Couchbase, Inc.

Greetings and welcome to the CouchBase third quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero and telephone keypad. It is now my pleasure to introduce your host, Edward Parker. Thank you. You may begin.

Good afternoon and welcome to CouchBase's third quarter 2025 earnings call. We will be discussing the results announced in our press release issued after the market closed today. With me are Couch Basis Chair, President and CEO, Matt Cain, and CFO, Greg Henry. Today's call will contain forward-looking statements, which include statements concerning financial and business trends and strategies, market size, product capabilities and development, our expected future business and financial performance and financial condition, and our guidance for future periods. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements by their nature address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For discussion of our material risks and other important factors that could affect our actual results, please refer to the risks assessed in today's press release and our most recent annual report on Form 10-K, or quarterly report on Form 10-Q, filed with the SEC. During the call, we will also discuss certain non-GAAP financial measures which are not prepared in accordance with generally accepted accounting principles. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as how we define these metrics and other metrics is included in our earnings press releases, which are available on our investor relations website. With that, let me turn the call over to Matt.

Thanks, Edward, and good afternoon, everyone. I'm pleased with our performance in the third quarter, highlighted by strong new customer growth, continued growth in Capella consumption and ARR mix, and continued progress on our full-year objectives, which allowed us to deliver top and bottom line results that exceeded our outlook. Annual recurring revenue, or ARR, was $220.3 million, up 17% year-over-year and 16% in constant currency. Revenue in Q3 was $51.6 million, up 13% year-over-year. Non-GAAP operating loss in the third quarter was 3.5 million. We added 34 new logos up from 24 in the third quarter of fiscal 2024. Capella now represents 15.1% of our total ARR and one-third of our customers are now using Capella. In Q3, we saw broad strength in both our core enterprise and Capella businesses. with solid performance across renewals, expansions, and new customer lands. We saw exciting customer wins across a variety of industries, including government, gaming, fintech, e-commerce, insurance, technology, communications, and travel and hospitality, reinforcing my confidence in the increasing relevance of our platform and our ability to meet the application needs across a wide range of use cases and industries. Our momentum with Capella continued in Q3, driven by both strong new logos and migrations. Notably, we had a major milestone this quarter with a multi-million dollar Capella migration, the largest in our history. We're seeing solid customer uptake and increasing consumption of Capella, which bodes well for the long-term growth and durability of our business. As I discussed last quarter, we've been making significant progress with a large set of key accounts where we are emerging as a strategic and long-term platform provider to enable a new generation of critical applications. This work continued in the quarter, and these large opportunities continue to represent a significant portion of our pipeline. The strength of our Q3 performance further underscores our confidence in our ability to close significant wins and expansions in Q4. We also demonstrated our commitment to drive leverage across the business, as evidenced by our excellent bottom line performance this quarter and throughout the year. In Q3, we improved our Rule of 40 score by 9 points year-over-year. As you all know, improving our operational rigor and efficiency has been a key priority And I am proud of the progress we've made in driving efficiency across go-to-market, R&D, and all aspects of our operations. Turning to customer wins, we saw notable wins in the quarter across a variety of industries. These include a leading global insurance company, which transitioned from community edition to couch-based server to power internal applications for its property and casualty insurance, and reinsurance businesses due to our leading price performance we also secured a global airline which is leveraging our mobile capabilities and high performance platform to power its in-flight entertainment system and enable custom content for passengers additionally we want an emerging ai powered cyber security vendor which selected Capella for its speed, ease of development, and strong search capabilities to support its real-time threat detection and remediation offerings. Further, a multinational technology company is leveraging Couchbase to support content management for a public sector agency's railway traffic planning platform because of our superior scalability and performance. Lastly, A leading online retailer chose Capella to power its mobile app, further demonstrating Capella's versatility and appeal across industries. Our existing customers continue to demonstrate a growing commitment to the Couchbase platform. A major Couchbase server expansion in Q3 was a Fortune 500 global media and technology company. This customer relies on Couchbase for several use cases, including its Customer 360 application, which helps deliver enhanced customer support across multiple lines of business. By expanding its use of Couchbase, this customer was able to further consolidate its tech stack, benefiting from our platform's flexibility and performance across multiple teams and use cases. Capella migrations and expansions were also strong in Q3. An EMEA-based airline decided to migrate to Capella due to our fully managed capabilities and enhanced features like Capella IQ to improve developer productivity. A leading online gaming company is expanding its use of Capella to power its customer personalization and content management for its cross-product promotions, where speed, scalability, and resiliency during peak times is a primary requirement. Additionally, an emerging communication software vendor is expanding its use of Capella given its low TCO in support of a variety of cloud-first initiatives. As I mentioned earlier, we saw our largest Capella migration to date with the Fortune 500 Global Hospitality Company, where we power its mission-critical central reservation system and member loyalty program. It originally selected Couchbase to replace its legacy infrastructure in order to create personalized customer experiences, improve online reliability, and release new apps faster. This multi-million dollar AR enterprise customer decided to migrate to Capella to further modernize its infrastructure and align with its cloud-first digital transformation initiative. And as a result, they are committed to tripling their spend with us. As you all know, Couchbase was architected to be the foundation for critical applications, delivering one of the world's most scalable, performant, and flexible modern data platforms. We've intentionally built our platform to combine uncompromising performance with the flexibility of deployment and usage models from cloud to on-premise and to the edge and everything in between. A key component of our flexible deployment model is our native edge capability, which empowers mobile developers to move data and compute closer to where it's being used. This not only improves the speed and resilience of mobile applications, but also eliminates dependencies on distant cloud data centers. In Q3, we saw significant traction with our mobile use case. as more customers recognize Couchbase is the only mobile database offering built from the ground up for these types of use cases. Our mobile solution makes Couchbase highly embeddable and programmable at the edge, catering to a wide range of applications across industries, such as retail, healthcare, industrial, and IOTs. We believe that our platform approach is the reason why our customers continue to demonstrate a growing commitment to the Couchbase platform. As demand for hyper-personalized, real-time AI applications accelerates, the core tenants of our value proposition are only becoming more relevant. As I've mentioned throughout the year, we are seeing an increasing number of strategic projects across our customer base where organizations are evaluating, architecting, and building the next phase of their data infrastructure to meet the needs of their AI and next generation applications. It's becoming increasingly clear that many alternative approaches and solutions are failing to meet the long-term demands of enterprises looking to scale their infrastructure for their rapidly evolving application roadmaps. As enterprises look to build the next generation of adaptive applications, The need to combine ever-growing volumes of data, whether structured, unstructured, internet-based, or proprietary enterprise data, with extremely low latency and high performance, is becoming more urgent. This is a trend that will only intensify in the coming years. Now, let me introduce you to our latest offering, Capella AI Services, which we just announced yesterday. Enterprises are facing challenges with both developing and deploying AI and with streamlining the creation of secure, agentic AI applications at scale. Our new AI services are designed to empower enterprises to address these challenges head on and include model hosting, automated vectorization, unstructured data pre-processing, and AI agent catalog services. These comprehensive services allow organizations to avoid latency issues and high operation costs, both of which are frequently encountered by application developers. By giving developers control over data throughout the development lifecycle and mitigating security and privacy issues with running LLMs outside the organization, we enable teams to bring agent-based applications into production in a safe and reliable manner. We are continuously extending our platform with new features and services, all purposely designed to empower developers in building next generation applications. As AI reshapes the landscape of software development, Couchbase equips developers with the developer data platform that integrates transactional, analytic, mobile, and AI functionality into a unified, fully managed service. Our mission is to simplify how developers and architects leverage these capabilities to create premium application experiences that push the boundaries of innovation without compromising on functionality, performance, operational costs, or connectivity. Before turning the call over to Greg, I want to take a moment to highlight the incredible momentum we've been seeing on the product front. Over the past quarter, I've had the privilege of spending significant time with our engineering leadership, and I can confidently say that the energy and excitement within the team are palpable. They're deeply inspired by what we're building and the significant impact it will have on our business. Our product teams are moving faster than ever, and the passion and commitment across the organization are truly remarkable. Looking ahead, I'm incredibly excited about the key initiatives we have in the pipeline, and I look forward to sharing more with you in the quarters to come. In conclusion, I'm pleased with the operational progress that we made across the company in the third quarter. We delivered strong top and bottom line results, made progress on our strategic priorities, delivered strong new customer growth, meaningfully increased our Capella mix, and continue to drive efficiency across our model. At the same time, we continue to make rapid progress with a number of high priority accounts where we are emerging as a strategic and long-term platform provider. Our customers and prospects are focused on building the next generation of adaptive applications while addressing the growing data challenges of an increasingly AI powered world. This opportunity set adds to my confidence in delivering a strong Q4 and our ability to drive substantial wins and expansion for years to come. And finally, we continue to drive innovation into our leading platform, positioning us even further as a long-term strategic partner for enterprises and their most critical applications in our AI world. As always, we will attack hard problems driven by customer outcomes. With that, I'll now hand the call over to Greg to walk you through our results in more detail. Greg?