chbase(US:BASE)2025-02-26 02:36Financial 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]