Couchbase Inc Q4 2025 Earnings Call Transcript

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

Question: Sanjit Singh - Morgan Stanley - Analyst : Yeah, thank you for taking the questions and Greg, it's been a pleasure working with you and really excited to see what the next chapter of of your career. And I guess with that, just sort of thinking about Q4 Matt, really awesome performance on a constant currency basis. I was wondering if you could sort of unpack for us the strength in Q4. Was it a function of executing on these strategic deals that you guys have been calling out for most of the year? Was it just better execution, was macro improving, just a little color on the strength in Q4. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2025 / 9:30PM, BASE.OQ - Q4 2025 Couchbase Inc Earnings Call

Question: Sanjit Singh - Morgan Stanley - Analyst : Awesome. And then I guess a follow up for Greg. It's a topic that I think we revisit a couple of times every year, Greg, just the delta, the spread between your revenue outlook and your ARR guidance for growth. Is that a function of more migration activity and sort of the timing of revenue on the consumption side versus the migration impact on the subscription side of the house. Just any color on the spread between the ARR outlook and the revenue outlook.

Question: Robert Oliver - Robert W. Baird & Co. Incorporated - Analyst : Great. Thanks, guys. I appreciate it. Greg, the Sanjit's comments, really enjoyed working with you and wish you all the best. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2025 / 9:30PM, BASE.OQ - Q4 2025 Couchbase Inc Earnings Call I guess first question for you guys is, just, Sanjit asked about the macro and Q4. I'll ask about it relative to this new fiscal year. It seems that there's a lot of cross currents out there in the market. So I just would be curious to hear from you guys as you look at the pipeline of opportunities this year, the renewal cohorts that you have. How you kind of factored that into your guidance and specifically on some of those renewal cohorts. Obviously an opportunity to cross sell. You talked about the uptick in Capella migrations. If you could break down some more color around what you're seeing specific or what you expect to see specifically in those cohorts, that would be helpful. And then I had a quick follow up.

Question: Robert Oliver - Robert W. Baird & Co. Incorporated - Analyst : Got it. Super helpful. Thanks, Matt. And then just one quick follow up. I think this is the second quarter in ARR or at least the last few quarters where you guys have called out meaningful Community migration, and I just wanted to get a sense for, is that a function of where you guys are in your motion and being able to articulate sort of the compelling nature of kind of moving from Community to you guys? Is it something about Generative AI in the market? What are some of the drivers of that and should we expect that to continue to be a driver for you guys? Thank you.

Question: Robert Oliver - Robert W. Baird & Co. Incorporated - Analyst : Very helpful. Thanks guys. Appreciate it.

Question: Jason Ader - William Blair - Analyst : Yeah, thank you. Matt, I guess start with you. You guys have been growing steadily in the mid 10s, showing nice leverage, I think a lot of people don't believe you're going to do the net new ARR that you did, so congrats on that. I don't want to take anything away from the trajectory and the history here, but what needs to happen for you guys to kind of break out of the range that you're in right now in terms of revenue growth. Like, if you were to think about the next few years, what do you think needs to happen for the company to really accelerate the top line growth, so let's call it something with a 2 in front of it?

Question: Jason Ader - William Blair - Analyst : Alright. Then, Matt, just a quick follow up on the news today. Any observation on the IBM deal today to acquire data stacks in terms of what it means for the database industry and the competitive landscape?

Question: Jason Ader - William Blair - Analyst : Alright, and then just a final note, Greg, best of luck. It was great working with you. Hope we cross paths again.

Question: Michael Cikos - Needham & Company - Analyst : Great, thanks for taking the questions here, guys, and I'll start off by thanking you, Greg, for the time together and good luck on your future endeavor here. For Matt, maybe if we could just kick off, I know Capella AI Services is early days here, but can you talk to the initial customer feedback? I imagine you probably ran pilots or had this an even a handful of select customers before taking it into this private preview stage we're in today. What are customers telling you and what are their findings, and then I have a follow up. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2025 / 9:30PM, BASE.OQ - Q4 2025 Couchbase Inc Earnings Call

Question: Michael Cikos - Needham & Company - Analyst : That's great to hear. And for the follow up here, I think we're all aware of the benefit in Q1 last year to license based on that early renewal you guys have seen in Q4 of fiscal '24. We just wanted to get a better sense. We're talking about the size of this renewal pool, the confidence you guys have in the step up in anticipated Capella migrations this coming year. Can you provide additional detail? What gives you that confidence here in those Capella migrations? Is there additional scrubbing a pipeline that's gone into place? Are you implementing more rigorous processes? Just anything to help instill that confidence with the rest of the us will be great. Thank you.

Question: Raimo Lenschow - Barclays Bank - Analyst : Perfect. Thank you. Congrats from me as well, and Greg, all the best. I wanted to stay on the Capella notion. So at the moment, there's a lot of kind of converting existing customers over to Capella, and that's going to be like a really multi-nice, multi-year opportunity. Where are we on that new customer ad front, because obviously, Capella as a cost solution should enable kind of new local growth to accelerate, why are we there and what are the initiatives for next year?

Question: Raimo Lenschow - Barclays Bank - Analyst : Yeah, perfect. Thank you. And if you think about that, Greg, now when you retiring, it's almost like not nice to ask a question, but like, if you think about the balance between growth and profitability, you kind of showed in Q4 when you go, when to break even that's achievable. Obviously, you give guidance, but how do you -- if the market is recovering next year, how do you think about that growth versus margin balance? Thank you.

Question: Raimo Lenschow - Barclays Bank - Analyst : Okay, perfect. Yeah. Makes sense. Thank you. Congrats.

Question: Howard Ma - Guggenheim Securities LLC - Analyst : Thanks. Greg, it's been a pleasure and wish you the best on your next opportunity. Matt, I wanted to ask you about the -- in your prepared remarks, you mentioned the global financial services firm that -- I believe that was an enterprise expansion. What I wanted to ask about is, it so seems like that customer consolidated apps built on both relational databases and one or more competing NoSQL databases. And the question is -- so how, I guess -- number one is how common is this? Number two is how long did this consolidation take from start to finish and are there more deals like this in the pipeline?

Question: Howard Ma - Guggenheim Securities LLC - Analyst : Thanks. That's really encouraging and as a follow up for Greg and sorry to cut you off earlier, Greg. I believe on the Capella side, correct me if I'm wrong, but contracts -- and the question is really around how we should think about Capella bookings versus consumption, and I believe contracts can take kind of two forms because with the migration deal, you have a large on-prem deal migrating, right to the cloud and that deal size should be about [inter] change or it could be bigger, it could be a little small. But it, it's not going to shrink a lot versus if you start on prem and then that turns into a private marketplace deal, right, that usually grows over time. So what is the, can you help us think about like how what is the right way to think about bookings versus consumption for Capella?

Question: Howard Ma - Guggenheim Securities LLC - Analyst : I'm sorry to ask another follow up, but, can I do that if this, this way is. Are Capella bookings that the growth rate in bookings and consumption, are those both accelerating?

Question: Rudy Kessinger - D. A. Davidson - Analyst : Hey guys, thanks for taking my questions. Congrats on hitting the ARR for the quarter and Greg, certainly been a pleasure working with you and best of luck on what's next. I'd like to start maybe just on this initial '26 ARR guide. Just curious about the guidance philosophy that went into it as compared to the initial fiscal '25 ARR guide. Just your assumptions around pipeline conversion rates, renewals, expansions, new logos, etc. Is it -- should we think of it as roughly similar to the guidance philosophy used last year or anything more conservative or different?

Question: Rudy Kessinger - D. A. Davidson - Analyst : Okay. And then obviously, as you guys have messaged prior to this and as evident by the Q1 ARR guide, it certainly seems like it's going to be a more balanced year, but could you talk about maybe just a bit more about the linearity that we should expect on ARR kind of one half versus second half or kind of Q1, Q2, Q3 sequentials and whatnot?

Question: Rudy Kessinger - D. A. Davidson - Analyst : Got the top. Okay. Thanks, guys.

Question: Miller Jump - Truist Securities Inc - Analyst : Great, thank you for squeezing me in and Greg, best of luck with your next chapter. I think just on the go to market side, maybe just, you've made some comments on recent calls about potentially moving to more of a hunter-farmer type model. Obviously, you've made some comments today about expanding the strategic account program. Just can you talk about maybe the kind of the scale of evolution that we would expect to see and go to market this year and maybe any potential hiring implications on that?

Question: Miller Jump - Truist Securities Inc - Analyst : That's great. Color. Thanks. If I could just squeeze in one quick one for Greg, just an update on anything you saw in turn activity in the quarter versus your expectations going in and were implied in guidance.

Question: Miller Jump - Truist Securities Inc - Analyst : Good to hear. Thank you.