Coveo Reports Third Quarter Fiscal 2026 Financial Results

Core Insights - Coveo reported a record SaaS Subscription Revenue of $36.6 million for Q3 FY2026, exceeding guidance and reflecting a 13% increase from $32.3 million in Q3 FY2025 [1][4] - The company achieved the highest level of new business bookings in its history, driven by strong performance in Generative AI and Commerce offerings [2][9] - Coveo's total revenue for the quarter was $38.0 million, a 12% increase compared to $34.0 million in the same quarter last year [3][4] Financial Performance - SaaS Subscription Revenue for Coveo's core Platform was $35.8 million, marking a 15% increase year-over-year [3][4] - The total revenue for the year-to-date reached $110.9 million, up 12% from $98.9 million in the previous year [3][4] - Gross margin remained stable at 78%, while product gross margin was 81% [3][4] Profitability Metrics - The company reported a net loss of $7.2 million for Q3 FY2026, compared to a net income of $4.0 million in Q3 FY2025, reflecting a significant decline [3][4] - Adjusted EBITDA was ($0.2) million, down from $0.6 million in the prior year [3][4] - Cash flows from operating activities improved to $0.5 million, compared to a loss of $0.2 million in the previous year [3][4] Customer and Market Developments - Coveo's Net Expansion Rate was 102% as of December 31, 2025, indicating strong customer retention and growth [4] - The company added several marquee enterprise customers, including Boston Scientific and Deloitte Digital, contributing to the strong performance in Generative AI solutions, which accounted for over 25% of new bookings [9] - Coveo's Commerce offerings also saw significant growth, with nearly half of all new business bookings attributed to this segment [9] Strategic Initiatives - Coveo introduced RAG-as-a-Service for AWS Agentic AI Services, enhancing its product offerings [9] - The company launched the Coveo app for ChatGPT, allowing users to query enterprise data in natural language [9] - Coveo entered a partnership with the Government of Canada to modernize public services with AI [9] Financial Outlook - The company expects SaaS Subscription Revenue and Total Revenue for FY2026 to be at the upper end of previously announced guidance ranges, projecting SaaS Subscription Revenue of $142.2 to $142.7 million for the full year [6] - Adjusted EBITDA for Q4 FY2026 is anticipated to be approximately breakeven, with positive operating cash flows expected for the full fiscal year [6]