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Couchbase Announces Fourth Quarter and Fiscal 2022 Financial Results

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SANTA CLARA, Calif., March 9, 2022 /PRNewswire/ -- Couchbase, Inc. (NASDAQ: BASE), provider of a leading modern database for enterprise applications, today announced financial results for the fourth quarter and fiscal year ended January 31, 2022.

Couchbase logo (PRNewsfoto/Couchbase)
Couchbase logo (PRNewsfoto/Couchbase)

"We finished our first fiscal year as a public company with strong momentum including ARR of $132.9 million, representing 23% growth, as well as record net new ARR of $10.6 million, which was up 65% year over year," said Matt Cain, President and CEO of Couchbase. "Looking ahead to fiscal 2023, we are excited about the opportunity to increase our momentum through our Capella database as a service offering and expanded go-to-market efforts. Modernization of applications remains a top priority for enterprises as they invest in digital transformation initiatives, and Couchbase continues to be thoughtfully architected to meet the market demand for this ongoing trend."

Fourth Quarter Fiscal 2022 Financial Highlights

  • Revenue: Total revenue for the quarter was $35.1 million, an increase of 19% year-over-year. Subscription revenue for the quarter was $32.8 million, an increase of 17% year-over-year.

  • Annual recurring revenue (ARR): Total ARR as of January 31, 2022 was $132.9 million, an increase of 23% year-over-year. See the section titled "Key Business Metrics" below for details.

  • Gross margin: Gross margin for the quarter was 88.2%, compared to 89.4% for the fourth quarter of fiscal 2021. Non-GAAP gross margin for the quarter was 88.7%, compared to 89.5% for the fourth quarter of fiscal 2021. See the section titled "Use of Non-GAAP Financial Measures" and the tables titled "Reconciliation of GAAP to Non-GAAP Results" below for details.

  • Loss from operations: Loss from operations for the quarter was $12.7 million, compared to $8.0 million for the fourth quarter of fiscal 2021. Non-GAAP operating loss for the quarter was $9.1 million, compared to $6.7 million for the fourth quarter of fiscal 2021.

  • Cash flow: Cash flows used in operating activities for the quarter were $2.7 million, compared to $6.6 million in the fourth quarter of fiscal 2021. Capital expenditures were less than $0.1 million during the quarter, leading to negative free cash flow of $2.7 million, compared to negative free cash flow of $6.6 million in the fourth quarter of fiscal 2021.

  • Remaining performance obligations (RPO): RPO as of January 31, 2022 was $161.6 million, an increase of 58% year-over-year.

Full Year Fiscal 2022 Financial Highlights

  • Revenue: Total revenue for the year was $123.5 million, an increase of 20% year-over-year. Subscription revenue for the year was $116.3 million, an increase of 20% year-over-year.

  • Gross margin: Gross margin for the year was 88.0%, compared to 88.8% for fiscal 2021. Non-GAAP gross margin for the year was 88.4%, compared to 88.9% for fiscal 2021.

  • Loss from operations: Loss from operations for the year was $56.3 million, compared to $33.1 million for fiscal 2021. Non-GAAP operating loss for the year was $45.5 million, compared to $28.2 million for fiscal 2021.

  • Cash flow: Cash flows used in operating activities for the year were $41.6 million, compared to $39.2 million in fiscal 2021. Capital expenditures were $0.8 million during the year, leading to negative free cash flow of $42.4 million, compared to negative free cash flow of $42.0 million in fiscal 2021.

Recent Business Highlights

  • Appointed cloud and database veteran Gopi Duddi as senior vice president of Engineering, overseeing all product development and delivery for the company. Duddi brings nearly 25 years of experience and, as a former general manager at AWS, built and supported some of the cloud service provider's fastest growing products.

  • Announced Couchbase Mobile 3, an edge-ready data platform that empowers mobile developers and edge architects to build fully native, modern applications in the cloud, at the edge and on mobile and IoT devices using the language, frameworks and platform of their choice.

  • Granted a U.S. patent for cost-based optimization for document-oriented database queries, making Couchbase the only document database and cloud company to hold a patent for this novel and critical query optimization method.

  • Achieved the Amazon Web Services (AWS) Outposts Ready designation, recognizing that Couchbase has demonstrated successful integration with AWS Outposts deployments. This achievement further strengthens Couchbase's mobile and edge partner ecosystem to provide a superior experience for customers.

  • Named one of the top five out of 25 highest-rated public cloud computing companies to work for in a list released by Battery Ventures with data specifically provided by Glassdoor.

Financial Outlook

For the first quarter of fiscal 2023, Couchbase expects:

  • Total revenue between $32.5 million and $32.7 million

  • Total ARR between $136 million and $138 million

  • Non-GAAP operating loss between $16.8 million and $16.6 million

For the full fiscal year 2023, Couchbase expects:

  • Total revenue between $146.5 million and $147.5 million

  • Total ARR between $160 million and $164 million

  • Non-GAAP operating loss between $57.2 million and $56.2 million

The guidance provided above is based on several assumptions that are subject to change and many of which are outside our control. If actual results vary from these assumptions, our expectations may change. There can be no assurance that we will achieve these results.

Couchbase is not able, at this time, to provide GAAP targets for operating income for the first quarter or full year of fiscal 2023 because of the difficulty of estimating certain items excluded from non-GAAP operating loss that cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant.

Conference Call Information

Couchbase will host a conference call and webcast at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Wednesday, March 9, 2022 to discuss its financial results and business highlights. To access this conference call, dial (888) 660-1027 from the United States and Canada or (409) 231-2719 internationally with conference ID: 8395512. The live webcast and a webcast replay of the conference call can be accessed from the investor relations page of Couchbase's website at investors.couchbase.com.

About Couchbase

At Couchbase, we believe data is at the heart of the enterprise. We empower developers and architects to build, deploy and run their most mission-critical applications. Couchbase delivers a high-performance, flexible and scalable modern database that runs across the data center and any cloud. Many of the world's largest enterprises rely on Couchbase to power the core applications their businesses depend on. For more information, visit www.couchbase.com.

Couchbase has used, and intends to continue using, its investor relations website and the corporate blog at blog.couchbase.com to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website and the corporate blog in addition to following our press releases, SEC filings and public conference calls and webcasts.

Use of Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, we believe certain non-GAAP financial measures are useful to investors in evaluating our operating performance. We use certain non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, may be helpful to investors because they provide consistency and comparability with past financial performance and meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. Non-GAAP financial measures are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP financial measures used by other companies. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures (provided in the financial statement tables included in this press release), and not to rely on any single financial measure to evaluate our business.

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss attributable to common stockholders and non-GAAP net loss per share attributable to common stockholders: We define these non-GAAP financial measures as their respective GAAP measures, excluding expenses related to stock-based compensation expense and litigation-related expenses. We use these non-GAAP financial measures in conjunction with GAAP measures to assess our performance, including in the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance.

Free cash flows: We define free cash flow as cash used in operating activities less purchases of property and equipment, which includes capitalized internal-use software costs. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors and investors with information about our future ability to generate or use cash to enhance the strength of our balance sheet and further invest in our business and pursue potential strategic initiatives.

Please see the reconciliation tables at the end of this press release for the reconciliation of GAAP and non-GAAP results.

Key Business Metrics

We review a number of operating and financial metrics, including ARR, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.

We define ARR as of a given date as the annualized recurring revenue that we would contractually receive from our customers in the month ending 12 months following such date.

Based on historical experience with customers, we assume all contracts will be automatically renewed at the same levels unless we receive notification of non-renewal and are no longer in negotiations prior to the measurement date. ARR excludes revenue from on-demand arrangements. Although we seek to increase ARR as part of our strategy of targeting large enterprise customers, this metric may fluctuate from period to period based on our ability to acquire new customers and expand within our existing customers. We believe that our ARR is an important indicator of the growth and performance of our business.

Forward-Looking Statements

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include, but are not limited to, quotations of management, the section titled "Financial Outlook" above and statements about Couchbase's market position, strategies and potential market opportunities. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as "anticipate," "expect," "intend," "plan," "believe," "continue," "could," "potential," "remain," "may," "might," "will," "would" or similar expressions and the negatives of those terms. However, not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties and other factors, including factors beyond our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to: our history of net losses and ability to achieve or maintain profitability in the future; our ability to continue to grow on pace with historical rates; our ability to manage our growth effectively; intense competition and our ability to compete effectively; cost-effectively acquiring new customers or obtaining renewals, upgrades or expansions from our existing customers; the market for our products and services being relatively new and evolving, and our future success depending on the growth and expansion of this market; our ability to innovate in response to changing customer needs, new technologies or other market requirements; our limited operating history, which makes it difficult to predict our future results of operations; the significant fluctuation of our future results of operations and ability to meet the expectations of analysts or investors; our significant reliance on revenue from subscriptions, which may decline and, the recognition of a significant portion of revenue from subscriptions over the term of the relevant subscription period, which means downturns or upturns in sales are not immediately reflected in full in our results of operations; and the impact of the ongoing COVID-19 pandemic. Further information on risks that could cause actual results to differ materially from forecasted results are included in our filings with the SEC that we may file from time to time, including those more fully described in our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2021. Additional information will be made available in our Annual Report on Form 10-K for the year ended January 31, 2022 that will be filed with the SEC, which should be read in conjunction with this press release and the financial results included herein. Any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

Couchbase, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)



Three Months Ended January 31,


Year Ended January 31,


2022


2021


2022


2021

Revenue:








License

$ 6,540


$ 5,482


$ 19,008


$ 14,032

Support and other

26,245


22,557


97,279


82,904

Total subscription revenue

32,785


28,039


116,287


96,936

Services

2,279


1,388


7,255


6,349

Total revenue

35,064


29,427


123,542


103,285

Cost of revenue:








Subscription(1)

2,311


1,961


8,529


6,074

Services(1)

1,817


1,160


6,252


5,543

Total cost of revenue

4,128


3,121


14,781


11,617

Gross profit

30,936


26,306


108,761


91,668

Operating expenses:








Research and development(1)

13,372


10,612


51,639


39,000

Sales and marketing(1)

23,658


19,103


89,372


70,248

General and administrative(1)

6,574


4,595


24,008


15,500

Total operating expenses

43,604


34,310


165,019


124,748

Loss from operations

(12,668)


(8,004)


(56,258)


(33,080)

Interest expense

(26)


(2,208)


(656)


(6,970)

Other income (expense), net

(256)


890


(300)


1,111

Loss before income taxes

(12,950)


(9,322)


(57,214)


(38,939)

Provision for income taxes

286


325


1,015


1,044

Net loss

$ (13,236)


$ (9,647)


$ (58,229)


$ (39,983)

Cumulative dividends on Series G redeemable convertible preferred stock


(1,480)


(2,917)


(4,076)

Net loss attributable to common stockholders

$ (13,236)


$ (11,127)


$ (61,146)


$ (44,059)

Net loss per share attributable to common stockholders, basic and diluted

$ (0.30)


$ (1.90)


$ (2.37)


$ (7.71)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

43,688


5,852


25,777


5,717












(1) Includes stock-based compensation expense as follows:



Three Months Ended January 31,


Year Ended January 31,


2022


2021


2022


2021

Cost of revenue—subscription

$ 73


$ 19


$ 196


$ 69

Cost of revenue—services

80


13


196


54

Research and development

1,119


348


3,343


1,316

Sales and marketing

1,447


523


3,968


1,536

General and administrative

868


426


3,047


1,696

Total stock-based compensation expense

$ 3,587


$ 1,329


$ 10,750


$ 4,671


Couchbase, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)



As of January 31,


2022


2021





Assets




Current assets




Cash and cash equivalents

$ 95,688


$ 37,297

Short-term investments

110,266


19,546

Accounts receivable, net

36,696


35,897

Deferred commissions

11,783


8,353

Prepaid expenses and other current assets

8,559


2,449

Total current assets

262,992


103,542

Property and equipment, net

4,288


6,506

Deferred commissions, noncurrent

8,243


4,941

Other assets

1,219


2,199

Total assets

$ 276,742


$ 117,188

Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)




Current liabilities




Accounts payable

$ 1,923


$ 2,428

Accrued compensation and benefits

16,143


9,110

Other accrued liabilities

3,231


4,154

Deferred revenue

69,010


57,168

Total current liabilities

90,307


72,860

Long-term debt


24,948

Deferred revenue, noncurrent

2,713


4,542

Other liabilities

507


1,358

Total liabilities

93,527


103,708

Redeemable convertible preferred stock


259,822

Stockholders' equity (deficit)




Preferred stock


Common stock


Additional paid-in capital

525,392


37,410

Accumulated other comprehensive income (loss)

(195)


1

Accumulated deficit

(341,982)


(283,753)

Total stockholders' equity (deficit)

183,215


(246,342)

Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)

$ 276,742


$ 117,188

Couchbase, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



Three Months Ended January 31,


Year Ended January 31,


2022


2021


2022


2021

Cash flows from operating activities








Net loss

$ (13,236)


$ (9,647)


$ (58,229)


$ (39,983)

Adjustments to reconcile net loss to net cash used in operating activities








Depreciation and amortization

710


698


2,824


2,006

Amortization of debt issuance costs


240


52


717

Debt prepayment costs


625



1,000

Stock-based compensation

3,587


1,329


10,750


4,671

Amortization of deferred commissions

3,940


3,316


13,763


10,402

Foreign currency transaction (gains) losses

377


(742)


382


(931)

Other

164


62


267


132

Changes in operating assets and liabilities








Accounts receivable

(14,289)


(17,616)


(730)


(5,524)

Deferred commissions

(8,867)


(5,046)


(20,495)


(13,450)

Prepaid expenses and other assets

(333)


1,379


(6,217)


56

Accounts payable

(1,604)


282


(491)


925

Accrued compensation and benefits

6,213


1,611


7,030


298

Accrued expenses and other liabilities

(86)


602


(493)


(279)

Deferred revenue

20,772


16,338


10,013


782

Net cash used in operating activities

(2,652)


(6,569)


(41,574)


(39,178)

Cash flows from investing activities








Purchases of short-term investments

(46,200)


(6,348)


(112,479)


(20,493)

Maturities and sales of short-term investments

1,800


900


21,268


900

Purchases of property and equipment

(5)


(49)


(819)


(2,819)

Net cash used in investing activities

(44,405)


(5,497)


(92,030)


(22,412)

Cash flows from financing activities








Payments of debt


(25,625)


(25,000)


(57,402)

Proceeds from issuance of debt, net of issuance costs


25,000



31,402

Proceeds from issuance of Series G redeemable convertible preferred stock, net of issuance costs




104,316

Proceeds from exercise of stock options

1,562


1,699


7,495


2,185

Proceeds from initial public offering, net of

underwriting discounts and commissions



214,854


Payment for fractional shares in reverse stock split



(9)


Payments of deferred offering costs



(4,930)


Net cash provided by financing activities

1,562


1,074


192,410


80,501

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(257)


168


(415)


162

Net increase (decrease) in cash, cash equivalents and restricted cash

(45,752)


(10,824)


58,391


19,073

Cash, cash equivalents, and restricted cash at beginning of period

141,983


48,664


37,840


18,767

Cash, cash equivalents, and restricted cash at end of period

$ 96,231


$ 37,840


$ 96,231


$ 37,840

Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown above:








Cash and cash equivalents

$ 95,688


$ 37,297


$ 95,688


$ 37,297

Restricted cash included in other assets

543


543


543


543

Total cash, cash equivalents and restricted cash

$ 96,231


$ 37,840


$ 96,231


$ 37,840

Couchbase, Inc.

Reconciliation of GAAP to Non-GAAP Results

(in thousands, except per share data)

(unaudited)



Three Months Ended January 31,


Year Ended January 31,


2022


2021


2022


2021

Reconciliation of GAAP gross profit to non-GAAP gross profit:








Total revenue

$ 35,064


$ 29,427


$ 123,542


$ 103,285

Gross profit

$ 30,936


$ 26,306


$ 108,761


$ 91,668

Add: Stock-based compensation expense

153


32


392


123

Non-GAAP gross profit

$ 31,089


$ 26,338


$ 109,153


$ 91,791

Gross margin

88.2 %


89.4 %


88.0 %


88.8 %

Non-GAAP gross margin

88.7 %


89.5 %


88.4 %


88.9 %




Three Months Ended January 31,


Year Ended January 31,


2022


2021


2022


2021

Reconciliation of GAAP operating expenses to non-GAAP operating expenses:








GAAP research and development

$ 13,372


$ 10,612


$ 51,639


$ 39,000

Less: Stock-based compensation expense

(1,119)


(348)


(3,343)


(1,316)

Non-GAAP research and development

$ 12,253


$ 10,264


$ 48,296


$ 37,684









GAAP sales and marketing

$ 23,658


$ 19,103


$ 89,372


$ 70,248

Less: Stock-based compensation expense

(1,447)


(523)


(3,968)


(1,536)

Non-GAAP sales and marketing

$ 22,211


$ 18,580


$ 85,404


$ 68,712









GAAP general and administrative

$ 6,574


$ 4,595


$ 24,008


$ 15,500

Less: Stock-based compensation expense

(868)


(426)


(3,047)


(1,696)

Less: Litigation-related expenses




(213)

Non-GAAP general and administrative

$ 5,706


$ 4,169


$ 20,961


$ 13,591




Three Months Ended January 31,


Year Ended January 31,


2022


2021


2022


2021

Reconciliation of GAAP operating loss to non-GAAP operating loss:








Total revenue

$ 35,064


$ 29,427


$ 123,542


$ 103,285

Loss from operations

$ (12,668)


$ (8,004)


$ (56,258)


$ (33,080)

Add: Stock-based compensation expense

3,587


1,329


10,750


4,671

Add: Litigation-related expenses




213

Non-GAAP operating loss

$ (9,081)


$ (6,675)


$ (45,508)


$ (28,196)

Operating margin

(36) %


(27) %


(46) %


(32) %

Non-GAAP operating margin

(26) %


(23) %


(37) %


(27) %


Three Months Ended January 31,


Year Ended January 31,


2022


2021


2022


2021

Reconciliation of GAAP net loss attributable to common stockholders to non-GAAP net loss attributable to common stockholders:








Net loss attributable to common stockholders

$ (13,236)


$ (11,127)


$ (61,146)


$ (44,059)

Add: Stock-based compensation expense

3,587


1,329


10,750


4,671

Add: Litigation-related expenses




213

Non-GAAP net loss attributable to common stockholders

$ (9,649)


$ (9,798)


$ (50,396)


$ (39,175)

GAAP net loss per share attributable to common stockholders

$ (0.30)


$ (1.90)


$ (2.37)


$ (7.71)

Non-GAAP net loss per share attributable to common stockholders

$ (0.22)


$ (1.67)


$ (1.96)


$ (6.85)

Weighted average shares outstanding, basic and diluted

43,688


5,852


25,777


5,717

The following table presents a reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP measure, for each of the periods indicated (in thousands, unaudited):


Three Months Ended January 31,


Year Ended January 31,


2022


2021


2022


2021

Net cash used in operating activities

$ (2,652)


$ (6,569)


$ (41,574)


$ (39,178)

Less: Purchases of property and equipment

(5)


(49)


(819)


(2,819)

Free cash flow

$ (2,657)


$ (6,618)


$ (42,393)


$ (41,997)

Net cash used in investing activities

$ (44,405)


$ (5,497)


$ (92,030)


$ (22,412)

Net cash provided by financing activities

$ 1,562


$ 1,074


$ 192,410


$ 80,501

Couchbase, Inc.

Key Business Metrics

(in millions)

(unaudited)



As of



Oct. 31,


Jan. 31,


April 30,


July 31,


Oct. 31,


Jan. 31,



2020


2021


2021


2021


2021


2022

Annual Recurring Revenue


$ 101.4


$ 107.8


$ 109.5


$ 115.2


$ 122.3


$ 132.9

Cision
Cision

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SOURCE Couchbase, Inc.