Coveo Solutions (CVO) Q2 2025 earnings summary

Executive summary

• SaaS subscription revenue reached $31.2 million, up 6% year-over-year and above guidance, with core platform growth of 11% and strong momentum in generative AI solutions and customer additions.

• Net loss narrowed to $5.4 million from $6.5 million, and adjusted EBITDA improved to $1.5 million from breakeven, ahead of guidance.

• Partnerships with SAP, Shopify, Salesforce, AWS, and Optimizely are driving growth and validating leadership in AI-powered digital experiences.

• Generative AI customer base grew over 50% sequentially, with notable enterprise wins and expanding partner ecosystem.

• The company continues to invest in innovation, launching new APIs and enhancing commerce and generative answering capabilities.

Financial highlights

• Total revenue was $32.7 million, up 5% year-over-year, with SaaS subscription revenue accounting for 95% of total revenue.

• Core platform contributed $29.9 million in SaaS revenue, up 11% year-over-year; Qubit platform revenue declined 51% to $1.3 million.

• Gross margin improved to 79% from 78%, with product gross margin at 82% and adjusted product gross margin at 83%.

• Cash and cash equivalents stood at $128.2 million at quarter end, with cash flow from operations at $1.4 million, up from $0.8 million.

• Adjusted EBITDA margin improved significantly year-over-year.

Outlook and guidance

• Q3 SaaS subscription revenue expected between $31.8–$32.3 million; total revenue between $33.4–$33.9 million; adjusted EBITDA between $0.0–$1 million.

• Fiscal 2025 annual guidance: SaaS subscription revenue $126–$130 million, total revenue $133–$138 million, adjusted EBITDA $0.0–$4 million, and positive operating cash flow of ~$10 million.

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

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

• Second-half bookings performance expected to be stronger, with SaaS subscription revenue growth for the core platform improving thereafter.