SANTA
CLARA, Calif., June 6, 2023
/PRNewswire/ -- Couchbase, Inc. (NASDAQ: BASE), the cloud
database platform company, today announced financial results for
its first quarter ended April 30, 2023.
"We delivered a solid start to the fiscal year and are pleased
that our results exceeded our guidance on all metrics," said
Matt Cain, Chair, President and CEO
of Couchbase. "I am proud of the progress our team is making on our
commitment to drive continued growth, increase Capella adoption,
improve sales and marketing efficiency, and accelerate the pace of
leverage in our model as we innovate for an exciting future."
First Quarter Fiscal 2024 Financial Highlights
- Revenue: Total revenue for the quarter was $41.0 million, an increase of 18% year-over-year.
Subscription revenue for the quarter was $38.5 million, an increase of 21%
year-over-year.
- Annual recurring revenue (ARR): Total ARR as of
April 30, 2023 was $172.2 million, an increase of 23% year-over-year
as reported and on a constant currency basis. See the section
titled "Key Business Metrics" below for details.
- Gross margin: Gross margin for the quarter was 85.6%,
compared to 86.7% for the first quarter of fiscal 2023. Non-GAAP
gross margin for the quarter was 86.4%, compared to 87.3% for the
first quarter of fiscal 2023. 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 $22.5 million, compared
to $19.0 million for the first
quarter of fiscal 2023. Non-GAAP operating loss for the quarter was
$12.9 million, compared to
$13.4 million for the first quarter
of fiscal 2023.
- Cash flow: Cash flow used in operating activities for
the quarter was $7.2 million,
compared to $8.6 million in the first
quarter of fiscal 2023. Capital expenditures were $1.3 million during the quarter, leading to
negative free cash flow of $8.5
million, compared to negative free cash flow of $9.4 million in the first quarter of fiscal
2023.
- Remaining performance obligations (RPO): RPO as of
April 30, 2023 was $165.6 million, a change of (2)%
year-over-year.
Recent Business Highlights
- Introduced an integration with Netlify and a new Visual Studio
Code extension for Couchbase Capella. These ecosystem enhancements
make it easier for developers and development teams to build modern
applications on Capella, streamline their workflows and increase
productivity.
- Announced the broadening of Capella's enterprise features and
capabilities so customers can more easily migrate their
applications. This includes support for time series data, extending
deployability and enhanced management. The new features
collectively position Capella as a single, comprehensive cloud
database platform that offers broad multimodel support and
in-memory performance, which is a powerful combination that lowers
TCO for customers.
- Introduced the Couchbase Independent Software Vendor (ISV)
Starter Factory. This program supports ISVs with additional tools
and resources required to build and monetize their applications
with Capella on Amazon Web Services (AWS).
- Announced the availability of Capella in the Microsoft Azure
Marketplace, an online store providing applications and services
for use on Azure. Couchbase customers can now take advantage of the
productive and trusted Azure cloud platform with streamlined
deployment and management.
Financial Outlook
For the second quarter and full year of fiscal 2024, Couchbase
expects:
|
|
Q2 FY2024
Outlook
|
|
FY2024
Outlook
|
Total
Revenue
|
|
$41.2-41.8
million
|
|
$171.7-174.7
million
|
Total ARR
|
|
$176.0-179.0
million
|
|
$191.5-195.5
million
|
Non-GAAP Operating
Loss
|
|
$10.9-10.1
million
|
|
$43.0-39.0
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 2024
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 live webcast at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Tuesday, June 6,
2023, to discuss its financial results and business highlights. The
conference call can be accessed by dialing 877-407-8029 from
the United States, or +1
201-689-8029 from international locations. The live webcast and a
webcast replay can be accessed from the investor relations page of
Couchbase's website at investors.couchbase.com.
About Couchbase
Modern customer experiences need a flexible database platform
that can power applications spanning from cloud to edge and
everything in between. Couchbase's mission is to simplify how
developers and architects develop, deploy and consume modern
applications wherever they are. We have reimagined the database
with our fast, flexible and affordable cloud database platform
Capella, allowing organizations to quickly build applications that
deliver premium experiences to their customers – all with
best-in-class price performance. More than 30% of the Fortune 100
trust Couchbase to power their modern applications. For more
information, visit www.couchbase.com and follow us on Twitter
@couchbase.
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,
employer payroll taxes on employee stock transactions and
restructuring charges. 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 flow: We define free cash flow as cash
used in operating activities less additions to 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. 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 also includes revenue from
consumption-based cloud credits of Couchbase Capella products. ARR
for Couchbase Capella products in a customer's initial year is
calculated as described above; after a customer's initial year it
is calculated by annualizing the prior 90 days of actual
consumption, assuming no increases or reductions in usage. ARR
excludes revenue derived from the use of cloud products only based
on on-demand arrangements and services revenue. ARR should be
viewed independently of revenue, and does not represent our revenue
under GAAP on an annualized basis, as it is an operating metric
that can be impacted by contract start and end dates and renewal
dates. ARR is not intended to be a replacement for forecasts of
revenue. 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. We updated our definition of ARR beginning in the third
quarter of fiscal 2023 to clarify that the 90-day actual
consumption methodology is only used after a customer's initial
year. The reason for this change is to better reflect the ARR for
Couchbase Capella products following the launch of Couchbase
Capella in fiscal 2022. ARR for prior periods have not been
adjusted to reflect these changes as they are not material to any
period previously presented.
We also attempt to represent the changes in the underlying
business operations by eliminating fluctuations caused by changes
in foreign currency exchange rates within the current period. We
calculate constant currency growth rates by applying the applicable
prior period exchange rates to current period results.
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 section titled "Financial Outlook" above and
statements about Couchbase's market position, strategies and
potential market opportunities. 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 geopolitical and macroeconomic factors. Further
information on risks that could cause actual results to differ
materially from forecasted results are included in our filings with
the Securities and Exchange Commission that we may file from time
to time, including those more fully described in our Annual Report
on Form 10-K for the fiscal year ended January 31, 2023. Additional information will be
made available in our Quarterly Report on Form 10-Q for the quarter
ended April 30, 2023 that will be filed with the Securities
and Exchange Commission, 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.
Couchbase,
Inc.
|
Condensed
Consolidated Statements of Operations
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
Revenue:
|
|
|
|
License
|
$
4,943
|
|
$
5,007
|
Support and
other
|
33,599
|
|
26,974
|
Total subscription
revenue
|
38,542
|
|
31,981
|
Services
|
2,454
|
|
2,872
|
Total
revenue
|
40,996
|
|
34,853
|
Cost of
revenue:
|
|
|
|
Subscription(1)
|
3,673
|
|
2,396
|
Services(1)
|
2,249
|
|
2,255
|
Total cost of
revenue
|
5,922
|
|
4,651
|
Gross
profit
|
35,074
|
|
30,202
|
Operating
expenses:
|
|
|
|
Research and
development(1)
|
15,383
|
|
14,421
|
Sales and
marketing(1)
|
32,553
|
|
26,843
|
General and
administrative(1)
|
9,625
|
|
7,926
|
Restructuring(1)
|
46
|
|
—
|
Total operating
expenses
|
57,607
|
|
49,190
|
Loss from
operations
|
(22,533)
|
|
(18,988)
|
Interest
expense
|
(25)
|
|
(25)
|
Other income (expense),
net
|
1,433
|
|
(556)
|
Loss before income
taxes
|
(21,125)
|
|
(19,569)
|
Provision for income
taxes
|
750
|
|
265
|
Net loss
|
$
(21,875)
|
|
$
(19,834)
|
Net loss per share,
basic and diluted
|
$
(0.48)
|
|
$
(0.45)
|
Weighted-average shares
used in computing net loss per share, basic and diluted
|
45,843
|
|
44,265
|
_______________________________
|
(1)
Includes stock-based
compensation expense as follows:
|
|
|
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
Cost of
revenue—subscription
|
$
193
|
|
$
122
|
Cost of
revenue—services
|
145
|
|
94
|
Research and
development
|
2,768
|
|
1,899
|
Sales and
marketing
|
3,241
|
|
1,987
|
General and
administrative
|
2,928
|
|
1,348
|
Restructuring
|
1
|
|
—
|
Total stock-based
compensation expense
|
$
9,276
|
|
$
5,450
|
Couchbase,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(unaudited)
|
|
|
As of April
30, 2023
|
|
As of
January 31,
2023
|
|
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
46,240
|
|
$
40,446
|
Short-term
investments
|
117,403
|
|
127,856
|
Accounts receivable,
net
|
42,212
|
|
39,847
|
Deferred
commissions
|
12,814
|
|
13,096
|
Prepaid expenses and
other current assets
|
6,839
|
|
8,234
|
Total current
assets
|
225,508
|
|
229,479
|
Property and equipment,
net
|
8,032
|
|
7,430
|
Operating lease
right-of-use assets
|
6,233
|
|
6,940
|
Deferred commissions,
noncurrent
|
8,089
|
|
7,524
|
Other assets
|
1,608
|
|
1,666
|
Total
assets
|
$
249,470
|
|
$
253,039
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
6,865
|
|
$
1,407
|
Accrued compensation
and benefits
|
8,495
|
|
12,641
|
Other accrued
expenses
|
4,813
|
|
6,076
|
Operating lease
liabilities
|
3,060
|
|
3,117
|
Deferred
revenue
|
78,540
|
|
71,716
|
Total current
liabilities
|
101,773
|
|
94,957
|
Operating lease
liabilities, noncurrent
|
3,873
|
|
4,543
|
Deferred revenue,
noncurrent
|
2,874
|
|
3,275
|
Total
liabilities
|
108,520
|
|
102,775
|
Stockholders'
equity
|
|
|
|
Preferred
stock
|
—
|
|
—
|
Common
stock
|
—
|
|
—
|
Additional paid-in capital
|
573,791
|
|
561,547
|
Accumulated other
comprehensive loss
|
(490)
|
|
(807)
|
Accumulated
deficit
|
(432,351)
|
|
(410,476)
|
Total stockholders'
equity
|
140,950
|
|
150,264
|
Total liabilities and
stockholders' equity
|
$
249,470
|
|
$
253,039
|
Couchbase,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
(unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(21,875)
|
|
$
(19,834)
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
Depreciation and
amortization
|
890
|
|
739
|
Stock-based
compensation, net of amounts capitalized
|
9,276
|
|
5,450
|
Amortization of
deferred commissions
|
4,540
|
|
4,009
|
Non-cash lease
expense
|
772
|
|
648
|
Foreign currency
transaction (gains) losses
|
(84)
|
|
974
|
Other
|
(746)
|
|
198
|
Changes in operating
assets and liabilities
|
|
|
|
Accounts
receivable
|
(2,274)
|
|
11,781
|
Deferred
commissions
|
(4,824)
|
|
(3,798)
|
Prepaid expenses and
other assets
|
1,405
|
|
312
|
Accounts
payable
|
5,458
|
|
731
|
Accrued compensation
and benefits
|
(4,060)
|
|
(8,112)
|
Accrued expenses and
other liabilities
|
(1,256)
|
|
(71)
|
Operating lease
liabilities
|
(826)
|
|
(666)
|
Deferred
revenue
|
6,423
|
|
(968)
|
Net cash used in
operating activities
|
(7,181)
|
|
(8,607)
|
Cash flows from
investing activities
|
|
|
|
Purchases of short-term
investments
|
(7,821)
|
|
(53,630)
|
Maturities of
short-term investments
|
19,423
|
|
9,600
|
Additions to property
and equipment
|
(1,288)
|
|
(799)
|
Net cash provided by
(used in) investing activities
|
10,314
|
|
(44,829)
|
Cash flows from
financing activities
|
|
|
|
Proceeds from exercise
of stock options
|
1,917
|
|
2,614
|
Proceeds from issuance
of common stock under ESPP
|
847
|
|
3,525
|
Net cash provided by
financing activities
|
2,764
|
|
6,139
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(103)
|
|
(719)
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
5,794
|
|
(48,016)
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
40,989
|
|
96,231
|
Cash, cash equivalents,
and restricted cash at end of period
|
$
46,783
|
|
$
48,215
|
Reconciliation of
cash, cash equivalents, and restricted cash within the consolidated
balance sheets to the amounts shown above:
|
|
|
|
Cash and cash
equivalents
|
$
46,240
|
|
$
47,672
|
Restricted cash
included in other assets
|
543
|
|
543
|
Total cash, cash
equivalents and restricted cash
|
$
46,783
|
|
$
48,215
|
Couchbase,
Inc.
|
Reconciliation of
GAAP to Non-GAAP Results
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
Reconciliation of
GAAP gross profit to non-GAAP gross profit:
|
|
|
|
Total
revenue
|
$
40,996
|
|
$
34,853
|
Gross profit
|
$
35,074
|
|
$
30,202
|
Add: Stock-based
compensation expense
|
338
|
|
216
|
Add: Employer taxes on
employee stock transactions
|
10
|
|
2
|
Non-GAAP gross
profit
|
$
35,422
|
|
$
30,420
|
Gross margin
|
85.6 %
|
|
86.7 %
|
Non-GAAP gross
margin
|
86.4 %
|
|
87.3 %
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
Reconciliation of
GAAP operating expenses to non-GAAP operating
expenses:
|
|
|
|
GAAP research and
development
|
$
15,383
|
|
$
14,421
|
Less: Stock-based
compensation expense
|
(2,768)
|
|
(1,899)
|
Less: Employer taxes on
employee stock transactions
|
(108)
|
|
(24)
|
Non-GAAP research
and development
|
$
12,507
|
|
$
12,498
|
|
|
|
|
GAAP sales and
marketing
|
$
32,553
|
|
$
26,843
|
Less: Stock-based
compensation expense
|
(3,241)
|
|
(1,987)
|
Less: Employer taxes on
employee stock transactions
|
(120)
|
|
(36)
|
Non-GAAP sales and
marketing
|
$
29,192
|
|
$
24,820
|
|
|
|
|
GAAP general and
administrative
|
$
9,625
|
|
$
7,926
|
Less: Stock-based
compensation expense
|
(2,928)
|
|
(1,348)
|
Less: Employer taxes on
employee stock transactions
|
(29)
|
|
(71)
|
Non-GAAP general and
administrative
|
$
6,668
|
|
$
6,507
|
|
|
|
|
GAAP restructuring
expense
|
$
46
|
|
$
—
|
Less:
Restructuring(2)
|
(46)
|
|
—
|
Non-GAAP
restructuring
|
$
—
|
|
$
—
|
|
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
Reconciliation of
GAAP operating loss to non-GAAP operating loss:
|
|
|
|
Total
revenue
|
$
40,996
|
|
$
34,853
|
Loss from
operations
|
$
(22,533)
|
|
$
(18,988)
|
Add: Stock-based
compensation expense
|
9,275
|
|
5,450
|
Add: Employer taxes on
employee stock transactions
|
267
|
|
133
|
Add:
Restructuring(2)
|
46
|
|
—
|
Non-GAAP operating
loss
|
$
(12,945)
|
|
$
(13,405)
|
Operating
margin
|
(55) %
|
|
(54) %
|
Non-GAAP operating
margin
|
(32) %
|
|
(38) %
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
Reconciliation of
GAAP net loss to non-GAAP net loss:
|
|
|
|
Net loss
|
$
(21,875)
|
|
$
(19,834)
|
Add: Stock-based
compensation expense
|
9,275
|
|
5,450
|
Add: Employer taxes on
employee stock transactions
|
267
|
|
133
|
Add:
Restructuring(2)
|
46
|
|
—
|
Non-GAAP net
loss
|
$
(12,287)
|
|
$
(14,251)
|
GAAP net loss per
share
|
$
(0.48)
|
|
$
(0.45)
|
Non-GAAP net loss per
share
|
$
(0.27)
|
|
$
(0.32)
|
Weighted average shares
outstanding, basic and diluted
|
45,843
|
|
44,265
|
_______________________________
|
(2)
|
For the three months
ended April 30, 2023, stock-based compensation expense related to
restructuring charges were included in the restructuring expense
line.
|
|
|
The following table
presents a reconciliation of free cash flow to net cash used in
operating activities, the most directly comparable GAAP measure,
for each of the periods indicated (in thousands,
unaudited):
|
|
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
Net cash used in
operating activities
|
$
(7,181)
|
|
$
(8,607)
|
Less: Additions to
property and equipment
|
(1,288)
|
|
(799)
|
Free cash
flow
|
$
(8,469)
|
|
$
(9,406)
|
Net cash provided by
(used in) investing activities
|
$
10,314
|
|
$
(44,829)
|
Net cash provided by
financing activities
|
$
2,764
|
|
$
6,139
|
Couchbase,
Inc.
|
Key Business
Metrics
|
(in
millions)
|
(unaudited)
|
|
|
As of
|
|
|
Jan.
31,
|
|
April
30,
|
|
July
31,
|
|
Oct.
31,
|
|
Jan.
31,
|
|
April
30,
|
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
|
2023
|
|
2023
|
Annual Recurring
Revenue
|
|
$
132.9
|
|
$
139.7
|
|
$
145.2
|
|
$
151.7
|
|
$
163.7
|
|
$
172.2
|
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SOURCE Couchbase, Inc.