Greg Henry: Yeah, thanks Raimo. Look, we obviously think professional services is key to our business. We believe it actually generates more software sales, long-term for us. But right now, what we’re seeing is customers when they’re budget-constrained due to macro, they are opting to continue and grow on the software side, but a little bit less on the services side. So, services as we talked about at the beginning of the year would be slightly down versus last year. Given we outperformed last year, there’s probably little slightly a bit more of a headwind than we expected. The second part of that is, as we get more and more into Capella, given that it’s a service in to itself that the customers are going to have a less smaller attach rate to the Capella business from a service perspective.
So, I think both of those things are starting to play right now. But look, we still think services are important for customers and we’ll continue to push them, but we’re very pleased at how the software part of the business is outperforming while services is a slight offset to that.
Raimo Lenschow: Yeah. Very clear. Thank you very much. Congrats.
Greg Henry: Thanks, Raimo.
Operator: Thank you. Our next question is from Rob Oliver with Baird. Please proceed with your question.
Rob Oliver: Great. Good afternoon, guys. Thanks for taking my question. I had two. Greg, I’ll start with you since there was one earlier on customer count. So, the 20% growth in Capella customers, certainly sounds great. And then just from some of the other commentary you guys made, trying to triangulate it, feels like the contribution might be about half new logos and half existing customers on Capella. Is that right? And how should we think about that going forward? I know you guys have said Capella is going to be the single best source of new logos for you. But sort of in the coming quarters, how should we think about that split?
Greg Henry: From a new logo perspective, Rob, is that…
Rob Oliver: Yes. Yeah, like, I’m thinking more Capella adds. It seems like — because you guys had 20% growth of Capella customers, but based on your customers added and the commentary around that, some of them aren’t new logos. So, I just wanted to get a sense of how that split is.
Greg Henry: Yeah. I think — so couple of things. One is we do expect that Capella will continue to be the majority of new logos, as we go forward into the second half of the year and into next year. That’s just where we’re seeing the most momentum. I would remind you that we do have customers that have both enterprise, Couchbase enterprise and Couchbase Capella. And so, in the total customer count, we only count them as one, but obviously when we give you the Capella customers, everybody who’s got Capella, but some of them also have enterprise. So, just when you’re trying to sort of reconcile the math, just to be aware of that. But again, we expect there to be the majority of that being Capella, but we’re still obviously, as Matt was talking about the pipeline, we still have a good pipeline around enterprise business, too.
So, we still plan on driving new logo business there. In terms of, if you think about ARR and revenue, clearly the migrations will be the larger, because given our enterprise nature and the large customers, that will make up the bigger amount in the near term until the newer customers get ramped up.
Rob Oliver: Okay, helpful, thanks. And then, Matt, you’ve gotten a couple of questions on AI and some of the macro already. So, I guess I’ll ask about, Capella consumption trends intra-quarter, kind of what you’re seeing in terms of customer usage for those that adopt Capella? Any color there would be really helpful. Thanks, guys.
Matt Cain: Rob, we said a couple of times that we have really high expectations for Capella and we’re pleased with the momentum. In terms of consumption, I would say that’s meeting, if not exceeding, even our internal expectations. I think it’s proving the value proposition of do more with less, getting people focused on application development while we run the database. I think they are realizing the benefits of the underlying Couchbase platform, faster, with more efficiency. We’ve talked about the — driving the majority of net new logos, we’re also seeing improvement on net retention rate, driven by the success of Capella. Your comment on balancing migrations in new logos is really important to us. While we are certainly focused on and excited on new logos and the area that we will do better, we see some really healthy migrations on Capella.
In addition to the ones we provided, one of the largest hospitality companies in the world that’s been an existing customer of ours, aggressively pursuing next-generation apps with Capella for the value proposition of scale and performance and cost effectiveness. And that’s just one example. As we look at the pipeline and the planning that we’re doing with existing customers, while managing the pipeline of new. We’re looking at consumption dynamics in both cohorts, if you will. And my comment on exceeding expectations actually pertains to both, which is something adding to our excitement about Capella overall.
Rob Oliver: Great. Helpful color. Thank you very much.
Matt Cain: Thanks.
Greg Henry: Thanks, Rob.
Operator: Thank you. Our next question is from Jason Ader with William Blair. Please proceed with your question.
Jason Ader: Yes, thank you. Good afternoon, guys. Just wanted to ask about the go-to-market side. I know we talked a lot about Capella here on this call. But are there any specific initiatives on the go-to-market side that are helping you get in front of new enterprise customers, which still seems to be like a challenge for you guys to get in front of — to get the ad-bats and to get in front of those prospects?
Matt Cain: Yeah, Jason, I would say there’s probably not a thing that we’re doing on the go-to-market side that isn’t focused on getting in front of new customers, everything from demand, announcing new capabilities, building our pipeline, establishing channel programs, investing in geographies that are relatively new to us where we are seeing disproportionate demand and faster return. I think one of the things that we’re very mindful of is, you need a compelling event for an application to be developed. And for the applications that we serve and a lot of cases they are truly mission critical, and there is a time element to that initial land. We’ve talked about shortening that quite a bit with Capella. But our teams are maniacally focused on new customer acquisition and managing the pipeline and there’s not an hour that goes by at Couchbase that we’re not thinking about how to get better there.
