Couchbase (NASDAQ: BASE) stock got hit hard in Thursday's trading. The company's share price closed out the daily session down 15.2%, according to data from S&P Global Market Intelligence.

After the market closed on Wednesday, Couchbase published results for the second quarter of its 2025 fiscal year (which ended July 31). The company delivered sales and earnings for the period that beat the market's expectations, but investors weren't happy with some elements of its forward guidance.

Q2 beats didn't stop a sell-off for Couchbase stock

For fiscal Q2, Couchbase posted a non-GAAP (adjusted) loss per share of $0.06 on sales of $51.59 million. The performance beat the average Wall Street analyst target, which had called for an adjusted loss of $0.09 per share and sales of $51.12 million.

Total sales were up 19.6% year over year, and subscription revenue rose roughly 20% to hit $49.3 million. Meanwhile, the company's adjusted gross margin increased to 88.3% from 87.2% in the prior-year period.

Couchbase's adjusted operating loss also narrowed to $4.1 million -- down from $9.2 million in the prior-year quarter. The company's Q2 report showed encouraging progress on some key fronts, but investors reacted negatively to the cloud software-specialist's forward guidance.

Couchbase's full-year targets underwhelmed Wall Street

For the full-year period, Couchbase now expects revenue to come in between $205.1 million and $209.1 million. The midpoint of that guidance range fell slightly short of the $207.3 million in sales called for by the average analyst estimate but represented an increase from management's previous guidance for sales between $204.5 million and $208.5 million.

Couchbase also lowered its adjusted operating loss forecast. The company now expects its adjusted operating loss will come in between $19.5 million and $24.5 million, improving from its previous forecast for a loss between $21.5 million and $26 million.

On the other hand, management reiterated its expectation that the business will end its fiscal year with annual recurring revenue (ARR) between $235.5 million and $240.5 million. It looks like investors were expecting the company to raise its target.

Following the Q2 report, Couchbase stock saw downward price-target revisions from Morgan Stanley, DA Davidson, Oppenheimer, and other investment firms. ARR trends were a recurring rationale for the price-target cuts.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Couchbase Stock Plummeted Today was originally published by The Motley Fool