Couchbase Slips on Wider-Than-Expected Q2 Loss

Couchbase, Inc. (BASE) reported a wider-than-expected second-quarter loss in its first public quarterly results following its listing on July 22, 2021. Shares were down 17% following the news in the pre-market trading session at the time of writing. Couchbase is a provider of modern databases for enterprise applications.

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The company reported a quarterly loss of $1.54 per share, worse than the Q2 FY21 loss of $1.50 per share and much wider than analysts’ estimated loss of $1.23 per share.

On a positive note, total revenue grew 18% year-over-year to $29.7 million, beating the consensus estimate of $28.16 million. (See Couchbase stock charts on TipRanks)

Subscription revenue, which is a major contributor to the company’s total revenue, increased 19% year-over-year to $28 million. Annual recurring revenue (ARR) jumped 20% to $115.2 million.

Commenting on the results, Matt Cain, President and CEO of the company said, “With the introduction of our latest innovation in Couchbase Server 7, we have fused the strengths of relational with the flexibility of a modern database allowing customers to re-platform and modernize applications from legacy solutions while building new ones. Enterprises are increasingly relying on Couchbase to power their most mission-critical applications, and we are driving a new paradigm in the database market.”

Based on the continued momentum witnessed in business, Couchbase guided for third-quarter revenue to fall in the range of $29.3 – $29.5 million, in line with the consensus estimate of $29.04 million.

Additionally, for the full fiscal year 2022, Couchbase forecasts total revenue to be in the range of $120.8 – $121.2 million, higher than the consensus estimate of $118.73 million.

In response to Couchbase’s quarterly performance, Barclays analyst Raimo Lenschow lifted the price target on the stock to $54 (4.7% upside potential) from $42 while maintaining a Buy rating.

Lenschow notes that the solid stock price performance since listing has created a “high bar that will yield some near-term pressure on shares.”

The analyst is impressed by the solid execution in the quarter with new customer additions and expansions. He also believes in the long-term growth potential of Couchbase.

Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 2 Holds. The average Couchbase price target of $46.50 implies 9.9% downside potential to current levels. Shares have gained 69.7% since its IPO.