Cloud database-as-a-service company Couchbase Inc. beat analysts’ expectations as its second-quarter revenue rose 8%, sending its stock about 3% higher in extended trading.

The company reported a loss before certain costs such as stock compensation of 17 cents per share, coming in ahead of Wall Street’s target of a 22 cent per share loss. Revenue rose to $43.1 million, beating the consensus estimate of $41.7 million. Couchbase also reported subscription revenue of $41 million, up 11% from a year earlier.

All told, Couchbase reported a net loss of $20.6 million, rising from the $15.3 million net loss it reported a year ago.

Couchbase is the company behind the popular Couchbase NoSQL database, which is used by enterprises to power complex business applications. Its flagship product is Couchbase Capella, a cloud-hosted version of the Couchbase database. Unlike traditional databases such as Oracle Database, Couchbase Capella has the ability to process both structured and unstructured data at the same time.

This is a unique capability that makes it a better choice for certain kinds of applications that need to tap both kinds of data. In addition, Couchbase Capella serves as a data cache. As such, companies can use just one system in Capella to handle three different tasks, as opposed to using three separate tools.

Executives say it’s this flexibility that’s powering Couchbase’s annual recurring revenue growth. The company reported total ARR at the end of the quarter of $180.7 million, up 24% from a year earlier.

Couchbase Chief Executive Matt Cain (pictured) highlighted the ARR growth, strong customer retention and increasing momentum of Capella in the quarter. “As we look to the second half of the fiscal year, we are poised to continue to make strong progress on our strategic initiatives, including investing in our cloud database platform for what we believe will be a very exciting future underpinned by AI-powered applications,” he said.

Couchbase’s strategic initiatives in AI are focused on a new generative artificial intelligence capability called Capella iQ, which was announced by the company last month. Capella iQ is a coding assistant that helps developers to write software faster and more easily, with AI-generated recommendations and sample code helping to improve their productivity. It’s a promising capability, as many companies struggle to hire capable developers to write all of the software that they need to be written.

In addition to Capella iQ, Couchbase is working to create a robust partner ecosystem that’s focused on accelerating AI. The new Couchbase AI Accelerate partner program, also announced in August, will make it easier for companies to build AI-based apps using Capella as the underlying database. Through this ecosystem, companies will be able to sell AI apps to other organizations.

The earnings and revenue beat, plus the enthusiasm around Couchbase’s AI initiatives, were enough to compensate for its somewhat disappointing guidance. For the third quarter, Couchbase is targeting revenue of between $42.7 million and $43.3 million, below Wall Street’s estimate of $43.6 million.

For the full year, Couchbase sees revenue of between $171.7 million and $174.7 million, the midpoint of which is just below the analyst estimate of $173.4 million.

Photo: Couchbase