunk) - Continuous investment in offerings, personnel, geographic presence, and infrastructure is essential for future **growth** and innovation[314](index=314&type=chunk) [Key Business Metrics](index=58&type=section&id=Key%20Business%20Metrics) Couchbase tracks key business **metrics** including **Annual Recurring Revenue** (**$132.9 million** as of January 31, 2022, a **23%** year-over-year **growth**) and **customer count** (**590** as of January 31, 2022) Annual Recurring Revenue (ARR) | Metric | As of January 31, 2022 (in millions) | As of January 31, 2021 (in millions) | |:-------|:-------------------------------------|:-------------------------------------| | ARR | $132.9 | $107.8 | - **ARR** grew by **23%** year-over-year, from **$107.8 million** in FY2021 to **$132.9 million** in FY2022[316](index=316&type=chunk)[317](index=317&type=chunk) Number of Customers | Metric | As of January 31, 2022 | As of January 31, 2021 | |:----------|:-----------------------|:-----------------------| | Customers | 590 | 541 | - The **total number of customers** increased from **541** in FY2021 to **590** in FY2022[319](index=319&type=chunk) [Non-GAAP Financial Measures](index=58&type=section&id=Non-GAAP%20Financial%20Measures) Couchbase utilizes non-GAAP **financial measures**, excluding **stock-based compensation** and litigation **expenses**, to assess underlying **performance**, reporting a **free cash flow of $(42.4) million** in FY2022 Non-GAAP Gross Profit and Margin (Fiscal Years) | Metric | FY2022 (Thousands USD) | FY2021 (Thousands USD) | FY2020 (Thousands USD) | |:------------------|:-----------------------|:-----------------------|:-----------------------| | Total Revenue | 123,542 | 103,285 | 82,521 | | Gross Profit | 108,761 | 91,668 | 74,719 | | Stock-based Comp. | 392 | 123 | 76 | | Non-GAAP GP | 109,153 | 91,791 | 74,795 | | Gross Margin | 88.0% | 88.8% | 90.5% | | Non-GAAP GM | 88.4% | 88.9% | 90.6% | Non-GAAP Operating Loss and Margin (Fiscal Years) | Metric | FY2022 (Thousands USD) | FY2021 (Thousands USD) | FY2020 (Thousands USD) | |:------------------------|:-----------------------|:-----------------------|:-----------------------| | Total Revenue | 123,542 | 103,285 | 82,521 | | Loss from Operations | (56,258) | (33,080) | (30,343) | | Stock-based Comp. | 10,750 | 4,671 | 3,418 | | Litigation-related Exp. | — | 213 | 4,139 | | Non-GAAP Op. Loss | (45,508) | (28,196) | (22,786) | | Operating Margin | (46)% | (32)% | (37)% | | Non-GAAP Op. Margin | (37)% | (27)% | (28)% | Non-GAAP Net Loss and EPS (Fiscal Years) | Metric | FY2022 (Thousands USD) | FY2021 (Thousands USD) | FY2020 (Thousands USD) | |:----------------------------------------|:-----------------------|:-----------------------|:-----------------------| | Net Loss Attributable to Common Stock. | (61,146) | (44,059) | (29,257) | | Stock-based Comp. | 10,750 | 4,671 | 3,418 | | Litigation-related Exp. | — | 213 | 4,139 | | Gain from Legal Settlement | — | — | (6,565) | | Non-GAAP Net Loss Attributable to Common Stock. | (50,396) | (39,175) | (28,265) | | GAAP Net Loss Per Share | (2.37) | (7.71) | (5.33) | | Non-GAAP Net Loss Per Share | (1.96) | (6.85) | (5.15) | | Weighted Average Shares Outstanding | 25,777 | 5,717 | 5,489 | Free Cash Flow (Fiscal Years) | Metric | FY2022 (Thousands USD) | FY2021 (Thousands USD) | FY2020 (Thousands USD) | |:--------------------------------------|:-----------------------|:-----------------------|:-----------------------| | Net Cash Used in Operating Activities | (41,574) | (39,178) | (21,757) | | Less: Purchases of Property & Equip. | (819) | (2,819) | (4,710) | | Free Cash Flow | (42,393) | (41,997) | (26,467) | [Components of Results of Operations](index=60&type=section&id=Components%20of%20Results%20of%20Operations) Couchbase's **results of operations** are driven by **subscription** and services **revenue**, with **costs** primarily from personnel, cloud infrastructure, and capitalized software amortization, alongside operating **expenses**, interest, and **taxes** - **Revenue** is derived from **subscriptions** (software licenses and post-contract support, PCS) and services (professional services and training)[330](index=330&type=chunk) - License **revenue** is recognized upon transfer of software access, while PCS and services **revenue** are recognized ratably over the term or over time[330](index=330&type=chunk) - **Cost of subscription revenue** includes personnel, software, cloud infrastructure, and amortization of capitalized internal-use software related to Couchbase Capella[332](index=332&type=chunk) - **Cost of services revenue** includes personnel, third-party partners, and travel **expenses**[333](index=333&type=chunk) - Operating **expenses** (**R&D**, **Sales & Marketing**, **G&A**) are primarily driven by **personnel-related costs** and are expected to increase in absolute **dollars** as the business grows[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) - **Interest expense**, other **income**/**expense** (**net**), and provision for **income taxes** also affect the **results of operations**[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk) [Results of Operations (Comparison of Fiscal 2022 and Fiscal 2021)](index=62&type=section&id=Results%20of%20Operations) In fiscal 2022, **total revenue** grew **20%** to **$123.5 million**, driven by **subscription** and services **growth**, but increased operating **expenses** and foreign currency **losses** led to a **net loss of $58.2 million**, despite a **91%** decrease in **interest expense** Consolidated Statements of Operations (in thousands) | Metric | FY2022 | FY2021 | FY2020 | |:-----------------------------|:----------|:----------|:----------| | License Revenue | $19,008 | $14,032 | $11,128 | | Support and Other Revenue | $97,279 | $82,904 | $65,472 | | Total Subscription Revenue | $116,287 | $96,936 | $76,600 | | Services Revenue | $7,255 | $6,349 | $5,921 | | **Total Revenue** | **$123,542**| **$103,285**| **$82,521** | | Cost of Subscription Revenue | $8,529 | $6,074 | $3,446 | | Cost of Services Revenue | $6,252 | $5,543 | $4,356 | | **Total Cost of Revenue** | **$14,781** | **$11,617** | **$7,802** | | **Gross Profit** | **$108,761**| **$91,668** | **$74,719** | | R&D Expenses | $51,639 | $39,000 | $31,672 | | Sales & Marketing Expenses | $89,372 | $70,248 | $57,829 | | G&A Expenses | $24,008 | $15,500 | $15,561 | | **Total Operating Expenses** | **$165,019**| **$124,748**| **$105,062**|\n| **Loss from Operations** | **$(56,258)**| **$(33,080)**| **$(30,343)**|\n| Interest Expense | $(656) | $(6,970) | $(4,657) |\n| Other Income (Expense), Net | $(300) | $1,111 | $6,509 |\n| Provision for Income Taxes | $1,015 | $1,044 | $766 |\n| **Net Loss** | **$(58,229)**| **$(39,983)**| **$(29,257)**| Revenue Growth (FY2022 vs FY2021) | Revenue Type | FY2022 (Thousands USD) | FY2021 (Thousands USD) | Change (Thousands USD) | % Change | |:-----------------------|:-----------------------|:-----------------------|:-----------------------|:---------| | License | 19,008 | 14,032 | 4,976 | 35% | | Support and other | 97,279 | 82,904 | 14,375 | 17% | | Total Subscription | 116,287 | 96,936 | 19,351 | 20% | | Services | 7,255 | 6,349 | 906 | 14% | | **Total Revenue** | **123,542** | **103,285** | **20,257** | **20%** | - **Subscription revenue** increased by **$19.4 million** (**20%**), with approximately **91%** of the increase attributable to **growth** from existing **customers**[348](index=348&type=chunk) - **Cost of subscription revenue** increased by **$2.5 million** (**40%**), primarily due to increased headcount and amortization of capitalized internal-use software related to Couchbase Capella[351](index=351&type=chunk) - **Gross margin** decreased from **88.8%** in FY2021 to **88.0%** in FY2022, mainly due to the amortization of capitalized internal-use software for Couchbase Capella[351](index=351&type=chunk)[352](index=352&type=chunk) - **Research and development expenses** increased by **$12.6 million** (**32%**), driven by higher **personnel-related costs** due to increased headcount[353](index=353&type=chunk) - **Sales and marketing expenses** increased by **$19.1 million** (**27%**), primarily due to increased **personnel-related costs** and marketing program **expenses**[356](index=356&type=chunk) - **General and administrative expenses** increased by **$8.5 million** (**55%**), mainly due to increased **personnel-related costs** and professional fees associated with being a public company[357](index=357&type=chunk) - **Interest expense** decreased by **$6.3 million** (**91%**) due to the termination of a term loan and replacement with a **Credit Facility** with a lower **interest rate** and **balance**[358](index=358&type=chunk) - Other **income** (**expense**), **net** decreased by **$1.4 million** (**127%**) due to an increase in **net foreign currency transaction losses**[359](index=359&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20Capital%20Resources) Couchbase's liquidity is supported by **$214.9 million IPO proceeds** and **$206.0 million** in **cash** and investments as of January 31, 2022, deemed sufficient for the next **12 months** despite historical **losses**, with **$161.6 million** in remaining **performance obligations** - Operations are financed through **subscription**/services **revenue** and **$214.9 million net proceeds** from the July **2021 IPO**[362](index=362&type=chunk) - As of January 31, 2022, **cash**, **cash equivalents**, and **short-term investments** totaled **$206.0 million**, with a **$40.0 million revolving line of credit** available[362](index=362&type=chunk) - Despite historical **net losses** and **negative operating cash flows**, current liquidity is believed sufficient for the next **12 months**[362](index=362&type=chunk) - Remaining **performance obligations** were **$161.6 million** as of January 31, 2022, with **$98.0 million** expected to be recognized in the next **12 months**[362](index=362&type=chunk) [Cash Flows](index=66&type=section&id=Cash%20Flows) In fiscal 2022, **cash used in operating activities** was **$41.6 million**, investing activities used **$92.0 million** (primarily for investments), while **financing activities** provided **$192.4 million** (driven by **IPO proceeds**) Summary of Cash Flows (in thousands) | Activity | FY2022 | FY2021 | FY2020 | |:--------------------------|:----------|:----------|:----------| | Operating Activities | $(41,574) | $(39,178) | $(21,757) | | Investing Activities | $(92,030) | $(22,412) | $(4,710) |\n| Financing Activities | $192,410 | $80,501 | $35,780 | - **Cash used in operating activities** for FY2022 was **$41.6 million**, driven by **net loss** (**$58.2M**) and increases in **deferred commissions** (**$20.5M**) and **prepaid expenses** (**$6.2M**), partially offset by increases in **deferred revenue** (**$10.0M**) and **accrued compensation** (**$7.0M**)[366](index=366&type=chunk) - **Cash used in investing activities** for FY2022 was **$92.0 million**, primarily from **net purchases of short-term investments** (**$91.2M**)[368](index=368&type=chunk) - **Cash provided by financing activities** for FY2022 was **$192.4 million**, mainly from **IPO proceeds** (**$214.9M**) and **stock option exercises** (**$7.5M**), offset by **debt repayment** (**$25.0M**) and offering **costs** (**$4.9M**)[369](index=369&type=chunk) [Contractual Obligations and Commitments](index=67&type=section&id=Contractual%20Obligations%20and%20Commitments) Couchbase's contractual obligations include purchase commitments for cloud infrastructure and **subscription arrangements**, alongside operating lease commitments for office facilities - Contractual obligations consist of purchase obligations (third-party cloud infrastructure, **subscription arrangements**) and operating lease commitments (office facilities)[370](index=370&type=chunk) [Indemnification Agreements](index=67&type=section&id=Indemnification%20Agreements) Couchbase provides indemnification to **customers**, partners, directors, and officers for various liabilities, with no material **demands** or expected **financial impact** to date - Couchbase indemnifies **customers**, vendors, lessors, and partners for **losses** from **intellectual property infringement**, contract breaches, and other liabilities[371](index=371&type=chunk) - Directors and officers are also indemnified against certain liabilities[371](index=371&type=chunk) - No material **demands** have been made to date, and no claims are expected to have a material effect on **financial condition**, **results of operations**, or **cash flows**[371](index=371&type=chunk) [Critical Accounting Policies and Estimates](index=68&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Couchbase's **financial statements** rely on critical accounting estimates for **revenue recognition**, capitalized software, **deferred commissions**, **stock-based compensation**, and **income taxes**, with the company electing the extended transition period for new accounting standards - Critical accounting estimates include **standalone selling prices** (**SSP**) for **performance obligations**, capitalized internal-use software **costs**, expected period of benefit for **deferred commissions**, **valuation of common stock** and **stock-based compensation**, **allowance for doubtful accounts**, and accounting for **income taxes**[378](index=378&type=chunk) - **Revenue recognition** involves significant judgment in determining distinct **performance obligations** (software license and PCS) and allocating **transaction price** based on relative **SSP**[376](index=376&type=chunk)[377](index=377&type=chunk) - **Stock-based compensation fair value** is estimated using the Black-Scholes model for options and ESPP, and Monte Carlo simulation for market-based RSUs, requiring subjective assumptions like expected term, **volatility**, and **risk-free interest rate**[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk) - Couchbase elected the extended transition period under the JOBS Act for new accounting standards[382](index=382&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Couchbase faces market **risks** from **interest rate** and foreign currency fluctuations, with its short-term, liquid investment portfolio limiting **interest rate impact**, and no hedging activities undertaken to date - Primary market **risks** are fluctuations in **interest rates** and foreign currency exchange **rates**[383](index=383&type=chunk) - Investment portfolio (money market funds, commercial paper, corporate **debt securities**) is highly liquid and short-term, so a **10% change** in **interest rates** is not expected to materially affect **results**[384](index=384&type=chunk)[385](index=385&type=chunk) - Foreign subsidiaries use the U.S. **Dollar** as functional currency, with remeasurement adjustments recognized in other **income** (**expense**), **net**. Increased international **sales** could heighten foreign currency **risk**[386](index=386&type=chunk) - Couchbase has not engaged in foreign currency hedging transactions to date[386](index=386&type=chunk) [Financial Statements and Supplementary Data](index=70&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section provides Couchbase's audited consolidated **financial statements** for fiscal years 2020-2022, including **balance sheets**, **statements of operations**, comprehensive **loss**, equity, **cash flows**, and detailed notes, along with the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=72&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an unqualified opinion, affirming Couchbase's consolidated **financial statements** for fiscal years 2020-2022 fairly present its **financial position**, **results**, and **cash flows** in conformity with U.S. GAAP - PricewaterhouseCoopers LLP provided an unqualified opinion on Couchbase, Inc.'s consolidated **financial statements** for the periods ended January 31, 2022, 2021, and 2020[391](index=391&type=chunk) - The **financial statements** are presented fairly, in all material respects, in conformity with U.S. GAAP[391](index=391&type=chunk) [Consolidated Balance Sheets](index=73&type=section&id=Consolidated%20Balance%20Sheets) As of January 31, 2022, **total assets** increased to **$276.7 million**, **liabilities** decreased to **$93.5 million**, and **stockholders' equity** shifted to a positive **$183.2 million** due to the **IPO** and preferred **stock conversion** Consolidated Balance Sheets (in thousands) | Metric | As of January 31, 2022 | As of January 31, 2021 | |:--------------------------------------------------------------------|:-----------------------|:-----------------------| | **Assets** | | | | Cash and cash equivalents | $95,688 | $37,297 | | Short-term investments | $110,266 | $19,546 | | Accounts receivable, net | $36,696 | $35,897 | | Deferred commissions (current) | $11,783 | $8,353 | | Prepaid expenses and other current assets | $8,559 | $2,449 | | Total current assets | $262,992 | $103,542 | | Property and equipment, net | $4,288 | $6,506 | | Deferred commissions (noncurrent) | $8,243 | $4,941 | | Other assets | $1,219 | $2,199 | | **Total assets** | **$276,742** | **$117,188** | | **Liabilities** | | | | Accounts payable | $1,923 | $2,428 | | Accrued compensation and benefits | $16,143 | $9,110 | | Other accrued expenses | $3,231 | $4,154 | | Deferred revenue (current) | $69,010 | $57,168 |\n| Total current liabilities | $90,307 | $72,860 |\n| Long-term debt | — | $24,948 |\n| Deferred revenue (noncurrent) | $2,713 | $4,542 |\n| Other liabilities | $507 | $1,358 |\n| **Total liabilities** | **$93,527** | **$103,708** |\n| Redeemable convertible preferred stock | — | $259,822 |\n| **Stockholders' Equity (Deficit)** | | |\n| Additional paid-in capital | $525,392 | $37,410 |\n| Accumulated other comprehensive income (loss) | $(195) | $1 |\n| Accumulated deficit | $(341,982) | $(283,753) |\n| **Total stockholders' equity (deficit)** | **$183,215** | **$(246,342)** |\n| **Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)** | **$276,742** | **$117,188** | - **Total assets** increased significantly from **$117.2 million** in FY2021 to **$276.7 million** in FY2022, primarily due to increases in **cash**, **cash equivalents**, and **short-term investments**[396](index=396&type=chunk) - **Total liabilities** decreased from **$103.7 million** in FY2021 to **$93.5 million** in FY2022, mainly due to the **repayment of long-term debt**[397](index=397&type=chunk) - **Stockholders' equity** shifted from a **deficit of $(246.3) million** in FY2021 to a positive **$183.2 million** in FY2022, reflecting the impact of the **IPO** and conversion of preferred **stock**[398](index=398&type=chunk) [Consolidated Statements of Operations](index=74&type=section&id=Consolidated%20Statements%20of%20Operations) Couchbase's **total revenue** increased to **$123.5 million** in fiscal 2022, but higher operating **expenses** led to an increased **net loss of $58.2 million**, resulting in a **$(2.37) net loss per share** Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | FY2022 | FY2021 | FY2020 | |:-----------------------------|:----------|:----------|:----------| | License Revenue | $19,008 | $14,032 | $11,128 | | Support and Other Revenue | $97,279 | $82,904 | $65,472 | | Total Subscription Revenue | $116,287 | $96,936 | $76,600 | | Services Revenue | $7,255 | $6,349 | $5,921 | | **Total Revenue** | **$123,542**| **$103,285**| **$82,521** | | Cost of Subscription Revenue | $8,529 | $6,074 | $3,446 |\n| Cost of Services Revenue | $6,252 | $5,543 | $4,356 |\n| **Total Cost of Revenue** | **$14,781** | **$11,617** | **$7,802** |\n| **Gross Profit** | **$108,761**| **$91,668** | **$74,719** |\n| R&D Expenses | $51,639 | $39,000 | $31,672 |\n| Sales & Marketing Expenses | $89,372 | $70,248 | $57,829 |\n| G&A Expenses | $24,008 | $15,500 | $15,561 |\n| **Total Operating Expenses** | **$165,019**| **$124,748**| **$105,062**|\n| **Loss from Operations** | **$(56,258)**| **$(33,080)**| **$(30,343)**|\n| Interest Expense | $(656) | $(6,970) | $(4,657) |\n| Other Income (Expense), Net | $(300) | $1,111 | $6,509 |\n| Provision for Income Taxes | $1,015 | $1,044 | $766 |\n| **Net Loss** | **$(58,229)**| **$(39,983)**| **$(29,257)**|\n| Net Loss Attributable to Common Stockholders | $(61,146) | $(44,059) | $(29,257) |\n| Net Loss Per Share, Basic and Diluted | $(2.37) | $(7.71) | $(5.33) |\n| Weighted-Average Shares | 25,777 | 5,717 | 5,489 | - **Total revenue** increased by **20%** from **$103.3 million** in FY2021 to **$123.5 million** in FY2022[401](index=401&type=chunk) - **Net loss** increased from **$39.9 million** in FY2021 to **$58.2 million** in FY2022[401](index=401&type=chunk) - Operating **expenses** increased significantly, with **R&D** up **32%** and **Sales & Marketing** up **27%** from FY2021 to FY2022[353](index=353&type=chunk)[356](index=356&type=chunk) - **Interest expense** decreased by **91%** from FY2021 to FY2022[358](index=358&type=chunk) [Consolidated Statements of Comprehensive Loss](index=75&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Couchbase reported a **total comprehensive loss of $58.4 million** in fiscal 2022, comprising a **net loss of $58.2 million** and **$(0.2) million** in **net unrealized investment losses** Consolidated Statements of Comprehensive Loss (in thousands) | Metric | FY2022 | FY2021 | FY2020 | |:------------------------------------------|:----------|:----------|:----------| | Net Loss | $(58,229) | $(39,983) | $(29,257) | | Net Unrealized Gains (Losses) on Investments, Net of Tax | $(196) | $1 | — | | **Total Co