Couchbase Announces Second Quarter Fiscal 2026 Financial Results

, /PRNewswire/ -- Couchbase, Inc. (NASDAQ: BASE), the developer data platform for critical applications in our AI world, today announced financial results for its second quarter ended July 31, 2025. "We had a great second quarter with all metrics exceeding the high end of our outlook," said Matt Cain, Chair, President and CEO of Couchbase. "I'm pleased with our team's execution in the quarter and continued work toward closing the transaction with Haveli Investments." Second Quarter Fiscal 2026 Financial Highlights Revenue: Total revenue for the quarter was $57.6 million, an increase of 12% year-over-year. Subscription revenue for the quarter was $55.4 million, an increase of 12% year-over-year. Annual recurring revenue (ARR): Total ARR as of July 31, 2025 was $260.5 million, an increase of 22% year-over-year as reported, or 21% on a constant currency basis. Gross margin: Gross margin for the quarter was 87.2%, compared to 87.5% for the second quarter of fiscal 2025. Non-GAAP gross margin for the quarter was 88.2%, compared to 88.3% for the second quarter of fiscal 2025. 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 $25.4 million, compared to $21.0 million for the second quarter of fiscal 2025. Non-GAAP operating loss for the quarter was $2.6 million, compared to $4.1 million for the second quarter of fiscal 2025. Cash flow: Cash flow used in operating activities for the quarter was $3.5 million, compared to cash flow used in operating activities of $4.9 million in the second quarter of fiscal 2025. Capital expenditures were $3.8 million during the quarter, leading to negative free cash flow of $7.3 million, compared to negative free cash flow of $5.9 million in the second quarter of fiscal 2025. Remaining performance obligations (RPO): RPO as of July 31, 2025 was $270.7 million, an increase of 25% year-over-year. Net Retention Rate (NRR): Dollar-based NRR for the quarter returned to greater than 115%. Recent Business Highlights Introduced Enterprise Analytics for self-managed customers, enabling teams to use Couchbase's real-time JSON-native analytics on-prem, in the cloud or within Couchbase's Database-as-a-Service, Couchbase Capella. Customers get real-time insights for faster decision-making without hurting operational workloads. Analysis and derived data can be written back in milliseconds to their Couchbase operational data store, for use within critical applications, all in a single database platform. Expanded ecosystem partnerships with AWS and Google to accelerate AI agent adoption, launching Capella in the AWS Marketplace AI Agents and Tools category while gaining official support in Google's MCP Toolbox for Databases. Customers can now use AWS Marketplace to easily discover, buy and deploy Couchbase's AI-ready platform directly through their existing AWS accounts. The integration within Google's MCP Toolbox accelerates agentic AI application development for developers, eliminates the need for custom connectors and reduces time-to-market for AI agent deployments. Announced partnership with K2view to generate synthetic data for building AI applications. This addresses a critical enterprise challenge of accessing safe, representative and compliant datasets for AI model training and testing. The collaboration enables customers to accelerate AI development cycles while maintaining data privacy and regulatory compliance through K2view's bi-directional connector integration with Couchbase's platform. Announced the fully managed Couchbase Connector for Confluent Cloud, eliminating infrastructure management complexity and enabling easy, bi-directional data movement between Confluent Cloud and Couchbase. The new connector reduces operational overhead by handling deployment, scaling, error handling and lifecycle management automatically, allowing developers and platform teams to focus on building real-time, event-driven applications. Garnered multiple industry recognitions, including Database Trends and Applications' (DBTA) list of "100 Companies That Matter Most in Data", and a DBTA Readers' Choice Award. Transaction with Haveli Investments In a separate press release issued on June 20, 2025, we announced that we have entered into a definitive agreement (the "Agreement") to be acquired by Haveli Investments. A copy of the press release and supplemental materials can be found on the "Investors" page of our website at https://investors.couchbase.com and on the Securities and Exchange Commission, or the SEC, website at http://www.sec.gov. Additional details and information about the terms and conditions of the Agreement and the transactions contemplated by the Agreement are available in the Current Report on Form 8-K filed with the SEC on June 20, 2025. Given the announced transaction, we will not be hosting an earnings conference call nor providing financial guidance in conjunction with this press release. For further detail and discussion of our financial performance, please refer to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2025, to be filed with the SEC on September 4, 2025. About Couchbase As industries race to embrace AI, traditional database solutions fall short of rising demands for versatility, performance and affordability. Couchbase is seizing the opportunity to lead with Capella, the developer data platform architected for critical applications in our AI world. By uniting transactional, analytical, mobile and AI workloads into a seamless, fully managed solution, Couchbase empowers developers and enterprises to build and scale applications and AI agents with confidence – delivering exceptional performance, scalability and cost-efficiency from cloud to edge and everything in between. Couchbase enables organizations to unlock innovation, accelerate AI transformation and redefine customer experiences wherever they happen. Discover why Couchbase is the foundation of critical everyday applications by visiting www.couchbase.com and following us on LinkedIn and X. Couchbase has used, and intends to continue using, its investor relations website and the corporate blog at www.couchbase.com/blog 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 income (loss) and non-GAAP net income (loss) per share: 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, restructuring charges, impairment of capitalized internal-use software, and business development activities. 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 provided by or 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 renewed at the same levels unless we receive notification of non-renewal and are no longer in negotiations prior to the measurement date. For Capella products, ARR in a customer's initial year is calculated as the greater of: (i) initial year contract revenue as described above or (ii) annualized prior 90 days of actual consumption; and ARR for subsequent years is calculated with method (ii). ARR excludes 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, expand within our existing customers and consumption dynamics. We believe that ARR is an important indicator of the growth and performance of our business. NRR for any period equals the simple arithmetic average of our quarterly dollar-based net retention rate for the four quarters ending with the most recent fiscal quarter. To calculate our dollar-based net retention rate for a given quarter, we start with the ARR ("Base ARR") attributable to our customers ("Base Customers") as of the end of the same quarter of the prior fiscal year. We then determine the ARR attributable to the Base Customers as of the end of the most recent quarter and divide that amount by the Base ARR. 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 federal securities laws 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, statements regarding our expectations with respect to the merger, assumptions, quotations of management, statements about the expected client demand for and benefits of our offerings, the impact of our recently-released and planned products and services and our 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 "may," "will," "should," "expect," "plan," "anticipate," "could," "would," "intend," "target," "project," "forecast," "contemplate," "believe," "estimate," "predict," "seek," "pursue," "potential," "ready," or "continue" 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: the pendency of the merger and our ability to complete the merger in a timely manner or at all, including the risk that our stock price may fluctuate and may decline if the merger is not completed; potential litigation and the outcome of any legal proceedings related to the merger; the response of competitors and other market participants to the merger; the risk that potential disruptions related to the merger will harm our current plans, operations and business relationships, including through the loss of customers and employees; unexpected costs, fees, expenses and other charges we may incur as a result of the merger; 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 highly competitive 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, including new capabilities, programs and partnerships and their impact on our customers and our business; 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 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 April 30, 2025 and in our Proxy Statement filed with the SEC on July 29, 2025. Additional information will be made available in our Annual Report on Form 10-Q for the quarter year ended July 31, 2025 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. Couchbase, Inc.Condensed Consolidated Statements of Operations(in thousands, except share data)(unaudited) Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Revenue: License $ 5,065 $ 5,242 $ 14,073 $ 12,101 Support and other 50,303 44,051 96,138 86,230 Total subscription revenue 55,368 49,293 110,211 98,331 Services 2,198 2,296 3,878 4,585 Total revenue 57,566 51,589 114,089 102,916 Cost of revenue: Subscription(1) 5,935 4,455 11,397 8,412 Services(1) 1,406 2,008 2,800 3,733 Total cost of revenue 7,341 6,463 14,197 12,145 Gross profit 50,225 45,126 99,892 90,771 Operating expenses: Research and development(1) 18,963 17,370 37,453 35,217 Sales and marketing(1) 37,529 36,168 75,689 73,923 General and administrative(1) 11,309 12,636 22,472 25,219 Business development activities 7,828 — 8,525 — Total operating expenses 75,629 66,174 144,139 134,359 Loss from operations (25,404) (21,048) (44,247) (43,588) Interest expense (15) (29) (30) (29) Other income, net 1,633 1,741 3,683 3,272 Loss before income taxes (23,786) (19,336) (40,594) (40,345) Provision for income taxes — 559 871 545 Net loss $ (23,786) $ (19,895) $ (41,465) $ (40,890) Net loss per share, basic and diluted $ (0.43) $ (0.39) $ (0.77) $ (0.81) Weighted-average shares used in computing net loss per share, basic and diluted 54,707 50,822 54,185 50,311 (1) Includes stock-based compensation expense as follows: Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Cost of revenue - subscription $ 385 $ 301 $ 728 $ 567 Cost of revenue - services 103 109 212 250 Research and development 4,439 4,214 8,854 8,207 Sales and marketing 5,351 6,162 10,624 11,385 General and administrative 3,821 5,370 7,065 10,374 Total stock-based compensation expense $ 14,099 $ 16,156 $ 27,483 $ 30,783 Couchbase, Inc.Condensed Consolidated Balance Sheets(in thousands)(unaudited) As of July 31, 2025 As of January 31, 2025 Assets: Current assets Cash and cash equivalents $ 44,110 $ 30,536 Short-term investments 98,112 116,635 Accounts receivable, net 42,643 49,242 Deferred commissions 17,694 16,774 Prepaid expenses and other current assets 9,493 15,206 Total current assets 212,052 228,393 Property and equipment, net 11,110 7,214 Operating lease right-of-use assets 6,739 3,935 Deferred commissions, noncurrent 19,060 19,602 Other assets 1,473 1,454 Total assets $ 250,434 $ 260,598 Liabilities and Stockholders' Equity: Current liabilities Accounts payable $ 4,493 $ 2,186 Accrued compensation and benefits 16,605 21,091 Other accrued expenses 8,095 8,443 Operating lease liabilities 1,053 1,356 Deferred revenue 86,689 94,252 Total current liabilities 116,935 127,328 Operating lease liabilities, noncurrent 7,131 2,960 Deferred revenue, noncurrent 2,359 2,694 Total liabilities 126,425 132,982 Stockholders' equity Preferred stock — — Common stock — — Additional paid-in capital 730,788 692,812 Accumulated other comprehensive income (2) 116 Accumulated deficit (606,777) (565,312) Total stockholders' equity 124,009 127,616 Total liabilities and stockholders' equity $ 250,434 $ 260,598 Couchbase, Inc.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited) Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Cash flows from operating activities Net loss $ (23,786) $ (19,895) $ (41,465) $ (40,890) Adjustments to reconcile net loss to net cash usedin operating activities: Depreciation and amortization 1,082 363 1,933 763 Stock-based compensation, net of amounts capitalized 14,099 16,156 27,483 30,783 Amortization of deferred commissions 5,076 4,184 10,172 8,280 Non-cash lease expense 584 765 1,304 1,530 Net accretion of discounts on short-term investments (231) (713) (533) (1,613) Foreign currency transaction (gains) losses (165) 8 (719) 291 Other 31 124 (19) 200 Changes in operating assets and liabilities: Accounts receivable 1,129 3,130 7,240 13,295 Deferred commissions (7,207) (5,179) (10,550) (8,249) Prepaid expenses and other assets 2,164 412 5,496 443 Accounts payable 1,307 938 2,667 146 Accrued compensation and benefits 6,956 5,188 (4,691) (3,991) Other Accrued Expenses 1,439 (294) (433) (1,107) Operating lease liabilities 431 (782) (239) (1,625) Deferred revenue (6,378) (9,255) (7,898) (1,547) Net cash used in operating activities (3,469) (4,850) (10,252) (3,291) Cash flows from investing activities Purchases of short-term investments (10,863) (18,351) (23,621) (37,805) Maturities of short-term investments 26,560 34,000 42,560 58,144 Purchases of property and equipment (3,849) (1,067) (5,709) (2,062) Net cash provided by investing activities 11,848 14,582 13,230 18,277 Cash flows from financing activities Proceeds from exercise of stock options 7,635 842 8,854 4,136 Proceeds from issuance of common stock under ESPP — — 1,424 1,795 Net cash provided by financing activities 7,635 842 10,278 5,931 Effect of exchange rate changes on cash,cash equivalents and restricted cash 50 58 318 (204) Net increase in cash, cash equivalents and restricted cash 16,064 10,632 13,574 20,713 Cash, cash equivalents, and restricted cash at beginning of period 28,046 51,975 30,536 41,894 Cash, cash equivalents, and restricted cash atend of period $ 44,110 $ 62,607 $ 44,110 $ 62,607 Reconciliation of cash, cash equivalents, andrestricted cash within the consolidated balance sheets to the amounts shown above: Cash and cash equivalents $ 44,110 $ 62,607 $ 44,110 $ 62,607 Restricted cash included in other assets — — — — Total cash, cash equivalents and restricted cash $ 44,110 $ 62,607 $ 44,110 $ 62,607 Couchbase, Inc. Reconciliation of GAAP to Non-GAAP Results (in thousands, except percentages and per share data) (unaudited) Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Reconciliation of GAAP gross profit to non-GAAP gross profit: Total revenue $ 57,566 $ 51,589 $114,089 $102,916 Gross profit $ 50,225 $ 45,126 $ 99,892 $ 90,771 Add: Stock-based compensation expense 488 410 940 817 Add: Employer taxes on employee stock transactions 32 28 55 98 Non-GAAP gross profit $ 50,745 $ 45,564 $100,887 $ 91,686 Gross margin 87.2 % 87.5 % 87.6 % 88.2 % Non-GAAP gross margin 88.2 % 88.3 % 88.4 % 89.1 % Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Reconciliation of GAAP operating expenses to non-GAAP operating expenses: GAAP research and development $ 18,963 $ 17,370 $ 37,453 $ 35,217 Less: Stock-based compensation expense (4,439) (4,214) (8,854) (8,207) Less: Employer taxes on employee stock transactions (205) (170) (375) (479) Non-GAAP research and development $ 14,319 $ 12,986 $ 28,224 $ 26,531 GAAP sales and marketing $ 37,529 $ 36,168 $ 75,689 $ 73,923 Less: Stock-based compensation expense (5,351) (6,162) (10,624) (11,385) Less: Employer taxes on employee stock transactions (516) (421) (819) (1,103) Non-GAAP sales and marketing $ 31,662 $ 29,585 $ 64,246 $ 61,435 GAAP general and administrative $ 11,309 $ 12,636 $ 22,472 $ 25,219 Less: Stock-based compensation expense (3,821) (5,370) (7,065) (10,374) Less: Employer taxes on employee stock transactions (78) (172) (163) (327) Non-GAAP general and administrative $ 7,410 $ 7,094 $ 15,244 $ 14,518 Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Reconciliation of GAAP loss from operations to non-GAAP loss from operations: Total revenue $ 57,566 $ 51,589 $114,089 $102,916 Loss from operations $(25,404) $(21,048) $ (44,247) $ (43,588) Add: Stock-based compensation expense 14,099 16,156 27,483 30,783 Add: Employer taxes on employee stock transactions 831 791 1,412 2,007 Add: Business development activities 7,828 — 8,525 — Non-GAAP loss from operations $ (2,646) $ (4,101) $ (6,827) $ (10,798) Operating margin (44) % (41) % (39) % (42) % Non-GAAP operating margin (5) % (8) % (6) % (10) % Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Reconciliation of GAAP net loss to non- GAAP net loss: Net loss $(23,786) $(19,895) $ (41,465) $ (40,890) Add: Stock-based compensation expense 14,099 16,156 27,483 30,783 Add: Employer taxes on employee stock transactions 831 791 1,412 2,007 Add: Business development activities 7,828 — 8,525 — Non-GAAP net loss $ (1,028) $ (2,948) $ (4,045) $ (8,100) GAAP net loss per share $ (0.43) $ (0.39) $ (0.77) $ (0.81) Non-GAAP net loss per share $ (0.02) $ (0.06) $ (0.07) $ (0.16) Weighted average shares outstanding, basic and diluted 54,707 50,822 54,185 50,311 The following table presents a reconciliation of free cash flow to net cash used in by operating activities, the most directly comparable GAAP measure (in thousands, unaudited): Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Net cash used in operating activities $ (3,469) $ (4,850) $ (10,252) $ (3,291) Less: Additions to property and equipment (3,849) (1,067) (5,709) (2,062) Free cash flow $ (7,318) $ (5,917) $ (15,961) $ (5,353) Net cash provided by investing activities $ 11,848 $ 14,582 $ 13,230 $ 18,277 Net cash provided by financing activities $ 7,635 $ 842 $ 10,278 $ 5,931 Couchbase, Inc.Key Business Metrics(in millions)(unaudited) As of: October 31, January 31, April 30, July 31, October 31, January 31, April 30, July 31, 2023 2024 2024 2024 2024 2025 2025 2025 ARR $ 188.7 $ 204.2 $ 207.7 $ 214.0 $ 220.3 $ 237.9 $ 252.1 $ 260.5 SOURCE Couchbase, Inc. 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Couchbase Announces Second Quarter Fiscal 2026 Financial Results

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