EPS of $-0.30 increased by 31.8% from previous year
Gross margin of 88.6%
Net income of -15.61M
""We ended fiscal 2025 on a high note with a great Q4. We delivered fourth quarter revenue, non GAAP operating loss and ARR adjusted for in quarter FX ahead of the high end of our guidance ranges. Highlights include robust renewals and expansions and continued strong Capella adoption and consumption growth, which resulted in our highest ever quarterly net new ARR."" - Matt Cain, Chief Executive Officer
Couchbase delivered a strong Q4 2025 performance with meaningful ARR momentum and continued Capella adoption, underscored by a record level of net new ARR. The company closed the quarter with total ARR of $237.9 million, up 17% year-over-year and 8% sequentially, driven by large strategic deals, expanding Capella usage, and a growing installed base. Q4 revenue rose 10% year-over-year to $54.9 million, with gross margin at 89.4% and a non-GAAP operating loss of $0.14 million, illustrating early-stage profitability leverage as Capella migrations scale.
Key Performance Indicators
Revenue
54.92M
QoQ: 6.38% | YoY:9.65%
Gross Profit
48.66M
88.61% margin
QoQ: 7.97% | YoY:8.26%
Operating Income
-15.83M
QoQ: 17.68% | YoY:9.20%
Net Income
-15.61M
QoQ: 14.00% | YoY:27.06%
EPS
-0.30
QoQ: -137.97% | YoY:31.82%
Revenue Trend
Margin Analysis
Key Insights
ARR: $237.9M (+17% YoY, +8% QoQ); Net new ARR: $17.6M (+14% YoY; +26% YoY ex currency to $19.5M)
Capella ARR: $38.5M (16.2% of total ARR; up 76% YoY, up from 15.1% last quarter)
Operating loss: Q4 -$0.144M; FY2025 -$14.4M; Net income: Q4 $78k; FY2025 net loss -$10.4M
Financial Highlights
Key quarterly metrics and trendlines:
- ARR: $237.9M (+17% YoY, +8% QoQ); Net new ARR: $17.6M (+14% YoY; +26% YoY ex currency to $19.5M)
- Capella ARR: $38.5M (16.2% of total ARR; up 76% YoY, up from 15.1% last quarter)
- Revenue: $54.9M (+10% YoY; +6% QoQ); Software revenue: $52.8M (+10% YoY; +7% QoQ)
- Gross margin: Q4 89.4%; Full year 88.9%
- Operating loss: Q4 -$0.144M; FY2025 -$14.4M; Net income: Q4 $78k; FY2025 net loss -$10.4M
- ARR per customer: $251k (vs. $273k YoY; up from $244k in Q3)
- NRR: >114% (below the public-company historical >115% by a small margin; expected to normalize in H2 FY2026)
- Free cash flow: Q4 $4.0M (FCF margin 7.3%); FY2025 FCF -$18.8M (FCF margin -9%)
- Cash & equivalents: ~$147.2M; Remaining Performance Obligations (RPO): $251.1M (+4% YoY); cash flow from operations: $4.4M in Q4; annual capex: -$0.375M; free cash flow expectations point toward breakeven FCF in 2027 per guidance.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
54.92M
9.65%
6.38%
Gross Profit
48.66M
8.26%
7.97%
Operating Income
-15.83M
9.20%
17.68%
Net Income
-15.61M
27.06%
14.00%
EPS
-0.30
31.82%
-137.97%
Key Financial Ratios
currentRatio
1.79
grossProfitMargin
88.6%
operatingProfitMargin
-28.8%
netProfitMargin
-28.4%
returnOnAssets
-5.99%
returnOnEquity
-12.2%
debtEquityRatio
0.03
operatingCashFlowPerShare
$0.08
freeCashFlowPerShare
$0.08
priceToBookRatio
7.34
priceEarningsRatio
-14.99
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management takeaways from the earnings call (grouped by theme):
- Growth strategy and Capella: Matt Cain emphasized the durable, AI-native positioning of Couchbase as a unified platform for transactional, analytical, mobile, and AI workloads, highlighting Capella’s growing contribution (Capella ARR 38.5M, 16.2% of total ARR) and the substantial pipeline of large strategic opportunities. He noted a 7-figure migration and a growing number of customers over $1M ARR, including a second customer above $10M ARR.
- AI and collaboration momentum: The company highlighted strategic AI initiatives, including Capella AI Services with NVIDIA Inference Microservices (NIM) to privately run Gen AI models, Google Cloud analytics expansion, Capella IQ, and a Capella AI services roadmap. Management framed these innovations as differentiators designed to accelerate developer productivity and AI-augmented workloads, reinforcing a long-term platform strategy.
- Customer and ARR dynamics: The firm reported 50 customers with ARR >$1M, ~44 net new logos in Q4, and notable migrations and expansions across travel & hospitality, banking, ecommerce, and other sectors. Management stressed that Capella migrations are a primary growth lever with a back-end loaded ARR profile expected to converge with revenue by FY2027.
- FX and guidance realism: Greg Henry acknowledged currency fluctuations impacting ARR guidance but reiterated the ARR growth trajectory and the cadence of renewals and migrations. The management team framed 2026 guidance as balanced and conservative with continued emphasis on efficiency and leverage toward positive free cash flow in the medium term.
- Leadership transition and execution discipline: The CFO transition (Bill Carey interim CFO) and Greg Henry’s departure were acknowledged, with assurances on continuity and continued focus on efficiency, Capella uptake, and AI-driven product evolution.
"We ended fiscal 2025 on a high note with a great Q4. We delivered fourth quarter revenue, non GAAP operating loss and ARR adjusted for in quarter FX ahead of the high end of our guidance ranges. Highlights include robust renewals and expansions and continued strong Capella adoption and consumption growth, which resulted in our highest ever quarterly net new ARR."
— Matt Cain, Chief Executive Officer
"As enterprises race to build intelligent applications, our platform uniquely unifies transactional, analytical, mobile and AI workloads, into a seamless fully managed solution."
— Matt Cain, Chief Executive Officer
Forward Guidance
Forward-looking guidance reflects a deliberate transition toward a more balanced revenue and ARR growth path as Capella migrations scale:
- Q1 FY2026: Total revenue $55.1M to $55.9M (+8% midpoint YoY); ARR $242.9M to $245.9M (+18% YoY at midpoint); non-GAAP operating loss of $-5.4M to $-4.4M.
- Full-year FY2026: Total revenue $228M to $232M (+10% midpoint YoY); ARR $273.6M to $278.6M (+16% YoY at midpoint); non-GAAP operating loss of $-13.4M to $-8.4M.
- Free cash flow: Management continues to target breakeven FCF in fiscal year 2027, with ongoing investments in R&D, Capella migrations, and AI capabilities expected to improve efficiency and leverage in the model.
- Key risk factors cited include currency fluctuations, renewal pool timing, and the pace of Capella migrations, which could influence near-term visibility and ARR composition. Investors should monitor Capella adoption rates, AI-enabled product uptake, and the pace of large strategic deals as primary indicators of execution.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
BASE Focus
88.61%
-28.80%
-12.20%
-14.99%
EVCM
70.90%
-6.82%
-1.63%
-41.32%
AVDX
73.50%
2.06%
0.70%
113.57%
INFA
81.30%
14.80%
0.42%
200.56%
LAW
74.20%
-70.60%
-17.10%
-2.98%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Couchbase is at a strategic inflection with Capella migrations driving ARR growth and AI-focused product expansion potentially enabling higher long-term revenue growth. The company projects 18% ARR growth in Q1 FY2026 and 16% ARR growth for FY2026, with profitability improvements expected to culminate in free cash flow breakeven in FY2027. Investors should monitor Capella adoption rates, migration velocity, and execution in the AI services roadmap (NIM, Capella AI, Capella IQ) as near-term catalysts. The balance sheet remains solid, with ample liquidity and a growing RPO base, which provides revenue visibility while the company continues to invest in growth and efficiency initiatives. In sum, the investment thesis rests on Capella becoming the primary growth engine, driven by migrations and AI-enabled capabilities, paired with ongoing cost controls and a path toward FCF breakeven within the next couple of years.
Key Investment Factors
Growth Potential
Capella-driven ARR growth remains the core growth vector, with Capella ARR at $38.5M and 16.2% of total ARR, up 76% YoY. The company also reports a robust pipeline of large strategic deals and a growing installed base, including 50 customers with ARR >$1M. The expansion of Capella into AI services (Capella AI, NIM collaboration with NVIDIA) and data analytics via Google Cloud regions creates multiple cross-sell/multi-modal opportunities and a pathway to higher ARR and revenue visibility.
Profitability Risk
Near-term revenue growth may lag ARR growth due to Capella migrations shifting from ARR bookings to consumption-based revenue. NRR is currently slightly below the historical >115% threshold, reflecting trailing effects from an anomalous loss/down-sell in fiscal 2025. FX volatility can distort both ARR and reported revenue. Large enterprise deal cycles can be lumpy, and the transition to a more balanced renewal pool may affect quarterly visibility. Competitive dynamics from MongoDB, DataStax, and other cloud-native platforms could pressure market share.
Financial Position
Healthy liquidity with $147.2M in cash and short-term investments; net debt of -$26.22M (net cash); RPO of $251.1M, with ~63% expected to be recognized as revenue in the next 12 months (~$158M). The company generated positive quarterly free cash flow in Q4 2025 ($4.0M) and is targeting breakeven FCF in 2027, signaling improving cash-generation capability while continuing to invest in R&D and go-to-market initiatives.
SWOT Analysis
Strengths
Unification of transactional, analytical, mobile, and AI workloads on a single platform (Capella + Couchbase Mobile) enabling rapid application development from cloud to edge
Strong gross margins (Q4 89.4%; FY2025 88.9%) and improving efficiency in SG&A and marketing spend (S&M 51% of revenue in Q4; 57% of revenue for FY2025)
Large, strategic enterprise customer wins and migrations (50+ >$1M ARR; second customer >$10M ARR)
AI-focused product roadmap (Capella AI Services, NVIDIA NIM integration, Capella IQ, Google Cloud analytics) and AI-enabled capabilities that address growing demand for Gen AI workloads
Healthy balance sheet: cash + short-term investments of $147.2M, modest net debt, substantial RPO ($251.1M) indicating bundled future revenue
Weaknesses
Near-term profitability remains negative (FY2025 net loss $10.4M; FY2025 FCF -$18.8M)
NRR below historical >115% level; expected normalization in H2 FY2026; revenue realization lags ARR due to migration-driven transition to Capella (ARR vs. revenue divergence)
Opportunities
Capella migrations across large accounts as a multi-year platform strategy; expansion into AI workloads and private-theater AI via NVIDIA NIM; Google Cloud analytics expansion to drive real-time JSON analytics; larger addressable market through Capella starter/transition packs for SMBs and mid-market
Edge and offline-first capabilities for industrial, transportation, and manufacturing use cases expanding Capella reach
Threats
Competitive pressure from MongoDB, DataStax and cloud-native databases; macroeconomic uncertainty affecting large enterprise IT budgets; potential delays in large strategic deals and longer sales cycles; FX volatility impacting ARR and revenue optics