Couchbase, Inc. Q2 2025 Earnings Summary

Couchbase, Inc. (NASDAQ: BASE), a prominent player in modern database solutions, reported favorable second-quarter results for fiscal year 2025 amid some challenges. The company’s annual recurring revenue (ARR) increased by 18% year-over-year to $214 million, while quarterly revenue rose by 20% to $51.6 million. The company added 62 new clients, significantly surpassing the previous year’s addition of 12.

The newly launched Capella platform now comprises 31% of the customer base and contributes 13.5% to the overall ARR. Although facing higher than expected customer loss and downgrading, Couchbase remains positive about achieving its annual goals and has raised its revenue forecast for FY 2025.

Key Takeaways

• Couchbase’s ARR is $214 million, representing an 18% year-over-year increase.
• Quarterly revenue reached $51.6 million, up 20% year-over-year.
• The addition of 62 new clients marked a significant increase from the prior year.
• Capella accounts for 31% of Couchbase’s customer base and adds 13.5% to total ARR.
• Despite customer churn, Couchbase maintains confidence in its long-term strategy.

Company Outlook

• Expected Q3 total revenue: $50.3 million to $51.1 million.
• Full-year revenue forecast raised to $205.1 million to $209.1 million.
• ARR projected between $235.5 million and $240.5 million.
• Anticipated recovery in growth retention rates in the latter half of the year.

Bearish Highlights

• Notable customer loss and downgrading impacted ARR performance more than anticipated.
• Significant losses from two clients contributed to the overall downsell.

Bullish Highlights

• Strong growth in gross new ARR, among the best in company history.
• New partnerships bolstered customer base expansion.
• Anticipated growth in strategic accounts generating more ARR moving forward.
• Positive trajectory toward achieving free cash flow.

Misses

• One deal short of meeting Q2 targets due to delays from Q1.
• No specific timeline for reaching operating breakeven indicated.

Q&A Highlights

• Executives discussed the impact of losses and churn on performance.
• Strong expectations for larger renewals and upsells in the second half of the year.
• Confidence in executing on strategic opportunities for future growth.

In summary, Couchbase’s solid performance in Q2 2025, despite higher customer churn, showcases its resilience and commitment to growth. The market watches if it will sustain momentum and leverage its robust pipeline in the coming quarters.