chbase(BASE) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue in Q1 was $34.9 million, an increase of 25% year-over-year [7][27] - Total annual recurring revenue (ARR) was $139.7 million, representing 27% year-over-year growth [7][27] - Net new ARR was a record for Q1, and remaining performance obligations (RPO) grew 68% to $169 million [7][27] - Gross margin remained best in class at 87.3% [7][29] - Operating profit was negative $13.4 million, ahead of guidance [7][31] Business Line Data and Key Metrics Changes - Subscription revenue for Q1 was $32 million, an increase of 21% year-over-year [28] - Professional services revenue for Q1 was $2.9 million, an increase of 93% year-over-year [28] - ARR per customer performance in Q1 was $227,000, up from $225,000 in the previous quarter [28] Market Data and Key Metrics Changes - The company saw a 100% year-over-year increase in partner-sourced and influenced new business [16] - The company exited the quarter with 614 customers, an increase of 24 customers from the fourth quarter [28] Company Strategy and Development Direction - The company aims to drive a generational rethink in the $60 billion database market [9] - Significant investments are being made in Capella, with plans to extend its availability to new regions and cloud service providers [11][12] - The company is transitioning to a cloud-centric model, with a focus on Capella as a service [13][14] - The introduction of version 7.1 of Couchbase Server aims to enhance performance and reduce deployment costs [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term prospects despite increased macroeconomic volatility [20] - Digital transformation initiatives are receiving high levels of attention, with enterprises planning to increase investment by 46% over the next 12 months [22] - The company is well-positioned to participate in the growing cloud database management service market [21] Other Important Information - Huw Owen has been promoted to Chief Revenue Officer, expected to drive growth [24] - The company is focused on balancing growth and profitability, with an emphasis on becoming a cloud-first company [35] Q&A Session Summary Question: Competitive environment and Capella's features - Management highlighted that Capella's new features and cloud support significantly enhance their competitive position, leading to increased demand and customer interest [37][39] Question: Go-to-market model and new CRO's focus - The new CRO is expected to improve new customer acquisition and leverage Capella for growth, with a focus on scaling the organization [40][42] Question: Market resonance and use cases for Capella - Management noted that Capella's architecture allows for a wide range of applications, enabling the company to address both mission-critical and emerging market needs [46][49] Question: COVID-impacted verticals and return to normalcy - The company reported a healthy return to pre-COVID levels, contributing to growth acceleration [55] Question: SQL-like architecture as a competitive advantage - Management affirmed that their SQL-like architecture is a key differentiator, facilitating integration with data warehouses and BI tools [56][57] Question: Capella's role in ARR results - Capella played a significant role in the strong ARR results, with customers increasingly considering long-term investments in the platform [62] Question: Referenceable customers and deployment at scale - Management indicated that they have significant customers using Capella at scale, with plans to share success stories as they become available [71] Question: Guidance and macroeconomic impact - Management expressed confidence in their guidance while remaining cautious about macroeconomic uncertainties [74] Question: Hiring plans for the year - The company is adapting its hiring plan as necessary, focusing on dedicated resources for Capella and maintaining operational flexibility [76][78]