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CI

Couchbase, Inc. (BASE)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered 10% YoY revenue growth to $54.9M and sequential growth of 6%; non-GAAP operating loss improved to ~$0.1M and the company achieved its first quarter of positive non-GAAP net income and second quarter of positive free cash flow, reflecting growing operating leverage .
  • Total ARR reached $237.9M (+17% YoY; +8% QoQ) with highest net new ARR in company history; Capella ARR rose to $38.5M and now represents 16.2% of total ARR, evidencing strong cloud migration and consumption momentum .
  • Guidance introduced for FY2026: revenue $228–232M, ARR $273.6–278.6M, and non-GAAP operating loss $13.4–8.4M; Q1 FY2026 revenue guided to $55.1–55.9M and ARR $242.9–245.9M. Management reiterated a path to operating income positive by FY2027 and indicated full-year free cash flow positive likely in FY2027 given timing dynamics .
  • Key narrative drivers: large strategic expansions (including consolidations away from legacy relational and competing NoSQL), accelerated Capella migrations (including community-to-paid conversions), and new AI offerings (Capella AI Services, NVIDIA NIM integration) that enhance agentic/RAG workloads and developer productivity—catalysts for estimate revisions and narrative re-rating .

What Went Well and What Went Wrong

What Went Well

  • Highest quarterly net new ARR and second consecutive quarter of positive free cash flow; first-ever positive non-GAAP net income, signaling improving efficiency and leverage: “we recorded our second quarter of positive free cash flow and our first quarter of positive non-GAAP net income” . Q4 free cash flow was $4.0M (7.3% margin) .
  • Robust strategic wins and migrations: Couchbase added 44 new logos and expanded across global financials, telecom, airline edge operations, and ad systems; Capella wins included a 7-figure community-to-paid conversion and migrations at a European telco/media firm .
  • AI momentum: Capella AI Services private preview launched; NVIDIA NIM integration streamlines private GenAI model deployment; JSON Analytics expanded to Google Cloud—positioning the platform for agentic AI/RAG use cases at scale .

What Went Wrong

  • Dollar-based NRR dipped to >114% (vs >115% historical run-rate) due to earlier-period anomalous loss/downsell; management expects NRR to return to historical levels in 2H FY2026 after anniversarying the anomaly .
  • GAAP gross margin compressed YoY to 88.6% (from 89.7%) as Capella mix rises; non-GAAP gross margin fell to 89.4% (from 90.4%) YoY .
  • Leadership transition risk: CFO Greg Henry resigned effective Feb 25, 2025; interim CFO appointed (Bill Carey). Company stated no disagreements and a consulting period through May 31, 2025 to ensure continuity .

Financial Results

Consolidated performance vs prior year and prior quarter

MetricQ4 FY2024 (oldest)Q3 FY2025Q4 FY2025 (newest)
Revenue ($USD Millions)$50.089 $51.628 $54.922
GAAP EPS ($)$(0.44) $(0.35) $(0.30)
Non-GAAP EPS ($)$(0.06) $(0.05) $0.00
GAAP Gross Margin (%)89.7% 87.3% 88.6%
Non-GAAP Gross Margin (%)90.4% 88.2% 89.4%
GAAP Operating Loss ($M)$(22.593) $(19.234) $(15.833)
Non-GAAP Operating Loss ($M)$(4.115) $(3.479) $(0.144)
Cash from Operations ($M)$(6.450) $(16.895) $4.358
Free Cash Flow ($M)$(7.735) $(17.478) $3.983

Segment breakdown

Metric ($USD Millions)Q4 FY2024 (oldest)Q3 FY2025Q4 FY2025 (newest)
License$7.196 $4.343 $6.464
Support & Other$40.865 $44.955 $46.317
Total Subscription Revenue$48.061 $49.298 $52.781
Services$2.028 $2.330 $2.141
Total Revenue$50.089 $51.628 $54.922

KPIs

KPIQ3 FY2025 (oldest)Q4 FY2025 (newest)
ARR ($USD Millions)$220.3 $237.9
Capella ARR ($USD Millions)$33.2 $38.5
Capella % of Total ARR (%)15.1% 16.2%
Customers (Count)903 947
Net New Logos (Count)34 44
Dollar-based NRR (%)>115% >114%
RPO ($USD Millions)$211.3 $251.1
Cash + Short-term Investments ($USD Millions)$141.9 $147.2

Notes:

  • Management highlighted FX impacts; ARR on guidance currency basis was $239.8M (+9% QoQ), net new ARR $19.5M (+26% YoY) .
  • Services revenue declined sequentially in Q4 (–8%) reflecting Capella as-a-service mix shift .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueQ1 FY2026N/A$55.1–55.9M Introduced
Total ARRQ1 FY2026N/A$242.9–245.9M Introduced
Non-GAAP Operating LossQ1 FY2026N/A$(5.4)–$(4.4)M Introduced
Total RevenueFY2026N/A$228.0–232.0M Introduced
Total ARRFY2026N/A$273.6–278.6M Introduced
Non-GAAP Operating LossFY2026N/A$(13.4)–$(8.4)M Introduced

Additional context:

  • FY2025 guidance (from Q3) was $207.2–208.0M revenue and $(20.0)–$(19.0)M non-GAAP operating loss; actual FY2025 revenue came in at $209.5M and non-GAAP operating loss at $14.4M—above and better than the guidance ranges .

Earnings Call Themes & Trends

TopicQ2 FY2025 (oldest)Q3 FY2025Q4 FY2025 (newest)Trend
AI/technology initiativesGA of Capella Columnar; Mobile with Vector Search; Capella Free Tier, enabling unified operational + analytics and developer productivity Announced Capella AI Services (model hosting, vectorization, unstructured preprocessing, agent catalog) Private preview of Capella AI Services; NVIDIA NIM integration; JSON Analytics to Google Cloud Accelerating
Capella migrations & consumptionLargest Capella land to date; strong migrations; Capella 13.5% of ARR; consumption rising Multimillion Capella migration; Capella 15.1% of ARR; 1/3 of customers on Capella Capella ARR +76% YoY; 16.2% of ARR; 33% of customers on Capella Accelerating
Strategic accounts (consolidation)Emphasis on multiyear platform deals; pipeline to drive 2H Broad set of large strategic opportunities set up for Q4; precontracted ARR visibility Executed several large expansions; replacing legacy relational and competing NoSQL; 50 customers >$1M ARR; second customer >$10M ARR Converting pipeline
ARR vs revenue divergenceHighlighted migration-related revenue recognition lag vs ARR growth Reiterated divergence drivers (Capella migrations; services contraction) Explained spread: Capella consumption rev rec vs ARR bookings and services decline; convergence expected by FY2027 Known, converging over time
Efficiency & Rule of 40Material improvement YoY; disciplined S&M and R&D spend; FCF progress Improved operating loss; Rule of 40 up 9 points YoY Non-GAAP breakeven; record FCF; reiterated operating income positive by FY2027 Improving
Macro commentaryChallenging environment but strong demand; churn outsized in Q2 due to specific accounts Conservatism embedded; back-half weighted renewals and large deals Balanced demand; prudence acknowledged; pipeline supports outlook Stable/prudent

Management Commentary

  • “We delivered fourth quarter revenue, non-GAAP operating loss and ARR adjusted for in-quarter FX, ahead of the high end of our guidance ranges…resulted in our highest ever quarterly net new ARR. In addition, we recorded our second quarter of positive free cash flow and our first quarter of positive non-GAAP net income.” — Matt Cain, CEO .
  • “At the end of the quarter, Capella ARR was $38.5M, an increase of 16% from last quarter and 76% year-over-year…Capella now represents 16.2% of our total ARR.” — Greg Henry, CFO .
  • “We’re working with NVIDIA to deploy NVIDIA Inference Microservices (NIM) in Capella AI Model Services…bringing LLMs closer to the data, minimizing latency and enhancing Capella’s agentic AI and RAG capabilities.” — Matt Cain .
  • “We now have 50 greater than $1 million customers…including our second customer above the $10 million ARR mark, demonstrating the commitment large enterprises are making to our developer data platform.” — Matt Cain .
  • CFO transition: “Greg Henry will be leaving Couchbase…Bill Carey will serve as interim CFO.” — Matt Cain; 8-K confirms no disagreements and a consulting period .

Q&A Highlights

  • Strength drivers: Balanced execution across strategic deals, Capella migrations, and new logos; a 7-figure community-to-paid Capella conversion cited .
  • ARR–revenue spread: Caused by Capella consumption-based revenue recognition and shrinking services revenue; management expects convergence by FY2027 and improved Rule of 40 over time .
  • Renewal linearity: FY2026 renewal pool larger and more evenly distributed between H1 and H2; Q1 ARR guided to 18% YoY at midpoint .
  • Community Edition conversions: ROI and managed service value drive CE → Capella migration; particularly appealing for smaller customers lacking DBA capacity .
  • Go-to-market evolution: Strategic account investments balanced with efficient digital-led funnel from free tier; capacity in quota carriers/SEs/cloud specialists viewed as sufficient .

Estimates Context

  • Company reported results exceeded the high end of its company outlook for revenue, non-GAAP operating loss and ARR (on guidance currency rates) .
  • Wall Street consensus comparisons via S&P Global were unavailable today due to system limitations; as a result, explicit “vs. consensus” beats/misses cannot be provided. Values that would normally be shown for consensus are unavailable and not included here. S&P Global consensus data was not retrievable at this time.

Key Takeaways for Investors

  • Momentum in Capella migrations and consumption is lifting ARR growth ahead of revenue; expect continued divergence near term and convergence by FY2027 as consumption ramps and services mix declines .
  • Strategic platform wins (including consolidation away from legacy relational and competing NoSQL) increased the >$1M customer cohort to 50 and added a second >$10M ARR customer—supportive of sustained multi-year growth .
  • Operating leverage is inflecting: non-GAAP breakeven and record FCF signal disciplined spend and improving unit economics; near-term profitability milestones reduce risk to Rule of 40 trajectory .
  • AI-native positioning is strengthening: Capella AI Services, NVIDIA NIM integration, and JSON Analytics on Google Cloud are catalysts for enterprise adoption of agentic/RAG apps with low latency and data governance .
  • Watch NRR recovery: NRR >114% vs historical >115% due to earlier anomaly; management expects recovery in 2H FY2026 as loss/downsells anniversary—key for durable ARR compounding .
  • Near-term setup: Q1 FY2026 ARR guidance implies ~18% YoY growth at midpoint; larger, more balanced renewal pool, and progressed migration pipeline reduce execution risk in early FY2026 .
  • Risks to monitor: CFO transition (interim CFO in place), FX variability on ARR, and margin effects from growing Capella mix; however, strong cash/investments ($147.2M) underpin strategic execution capacity .