The News: Couchbase revenue hit $45.8 million in the third quarter (Q3) fiscal 2024, up 19% from $38.6 million year-over-year (YoY), as the cloud database platform vendor reported its latest earnings figures on December 6. The $45.8 million Q3 revenue figure beat analyst consensus estimates of $43 million from Investing.com for the period ending October 31. Read the full Q3 earnings press release on the Couchbase investors webpage.

Couchbase Revenue in Q3 Rises 19% to $45.8 Million, Beating Estimates

Analyst Take: Couchbase revenue grew by 19% in Q3, exceeding the high end of the company’s guidance for the quarter, beating analyst estimates, and providing a solid revenue boost amid still challenging macroeconomic conditions across the global economy. The company is continuing to see good traction with its Couchbase Capella databases as a service (DBaaS) platform for today’s mobile and IoT application requirements. It recently unveiled a new Capella columnar service on Amazon Web Services (AWS); this service offers a database that stores data in columns rather than in rows for improved efficiency.

Here are Couchbase’s Q3 earnings results by the numbers:

• Q3 2024 revenue of $45.8 million, up 19% from $38.6 million YoY. The Q3 revenue figure beat analyst consensus estimates of $43 million from Investing.com.
• Q3 2024 non-generally accepted accounting principles (non-GAAP) operating loss of $5 million, down 48% from $9.6 million YoY.
• Q3 2024 non-GAAP loss per share of $0.08 per share, up from a loss of $0.22 per share YoY. The per share loss beat analyst consensus estimates of an $0.18 loss per share from Investing.com.
• Q3 2024 non-GAAP gross profit of $41 million, up 21% from $34 million YoY.
• Q3 2024 non-GAAP gross margin of 89.5%, down from 88% YoY.

The trends in these figures are a positive sign for the company as Couchbase continues to see its operating losses fall, by 48% in Q3, as it continues to build momentum in the marketplace. That progress is also evidenced by Q3 total annual recurring revenue (ARR) of $188.7 million, which is up 24% YoY and up 4% sequentially.

Couchbase Capella is also showing growth with customers, with one-fifth of Couchbase customers now using Capella, according to the company. Couchbase added 24 net new customers in Q3 for the company, doubling its YoY progress and adding more new customers in Q3 than the company did in Q1 and Q2 combined. I believe that these are good signs and mark measurable progress for Couchbase.

Couchbase Revenue by Business Segment

Couchbase’s revenue is made up of database subscription revenue and services revenue. In Q3, the company generated $44 million in subscription revenue, up 23% from $36 million YoY, and services revenue of $1.8 million, down from $2.8 million YoY.

Couchbase’s flexible database platform can be used for applications from cloud to edge and everything in between and is designed to make it easier for developers to develop, deploy, and run modern applications anywhere.

Couchbase Revenue Guidance for Q4 and Full Fiscal Year 2024

As part of its Q3 FY 2024 earnings report, Couchbase also provided earnings guidance for the fourth quarter (Q4) and full fiscal year of 2024. Couchbase said it expects Q4 2024 revenue to be between $46.2 million to $46.8 million, with a non-GAAP operating loss of $8.2 million to $7.4 million. It also expects a total ARR of $198 million to $202 million for Q4.

For the full fiscal year of 2024, Couchbase expects revenue to be between $176.2 million and $176.8 million, with a non-GAAP operating loss between $35.4 million to $34.6 million. It also expects a total ARR of $198 million to $202 million for the full year.

Couchbase Revenue Overview

The healthy Q3 rise in Couchbase revenue is a positive sign for the company as its Capella database services continue to gain market share among customers, and I expect that its revenue will grow even more as its new Capella columnar capabilities are brought to market as well.

Those capabilities are particularly interesting for developers because they will allow organizations to harness real-time analytics to build adaptive applications to drive their own businesses. For users, that is exciting because it will allow real-time data analysis on the same platforms used for operational workloads, removing friction and frustrations for developers. Making it easier for customers to get their work done will be a big win, I believe.

The Capella columnar service was announced recently at AWS re:Invent 2023 and is designed to significantly enhance a customer’s ability to harness real-time analytics when building adaptive applications. At the heart of this new service is the introduction of a columnar store and data integration capability directly into Capella that further converges operational and real -time analytic workloads into a single platform.

And, of course, Couchbase is not forgetting generative AI. The new Capella columnar will also feature built-in natural language processing with Capella IQ, which is the developer copilot that was introduced by Couchbase earlier in 2023.

I am pleased to see these innovations and this progress for Couchbase. These advancements are coming under the watchful eye of Matt Cain, the chairman, president, and CEO of Couchbase, along with his executive team. Together they are showing effective leadership in a still challenging market. But Couchbase and its leadership are countering those challenges by preparing the company wisely for continuing revenue and customer growth in 2024 through smart initiatives, good feature advancements, and focus on what they can control in the coming year. These are smart moves that I believe will lead to continuing progress for the database vendor.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

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