chbase(BASE) - 2026 Q2 - Quarterly Results

Second Quarter Fiscal 2026 Overview Q2 FY2026 Financial Highlights Couchbase reported strong financial results for Q2 FY2026, exceeding outlooks with 12% year-over-year revenue growth and 22% ARR growth, while non-GAAP operating loss improved and Net Retention Rate returned to over 115% Q2 FY2026 Key Financial Highlights | Metric | Q2 FY2026 (Millions) | Q2 FY2025 (Millions) | YoY Change | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Total Revenue | $57.6 | $51.6 | +12% | | Subscription Revenue | $55.4 | $49.3 | +12% | | Total ARR (as of July 31, 2025) | $260.5 | $214.0 | +22% (21% CC) | | GAAP Gross Margin | 87.2% | 87.5% | -0.3 pp | | Non-GAAP Gross Margin | 88.2% | 88.3% | -0.1 pp | | GAAP Loss from Operations | $(25.4) | $(21.0) | +$4.4M | | Non-GAAP Operating Loss | $(2.6) | $(4.1) | -$1.5M | | Cash Flow Used in Operating Activities | $(3.5) | $(4.9) | -$1.4M | | Negative Free Cash Flow | $(7.3) | $(5.9) | +$1.4M | | Remaining Performance Obligations (RPO) | $270.7 | $216.6 | +25% | | Net Retention Rate (NRR) | >115% | N/A | Returned to >115% | Recent Business Highlights Couchbase expanded its product offerings and strategic partnerships, introducing Enterprise Analytics for self-managed customers and enhancing its ecosystem with AWS and Google to accelerate AI agent adoption - Introduced Enterprise Analytics for self-managed customers, enabling real-time JSON-native analytics on-prem, in the cloud, or within Couchbase Capella for faster decision-making without impacting operational workloads[4] - Expanded ecosystem partnerships with AWS and Google to accelerate AI agent adoption, launching Capella in the AWS Marketplace AI Agents and Tools category and gaining official support in Google's MCP Toolbox for Databases[4] - Announced partnership with K2view to generate synthetic data for building AI applications, addressing challenges in accessing safe, representative, and compliant datasets for AI model training and testing[4] - Announced the fully managed Couchbase Connector for Confluent Cloud, simplifying bi-directional data movement and reducing operational overhead for real-time, event-driven applications[8] - Garnered multiple industry recognitions, including Database Trends and Applications' (DBTA) list of '100 Companies That Matter Most in Data' and a DBTA Readers' Choice Award[8] Strategic Corporate Developments Transaction with Haveli Investments Couchbase announced a definitive agreement to be acquired by Haveli Investments, as detailed in a separate press release and an 8-K filing, and will not host an earnings conference call or provide financial guidance due to this pending transaction - Couchbase has entered into a definitive agreement to be acquired by Haveli Investments, announced on June 20, 2025[5] - No earnings conference call or financial guidance will be provided in conjunction with this press release due to the announced transaction[5] About Couchbase Couchbase positions itself as a developer data platform, Capella, designed for critical applications in an AI-driven world, aiming to lead by uniting transactional, analytical, mobile, and AI workloads into a seamless, fully managed solution - Couchbase offers Capella, a developer data platform architected for critical applications in the AI world, addressing demands for versatility, performance, and affordability[6] - The platform integrates transactional, analytical, mobile, and AI workloads into a seamless, fully managed solution, empowering developers to build and scale applications and AI agents[6] GAAP Financial Statements Condensed Consolidated Statements of Operations For the three months ended July 31, 2025, Couchbase reported total revenue of $57.6 million, a 12% increase year-over-year, primarily driven by subscription revenue, though net loss widened to $23.8 million due to increased operating expenses Condensed Consolidated Statements of Operations (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :---------------------- | :--- | :--- | | Total Revenue | $57,566 | $51,589 | | Total Subscription Revenue | $55,368 | $49,293 | | Gross Profit | $50,225 | $45,126 | | Loss from Operations | $(25,404) | $(21,048) | | Net Loss | $(23,786) | $(19,895) | | Net Loss per Share (basic and diluted) | $(0.43) | $(0.39) | | Total Stock-Based Compensation Expense | $14,099 | $16,156 | Condensed Consolidated Statements of Operations (Six Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :---------------------- | :--- | :--- | | Total Revenue | $114,089 | $102,916 | | Total Subscription Revenue | $110,211 | $98,331 | | Gross Profit | $99,892 | $90,771 | | Loss from Operations | $(44,247) | $(43,588) | | Net Loss | $(41,465) | $(40,890) | | Net Loss per Share (basic and diluted) | $(0.77) | $(0.81) | | Total Stock-Based Compensation Expense | $27,483 | $30,783 | Condensed Consolidated Balance Sheets As of July 31, 2025, Couchbase's total assets decreased slightly to $250.4 million from $260.6 million at January 31, 2025, with cash and cash equivalents increasing while short-term investments and deferred revenue declined Condensed Consolidated Balance Sheets (as of July 31, 2025 vs. January 31, 2025, in thousands) | Metric | As of July 31, 2025 | As of January 31, 2025 | | :-------------------------- | :------------------ | :--------------------- | | Cash and Cash Equivalents | $44,110 | $30,536 | | Short-Term Investments | $98,112 | $116,635 | | Total Current Assets | $212,052 | $228,393 | | Total Assets | $250,434 | $260,598 | | Total Current Liabilities | $116,935 | $127,328 | | Total Liabilities | $126,425 | $132,982 | | Total Stockholders' Equity | $124,009 | $127,616 | Condensed Consolidated Statements of Cash Flows For the three months ended July 31, 2025, net cash used in operating activities decreased to $3.5 million, while investing activities provided $11.8 million and financing activities provided $7.6 million, resulting in a net increase in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :--- | :--- | | Net Cash Used in Operating Activities | $(3,469) | $(4,850) | | Net Cash Provided by Investing Activities | $11,848 | $14,582 | | Net Cash Provided by Financing Activities | $7,635 | $842 | | Net Increase in Cash, Cash Equivalents and Restricted Cash | $16,064 | $10,632 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $44,110 | $62,607 | Condensed Consolidated Statements of Cash Flows (Six Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :--- | :--- | | Net Cash Used in Operating Activities | $(10,252) | $(3,291) | | Net Cash Provided by Investing Activities | $13,230 | $18,277 | | Net Cash Provided by Financing Activities | $10,278 | $5,931 | | Net Increase in Cash, Cash Equivalents and Restricted Cash | $13,574 | $20,713 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $44,110 | $62,607 | Non-GAAP Measures and Key Business Metrics Use of Non-GAAP Financial Measures Couchbase utilizes non-GAAP financial measures to provide investors with supplemental information for evaluating operating performance, excluding items like stock-based compensation and business development activities for consistency and comparability - Non-GAAP financial measures are used to evaluate ongoing operations, for internal planning and forecasting, and to provide consistency and comparability with past financial performance[9] - Non-GAAP gross profit, gross margin, operating loss, operating margin, net income (loss), and net income (loss) per share exclude stock-based compensation, employer payroll taxes on employee stock transactions, restructuring charges, impairment of capitalized internal-use software, and business development activities[10] - Free cash flow is defined as cash provided by or used in operating activities less additions to property and equipment, including capitalized internal-use software costs, serving as an indicator of liquidity[11] Reconciliation of GAAP to Non-GAAP Results The reconciliation tables demonstrate adjustments from GAAP to non-GAAP figures, primarily by excluding stock-based compensation and business development activities, resulting in significantly lower non-GAAP operating and net losses Reconciliation of GAAP to Non-GAAP Gross Profit (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :---------------------- | :--- | :--- | | GAAP Gross Profit | $50,225 | $45,126 | | Non-GAAP Gross Profit | $50,745 | $45,564 | | GAAP Gross Margin | 87.2% | 87.5% | | Non-GAAP Gross Margin | 88.2% | 88.3% | Reconciliation of GAAP to Non-GAAP Loss from Operations (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :--- | :--- | | GAAP Loss from Operations | $(25,404) | $(21,048) | | Non-GAAP Loss from Operations | $(2,646) | $(4,101) | | GAAP Operating Margin | (44)% | (41)% | | Non-GAAP Operating Margin | (5)% | (8)% | Reconciliation of GAAP to Non-GAAP Net Loss and Free Cash Flow (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :--- | :--- | | GAAP Net Loss | $(23,786) | $(19,895) | | Non-GAAP Net Loss | $(1,028) | $(2,948) | | GAAP Net Loss per Share | $(0.43) | $(0.39) | | Non-GAAP Net Loss per Share | $(0.02) | $(0.06) | | Net Cash Used in Operating Activities | $(3,469) | $(4,850) | | Free Cash Flow | $(7,318) | $(5,917) | Key Business Metrics Definitions Couchbase defines Annual Recurring Revenue (ARR) as the annualized recurring revenue contractually received from customers over the subsequent 12 months, with specific calculations for Capella products, and Dollar-based Net Retention Rate (NRR) as the average of quarterly retention rates measuring ARR growth from existing customers - ARR is defined as the annualized recurring revenue contractually received from customers in the 12 months following a given date, excluding services revenue[14] - For Capella products, initial year ARR is the greater of contract revenue or annualized prior 90 days of actual consumption; subsequent years use annualized prior 90 days of actual consumption[14] - NRR for any period is the simple arithmetic average of quarterly dollar-based net retention rates for the four quarters ending with the most recent fiscal quarter, measuring ARR from existing customers[16] Annual Recurring Revenue (ARR) Trend Couchbase's Annual Recurring Revenue (ARR) has shown consistent growth, reaching $260.5 million as of July 31, 2025, reflecting a steady increase over the past several quarters Annual Recurring Revenue (ARR) Trend (in millions) | As of Date | ARR | | :---------- | :---- | | Oct 31, 2023 | $188.7 | | Jan 31, 2024 | $204.2 | | Apr 30, 2024 | $207.7 | | July 31, 2024 | $214.0 | | Oct 31, 2024 | $220.3 | | Jan 31, 2025 | $237.9 | | Apr 30, 2025 | $252.1 | | July 31, 2025 | $260.5 | Legal and Contact Information Forward-Looking Statements This section contains forward-looking statements regarding future events, financial performance, and the pending merger with Haveli Investments, highlighting inherent risks and uncertainties related to the merger's completion, market competition, and the company's ability to achieve profitability - The press release contains forward-looking statements based on management's beliefs and assumptions, covering expectations for the merger, client demand, product impact, market position, and strategies[18] - Forward-looking statements involve known and unknown risks and uncertainties, including those related to the timely completion of the merger, potential litigation, competitor response, and disruptions to business relationships[18] - Other risks include the company's history of net losses, ability to grow, intense competition, customer acquisition/retention, market evolution, and reliance on subscription revenue[18] Investor and Media Contacts Contact information for investor relations and media inquiries is provided for Couchbase, Inc - Investor Contact: Edward Parker, ICR for Couchbase, IR@couchbase.com[20] - Media Contact: Amber Winans, Bhava Communications for Couchbase, CouchbasePR@couchbase.com[20]