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]

Group 1 - The article discusses the services provided by IPO Edge, which includes actionable information on growth stocks, first-look IPO filings, previews on upcoming IPOs, an IPO calendar, a database of U.S. IPOs, and a comprehensive guide to IPO investing [1]

Company Overview - Couchbase, Inc. is a developer data platform focused on critical applications in the AI sector, aiming to address the limitations of traditional database solutions in terms of versatility, performance, and affordability [3]. Financial Reporting - Couchbase will report its financial results for the fourth quarter and full fiscal year ending January 31, 2025, on February 25, 2025, after market close [1]. - A conference call and webcast will be held on the same day at 1:30 p.m. Pacific Time to discuss these financial results [2]. Product Offering - Couchbase's Capella platform integrates transactional, analytical, mobile, and AI workloads into a fully-managed solution, providing developers and enterprises with flexibility, performance, scalability, and cost-efficiency [3]. - The company is trusted by over 30% of the Fortune 100, enabling organizations to innovate and accelerate AI transformation [3].

Group 1 - Couchbase, Inc. will present at the 27th Annual Needham Growth Conference on January 14, 2025, at 12:00 p.m. PT / 3:00 p.m. ET [1] - The company’s Chief Financial Officer, Greg Henry, will lead the presentation, and management will also engage in investor meetings [1] - A live webcast and replay of the presentation will be available on Couchbase's investor relations website [1] Group 2 - Couchbase is positioned to lead in the AI-driven market with its Capella platform, which integrates transactional, analytical, mobile, and AI workloads [2] - The platform offers a fully-managed solution that enhances performance, scalability, and cost-efficiency for developers and enterprises [2] - Over 30% of the Fortune 100 companies trust Couchbase to drive innovation and accelerate AI transformation [2]

Group 1 - The Q3 earnings season has been favorable for tech stocks, particularly for rebound plays that had previously fallen out of favor [1] - Strong results were reported by several technology companies, indicating a positive trend in the sector [1] - The insights provided by Gary Alexander, who has extensive experience in both Wall Street and Silicon Valley, highlight the current themes shaping the technology industry [1]

My previous investment thought on Couchbase, Inc. (NASDAQ: BASE ) (published on 5th Sept) was a hold rating, as I had concerns about its ability to meet the FY25 ARR growth target. Overall, after looking at the 3Q25 results. My viewI focus on long-term investments while incorporating short-term shorts to uncover alpha opportunities. My investment approach revolves around bottom-up analysis, delving into the fundamental strengths and weaknesses of individual companies. My investment duration is the medium to ...

Part I [Item 1. Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents Couchbase, Inc.'s unaudited condensed consolidated financial statements for the quarter ended October 31, 2024, along with detailed accounting notes [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of October 31, 2024, shows a decrease in total assets to $222.5 million from $247.8 million at January 31, 2024, primarily driven by a reduction in cash, short-term investments, and accounts receivable Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Oct 31, 2024 | Jan 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $194,301 | $224,286 | | **Total assets** | $222,459 | $247,752 | | **Total current liabilities** | $91,174 | $112,506 | | **Total liabilities** | $95,681 | $117,331 | | **Total Stockholders' Equity** | $126,778 | $130,421 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended October 31, 2024, total revenue increased to $51.6 million from $45.8 million year-over-year, but a rise in operating expenses led to a higher net loss of $(18.2) million Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 FY2025 (ended Oct 31, 2024) | Q3 FY2024 (ended Oct 31, 2023) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $51,628 | $45,813 | +12.7% | | **Gross Profit** | $45,072 | $40,702 | +10.7% | | **Loss from Operations** | $(19,234) | $(17,542) | +9.6% | | **Net Loss** | $(18,152) | $(16,255) | +11.7% | | **Net Loss Per Share** | $(0.35) | $(0.34) | +2.9% | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended October 31, 2024, net cash used in operating activities slightly improved to $(20.2) million, while net cash provided by investing activities significantly decreased Cash Flow Summary for the Nine Months Ended October 31 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(20,186) | $(20,443) | | **Net cash provided by investing activities** | $2,885 | $18,093 | | **Net cash provided by financing activities** | $8,766 | $9,353 | | **Net (decrease) increase in cash** | $(8,863) | $6,461 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide crucial details supporting the financial statements, including changes in accounting estimates, new credit facilities, and revenue breakdown by geography - The company increased the expected period of benefit for deferred sales commissions from three to four years, effective February 1, 2024, applied prospectively[49](index=49&type=chunk) - As of October 31, 2024, the company's Remaining Performance Obligations (RPOs) were **$211.3 million**, with **$128.7 million** expected to be recognized as revenue over the next 12 months[70](index=70&type=chunk) - On February 7, 2024, the company entered into a new three-year, **$25.0 million** senior secured revolving loan facility, with no debt outstanding as of October 31, 2024[71](index=71&type=chunk)[72](index=72&type=chunk) Revenue by Geographic Area (in thousands) | Region | Nine Months Ended Oct 31, 2024 | Nine Months Ended Oct 31, 2023 | YoY Growth | | :--- | :--- | :--- | :--- | | United States | $103,438 | $82,848 | 24.9% | | International | $51,106 | $47,100 | 8.5% | | **Total** | **$154,544** | **$129,948** | **18.9%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting 19% revenue growth and 17% ARR growth, while continuing to invest in its DBaaS offering amidst macroeconomic headwinds [Overview and Business Model](index=26&type=section&id=Overview%20and%20Business%20Model) Couchbase provides a cloud database platform with a primarily subscription-based business model, employing a dual go-to-market strategy for enterprises and developers - The company's mission is to simplify modern application development and deployment across cloud and edge environments, powering core applications with high performance and reliability[102](index=102&type=chunk) - The substantial majority of revenue (**96%** for the nine months ended Oct 31, 2024) comes from subscriptions, with a smaller portion from professional services[106](index=106&type=chunk) - The go-to-market strategy focuses on a direct sales force for large enterprises and a developer-focused approach with free trials and the Couchbase Capella DBaaS offering to drive adoption[108](index=108&type=chunk) [Key Business Metrics](index=29&type=section&id=Key%20Business%20Metrics) The company's key performance indicators showed strong growth, with Annual Recurring Revenue (ARR) increasing by 17% year-over-year and total customer count growing by 26% Annual Recurring Revenue (ARR) | Date | ARR (in millions) | YoY Growth | | :--- | :--- | :--- | | Oct 31, 2024 | $220.3 | 17% | | Oct 31, 2023 | $188.7 | - | Customer Count | Date | Total Customers | | :--- | :--- | | Oct 31, 2024 | 903 | | Oct 31, 2023 | 715 | - As of October 31, 2024, ARR for the Couchbase Capella DBaaS product was approximately **$33.2 million**[114](index=114&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Total revenue for Q3 FY2025 grew 13% year-over-year to $51.6 million, driven by subscription revenue, while operating expenses increased across all categories, widening the operating loss - For the three months ended Oct 31, 2024, subscription revenue growth was primarily driven by existing customers, who accounted for approximately **92%** of the increase[148](index=148&type=chunk) - Cost of subscription revenue increased by **37%** in Q3 YoY, mainly due to higher computing infrastructure costs for the growing Couchbase Capella service[149](index=149&type=chunk) - Operating expenses for the nine-month period increased by **13.5%** YoY, primarily due to higher personnel-related costs, including stock-based compensation, across R&D, Sales & Marketing, and G&A departments due to headcount growth[152](index=152&type=chunk)[155](index=155&type=chunk)[158](index=158&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of October 31, 2024, Couchbase had $141.9 million in cash, cash equivalents, and short-term investments, believing its existing capital is sufficient for at least the next 12 months - The company's primary sources of liquidity are cash from operations, proceeds from its July 2021 IPO, and a new credit facility[162](index=162&type=chunk)[164](index=164&type=chunk) - A substantial source of cash is from customer prepayments for subscriptions, which are recorded as deferred revenue, with remaining performance obligations of **$211.3 million** as of October 31, 2024[164](index=164&type=chunk) Cash Flow Summary for Nine Months Ended Oct 31 (in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(20,186) | $(20,443) | | Free Cash Flow | $(22,831) | $(23,868) | [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies interest rate and foreign currency exchange rate risks, but expects no material impact from a hypothetical 10% change due to its short-term investments and U.S. Dollar functional currency - The company's investments are exposed to interest rate fluctuations, but due to their short-term nature, a **10%** change in rates is not expected to have a material effect[178](index=178&type=chunk) - Foreign currency risk exists, but a hypothetical **10%** change in the U.S. Dollar's value relative to other currencies is not expected to materially impact results of operations[179](index=179&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of October 31, 2024, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period[182](index=182&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[183](index=183&type=chunk) Part II. Other Information [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial results - Couchbase is not currently involved in any legal proceedings that are considered material to its business[187](index=187&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks including a history of net losses, intense competition, challenges in customer acquisition, reliance on innovation, security breaches, evolving data privacy regulations, and intellectual property protection [Risks Related to Business and Operations](index=44&type=section&id=Risks%20Related%20to%20Business%20and%20Operations) The company faces operational risks including a history of net losses, intense competition from established players and cloud providers, and challenges in customer acquisition and expansion due to macroeconomic pressures - The company has a history of net losses, incurring **$59.0 million** in the nine months ended October 31, 2024, and may not achieve or maintain profitability in the future[190](index=190&type=chunk) - Competition is intense from legacy database providers (Oracle, IBM), NoSQL providers (MongoDB), and major cloud infrastructure providers (Amazon, Microsoft, Google), many of whom have greater resources and brand recognition[194](index=194&type=chunk) - Failure to cost-effectively acquire new customers or secure renewals and expansions from existing ones, especially in the current macroeconomic environment causing longer sales cycles and budget scrutiny, could adversely affect business[196](index=196&type=chunk)[207](index=207&type=chunk) [Risks Related to Technology, Security, and Data Privacy](index=51&type=section&id=Risks%20Related%20to%20Technology%2C%20Security%2C%20and%20Data%20Privacy) Risks include product errors, reliance on third-party infrastructure, potential security breaches leading to liability and reputational damage, and non-compliance with evolving global data privacy laws - Real or perceived errors, failures, or bugs in the company's complex products could result in negative publicity, data loss, and harm to the brand, potentially leading to customer loss[211](index=211&type=chunk) - Security breaches or unauthorized access to customer data could lead to significant liability, regulatory investigations, and reputational damage, potentially causing customers to reduce or terminate their use of the products[257](index=257&type=chunk) - The company is subject to numerous evolving U.S. and international data privacy laws like GDPR and CCPA, and failure to comply could result in significant fines and harm to the business[260](index=260&type=chunk)[262](index=262&type=chunk) [Risks Related to Intellectual Property and Open Source](index=59&type=section&id=Risks%20Related%20to%20Intellectual%20Property%20and%20Open%20Source) The company's open-source model and reliance on third-party software present risks including impact on sales, litigation exposure, competitor access to technology, and costly intellectual property disputes - The use of open-source software and making its own source code available could negatively impact the ability to sell products, lead to litigation, and allow competitors to access its technology[241](index=241&type=chunk) - The availability of its source code may lower barriers to entry for competitors, who could develop similar products with less investment, potentially leading to price reductions and loss of market share[245](index=245&type=chunk) - The company may become subject to costly intellectual property disputes and infringement claims, which could result in significant liability, damage payments, and limitations on its ability to use certain technologies[249](index=249&type=chunk) [Other Information](index=75&type=section&id=Item%205.%20Other%20Information) This section discloses that several executive officers and a director adopted Rule 10b5-1 trading plans for the pre-arranged sale of company stock during the last fiscal quarter - Several key executives and a director have adopted Rule 10b5-1 trading arrangements for the future sale of company stock, including: - **Matt Cain** (CEO) - **Greg Henry** (CFO) - **Margaret Chow** (SVP, Chief Legal Officer) - **Huw Owen** (SVP, Chief Revenue Officer) - **Lynn Christensen** (Director)[306](index=306&type=chunk)

Next-generation database software provider Couchbase (BASE -22.20%) delivered a solid earnings report after the close of trading Tuesday, but offered somewhat disappointing guidance. In response, traders punished the stock. Shares plunged by as much as 24.2% during Wednesday morning trading, and were still down by 21.6% as of 1:22 p.m. ET.Couchbase's third-quarter results and guidanceCouchbase's results for its fiscal 2025 third quarter exceeded expectations. For the period, which ended Oct. 31, revenues ro ...