Couchbase Inc at UBS Global Technology and AI Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Austin Dietz - UBS Equities - Analyst : But with that said, let's go and get started. Greg, the database market's one of the larger more strategic software markets out there. As a result, that's invited a number of entrants into it. So how should we think about Couchbase's opportunity given the number of database providers out there?

Question: Austin Dietz - UBS Equities - Analyst : Yeah, fantastic. Could you maybe touch on how you're similar to but more importantly different than MongoDB? It's a name that some are familiar with in the room. That would be great.

Question: Austin Dietz - UBS Equities - Analyst : That's great. And what about the cloud native databases from hyperscalers? Could you maybe talk about the relative positioning of your own cloud based database capella relative to some of the hyperscalers offerings there? And what types of applications are you best suited to underpin?

Question: Austin Dietz - UBS Equities - Analyst : And while we've got you, over the last six to nine months, have you noticed any change in the competitive intensity of that, the database market with the hyperscalers and anything you'd flag or call out?

Question: Austin Dietz - UBS Equities - Analyst : Yeah. Yeah. Well, so all around capella, now represent 15% of your ARR mix today nicely last night. And you've talked about capella reaching 30% to 50% of that total ARR mix over the coming years. So what initiatives are you pursuing to drive more capella adoption?

Question: Austin Dietz - UBS Equities - Analyst : And Greg, what would need to happen for capella to hit that 15% of ARR mark sooner than anticipated. So maybe more towards the four year end of that time frame relative to the six year end.

Question: Austin Dietz - UBS Equities - Analyst : Yeah. Maybe just to tease out that migration you just brought up. Was there a specific trigger or what was the catalyst that drove such a large migration to capella?

Question: Austin Dietz - UBS Equities - Analyst : Yeah, that makes sense. And it ties into your medium term target. You talked about a 20%-plus ARR and revenue growth, medium term target. So could you talk about the construction of that 20%-plus growth outlook? And how much of that depends on capella success?

Question: Austin Dietz - UBS Equities - Analyst : Yeah, well, maybe we stick on -- stick to ARR here. And as a follow up to that, you obviously reported 3Q last night. You reported 16% ARR growth in constant currency. You got into 17% growth ARR in 4Q. So could you talk about what you would need to see for ARR growth to return to that 20%-plus level relative to the 16% to 17% range we're in right now.

Question: Austin Dietz - UBS Equities - Analyst : Yeah, fantastic. .

Question: Austin Dietz - UBS Equities - Analyst : Yeah, that's great. And yeah, maybe just your point on the renewal pool perhaps you can, elaborate a little bit more. So next year, I think you talked about it being larger. Is there any way to think about sort of how much larger and then just evenly distributed? So how are you guys going about that opportunity, may be we could speak to your focus there?

Question: Austin Dietz - UBS Equities - Analyst : Yeah. So I'd love to ask you a little bit more specifically about the 4Q ARR guidance, before we get to next year, there's obviously 4Q because it implies a healthy step up in the net new ARR dollars, you'll add in 4Q. And you've talked about having some contribution from a precontracted amount of ARR that will step up. So that's great. But then you've also talked about these larger strategic deals that you have in the pipeline. So first, could you provide more color on these large strategic deals slated for Q4? How do they compare to your average deal size? How many are we talking about? More color on those deals. I think we'd all love to hear about.

Question: Austin Dietz - UBS Equities - Analyst : Yeah, I mean, it's a fair point and it just also given the size of these deals, often times they can be more hands in the pot, more sign off required. So I guess just given the nature of these more strategic deals, can you talk about your confidence level in pipeline conversion in this all important fourth quarter here? And closing the number of deals you need to hit the 4Q to ARR guidance.

Question: Austin Dietz - UBS Equities - Analyst : And was that was -- because you made this comment last night on the call that you might see some of those deals pull forward from Q1 and before. Is that the primary driver or --

Question: Austin Dietz - UBS Equities - Analyst : Okay.

Question: Austin Dietz - UBS Equities - Analyst : Yeah. That makes sense. And then, last night you had talked about, you'd obviously you brought up earlier, one of the largest capella migrations to date. And I think there was reference to having line of sight to several more of these larger capella migrations. So how does -- from a timing perspective, is that relevant for this Q4 ARR discussion or is that comment was more referenced over the coming 12 to 24 months, you could see more of those migrations play out.

Question: Austin Dietz - UBS Equities - Analyst : And, when did that hunter farmer model go into --

Question: Austin Dietz - UBS Equities - Analyst : Okay. Just this fiscal year. Yeah I mean --

Question: Austin Dietz - UBS Equities - Analyst : Yeah. That makes sense. And what about the new logo piece Greg, I think you added around 34 new logos last night, healthy but not blow out. So I guess what are you doing to drive greater new logos coming on the Couchbase's platform? And where are we on just that, that evolution of that new logo machine or [position]?

Question: Austin Dietz - UBS Equities - Analyst : Yeah, and how should we think about there's now a free tier out there as well. That was -- I think a fairly recent introduction. So maybe you could elaborate a little bit more on that and it's potential that free tier to drive new logos with time. How do you see that plan out? Are there specific triggers where a customer then tips over? But yeah, to a paid seat or if you could talk about that opportunity?

Question: Austin Dietz - UBS Equities - Analyst : And I think going, you had referenced the strong new logo number in 2Q, I think there might have been some ISP or other partner involvement in that. So how built out is that partner ecosystem for you guys? And could that be an additional driver of new logos over time?

Question: Austin Dietz - UBS Equities - Analyst : Okay. That's great. Yeah, I mean, maybe just a step back, a broader question for you, Greg, I think investors had -- all have hoped that AI would lead to a pull through of the data stack layer as enterprise has got their data states in order and a couple of years into this. We haven't really seen any signs of a lift in the result. So why is that? And will AI lead to a pull through of the data stack at some point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 5:55PM, BASE.OQ - Couchbase Inc at UBS Global Technology and AI Conference

Question: Austin Dietz - UBS Equities - Analyst : Yeah, that's great. Yeah, and maybe just on AI to your point, there's only so many applications out there, but you guys are certainly a part of that modern no sequel database layer and modern AI stack where -- yeah, we just love to hear something about the early AI use cases that Couchbase, that you're seeing on the platform that you're being pulled along for. Yeah, so we start there and then timing wise, I'd be curious to hear when enterprises could put more of these AI applications in the production.

Question: Austin Dietz - UBS Equities - Analyst : Yeah, I mean, it's a good way to like, has there been any early read on how the consumption profile of these AI applications? How they might compare to traditional applications that are in Couchbase platform or is it too early to say?

Question: Austin Dietz - UBS Equities - Analyst : Yeah. And that makes sense. And then you guys just announced capella AI services to streamline the development of a Gen AI application. So can you talk a little bit more about this latest offering and what you're seeing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 5:55PM, BASE.OQ - Couchbase Inc at UBS Global Technology and AI Conference

Question: Austin Dietz - UBS Equities - Analyst : Yeah. Does it feel like the potential uptake of these agentic AI applications, could it be faster over the next 12 to 24 months than the pace of adoption of what we've seen in the last 12 months of more vector search rag related use cases. How do you think about this sort of next chapter?

Question: Austin Dietz - UBS Equities - Analyst : Yeah. And then Greg this new offering -- one of your new offerings columnar service, looks interesting and we're seeing this more broadly in the industry where it's the convergence of both operational data with analytical data. We're seeing it from Microsoft, we're seeing it from Snowflake, yourself. So I guess what's going on in the industry, what's happening that we're seeing a greater convergence between these two? And then maybe you could talk about the monetization of that service as well. Would columnar add net new applications to Couchbase platform. Is this about driving greater usage and expansion of existing applications that you think about that?

Question: Austin Dietz - UBS Equities - Analyst : Fantastic. Great. In the last thirty seconds, one from the audience. One of the factors went on the 4Q revs guide is the consumption [rev-rac] at capella. As these capella migrations ramp next year, could we begin to see a greater divergence between revenue and ARR growth.

Question: Austin Dietz - UBS Equities - Analyst : That makes sense. We're out of time. Greg thanks for being here and thanks everyone toady.