Couchbase Inc. delivered better than expected revenue and earnings based on solid customer demand for database technology while emphasizing its expanded cloud-first focus.
Total revenue for the quarter was $34.9 million, an increase of 25% year-over-year. That exceeded analysts’ expectations by $2.23 million. Subscription revenue for the quarter was $32.0 million, an increase of 21%. Total annual recurring revenue (ARR) as of April 30, 2022 was $139.7 million, an increase of 27%.
Couchbase Inc. reported major customer wins with Halliburton (for mobile and data synchronization) and Western Union (for cross-border, cross-currency money movement and payment services), as well as a $1-million-plus deal for the Couchbase Capella DBaaS. The company now has 614 customers, an increase of 24 from the previous quarter.
With the momentum behind the cloud version of its database, the company has made cloud centricity its number one priority. “In Q1 we more than doubled the number of people focused on Capella development,” said CEO Matt Cain on Couchbase’s earnings call. “The most visible sign is that our Capella announcements were delivered ahead of schedule.”
Those announcements included:
- Availability of Capella in Google Cloud (adding to existing AWS support)
- Capella App Services, a back-end system for managing and hosting mobile and IoT applications
Cain said that going forward, new capabilities will be released on Capella before, or concurrently with, the company’s Server NoSQL database.
“In our emerging cloud business, initial uptake and leading indicators of demand for Capella continue to validate our excitement in — and very high expectations for — our as-a-service offering,” he said. In addition, the company continues to see robust interest in digital transformation initiatives among customers, despite macroeconomic pressures. Recent Couchbase research indicates that customers are investing aggressively in digital transformation, even though they are seeing delays in failures in their efforts.
Cain and CFO Greg Henry were bullish on the state of customer demand. For example, they said industry forecasts indicate the Cloud Database Management service revenue to be 50% of the total database market this year “Now we’re well positioned to fully participate,” Cain says. “Cloud is at the heart of most customer conversations.”
Cain also expressed confidence in the company’s outlook based on the technology advances it’s making: “We remain confident we have the opportunity to drive a generational rethink in the $60 billion database market. We are convicted we have the best enterprise database.”
Other financial indicators:
- Remaining performance obligations (RPO) as of April 30, 2022 was $169.0 million, an increase of 68% year-over-year.
- Non-GAAP EPS of -32 cents beat expectations by 7 cents.
The company also raised its outlook for the rest of the year:
- For fiscal year 2023, total revenue is now forecast in $148 million range and ARR between $160.5 million and $164.5 million.
- The company lowered the forecast for its operating loss.
Couchbase joins a slew of other cloud vendors that are delivering stronger than expected results and painting a bullish picture about the demand outlook for the rest of the year, as customers continue to invest in cloud services, digital transformation, and strategic initiatives that can streamline the business and deliver greater profits.