Press Release

Couchbase Announces Third Quarter Fiscal 2022 Financial Results

Santa Clara, Calif., - December 7, 2021 Couchbase, Inc. (NASDAQ: BASE), provider of a leading modern database for enterprise applications, today announced financial results for its third quarter ended October 31, 2021.

“Our strong third quarter performance was driven by ongoing large deal momentum, including some significant expansions, as well as acceleration of our cloud business. We also delivered solid top line growth with ARR up 21% and revenue up 20% year over year,” said Matt Cain, President and CEO of Couchbase. “We continue to see demand for our modern database as digital transformation remains a priority across industries, and are excited about the market opportunity for Capella which makes it faster and easier to consume Couchbase in the cloud.”

Third Quarter Fiscal 2022 Financial Highlights:

  • Revenue: Total revenue for the quarter was $30.8 million, an increase of 20% year-over-year. Subscription revenue was $29.0 million, an increase of 20% year-over-year.
  • Annual recurring revenue (ARR): Total ARR for the quarter was $122.3 million, an increase of 21% year-over-year. See the section titled “Key Business Metrics” below for details.
  • Gross margin: Gross margin for the quarter was 87.9%, compared to 87.8% for the third quarter of fiscal 2021. Non-GAAP gross margin for the quarter was 88.3%, compared to 87.9% for the third quarter of fiscal 2021. See the section titled “Use of Non-GAAP Financial Measures” and the tables entitled “Reconciliation of GAAP to Non-GAAP Results” below for details.
  • Loss from operations: Loss from operations for the quarter was $15.5 million, compared to $9.1 million for the third quarter of fiscal 2021. Non-GAAP operating loss for the quarter was $12.1 million, compared to $7.9 million for the third quarter of fiscal 2021.
  • Cash flow: Cash flows used in operating activities for the quarter were $19.7 million, compared to $13.1 million in the third quarter of fiscal 2021. Capital expenditures were $0.6 million during the quarter, leading to negative free cash flow of $20.3 million, compared to negative free cash flow of $13.3 million in the third quarter of fiscal 2021.
  • Remaining performance obligations (RPO): RPO as of October 31, 2021 was $124.3 million, up 41% year-over-year.

Recent Business Highlights:

  • Launched Couchbase Capella hosted Database-as-a-Service (DBaaS) offering on Amazon Web Services (AWS). Capella delivers database flexibility for developers and performance at scale for enterprise applications. Because Capella is fully managed and automated, customers can focus on development, improving their applications and reducing time to market, instead of worrying about operational database management efforts.
  • Achieved SOC 2 Type 1 Compliance Certification for Capella, thereby extending its security credentials.
  • Hosted annual user conference Couchbase ConnectONLINE, consisting of more than 100 sessions that brought together over 5,200 developer, architect, business user and community member registrants to learn more about Couchbase’s modern database for enterprise applications.
  • Announced the winners of the annual Couchbase Community Awards, honoring customers Amadeus, Citigroup, Emirates, Northwestern University, BroadJump, Cvent and Molo17 and partners AWS, Red Hat, Infosys and DigitalRoute for accelerating modernization initiatives and enabling innovation for enterprise-critical applications.
  • Named to Inc. Magazine’s Top 250 Best-Led Mid-Market Companies in America list and earned Great Place to Work Certification.
  • Appointed Alvina Antar, Chief Information Officer of Okta, to Couchbase’s Board of Directors.

Financial Outlook:

For the fourth quarter of fiscal 2022, Couchbase expects: 

  • Total revenue between $33.9 million and $34.1 million
  • Total ARR between $129 million and $130 million
  • Non-GAAP operating loss between $10.6 million and $10.2 million

For the full fiscal year 2022, Couchbase expects:

  • Total revenue between $122.4 million and $122.6 million
  • Total ARR between $129 million and $130 million
  • Non-GAAP operating loss between $47.0 million and $46.6 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 income for the fourth quarter or full year of fiscal 2022 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.

Conference Call Information

Couchbase will host a conference call and webcast at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Tuesday, December 7, 2021 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: 2318369. 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.

Upcoming Conference Participation

Couchbase management will participate in the following investor conferences during the fourth quarter of fiscal 2022. Webcasts of company presentations can be found on Couchbase’s Investor Relations website at investors.couchbase.com.

  • Barclays Global Technology, Media and Telecommunications Conference on December 8, 2021 at 9:40 a.m. PT (12:40 p.m. ET)
  • 24th Annual Needham Virtual Growth Conference on January 12, 2022 at 11:45 a.m. PT (2:45 p.m. ET)

About Couchbase

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.

Use of Non-GAAP Financial Measures

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 litigation-related expenses. 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.

Free cash flows: 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 release for the reconciliation of GAAP and non-GAAP results.

Key Business Metrics

We review a number of operating and financial metrics, including Annual Recurring Revenue (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. Based on historical experience with customers, we assume all contracts will be automatically renewed at the same levels unless we receive notification of non-renewal and are no longer in negotiations prior to the measurement date. ARR excludes revenue from on-demand arrangements. Although we seek to increase ARR as part of our strategy of targeting large enterprise customers, this metric may fluctuate from period to period based on our ability to acquire new customers and expand within our existing customers. We believe that our ARR is an important indicator of the growth and performance of our business.

Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include, but are not limited to, quotations of management, the “Financial Outlook” section, and statements about Couchbase’s market position, strategies, and potential market opportunities, including its positioning in the market. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “continue,” “could,” “potential,” “remain,” “may,” “might,” “will,” “would” or similar expressions and the negatives of those terms. However, not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties, and other factors, including factors beyond our control, which may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to: our history of net losses and ability to achieve or maintain profitability in the future; our ability to continue to grow on pace with historical rates; our ability to manage our growth effectively; intense competition and our ability to compete effectively; cost-effectively acquiring new customers or obtaining renewals, upgrades or expansions from our existing customers; the market for our products and services being relatively new and evolving, and our future success depending on the growth and expansion of this market; our ability to innovate in response to changing customer needs, new technologies or other market requirements; our limited operating history, which makes it difficult to predict our future results of operations; the significant fluctuation of our future results of operations and ability to meet the expectations of analysts or investors; our significant reliance on revenue from subscriptions, which may decline and, the recognition of a significant portion of revenue from subscriptions over the term of the relevant subscription period, which means downturns or upturns in sales are not immediately reflected in full in our results of operations; and the impact of the COVID-19 pandemic. Further information on risks that could cause actual results to differ materially from forecasted results are included in our filings with the SEC that we may file from time to time, including those more fully described in our Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2021. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended October 31, 2021 that will be filed with the SEC, which should be read in conjunction with this press release and the financial results included herein. Any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

Investor Contact:
Edward Parker
ICR for Couchbase
IR@couchbase.com

Media Contact:
Michelle Lazzar
Couchbase Communications
CouchbasePR@couchbase.com

Couchbase, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

$

3,774

 

 

$

3,010

 

 

$

12,468

 

 

$

8,550

 

Support and other

 

 

25,234

 

 

 

21,078

 

 

 

71,034

 

 

 

60,347

 

Total subscription revenue

 

 

29,008

 

 

 

24,088

 

 

 

83,502

 

 

 

68,897

 

Services

 

 

1,816

 

 

 

1,565

 

 

 

4,976

 

 

 

4,961

 

Total revenue

 

 

30,824

 

 

 

25,653

 

 

 

88,478

 

 

 

73,858

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription(1)

 

 

2,094

 

 

 

1,840

 

 

 

6,218

 

 

 

4,113

 

Services(1)

 

 

1,642

 

 

 

1,296

 

 

 

4,435

 

 

 

4,383

 

Total cost of revenue

 

 

3,736

 

 

 

3,136

 

 

 

10,653

 

 

 

8,496

 

Gross profit

 

 

27,088

 

 

 

22,517

 

 

 

77,825

 

 

 

65,362

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development(1)

 

 

13,103

 

 

 

10,109

 

 

 

38,267

 

 

 

28,388

 

Sales and marketing(1)

 

 

22,817

 

 

 

17,443

 

 

 

65,714

 

 

 

51,145

 

General and administrative(1)

 

 

6,659

 

 

 

4,044

 

 

 

17,434

 

 

 

10,905

 

Total operating expenses

 

 

42,579

 

 

 

31,596

 

 

 

121,415

 

 

 

90,438

 

Loss from operations

 

 

(15,491

)

 

 

(9,079

)

 

 

(43,590

)

 

 

(25,076

)

Interest expense

 

 

(133

)

 

 

(746

)

 

 

(630

)

 

 

(4,762

)

Other income (expense), net

 

 

(51

)

 

 

(86

)

 

 

(44

)

 

 

221

 

Loss before income taxes

 

 

(15,675

)

 

 

(9,911

)

 

 

(44,264

)

 

 

(29,617

)

Provision for income taxes

 

 

249

 

 

 

237

 

 

 

729

 

 

 

719

 

Net loss

 

$

(15,924

)

 

$

(10,148

)

 

$

(44,993

)

 

$

(30,336

)

Cumulative dividends on Series G redeemable convertible preferred stock

 

 

 

 

 

(1,446

)

 

 

(2,917

)

 

 

(2,596

)

Net loss attributable to common stockholders

 

$

(15,924

)

 

$

(11,594

)

 

$

(47,910

)

 

$

(32,932

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.37

)

 

$

(2.04

)

 

$

(2.43

)

 

$

(5.81

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

 

 

43,440

 

 

 

5,695

 

 

 

19,742

 

 

 

5,672

 

 

 

  1. Includes stock-based compensation expense as follows:

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cost of revenuesubscription

 

$

66

 

 

$

16

 

 

$

123

 

 

$

50

 

Cost of revenueservices

 

 

70

 

 

 

14

 

 

 

116

 

 

 

41

 

Research and development

 

 

1,085

 

 

 

328

 

 

 

2,224

 

 

 

968

 

Sales and marketing

 

 

1,292

 

 

 

337

 

 

 

2,521

 

 

 

1,013

 

General and administrative

 

 

840

 

 

 

440

 

 

 

2,179

 

 

 

1,270

 

Total stock-based compensation expense

 

 

$

3,353

 

 

$

1,135

 

 

$

7,163

 

 

$

3,342

 

Couchbase, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

As of October 31,

 

 

As of January 31,

 

 

 

2021

 

 

2021

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

141,440

 

 

$

37,297

 

Short-term investments

 

 

66,195

 

 

 

19,546

 

Accounts receivable, net

 

 

22,525

 

 

 

35,897

 

Deferred commissions

 

 

9,215

 

 

 

8,353

 

Prepaid expenses and other current assets

 

 

8,191

 

 

 

2,449

 

Total current assets

 

 

247,566

 

 

 

103,542

 

Property and equipment, net

 

 

4,983

 

 

 

6,506

 

Deferred commissions, noncurrent

 

 

5,885

 

 

 

4,941