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CI

Couchbase, Inc. (BASE)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY2026 delivered revenue of $56.5M (+10% YoY) and non-GAAP EPS of -$0.06, both above the high end of guidance and ahead of consensus; ARR reached $252.1M (+21% YoY) with record first-quarter net new ARR, driven by large strategic accounts and strong Capella consumption .
  • Management raised FY2026 revenue and ARR outlooks, while widening the non-GAAP operating loss range due to FX; Q2 guidance implies modest sequential revenue downtick tied to migration-related revenue recognition dynamics .
  • Capella ARR grew 84% YoY to $44M and now represents 17.4% of total ARR and ~33% of the customer base; NRR remained >114%, while total customers decreased to 937 due to starter-pack churn as cohorts transitioned to the free tier .
  • Key stock-reaction catalysts: beats vs consensus on revenue and EPS*, acceleration in net new ARR, raised FY ARR outlook, and narrative strength around agentic AI and edge initiatives; caution on near-term revenue recognition headwinds from enterprise-to-Capella migrations .
    (*) Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Highest Q1 net new ARR in company history; strong momentum with large strategic accounts and Capella consumption, bolstering confidence in full-year objectives (“great start to fiscal 2026… highest first quarter net new ARR”) .
  • Beat-and-raise quarter: revenue and non-GAAP operating loss exceeded the high end of guidance; FY revenue and ARR outlook raised (ARR midpoint up ~5.4% vs prior) .
  • Product innovation and AI traction: launched Couchbase Edge Server; reinforced AI agent capabilities (Model Context Protocol Server) enabling secure enterprise data interaction by agents; garnered industry recognition (CRN, Data Breakthrough) .

What Went Wrong

  • Services revenue declined 27% YoY and 22% sequentially; gross margin compressed YoY (GAAP 87.9% vs 88.9%); cash from operations negative at -$6.8M with FCF -$8.6M .
  • Customer count declined by 10 sequentially to 937, driven by churn in low-ARR starter packs (developers shifting into the free tier) despite healthy gross retention .
  • Revenue recognition headwinds from enterprise-to-Capella migrations led to revenue lag vs ARR; management expects convergence later this year and into next year .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ3 FY2025Q4 FY2025Q1 FY2026
Total revenue ($USD Millions)$51.63 $54.92 $56.52
Subscription revenue ($USD Millions)$49.30 $52.78 $54.84
Services revenue ($USD Millions)$2.33 $2.14 $1.68
Gross margin % (GAAP)87.3% 88.6% 87.9%
Gross margin % (Non-GAAP)88.2% 89.4% 88.7%
Loss from operations ($USD Millions, GAAP)$(19.23) $(15.83) $(18.84)
Loss from operations ($USD Millions, Non-GAAP)$(3.48) $(0.14) $(4.18)
GAAP EPS ($)$(0.35) $(0.30) $(0.33)
Non-GAAP EPS ($)$(0.05) $0.00 $(0.06)

Q1 FY2026 vs S&P Global Consensus

MetricQ1 FY2026 ActualQ1 FY2026 Consensus*Surprise
Total revenue ($USD Millions)$56.52 $55.59*+$0.93M
Non-GAAP EPS ($)$(0.06) $(0.079)*+$0.019

(*) Values retrieved from S&P Global.

Segment Breakdown

Revenue Component ($USD Millions)Q3 FY2025Q4 FY2025Q1 FY2026
License$4.34 $6.46 $9.01
Support and other$44.96 $46.32 $45.84
Total subscription$49.30 $52.78 $54.84
Services$2.33 $2.14 $1.68
Total revenue$51.63 $54.92 $56.52

KPIs

KPIQ3 FY2025 (Oct 31, 2024)Q4 FY2025 (Jan 31, 2025)Q1 FY2026 (Apr 30, 2025)
ARR ($USD Millions)$220.3 $237.9 $252.1
RPO ($USD Millions)$211.3 $251.1 $239.6
Capella ARR ($USD Millions)——$44.0
Capella as % of total ARR15.1% —17.4%
Customer count (#)——937
Dollar-based NRR (%)——>114%

Guidance Changes

MetricPeriodPrevious Guidance (Feb 25)Current Guidance (Jun 3)Change
Total Revenue ($USD Millions)FY2026$228.0–232.0 $228.3–232.3 Raised (narrowly)
Total ARR ($USD Millions)FY2026$273.6–278.6 $279.3–284.3 Raised
Non-GAAP Operating Loss ($USD Millions)FY2026$(13.4)–$(8.4) $(15.5)–$(10.5) Widened (FX headwind cited)
Total Revenue ($USD Millions)Q2 FY2026—$54.4–55.2 New
Total ARR ($USD Millions)Q2 FY2026—$255.8–258.8 New
Non-GAAP Operating Loss ($USD Millions)Q2 FY2026—$(5.1)–$(4.1) New

Notes: Management said FY operating loss outlook was lowered excluding FX; reported range includes a ~$3.5M FX headwind .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY2025)Previous Mentions (Q4 FY2025)Current Period (Q1 FY2026)Trend
AI/technology initiativesIntroduced Capella AI Services; Columnar, mobile vector search; expanded AI partnerships (Bedrock, Azure OpenAI, NVIDIA NIM, etc.) Capella AI Services private preview; NVIDIA integration; Capella Analytics on Google Cloud AI agents via MCP Server; vector database powering agentic workflows; continued innovation and ecosystem connectors Expanding scope and depth
Edge/server & mobileNoted mobile vector search and free tier —Launched Couchbase Edge Server; offline-first for constrained hardware; strong mobile use cases and competitive replacements Strengthening
Strategic accountsConfidence in objectives; Capella at 15.1% ARR Strong Q4; raised FY outlook Record Q1 net new ARR; pipeline of large strategic opportunities growing Accelerating
Consumption & migrationsCapella consumption building Progress with Capella uptake Very strong credit consumption; migrations causing revenue lag vs ARR Robust consumption; short-term revenue timing headwind
Macro & selling environment——Longer sales cycles and deal scrutiny persist; pipeline strength offset macro Neutral to slightly cautious
Customer metrics——Customers 937; NRR >114%; ARR/customer $269k Healthy retention; logo count decline from starter packs
Regulatory/legal———Stable

Management Commentary

  • “We had a great start to fiscal 2026, delivering the highest first quarter net new ARR in company history… momentum with our large strategic accounts… strong growth in Capella consumption” — Matt Cain, CEO .
  • “We exceeded our outlook across all metrics, continued building momentum with our large strategic customers and drove continued Capella adoption… fully convicted in our ability to achieve our full year objectives” .
  • “Capella now represents 17.4% of our total ARR and 33% of our customer base” .
  • “Revenue recognition headwinds… migrations create a delay in revenue during ramp; we expect revenue and ARR to converge later this year and into next” — Bill Carey, Interim CFO .
  • “Starter-pack churn drove net customer decline; several have scaled above $100k ARR, with two >$500k trending toward $1M” .

Q&A Highlights

  • Macro environment: Longer sales cycles and scrutiny persist but did not materially impact Q1; strong pipeline offsets macro challenges .
  • Revenue vs ARR: Enterprise-to-Capella migrations shift recognition to usage and introduce ramp timing; services revenue softness also weighed; ARR remains the leading performance indicator .
  • Competitive landscape: Postgres + vector discussed; Couchbase emphasized differentiation for “critical applications” via memory-first architecture, integrated data services, and embedded vector beyond mere support of formats .
  • Go-to-market: Free tier enhancements materially lifted trial volumes; strategic account focus targets multi-application expansions and platform standardization .
  • FX/guidance: FY ARR outlook raised with $3.6M FX tailwind; FY operating loss range includes $3.5M FX headwind .

Estimates Context

  • Q1 FY2026: Revenue beat consensus by ~$0.93M; non-GAAP EPS beat by ~$0.019 (better loss) . Consensus: revenue $55.59M*, EPS $(0.079)*.
  • Q2 FY2026: Guidance $54.4–55.2M revenue and ARR $255.8–258.8M vs consensus revenue $55.15M*; midpoint trending slightly below consensus, consistent with migration-related timing .
  • Estimate counts: Q1 revenue and EPS had ~15 estimates; Q2 revenue ~14, EPS ~15*.
    (*) Values retrieved from S&P Global.

Key Takeaways for Investors

  • Beat-and-raise quarter with accelerating ARR and strong Capella consumption; headline growth vector is intact despite GAAP margin compression .
  • Near-term revenue recognition headwinds from migrations are temporary; management expects revenue/ARR convergence later in FY2026 and into FY2027 .
  • FY ARR raised meaningfully; revenue raised slightly; operating loss range widened due to FX, but management reiterated path to operating income positive in FY2027 .
  • Strategic account wins and multi-application expansions increase platform stickiness; agentic AI and edge/server launches deepen product-led growth vectors .
  • Customer logo count decline tied to starter-pack churn is not thesis-negative; cohort evidence shows conversions to materially higher ARR, aided by free tier .
  • Watch Q2: revenue guidance implies modest sequential deceleration, consistent with migration ramps; monitor consumption trends and RPO recognition (~66% next 12 months) for visibility .
  • Execution focus: sustaining >114% NRR, driving Capella share of ARR higher, and tightening sales/marketing efficiency to deliver leverage .
Note: All consensus/estimate values marked with * were retrieved from S&P Global.