Pure Storage and Couchbase Report Strong Q3 Results, Highlight AI Innovations

Pure Storage Announces Third Quarter Fiscal 2025 Financial Results - Pure Storage (NYSE:PSTG)

Awarded industry-first design win from a top-four hyperscaler SANTA CLARA, Calif., Dec. 3, 2024 /PRNewswire/ -- Today Pure Storage PSTG, the IT pioneer that delivers the world's most advanced data storage technologies and services, announced financial results for its third quarter fiscal year 2025 ended November 3, 2024. "Pure Storage has achieved another industry first in our journey of data storage innovation with a transformational design win for our DirectFlash technology in a top-four hyperscaler," said Pure Storage Chairman and CEO Charles Giancarlo. "This win is the vanguard for Pure Flash technology to become the standard for all hyperscaler online storage, providing unparalleled performance and scalability while also reducing operating costs and power consumption." Third Quarter Financial Highlights Revenue $831.1 million, an increase of 9% year-over-yearSubscription services revenue $376.4 million, up 22% year-over-yearSubscription annual recurring revenue (ARR) $1.6 billion, up 22% year-over-yearRemaining performance obligations (RPO) $2.4 billion, up 16% year-over-yearGAAP gross margin 70.1%; non-GAAP gross margin 71.9%GAAP operating income $59.7 million; non-GAAP operating income $167.3 millionGAAP operating margin 7.2%; non-GAAP operating margin 20.1%Q3 operating cash flow $97.0 million; free cash flow $35.2 millionTotal cash, cash equivalents, and marketable securities $1.6 billionReturned approximately $182 million in the third quarter to stockholders through share repurchases of 3.6 million shares "Our third quarter results exceeded our expectations on revenue and operating income, demonstrating the sustaining strength of our business models," said Kevan Krysler, Pure Storage CFO. "We remain focused on driving both near-term results and long-term value creation through disciplined investments and innovation that position Pure as the leader in transforming the data storage landscape." Third Quarter Company Highlights Leading the Hyperscale Opportunity: With its industry-first design win with a top-four hyperscaler, Pure Storage is extending its DirectFlash® technology into massive scale environments today dominated by hard disks. The unmatched capabilities of Pure's DirectFlash® technology deliver new levels of innovation, performance, and scalability to an industry with demanding requirements, enabling hyperscalers to fully modernize their infrastructure, significantly improve operational efficiency, and dramatically free up scarce electrical power. Pure Storage also deepened its collaboration with Kioxia, a global leader of NAND Flash technology, to develop cutting-edge technology and manufacturing capacity to address the growing need for high-performance, scalable storage infrastructure for tomorrow's hyperscale environments. Advancing Enterprise AI: Pure Storage expanded its ability to serve the world's largest AI training environments with recent certification of FlashBlade//S500 with NVIDIA DGX SuperPOD, which optimizes performance, power, and space efficiency. Pure also entered into a strategic partnership with CoreWeave to better serve AI customers by making Pure Storage available as a standard option within the CoreWeave dedicated cloud environment. With its introduction of the new Pure Storage GenAI Pod, Pure Storage is providing a set of full-stack solutions which reduce the time, cost, and expertise required to deploy generative AI projects. Delivering Platform Innovation: With the Pure Storage platform, Pure is driving the biggest shift in enterprise storage since Flash. Pure Storage will be delivering v2.0 of Pure Fusion™ in its fourth quarter, which will enable customers to create their own enterprise data cloud, opening their data storage environment like the hyperscalers operate theirs. During the quarter Pure Storage unveiled solutions enabling seamless VMware migrations to Microsoft Azure, delivering enterprise-scale flexibility. And the new Pure Storage FlashArray™ with AWS Outposts brings together Amazon Web Services and Pure's enterprise-grade storage on AWS Outposts, giving customers the flexibility to run cloud services on an enterprise-grade storage platform within their own data centers. Industry Recognition and Accolades Leader for Fifth Consecutive Year in the 2024 Gartner® Magic Quadrant™ for Primary Storage PlatformsLeader for Fourth Consecutive Year in the 2024 Gartner® Magic Quadrant™ for File and Object Storage PlatformsForbes Most Trusted Companies in America 2025 (Ranked #144)Fortune Best Places to Work in Technology 2024 (Ranked #14) Fourth Quarter and FY25 Guidance Q4FY25 Revenue $867M Revenue YoY Growth Rate 9.7 % Non-GAAP Operating Income $135M Non-GAAP Operating Margin 15.6 % FY25 Revenue $3.15B Revenue YoY Growth Rate 11.5 % Non-GAAP Operating Income $540M Non-GAAP Operating Margin 17 % These statements are forward-looking and actual results may differ materially. Refer to the Forward Looking Statements section below for information on the factors that could cause our actual results to differ materially from these statements. Pure has not reconciled its guidance for non-GAAP operating income and non-GAAP operating margin to their most directly comparable GAAP measures because certain items that impact these measures are not within Pure's control and/or cannot be reasonably predicted. Accordingly, reconciliations of these non-GAAP financial measures guidance to the corresponding GAAP measures are not available without unreasonable effort. Conference Call Information Pure will host a teleconference to discuss the third quarter fiscal 2025 results at 2:00 pm PT today, December 3, 2024. A live audio broadcast of the conference call will be available on the Pure Storage Investor Relations website. Pure will also post its earnings presentation and prepared remarks to this website concurrent with this release. A replay will be available following the call on the Pure Storage Investor Relations website or for two weeks at 1-800-770-2030 (or 1-647-362-9199 for international callers) with passcode 5667482. Additionally, Pure is scheduled to participate at the following investor conferences: Wells Fargo 8th Annual TMT Summit Date: Wednesday, December 4, 2024 Time: 1:30 p.m. PT / 4:30 p.m. ET Chief Technology Officer Rob Lee 27th Annual Needham Growth Conference Date: Thursday, January 16, 2025 Time: 9:45 a.m. PT / 12:45 p.m. ET Founder & Chief Visionary Officer John "Coz" Colgrove Chief Financial Officer Kevan Krysler The presentations will be webcast live and archived on Pure's Investor Relations website at investor.purestorage.com. ---- About Pure Storage Pure Storage PSTG delivers the industry's most advanced data storage platform to store, manage, and protect the world's data at any scale. With Pure Storage, organizations have ultimate simplicity and flexibility, saving time, money, and energy. From AI to archive, Pure Storage delivers a cloud experience with one unified Storage as-a-Service platform across on premises, cloud, and hosted environments. Our platform is built on our Evergreen architecture that evolves with your business - always getting newer and better with zero planned downtime, guaranteed. Our customers are actively increasing their capacity and processing power while significantly reducing their carbon and energy footprint. It's easy to fall in love with Pure Storage, as evidenced by the highest Net Promoter Score in the industry. For more information, visit www.purestorage.com. Connect with Pure Blog LinkedIn Twitter Facebook Pure Storage, the Pure P Logo, Portworx, and the marks on the Pure Storage Trademark List are trademarks or registered trademarks of Pure Storage Inc. in the U.S. and/or other countries. The Trademark List can be found at purestorage.com/trademarks. Other names may be trademarks of their respective owners. Forward Looking Statements This press release contains forward-looking statements regarding our products, business and operations, including but not limited to our views relating to our opportunity with hyperscale and AI environments, our ability to meet hyperscalers' performance and price requirements, our ability to meet the needs of hyperscalers for the entire spectrum of their online storage use cases, the timing and magnitude of large orders, including sales to hyperscalers, the timing and amount of revenue from hyperscaler licensing and support services, future period financial and business results, demand for our products and subscription services, including Evergreen//One, the relative sales mix between our subscription and consumption offerings and traditional capital expenditure sales, our technology and product strategy, specifically customer priorities around sustainability, the environmental and energy saving benefits to our customers of using our products, our ability to perform during current macro conditions and expand market share, our sustainability goals and benefits, the impact of inflation, economic or supply chain disruptions, our expectations regarding our product and technology differentiation, new customer acquisition, and other statements regarding our products, business, operations and results. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings and reports with the U.S. Securities and Exchange Commission, which are available on our Investor Relations website at investor.purestorage.com and on the SEC website at www.sec.gov. Additional information is also set forth in our Annual Report on Form 10-K for the year ended February 4, 2024. All information provided in this release and in the attachments is as of December 3, 2024, and Pure undertakes no duty to update this information unless required by law. Key Performance Metric Subscription ARR is a key business metric that refers to total annualized contract value of all active subscription agreements on the last day of the quarter, plus on-demand revenue for the quarter multiplied by four. Non-GAAP Financial Measures To supplement our unaudited condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, Pure uses the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, and free cash flow. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses such as stock-based compensation expense, payments to former shareholders of acquired companies, payroll tax expense related to stock-based activities, amortization of debt issuance costs related to debt, and amortization of intangible assets acquired from acquisitions that may not be indicative of our ongoing core business operating results. Pure believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies. For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures" and "Reconciliation from net cash provided by operating activities to free cash flow," included at the end of this release. PURE STORAGE, INC. Condensed Consolidated Balance Sheets (in thousands, unaudited) At the End of Third Quarter of Fiscal 2025 Fiscal 2024 Assets Current assets: Cash and cash equivalents $ 894,569 $ 702,536 Marketable securities 753,960 828,557 Accounts receivable, net of allowance of $956 and $1,060 578,224 662,179 Inventory 41,571 42,663 Deferred commissions, current 86,839 88,712 Prepaid expenses and other current assets 204,485 173,407 Total current assets 2,559,648 2,498,054 Property and equipment, net 431,353 352,604 Operating lease right-of-use-assets 157,574 129,942 Deferred commissions, non-current 210,671 215,620 Intangible assets, net 23,039 33,012 Goodwill 361,427 361,427 Restricted cash 11,249 9,595 Other assets, non-current 99,504 55,506 Total assets $ 3,854,465 $ 3,655,760 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 102,021 $ 82,757 Accrued compensation and benefits 155,652 250,257 Accrued expenses and other liabilities 141,846 135,755 Operating lease liabilities, current 47,941 44,668 Deferred revenue, current 897,174 852,247 Debt, current 100,000 -- Total current liabilities 1,444,634 1,365,684 Long-term debt -- 100,000 Operating lease liabilities, non-current 146,390 123,201 Deferred revenue, non-current 784,282 742,275 Other liabilities, non-current 68,573 54,506 Total liabilities 2,443,879 2,385,666 Stockholders' equity: Common stock and additional paid-in capital 2,821,010 2,749,627 Accumulated other comprehensive income (loss) 1,023 (3,782) Accumulated deficit (1,411,447) (1,475,751) Total stockholders' equity 1,410,586 1,270,094 Total liabilities and stockholders' equity $ 3,854,465 $ 3,655,760 PURE STORAGE, INC. Condensed Consolidated Statements of Operations (in thousands, except per share data, unaudited) Third Quarter of Fiscal First Three Quarters of Fiscal 2025 2024 2025 2024 Revenue: Product $ 454,735 $ 453,277 $ 1,204,714 $ 1,161,978 Subscription services 376,337 309,561 1,083,608 878,838 Total revenue 831,072 762,838 2,288,322 2,040,816 Cost of revenue: Product (1) 154,970 126,770 385,446 343,588 Subscription services (1) 93,180 83,321 284,168 244,541 Total cost of revenue 248,150 210,091 669,614 588,129 Gross profit 582,922 552,747 1,618,708 1,452,687 Operating expenses: Research and development (1) 200,086 182,100 589,396 549,923 Sales and marketing (1) 255,830 231,707 757,069 696,885 General and administrative (1) 67,319 64,729 213,551 192,944 Restructuring and impairment (2) -- -- 15,901 16,766 Total operating expenses 523,235 478,536 1,575,917 1,456,518 Income (loss) from operations 59,687 74,211 42,791 (3,831) Other income (expense), net 17,156 5,184 50,684 23,619 Income before provision for income taxes 76,843 79,395 93,475 19,788 Income tax provision 13,204 9,006 29,171 23,915 Net income (loss) $ 63,639 $ 70,389 $ 64,304 $ (4,127) Net income (loss) per share attributable to common stockholders, basic $ 0.19 $ 0.22 $ 0.20 $ (0.01) Net income (loss) per share attributable to common stockholders, diluted $ 0.19 $ 0.21 $ 0.19 $ (0.01) Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic 327,675 314,153 325,530 309,842 Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted 340,564 330,255 341,490 309,842 (1) Includes stock-based compensation expense as follows: Cost of revenue -- product $ 3,216 $ 1,443 $ 9,443 $ 7,056 Cost of revenue -- subscription services 7,800 6,849 24,632 19,347 Research and development 49,227 43,908 150,390 126,225 Sales and marketing 24,393 19,209 72,330 55,883 General and administrative 16,436 16,557 62,161 46,732 Total stock-based compensation expense $ 101,072 $ 87,966 $ 318,956 $ 255,243 (2) Includes expenses for severance and termination benefits related to workforce realignment and lease impairment and abandonment charges associated with cease-use of our former corporate headquarters. PURE STORAGE, INC. Condensed Consolidated Statements of Cash Flows (in thousands, unaudited) Third Quarter of Fiscal First Three Quarters of Fiscal 2025 2024 2025 2024 Cash flows from operating activities Net income (loss) $ 63,639 $ 70,389 $ 64,304 $ (4,127) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 29,272 31,647 99,099 91,560 Stock-based compensation expense 101,072 87,966 318,956 255,243 Noncash portion of lease impairment and abandonment -- -- 3,270 16,766 Other 2,381 (2,815) 5,107 (5,844) Changes in operating assets and liabilities: Accounts receivable, net (161,723) (111,190) 83,998 (23,959) Inventory 5,071 818 (1,590) 5,278 Deferred commissions 669 (9,501) 6,822 (19,061) Prepaid expenses and other assets (40,008) 20,044 (67,014) 19,686 Operating lease right-of-use assets 9,383 7,634 25,911 27,269 Accounts payable 33,755 7,533 20,597 33,844 Accrued compensation and other liabilities 7,781 4,767 (70,951) (52,757) Operating lease liabilities (12,096) (8,324) (30,353) (21,457) Deferred revenue 57,797 59,464 86,934 110,856 Net cash provided by operating activities 96,993 158,432 545,090 433,297 Cash flows from investing activities Purchases of property and equipment (1) (61,788) (45,062) (170,641) (151,591) Purchases of marketable securities and other (43,632) (105,108) (314,083) (351,725) Sales of marketable securities 12,817 3,747 61,241 52,495 Maturities of marketable securities 131,994 109,196 329,978 495,899 Net cash provided by (used in) investing activities 39,391 (37,227) (93,505) 45,078 Cash flows from financing activities Proceeds from exercise of stock options 3,426 3,056 21,194 32,904 Proceeds from issuance of common stock under employee stock purchase plan 26,408 23,870 51,736 45,089 Proceeds from borrowings -- 6,890 -- 106,890 Principal payments on borrowings and finance lease obligations (1,786) (7,515) (5,721) (584,582) Tax withholding on vesting of equity awards (54,905) (4,755) (141,591) (16,582) Repurchases of common stock (181,999) (22,460) (181,999) (114,341) Net cash used in financing activities (208,856) (914) (256,381) (530,622) Net increase (decrease) in cash, cash equivalents and restricted cash (72,472) 120,291 195,204 (52,247) Cash, cash equivalents and restricted cash, beginning of period 979,807 418,860 712,131 591,398 Cash, cash equivalents and restricted cash, end of period $ 907,335 $ 539,151 $ 907,335 $ 539,151 (1) Includes capitalized internal-use software costs of $6.0 million and $5.1 million for the third quarter of fiscal 2025 and 2024 and $15.8 million and $15.7 million for the first three quarters of fiscal 2025 and 2024. Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures The following table presents non-GAAP gross margins by revenue source before certain items (in thousands except percentages, unaudited): Third Quarter of Fiscal 2025 Third Quarter of Fiscal 2024 GAAP results GAAP gross margin (a) Adjustment Non- GAAP results Non- GAAP gross margin (b) GAAP results GAAP gross margin (a) Adjustment Non- GAAP results Non- GAAP gross margin (b) $ 3,216 (c) $ 1,443 (c) 103 (d) 75 (d) 3,306 (e) 3,306 (e) Gross profit -- product $ 299,765 65.9 % $ 6,625 $ 306,390 67.4 % $ 326,507 72.0 % $ 4,824 $ 331,331 73.1 % $ 7,800 (c) $ 6,849 (c) 368 (d) 329 (d) Gross profit -- subscription services $ 283,157 75.2 % $ 8,168 $ 291,325 77.4 % $ 226,240 73.1 % $ 7,178 $ 233,418 75.4 % $ 11,016 (c) $ 8,292 (c) 471 (d) 404 (d) 3,306 (e) 3,306 (e) Total gross profit $ 582,922 70.1 % $ 14,793 $ 597,715 71.9 % $ 552,747 72.5 % $ 12,002 $ 564,749 74.0 % (a) GAAP gross margin is defined as GAAP gross profit divided by revenue. (b) Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue. (c) To eliminate stock-based compensation expense. (d) To eliminate payroll tax expense related to stock-based activities. (e) To eliminate amortization expense of acquired intangible assets. The following table presents certain non-GAAP consolidated results before certain items (in thousands, except per share amounts and percentages, unaudited): Third Quarter of Fiscal 2025 Third Quarter of Fiscal 2024 GAAP results GAAP operating margin (a) Adjustment Non- GAAP results Non- GAAP operating margin (b) GAAP results GAAP operating margin (a) Adjustment Non- GAAP results Non- GAAP operating margin (b) $ 101,072 (c) $ 87,966 (c) -- 580 (d) 2,991 (e) 2,604 (e) 3,536 (f) 3,718 (f) Operating income $ 59,687 7.2 % $ 107,599 $ 167,286 20.1 % $ 74,211 9.7 % $ 94,868 $ 169,079 22.2 % $ 101,072 (c) $ 87,966 (c) -- 580 (d) 2,991 (e) 2,604 (e) 3,536 (f) 3,718 (f) 154 (g) 153 (g) Net income $ 63,639 $ 107,753 $ 171,392 $ 70,389 $ 95,021 $ 165,410 Net income per share -- diluted $ 0.19 $ 0.50 $ 0.21 $ 0.50 Weighted-average shares used in per share calculation -- diluted 340,564 -- 340,564 330,255 -- 330,255 (a) GAAP operating margin is defined as GAAP operating income divided by revenue. (b) Non-GAAP operating margin is defined as non-GAAP operating income divided by revenue. (c) To eliminate stock-based compensation expense. (d) To eliminate payments to former shareholders of acquired company. (e) To eliminate payroll tax expense related to stock-based activities. (f) To eliminate amortization expense of acquired intangible assets. (g) To eliminate amortization expense of debt issuance costs related to our debt. Reconciliation from net cash provided by operating activities to free cash flow (in thousands except percentages, unaudited): Third Quarter of Fiscal 2025 2024 Net cash provided by operating activities $ 96,993 $ 158,432 Less: purchases of property and equipment (1) (61,788) (45,062) Free cash flow (non-GAAP) $ 35,205 $ 113,370 (1) Includes capitalized internal-use software costs of $6.0 million and $5.1 million for the third quarter of fiscal 2025 and 2024. View original content to download multimedia:https://www.prnewswire.com/news-releases/pure-storage-announces-third-quarter-fiscal-2025-financial-results-302321516.html SOURCE Pure Storage PSTGPure Storage Inc $66.2524.9% Overview Rating: Speculative 37.5% Technicals Analysis 66 0100 Financials Analysis 20 0100 Watchlist Overview Market News and Data brought to you by Benzinga APIs

Couchbase Announces Third Quarter Fiscal 2025 Financial Results - Couchbase (NASDAQ:BASE)

SANTA CLARA, Calif., Dec. 3, 2024 /PRNewswire/ -- Couchbase, Inc. BASE, the developer data platform for critical applications in our AI world, today announced financial results for its third quarter ended October 31, 2024. "I'm pleased with the continued operational progress of the entire Couchbase team," said Matt Cain, Chair, President and CEO of Couchbase. "We delivered top- and bottom-line results that exceeded our outlook, and we achieved another significant milestone with Capella, which now represents 15.1% of our ARR and one third of our customer base. I remain highly confident in our outlook and ability to achieve our objectives in fiscal 2025." Third Quarter Fiscal 2025 Financial Highlights Revenue: Total revenue for the quarter was $51.6 million, an increase of 13% year-over-year. Subscription revenue for the quarter was $49.3 million, an increase of 12% year-over-year.Annual recurring revenue (ARR): Total ARR as of October 31, 2024 was $220.3 million, an increase of 17% year-over-year, or 16% on a constant currency basis. See the section titled "Key Business Metrics" below for details.Gross margin: Gross margin for the quarter was 87.3%, compared to 88.8% for the third quarter of fiscal 2024. Non-GAAP gross margin for the quarter was 88.2%, compared to 89.5% for the third quarter of fiscal 2024. See the section titled "Use of Non-GAAP Financial Measures" and the tables titled "Reconciliation of GAAP to Non-GAAP Results" below for details.Loss from operations: Loss from operations for the quarter was $19.2 million, compared to $17.5 million for the third quarter of fiscal 2024. Non-GAAP operating loss for the quarter was $3.5 million, compared to $5.0 million for the third quarter of fiscal 2024.Cash flow: Cash flow used in operating activities for the quarter was $16.9 million, compared to cash flow used in operating activities of $12.7 million in the third quarter of fiscal 2024. Capital expenditures were $0.6 million during the quarter, leading to negative free cash flow of $17.5 million, compared to negative free cash flow of $13.8 million in the third quarter of fiscal 2024.Remaining performance obligations (RPO): RPO as of October 31, 2024 was $211.3 million, an increase of 29% year-over-year. Recent Business Highlights Announced Capella AI Services to provide the critical capabilities and tools required for our customers to streamline the development of agentic AI applications. The new AI Services include model hosting, automated vectorization, unstructured data preprocessing and AI agent catalog services, allowing organizations to prototype, build, test and deploy AI agents while keeping models and data close together on one unified platform. Couchbase's innovation and newest features with AI Services are on display at AWS re:Invent this week.Continued to advance the Couchbase platform with three major releases: Capella Columnar which converges operational and real-time analytics; Mobile with vector search which makes it possible for businesses to offer similarity and hybrid search in their applications on mobile and at the edge; and Capella Free Tier, a workspace which empowers developers to work faster.Expanded Couchbase's AI partner ecosystem through new and recently introduced integrations with industry leaders including Amazon Bedrock, Azure OpenAI, Google Vertex AI, Haystack, LangChain, LlamaIndex, NVIDIA NIM/NeMo, Unstructured.io, Vectorize and others. These integrations help empower our customers to more easily develop enterprise-class, RAG-based solutions and meet their specific deployment needs.Recognized innovative Couchbase customer achievements through the 2024 Customer Impact Awards, demonstrating how leading companies are leveraging Couchbase's technology to transform their operations. For one of the award recipients - a leading software and technology company that powers the global travel industry serving a wide range of travel companies including airlines, hoteliers, travel agencies and other suppliers - Couchbase will enable a distributed, always-on transactional system. Couchbase handles hundreds of thousands of read transactions and more than 1,000 updates per second for this customer. Financial Outlook For the fourth quarter and full year of fiscal 2025, Couchbase expects: Q4 FY2025 Outlook FY2025 Outlook Total Revenue $52.7-53.5 million $207.2-208.0 million Total ARR $236.5-239.5 million $236.5-239.5 million Non-GAAP Operating Loss $5.7-4.7 million $20.0-19.0 million The guidance provided above is based on several assumptions that are subject to change and many of which are outside our control. If actual results vary from these assumptions, our expectations may change. There can be no assurance that we will achieve these results. Couchbase is not able, at this time, to provide GAAP targets for operating loss for the fourth quarter or full year of fiscal 2025 because of the difficulty of estimating certain items excluded from non-GAAP operating loss that cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant. Conference Call Information Couchbase will host a live webcast at 1:30 p.m. Pacific Time (or 4:30 p.m. Eastern Time) on Tuesday, December 3, 2024, to discuss its financial results and business highlights. The conference call can be accessed by dialing 877-407-8029 from the United States, or +1 201-689-8029 from international locations. The live webcast and a webcast replay can be accessed from the investor relations page of Couchbase's website at investors.couchbase.com. About Couchbase As industries race to embrace AI, traditional database solutions fall short of rising demands for versatility, performance and affordability. Couchbase is seizing the opportunity to lead with Capella, the developer data platform for critical applications in our AI world. By uniting transactional, analytical, mobile and AI workloads into a seamless, fully-managed solution, Couchbase empowers developers and enterprises to build and scale applications with complete flexibility - delivering exceptional performance, scalability and cost-efficiency from cloud to edge and everything in between. Trusted by over 30% of the Fortune 100, Couchbase enables organizations to unlock innovation, accelerate AI transformation and redefine customer experiences wherever they happen. Discover why Couchbase is the foundation of critical everyday applications by visiting www.couchbase.com and following us on LinkedIn and X. Couchbase has used, and intends to continue using, its investor relations website and the corporate blog at blog.couchbase.com to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website and the corporate blog in addition to following our press releases, SEC filings and public conference calls and webcasts. Use of Non-GAAP Financial Measures In addition to our financial information presented in accordance with GAAP, we believe certain non-GAAP financial measures are useful to investors in evaluating our operating performance. We use certain non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, may be helpful to investors because they provide consistency and comparability with past financial performance and meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. Non-GAAP financial measures are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP financial measures used by other companies. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures (provided in the financial statement tables included in this press release), and not to rely on any single financial measure to evaluate our business. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss and non-GAAP net loss per share: We define these non-GAAP financial measures as their respective GAAP measures, excluding expenses related to stock-based compensation expense, employer payroll taxes on employee stock transactions, restructuring charges and impairment of capitalized internal-use software. We use these non-GAAP financial measures in conjunction with GAAP measures to assess our performance, including in the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. For the fourth quarter of fiscal 2024, we excluded the impairment of capitalized internal-use software, a non-cash operating expense, from our non-GAAP results as it is not reflective of ongoing operating results. This impairment charge related to certain previously capitalized internal-use software that we determined would no longer be placed into service. Prior period non-GAAP financial measures have not been adjusted to reflect this change as we did not incur impairment of capitalized internal-use software in any prior period presented. Free cash flow: We define free cash flow as cash used in operating activities less additions to property and equipment, which includes capitalized internal-use software costs. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors and investors with information about our future ability to generate or use cash to enhance the strength of our balance sheet and further invest in our business and pursue potential strategic initiatives. Please see the reconciliation tables at the end of this press release for the reconciliation of GAAP and non-GAAP results. Key Business Metrics We review a number of operating and financial metrics, including ARR, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. We define ARR as of a given date as the annualized recurring revenue that we would contractually receive from our customers in the month ending 12 months following such date. Based on historical experience with customers, we assume all contracts will be renewed at the same levels unless we receive notification of non-renewal and are no longer in negotiations prior to the measurement date. For Capella products, ARR in a customer's initial year is calculated as the greater of: (i) initial year contract revenue as described above or (ii) annualized prior 90 days of actual consumption; and ARR for subsequent years is calculated with method (ii). ARR excludes services revenue. Prior to fiscal 2025, ARR excluded on-demand revenue and, for Capella products in a customer's initial year, ARR was calculated solely on the basis of initial year contract revenue. The reason for these changes is to better reflect ARR where usage rates or timing of purchases may be uneven and to better align with how ARR is used to measure the performance of the business. ARR for prior periods has not been adjusted to reflect this change as it is not material to any period previously presented. ARR should be viewed independently of revenue, and does not represent our revenue under GAAP on an annualized basis, as it is an operating metric that can be impacted by contract start and end dates and renewal dates. ARR is not intended to be a replacement for forecasts of revenue. Although we seek to increase ARR as part of our strategy of targeting large enterprise customers, this metric may fluctuate from period to period based on our ability to acquire new customers, expand within our existing customers and consumption dynamics. We believe that ARR is an important indicator of the growth and performance of our business. We also attempt to represent the changes in the underlying business operations by eliminating fluctuations caused by changes in foreign currency exchange rates within the current period. We calculate constant currency growth rates by applying the applicable prior period exchange rates to current period results. Forward-Looking Statements This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include, but are not limited to, quotations of management, the section titled "Financial Outlook" above and statements about the expected client demand for and benefits of our offerings, the impact of our recently-released and planned products and services and our market position, strategies and potential market opportunities. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as "anticipate," "expect," "intend," "plan," "believe," "continue," "could," "potential," "remain," "may," "might," "will," "would" or similar expressions and the negatives of those terms. However, not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties and other factors, including factors beyond our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to: our history of net losses and ability to achieve or maintain profitability in the future; our ability to continue to grow on pace with historical rates; our ability to manage our growth effectively; intense competition and our ability to compete effectively; cost-effectively acquiring new customers or obtaining renewals, upgrades or expansions from our existing customers; the market for our products and services being highly competitive and evolving, and our future success depending on the growth and expansion of this market; our ability to innovate in response to changing customer needs, new technologies or other market requirements, including new capabilities, programs and partnerships and their impact on our customers and our business; our limited operating history, which makes it difficult to predict our future results of operations; the significant fluctuation of our future results of operations and ability to meet the expectations of analysts or investors; our significant reliance on revenue from subscriptions, which may decline and, the recognition of a significant portion of revenue from subscriptions over the term of the relevant subscription period, which means downturns or upturns in sales are not immediately reflected in full in our results of operations; and the impact of geopolitical and macroeconomic factors. Further information on risks that could cause actual results to differ materially from forecasted results are included in our filings with the Securities and Exchange Commission that we may file from time to time, including those more fully described in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended October 31, 2024 that will be filed with the Securities and Exchange Commission, which should be read in conjunction with this press release and the financial results included herein. Any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements. Couchbase, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Revenue: License $ 4,343 $ 4,577 $ 16,444 $ 14,318 Support and other 44,955 39,420 131,185 109,175 Total subscription revenue 49,298 43,997 147,629 123,493 Services 2,330 1,816 6,915 6,455 Total revenue 51,628 45,813 154,544 129,948 Cost of revenue: Subscription(1) 4,866 3,549 13,278 11,067 Services(1) 1,690 1,562 5,423 5,875 Total cost of revenue 6,556 5,111 18,701 16,942 Gross profit 45,072 40,702 135,843 113,006 Operating expenses: Research and development(1) 17,486 15,903 52,703 47,578 Sales and marketing(1) 34,196 31,602 108,119 96,503 General and administrative(1) 12,624 10,739 37,843 30,823 Restructuring(1) -- -- -- 46 Total operating expenses 64,306 58,244 198,665 174,950 Loss from operations (19,234) (17,542) (62,822) (61,944) Interest expense (17) -- (46) (43) Other income, net 1,790 1,298 5,062 3,986 Loss before income taxes (17,461) (16,244) (57,806) (58,001) Provision for income taxes 691 11 1,236 780 Net loss $ (18,152) $ (16,255) $ (59,042) $ (58,781) Net loss per share, basic and diluted $ (0.35) $ (0.34) $ (1.16) $ (1.26) Weighted-average shares used in computing net loss per share, basic and diluted 51,831 47,586 50,821 46,724 (1) Includes stock-based compensation expense as follows: Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Cost of revenue -- subscription $ 318 $ 130 $ 885 $ 559 Cost of revenue -- services 104 119 354 413 Research and development 4,497 3,116 12,704 9,498 Sales and marketing 5,242 4,188 16,627 11,461 General and administrative 5,127 4,202 15,501 11,216 Restructuring -- -- -- 1 Total stock-based compensation expense $ 15,288 $ 11,755 $ 46,071 $ 33,148 Couchbase, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited) As of October 31, 2024 As of January 31, 2024 Assets Current assets Cash and cash equivalents $ 33,031 $ 41,351 Short-term investments 108,908 112,281 Accounts receivable, net 28,514 44,848 Deferred commissions 13,297 15,421 Prepaid expenses and other current assets 10,551 10,385 Total current assets 194,301 224,286 Property and equipment, net 7,000 5,327 Operating lease right-of-use assets 5,497 4,848 Deferred commissions, noncurrent 14,485 11,400 Other assets 1,176 1,891 Total assets $ 222,459 $ 247,752 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 4,724 $ 4,865 Accrued compensation and benefits 12,323 18,116 Other accrued expenses 3,981 4,581 Operating lease liabilities 2,150 3,208 Deferred revenue 67,996 81,736 Total current liabilities 91,174 112,506 Operating lease liabilities, noncurrent 3,678 2,078 Deferred revenue, noncurrent 829 2,747 Total liabilities 95,681 117,331 Stockholders' equity Preferred stock -- -- Common stock -- -- Additional paid-in capital 676,360 621,024 Accumulated other comprehensive income 119 56 Accumulated deficit (549,701) (490,659) Total stockholders' equity 126,778 130,421 Total liabilities and stockholders' equity $ 222,459 $ 247,752 Couchbase, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Cash flows from operating activities Net loss $ (18,152) $ (16,255) $ (59,042) $ (58,781) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 757 399 1,520 2,034 Stock-based compensation, net of amounts capitalized 15,288 11,755 46,071 33,148 Amortization of deferred commissions 4,375 4,500 12,655 13,742 Non-cash lease expense 863 765 2,393 2,313 Foreign currency transaction losses (gains) (60) 484 231 649 Other (456) (804) (1,869) (2,580) Changes in operating assets and liabilities Accounts receivable 2,912 1,577 16,207 9,114 Deferred commissions (5,367) (4,746) (13,616) (13,892) Prepaid expenses and other assets (606) 955 (163) 837 Accounts payable (295) (10) (149) 1,735 Accrued compensation and benefits (1,799) (1,763) (5,790) (3,517) Other Accrued Expenses 632 (1,126) (475) (2,997) Operating lease liabilities (876) (838) (2,501) (2,561) Deferred revenue (14,111) (7,636) (15,658) 313 Net cash used in operating activities (16,895) (12,743) (20,186) (20,443) Cash flows from investing activities Purchases of short-term investments (37,809) (26,141) (75,614) (90,456) Maturities of short-term investments 23,000 41,854 81,144 111,974 Additions to property and equipment (583) (1,066) (2,645) (3,425) Net cash (used in) provided by investing activities (15,392) 14,647 2,885 18,093 Cash flows from financing activities Proceeds from exercise of stock options 1,115 2,703 5,251 7,353 Proceeds from issuance of common stock under ESPP 1,720 1,153 3,515 2,000 Net cash provided by financing activities 2,835 3,856 8,766 9,353 Effect of exchange rate changes on cash, cash equivalents and restricted cash (124) (290) (328) (542) Net (decrease) increase in cash, cash equivalents and restricted cash (29,576) 5,470 (8,863) 6,461 Cash, cash equivalents, and restricted cash at beginning of period 62,607 41,980 41,894 40,989 Cash, cash equivalents, and restricted cash at end of period $ 33,031 $ 47,450 $ 33,031 $ 47,450 Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown above: Cash and cash equivalents $ 33,031 $ 46,907 $ 33,031 $ 46,907 Restricted cash included in other assets -- 543 -- 543 Total cash, cash equivalents and restricted cash $ 33,031 $ 47,450 $ 33,031 $ 47,450 Couchbase, Inc. Reconciliation of GAAP to Non-GAAP Results (in thousands, except per share data) (unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Reconciliation of GAAP gross profit to non-GAAP gross profit: Total revenue $ 51,628 $ 45,813 $ 154,544 $ 129,948 Gross profit $ 45,072 $ 40,702 $ 135,843 $ 113,006 Add: Stock-based compensation expense 422 249 1,239 972 Add: Employer taxes on employee stock transactions 22 55 120 86 Non-GAAP gross profit $ 45,516 $ 41,006 $ 137,202 $ 114,064 Gross margin 87.3 % 88.8 % 87.9 % 87.0 % Non-GAAP gross margin 88.2 % 89.5 % 88.8 % 87.8 % Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Reconciliation of GAAP operating expenses to non-GAAP operating expenses: GAAP research and development $ 17,486 $ 15,903 $ 52,703 $ 47,578 Less: Stock-based compensation expense (4,497) (3,116) (12,704) (9,498) Less: Employer taxes on employee stock transactions (106) (199) (585) (430) Non-GAAP research and development $ 12,883 $ 12,588 $ 39,414 $ 37,650 GAAP sales and marketing $ 34,196 $ 31,602 $ 108,119 $ 96,503 Less: Stock-based compensation expense (5,242) (4,188) (16,627) (11,461) Less: Employer taxes on employee stock transactions (275) (327) (1,378) (777) Non-GAAP sales and marketing $ 28,679 $ 27,087 $ 90,114 $ 84,265 GAAP general and administrative $ 12,624 $ 10,739 $ 37,843 $ 30,823 Less: Stock-based compensation expense (5,127) (4,202) (15,501) (11,216) Less: Employer taxes on employee stock transactions (64) (176) (391) (264) Non-GAAP general and administrative $ 7,433 $ 6,361 $ 21,951 $ 19,343 Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Reconciliation of GAAP operating loss to non-GAAP operating loss: Total revenue $ 51,628 $ 45,813 $ 154,544 $ 129,948 Loss from operations $ (19,234) $ (17,542) $ (62,822) $ (61,944) Add: Stock-based compensation expense 15,288 11,755 46,071 33,147 Add: Employer taxes on employee stock transactions 467 757 2,474 1,557 Add: Restructuring(2) -- -- -- 46 Non-GAAP operating loss $ (3,479) $ (5,030) $ (14,277) $ (27,194) Operating margin (37) % (38) % (41) % (48) % Non-GAAP operating margin (7) % (11) % (9) % (21) % Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Reconciliation of GAAP net loss to non-GAAP net loss: Net loss $ (18,152) $ (16,255) $ (59,042) $ (58,781) Add: Stock-based compensation expense 15,288 11,755 46,071 33,147 Add: Employer taxes on employee stock transactions 467 757 2,474 1,557 Add: Restructuring(2) -- -- -- 46 Non-GAAP net loss $ (2,397) $ (3,743) $ (10,497) $ (24,031) GAAP net loss per share $ (0.35) $ (0.34) $ (1.16) $ (1.26) Non-GAAP net loss per share $ (0.05) $ (0.08) $ (0.21) $ (0.51) Weighted average shares outstanding, basic and diluted 51,831 47,586 50,821 46,724 (2) For the nine months ended October 31, 2023, an immaterial amount of stock-based compensation expense related to restructuring charges was included in the restructuring expense line. The following table presents a reconciliation of free cash flow to net cash provided by (used in) operating activities, the most directly comparable GAAP measure, for each of the periods indicated (in thousands, unaudited): Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Net cash used in operating activities $ (16,895) $ (12,743) $ (20,186) $ (20,443) Less: Additions to property and equipment (583) (1,066) (2,645) (3,425) Free cash flow $ (17,478) $ (13,809) $ (22,831) $ (23,868) Net cash (used in) provided by investing activities $ (15,392) $ 14,647 $ 2,885 $ 18,093 Net cash provided by financing activities $ 2,835 $ 3,856 $ 8,766 $ 9,353 Couchbase, Inc. Key Business Metrics (in millions) (unaudited) As of Jan. 31, April 30, July 31, Oct. 31, Jan. 31, April 30, July 31, Oct. 31, 2023 2023 2023 2023 2024 2024 2024 2024 Annual Recurring Revenue $ 163.7 $ 172.2 $ 180.7 $ 188.7 $ 204.2 $ 207.7 $ 214.0 $ 220.3 View original content to download multimedia:https://www.prnewswire.com/news-releases/couchbase-announces-third-quarter-fiscal-2025-financial-results-302321531.html SOURCE Couchbase, Inc. BASECouchbase Inc $18.67-9.02% Watchlist Overview Market News and Data brought to you by Benzinga APIs