Earnings call transcript Q4 2023

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Operator

Greetings. Welcome to the Couchbase Fourth Quarter and Full Year Fiscal 2023 Earnings Conference Call. [Operator Instructions].

I will now turn the conference over to your host, Edward Parker.

You may begin.

Edward Parker

to Quarter welcome Earnings and afternoon, Couchbase's XXXX Fourth Call. Good

Couchbase's announced be closed press are Matt discussing will Greg in and today. and CFO, Cain; the me market We the results our Henry. CEO, after release With Chair issued

will financial which not include contain not for should condition relied as subsequent our these of performance business and duty financial statements today expected and future representing statements, market These guidance views upon to strategies, financial statements reflect our and and size as our views forward-looking periods. date, only future call concerning and and Today's undertake trends business and update be at any we statements. do and any

are could expectations. uncertainties subject to by statements Forward-looking risks cause materially from results that that to differ their nature matters actual and address

For factors of report report refer today's XX-Q important with recent our SEC. risks that results, the on filed and these most could press risks a other please the or quarterly actual in Form XX-K discussed and to our discussion Form material release on affect annual

which During in the accepted is as with also in call, to measures principles. financial available metrics included certain directly non-GAAP as our GAAP are the releases, well accounting we on our these reconciliation financial accordance A of Investor generally metrics how Relations other not and are most we measures, which measures earnings these non-GAAP comparable website. will prepared discuss financial press define

me that, the Matt. turn let call to over With

Matthew Cain

everyone. good afternoon, and Edward, you, Thank

off a results. and guidance. well QX our Greg results details few as first On highlights full on quarter with and start of today's our as provide XXXX will fiscal I'll year quarter call, our I financial fourth

ongoing progress macroeconomic result we I'm operating to improvement substantial quarter, fiscal quarter, us our delivered the beyond. and direct anchored by the with better-than-expected metrics. guidance during excellent headwinds, performance. that deal spite efficiency, our healthy in the serve beating company by continued of driving of We will headlined growth. across activity. made especially delivered see Couchbase retention and pleased a pipeline all momentum XXXX metrics operationally well growing continues in these margin focus large Capella, Furthermore, results in is efforts with strong non-GAAP across This another our on

annual currency. Total revenue, Revenue or million, was in up and $XX.X XX% recurring million, constant ARR, QX year-over-year year-over-year. XX% $XXX.X in was up up XX%

guidance but operating XX Our driving our and non-GAAP the continue our gross with midpoint focus Non-GAAP margin on points operating We'll in momentum a more efficient this range. minute, million, margin an increasing more percentage best-in-class remains loss model. $X.X topline of to leverage in on above XX.X%. at cover operating strong complement implied was will growth our we

from which of an exited XX XXX quarter increase were We with customers, deals. the the of Capella majority QX,

Before our from more past I our on the Greg XXXX. fiscal provides details year accomplishments QX, want priorities to reiterate highlight for and

momentum X out things: extremely our the Looking and proud the year. we and to this portfolio, attribute beginning product back all laid I of do our enhanced fiscal XXXX, we that more us at I'm in at accomplished success to expanded differentiated that to an leverage our in of efficient additions the to go-to-market initiatives our pace position heading These into on world-class fiscal and achievements have excellent build team. key our model. accelerate put importantly, XXXX meaningfully and

achievements. me recap briefly Let these

unique app platform. we with database services. on progress First, managed rapid Capella, the summer, launched which fully includes Cloud during our Recall our made Capella cloud Google we that

to cloud on we And all developer X platforms. new Capella a in of This completing was thanks introduced exciting and of the Capella existing industries announced growing we then and across the pipeline we new this over experience past opportunities additions broad January, a by for across saw fall logo Capella year. migrations both made, meaningful new the customers. Azure major investments range a and Capella Next, on availability complemented

our we of and and with both significant Second, to made go in to We across sell market efficacy go-to-market progress motions efficiency. efficiency. transformed terms we buy from how

partner ecosystem alliance continues Importantly, to and our deepen.

we customer growth integrators. including Capella at by on am we This During multiyear has saw strategic to AWS. sourced about and collaboration the strong agreement AWS excited begun with particularly announced year, influenced providers service already November. in bookings Reinvent migrations and cloud to and broadened accelerate ISVs, streamline system that partners I our

grew and On to our and the growing community the number continue our share our through relations. increased enhanced of from We the evangelists invest in in events online buy presence. developer building side, mind market, developers community we with developer

will All enhancements developers be business. important we an product of with our for this, for accelerator made combined

And third, engineering world-class adding our team we of and new more. sales, leadership by multiple parts including the across evolved culture and organization,

strategies. rigor advantage sustainable allowed develop skilled we on growth development Our the competitive as attract, product to operational talent at pace and Refocused accelerated our responsibilities culture and drive and a enhance execute go-to-market efficiency. roles and remains a have our and move necessary to delivery, higher us retain highly faster

team under also to In made our an the expenses. increasingly offerings approach to growth sustained a believe are investments always so incremental we summary, our disciplined deliver way. capabilities and strategic fiscal doing ability XXXX yielding operated bolsters efficient while We've product, we in that go-to-market and in

However, in with reflects rigor growth of increased leverage XXXX. to improved extra weeks an recent step the our operational in implementation complement

quarter. from wins Now turning to the

care, more. We of net a Capella. range travel e-commerce, from We a technology, are QX, were in that our logos of and insurance, industries, including majority new broad added customers pleased gaming, health

premier Some beginning for company, health what logo performance, of the reinforced care speed, exciting logos IT mobile use Capella flexibility, cases from gaming to TCO. global started at new with fast-growing Customers quarter a global company. see and The company the the a publicly-traded and included best-in-class new Capella selecting we scalability Capella and entertainment year. a wins improved

move clothing connectivity. such made of existing migrations They acceleration the This company long-time owns regardless One brands. digital experience to service see continue performance improved decision customer has managed that immersive provided. to to build international works Internet a an because several from major showrooms to our from a for In new Capella Capella customers. flexibility, to that leveraged Couchbase smooth, addition the from came logos, we that of TCO and on-prem of flawlessly migration

sessions TCO, Another large-scale moved has notable messages. Capella application support supported experiencing migration in X-figure cloud-based a recording deal the After communication have reduction growth. even in This Capella's while communication leading quarter their have looking seeing initial for team success is Capella provider. a when initially their from SMS Their platform was database with selected all to enterprise developer managing and Capella real-time entire rapid estate greater and performance, they reduced Capella. they to Couchbase management, customer

offerings many telco, most TCO. They entertainment, consolidating mobile multimodal our continue both platform business lower and expansions for a us. advantage travel. continue retail, generate and In And and also to continue wide to range to for our Customers applications. to of differentiated our of take new range quarter, of media leverage cost we the industries, broad large efficiencies a of by server capabilities and logos realize technology their and use across vendors including saw and to momentum important and power cases architecture

near-term the to Now on some environment. thoughts turning

we on and of many technology keep increased focusing broader seeing we large our on macroeconomic investing discipline trends intensified our what control. of plan the the opportunity peers, of and can in IT also us, Given ahead expense and impact to headwinds innovating the spending Like rigor affecting we're while quarter. placing these

increments. are requiring buying decisions, some are longer to taking customers extra to and prospects approval their of make example, For in electing or smaller are buy layers

indicators strong, and the NoSQL too we that see sufficient for global the in expensive priority application scale to the demand Relational are transformation, lack and at modernization. databases serve. that growth core enterprises incessant and systems continue short are task, said, for data is remains digital a which ill-suited volume to variety healthy a and requirement accommodate emerging organizations across believe nothing of pipeline growth. solutions other and the remain Modern performance we That strategic of we successful and

familiar our way and of are and core of to challenging this of differentiators, unique affordable in powerful our against in especially Couchbase's note, value interest ability resonate serving platform increased value continues across proposition validation to more fast, the Capella the one economic market. a our as macro of deliver a Of the flexible, backdrop.

and ecosystem massive As these expanded result that continued we market. we outlook, of near-term This drive the fruit, expanded opportunity positioned remain with all rethink we transformational the their bear of has of informed include well carefully serve leverage. database operational dynamics. am terms any strategic are extremely as the driving how we These fiscal Capella, downturn a just I in mindful we product continue will look terms starting coupled we with weather greatly implemented. generational are to go initiatives improvements us particularly seize that partner of to a to a meaningfully to XXXX, focus as market. confident growth we've a and well of looking at changes to This both to how these are portfolio, in the

In I our priorities. closing, reiterate want to

across these accelerating and second, growth; and efficiency; topline fourth, across high to management for I model. the Capella XXXX, and our all pace all leverage metrics; delivering is driving further third, team have improvements of First, our the in expectations committed marketing sales delivering increasing of areas. mix fiscal of

values that I Greg, one outcomes. I've emphasize we many At times want to core over Couchbase, call the repeated driven handing hard our to attack of Before by customer problems before.

call to walk more detail. our I'll results to Greg? With hand the that, in Greg through over you

Gregory Henry

us. solutions We despite strong efficiency scrutiny, while renewal demand continue loss metrics and key guidance of all in and more improve momentum, a resulted levels thanks, Thanks, deal beat guidance. overall meaningful everyone, environment healthy another across of robust to as rates macro efforts to for outperformance for increased see Matt, business strong against our experiencing we our reduce costs operating our quarter and we joining a had and challenging

We our the quarter. execution are with in pleased

quarter I'll and in walk fourth more through financial full now results our year fiscal detail. you XXXX

million growth quarter or year-over-year. XX% year-over-year XX% basis. fiscal and increase was Revenue Total representing XX% currency year-over-year at of million year, $XX.X of increase ARR, million, an year-over-year a XX% on year, growth of an the $XXX.X recurring revenue, annual constant end the the fourth the full for was for or $XXX.X

nonrecurring our professional to remind and is count. subscription we growth In customer this revenue in strong nor does addition appear from benefited you ARR not revenue in which continued number strength services, quarter,

levels. not same of $XXX.X XXXX fiscal for in recent million revenue revenue million, fourth $XX.X an degree percentage services and and year, year, revenue quarter XX% increase expect million, and fourth of the do for full year-over-year. anticipate Professional XX% $XX.X as of of million year-over-year $X.X XX% professional of full of quarter an increase increase the an an services was Subscription be year-over-year. was increase for XX% contribution in for year-over-year a the the slightly We to strength below the

We XX exited the the year of customers with quarter. net XXX new increase an customers, third from

the in Our quarter we ARR up fourth $XXX,XXX, have quarter third per share the and growing was from customers. performance wallet $XXX,XXX indicative in large of with customer

fact, XXXX. spending in XX% over ARR grew number In customers $X the million in of fiscal

As revenue quarters. a to future per reminder, customer moderate as in ARR Capella growth in decline expect we contribution, continues or grow could

remainder on results Our the the otherwise a of all share discussing and net to continues our rate that dollar-based stated, count unless note statement, retention are basis. expenses, references income to please XXX%. In non-GAAP exceed of operations

best-in-class at gross ago compares margin a a our XX.X% to quarter. last This remained year gross margin QX, and XX.X% of In XX.X%.

our was year increased fiscal margin services. to gross fiscal Capella Our as full XX.X%, year as professional than well XXXX of due slightly an of the mix lower XX.X% for

As decline we time. increases, mix expect over will margin a as reminder, Capella gross

expenses. to Turning

are efficiency the the see but on continue opportunity capture we We us, generational of improving in focused front invest to our to growth. of

were marketing sales Our $XX.X XX% compared a $XX.X expenses revenue of for revenue or ago. million year XX% or of and QX to million

were our XX% fiscal sales expenses $XXX.X compared million or or year. For the of revenue revenue the million fiscal year, in to full marketing $XX.X XX% prior of and

and XX% ago. Research revenue a of $XX.X were or to year development expenses compared $XX.X revenue of million million or XX% for QX

or to the million prior of $XX.X For XX% revenue and in the expenses fiscal million research our or of year, revenue development $XX.X year. full XX% fiscal compared were

bolster past our in our the we thoughtfully as offering. During as-a-service well continued as offering year, in features to to platform invest additional

XX% to General million XX% administrative revenue were compared expenses for of million of revenue QX year and a or $X.X ago. total $X.X or

XX% and our year. to million $XX.X prior the year, of million expenses fiscal or or revenue general For in XX% were the compared full revenue administrative $XX.X of fiscal

$XX.X a was QX negative in operating operating for was or an a operating margin loss margin to margin million $XX.X year. XX% loss year prior operating negative the year an or XX% or XX% negative for million $X.X of negative Non-GAAP to the full loss operating or million a fiscal of Operating compared a fiscal ago. $X.X margin compared a XX% million operating loss operating

efficiency quarter, to eliminations. optimizing model, in count path from our fourth largely net optimization improve these talked leverage in margin by result our natural that our role management identified this to savings ongoing and efforts the our to Incremental and included head embedded accelerate addition fiscal that opportunities we During for profile approximately in took rigorous X%, we This proactive million in additional approximately $X performance XXXX. improve of to Matt about, actions cost will operational profitability. to measures and anticipate

our strategic improving manage conditions initiatives market margins. while monitor will We and selectively headcount operating align to our with

$X negative million net common per Non-GAAP attributable loss was for QX share. or $X.XX to stockholders

loss net or was million fiscal year, per the For $X.XX $XX.X share. negative full

balance in capitalized growth cash equivalents investments. We flow QX the strategy. short-term to and statement. $XXX long-term execute sheet against cash, remain well cash We ended Turning and million our with to

remaining $XXX.X million an RPO, Our increase or year-over-year. QX, obligations, at performance end X% totaled the of of

recognize the total contraction RPO multiyear electing fiscal some no XXXX, year to which macro $XXX.X represents are aggressively. or has been to terms as note year-over-year and XX% plans over incentivize our RPO total because expect contracts growth. our uncertainty as contracts year-over-year performance revenue million We impacted We that sales customers the shorter-term longer of XX% by in billings approximately

flow full for cash and flow $XX.X free negative XX% year, was $XX.X flow cash margin. the negative for XX% QX Free QX margin. million. or million million cash $XX.X was a was $XX.X negative flow Operating Free for the free cash cash year was million or flow it negative negative for negative full

improvement. We the committed material and cash with further are profile to in have driving flow we free remain pleased improvement made our

and full I Now year for QX guidance will the XXXX. provide fiscal

build we ecosystem strong. and initiatives and capabilities, our see product achieved solid improved anticipate discussed, fiscal continue rates industry remains expanded of support momentum including sustain excellent to addition our to As to drivers, go-to-market These that going gives contribute can us Matt cautious pipeline public. and motion partner in across upon our will we we our continue that growth in renewal factors, incremental the optimism digital we've transformation broad-based momentum since enhanced in XXXX. to momentum Furthermore,

impact the acquisition of environment and the said, sales and pipeline impacting closely, conversion, we and That on including headwinds sales monitoring business deal our IT expansion mindful retention and pipeline bookings, spending are macro are sizes, and the rates, logo cycles, productivity.

an all elevated our to such, embeds forward-looking across uncertainty. this these As prudently for degree of of outlook metrics conservatism account

addition, quickly position to to put our the need changes and steps taken in additional us have should to make arise. model In respond a we operating

we're currently our the Additionally, that such, this factoring on-demand to our to annual as outlook. I'd dynamic like everyone credit of the as portion is emerging remind Capella portion not opposed ARR, business, in and counted

and consumption recognition. now Historically, logos assumed for contract plan in new we a want over customer but pattern ramp Capella. how Capella to forecast to to straight usage to assume be we approximate the consumption enterprise especially migrate change and line, period, for customers true a Lastly, who I and highlight revenue

growth $X While relative recognition impact the revenue to XXXX, approximately the material expect in prior to not year-over-year method. of to full approximately revenue QX to is a an year X% representing impact impact negative million, our we fiscal do

the $XXX.X the the anticipate revenue growth With million represents XX% which $XX.X first or range in ARR a of year-over-year to million these at quarter of range we $XX.X growth midpoint. expect in for million, $XXX.X XXXX, million XX% midpoint. factors the of in We mind, of total at the to fiscal year-over-year

non-GAAP $XX.X to in a $XX.X expect the negative million of operating range negative million. We loss

full fiscal million of revenue year $XXX.X midpoint For growth before the XXXX, XX% million to revenue change. total at the the or $XXX.X the we of expect in range recognition XX% year-over-year of a or

deals, timing certain the of strength therefore, of of we've As Capella migrated than reminder, the to or indicator which better with a respect revenue ARR customers. the view new as our to historically implementation visibility, our revenue continue impacts along enterprise We, a seen business. with variability

We expect growth finally, And or $XXX million $XX range to the ARR operating midpoint. negative $XXX loss a million non-GAAP $XX to in at the XX% the range million. in negative of expect million of we

take Matt are Operator? and With that, I happy questions. your to

Operator

And first Instructions]. Lenschow question our of [Operator the Raimo comes from line with Barclays.

Raimo Lenschow

talked action talk to you on for to Can a kind you Congrats headwinds, with these solid about guidance of Matt, the a but be sales think decision-making year? current or well. for you very you environment, you then quarter. land, enable first but another in et the and little you performing the et Greg. approach Matt, really terms numbers, the you, if accounts about question -- want still of up also you come pretty solid have QX for longer to longer cycles, have cetera, solid with follow-up seem than the to taken of I bit kind next cetera, a ARR about

Matthew Cain

that think Raimo, probably that we're separate the being as the control we can we think very we'll the call, against throughout to how And that can't. I maniacal we about about environment, more. from talk things the we perform things

As to focus outside little of intensified remarks, the control that quarter. on some cycles, Longer decision-making in production. sales prepared a economic something into were we there some bit indicated criteria, our value, in move customers things the longer elevated taking

initiatives multiple go-to-market up our a have operational with great to true with our ability things that our ownership, showing end into solutions shift our that we take the customers, environments, articulating offering, cost the providing overcome as our with the we business. can feel cycle, And over those we consolidating we solution of really up fact the deliver really control, to results understanding rigor, total the with Couchbase as partnerships partners sales with great Capella, intensified pride to expanded of solid in and particularly and Capella one, that value great really executing some on of across about opened really

more on quarter, of all the mix what of time a of done we On do this a particularly to and faster, been of that spent leverage about as lot Capella. do attention how has story and with acceleration. top the we've things, We've increase company in the grow accelerate how on Couchbase lot side. those proud time spending the talking line, top of we we're the a operational And emphasis business

the are really great our go-to-market us set and from in teams. totally control talk to it focused today's and we a the can in leaning sure collective that control, product, world way And outside what on deal Couchbase the allowed there that not being our and we focus So standpoint it for making is, result across up fiscal the and environment, great up understanding be to ahead. of with lot a we put the year forces of and way effort are team economic us about that and really dedication of that we want a

Raimo Lenschow

drivers you then And the Greg. how Perfect. about the remind one you breakeven us the for just Can profitability Okay. and done improved path that The will you to get -- there? leverage. well on think

Gregory Henry

Yes, leverage. for Yes. of the improved terms look, we've obviously seen in results in the your year quarter comments. and again, Thanks for Raimo,

of going is of very we'll points XX continuing about we coming the our are by on things prior like prepared mindful really very XX Rule forward. talked focus focused to in where and that into we've remarks, be we Things that. year, As be around increased in

on really efficiency As couple growing greater with that leverage. of but Matt and things greater we're growing stated, a focused is

path quarter. breakeven. in actions to the moving you be put cost profitability to a in continue sort as we and in so about yet to of the beared that of talked leverage fourth management. of other we And see as along We've company, actions that think And with continuing growth towards fruit going we're well place even we future took haven't terms that saw some to

to committed that but We Raimo, we there. time are a put haven't getting frame on yet,

Operator

with Our Guggenheim Securities. comes next the Howard from line question Ma of

Howard Ma

one I have Greg. Matt one for Great. for and

for First Matt.

progress directly rep availability more if the they general you for purchase available you the guess, as those is So experience, on When marketplace? buying you marketplaces? will GCP, marketplaces usually how on significant with base? sales Capella most be buying frictionless and towards Capella -- respect on great. customers And involved? AWS, just from I now, I on a more Couchbase do are understand there Capella's to a which to of that then can direct customer Or is comment Azure And broadly, new be availability hyperscaler expanding will think

Matthew Cain

appreciate Howard, the question.

what a about refer on think and they're do we a highly lot efficiency great we engage early and we've understanding go-to-market, create buy As and overall their complementing for Couchbase. time direct from in model. cycle to talking about technologies sales of our spent that of buying our on efforts instrumented consideration experience as model How and a evaluating as we value developers them with the

increase that that factor with we're can engagement. to tools map dramatically developer the even believe direct frictionless that experience experience against then of that and all we sales our offering, more creating these road our integrating innovation new motion and with instrument We UIs, complementary an and into from going buy on Capella

we If portfolio X out Capella. we hyperscalers And all on this ago, both and year, market the with market X in in only we've mobile. were AWS. on go now year back We're with on rounded server server

tremendous that bringing to upside are to So question, in our the now that there is we and think answer sellers our portfolio partners market.

those announced the as partnership, for that reaching was milestone with a big Anytime saw levels are of us. We and dramatically offering, Azure And we partners our part a engagement is Google Capella we with with strategic market anticipate our we now ability factor with which very real collaboration you the for our AWS, increase us. similar in to solutions. have

we to which that's buy can way. cloud the technology. is line, open consume As it ways over they to to They want through were it pertains leverage this customers in want around, continue proud it and a ways, ability came thing we the logos benefiting them. our mix time marketplaces, from team's to And and do us actually of do to great If to more of evangelize of it very from logos to actually the the things for majority traditional engage we of Capella in our new net from that QX benefited want go-to-market with in partner Capella we're them. getting one that is new what can and both that

their and Solving development needs, lower cost but of doing it total efficient a more ways. ownership

So upside company in and bucket the what of on, in innovate what forward. the I'd intersection the go-to-market. of big, will think and we we far And as and for we're our we can go again, do be that put squarely that big how we control working there, transformational as improve as

Howard Ma

guidance sense. until primary for -- to self-managed Okay. then -- And a delta one for ARR you that X% the in is between like or is later I out, change, if to total there's a ARR, percentage guidance hope growth include like really recognition I still point discussed that XX% as But on, XX% delta. X% revenue discrepancy a the due Great. total XX% that us just that understand color. that could better point. makes that Is in primarily understand difference? I you -- if for that back helpful revenue revenue XX% percentage squeeze committed -- That's an for Capella about Can help you growth. Greg. that's contracts you the that in don't recognize to still it's increase to still so it a and good

Gregory Henry

I'd you yes, revenue. yes, to that course. the of have there's Howard, makes and growth And of drivers Yes, from X in the sense. ARR it sort delta And Good thanks. between it's call, -- on say the the

you is Capella. The first, as mentioned,

to the growth As consumption we model, of and bit little that logos, delta ARR in as you a particularly a and where now it take those from doing migrations time have perspective. terms as especially revenue the some growth. That with updated of new will we're consumed. And more revenue Capella things ramp get create versus recognition

grow as ARR, mean services services the in that what we're of services. of grew it thing is we talked last near And that. I had expecting of add it is our second to part anywhere and we we outperformance had not services, XX% not about would year, revenue. part I Last obviously, year an ahead is expected,

In a negative growth probably slight will be fact, this it year.

what that's combined are you you're seeing between if things growth ARR the sort rate revenue. creating really so those And X what's -- dislocation, will, and the of on

Operator

Our next the Sachs. Rangan Kash question comes line with of Goldman from

Kasthuri Rangan

are quarter, talk the about the cash... what things the In that...

Gregory Henry

Sorry, Kash.

you We interrupt. very Sorry to can't hear well.

Kasthuri Rangan

Is this better?

Gregory Henry

better. little A

Kasthuri Rangan

Right. I would [indiscernible] .

to are projects using cause of that are other words, of So what and trends, central curious the from thing. initiatives quickly a your trends dampen might accelerate, good people out to seeing gotten very market has In what Couchbase's to respect for get handle the are trends use for those thoughts consumption. distinct that Capella several the the since And sort on as you're of now. up case? ramped might that consumption customers Capella product things what that the been kind And the on we've the actually possible. with as quarters What those are

Matthew Cain

a were hard you little to hear. Kash,

I think And I've miss up of it. please if heard feel the I'll picked back. what I most of and come answer to free sort restate anything, question, I

furthermore that understanding emerging? there and and noting of been with upside there's adoption there, generally in patterns consumption from any that big think Capella are market in I we've we what terms are seeing Capella and

logos the I mentioned at cases both second. for is I'll what customer in quarter a some a dominating generally touch our and say both speaking use new very conversations, in would Capella new And we So is high migrations, which level logos on migrations. and

customer, operational to where them when Generally of existing able having would expected speaking, efficiency it be or offering, and advice And fact may we overcome light any to our that telemetry and be of to growth those even will new aligned and things traditional are somebody use able or consumption into directly have Capella offer of that's in on what any barriers. of pace work being services get opening whether to of and leveraging would or the tell ahead I a a we developer, subsequent to like customers cases the in an the what ease then being being in we understand model. you things we seeing we really logo that engage up challenges see accelerate

use I a for we're much their Capella, more marketplace that seeing Europe to running enabling talked a item developers cases. pertains catalog excited our process, in we where it cases, to company. was million is think leverage their on verticals That QX on responding gaming migrations, application about vast very development variety retailers. internal reporting agile in was a from use a Capella online feedback. As managing of large to different we're it and that across bug for one the In That's application $XX of across which product product be many alone,

with and to finance cases. Couchbase that And platform we've services Couchbase and the it hasn't the Capella been additional in market out that consumption we and so And use seeing highly out is interactive of a product play market had professional it. that applications edge benefits in and the pertains the that services to arsenal and broad-based until are model telco offering offers

a impact to pipeline our the had play in the results basis. out We've business. the that have go-forward and seeing that to going And extremely on we're expectations for in high that's

So what has go we're talking bullish remain forward. that consistent and what us store we on in very for as been with this about, seeing we've

Operator

And from question our Oliver of Rob with next Baird. line the comes

Robert Oliver

getting about Matt, bigger. partners. on partners, excited you're obviously, are sizes Deal

guess, road, a from, partners, Can if of touched say, today? the sort I about first, either success Greg. deals for how are how had influencing down might a your And us all, flavor then constitute talking You're we you what go-to-market. I more a percentage driving of a might think of follow-up business? deals partners evolution or about of And the give then at efficient

Matthew Cain

type. are foundational partner Yes, it's appreciate strategy, Rob, I element partners the Look, and just not our one question. a of

pace the with Capella of As very impact, to the have the leverage there I we expanded market. we we only as CSPs. And is think end about going increase about think more our obviously, partnerships excited are

and we time, in investments with addition geographies. partnerships and have we At with to the resellers success particular in also have great same ISVs, GSIs

hard-pressed, some analyze on And deal pipeline, see variation with in channels. find those or hasn't analytics some be as various often can quarter we to the by talk engaged a You'd where we customer influence of by and And geography been you sourced. or us flow partner way. partner partner Rob, a about

workloads some to of AWS people joint logos teams are both every go-to-market customers, are are to coverage activities we after frankly, we in and the think can likes Capella, go base one But for a there's new existing the for creative do desire net CE excited convert to for net that into really go-to-market terms their cloud and of account and providers. customers, providers some really their mapping, with impressed which converting new new logo partners their our with with encouraging the at leveraging about to in about of of moving Couchbase. have that Capella, getting And is deals, very in installed we large things workloads quite our

Greg opportunity future way metrics a in customers pile But think the that on so and it, from customers and leverage touch some I as the QX. of it's pervasive able across gives business us our expands just about particular to exponentially. And may be to our an

Gregory Henry

in or we add a activity X/X quarter, And Yes. just partner I'd Matt's Rob, partner deal upwards point, of typically to X/X see source of mean I influence. our

said, a So is big and of as business. Matt our part it meaningful

Robert Oliver

And guys. helpful, follow-up materiality kind of to and threshold traction majority Capella reach on fiscal and nice about know you new able you. Greg, had I really just a conversion year potentially And perhaps That's talked this then, that for guys adds. being a customer of Okay. now

So is that might that we still broken it later year? this assume to fair out see

Gregory Henry

Look, the as Thanks with said, that, for and Yes. Matt are Rob. pleased we traction. Yes. Capella

fair the things. statement. saw You with customer that's along a other it's think And impact having I

more any at the Capella I think this around commitment, begin details but to business. year, and it's information haven't We we fair point think would some that sharing made

Operator

question Our Hedberg from Capital comes RBC with line next the Matt of Markets.

Matthew Hedberg

around macro you guess, intensifying the pipeline -- thoughts as sort on remarks, your conservatism fiscal additional of of about some guidance of cycles like quarter or maybe on. deal the talk levels 'XX? rates? Greg, played year. In maybe about extended embed prepared you headwinds sort some you the could I talked Congrats for Did conversion any

Matthew Cain

of of Greg. In Matt. to importance start off is and thought this the light Matt, I'd the question, I turn over then it

ahead, assumption some if those it come wanted we to we with persist, as dynamics intensified, the we an and not at mentioned, we thought that get worse. As see dynamics year did about

took rates, outside things across in of cycles, assumption elevated expansion a we generation, actually business size, dynamic those logo retention the conversion, across our had macro conservatism that -- pipeline mind, and control. of and that level like look things is because deal acquisition an With sales

If don't run even Capella don't deterioration impact sales rates. not we a that increase you we in and that improve, retention out, an migrations would that that a a material see additions CE we productivity, close improvement Capella have with were would material rates imply to to migrations, in from net don't that have logo and that new

Now very business patterns the aligned clear, are of our we're that to seeing in assumption. the with effects be that not

again, what so know long and do mindful that very on be the we We we And to how of persist. and wanted those dynamics to going going focus it. weather can. that can noting ensure environment, possible on don't to don't control it's then everything And control focus what macroeconomic we we to we're

Gregory Henry

Yes. particularly demonstrated behind our other that been have of becoming think is demonstrated possibly have pattern again, how risk some of just growth like reasonably not the in performance current and our guidance. business. applied we adjustment running indicative and our is what managers sort and very challenges, through growth add, public these and committed delivering a ones not our risk carefully company all and and apply we're guidance But since this the I business Matt and to that and one, of think, specific feel I we've Matt experienced I but since on we potential. Matt, more we're in efficiency the this continue profitability. into guidance as reacceleration the just we've I'd said, We're of

Matthew Hedberg

coming talked color. And we the out on question Obviously, about sort then second balancing Great that of Capella of drive with me dovetails profitability. to Great. lot my Greg, investments a go-to-market growth of IPO, actually, your success and of adoption. broader

are spent things As of continued drive go-to-market to that Capella? be sort dollar think to a the incremental of success you look 'XX, that best there can are going on top you priority fiscal

Gregory Henry

Like seen we've our improved for we a And sales as year. of building look, efficiency hopefully some Yes, Matt, question. improve certainly great plan again, that next this year. marketing and to are us

first not set us a he's made to we joined new in the Huw and models spending really year, know, you new CRO to middle the as but place getting months also future. organization. business continue running the and success change. As last better creating He's of only for the more been the things create efficiency up within X in sales

As Matt think we prepared we're leaders. what hiring talked about remarks, his in are better

available we also us we those efficiency a of to allow us. growth there, create believe for have of also the And number is believe combination things will think, the we so potential the but is

Matthew Cain

development me that doing the this chair, across priorities those teams. Matt it's had. from it's best that that's coming the critical the what taking on of few return. best side team direct to think marketing us the side give field not sales that and we business focus collaboration are with are ever about to our year across the my team, on going level for on just And fiscal the sales the Couchbase together and and great John is synergy his has Matt, see to the

we're to, alluded them. It's underneath the in talent not leaders. And just those bringing it's that, as that Greg

the it's of of frankly, leverage that us, can it's areas willingness So a level for be are, say we better. where competitive collaboration, the understanding where into do to points lean we focus, I'd a on not quite may strength the level the know

think that company. I to for we certainly work that think on across may I lot initiatives confidence based have there's on in hard good the there's all so come things operational seeds alignment clear the you on And a all that see not

Operator

Kessinger from comes the question Davidson. next of Rudy with line Our D.A.

Rudy Kessinger

Certainly loss like understanding sounds the that's been a you've to curious I'm the outlook. line. get extent on conservatism got guidance lot you're on applying of the conservatism to what top operating

million last I think at X roughly you over in $XX might this say, look guys revenue. years, and added some the have

had years you operating a yet? more X ago. You're roughly still guiding Why as you same the on loss dollar aren't showing leverage basis

Gregory Henry

earlier, making feel we We for to we go later think Rule question. is bottom that through and that. about about efficiency good I fall great very And the fiscal got to line. the for about some I we I year, delivered and feel if Again, last think in XX at thanks last what leverage year we particularly how we like saw performed points yes, of the look we back of mentioned year. added Rudy, 'XX progress as Yes. you to and as there, XX having

talked bottom and say would on top I we go about the the forward, it's yes, again, we into line line. prudence both As that And guidance. we've our added the

efficiency, flow We better cash are more free position. expecting to see

some materializes, the line will line mostly So there that to as if through we well. the Obviously, that believe is year. bottom that through of the progress we top as certainly adjustment fall risk

generating of we seeing multiplier So I control, the a and it's more line. having executing at can think the that again, through as of, as sort growth, providing combination us fall what effect for well the bottom efficiency

Rudy Kessinger

new in of think it from Capella? it net terms ARR, we percentage out? early Okay. just some customers to the of should relative smaller imagine customers deals obviously other that still in came of how But break customers too that then of quarter of in the signed. I know what Capella, said And those you about was new were are any on the Is to Capella you QX. I majority

Gregory Henry

we the being typically that in field past, Yes, I your talk very yes, deals quicker people also and customers we Rudy. Yes, that up is as that we've question. specifics Capella. focused out. would getting would we're the is way any to is and points do with because them smaller-sized say about customers running easier said smaller also in haven't about and of teams broken deals, Good say using think and I we and the that want with the case. that that Capella

that and to get them great we get So lead future. started, them we going will believe if the in can things

So should smaller deal per about do could over Capella continue rate over time generally think with greater moderate smaller way which come more But the and growth fuel the we We've retention customer, see talked adoption, even sizes. I in time. expect net to Capella would that that's our we the see sizes. to to ARR deal and as

we how that's So see it.

information start previously, we we I point year, Capella the we'll some metrics, of break mentioned, question will Rob's you're and some that believe out sharing this looking at to As for.

Operator

line comes Our from next the Stanley. question Sanjit Singh of with Morgan

Unidentified Analyst

to Great. X question I This of sort consolidation. on ask want of theme Sanjit. [indiscernible] is for the

to at how theme Capella. you spoke And X or a to the On other to maybe about X parsing how a of customers you year of out, of if theme looking the you're a coming pull that can cloud And are or ask quarter sort is argument quite that consolidation keep QX. to theme is I cost consolidate of earnings call, how the argument? fiscal big consolidation last And you sort going? bit levers databases to are impacting then 'XX, sort NoSQL of in how be current maybe that want year of versus sort a What fiscal that sort 'XX. product that of much will of particularly

Matthew Cain

fundamental from Appreciate database decade support of that quite can to a from put company. developing part cloud our frankly, ensuring we've big our is innovation the and had of value the outset run modalities, that mindset can edge. the in it this We've modern that multiple architecture pretty question. of Look, very I think been cloud into our to has a proposition the

real-time today's an than earlier database operational characteristics. find top You'd on be hard we that talking analytics about of of would was to sort and pressed that applications was Couchbase these predicted company require a

tech things that part that other net adjacent and search, they eventing enterprise can customers and put Couchbase be relational that, offload, in connectors new large how more cash applications with like more understand adjacencies. we've like success support inside seen been them have think replatforming is of there things I database, can applications, you've single into can platform, of a a full helping the

that and/or for That companies of in when with different even go-forward consumption think be overlay important. databases when important pressure, economic this how choosing a more are going been basis. we are paradigm companies vendors are Obviously, of ease for going Capella, Different the how productive is there's extract things. to I on can them resources be with less critically And different. through Each has never focused more strategic more costs. and I is picking company industries

is So of focus than of whether that get and value at those. on more I been productivity equally -- the now. or there both there that has think less proposition it's cost, conversation about never we been our part more can of part And has

think I saw So in we that QX.

I this continue think with and layer and to forward. expand business expect that's going that support And in time. that Capella, to applications going innovate the dynamic that persist upside we element on as we for go we the for this to to think of developers of as is think we we long can with the we amount types see a

Unidentified Analyst

of your a to And sort existing Excellent. guidelines metric you new more terms quick in expect how to what And mix again? can within put the meaningful understand us second contract a can there can you which then that do the around in continue? forward On point shift have question. at become squeeze way terms, RPO help sort Is any contract if I base? of broken long out is you customer

Gregory Henry

Yes, good question.

broken terms. about average the talked just haven't of in sort on past We that I generically terms. contract out our the weighted about

that our the terms little a that shorter. And low historical have of view now. worse bit now. best stay given the expect assumed in continue contract gets So or of right the update going specifically. mention be in that the get potentially information, that's stays did macro and what's guidance, you broken are they're assumed we what we we'll -- out side or as on the We the right we macro. not to haven't again, but we the same to the terms on a norms, we the the get outside kind said as we've They're would implication that that's sort we've of same that would but And But more shorter.

Operator

comes question with next the line our of Stifel. from Galvin And Robert

Robert Galvin

was the wondering demand talk on QX Galvin I QX I Rob was just trends a is And on Reback. what could during if lighter. big the on that for you are QX I'm trends quarter? quarter. This saw know wondering Capella was like? Brad you

Gregory Henry

come just I continues it. question, the too. well. the Capella Appreciate to continues Rob. to to willing want just a There's Thanks, Capella try that not the as commitment. rest we on marketplaces in again, are, that people And of across well as of with and the performing -- lot business and make see directly. Yes. Look, to us the be appreciate like demand that

and continue that. year, marketplace to a see on-demand in regular see We earlier it And we so but do the longer-term this activity about to deals. we contracting deal, was not Capella talked leading

opportunity of So excited to Capella. seeing get that on-demand using to get into we're the and used sort customers we're

rest along the So is of the Capella business. where feel trending about we with good that

Operator

to remarks. we closing Cain end reached have And I'll call Matt the the question-and-answer the session. over turn of for now

Matthew Cain

of some our excited a big with had cloud transformation, opportunity and operator. quarter the about and to very the Capella acceleration we like trends edge. our recap, innovation We To digital a year. Thanks, strong at due remain strong in favor,

and of also environment a on while are this, believe during very focused the we like will be times We building exciting cognizant are execution sharply macro what future.

to Thank us, you next look quarter. you I all and forward for joining with speaking

Operator

may and lines participation. concludes your this you time. today's disconnect your Thank conference, This for you at

Couchbase (BASE) 7 Mar 232023 Q4 Earnings call transcript