Thank you for standing by, and welcome to Couchbase's Third Quarter Fiscal 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference may be recorded. Should you require any further assistance, please press star zero. I would now like to hand the conference over to your host, Edward Parker, Investor Relations. Please go ahead. Good afternoon, and welcome to Couchbase's Third Quarter 2022 Earnings Call. We will be discussing the results announced in our press release issued after the market closed today. With me are Couchbase's President and CEO, Matt Cain, and CFO, Greg Henry. Today's call will contain forward-looking statements, which include statements concerning financial and business trends and strategies, our expected future business and financial performance and financial condition, and our guidance for future periods. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements, by their nature, address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks discussed in today's press release, our quarterly report on Form 10-Q for the quarter ended July 31st, 2021, our quarterly report on Form 10-Q for the quarter ended October 31st, 2021, to be filed with the SEC and other periodic filings with the SEC. During the call, we will also discuss certain non-GAAP financial measures, which were not prepared in accordance with generally accepted accounting principles. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as how we define these metrics and other metrics, is included in our earnings press release and our final IPO prospectus, which are available on our investor relations website. With that, let me turn the call over to Matt. Thank you, Edward, and good afternoon, everyone. Thank you all for joining us today. During today's call, Greg and I will provide details on our third quarter results, as well as our fourth quarter and full year guidance. Let's kick this off with a few highlights of our Q3 financial results. Our third quarter revenue was $30.8 million, growing 20% year-over-year. Total annual recurring revenue or ARR was $122.3 million, which was up 21% year-over-year. RPO grew 41% to $124.3 million. Our gross margin remains best in class at 88.3%. We had a great quarter. In our core business, we saw ongoing big deal momentum, robust renewal activity, some significant expansions, and delivered accelerating year-over-year revenue and ARR growth ahead of our guidance. We also saw several COVID-impacted customers return to growth, and we're cautiously optimistic that others will follow, which would add a tailwind behind our accelerating ARR growth. Perhaps most importantly, we're seeing momentum in our cloud business, bolstered by positive reception and very strong initial uptake of our recently announced hosted Database as a Service offering, Capella, which I'll discuss more in a moment. Overall, our strong fiscal third quarter performance demonstrates how enterprises are turning to and investing in Couchbase as a key technology partner supporting their digital transformation initiatives. I'm proud of the team, and I've never been more confident in our strategy, our technology, and our opportunity. Looking ahead, we're set up for what we believe will be a great fiscal fourth quarter and a landmark year for the company in fiscal 2023. At Couchbase, our mission is to empower enterprises with the ability to build, deploy, and maintain their mission-critical applications by delivering the world's most scalable, highest performing, and flexible modern databases. Enterprises are confronting the reality that relational platforms are fundamentally unable to accommodate the requirements of modern applications. While many emerging NoSQL technologies address these limitations, they struggle to do so at the mission-critical scale and performance levels required by the modern enterprise. These technologies weren't architected to accommodate the wide spectrum of deployment and consumption modalities increasingly common across enterprise environments. Couchbase was born to bridge these critical gaps. Enterprises are choosing to build their most important applications on Couchbase because we offer the scalability, flexibility, and ease of adoption necessary to accommodate the incessant growth in data volume and variety that is at the core of digital transformation. We empower architects tasked with designing, building, and supporting applications on which their businesses depend. We also provide developers the tools they need to build software in a modern, agile, and elegant way. We do this for both new applications and existing ones that need to be re-platformed. We enable modern application design while leveraging the existing and ubiquitous knowledge of SQL. We can run anywhere from cloud to on-prem, from the data center to the edge, in managed or hosted deployments. We proudly do all these things with uncompromised performance, but in an approachable and familiar way. We do all this in a single, carefully architected enterprise platform. Simply put, I remain confident that we have the opportunity to drive a generational rethink in the $60 billion database market. Turning to some of the developments in the quarter. In October, we held our annual user conference, Couchbase Connect Online, with the theme of Modernize Now, which underscores the need for organizations to become more flexible and increase developer agility to expedite modern application initiatives. Connect was an impactful week as we raised awareness among key influencer audiences with a particular focus on developers. We saw over 5,200 registrations, and we educated customers and prospects about our modern database across more than 100 sessions, over half of which were for developers. Of course, the big news at Connect was our introduction of Couchbase Capella, our new fully hosted Database as a Service offering that delivers database flexibility and ease of adoption for developers and performance at scale for enterprise applications with the best price performance of any Database as a Service. Capella is available as a free trial for developers, enabling them to get up and running with Couchbase with just a few clicks in a matter of minutes. It is now available on AWS, with additional cloud providers becoming available in the future. I want to take some time to talk through why the introduction of Capella is so significant. As you know, one of the core value propositions of Couchbase is that we are architected to run anywhere and in whatever consumption model an organization desires. Recall that our core platform is cloud native and more than 50% of our customers deploy Couchbase in any one of the major public clouds today. On top of that, we have had our virtual private cloud offering in market for over 18 months. Now with Capella, which is fully managed and automated, customers can focus exclusively on agile development of their most important applications instead of worrying about operational database management efforts. Though it is still early days for Capella, the feedback from customers has been overwhelmingly positive. We are excited by the leading indicators of our buy from business. An example of this is developer trial activity, including account sign-ups and cluster creation. Overall, trial activity in the month since launch has meaningfully outpaced all other product launches in our history. More specifically, we had more than double the number of clusters deployed in the first month of Capella than we did in the previous three quarters. This is the activity we would hope to see, further reinforcing our confidence that this new offering will be a major growth driver for Couchbase and will greatly accelerate developer adoption, and we intend to keep our foot on the gas. We will maintain an aggressive investment cadence to support our ambitious product roadmap, and Capella will be a cornerstone within our buy from sales motion, complementing our world-class sell to motion. I look forward to updating you all on our progress with Couchbase Capella in the quarters to come. In Q3, we saw continued momentum across our partner ecosystem. I am pleased with the volume of partner deal activity. Of note, the partner sourced and influenced new business for the first three quarters of FY 2022 has already surpassed that of all our previous fiscal year. On the CSP front, we continue to work with all major cloud providers, and in Q3, we specifically saw continued strong engagement and support from AWS. Beyond launching Capella on AWS with support from AWS SaaS Factory team, we were invited to two new select go-to-market programs and qualified for multiple designations and integrations with AWS offerings. Now I'd like to spend a few minutes discussing some customer wins in the quarter and how enterprises are leveraging the power of Couchbase to transform their business. A new G2K logo in Q3, Amgen Technologies, a leading insurance company in France, began its modernization journey by selecting Couchbase over another NoSQL solution to replace Oracle and Postgres to power their data hub, the system of record for the more than 4 million people they insure. The data hub must be able to continuously ingest a large volume of data but also expose this data to consuming applications through REST APIs. MGEN chose Couchbase due to our ability to join a large volume of data, full text search, scalability, and supporting a large number of transactions with low latency. Another new win from the quarter, which was also our largest Capella deal to date, was with the leading financial services provider that empowers billions of people and millions of merchants to buy and sell online across many emerging global markets. The company selected Capella on AWS over MongoDB Atlas to power its payment gateway. This customer's development team cited database performance and the familiarity of our SQL++ query language as the key factors in their decision to partner with Couchbase. Also in the quarter, Domino's Pizza significantly expanded with Couchbase. Domino's will be using Couchbase for real-time, point-of-purchase customer segmentation and behavior analytics to determine customer lifetime value and to deliver personalized marketing campaigns. They were also able to take things that they already knew about their customers and then combine that with the new information to take action in hours versus weeks or months, as was previously the case. This is a great land and expand example. Once customers adopt our technology, they quickly find new use cases. With our platform, Domino's can deliver not only the perfect pizza, but also insights to its internal business partners in real time. As I take stock of Couchbase's first few months into our journey as a public company, I am very proud of all that we have accomplished in just a short period of time. It has been very encouraging to see the recognition and validation of our modern database for enterprise applications from across the industry, including partners, industry analysts, and customers. I'm even more excited about the months and years to come. It is clear to me that enterprises are increasing the urgency by which they modernize their application stacks, which intensifies the need for a modern database like Couchbase, and is the reason why we are all so excited to come to work every day. While we are not completely back to a normal enterprise buying and selling environment, as pandemic protocols are still impacting our business, we are seeing spending from some of our key customers in our distressed industries recover, and our go-to-market organization is starting to get back in front of our customers in face-to-face engagements. I'm encouraged by these developments, and I remain cautiously optimistic that the recovery will continue with increasing momentum in the coming months. From a technology perspective, our product portfolio has never been stronger. Drafting off the momentum of our release of Couchbase Server 7 in the second quarter and building off our current virtual private cloud offering, the release of Couchbase Capella hosted Database as a Service offering in the third quarter marks the beginning of a new chapter in the Couchbase story. Enterprises are increasingly looking to offload the management and tuning of database systems so they can fully focus on the applications that run their business, and Capella provides this capability while offering all the mission-critical attributes customers have come to expect from Couchbase. Bigger picture, Capella enhances one of the core value propositions of Couchbase, the ability to enable enterprises to leverage our modern database in whatever deployment and consumption model that business requires, while at the same time fundamentally changing how developers can access the platform. With Capella, this access is just a matter of a few clicks away. We've invested an enormous amount of time into this offering, and as I discussed earlier, we're thrilled with the customer feedback we've received so far. We have a robust Capella roadmap ahead of us, and you can expect more announcements next year, including support for additional cloud providers, more features, and more capabilities. Needless to say, we have very high ambitions for our as a service portfolio. Of course, our product investments go beyond Capella. Couchbase is built for a world where the applications are delivered as a continuously running service from the cloud and consumed at the edge on occasionally connected devices as mobile applications. As you know, early on, we uniquely made investments in our mobile and edge database capabilities to completely round out our ability to run anywhere. We are currently investing in the next release of Couchbase Mobile, our full-featured embedded NoSQL database for mobile and edge computing. The forthcoming innovations will make our capabilities more easily embeddable and programmable at the edge, catering to a vast variety of industrial, retail, healthcare, and IoT applications. You'll also see focus on secure management and operations from cloud to edge, and simplify administration to make remote databases at scale significantly easier for customers. We look forward to sharing more about the next phase of our mobile and edge offerings. Stay tuned. The next release of our core platform is also coming next year, and with it, we are making it even easier to migrate from relational databases. We are the only modern database for enterprise applications that makes it easy to seamlessly combine operational capabilities and analytical insight, and the next Couchbase Server release will feature important updates to our analytics features. You will also see us extending our core platform support to additional processing architectures, which will reduce the cost for both our customers as well as Capella in the future. In summary, we had a strong quarter. We wouldn't have had this opportunity without the extraordinary team we have in place, as well as the core values that guide us in what we do every single day. At Couchbase, we aim to be good humans always, to act with uncompromised integrity, and to allow all our employees to serve their families. This allows us to attack hard problems for our customers and play to win together so that we make tomorrow better than today. We achieved that in Q3 and expect to do so in Q4. The best of Couchbase is yet to come. I will now turn the call over to Greg to talk about our financial results. Greg? Thanks, Matt. Thanks again everyone for joining us. As Matt mentioned, Couchbase's strong third quarter performance was driven by ongoing large deal momentum in our core enterprise business, including some significant expansion, as well as acceleration of our cloud business. While some of our customers in distressed industries remain impacted by the pandemic, we saw improvement in the third quarter and are cautiously optimistic that those customers will continue to recover. Total revenue in Q3 was $30.8 million, growing 20% year-over-year and up 4% from the prior quarter. Subscription revenue was $29.0 million, also up 20% year-over-year and up 3% from the prior quarter. Professional services revenue in Q3 was $1.8 million, up 16% year-over-year and 9% quarter-over-quarter. Total annual recurring revenue for ARR was $122.3 million, representing 21% year-over-year growth and 6% quarter-over-quarter growth. We are pleased with our ARR performance as year-over-year growth accelerated in the quarter. We expect this trend to continue into the next fiscal year. As a reminder, ARR represents the annualized recurring revenue at the end of the period that is currently contracted and committed over the forward twelve-month period. We believe ARR best represents our business performance by accounting for timing variability among our customers' implementation times. As most of you may know, we continue to serve the most mission-critical applications at the largest enterprises. We remain focused on this segment of the market and are pleased to report our ARR per customer performance in the quarter was $215,000, up from $193,000 from the same period last year. Our dollar-based net retention rate was 115% for Q3. In discussing the remainder of the income statement, please note that unless otherwise noted, all references to our expenses, operating results, and share count are on a non-GAAP basis. Our growth margin profile remains best in class. In Q3, our growth margin was 88.3%. This compares to a growth margin of 87.9% a year ago and 88.3% last quarter. We have a long-term growth margin target to remain above 80%, with our trajectory somewhat contingent on the rate of uptake and eventual mix of our growing as-a-service offering. Turning to expenses, our sales and marketing expenses for Q3 were $21.5 million, or 70% of total revenue, compared to $17.1 million, or 67% of revenue a year ago. We continue to make significant investments across our sales and marketing organizations, including aggressive additions to quota-carrying headcount as well as ongoing investments to customer success, our partner program, and bolstering our go-to-market expertise in cloud. Research and development expenses for Q3 were $12.0 million, or 39% of revenue, compared to $9.8 million and 38% a year ago. We've invested purposely and aggressively in product engineering. Specifically, we continue to invest in Couchbase Capella in addition to ongoing core platform development. General and administrative expenses for Q3 were $5.8 million, or 19% of revenue, compared to $3.6 million and 14% a year ago. On a dollar basis, the growth in G&A was mainly a result of expenses incurred in connection with our initial public offering and preparing for and being a public company. non-GAAP operating loss for Q3 was $12.1 million, or a -39% operating margin, compared to a -$7.9 million, or a -31% operating margin in the year-ago quarter. This result was significantly better than our expectations and was driven by better-than-expected revenue as well as lower-than-expected OpEx, primarily due to timing. We remain committed to investing aggressively, although we are on track to exceed our full-year operating loss target. We now expect our second-half OpEx investments to be more weighted towards Q4. non-GAAP net loss attributable to common stockholders for Q3 was negative $12.6 million, or negative $0.29 per share. As we continue to scale the business, we believe we have a significant opportunity to gain leverage. Turning to the balance sheet and cash flow statement. We ended Q3 with $207.6 million in cash equivalents, and short-term investments. Our remaining performance obligations, or RPO, totaled $124.3 million, up 41% from $88.3 million last year and up 5% from $118.9 million from the prior quarter. Our year-over-year RPO growth is reflective of the strong renewal and upsell activity. We expect to recognize approximately 62%, or $76.7 million of the total RPO as revenue over the next 12 months. Operating cash flow was negative $19.7 million compared to negative $13.1 million a year ago. Free cash flow was also negative $20.3 million, or negative 66% free cash flow margin, compared to negative $13.3 million and a negative 52% free cash flow margin a year ago. I will now conclude the call by providing guidance for Q4 and full year fiscal 2022. We continue to see strong business momentum and elevated database infrastructure migration activity across our industry, and our pipeline momentum is strong. Furthermore, as I indicated earlier, we are seeing signs of recovery in portions of our customer base impacted by COVID. That said, we're continuing to see variability with respect to the implementation timing of certain deals, which impacts our revenue visibility. Accordingly, we are prudently considering this variability in our revenue guidance, even as we see continued upside to our ARR outlook. Our guidance also assumes some continued uncertainty among distressed industries and our go-to-market motion as we continue to monitor pandemic-related developments. Clearly, a deviation from this assumption would cause us to modify our guidance higher or lower. For the fourth quarter of fiscal 2022, we expect total revenue in the range of $33.9 million-$34.1 million. Therefore, a year-over-year growth rate of 16% at the midpoint. We anticipate ARR in the range of $129 million-$130 million, which represents 20% growth at the midpoint. We expect a non-GAAP operating loss in the range of -$10.6 million-$10.2 million. For the full year FY 2022, we expect total revenue in the range of $122.4 million-$122.6 million. Therefore, a year-over-year growth rate of 19% at the midpoint. As noted above, we expect ARR growth to be 20% at the midpoint. Finally, we expect a non-GAAP operating loss in the range of -$47.0 million-$46.6 million. With that, Matt and I are happy to take your questions. Operator? To ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Sanjit Singh of Morgan Stanley. Your line is open. Hi. Thank you for taking the questions. Congrats on the improved ARR growth above 20%. Really nice to see. I guess I'll start with Capella and you mentioned, Matt, some of the number of clusters deployed in the month after release being significantly up. I think broad stroke, if you just go through some of the developer initiatives you're working on and when do you think this can, Capella can cross some important thresholds, let's say 10% of revenue, given from where you're starting today, is that a two-year timeframe, a one-year timeframe? What's a reasonable timeframe to think about hitting some of these initial revenue thresholds? Sanjit, thanks for the question and appreciate the commentary. We're certainly excited about the re-acceleration. Capella marks a major milestone for us as a company. As you know, Couchbase has been architected for the most mission-critical applications. We have a cloud to edge, cloud native platform, but what the Capella offering allows us to do is completely simplify the ability for developers and other personas to adopt that industry-leading technology. What I talked about in the call is the early indication that we're seeing of just how valuable that consumption model is. It took us three weeks to see the volume of clusters and trial activity that we saw in the previous three quarters. That's not to diminish our VPC offering, but more so to demonstrate how powerful it is when we provide a form factor that is so easy that within a couple clicks they're up and running with the full power of the Couchbase platform. It's not just about the cluster volume either. It's about the conversion that we're seeing in people that are interested to deploying clusters, where we've seen a 4x-5x increase in efficiency of that metric. Leading indicators suggest that, you know, we've got the product market fit that we've been working so hard for and talking about. Setting aside kind of the product-led growth initiative, you asked about developers. We're putting a lot of time into the developer experience, and more specifically when we think about it, there's developer advocacy, making sure we're building great products and providing integrations for developers to see the full power of Couchbase. You can go out there and get up and running via web-based interface and what we call the playground, really simplifying the path to, you know, trying out Couchbase. We're investing in developer relations, so engaging the developers, articulating what other customers are doing with the power of our platform, how they're finding our elegant design and enabling, you know, truly next generation applications. Then finally, organizing communities to make all of that that much more efficient. We're excited that in the quarter, Sanjit, all leading indicators on developer traction, everything from web page views to organic traffic, time on page, downloads, were materially up quarter over quarter and year over year. These are initiatives that we've been working hard on for a long time. Our development cycles, our go-to-market efforts are aligned. We're gonna keep our foot on the gas pedal, and we think we're only scratching the surface on what's possible. Yeah. Sanjit, this is Greg. Just to touch on your question. Well, hey, good evening, everybody. While we're really excited about Capella and what it's gonna do for us and doing for us today, we're still not at the point where we're gonna be, you know, disclosing anything specifically around the financial or the timeframe. We're certainly, you know, continuing to work through that. When the time comes, we will obviously share that, but we're just not ready to do that today, given that it's still an immaterial part of the business. Got it. Just one follow-up question for you, Greg. As we think about the relationship between ARR and revenue, and this certainly came up in the last call around some of the timing of deployments. If you could just sort of, you know, big picture it for us. We've had, I think, going on three straight quarters, actually multiple quarters of sustained 20% or above ARR growth. As we think going into fiscal year 2023, given that you've had that sustained 20% growth in ARR, shouldn't that converge or align with a 20% or better type revenue growth profile going into next year? If it doesn't, why? If you could just sort of walk us through why wouldn't that be the case? Yeah, good question, Sanjit. Just about next year, obviously we're not at the point where we're gonna give fiscal 2023 guidance yet. We'll do that a quarter from now. I'm not gonna comment on specifically about next year. Look, I agree with your assessment that the revenue is lagging, and it will eventually catch up with ARR. That is ultimately gonna be our view as well. Right now, because of our definition of ARR, we're obviously, you know, able to count things that are in the future where they're not generating revenue today. They will be in the future. I would also point you to RPO as another good metric to show you, the really high-quality deals that we're seeing with RPO growing over 40% and current RPO, you know, on an escalating path for the last several quarters. It will certainly come. We obviously like the fact, and we hope that ARR continues to remain above the revenue growth. That, you know, that's what we're gonna see. Again, I would always focus that ARR is our most important metric that we follow. We set the definition of that for that exact reason, because the deals we do with these large customers, the implementation timing and the start dates is always a little uncertain, and so we have to account for that. Makes perfect sense. Thank you, Greg. Appreciate it. Thanks, Sanjit. Thank you. Our next question comes from Matt Hedberg of RBC Capital Markets. Your question please. Hi, guys. Thanks for taking my questions, and I'll offer my congrats as well on the acceleration this quarter. You know, what sounds like a strong start to Capella. Matt, I guess I wanted to ask on the partner front. I mean, you noted, I think you said that the first three quarters of the year had outpaced all of partner activity in fiscal 2021. I guess I'm wondering, you know, could you put a finer point on why that's been such a. You know, you've seen a lot of strength there. I guess to the extent that Capella offers another interesting sales motion for the partner channels, could you articulate that as well? Yeah. Matt, great to hear from you, and appreciate the question. When we think about our partner business, this is an area of the company that we've been investing in for many years and believe it's a key foundation to building a great database and specifically an enterprise database company. When we talk about our partner investments, that's everything from GSIs to ISVs to cloud service providers. We study very carefully not just how we're influencing large enterprise opportunities and leveraging the relationships and the reach that these partners provide, but also opportunities that are sourced where, you know, partners are bringing net new opportunities to the company. I'd say the continued strength is expected, Matt, because we've continued to make this a point of focus and have been investing in it for many years. If anything, we are accelerating our investments there, particularly in the area of cloud service providers as, you know, they become even more important for us with Couchbase Capella. I would tell you that Capella is not just an opportunity for cloud service providers, it's an opportunity across the enterprise. SIs deploy, you know, hundreds of thousands of developers and touch developers and large enterprises. Having a form factor that's conducive to allowing them to accelerate digital transformation projects is critically important. The ISV channel is one of particular strength for us, and the ability to embed a hosted offering into a solution stack opens up opportunities that are additive to our existing portfolio. We remain very excited about this. It's helping us gain, you know, leverage in our overall go-to-market and will be an area that we continue to focus on, not just with go-to-market investment, but ensuring that we have the appropriate roadmaps and technology integrations to grow that channel as we go forward. That's super great and exciting. Greg, if I have my math right, I believe CRPO grew near 34%. Am I in the right ballpark for CRPO growth? Correct. Yes, that's exactly right. I guess, you know, maybe following up on Sanjit's question on, you know, I know you're not guiding to next year, but to me, that would seem like a pretty good indicator of, you know, kind of the trajectory of the business. Our RPO has grown north of 40%, I believe now two quarters in a row. I mean, how should we think about, I guess, you know. Maybe the question is: Was there anything abnormal, like large deals, that drove the RPO strength? Is it right to kinda look at CRPO as a good indicator for maybe where next year could eventually get to for ARR growth? Yeah, yeah. Great question, Matt. Again, I'll answer this again, we will continue to reinforce ARR as a key metric that we focus on in the business. But look, we had a very strong quarter. Again, we're working with some of the largest, you know, enterprises underpinning the very, you know, complex deployments, and we're doing, you know, big, healthy renewal and expansion deals. You know, there is a multiyear dynamic. You're seeing that in the total RPO, but you're also seeing it in the short-term RPO. As I mentioned, Sanjit's question was around the implementation timings. You know, there's variability there, and that's why you see what you're seeing with current RPO and ARR and versus revenue, it's a lagging indicator. We feel great about where the ARR is heading in terms of re-accelerating and getting, you know, healthily back in the 20s and the CRPO just add to that. We're excited about what that brings in the future, and we're gonna continue to do, you know, these great, healthy deals that are long-term focus for Couchbase. Got it. Thanks a lot, guys. Thanks, Matt. Thank you. Our next question comes from Ittai Kidron of Oppenheimer. Please go ahead. Thanks, Matt. Well, guess what? Wanna talk about Capella as well. Maybe you can talk about, you know, when you think about the first users that you're now seeing on the platform. How many of them, by the way, are completely new to Couchbase versus existing customers that are just kinda looking to diversify their deployment mode? Yeah, well, Ittai, first of all, I'm not surprised you wanna talk about Capella, and I could talk about it all day because of the, you know, potential it has for us. Quite frankly, we're seeing a very healthy balance of existing customers and new customers. You know, we had the biggest quarter in our history from our overall cloud business, which was our VPC product. You know, I was asked, what was I pleasantly surprised by from the quarter? Quite frankly, the commercial activity on all things cloud, it's as if we released hosted Capella, you know, a quarter ago because of the, you know, number of conversations that we're having, which I think is indicative of the demand that we have. We had a new logo, as a matter of fact, in Asia, where we work closely with AWS, short sales cycle, you know, heavy demand for the technology and the partnership allowed us to, you know, show up in local language and local support to get things over the line. That was a completely new logo. At the same time, we're talking to, you know, some of our largest customers for net new applications and eventually, you know, migrating existing applications. I'd say the activity is very healthy. When we look at that trial activity, we do fundamentally believe that Capella will be the new logo engine for the company as we go forward. I think when we study the clusters deployed and, you know, some of the early-stage top-of-funnel activity, we're certainly seeing that really extending the reach of the Couchbase platform to many, many more customers. That's great. Maybe a follow-up on this, if you think of this as a major driver for you going forward, how do you think the go-to-market needs to evolve in order to enable that? Is self-serve gonna be a material element here with Capella, or you're still going to require a significant direct sales force investment? Yeah, Ittai, we think about our go-to-market as an enterprise sell-to motion, and we are augmenting that with a buy-from motion. We certainly expect new customers to, you know, come to us, find us and, you know, start to get into trials on Couchbase Capella. At the same time, we will be articulating the value proposition and that offering to existing customers. We've been investing in both of those motions and ensuring that we have a well orchestrated set of handoffs between them. You know, over the course of the past many quarters, everything from additional sales capacity to, you know, marketing investment, to cloud specialization, to, you know, overlay cloud security experts, we're really being mindful of that balance, and most importantly, starting from how do we satisfy our customers and ensure that they're successful, whether they're coming, you know, on their own via one of the marketplaces or, you know, we are working with one of our existing customers to migrate over. We're pretty excited about the investments and the foundation we have on the go-to-market side, and are starting to, you know, see those really start to pay off. Very good. Thanks. Good luck, guys. Thank you. Thank you. Our next question comes from Raimo Lenschow of Barclays. Your line is open. Hey, thanks. Two quick questions for me. Greg, if I look at Q3, that looked really healthy. If I look at Q4 guidance, compared to some of the consensus numbers out there, and maybe consensus is a little bit all over the place, looked a bit differently. Was there any pull forward from Q4 and Q3 that kind of maybe impacted numbers or, you know, what's driving it there? One from Matt. If I think about the pandemic impacted industries and then coming back, you talked about some progress there. Like, if you think about that in the coming quarters, do you think kind of there's more to come or are we kind of done now with recovery there? Thank you. Thanks, Raimo. This is Greg. I'll answer your first question, then turn over to Matt. Look, we don't necessarily pull forward from future quarters, per se. Look, we do deals when customers wanna do deals. So are there times where we do early renewals? Sure. It's not a pull forward per se. We're not aggressively pulling forward. We talked about that on the last call. There was a couple early renewals where customers, you know, wanted to do deals. So I wouldn't say there's any pull forward. I think you're probably talking potentially about the revenue guidance. Look, I would tell you on the revenue side, look, we're just starting to see some of these large customers we have just think further ahead about their implementation timing. Part of it, I would say, is budget related, part of it is just more prudence in terms of their buying timing. We're very excited about these deals. We're trying to provide the most accurate guidance to you and also be prudent. There's a little bit of that in there on the revenue side. The only other thing I would tell you on the guidance is, look, we had less expenses, and I talked about this in the prepared remarks, a little less expenses in Q3 than we had originally planned. Those have moved to Q4. It's just a timing difference, but there's no impact on the full year. That's why you saw for the full year, we've raised ARR revenue and op profit guidance as well. Yeah. Okay. Raimo, let me address your question on pandemic and in particular distressed industries. As you know, our platform serves travel and hospitality and other verticals for that matter, very, very well. Clearly with, you know, the pandemic being what it was, those companies were, you know, under duress. As we've talked previously, we took great pride in showing up as a true partner to those companies during those times, making sure that we weren't just, you know, a technology vendor, but a partner that was there for them in good times and in future great times. We did mention that we saw some return to some very healthy levels. One of my, you know, most proud moments during the quarter on behalf of the company, we were dealing with one of the world's largest hospitality companies. They communicated to us that their business is at 50% of pre-pandemic volume, and yet we had a significant expansion with them as they invest in Couchbase as a true digital transformation platform for the future. I don't think that happens if we don't have technology that's future-proof, that we have great relationships, that they're truly seeing, you know, Couchbase as one of their key partners. We're seeing, you know, points of strength. We are certainly engaged with our customers, you know, in this quarter and beyond. I'd say we're cautiously optimistic. You know, we can't predict the future. Obviously, there's still variance and, you know, pressure on, you know, return to normal activity. I think, as we mentioned, this is part of our acceleration and, you know, one of the many contributing factors to additional tailwinds as we go forward. I would just add, there was one other customer too, unique situation, cruise line, that last year came to us, obviously, in the midst of the pandemic, wasn't sailing, generating any revenue. Look, we had to sort of, you know, do a special deal and take care of them as one of our valued customers. They've come back this year, and they're getting back to business. We've done now a multi-year deal where we're gonna more than double the estate at that customer. That's just a great example of where we are starting to see some of that, you know, that return from COVID and how we've, you know, taken care of these customers and done right by them. We're gonna see them as great customers for many years to come. Okay. Perfect. Thank you. Thanks, Raimo Lenschow. Thank you. Our next question comes from Jason Ader of William Blair. Please go ahead. Yeah, thank you. Good afternoon, guys. I wanted to ask about the comment, Greg, that you made on ARR expected to accelerate, continue to accelerate going forward. I just wanted to unpack that a bit and understand you know, what's giving you that confidence, how much of it is what the you know kind of the pipeline that you see right now, versus kind of some of the macro assumptions around COVID recovery, versus you know, the uptake of Capella and the contribution from Capella. Yeah, great question, Jason. Yeah, look, I think we talked about this even on the IPO roadshow, that we knew we were gonna be heading into a re-acceleration period, and we feel like we're entering that now. Based on what we see both in the, you know, the existing customer base and our pipeline, the new logos in particular that's coming, we believe from Capella here, we have seen an improvement from the COVID-impacted cohort that we've talked about before. That cohort is no longer, you know, negative growth. We're starting to turn to positive growth. It's just a combination of all those things, what we see in the pipeline, the product launches we have. All those things give us, you know, excitement and confidence that we will be able to continue this acceleration, you know, beyond Q3 into Q4 and in the next year. Okay, great. Did you provide the customer count, Greg? I did not, but I'm happy to because you will- Yeah, that'd be great. ... eventually see it. The customer count for ending Q3 was 568 customers. Okay. Matt, for you, just wanted to get some comments on the competitive environment and who you're competing against, mainly today, and how has that changed, let's say, over the last 12-18 months, if at all? Jason, I think one of the things that we take pride in is that, you know, we're focused on, you know, being the modern database for enterprise applications. We're multimodal. You know, we're designed as a cloud-native database that can run from cloud to edge at the highest performance and scalability and now with any consumption model that the customers want. I think, you know, we take great pride in our unique differentiation that we believe we will be able to sustain in helping customers not just with new applications but in replatforming relational ones. As we think about enterprises, you know, they're gonna be evaluating legacy relational technologies, next generation, you know, modern databases, but there really is not a platform that can provide the true breadth and depth of capabilities that Couchbase was designed for. Anytime we're engaged with an account, you know, we're proving our value and articulating, you know, all aspects of that value proposition, proving things out and proof of concept. With Capella, we're able to let, you know, developers do that directly. Look, if you were to pick a database, you know, our customers are gonna have those or will be trialing them, but there is no other database that can do the things that we have because of the architectural approach and, you know, point of optimization that we've chosen from the very outset of our company, which we remain committed to. Let me ask you a slightly different way. If I think about kind of the three buckets, you know, kind of the cloud guys, the incumbent relational guys, and then the sort of newer NoSQL folks, who are you seeing the most of among those three groups? Look, that is exactly how we break it down, and we think about, you know. Whenever I think about competitive dynamics, I put myself in the shoes of our customers. They're saying, "What do I need for my application? If I have an existing database, an incumbent, whether it be Oracle or someone else, can that provide, you know, the capabilities that I need?" We know that the answer to that question is no, and they're often in evaluation to figure out, you know, which technologies they can layer in to augment their applications or in some cases, you know, offload off of relational databases. That's a dynamic that we see. There are, you know, several next generation NoSQL solutions, you know, MongoDB obviously and others. Their point of optimization is different than ours. While there is overlap, and we may have points of comparison, when we get into scale and performance and, you know, cloud-to-edge deployments, you know, those comparisons go in our favor for the applications that we're architected for. Obviously, enterprises are constantly evaluating, you know, the embedded solutions in cloud, AWS and Microsoft, probably the leading two. Again, our job is to ensure that we're solving database problems that our enterprises can't get from other areas. If you were to go listen to our customer base, as I know you have, Jason, you're gonna hear that played out, right? Performance and scale that's not available with other solutions, the familiarity with SQL, cloud-to-edge deployments, you know, multimodal capabilities, everything from key value cache, document database, ACID transactions, becoming a true source of truth and, you know, system of record for the most mission-critical applications. You put all that into a single platform that was architected from the beginning to make those things happen. When we get into alternatives, yes, they're looking at them, but there is no other solution that, you know, has that full set of capabilities integrated into a single platform. Thank you very much. Thanks, Jason. Thank you. Our next question comes from Rob Oliver of Baird. Your question, please. Great. Thanks. Good evening, guys. Appreciate it. First question for you, Matt, also on Capella. Just around the large deal that you saw, I assume that was a current customer migration, but would love to hear some of the dynamics around that deal, in particular around kind of sales cycle. I know one of the things that's exciting about Capella is just the lower sales cycles associated with it. Just would be curious in some of the early activity, particularly the larger deals, if that was reflected in terms of what you saw this quarter. I had a quick follow-up. Rob, thanks for the question. We have multiple cloud deals to talk about. I think the one that you may be referring, our largest Capella deal to date, that was an accelerated sales cycle out of emerging markets. You know, they were in an evaluation cycle between us and MongoDB Atlas. You know, they talk about not just our performance, the breadth of our capabilities, you know, per my comments to Jason, but also the familiarity and ease of use of SQL and what we've built into you know, Capella as an offering. Quite frankly, we're seeing some very nice sized deals in new logos. You know, a large gaming company in Asia turned into an over six-figure you know, transaction. Those are really important deals for us. The fact that we can see those enter into the pipeline and move to closure at a fraction of, you know, the normal time period that we would have with a customer managed solution, those are the things that, you know, have us really excited. This is not a story about just migrating our base. As a matter of fact, we think about the impact of Capella in the following order, new logos first, second, net new applications and existing customers, and then the final piece will be, you know, customers migrating their existing applications. Per my commentary, the fact that I mean, we have really healthy activity across all three of those already, and we think that that's only gonna accelerate with the fully hosted offering, you know, that we're now in market with. Really exciting stuff. Again, this is new opportunities, new applications, extending reach. It's not just in production, Rob. As you know, developers wanna try technology, they wanna be deployed in, you know, test environments, they wanna expand easily. You know, these are benefits that we now have in market because of, you know, this consumption model. You combine that with all of the capabilities in the Couchbase platform that we've worked so hard to build and, you know, take such great pride in, you can see why we're excited about the path forward. That's great. Thanks, Matt. Appreciate it. Greg, just one for you as well on, thanks for some of the other metrics you provided in ARR per customer up nicely again, I think even sequentially. I know you've tried to help us understand, you know, some of the metrics that could change, like margin, for example, gross margin around, you know, as we shift to Capella. Is ARR one of them? In other words, you know, clearly we're not in the, you know, the flywheel yet where the customer count is seeing a big impact from Capella. As we start to do, will that ARR per customer, you know, be a bit lower? Are there any other metrics that we should be aware of, you know, as Capella starts to ramp in 2022? Thanks a lot. Yeah. Thanks, Rob. Yeah, look, certainly there could be an impact on the ARR per customer. I mean, as Matt talked about, we hope that this becomes our new logo engine, and we will, you know, see a lot of new logos. Obviously those come in at a smaller ticket price than we typically grow them. If we do start seeing the pickup which we expect, yes, that certainly could have an impact on the ARR per customer as we go. As you mentioned on gross margin, obviously, the cost of Capella is greater than the self-managed software. We'll see impact there. We've stated that we, you know, believe we can continue to be an 80% plus gross margin business over time, but that will all depend on, you know, the mix and how fast the uptake is and all that. Those are the areas that we look for. Obviously, the offset is, more customers, you know, faster growth rate is what we're, you know, looking for out of, Capella as the engine to grow new logos. Understood. Okay. Thanks again, guys. Appreciate it. Thank you, Rob. Thank you. Our next question comes from Kash Rangan of Goldman Sachs. Your line is open. This is John, for Kash Rangan, and thanks for taking the question and squeezing me in here. Just a quick one in terms of kind of the feedback that you've seen post-release of Couchbase Server 7.0, and how does, you know, support for ACID transactions change the types, if at all, the types of workloads you can go after? Then to that end, when you talk to customers today, what are you seeing with respect to kind of growth in net new workloads versus replatforming off legacy relational technology? Is there any change there with respect to replacement of relational databases? Dan, thanks for the question, appreciate you articulating the importance of Couchbase Server 7, you know, our largest server release in history and made materially advancements on making it that much easier for companies that are replatforming applications off of relational technologies. One of the concepts that's really important to us is not just moving those applications, but enabling Couchbase to move from what we call a source of truth to a full system of record. We talked about one of the G2Ks, MGEN, not only was that a relational migration, but we are now the system of record for their data hub. You know, another deal that we saw in the quarter is another G2K, actually one of the world's largest auto manufacturers starting to repurpose off of relational technologies, combining that with net new capabilities, powering things like marketing research applications. In this case, the team had no previous familiarity with quote-unquote "NoSQL technologies," but because of the SQL bridge that we've enabled, you know, they can get into and enjoy all the benefits of Couchbase. The combination of being able to service the relational data model, but also open up all the power and flexibility and agility that comes with, you know, the NoSQL engine, and to do that in a single form factor allows us with the addition of ACID-based transactions that we've been in market with for a long time to again become that full system of record, and what we say increase the density of the application that we support. You layer in Couchbase Capella, and now not only are we managing all aspects of the, you know, the database technology, but the underlying, you know, platform and infrastructure as a service. You can see how that, you know, increases our reach, increases our wallet share, but, you know, most importantly, able to satisfy customer demand for, you know, net new and replatformed applications. Great. Just a quick follow-up from me. You mentioned a couple some expenses shifting from Q3 into Q4. Just, you know, can you kind of update us on hiring efforts and how that's tracked relative to plan? And as you look into next year, when you think about some of the go-to-market investments that you're making, whether it's in Capella or quota capacity on the direct side of the offense, can you just kinda give us a sense as to what top priorities are for investment and how you're thinking about the pace of quota additions in the next year? Yeah, good question, Dan. I think the headcount is where we expect it to be. We're on track. Hiring, as you probably have heard universally, is remaining challenging. We're managing through it. We are tracking where we want to be for headcount. We're obviously continuing to aggressively invest in both the R&D side of the house as well as sales and marketing, and you'll continue to see that as we go into Q4 and into next year. Purely from a capacity quota-carrying, we tend to do most of our hiring in Q4 and Q1 as we ramp for next year. We're on track to do that again this year. We feel very comfortable where we are from a headcount and sales capacity perspective at this point. Dan, one of the things that we talk a lot about is field capacity. It's not just quota carriers, but ensuring that those quota carriers have all of the support they need across the company to make our customers successful, everything from SE teams to services teams, cloud specialists, you know, customer success, more investment on the partner side. What we think about first is, you know, how do we get to and support our customers and then ensure that we have the appropriate investments to make sure that we're showing up as a true business partner. We take a very balanced approach. We study this maniacally. We understand, you know, the ratios of those resources that we need and everything from, you know, our largest companies, G2Ks, and we're obviously gonna have a different model for, you know, the buy from motion and really being mindful about the work to be done and the resources that we need to, you know, to put in place, in addition to, you know, continued aggressive investment on the innovation side. We put those two things together and, you know, good things happen. Great. Congrats on the quarter and thanks again. Thanks, Dan. Thank you. At this time, I'd like to turn the call back over to Matt Cain for closing remarks. Sir? Great. Thanks again everyone for joining us today. I just want to reiterate how excited I am about the future at Couchbase. With the continued innovation on our leading core platform, our ongoing strength in our mobile and edge portfolio, the launch of the fully hosted Couchbase Capella, recent large customer wins, and continued execution of our land and expand motion, we're well positioned for acceleration. We're looking forward to keeping you posted on our progress in the quarter ahead. Thank you very much. This concludes today's conference call. Thank you for participating. You may now disconnect.