Thank you to everyone for joining us today, as part of our annual Needham Growth Conference. My name is Mike Cikos. I'm the lead analyst here covering infrastructure software, and with me, I'm pleased to say that we have the Chief Financial Officer from Couchbase, Mr. Greg Henry. Thank you. Greg, thank you for joining us. Glad to be here. And just to kick things off, we're gonna have a fireside chat here, but just to make sure this is as interactive as possible, if you guys have questions, please feel free to lob them in. I'll do my best to pick up my head every now and again, but if I don't, just yell it out, and we'll make sure we get to it while we have Greg here. With that out of the way, Greg, just to start it off, but with Couchbase, maybe walk us through company's mission, offering, and I know that the database market can be a little abstract sometimes to maybe generalists or newcomers. So if you could kinda articulate how the offering is different versus other offerings out there today. Yeah, appreciate it. Again, thanks for having me, thanks to the Needham team. Yeah, look, Couchbase is, you know, well over a decade old now. We operate in this massive database world, which I think recently we sized at $136 billion, based on what IDC said. We're focused on the operational component of the database. We've long been a JSON document store and key-value caching that, you know, we sold, you know, enterprise software as a, what I'll call an on-prem. It didn't have to be run on-prem, but it was a customer-managed offering that they would deploy and put wherever they wanted. We've now come out with our Capella offering, which is the Database as a Service offering, which now we run and we host in the various clouds, based on your choice. We also have a mobile edge offering that we were first to market with, probably almost a decade ago now, that basically you can run everything out to the edge, even when you're offline. We've always, you know, been focused on scalability and performance. That's been our hallmark. It comes to us through the architectural differentiation that we developed well over a decade ago, that is sort of baked in all the database vendors today. And ours just happens to be a shared-nothing, memory-first scale-out architecture. The scale-out most database vendors have, the shared-nothing comes from the fact that we have caching along with the JSON document store. The shared-nothing is really the key component where you have equal individual nodes running the database, and they're all equally intelligent. If one's gonna have a problem, another one can pick it up, and it just creates a seamless, very fast performant database that we've been very successful selling to large enterprise for mission-critical applications, tier zero workloads, and really run, you know, help run their businesses. You're already hitting on a couple of things that I'd, I'd like to just dive into a little bit deeper, but like that... Again, if IDC is estimating a $136 billion TAM, I know you're talking to your offering being more of a JSON document store. So first, what does that JSON document store enable that maybe other databases don't quite capture? And then secondly, how much of that $136 billion is addressable today by the JSON document versus, I think about more legacy or relational database styles? Yeah. Well, if I go backwards with your question, so- Go ahead. Good. We can address anything around an operational database. And it's really moving from the relational to the non-relational. That's what we're focused on. There is the other piece of the database world, which is called analytical databases, which are very different, right? We're real-time, runtime, operational. Analytical is more offline batch processing. So they are very different and have different requirements. I'd say it's hard to know, but half-ish the market is something that we can easily get after, $60 billion or more. And that's why we've tried to build this very complete platform, and I highlight the JSON document store and the key-value caching, along with mobile, and then we bring it as a service. So we really can really, you know, get after all of it. The majority of what we're doing today is still greenfield new applications, but some of the legacy workloads are starting to move over, but there are still tens of billions sitting there that will move over into Couchbase and a few other competitors over the next, you know, many years. Why, why do we win? Again, it goes back to that scale and performance, getting after these really large enterprise mission-critical applications, and that's been our sweet spot. So if you think about our customer base today, we're over, you know, $250,000 average ARR per customer, showing this real nice, you know, scale that we get to with these customers. Because they land, they start, you know, with one application, and they grow to, you know, several tens of applications, and then you get upwards of 50 to 100 applications, and you start getting into these multi-million-dollar accounts. As you know, we did an Investor Day back on December 13th here in New York. If you haven't seen it, it's on our IR website, but we laid out some of the things that we've done in terms of taking a customer that started with $100K back in 2017; it's now almost a $10 million customer today. We have another example where I think it was $500,000; that's over $4 million in a span of, like, three years. So we can really grow these accounts very, very nicely. Because of that scalability that we're talking to here, does that engage or attract a specific type of customer, or is it more focused to a specific verticals, or is this relatively broad-based as far as the market you're able to address? It's very broad-based. We don't pay any vertical tax to go across. We don't have any specific concentration in any one vertical where a majority of our business is sitting. We do very well with travel, entertainment, retail, financial services in particular, but we can sort of hit it all with the platform we have today. All right. And I know that the company as well, it's been a busy couple of months for you guys. You had a solid Q3. You had your first Investor Day, I think, as a public company. We're already starting to allude to that, but could you just give us, like, the, the quick hits, if you will, from the Investor Day? Like, what, what are some of the main points that you would, you know, like the, the audience here to leave with, or that you really wanted to stress, which maybe, maybe was lost on the audience, or maybe they didn't pick up because they didn't have a chance to tune in? Yeah, a couple things. One is, like, we really hit on the platform of what we have today. The key theme was, we have this amazing foundation we built for the last decade, which is our enterprise business, and now we're getting into the Capella, the as-a-service offering, which is only gonna provide even more tailwinds as we go forward. A lot of talk about AI and how we've enabled that, and we'll be enabling more of that over time. The shifting of the go-to-market to be more focused on, because we have these very large accounts, to be more targeted with those, and freeing up some of the rep capacity there to go do new, new logos while getting more out of that. Then, just financial, we just talked about things like we finally disclosed some of the Capella metrics, so we said we were at 10% of ARR, which would give you around an, you know, $18 million to $20 million range based on where we're at. We had 22% of our customer base was a Capella user, and we disclosed that we had our Q3 net retention rate in Capella was 167%, just to give some sense of how it's doing. Then lastly, we laid out some longer term targets financially, and the highlights are, we said, look, for the next four to six years, we think we, we, we can be growing at a 20%+ top-line growth rate. We're gonna get to free cash flow break even by fiscal 2026, and we'll be op income positive by fiscal 2027. The NRR at 167, awesome. Yeah. Great, right? But one of the things that would be helpful is, like, can you give us the composition of that? How much is, like, an existing workload continuing to grow versus me putting more workloads on Capella, right? Because the concern is, if, again, if I'm a customer with 167% NRR tied to you, that spend is gonna ramp up real quick, and it could almost... It reminds me of during the COVID times, it was almost a toxic level of NRR just because it got so high. I know it's a new offering and they're adding workloads, but can you help us segment that? Yeah. It's off a little bit of a smaller base to start with, too. True. There's some of that. Very true. And, look, again, I don't mean to keep pointing back, but if in the Investor Day material, you'll see I tried to highlight a couple examples. So we took one customer, that was a million-dollar enterprise, on-prem customer, went 100% into Capella, and about a year and a half later, they're three times the size, having run on Capella. And we've put a line in there to show, look, a normal enterprise account, where it would be. It's magnitudes ahead where the enterprise account would be. So we are getting the benefits of consumption, but this customer is putting more workloads in there. Yep. Yeah. The workloads they have are growing, and they're looking around, you know, their estate now and trying to figure out where, where others can come from. The other example we gave was a new logo, which started relatively small, and today we're, again, a year to a year and a half in, and they're running at seven times what their initial purchase was. But that is not atypical, because we see customers come in, just like I use the example of when I buy infrastructure from the cloud vendors, I don't buy at 100% of my forecast, I buy at 60 or 70, and I'll go back and rebuy or redo the contract later, and that's exactly what we're seeing. So we're seeing they start small, smaller than enterprise, but then they grow much, much quicker. Awesome. And I don't wanna totally derail, 'cause I wanna get to Capella, but I just had a question again, just, I'm trying to figure out more around gen AI and the types of workloads that people are putting in development, and hopefully, eventually, more of those get to production. But, there's a lot of folks who are looking at gen AI workloads and thinking that, the compute intensity is much higher. As a result, it should inherently drive consumption But I've also heard from other folks that the compute intensity is less of a factor, with much more consideration is the popularity or how much the use case is thriving, and actual usage of that application, not necessarily the underlying intensity. Could you help me figure out, when you look at a or think about a gen AI workload, is it more the popularity of that use case, or is there still some benefit to your model just because it is a much more intensive process when thinking about the underlying compute? Yeah, I think there'll be a little of both- Okay ... but we see, we see it more on, hey, you're gonna be using an AI feature in, in the platform, just like you could use any other feature, and we think that will drive usage and consumption over time. by using it. So we've been asked a lot of times about, "Hey, how are you gonna monetize it?" You know, we're, we talked, we launched or talked about, we have Capella iQ. Last summer, we talked about, which is, think of it like a copilot. We're working on, you know, Vector, which will be coming soon, and all those things will just be, you know, components of the platform. They're not gonna be separate SKUs. We're not trying to sell them separately, but we think that's gonna just give the customer more opportunity to use that over time and thus drive consumption. And look, we talked to customers. One of my reps came back from a very, very, very large company the other day, he's a customer of ours, and said this customer was talking to him about hundreds of vector-type use cases that they're thinking about. They're not even doing it today, but they're thinking about how they might be able to use it. Just to give you an example of how much, you know, demand could be out there for these types of use cases that isn't sitting there today. That's great. Thank you, thank you for that. I guess to come back to Capella, right? I know we've already started to tease out some of the metrics behind it, but just at a very high level, can you remind folks what is it Capella is achieving that maybe your existing offering had, and then the importance of Capella to the Couchbase offering, whether it's giving customers a whole, a more holistic database offering or enabling them with something that they didn't have previously? Yeah, look, I think the thing that it's really doing for us in particular, and I'll talk about the customer as well, what it's doing for us is it's creating—it created an ease of access and ease of use way to get into Couchbase. Yes, we're an open source, and yes, there's a free version, but the reality is, for somebody to go, like, again, you download the software, procure infrastructure, put it all together, get it up and running, that was just, quite honestly, cumbersome, right? And developers don't have the time or patience for that, and rightfully so. So with Capella, I'm not a developer or an engineer, and I got a Capella account going in 90 seconds. So just the ease of access, ease of use, free trial, we created starter packs from a commercial perspective, so $1,000, $5,000, and $25,000, which are bundled credits and services. Just simple, low dollar way to sort of get into Capella and start using Capella. So that's what we think is important. For the customers, we think there's a real TCO benefit for them. They can stop having to procure the infrastructure, stop having to hire and manage people that are running the database, and we can do all that for them, and they can get greater efficiency out of that. And look, a lot of customers will come and say, "I'm not in the business of running databases. You can have it. I'm happy to do it. Just like I don't want to run my data center, I'll give it to the cloud guys." They're willing to cede the running and managing of all that to us. And I know- They'll benefit from it as well. I know we're talking about the consumption element for the Capella offering. Can you remind folks, like, what is the pricing mechanism? How is it customers are consuming their credits? What is it that you guys are looking at for that consumption? Yeah. So we sell it on either an annual credit model, so you get 12 months to use it in any way, shape, or form. There's obviously an on-demand, pay-as-you-go as well. But when you come in and you get a certain number of credits for the year, it's again, it's the same model we had on a per node basis before. It's based on how much compute and what level of... effectively what level of support you're getting from us will dictate the type of credit you need, and then at what rate you'll be consuming those credits based on, you know, using of them. But is it more a function, like is it tied to, in addition to the support, but like, is it tied to the reads and writes that are taking place? Yeah ... at the database level? That's right. Okay. And just for the audience here, to stress that point, I just wanna make sure everyone's aware, consumption is a rev rec model, but it's not the business model. Because there are other consumption elements and models that are out there more broadly, where you might be running a query, which is very different from obviously a read and write taking place at the database level. And I do wanna stress that when you're thinking about how Capella is being monetized with the customer base. That's right. Um- And again, and again, it goes back to the operational aspect versus potentially like an analytical aspect- Yes ... in terms of running the business and keeping it sort of moving along and being real time, runtime. Excellent. Excellent. For Capella, and again, thinking about the impact to the overall business, but can you give us a split as far as how much of the growth today is being driven by net new logos that are coming over to Couchbase versus how many might be migrations? Yeah, it's a great question. Today, the predominant pool of ARR dollars are coming from migrations, but the predominant amount of customer count and new logos is coming from new customers. So big percentage of the customer count is new logos, big percentage of the ARR dollars are migrations. And look, we're gonna have both over time. Like, we are actively working with our installed base. In fact, we put them into three buckets of, you know, actively considering Capella, potentially considering Capella, and not considering Capella right now. And we're going after the ones who are looking at it or considering it now and, you know, really trying to sell hard. At the same time, anytime we're doing a large enterprise deal, if it's a renewal point, we're trying to you know, seed that with a starter pack and just say, "Hey, look, you're a million-dollar account. Take a $5,000 Capella starter pack. Let somebody in there over the next 12 months use it." So we're really trying to seed those accounts so that they get, you know, the experience using Capella, because we've really found that those who are using Capella really enjoy it. Okay. And for the migrations of the workloads, right? Can you help us think through, like, what's the lift that's required on that customer? Because again, historically, you don't wanna change your database with where that workload is located. There's worries about data loss. You have to stand up maybe redundancies, so there's a dual cost effort on your side. But can you help us think about... Obviously, I think it speaks to the value prop that Capella is bringing, that you're getting that migration, but what's required on the customer's part to make that migration happen? Yeah, there is, and that's why, again, on these starter packs, we have these services bundled in to sort of help... You know, we're there to help them. I would say it takes anywhere from days to up to six months to do a migration. So that million-dollar migration I talked about, it took them about six months. Now, when we do that, though, we give what we call dual use rights. So we basically say, "Hey, for this period of time, you can continue to use your enterprise on-prem licenses, but you're a Capella consumption customer." So we make that migration as seamless and easy as we possibly can because we're not gonna make them sort of double pay for that interim period, because it'll be too punitive to them, and it's gonna preclude them from moving into Capella, and we don't wanna create any friction for them to move into Capella. After that initial lift, is there some steady stream service that's provided, or they can subscribe to a service? Or no, it's really, it's just running in the background, it's less of an event? Yeah, it's really, you know, Okay And that's what we've talked about, is if you look at our business, the bigger Capella gets because it's a service as it, as it, in itself, in and of itself, our professional services business will probably not be growing at the same rate because it's embedded in there. I think, Mike, you might have asked too, just to clarify. Yeah. When we do migrate, if you took a dollar of enterprise and brought it over apples to apples, it becomes sort of a $1.50 to $2, depending on what they take in terms of the uplift, just to move into Capella, because now the infrastructure and the people running the service are there versus being a self-managed. So- There's natural uplift in just getting to Capella without even getting into the consumption flywheel. And we have this true as-a-service offering, so can you think about the benefits to the overall Couchbase model when thinking about the efficiency that you're just talking to on the services, the leverage that helps eventually flows through the model? How should we think about all these pieces moving together? Yeah, look, the reality is, the first sale is still a sale, but when they get on the consumption model- we're already seeing where they're liking it. The majority of customers are consuming beyond the level at which they've actually purchased, so they're overconsuming, and almost all of them are for good reasons. And so once you get on that model, yes, the first one's challenging 'cause it's a sale, but after that, it's we can. We have the telemetry to know what they're doing, how they're running it, where they're running it, as well as their consumption rate. And we talk to every customer, whether they're overconsuming or underconsuming, to make sure that they know where they're at on their journey, to make sure it's not a surprise to them. For the ones who are overconsuming, in particular, "Hey, you know, you're gonna run out." We can project at any, any point we can project when they're gonna run out based on what they're using, and we're in constant dialogue with them about, "Hey, you're gonna probably have to buy more, and how are we gonna make this work?" So it's a much more continuous and fluid conversation versus the subscription model, where you show up once a year for the renewal and, you know, have the big discussion then. It's a much more ongoing, fluid discussion. I know you guys also have this broader platform that you need to balance as far as, like, driving R&D innovation throughout. So maybe just taking a step back, can you help us think about your approach to prioritizing where that innovation is occurring? How is it you guys are optimizing this on behalf of your customers? Yeah. So going all the way back, we've always been focused on this Couchbase platform, in any form. And today we're very close. We're almost effectively at parity between the enterprise version and what's in Capella. It's gonna be at parity very, very soon, and after that, we think that there's a good rationale that we might actually put the new features go to Capella first before flowing down into the enterprise version. So we're making heavy investments to get to parity, continue to grow the offering. Like I said, Vector will be another feature as part of the platform that's gonna come out. It's we don't think that's gonna be a standalone, you know, business by itself, but it's gonna be a feature that's gonna be required to be part of a, you know, highly performant, successful operational database platform. But we will continue to invest in, you know, all of our Capella operations to make sure that we're, you know, taking care of the customers and continue to build out the technology in the platform as well. We're making, again, heavy, heavy on the AI investment side. Just to tease out the Capella first comment. And I know we're early, right? But is the thought there that maybe there's a bit of a carrot before the horse as far as driving customer adoption, specifically towards Capella? Is that the—that's the end game here? We want customers to be in Capella. Right. We think it's beneficial for them over the long haul. from a TCO and just database operations, and we think it's gonna be best for Couchbase, and we're already, you know, seeing some of those benefits. But that's where, that's where we want it to go. And look, we see other companies out there that are consumption companies. Some of them are fully consumption, some have been migrating, and we just see what happens over this, you know, multi-year journey, where you get this very, very strong for the first five, six, seven years. This very consumption-driven model that really grows very, very nicely, and we're in the very early days of that at Couchbase, and it takes a long time before you get to this sort of optimization point. We're nowhere, we're nowhere near that. So I know a lot of folks have been tuning in to what the cloud vendors are saying on optimization and other. that is not impacting how we're running our business today because we're so early in that, consumption adoption phase. That's a great point. I'd also argue, and Warren, I'm in your camp on this, but when thinking about the optimization, those workloads, again, are mission-critical. The idea that you're gonna take down an application when your users are using it in some capacity is just almost. It's a head-scratcher that that would be taking place in the first place. So that database positioning in the stack puts you in a very strong sweet spot, if you will. Yeah, and that's why I try to highlight we're tier zero applications. We have customers telling us that says, "Look, if you don't work, we can't run our business. I mean, what a great place to be. Yep, yep. I guess building on the R&D innovation, you guys have announced some capabilities more recently, whether it's Capella iQ, Columnar Store. Could you hash out each of those specifically as far as what they're bringing to the Couchbase story, early reads as far as customer adoption and how they're using these new capabilities? Yeah. So we've announced them, we've announced them. They're not, you know, like Capella iQ is not quite- GA. It's almost there. But that—think of that as a copilot. So it's just—it's the ability to give our developer users a faster way to continue to write code and develop their applications. And we think that's gonna be extremely powerful as we move forward because so much of this code, quite honestly, can be written by AI. There's gonna be a human that's gonna have to come in there and fine-tune it and tweak it, but there's so much of the base that can be written by the AI technology. Columnar is more around analytics, so trying to get deeper real-time analytics off the platform. We've always had analytics, but we think Columnar is going to be sort of a new level, to power companies who are really trying to use real-time analytics to run the database, which has always been a massive challenge with how operational databases run. So, very excited about that. I know we've spoke about AI a couple of times now between Capella iQ or the compute intensity. Can you help us think about, like, other areas where AI is interesting to Couchbase as far as maybe features that you guys can build in or to help you guys with migrations? Like, are there other avenues that we can explore on that? Yeah, you know, we already had created this sort of like mapping tool on the enterprise side of the business that can map from a relational to the non-relational, right? And again, just remind people that Couchbase has developed the query where the query language queries on a NoSQL environment, but it uses a SQL language, which is sort of the default language of all the relational. So in terms of us, our ability to migrate legacy relational workloads over to ours, we think is going to be a massive opportunity for us as we go forward. That's one of the things that we're thinking about from an AI perspective. And for us internally, we think AI is going to help us from a development perspective as well. Leveraging that to, again, go faster with how we're developing, you know, Capella. And again, just to tease that out a little bit more, when you're talking about the understanding of the different languages, so is it worthwhile to think that in some way you guys can use AI to help understand the syntaxes between the different databases to help streamline that workload migration we were talking about earlier? Correct. Okay. Particularly the legacy piece, which is the biggest piece, that's still sitting there because it's all SQL. Okay. Versus other database companies have created their own proprietary language. So we think we're going to have an advantage to be able to sort of do that sort of mapping and migration quicker, faster, better than others. Okay. And vector searches, I know, again, I didn't want to leave that on the table, but I think you had said earlier that you guys view that as a feature that you can build into the platform. So can you talk about your view of vector search, the importance of it, what it enables for your customers, that maybe they didn't have previously or the importance, I guess, how they're planning on using that in their own workflows? Yeah. So I'd say even though we haven't formally announced vector, I just said it's coming- ... we've always had things like indexing and full text search as part of the platform. This is just really taking this to a new level and allowing, you know, better access to the data, better, faster access to the data through the vectors. So that's what, that's what we're building, and we're doing it, I think, in a proprietary way, using a different sort of, you know, set of tools than we've seen some of the others use. I told you, we talked to this customer the other day, and the rep came back saying that they had hundreds of vector use cases that they're developing. So we think it's going to be an important part of the platform. Like I said, it's going to be a feature, not. We don't see vector being a platform in and of itself, but we think it's going to be a feature, and we're obviously starting to see that, and we think eventually, you know, most of the key database vendors, if not all of them, will have this as a, as a key feature, just like we have Query today. Okay. Shifting gears, go-to-market. So again, just very high level to start us off, but can you walk us through what Couchbase's go-to-market strategy is today as far as the different avenues to attract either developers or get that next new workload on the platform? Yeah. So we've been a very, you know, enterprise, sell to traditional, you know, rep SE to the customer. That's our enterprise model that we've been running for, like I said, a decade plus, and we think it's the hardest one to figure out, and we think we've done a pretty good job now in sort of figuring that piece out. Now comes the Capella, which is the self-serve buy from model. I know you asked before about where are we going to get the efficiencies, that's exactly where we're going to get the efficiencies from. Because, look, you can start small, grow much faster. You don't have to have this big renewal conversation every year. We just think that we're going to see a really significant amount of efficiencies. If you look lately, excuse me, we've been seeing this in the model, right? You've sort of seen the sales and marketing as a percent of revenue come down. We'll continue to see that. We'll continue to see overall leverage in the model that we'll get. And we just think it's going to, you know, continue to pick up from here, which is why we had confidence to come out and say when we're going to be free cash flow and operating income positive. Mm-hmm. And for the competitive set that you guys are squaring off against, who is it you guys are seeing most in the market? And then I guess the follow-up is, do those competitors change because of Capella? I know you've had it out there for a little bit now, but has there been a notable change as far as who you're competing head-to-head with there? Yeah, I don't think we've seen a change in the competitor set since we've launched Capella. I think we've become more competitive, quite frankly. The ones we tend to tell people that we see Mongo quite a bit. We're, you know, head-to-head against them quite, quite often, which is a good sign for us. In fact, more than, more than we've seen in the past, and it's because of Capella, because we can compete with Atlas and, you know, the as-a-service need. And then we see usually Amazon and Microsoft from a cloud perspective. Those are the ones we see most often. That doesn't mean the other ones, such as Redis and DataStax and Aerospike from time to time as well, but those are the ones we see sort of predominantly. Okay. And with Capella now, I guess a slightly different flavor of the question, but like, how would- how did that change your ability to compete versus those vendors? Yeah. Well, one is, some of the vendors we would go talk to and I wanna know if, even if I'm not gonna buy it today, I wanna know you have it as a service offering, and I can see it. Because I'm making a 10-year decision now, and I'm not gonna make that if I can't touch and feel it. So we've taken that off the table. And because we've been very, again, scalable and performant, and I think the market knows this, I think we're starting to see that, "Oh, Capella's out there, maybe I should take a look at that, too." Where before we weren't getting some of those looks. So we're just getting better awareness. From a go-to-market marketing perspective, we were running sort of our own Couchbase Days a lot and trying to get developers in, and really what we found is we've changed that model in the last year, and we're just going to the cloud vendors' shows that they're putting on in the regions, and the developer you know numbers there are just dramatically higher. So we're getting to far more developers than we've ever have in the past. And again, the ease of use, ease of access of Capella, where you can have a free trial, eventually we'll have a free tier, just gonna help us you know immensely with the developer community. And the sales force thinking through their motivation. So first, how have they responded to selling Capella? And then secondly, how are they incentivized to go out with the broader Couchbase offering? Yeah. What, what are the specific things that they're incentivized to get across the finish line? They are highly incentivized to sell Capella, let's just put it that way. Like, that's where they're gonna make their best money. And I would say, look, these are a bunch of enterprise infrastructure sellers that we've had that are used to subscription, and we've had to sort of, evolve them a little bit to say: Look, you don't have to sell a $100,000-$200,000 new logo. That's not the Capella model. Sell them a $5,000 or $25,000 starter pack and just get them going. Small sales grow quickly. And they've seen... Because they're starting to do this, and they're seeing that, "Wait a second, I, I don't have to wait for the renewal point the next year to go try to upsell them." Customers are running out of credits. They come to us and say, "We need to buy more. We're expanding a use case 'cause we've run out. We're gonna buy more." So they're seeing the power of Capella in terms of instead of this sell to model, it's really becoming a buy from model. And so, and again, they're very, they're very incented to sell Capella and get them on the consumption model train. And you, you're partially answering this already by talking about the, how the model's become a sell-- become more of a buy from rather than a sell to. But one of the things I've gotten from a handful of folks is, like, if you are specifically going after driving consumption with customers, how do you do that without just becoming a, a pest? Just inbounding like: "Hey, is there another workload we can help you with?" Like, can you help us think through how you're driving that consumption, to where it still feels organic for the customer? Yeah, I'd say most of it today is organic, just 'cause we're in the early days. But look, again, they're gonna make their money selling Capella, and getting people started and growing. And so just as much as we focus on getting new customers, we focus just about as much on getting new applications. And the reality is, it is easier to sell a new application to an existing customer than sell to a new customer and get them started. So they are, you know, looking around and hunting for new applications, and they always have been, and that's really a key to our business. I think it'll be even more of a focus going forward, is focus on selling new applications, even as much as selling new customers. Great. We were already talking about how you guys are leveraging some of those cloud conferences, right? Just because the developer volume there is so great. Would love to get your insights as far as the strength or the types of relationships you have with the different hyperscalers, and how you're leveraging their resources to get Capella out to the market? Yeah, we have relationships with all of them. They're all set up where their people get, you know, quota retirement and get paid on selling Couchbase. They like it, too, because obviously they're trying to sell, you know, more of their infrastructure. So they like when they're selling that, particularly with Capella and what they've seen early days at Capella. We have an amazing relationship with all of them. I'd say Amazon, we're further along just 'cause we came out with that first with Capella, but we announced a really pretty strategic partnership with them last year. And I think if you look at who else is sort of attaining that level of partnership, we're punching above our weight there. We had folks from Amazon, AWS, come to our sales kickoff last year, and it wasn't just one person up there for 15 minutes. There was a whole team of people, like 10 of them. They sat through, you know, our sessions, learning about how we're trying to sell and go to market so they can help facilitate that, and we think that's just gonna continue to evolve, not only with Amazon, but also, you know, Google and Microsoft. Great. Shifting to the analyst day, and this is more just a look at the long-term model, right? But can you just remind us? I know that you guys have, I think, it's a 20%+ ARR target out there. So what gets you the confidence in being able to drive that kind of durable growth? And can you help us think about the building blocks as far as, net new logos, expansion of existing workloads, and then new workloads from existing customers coming on? Like, how do those fit into that ARR target? Yeah, again, we—the theme of the day was we've got this great foundation, and Capella is starting to inflect. We think we can continue to lean on this foundation that we built of this enterprise business for a long time now. We've said even since we went public, before Capella, we had 115%+ net retention rate. That's the enterprise business. Now, we add on Capella on top of that, so that's why we have the confidence that we can continue to grow it. We do assume a certain amount of migrations are happening. We think we'll start seeing a pickup in new logos. We saw a little bit of that in, you know, in Q3, you know, last quarter. I think we said it was one of our best, you know, gross logo. It might have been the best gross new logo in company history last quarter. And now we gotta put a few more quarters together of that, but we're starting to see that new logo flywheel kick in as well. So I think those are the couple of areas that gives us the confidence. And, on the profitability side of the equation, as a reminder to folks, when is it you guys are targeting free cash flow breakeven? And as a reminder, on top of that, where are the sources of leverage you guys anticipate to drive to get to that breakeven target? Yeah. So we said we're gonna be free cash flow positive in fiscal 2026. We're on a fiscal January 31 calendar. We're closing fiscal 2024 here, so within two years, and then op income within three years, if not sooner. Look, we've got a, you know, high 80% gross margin today, even with 10% of Capella coming in. We said we'd be able to maintain over this period at least 80% gross margin. So we're really trying to drive the Capella volume, quite frankly, even though it's gonna come at a, come at a, you know, a decelerating rate over time, but we're gonna get more margin dollars going through the system. We're gonna get that go-to-market efficiency we talked about, and that's what's gonna really drive and create that leverage in the model for us. And the reality is, we have opportunity. We are nowhere near best-in-class from go-to-market efficiency. We have real opportunity to drive this Capella and otherwise. I think that's probably where I wanted to go next. But if I think about the ability to attract or engage developers, they are by default a finicky bunch, right? And they wanna test and then play with the product. How is it you guys are increasing your visibility with that audience? What are some of the initiatives you currently have in place for that? Yeah. Well, it was, again, first it was getting Capella to market- free trial, going to the cloud vendor conferences, where they have the large majority of developers sitting there already. I mentioned a little bit earlier that, you know, we're thinking about and looking to do potentially a free tier, sort of in perpetuity, to allow developers to continue to, you know, to work on that without having the burden of, you know, my credits are running out, type thing. And look, we've got developer, you know, relations folks that have been hired, that sit in marketing, some sit in engineering. We're trying to come at it from a developer perspective as we move forward here, in terms of the mindset of how we build the platform. Awesome. I think probably time for one more question, but we'll turn it back to you. For the audience, what would be some of the main points you'd want them to leave this fireside with? Yeah, I'd just say, if you hadn't had a chance to look at the, you know, Investor Day material and presentation, I think that's a great overview. You know, you get all the key executives, particularly Matt, our Chief Executive Officer, talking about the vision and what we've done and what we're gonna do in the future. A technology update, go-to-market update. Look, we're as excited as we've ever been. I've been at Couchbase for seven years now. Really, the opportunity for us is immense, and we have all the tools to fight with, and you're starting to see some of the growth in terms of, you know, expanding our growth rate over the last couple of years, getting leverage in the model. We've seen some of the efficiencies, and just with Capella kicking in, just we think it's a great time at Couchbase. All right, then we'll leave it there. Thank you.