Couchbase (NASDAQ:BASE) Q3 Sales Beat Estimates, Provides Optimistic Full-Year Guidance

Petr Huřťák /
2023/12/06 4:20 pm EST

Database as a service company Couchbase (NASDAQ: BASE) reported Q3 FY2024 results topping analysts' expectations, with revenue up 18.8% year on year to $45.81 million. The company expects next quarter's revenue to be around $46.5 million, in line with analysts' estimates. It made a GAAP loss of $0.34 per share, improving from its loss of $0.37 per share in the same quarter last year.

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Couchbase (BASE) Q3 FY2024 Highlights:

  • Revenue: $45.81 million vs analyst estimates of $43.02 million (6.5% beat)
  • ARR: $188.7 million vs analyst estimates of $186.7 million (1.1% beat)
  • EPS (non-GAAP): -$0.08 vs analyst estimates of -$0.18
  • Revenue Guidance for Q4 2024 is $46.5 million at the midpoint, roughly in line with what analysts were expecting (ARR guidance was ahead)
  • Free Cash Flow was -$13.81 million compared to -$1.59 million in the previous quarter
  • Gross Margin (GAAP): 88.8%, up from 87.4% in the same quarter last year

Formed in 2011 with the merger of Membase and CouchOne, Couchbase (NASDAQ:BASE) is a database-as-a-service platform that allows enterprises to store large volumes of semi-structured data.

Data Storage

Data is the lifeblood of the internet and software in general, and the amount of data created is accelerating. As a result, the importance of storing the data in scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand from analyzing simple, structured datasets to high-scale processing of unstructured data such as images, audio, and video.

Sales Growth

As you can see below, Couchbase's revenue growth has been strong over the last two years, growing from $30.82 million in Q3 FY2022 to $45.81 million this quarter.

Couchbase Total Revenue

This quarter, Couchbase's quarterly revenue was once again up 18.8% year on year. We can see that Couchbase's revenue increased by $2.67 million quarter on quarter, which is a solid improvement from the $2.14 million increase in Q2 2024. Shareholders should applaud the re-acceleration of growth.

Next quarter, Couchbase is guiding for a 10.5% year-on-year revenue decline to $46.5 million, a further deceleration from the 18.7% year-on-year decrease it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 12.9% over the next 12 months before the earnings results announcement.

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Cash Is King

If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Couchbase burned through $13.81 million of cash in Q3 , increasing its cash burn by 15.5% year on year.

Couchbase Free Cash Flow

Couchbase has burned through $35.62 million of cash over the last 12 months, resulting in a negative 20.7% free cash flow margin. This low FCF margin stems from Couchbase's poor unit economics or a constant need to reinvest in its business to stay competitive.

Key Takeaways from Couchbase's Q3 Results

Although Couchbase, which has a market capitalization of $962.7 million, has been burning cash over the last 12 months, its more than $156.6 million in cash on hand gives it the flexibility to continue prioritizing growth over profitability.

We enjoyed seeing Couchbase exceed analysts' ARR (annual recurring revenue), revenue, and non-GAAP EPS expectations this quarter. We were also glad that the company guided ARR ahead for next quarter and raised full year guidance for ARR and revenue. Overall, we think this was a really good quarter that should please shareholders. The stock is flat after reporting and currently trades at $19.93 per share.

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