Expanded Support for Edge Workloads Allows Businesses to Effectively Operate in Any Remote, Disconnected and Resource-Constrained EnvironmentsSANTA CLARA, Calif., March 4, 2025 /PRNewswire/ -- Couchbase, Inc. (NASDAQ: BASE), the developer data platform for critical applications in our AI world, today launched Couchbase Edge Server, an offline-first, lightweight database server and sync solution designed to provide low latency data access, consolidation, storage and processing for applications in resource-co ...

Core Insights - The current market environment is characterized by nervousness due to turbulent macro conditions, persistent inflation, and geopolitical shifts, which has limited the rebound potential for small and mid-cap stocks during the Q4 earnings season [1]. Group 1: Market Conditions - Small and mid-cap rebound plays have struggled to enjoy rallies amid the ongoing challenges in the market [1]. Group 2: Industry Expertise - Gary Alexander, with extensive experience in covering technology companies and advising startups, has insights into the themes shaping the industry today [1].

Group 1 - Couchbase, Inc. (BASE) has shown a year-to-date return of 12.4%, significantly outperforming the Computer and Technology sector, which has returned an average of -4.3% [4] - The Zacks Consensus Estimate for BASE's full-year earnings has increased by 2.9% over the past quarter, indicating improving analyst sentiment and a positive earnings outlook [4] - Couchbase, Inc. holds a Zacks Rank of 2 (Buy), suggesting it has characteristics that may lead to outperformance in the market over the next one to three months [3] Group 2 - Couchbase, Inc. is part of the Internet - Software industry, which consists of 150 companies and currently ranks 82 in the Zacks Industry Rank [6] - Stocks in the Internet - Software industry have gained approximately 5.9% year-to-date, indicating that Couchbase, Inc. is performing better than its industry peers [6] - Another stock in the Computer and Technology sector, DigitalOcean Holdings, Inc. (DOCN), has returned 25.4% year-to-date and also holds a Zacks Rank of 2 (Buy) [5]

Financial Data and Key Metrics Changes - Total Annual Recurring Revenue (ARR) reached $237.9 million, up 17% year-over-year and 8% sequentially [9][32] - Net new ARR was $17.6 million, up 14% year-over-year; excluding currency fluctuations, it was $19.5 million, up 26% year-over-year [9][33] - Revenue for Q4 was $54.9 million, an increase of 10% year-over-year [9][35] - Non-GAAP operating loss for Q4 was $144,000, significantly improved from a loss of $4.1 million in Q4 2024 [10][41] - Free cash flow for Q4 was $4 million, marking the highest quarterly free cash flow in company history [43][44] Business Line Data and Key Metrics Changes - Capella ARR was $38.5 million, up 76% year-over-year and now represents 16.2% of total ARR [34] - The company added 44 new logos in Q4, up from 34 in the same quarter last year [10][38] - Software revenue for Q4 was $52.8 million, up 10% year-over-year [35] Market Data and Key Metrics Changes - The company experienced broad strength across both core enterprise and Capella businesses, with strong renewals and expansions [11] - Significant expansions were noted in various sectors including travel, banking, e-commerce, and gaming [13][16] Company Strategy and Development Direction - The company aims to focus on sustained growth, driving Capella uptake, and enhancing support for AI use cases [24][25] - The strategic positioning as a long-term partner for enterprises is emphasized, particularly in the context of AI-driven applications [25][92] - The company is committed to improving operational efficiency while investing in R&D, especially in AI [121][124] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the healthy pipeline of large strategic accounts and the balance of execution in Q4 [54][66] - The renewal pool for fiscal 2026 is larger and more evenly distributed, which is expected to drive growth [45][68] - Management anticipates a return to historical net retention rates in the second half of fiscal 2026 [37] Other Important Information - CFO Greg Henry announced his departure after eight years, with Bill Carey stepping in as interim CFO [26][27] - The company is focused on leveraging its unique platform capabilities to meet the growing needs of enterprises [25][100] Q&A Session Summary Question: Strength in Q4 performance - Management attributed the strong performance to executing strategic deals, strong renewals, and Capella migrations [52][54] Question: Delta between revenue outlook and ARR guidance - The difference is due to increased migration activity and the transition to Capella, which affects revenue recognition [56][59] Question: Market conditions and renewal cohorts - Management noted a healthy pipeline and balanced renewal base, which is expected to drive growth [64][66] Question: Community migration drivers - Factors include data security, reliability, and the ROI of moving to Capella, which is expected to continue driving new business [72][75] Question: Capella AI Services customer feedback - Initial feedback indicates strong relevance of Couchbase's platform and its capabilities in AI services [98][100] Question: Confidence in Capella migrations - Management has a clear understanding of customer readiness for migration and is optimistic about the upcoming renewal base [103][108] Question: Balance between growth and profitability - The company aims to balance growth with profitability while continuing to invest in R&D, particularly in AI [120][124]

Financial Highlights - Couchbase's Annual Recurring Revenue (ARR) reached $238 million, demonstrating a 17% year-over-year growth[11] - The company boasts a strong customer base with 947 total customers, including 29% from the Fortune 100[11] - Non-GAAP gross margin stands at 89%[11] - Dollar-based Net Retention Rate (NRR) is at 114%+[11] Business Model and Growth - Subscription revenue shows a 10% year-over-year growth, indicating a predictable model[11] - ARR per customer is $251,000, reflecting a land and expand strategy[11] - The company has 305 customers with ARR greater than $100,000 and 50 customers with ARR exceeding $1 million, showcasing a scalable business model[11] Future Expectations - Couchbase anticipates delivering 20%+ growth with positive Free Cash Flow (FCF) and Non-GAAP Operating Income by fiscal year 2027[92] - The company projects fiscal year 2026 revenue to reach $230 million[91]

Core Insights - Couchbase, Inc. reported revenue of $54.92 million for the quarter ended January 2025, marking a year-over-year increase of 9.7% and exceeding the Zacks Consensus Estimate of $53.16 million by 3.32% [1] - The company achieved an EPS of $0.00, a significant improvement from -$0.06 a year ago, resulting in a 100% EPS surprise compared to the consensus estimate of -$0.08 [1] Financial Performance Metrics - Annual Recurring Revenue (ARR) was reported at $237.90 million, slightly above the estimated $237.80 million by six analysts [4] - Total subscription revenue reached $52.78 million, surpassing the average estimate of $50.98 million based on seven analysts, reflecting a year-over-year change of 9.8% [4] - Revenue from services was $2.14 million, slightly below the average estimate of $2.18 million, with a year-over-year increase of 5.6% [4] Stock Performance - Over the past month, Couchbase shares have returned -3.3%, compared to a -1.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Couchbase, Inc. reported break-even quarterly earnings per share, surpassing the Zacks Consensus Estimate of a loss of $0.08, compared to a loss of $0.06 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $54.92 million for the quarter ended January 2025, exceeding the Zacks Consensus Estimate by 3.32%, and up from $50.09 million year-over-year [2] - Over the last four quarters, Couchbase has surpassed consensus EPS estimates four times and topped consensus revenue estimates four times [2] Stock Movement and Outlook - Couchbase shares have increased approximately 6.2% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] - The sustainability of the stock's immediate price movement will depend on management's commentary during the earnings call [3] - The current consensus EPS estimate for the coming quarter is -$0.07 on revenues of $56.21 million, and -$0.17 on revenues of $235.3 million for the current fiscal year [7] Industry Context - The Internet - Software industry, to which Couchbase belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Couchbase's stock performance [5][6]

Financial Performance - Total revenue for Q4 FY2025 was $54.9 million, a 10% increase year-over-year[5] - Total revenue for FY2025 was $209.5 million, a 16% increase year-over-year[8] - Total revenue for the three months ended January 31, 2025, was $54,922 thousand, an increase of 9% compared to $50,089 thousand for the same period in 2024[27] - Subscription revenue for the year ended January 31, 2025, reached $200,410 thousand, up 17% from $171,554 thousand in 2024[27] - Total revenue for the three months ended January 31, 2025, was $54.9 million, an increase of 9.4% compared to $50.1 million for the same period in 2024[33] Profitability Metrics - Gross margin for Q4 FY2025 was 88.6%, down from 89.7% in Q4 FY2024[5] - Non-GAAP gross profit for the year ended January 31, 2025, was $186.3 million, up from $159.3 million in 2024, reflecting a growth of 16.9%[33] - The gross margin for the three months ended January 31, 2025, was 88.6%, slightly down from 89.7% in the same period of 2024[33] - Non-GAAP operating margin for the three months ended January 31, 2025, was -0.3%, an improvement from -8% in the same period of 2024[34] Operating Loss and Cash Flow - Loss from operations for Q4 FY2025 was $15.8 million, improved from $22.6 million in Q4 FY2024[5] - Non-GAAP operating loss for FY2025 was $14.4 million, significantly improved from $31.3 million in FY2024[8] - The net loss for the three months ended January 31, 2025, was $15,611 thousand, a decrease from a net loss of $21,402 thousand in the same period of 2024[27] - The company reported a net loss of $15.6 million for the three months ended January 31, 2025, an improvement from a net loss of $21.4 million in the same period of 2024[34] - Free cash flow for Q4 FY2025 was $4.0 million, compared to negative free cash flow of $7.7 million in Q4 FY2024[5] - Free cash flow for the three months ended January 31, 2025, was $4.0 million, compared to a negative free cash flow of $7.7 million in the same period of 2024[34] Future Projections - For Q1 FY2026, Couchbase expects total revenue between $55.1 million and $55.9 million[9] - Couchbase aims for total ARR of $242.9 million to $245.9 million in Q1 FY2026[9] Assets and Liabilities - Cash and cash equivalents as of January 31, 2025, were $30,536 thousand, down from $41,351 thousand as of January 31, 2024[29] - Total assets increased to $260,598 thousand as of January 31, 2025, compared to $247,752 thousand as of January 31, 2024[29] - Deferred revenue increased to $94,252 thousand as of January 31, 2025, from $81,736 thousand as of January 31, 2024, indicating strong future revenue potential[29] Research and Development - Operating expenses for the year ended January 31, 2025, totaled $263,162 thousand, an increase from $242,492 thousand in 2024, primarily driven by higher research and development costs[27] - GAAP research and development expenses for the year ended January 31, 2025, were $70.6 million, an increase from $64.1 million in 2024[33] Stock and Shares - Stock-based compensation expense for the year ended January 31, 2025, was $61,297 thousand, compared to $45,774 thousand in 2024, reflecting increased equity incentives[31] - The weighted average shares outstanding for the three months ended January 31, 2025, were 52.8 million, compared to 48.5 million in the same period of 2024[34] New Initiatives - Couchbase launched the private preview of Capella AI Services to enhance application development and reduce operational costs[8]

Core Insights - Couchbase, Inc. reported strong financial results for the fourth quarter and fiscal year 2025, achieving the highest quarterly free cash flow and net new ARR in company history [2][6][7] - The company experienced significant growth in total revenue and subscription revenue, with a year-over-year increase of 10% and 17% respectively for the fourth quarter [6][26] - Annual recurring revenue (ARR) reached $237.9 million, marking a 17% increase year-over-year, with a constant currency basis ARR of $239.8 million [6][26] Financial Highlights - **Fourth Quarter Fiscal 2025**: - Total revenue was $54.9 million, a 10% increase year-over-year - Subscription revenue was $52.8 million, also a 10% increase year-over-year - Gross margin was 88.6%, down from 89.7% in Q4 fiscal 2024 - Loss from operations was $15.8 million, improved from $22.6 million in Q4 fiscal 2024 - Free cash flow was $4.0 million, compared to negative free cash flow of $7.7 million in Q4 fiscal 2024 [6][26] - **Full Year Fiscal 2025**: - Total revenue was $209.5 million, a 16% increase year-over-year - Subscription revenue was $200.4 million, a 17% increase year-over-year - Gross margin was 88.1%, up from 87.7% in fiscal 2024 - Loss from operations was $78.7 million, improved from $84.5 million in fiscal 2024 - Negative free cash flow was $18.8 million, an improvement from negative $31.6 million in fiscal 2024 [6][26] Business Developments - Couchbase launched the private preview of Capella AI Services, aimed at simplifying the development of secure agentic applications [6][12] - The company announced integration with NVIDIA AI, enhancing the development of AI applications through Capella AI Model Services [6][12] - Capella Analytics Services were made available on Google Cloud, allowing enterprises to analyze operational JSON data at scale [12] Financial Outlook - For Q1 FY2026, Couchbase expects total revenue between $55.1 million and $55.9 million, and total ARR between $242.9 million and $245.9 million [7] - For the full year FY2026, total revenue is projected to be between $228.0 million and $232.0 million, with total ARR expected to be between $273.6 million and $278.6 million [7]

Core Insights - Couchbase, Inc. has announced the integration of NVIDIA NIM microservices into its Capella AI Model Services, enhancing the deployment of AI-powered applications for enterprises [1][2][3] Group 1: Capella AI Model Services - Capella AI Model Services provide managed endpoints for large language models (LLMs) and embedding models, enabling enterprises to meet privacy, performance, scalability, and latency requirements [2][4] - The services minimize latency by colocating AI models with data, combining GPU-accelerated performance with enterprise-grade security [2][5] - Capella AI Model Services streamline agent application development and operations, addressing challenges such as agent reliability and compliance [4][5] Group 2: Collaboration with NVIDIA - The integration of NVIDIA NIM microservices allows customers to run preferred AI models securely while improving performance for AI workloads [3][6] - NVIDIA's rigorously tested NIM microservices are optimized for reliability and tailored to specific business needs, enhancing the overall deployment process [5][6] - Access to NVIDIA NIM microservices accelerates AI deployment, delivering low-latency performance and security for real-time applications [6] Group 3: Market Position and Strategy - Couchbase aims to lead in the AI space by providing a unified data platform that supports the full application lifecycle, from development to optimization [3][8] - The Capella platform is designed to meet the rising demands for versatility, performance, and affordability in AI applications [8][9] - By integrating various workloads into a seamless solution, Couchbase empowers organizations to innovate and accelerate AI transformation [9]