Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to the Couchbase Second Quarter Fiscal 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Edward Parker, Head of Investor Relations. Edward. you, Thank

begin. You may

Edward Parker

and call. welcome quarter afternoon, Couchbase's to earnings XXXX Good second

We in results issued the will discussing be announced market today. after close our the release press

and President With Couchbase's and CFO, Greg CEO, me Henry. Chair, Matt are Cain;

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

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

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

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

With that let me over the turn Matt. call to

Matt Cain

afternoon, you, Thank Edward, good everyone. and

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

top-line across I again, difficult while the strong momentum economic a beating pleased Couchbase deliver environment. outperforming our against our once with delivered strategy profitability, on against all to quarter, all metrics. guidance team's execution am a

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

loss margin was points was continued gross implied non-GAAP operating margin our and increasing XX.X%. and above discipline. million, operating focus Non-GAAP guidance of range. percentage expense our $X.X Our the across midpoint business efficiency our non-GAAP remains operating best-in-class demonstrates This on at X

model. the As fiscal fiscal the the top-line the progress proud crossed on halfway out pace the point we I'm XXXX: laid four our sales in especially focus and for the mix making year, priorities of and accelerate we're we of growth; efficiency; of marketing Capella; key drive of increase on leverage

our all our much these to strong across While of for We a half up reach there is full to building. of believe do more and, are importantly, second beyond. year more potential, momentum we the is set

many the we initiatives four key of to with it and to opportunity underway be how will progress, I AI We exciting specifically our but priorities. want continue have on tailwind touch our a see for all

demanding applications To one, of because begin, solution is users. and text platform a that full databases only From to indexing, rich, we've and application provide seamlessly there our operational for in analytical search, fact not experiences perform, no more, behind architected cloud but data, like eventing, enables database. a every are The the advanced integrates end differentiated a personalized, services, capabilities, developers. platform also multi-modal single Combining for AI. heroes is AI, day is database without unsung

value as of cloud and performance and applications platform Couchbase are AI requirements the extend AI platform for the will capabilities for that in We're investing perfectly massive modern suited a that further architecture scalability Our database unique AI require. additional applications.

ways for apps To and to our run the long-term destination cement as customers build AI are AI catalyst powered next platform. position modern our anywhere for a Developers Generative great can is that exploring applications. AI with drive a adoption; at first, AI applications, and productivity anywhere, foster second, third, our build Edge; AI AI the AI processing; optimize including fourth, and developer strategy vibrant enable apps and following pillars: ecosystem. has four powered the

What that has productivity. workflows. private never to prompts Capella natural been new productivity of more last developers increasingly the to AI in backdrop, visit our capability just how which to sample will important you demo code greatly adds to impact takes to Capella iQ to code, just rapidly encourage generative code, a of tests. the take an quickly I'm the innovate offering in video we deliver week preview easily Capella enhance to watch and capabilities given Developer I have hours use with from of clicks. iQ, more datasets developers. and and allow With pressure Capella few minutes complex Capella for language generate to thought developer profound announced excited used our a and website This that developer and moving see queries will to unit a to feature iQ,

higher applications to leads productivity quality, quickly more easily the more and test to time result more faster AI in generative market. build with Leveraging and and developer being ultimate efficient and to Capella

Capella this will consumption. drive increased adoption We and expect

for Our recommendations and development during this that build a and the to is be Capella intelligent process, iQ enhance to we will out makes vision developers co-pilot new important continue for feature.

ongoing This and for participating and for our our focus momentum last investing week Program. are for includes with make and go-to-market why ecosystem, improving is Capella, AI and deploying across customers customers to opportunities partners. technical, AI continue to reduces Partner build data applications broader and also our integrations AI with we partner side, program go-to-market Couchbase to enablement ecosystem. the improvements is designed AI is applications which efficiency easier in and driving Accelerate AI on who operational the partner It we gaining undoubtedly On by it models announced for ecosystem. support building friction

with the happy to is go-to-market increasing joint Couchbase applications engagement we're Additionally, to starting AI AWS that clouds. of an on number to deepen world. our we through next-gen ways expand reach summits and serve relationships strategic developing their who developer I'm continue activities At creation, now partners our to see premier a asset our partner. and deployed And around share are AWS, ongoing Google Cloud customers around and

The aforementioned opportunity priorities drives key AI recent how further the is four tailwind announcements progress how it year. and exciting for against the our illustrate

While drive enormous. database innovations AI at increase customers easier potential announced other week, significant transformation developer it still make platform. continue for efficiency, the for Capella cloud the new further to the is enhance said, and rapid to Last deliver pace. is several Capella important operate experience, updates early it we that That we also days, to additional to a

continue hard every market-leading remains technology day and work who of at we rapidly we capabilities bring differentiated to heart the Our will our enhancements offering. are, to and to

majority turning new we including activity to to strong breadth contributor an with pleased Now, this was In our and customer portfolio managed that Capella with of our am many and hi-tech our of Capella, our service wins, Starting again, financial to quarter. manufacturing, Capella net rate. product telco, saw industries services, gain continues and Once I new the momentum. represented QX, important logos we saw academia, industries, gaming. across the retention wins across

Capella. migrations existing and continue to with see We customer expansions also

offload company with us database MoneyGram the leading partnership decided to invest improve its expand TCO. and Capella in management During global and further to quarter, fintech

because This performance impressive add its customer the database in away logos were Couchbase using clearing customer excited from during to Oracle superior legacy performance. including delivering enterprise, was large its for and migrate banking quarter, the new its and selected is speed. had a not platform several to our desired to relational we Europe. Switching group derivatives This application for

compelling connected an devices AI-powered cities. we in that pleased Smart, cloud to platform scalability sensor fast-growing that management and Only customer its application could needed won cases. on selected cloud-based use performance. for price these also a Couchbase needs platform operational smart city could AI database a mobile performance, smart deliver company technology for I'm use delivers with that the Tondo city with deliver including a Couchbase Tondo platform, cases. This power Israel, excellence high most

company, financial significant Australian multinational a a US's We of customers, and major companies including consumer the large saw also with expansions one retailer. electronics enterprise banking long-term services largest

one the signed retailer multi-year multinational world's grocery retailers, British a largest Tesco, agreement. and Additionally, a of has

one expanded was its tracking, Recently, the Trendyol shopping cart, claims, the of support important we and in Couchbase product the This delivery history, expansions for our to catalog, valued such most one help of growing multi-category biggest top coupons, marketplace in platforms to personalization. a Trendyol's is and significantly with be its online Turkey world. pre-orders application, business. including inventory and partnership partner in of pleased customer the management, leading its Trendyol many e-commerce e-commerce are

on demand provide near-term let the few Now me a thoughts environment.

customers deal with end headwinds over electing pleased to quarters, our for quarter, These approval discussed layers macro trends we of of the longer cycles, buy the against two I through the continue IT continues the headwinds. to smaller As scrutiny in very in am uncertainty and but persisted execution present spending increments. and these extra to we last see

That said, as transformational healthy drive it database desire for believe businesses, cloud, applications And platform, create interest ones. greater net see and efficiency driven is in we our and days, early deals IT such to adoption will cloud pipeline and of re-imagine continue the by customers modernization. of for impact as rapid AI a trends a we cost though existing new

and we that These are the elements extremely operational of dynamics of strengths very architected. while are. for us make opportunities we requirements who foundational tailwinds the and creating the performance with analytical coupled us scale, massive convergence as further AI are and company, how a additional high capabilities, of are leveraging

has that I as You've has for often ever this moment, heard it that's think me say been been. built and true as today Couchbase

our to marketing on to for remain nimble making of areas model. top-line are control, we committed focus we progress initiatives. In leverage increase against mix dedicated our on the cannot the of we're and on can XXXX: pace priorities We growth; navigating delivering we control. Capella; closing, in further and and sales efficiency; what our drive fiscal We're in accelerate key focusing

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

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

Greg Henry

thanks us. Matt, for and joining Thanks, everyone

environment, another had in execution, elevated our mentioned, the quarter, pleased driving our we key guidance. to are beat strong metrics. outperformance our with as dedication our Despite deal delivering the all across We to we ability while operating value of and to healthy that navigate customers, scrutiny guidance loss our Matt level

before for walk the quarter year. full through in guidance I'll now our and our quarter more second you detail, third providing

ARR, of quarter, or growth on sequentially. X% revenue, year-over-year, year-over-year the Total was a and annual $XXX.X growth end or basis, representing million constant currency XX% XX% recurring at the second

on-demand our increase $XX.X growth in for year-over-year are of quarter in outperformance the revenue that Revenue non-recurring. business Recall of benefited services, as strength X% quarter sequentially. subscription and was second well both which million, as X% the in revenue year-ago strong an and from professional

Subscription year-over-year professional revenue second $XX fiscal strength $X.X quarter was and revenue the sequentially, was for services of XX% for XX% following year-over-year in XXXX. expectations services decline our and X% quarter second consistent million, a XX% Professional of an increase in with million, outsized the sequentially.

expect percentage to contribution XXXX levels. in be to continue a We as recent below revenue of fiscal

ARR from growing performance $XXX,XXX, have $XXX,XXX second we year-over-year, first in the the large with customer of and up was Our customers. per in XX% the quarter wallet share up indicative quarter,

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

or exceed activity across driven enterprise rate, by retention net base of larger dollar-based and strong upsell continues to our renewal customers. XXX%, Our NRR,

in-quarter improving, thanks years. NRR last steadily to Capella been has was our the the three highest and NRR in Our

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

growth As from majority by new we Matt and more count quarter, the encouraged our mentioned, our of remain as our retention new evidenced spending strong logos environment. metrics XX% a by expand logo the the Capella, once grew ARR our and confident again, Capella first consistent reliably We're of represented more and quarter. customer than pipeline challenging logo ability to against in in by our strength the logos,

non-GAAP a the references that expenses, and please share to of are otherwise stated, remainder note unless all our of results discussing statement, the basis. count income In on operation

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

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

expenses. to Turning

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

outlook. our this with on from us and saving initiatives front our loss in our discipline benefits early pleased outperforming are cost resulted our expense operating as We execution

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

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

in as-a-service invest thoughtfully offering additional our We to bolster as in continue features platform. to well as our

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

Non-GAAP of percentage a an loss or operating compared than margin loss X for higher million our year-ago. XX% margin, $X.X operating points a or guidance, to million XX% of QX $X.X negative was operating operating a the midpoint negative

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

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

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

recognize represents year-over-year or RPO total $XXX.X expect XX% We the XX approximately as months, which of to next over million revenue XX% growth.

cash flow and cash $XXX,XXX, flow cash $X.X for or free negative million, negative was was Operating X% margin. QX free flow negative

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

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

we discussed, strong. pipeline solid see their monitor expansion momentum retention including product partner cycles, and on carefully and that rates, remains anticipate fiscal investments momentum impact the in business, and complement Furthermore, sizes, pipeline in are conversion, ecosystem acquisition capabilities, bookings, and sales motion mindful we XXXX. Matt and will our our deal continue said, we our macro logo That productivity. our to As continue go-to-market sales to headwinds of our

how those emerging across well outlook macro trends service the a for a visibility offering. our such, for as consumption degree As to all maintains impact the may as of account lack consistent of conservatism into of as uncertainty, metrics the

With these of million in $XXX for anticipate the factors range fiscal we ARR of growth year-over-year represents which to the in quarter the third XXXX, midpoint. $XXX mind, million, XX% at

revenue to range million the in total or the $XX.X growth midpoint. million, expect at $XX.X of of year-over-year We XX%

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

XX% year our midpoint. XX% For fiscal the to and million, XXXX, $XXX.X million, the $XXX.X our to to outlook compares This of at of or ARR expect ARR growth raising million in $XXX.X are range the or $XXX.X full the we midpoint. now of outlook prior at million growth

midpoint. or the to of in at expect continue million We $XXX.X revenue to the of year-over-year XX% $XXX.X a growth range total million,

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

be Capella. to services revenue in lower While XXXX as year recent fiscal pronounced we now rate well as from services electing this with as be expect anticipated due result below macro-related the that pressures we would contribution fewer levels, more this budgetary customers a services dynamic fiscal attach naturally to of

now are of and And to decreasing million range loss finally, operating the in expect we loss million. a negative outlook our $XX.X negative $XX.X non-GAAP operating

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

Operator

Thank you.

[Operator session. Thank a We be conducting will question-and-answer now Instructions] you.

your Please question. is first with Our with question RBC Matt Markets. Capital from Hedberg proceed

Matt Hedberg

here. Congrats my taking for start to questions. Thanks Matt, on want guys. Great, with I you. the results

way the kind monetize ways strategy script, four in helpful. plan Gen like an super with iQ, of monetization But wondering, and you Capella adoption sort to is your about AI that? think you're products increased other with think there And outlined thinking of it additional was the consumption. I mentioned of you some I for Capella I'm the you

Matt Cain

you. and part will better answer consumption, it we Simple efficiency. from be hear Matt, additional reach, to monetize the more with Capella of developer offering good is to go-to-market that expect

as, is again there of but of So, compelling the be will the a as we business, itself Capella. part to service think far is impact part

Matt Hedberg

sort through of is pipeline those And like about sense. of to wondering a great on of AWS. like? GCP when what how I'm on lot partners look of in with you're I front, was this deals? you comments then, would know profile that, those for seeing deals talk hyperscaler-type your And makes the It had hyperscaler lot customers come the I progress you've sort That of quarter. just hear know Great. the

Matt Cain

Hey, Matt.

over program AI about and our we're to with customers AWS, big with tools be they there. the and business. our to ongoing benefits going thinking that premier are the partner the the announcement specific bar their our excited that program, of So, to a with we obviously, the momentum and GCP total developers ecosystem use, bringing continue in and and want are partnerships about part Investing going the got

that to Quite a partner partners on us. you [$X,XXX] of all working frankly, new across to to regions just including strategic migrations, solutions, up account but the across have which for influence. talking plans, with And appreciate reach tremendous we that largest go-to-market which and for do way that extent territory a that customers efficiency with them, all and can our beneficial we partner with think the success and we're starter all planning the us of that types, been very lot customers. We source, part and packs work are joint seeing big the and deal with time. (ph) to of about and seeing our build really about And business have not some we've can credibility all partner Capella relatively we're

Matt Hedberg

Matt. lot, a done. Thanks Well

Operator

Thank you.

your with is Ittai question proceed Oppenheimer. next Our Please with question. Kidron from

Ittai Kidron

Thank and cRPO. ask revenue, you. I about Greg, you to ARR wanted

decelerating a year-over-year fifth your from growth, think I So, looking where a revenue the XX% quarter row XX% now over basis. under it's it's at in to declining, on

the quite Your XX%, the ARR, you're firm at in in XX% however, range. teens, And holding the is is low-teens. cRPO

the forward I key and the they apart, should are going three, think three how I So, so why me guess? far evolution reconcile about metrics help of these

Greg Henry

any obviously, RPO, ARR, cRPO does all whereas point Ittai. Hey, our not from pick hear include you. just to up. would first Good Yeah. and business, that or services on-demand well, of Yeah, I'd revenue out

there. sort a little of is oranges of and So, apples bit there

the quarter, particularly of couple a just revenue things. for And for perspective, there again, this was

talked impacted macro, has of continued subscription more Services, and the Our it script, business as so to because is well. demand do our about less. we been in the

seeing that. we revenue And peaked comparison, not sort last we're subscription year year-over-year and just this So, a services And time, of obviously, from both from at that's repeating. revenue.

the -- as forward. think on I reasonably subscription revenue subscription go to has we an see and continue software constant the revenue think we will improvement been revenue we

or sort On they multi-year, -- we when contracts, towards get stages performance of obligations. RPO some less their in performance and our cRPO in the when later of that's the remaining one-year particular, whether of

a we we our renewal that customers for are now think an couple largest up the that and QX, of start see on So, have seeing well. between improvement RPO as we and -- will

Ittai Kidron

of Okay. part be said clear, you to And is not ARR. just Capella

Greg Henry

No, What's of services, Capella of not business. is is part on-demand professional part ARR. ARR any

Ittai Kidron

And see Capella one-year common or contracts? mostly it. it's is to Got it demand, on

Greg Henry

sorry. I'm repeat that? you Could

Ittai Kidron

is consumption see Capella demand or or mostly three contracts year? on common one it to there it one-year or is

Greg Henry

Capella today annual the ARR. of our is model, largest The which majority business would into fall credit

Ittai Kidron

equation. out is Matt, for and changing side understand okay. for what on there competitive what me it, you the you're one you. Got of seeing Help the

doing about rate think on competitive just I'm would competitors where front, do the a it. marketplace. greatly from the standpoint, trying your to of market. your Some very the in win appreciate then, well in you. are you Thank place And anything see

Matt Cain

today. we and to never been I'm scalability speaking, for high-performance the generally architectures they we with more how If Ittai, nature edge of Look, and applications cloud that the prevalent are are. demand about than have serve, we pleased think competitive

is moving the with model of power preferred all and by exciting a Capella to getting the additional, would benefits and bringing Couchbase consumption those full what's platform at-bats that that the majority call, we're them. of market the and us I certainly, customers, often what think down I is with

proof have now. that new of customers. dynamics, it the see than integration concepts competitive I more But when the do of more we less, increases and and value power think the would the the and value get of relevant our in into the proposition, say, I existing are people and platform in the propositions services, value platform both we with the show some situations ways, do they And those never TCO been

up every well day more about do do So, I'm migration we've we But and other with appetite that cloud, the things how with We like many and with pleased before. dynamics compete. modernization we're to talked positioned better. wake to

Ittai Kidron

All Thank Appreciate right, good. you. it.

Greg Henry

Ittai. Thanks,

Operator

you. Thank

question Please next Sanjit with is Stanley. proceed Our Morgan with question. Singh from your

Unidentified Analyst

the talking one years so time I migration are maybe of or what strategy, doing do the of accelerated you that opportunities kind think [Dion] migration it strategy you as apps, think sort question you right, both out? other the higher two the one in workloads mostly related cases, where This two kind level Thank in about is bigger about? those the sort for of today see on already the new more really side that the for the first kind through I you about Great. AI. AI both trying And those spent Anything these lot first about the two which, workloads of big a we you. mean, the (ph) When ones? many or AI way position kind of you laid and well I on you than two, out. Sanjit. thinking to that then, around talked and are of as you're that resonates. And share to gets for side ones new then ways, impacts you opportunities can of to have your

Matt Cain

appreciate question. I look, Yeah, the

combine the And customized great operational I think we use personal about for applications new. bring next demands the all to be we we why all the is that database we to lives. a on data say lot rich, personalized, it's are in professional demand and able applications, and why that light, -- to both our for and catalyst if think back AI, the about from we existing platform, processed step talk like excited very And relevant. data and to never applications, a for in the to be of you the was to Couchbase built edge amount need and And personalization with leverage that search well light bring think services analytical lends to itself cloud about platform TCO further and performance benefits. that's customization scale if and more for going more capabilities, with that future single that's indexing, been eventing to even so

lot with strategic them applications. to mentioned a remarks, their today in their for prepared AI, and of as platform us large We're we of the spending a same customers that future being the is time At existing on plans time, new had an needed that that net they're in data we smart a platform they cities company the their the customer the enable an that geography emerging AI process application is Couchbase to all and was realized for that building.

So, architectural always a way take And done, as the solid data a have services we integrate we upon developers. an then, for approach and layer. compelling customers to foundation, in both

together You do, architected a the bringing to combine and at scale model, that Capella other performance. quite all just we're certainly lot capabilities that aren't really frankly way consumption of the a vendors seamless with and in

we're going both think workloads. get be I able so, to And at to migrations new and

bit a existing on size we time of and bigger we a can that of some contribution our we our of attention lot gate, effect customers, a As the monetize the little look business, certainly but spend a when logos. because at of on new of migration of be the out

excited So, that of integrated impact path hard-pressed forward. about be thinking to over is we'll any one time. and future our of is we we're be track winning bigger platform inclusive a isn't customer to trending But about platform strategy is you'd an which data think AI. And find that a able the strategy the

Unidentified Analyst

question. one of follow-up lot maybe then quick sense. a Makes And just

think customer to customer you a I your some have Is XX seems of on kind us out bit thinking little new customers view sort share about kind net up which pushing particularly of of Just of kind you still granularity was super Is compared this down around signings around quarter. but more put compared from can the a piece reconciling when around you think that helpful. about add can that low levels the any commentary market still that would you customer Capella, that, quarter, of last last there to momentum, versus piece? that way piece numbers, still maybe quarter, step churn down the any churn Or that number? the be I'm weighing customer help

Greg Henry

Yeah, give happy color some to there.

are do yes, still smaller quarter, impact. dollar our last on question, we have did we are not like a your to customers macro seeing impacted. So, more They which bit a big churn

in is gross what and are with actually historically. we've script, up Capella mentioned as seen performing the ads XX% count quarter-over-quarter. Our well we logo And line in

actually with through how is think still that that churn. So, count working impacts second going some Capella we start performing. we're we forward very more as to But of overall, year. pleased sort smaller favorable through move We're to customer the of of business seeing we're the half the

Unidentified Analyst

That sense. makes Thank Great. you.

Operator

Thank you.

your question Raimo is from with with Lenschow Barclays. next Our Please proceed question.

Raimo Lenschow

you you I you. seeing this back Can you pipeline what if you part continue as early about are improve think a quarter Perfect. to to terms Thank of follow-up. you stage one there? the about like have like think what speak pipeline little quick for then, see bit you. looks in pipeline of like year, and how But is things the It evolving? And

Matt Cain

active come answer it. hopefully, to the in back half, have we appreciate new stage how really expect early those detail deals. and you've Capella, to we from we into the how Raimo, that grow the in different feel we the simple trials of measure level of in are to Capella there, And progression good everything about migrations logos expansions terms the dynamics is understand that that,

execution grow those look an really frankly overall, to and and we to in the beyond. half we the so, of team in continue have we But size, demand I as entirety pipeline of And and the back about velocity, exciting as the business indicative both nurture think opportunities forward. the mix and metrics the the go-to-market terms of of good. scale, confident go across feel for we it's quite optimism pipeline, I look think of the of the And the product,

Raimo Lenschow

services of as the Yeah. path think services Like, was professional And do all do revenue, then professional well. you bit that as you. we a then, terms journey, think about time. think going there headwind better. speak and obviously Congrats how managing you little obviously subscription glide that the me when of in about Like, going you revenue to about -- the about how forward Greg? a from Thank be

Greg Henry

Yeah, generates less but due Look, a it for But customers is right opting our to continue seeing to obviously macro, believe budget-constrained they when services us. software the they're sales, business. software side. on are side, bit is now, what the little key long-term we're thanks and more Raimo. professional We grow actually we services to think on

we slightly beginning as the down the year would versus about of last talked year. at services So, be

Given there's a expected. a more we we headwind year, slightly outperformed bit little last probably than of

The second service more as is, it's get have of are smaller going more the a business attach Capella that and Capella, part into rate to a given in to the that less perspective. a to that from itself customers service we

customers So, of right play how push business I that. to look, software the we are starting think to offset now. the services continue at is both of those still pleased part things very is we'll outperforming for and slight But think while important are services but to we're a them,

Raimo Lenschow

Yeah. Very clear. Thank you very much. Congrats.

Greg Henry

Raimo. Thanks,

Operator

you. Thank

question. with from proceed your is Baird. Oliver question next Our Rob with Please

Rob Oliver

start for Thanks with on count. guys. there Greg, one afternoon, I customer you was two. taking had I'll earlier Good since my Great. question.

existing quarters, the great. think how in have that forward? growth commentary split? And best I going is going logos customers we single new But other contribution be think you the triangulate might should trying the certainly for it, half Capella source Capella. feels said and know that some of coming the like And guys the half from you. sort about sounds new Capella on guys how to we that of about right? to So, XX% be logos should just customers, about in Is then made, of you

Greg Henry

is From that... Rob, a perspective, new logo

Rob Oliver

like, had aren't Capella Yeah, of guys Yes. more Capella some -- logos. added It but on your them I'm because customers and thinking new around commentary seems like the growth based adds. customers, that, you XX% of

how sense split So, wanted I is. to that just a get of

Greg Henry

Yeah.

half new One of -- as of expect and go to think seeing will I both is Capella most have we so that forward we're things. would continue the next the enterprise, momentum. year. be of majority do into Couchbase and the have remind couple customers into I logos, Capella. that that we the enterprise Couchbase where just you year we That's do second

Capella, in only you them Capella so, customers, count, when who's enterprise. the give got we but And as them some everybody one, have but customer the count also of we total obviously

So, Capella, of enterprise we just a to to to just as Matt expect there still But that pipeline, business, you're we pipeline was have being around of aware too. sort about obviously, when but majority we're of talking math, the be good that. trying reconcile the again, the still be

still we new there. logo So, on business plan driving

newer make bigger In the the until revenue, if migrations terms in will about term near the because the nature clearly you and think that our customers, enterprise ARR up of, the up. larger, ramped customers large given get the will and be amount

Rob Oliver

Okay, helpful, some thanks. of And couple already. you've then, the gotten Matt, of a on questions and macro AI

that of adopt So, usage about, customer I'll trends helpful. be Capella for ask seeing color those Thanks, would what there you're I in Capella? really Any guess of consumption guys. kind terms intra-quarter,

Matt Cain

Rob, couple momentum. really pleased Capella of that the we we and with expectations said high for we're have times a

I say In consumption, internal that's would our meeting, if terms not of even expectations. exceeding,

it's people proving application we think proposition of the focused do while development on I database. less, run getting more with the value

I of are efficiency. underlying think platform, with Couchbase the realizing benefits faster, more they the

the logos, by retention net on of net new improvement success we're the We've also talked -- about rate, Capella. driving seeing of majority driven the

balancing Your important migrations new to on really us. logos comment in is

area and we we on on better, migrations that we focused do see the While will certainly really and on excited logos healthy some are new Capella.

the that's the an world value with Capella apps existing proposition scale for of and of addition cost and in next-generation customer aggressively performance effectiveness. that's we ones largest one ours, been of hospitality companies the just provided, the In And example. pursuing to one

As is look managing we of and in to adding you something comment both, our that the actually both at expectations We're new. pipeline consumption pipeline And which customers, while excitement looking at Capella we're with dynamics the cohorts, doing will. pertains existing if about my exceeding overall. on to the planning

Rob Oliver

Thank Helpful very Great. color. you much.

Matt Cain

Thanks.

Greg Henry

Thanks, Rob.

Operator

you. Thank

William question. with Blair. your Ader next Please Our Jason from is question with proceed

Jason Ader

Good Yes, afternoon, you. thank guys.

to like helping to this challenge ad-bats are in front the to to guys which side Just know are you on and any about new of about get a a those for prospects? that there be go-to-market front still get ask of here get talked seems to in of specific we go-to-market call. Capella on wanted initiatives the I side. get the But -- enterprise customers, you front in lot

Matt Cain

Yeah, building new are everything Jason, on announcing geographies customers, seeing pipeline, focused demand, in from probably us faster new in getting are channel new would programs, that say disproportionate there's and isn't of investing where I go-to-market on that the our return. to not we capabilities, establishing that a demand thing front doing relatively we're side

the application serve there of And very that lot that developed. with are talked initial focused that think applications an hour better I to our for and teams a that maniacally is, to get time and Capella. be to need Couchbase of on element at not an truly quite a mission acquisition we that not by shortening we're is about the that pipeline of a new they there. are how we're and land. compelling one bit cases event managing you We've for customer things goes thinking the But about and critical, a mindful there's

indicators that do go would we mentioned, So, seeing that will the expect it's we We're think as we Greg And I unquestionably to we I that can would area improve. say want. as and an forward. leading better

Jason Ader

You you you mentioned any that of geographies? on expand geos. following can about Anything there? sort success talk up just certain can how And in disproportionate that, Matt, on

Greg Henry

it's Jason, add I I'll it. Greg. look, there's regions couple particular. in Yeah. Hey, mean a of

TIMEA, seeing region Europe activity Middle and we to sort we're and then out So, is good and Africa, as East very there. are Turkey, run EMEA we broke it Israel, and which of actually

last And of there, a new which been great lot activity as of a logo has investing doing Asia technology, the of and a because is in imagine, the other leader newer couple We lot have well. one, very can you we're we've seeing Pacific. there. then which Capella of And newer we're Pacific, also been Asia out years, activity coming

impactful as invested regions over those become few the to more business, really much years. to are there we've So, last starting the

Jason Ader

Good Thanks, guys. luck.

Greg Henry

Thanks, Jason.

Operator

Thank you.

with from your is proceed question. Brad Stifel. with question next Our Please Reback

Brad Reback

reason next Matt, very Oh, year? wouldn't Thanks great. you out much. Capella break any

Matt Cain

reporting-wise? like, Brad, sense, what In

Brad Reback

Yes.

Matt Cain

break at can be excited do We out that. we're when to to we ready that are that expect the and point

Brad Reback

gain M&A Thanks. Okay. Switching using gears, around scale? to thoughts

Matt Cain

like Yeah, would there partner Brad, we is at agile in I as platform improving that particularly we always being I ourselves us. an pride build think consideration benefits by think be beyond It's with And mean the for ongoing analysis. our about a area. we're strategy M&A, doing an scale, and something particular

it's say but we prepared to I'd do, that. So, make beyond of part what comments I'm not

Brad Reback

Great. Thanks very much.

Matt Cain

Thanks, Brad.

Greg Henry

Thanks, Brad.

Operator

you. Thank

with Wedbush Our with Koujalgi your Please Securities. is next proceed Taz question from question.

Taz Koujalgi

don't look Greg. guys. number Thanks revenues focus for question. on you billings [indiscernible] mostly at on I quarter, But as billings what taking and One looks Greg, for this a my light. Hey, much, the if ARR. focus bit mean little you

down never I which happened think sequentially, is I seasonally believe before.

anything any call on the invoicing there out headwind So, to duration front? metric, the billing or on

Greg Henry

the are the of timing upfront or with of the the enterprise We that business. I billings us noisy. Because much. those when a a We part had when is No, for is on billings And still -- is say timing we renewals. business and ARR predominant I the that too of it mean, Taz. renewal. measure, of get we annual tried to our don't to think say, is the better some renewal not really, do lot would a do again, bit we've focus we

wouldn't no, into the anything Durations So, not saw sort lows of billings. if steady, in macro. we of slightly the the from the improving sort are of I worst about read

Taz Koujalgi

Matt, Got in it. strong Capella strength the few Then you've just last quarters. one seen for Matt. follow-up in

a signing there could to are On with up sales your element to the rep versus go-to-market them? direct field motion guy motion any a get you traction where on for Capella, or just people Capella is comment customers? self-service If sales self-service requiring a selling to Capella Capella without

Matt Cain

come Yeah, Taz, developers purchase, in would direct, model, What value proposition. more et cetera. say, I it's initial certainly their part complementing go-to-market of to highly evaluation the instrumented, us enabling Capella our to

business. new new activity applications within but logos, So, we're of get one And the complement building it's something we accounts that expansion actively see as benefits is, certainly where faster. the a existing to for people there just that not our overall at can

So, getting on we're focusing product-led the what we developer a experience growth. into lot and call

in what and will is we Capella of overall the with do the and have leading which that All of place excited we're the possible instrumentation to and about offering indicators the business.

Taz Koujalgi

Thanks, helpful. Very it. Got guys.

Greg Henry

Thanks, Taz.

Operator

Thank you.

Ma with Securities. Please Howard Our with question. your proceed next Guggenheim question from is

Howard Ma

the equal? amount the back-half add if new same Greg, the make year that in year is you if Thank normally added half. the about first the new you. $XX so, would that of bookings ARR ARR you two the second net Can And in offsetting halves factors there of weighted? any as half us assumes guidance are more this more million remind

Greg Henry

QX it. we Yeah. tends about we there half, the guidance feel is to Hey, about question slightly the feel the in in To yes, bookings, particularly even this weighted the half. and and towards the the second good guide the obviously about good the bookings Look, second is which bookings be have the outlook we Again, Howard. more our Appreciate question. your ARR ARR quarter. performance largest

again, if And minimum at that, it. before, guidance up stated we set we've half. heading we second about momentum into to we not the good As have the meet beat a hopefully feel

Howard Ma

are capabilities, to existing you. of such Thank think Okay, customers? among Gen co-pilots great. accelerate near Thanks. AI any capabilities drive a customer term? new your customer new evidence placing Capella expansion as or more prospects For AI mechanism Gen weight And more when on you coating system, for is acquisition could do database that you Matt, have choosing management instance, a do engine

Matt Cain

for to about and the and is Capella you of -- think think iQ. lot simple is to to we question about just much you to think full private sign-ups I Capella and value we the so people Howard, have preview I I much exceeded the quite directly important then And of were is, get more excited frankly if would indicative think quickly us. simple which efficient And for early a add customer that's making to answer so developers, something the experience And the really that Couchbase. new announce yes. expectation, question easier going that how my activity. think benefit proposition to of Couchbase, tell it

new be migrations. both it's and to So I going accelerant think sides, on an

Howard Ma

Thank Great. you. That's encouraging.

Greg Henry

Howard. Thanks,

Operator

Thank you.

from Kessinger Please your question. Our next proceed question Rudy is D.A. with Davidson. with

Rudy Kessinger

it's I trended as questions. is metrics I Hey, comment you bookings new as it Anything or seen? you you quarters? bookings percentage a I at said just of my speak (ph) Any can everybody share? a you you've know has increase for several know customer bookings? this thanks percentage the On maybe directionally awaiting further trending taking been how signings. share, over least last could new how [regularly] total in Capella of call of Capella, for can the But majority

Greg Henry

it's It's Yeah. Greg. a hear whether revenue, becomes from every customer grow. again, accounts. Hey, quarter larger Rudy. Good of much It every ARR or percentage just, bookings, metric, Capella Yeah, to you. it to look, continues pretty

is we which what so, And expected.

of rest quarter, every growing So, because yeah, a component it's just it business. becomes than bigger faster the the

Rudy Kessinger

exceeding outperformance the quarter. expectations, It know also on the that primarily is $X flipped but enough. that tailwind raise the the the like any FX in fair there? the million driver year? and a X% And quarter for in have primary impact on Did I raise the Okay, sounds ARR to year, what's $X million the consumption for

Greg Henry

much. as not bit, little A

was two it think I things.

improve think talked three to we retention about it's acceleration and the I Capella years. it best rate continuing net the the in being

also it in expansion. was referred quarter driven Capella. material deals some Matt, the that -- to part with enterprise closed by So of large But, some very we

performance combination pipeline where we strong. of honestly sort So of quarter, it's terms broad-based and I the both, just it's really guidance -- see in again, of it had the set quite a as in

what and we're for in the outlook. the second So, second quarter did half we here excited again

Operator

questions further the are There any to hand no you. to at management like this over closing I back comments. time. would Thank floor for

Matt Cain

operator. Thanks,

excited favor. AI. and some of another strong had remain for we efficiency, rapid due our with cloud, cost opportunity about quarter. trends greater IT our We modernization recap, course To of Capella, in desire The very big to adoption

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

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

Operator

conference. today's concludes This

at your participation. may You time. Thank your you lines disconnect for this

Couchbase (BASE) 6 Sep 232024 Q2 Earnings call transcript