What happened
Shares of Couchbase (BASE -2.63%), the cloud database software provider, fell 13% on Thursday (1:45 p.m. ET) despite reporting "beats" on both the top and bottom lines last night.
Analysts had forecast that Couchbase would lose $0.25 per share on sales of $34 million in its fiscal fourth quarter 2021. In fact, Couchbase lost only $0.22 per share and delivered sales of $35.1 million.
Image source: Getty Images.
So what
Of course, those were pro forma numbers. When calculated according to generally accepted accounting principles (GAAP), Cloudbase's losses were still better than feared but $0.30 per share -- not $0.22.
Q4 sales climbed 19% year over year for Cloudbase, with subscription revenue up 17% and annual recurring revenue up 23%. Gross profit margins on those revenues, however, slimmed by 120 basis points to 88.2%.
For the year, Cloudbase's revenues were $123.5 million (up 20%). GAAP losses for the year came to $2.37 -- bad, but only about one-third of what the company lost in 2020.
Free cash flow ran negative both for the quarter and the year: negative $2.7 million and negative $42.4 million, respectively.
Now what
So last night's news wasn't all bad. Unfortunately, investors appear to be more focused on what will happen in 2022 instead. In the first fiscal quarter currently underway, Cloudbase is forecasting sales broadly in line with analyst estimates -- about $32.6 million, with continued losses. For the full year, however, Cloudbase warned that revenues will probably be only about $147 million, well below the $151.5 million that Wall Street had been projecting -- and with continued losses besides.
Long story short, Cloudbase may have "beat earnings" last night, but with the prospect of seeing it "miss earnings" in 2022 on the horizon, investors have decided to sell.
