Why Couchbase Stock Dropped Today

Sofa base (BASE -15.22%) shares were hit hard in Thursday’s trading. The company’s share price ended the daily session down 15.2%, according to data from S&P Global Market Intelligence.

After the market closed on Wednesday, Couchbase released results for the second quarter of its 2025 fiscal year (which ended July 31). The company delivered sales and earnings for the period that beat market expectations, but investors were unhappy with some elements of its forward guidance.

The Q2 beat didn’t stop the selloff for Couchbase stock

For the fiscal second quarter, Couchbase posted a non-GAAP (adjusted) loss per share of $0.06 on sales of $51.59 million. The performance beat the average Wall Street analyst target, which had called for an adjusted loss of $0.09 per share and sales of $51.12 million.

Total sales were up 19.6% year-over-year, and subscription revenue was up about 20% to $49.3 million. Meanwhile, the company’s adjusted gross margin rose to 88.3% from 87.2% in the year-ago period.

Couchbase’s adjusted operating loss also narrowed to $4.1 million — down from $9.2 million in the year-ago quarter. The company’s Q2 report showed encouraging progress on some key fronts, but investors reacted negatively to the cloud software specialist’s advanced guidance.

Couchbase’s full-year targets disappointed Wall Street

For the full-year period, Couchbase now expects revenue to be between $205.1 million and $209.1 million. The midpoint of the guidance range fell slightly short of the $207.3 million in sales called for by the average analyst estimate, but was an increase from management’s previous guidance for sales of $204.5 million to $208.5 million .

Couchbase also cut its adjusted operating loss forecast. The company now expects an adjusted operating loss of between $19.5 million and $24.5 million, improving on its previous forecast for a loss of between $21.5 million and $26 million.

On the other hand, management reiterated its expectation that the business will end its fiscal year with annual recurring revenue (ARR) between $235.5 million and $240.5 million. Investors apparently expected the company to raise its target.

Following the Q2 report, Couchbase shares saw downward price target revisions from Morgan StanleyDA Davidson, Oppenheimer and other investment firms. ARR trends were a recurring rationale for lowering the target price.