Santa Clara, Calif., – June 8, 2022 – Couchbase, Inc. (NASDAQ: BASE), provider of a leading modern database for enterprise applications, today announced financial results for its first quarter ended April 30, 2022.
“We delivered a strong first quarter exceeding the high end of our guidance on all metrics, highlighted by the third straight quarter of accelerating ARR growth,” said Matt Cain, President and CEO of Couchbase. “Couchbase Capella is continuing to gain momentum and customer feedback has been positive. We are confident that our expansive and differentiated product portfolio will continue to be at the forefront of our customers’ digital transformation initiatives.”
- Revenue: Total revenue for the quarter was $34.9 million, an increase of 25% year-over-year. Subscription revenue for the quarter was $32.0 million, an increase of 21% year-over-year.
- Annual recurring revenue (ARR): Total ARR as of April 30, 2022 was $139.7 million, an increase of 27% year-over-year, or 31% on a constant currency basis. See the section titled “Key Business Metrics” below for details.
- Gross margin: Gross margin for the quarter was 86.7%, compared to 87.9% for the first quarter of fiscal 2022. Non-GAAP gross margin for the quarter was 87.3%, compared to 88.0% for the first quarter of fiscal 2022. See the section titled “Use of Non-GAAP Financial Measures” and the tables titled “Reconciliation of GAAP to Non-GAAP Results” below for details.
- Loss from operations: Loss from operations for the quarter was $19.0 million, compared to $14.1 million for the first quarter of fiscal 2022. Non-GAAP operating loss for the quarter was $13.4 million, compared to $12.3 million for the first quarter of fiscal 2022.
- Cash flow: Cash flow used in operating activities for the quarter was $8.6 million, compared to $3.2 million in the first quarter of fiscal 2022. Capital expenditures were $0.8 million during the quarter, leading to negative free cash flow of $9.4 million, compared to negative free cash flow of $3.4 million in the first quarter of fiscal 2022.
- Remaining performance obligations (RPO): RPO as of April 30, 2022 was $169.0 million, an increase of 68% year-over-year.
- Announced the Couchbase Capella DBaaS offering on Google Cloud. Customers now have more flexibility on where to deploy Capella, improving alignment with applications and supporting hybrid and multi-cloud strategies from a single platform with price performance superior to competitors.
- Announced that Couchbase Capella manages and fully hosts a backend for mobile and IoT applications called Capella App Services. The enhanced offering makes it easier for developers to design and deploy fast and resilient mobile applications that seamlessly sync data between the cloud and connected devices. Now as a fully managed service, development teams can save time, effort and resources by streamlining setup configuration, synchronization and ongoing backend services management.
- Announced version 7.1 of Couchbase Server, which delivers incredible advancements in performance, storage capacity and workload breadth, including expanded operational analytics support with direct Tableau integration – all while dramatically reducing deployment cost. With Couchbase Server 7.1, enterprise architects and development teams significantly reduce the cost of building and running applications while gaining compelling operational efficiency.
- Granted an additional U.S. patent for a novel approach to optimizing document-oriented database queries on arrays. This is Couchbase’s second patent recognizing inventions in cost-based optimization for document-oriented databases and highlights the Company’s unique engineering innovation.
- Total revenue between $35.8 million and $36.0 million
- Total ARR between $142.5 million and $144.5 million
- Non-GAAP operating loss between $11.9 million and $11.7 million
- Total revenue between $147.2 million and $148.2 million
- Total ARR between $160.5 million and $164.5 million
- Non-GAAP operating loss between $55.2 million and $54.2 million
The guidance provided above is based on several assumptions that are subject to change and many of which are outside our control. If actual results vary from these assumptions, our expectations may change. There can be no assurance that we will achieve these results.
Couchbase is not able, at this time, to provide GAAP targets for operating loss for the second quarter or full year of fiscal 2023 because of the difficulty of estimating certain items excluded from non-GAAP operating loss that cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant.
Couchbase today announced it has promoted Huw Owen to Senior Vice President and Chief Revenue Officer, effective immediately. Mr. Owen has served as a leader of Couchbase’s international sales business for nearly four years, where he played a significant role in accelerating Couchbase’s growth, including increasing international ARR by nearly 200%. Prior to Couchbase, Mr. Owen held various international sales leadership roles at Veritas, Symantec, Lenovo and Good Technology.
“Huw’s impressive background combines scaling sales at high-growth companies with operational excellence at leading enterprise technology companies, making him well suited to take Couchbase to the next level of growth,” said Mr. Cain. “Huw is an ideal successor to step into the CRO role and I am excited to welcome him to our world class management team. I’d like to thank Denis Murphy for his many contributions to Couchbase and we wish him well in his future endeavors.”
Couchbase will host a conference call and webcast at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Wednesday, June 8, 2022 to discuss its financial results and business highlights. To access this conference call, dial (888) 660-1027 from the United States and Canada or (409) 231-2719 internationally with conference ID: 9493179. The live webcast and a webcast replay of the conference call can be accessed from the investor relations page of Couchbase’s website at investors.couchbase.com.
At Couchbase, we believe data is at the heart of the enterprise. We empower developers and architects to build, deploy and run their most mission-critical applications. Couchbase delivers a high-performance, flexible and scalable modern database that runs across the data center and any cloud. Many of the world’s largest enterprises rely on Couchbase to power the core applications their businesses depend on. For more information, visit www.couchbase.com.
Couchbase has used, and intends to continue using, its investor relations website and the corporate blog at blog.couchbase.com to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website and the corporate blog in addition to following our press releases, SEC filings and public conference calls and webcasts.
In addition to our financial information presented in accordance with GAAP, we believe certain non-GAAP financial measures are useful to investors in evaluating our operating performance. We use certain non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, may be helpful to investors because they provide consistency and comparability with past financial performance and meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. Non-GAAP financial measures are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP financial measures used by other companies. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures (provided in the financial statement tables included in this press release), and not to rely on any single financial measure to evaluate our business.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss attributable to common stockholders and non-GAAP net loss per share attributable to common stockholders: We define these non-GAAP financial measures as their respective GAAP measures, excluding expenses related to stock-based compensation expense and employer taxes on employee stock transactions. We use these non-GAAP financial measures in conjunction with GAAP measures to assess our performance, including in the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance.
Beginning with the first quarter of fiscal 2023, we have excluded employer payroll taxes on employee stock transactions, which is a cash expense, from our non-GAAP results. These payroll taxes have been excluded from our non-GAAP results because they are tied to the timing and size of the exercise or vesting of the underlying equity awards, and the price of our common stock at the time of vesting or exercise may vary from period to period independent of the operating performance of our business. Prior period non-GAAP financial measures have not been adjusted to reflect this change, and the effect of this change is not material for any period previously presented.
Free cash flow: We define free cash flow as cash used in operating activities less purchases of property and equipment, which includes capitalized internal-use software costs. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors and investors with information about our future ability to generate or use cash to enhance the strength of our balance sheet and further invest in our business and pursue potential strategic initiatives.
Please see the reconciliation tables at the end of this press release for the reconciliation of GAAP and non-GAAP results.
Key Business Metrics
We review a number of operating and financial metrics, including ARR, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
We define ARR as of a given date as the annualized recurring revenue that we would contractually receive from our customers in the month ending 12 months following such date. ARR also includes revenue from consumption-based cloud credits of Couchbase Capella products. ARR for Couchbase Capella products is calculated by annualizing the prior 90 days of actual consumption, assuming no increases or reductions in usage.
Based on historical experience with customers, we assume all contracts will be automatically re