Coveo Solutions (CVO) Q2 2025 earnings summary

Executive summary

• SaaS subscription revenue reached $31.2M in Q2 FY'25, up 6% year-over-year and above guidance, with core platform growth at 11%.

• Total revenue was $32.7M, a 5% increase year-over-year, also exceeding guidance.

• Adjusted EBITDA improved to $1.5M from breakeven or $15K a year ago, ahead of guidance.

• Net loss narrowed to $5.4M from $6.5M, and operating loss improved to $4.8M from $10.2M.

• Generative AI customer base grew over 50% sequentially, with strong new logo wins and expanded partnerships.

Financial highlights

• Gross margin improved to 79% from 78% year-over-year; product gross margin remained at 82%.

• Cash flows from operating activities were $1.4M, up 72% year-over-year; cash and cash equivalents stood at $128.2M.

• Net Expansion Rate was 104% excluding Qubit, down from 106% in Q1; overall NER was 100%.

• Qubit platform revenue declined 51% year-over-year to $1.3M; professional services revenue was $1.6M, down 14% year-over-year.

• Adjusted gross margin was 80%, and adjusted product gross margin was 83%.

Outlook and guidance

• Q3 FY'25 SaaS subscription revenue expected at $31.8M–$32.3M; total revenue at $33.4M–$33.9M.

• Full year FY'25 SaaS subscription revenue guidance is $126M–$130M; total revenue $133M–$138M; adjusted EBITDA $0–$4M.

• Positive operating cash flow of approximately $10M anticipated for FY'25.

• Guidance assumes continued Qubit Platform revenue decline and cautious enterprise spending.

• Guidance expected to be within previously issued ranges, toward the low to midpoint.