Couchbase (BASE) Stock Forecast & Price Target

Couchbase Inc has demonstrated strong financial performance, with an Annual Recurring Revenue (ARR) growth of 17% year-over-year, amounting to $238 million, and reaching a record net new ARR of $18 million quarter-over-quarter. The company’s revenue of $54.9 million reflects a 10% year-over-year increase, surpassing management's guidance and consensus estimates, while subscription revenue accounted for a significant 95% of total revenue in fiscal year 2024, up from 92% the previous year. Looking ahead, management expects a substantial increase in customer migrations to Capella, forecasting it to drive the majority of net new ARR in fiscal year 2026, thereby positioning Couchbase for continued revenue growth.

Couchbase Inc. has set full-year guidance for Total ARR slightly above consensus but has fallen short on total revenue expectations, which has raised concerns among analysts given its reliance on events like Capella migrations that impact upfront license revenue recognition. The forecast for FY26 total revenue is also projected to underperform consensus, primarily due to ongoing difficulties with churn and downsell rates, evidenced by a decline in the DBNRR metric which is now slightly above 114%. Furthermore, a potentially challenging economic environment could exacerbate pressures on IT budgets, posing significant risks to revenue growth and long-term profitability, particularly as management indicates that free cash flow profitability may be delayed until FY27.