Coveo Solutions (CVO) Q3 2025 earnings summary

Executive summary

• Q3 FY'25 total revenue reached $34.0M, up 7% year-over-year, with SaaS subscription revenue at $32.3M, representing 95% of total revenue and core platform SaaS growing 12% year-over-year.

• Record-high new bookings, 36% sequential growth in generative AI customer base, and strong momentum in commerce with new client wins, half influenced by SAP partnership.

• Announced senior executive team changes effective April 1, 2025: Laurent Simoneau to CEO, Louis Têtu to Executive Chairman, John Grosshans to COO, and Marc Sanfaçon to CTO.

• Net income for Q3 FY'25 was $4.0M, a turnaround from a net loss of $6.2M in Q3 FY'24.

• Expanded partnerships with SAP, Shopify, AWS, and Salesforce are driving growth and market reach.

Financial highlights

• SaaS subscription revenue for the core platform grew 12% year-over-year to $31.1M; Qubit platform revenue declined 44% to $1.2M.

• Total revenue was $34M, up 7% from a year ago; professional services revenue was $1.7M, down 10% year-over-year.

• Adjusted EBITDA was $0.6M, including $0.5M in one-time severance costs, compared to $(0.7)M a year ago.

• Gross margin improved to 78%, with product gross margin at 82% and adjusted gross margin at 80%.

• Ended the quarter with $119M in cash and no debt; $6.3M used to repurchase 1.4M shares.

Outlook and guidance

• Q4 FY'25 SaaS subscription revenue expected at $32.3M–$32.8M; total revenue at $34.1M–$34.6M; Adjusted EBITDA at $0.0M–$1.0M.

• Full-year FY'25 SaaS subscription revenue expected at $126.3M–$126.8M; total revenue at $133.0M–$133.8M; Adjusted EBITDA at $0.3M–$1.3M.

• ARR growth expected to exit the year in the low to mid-teens range, outpacing reported core SaaS subscription revenue growth.

• Positive cash flow from operations of approximately $10M is expected for Fiscal 2025.

• Guidance reflects FX volatility and fewer revenue recognition days in Q4.