• Total ARR: $237.9 million, up 17% year over year and 8% sequentially.
• Net New ARR: $17.6 million, up 14% year over year.
• Revenue: $54.9 million in Q4, up 10% year over year.
• Non-GAAP Operating Loss: $144,000 in Q4.
• Free Cash Flow: $4 million in Q4, representing a 7.3% margin.
• Capella ARR: $38.5 million, up 16% from last quarter and 76% year over year.
• Gross Margin: 89.4% in Q4.
• Sales and Marketing Expenses: $28.3 million in Q4, 51% of revenue.
• Research and Development Expenses: $13.3 million in Q4, 24% of revenue.
• General Administrative Expenses: $7.7 million in Q4, 14% of revenue.
• Net Income: $78,000 in Q4.
• Cash and Equivalents: $147.2 million at the end of Q4.
• Customer Count: 947 customers, with 44 net new customers added in Q4.

• Warning! GuruFocus has detected 4 Warning Signs with BASE.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Couchbase Inc (NASDAQ:BASE) reported its highest ever quarterly net new ARR, driven by robust renewals, expansions, and strong Capella adoption.
• The company achieved its second quarter of positive free cash flow and its first quarter of positive non-GAAP net income.
• Total ARR grew by 17% year over year, reaching $237.9 million, with Capella now representing 16.2% of total ARR.
• Couchbase Inc (NASDAQ:BASE) added 44 new logos in Q4, up from 34 in the same quarter of the previous year.
• The company expanded its analytics services to Google Cloud regions, enhancing its real-time JSON analytics capabilities.

Negative Points

• The dollar-based net retention rate (NRR) was slightly below historical levels at greater than 114%, compared to the typical greater than 115%.
• Q4 ARR per customer decreased to $251,000 from $273,000 in Q4 2024, reflecting the increasing mix of Capella.
• The company experienced foreign currency fluctuations impacting ARR, although it still exceeded guidance.
• Couchbase Inc (NASDAQ:BASE) reported a non-GAAP operating loss of $144,000 in Q4, despite improvements from the previous year.
• The departure of CFO Greg Henry could pose transitional challenges, although an interim CFO has been appointed.

Q & A Highlights

Q: Can you explain the strength in Q4 results? Was it due to strategic deals, better execution, or macro improvements? A: Matthew Cain, President, Chief Executive Officer, Director: The strong Q4 results were due to balanced execution across the company. We executed on large strategic accounts, which contributed significantly. Additionally, we saw strength in Capella migrations and new logo acquisitions, including a Community Edition customer reaching over a million ARR in Capella. This balanced execution reflects our healthy pipeline and strategic positioning.

Q: What accounts for the difference between revenue outlook and ARR guidance growth? A: Gregory Henry, Chief Financial Officer, Senior Vice President: The difference is primarily due to the transition to Capella, which is an as-a-service offering. This transition impacts revenue growth as services business contracts, but ARR reflects the migration activity. We expect ARR and revenue growth rates to converge by fiscal 2027 as Capella adoption increases.

Q: How does the macro environment affect your pipeline and renewal cohorts for the new fiscal year? A: Matthew Cain, President, Chief Executive Officer, Director: We have a strong pipeline of large strategic accounts and a balanced renewal base for the fiscal year. Our ability to execute on Capella migrations and renewals is crucial. Despite macroeconomic prudence, enterprises are investing in platforms like ours to unlock the next phase of applications, particularly in AI, which positions us well.

Q: What factors are driving the migration from Community Edition to Capella, and will this continue to be a driver? A: Matthew Cain, President, Chief Executive Officer, Director: Companies are evaluating technology investments for better ROI, data security, and support. Capella's utility accelerates the decision to move from Community Edition to a paid offering. This migration will continue to be a source of new business as we unlock developers' ability to build applications faster on a reliable platform.

Q: What needs to happen for Couchbase to accelerate revenue growth beyond the current range? A: Matthew Cain, President, Chief Executive Officer, Director: Execution is key. We have a differentiated data platform and are innovating rapidly to maintain our strategic position as an AI-native data platform. Our go-to-market strategy, including Capella migrations and perpetual free tier, is set to drive growth. We are focused on executing our commitments and leveraging our strategic positioning.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.