Coveo Solutions Q4 Earnings Call Highlights

Key Points

• Coveo reported record bookings in fiscal 2026, with management citing strong demand in B2B commerce, generative AI, and large enterprise deployments as the main growth drivers.
• Revenue continued to rise, with fourth-quarter total revenue up 9% to $37.4 million and full-year revenue up 11% to $148.3 million. The company also generated $13.7 million of operating cash flow in Q4 and ended the year with about $102 million in cash and no debt.
• Management said strategic enterprise AI customers are now the focus, while mature, simpler use cases are less central. Coveo expects fiscal 2027 revenue growth and positive adjusted EBITDA for the full year, with SaaS subscription revenue projected to reach $154 million to $158 million.

Coveo Solutions TSE: CVO reported record fourth-quarter and full-year new business bookings for fiscal 2026, with management pointing to strength in B2B commerce, generative AI and large enterprise deployments as the main drivers of momentum.

On the company’s earnings call, Executive Chairman Louis Têtu said Coveo ended fiscal 2026 with its “best new business bookings year ever” and posted $13.7 million of operating cash flow in the fourth quarter while maintaining the break-even levels it had guided for the year.

Management framed the results around Coveo’s position in enterprise AI, arguing that large companies need technology that can connect AI systems to trusted, permission-aware enterprise data. Têtu said Coveo’s platform has evolved into a “trusted relevance and context layer for enterprise AI,” supporting search, recommendations, personalization and generative AI experiences across complex business environments.

Fiscal 2026 Revenue Rises as Core Platform Expands

Chief Financial Officer Karine Hamel said fourth-quarter subscription revenue was $35.9 million, up 10% year over year. With the Qubit platform fully deprecated, all SaaS subscription revenue in the quarter came from the Coveo core platform, which grew 14%.

Total revenue for the quarter was $37.4 million, an increase of 9%. For the full fiscal year, SaaS subscription revenue was $142.5 million, up 13%, while the Coveo core platform grew 15%. Full-year total revenue was $148.3 million, up 11%.

Gross margin was 78% for both the quarter and the full year. Product gross margin was 80% in the quarter and 81% for the year. Adjusted EBITDA was $0.8 million in the fourth quarter and negative $0.8 million for the full year, which Hamel said was in line with guidance.

Coveo generated $13.7 million in operating cash flow in the fourth quarter, helped by collections, and $10.5 million for the full year, compared with $11.1 million in the prior year. The company ended the year with about $102 million in cash and no debt.

The company also continued its share repurchase program, buying back about 1.9 million shares for cancellation in the quarter at a weighted average price of CAD 6.08 per share, for total consideration of $8.4 million. For the full year, Coveo repurchased about 4.4 million shares at a weighted average price of CAD 6.83 per share, for total consideration of $22 million.

B2B Commerce and Generative AI Drive Bookings

Hamel said commerce was the primary growth driver in the quarter, representing about 60% of total new business bookings and remaining Coveo’s fastest-growing segment. B2B commerce, in particular, delivered record new logo additions and strong new business bookings.

Co-Founder and Chief Executive Officer Laurent Simoneau said Coveo is seeing strength among B2B manufacturers and distributors, where large parts catalogs, complex buyer journeys and fragmented technical content create challenges that the company’s AI technology is designed to address.

Simoneau said Coveo landed, for the second consecutive quarter, the largest deal in its history: a seven-figure annual subscription with a Global 1000 industrial manufacturer. He said the customer operates a large B2B aftermarket parts and service business and will use Coveo for AI-powered parts discovery and recommendations across millions of parts in more than 30 languages.

Simoneau said the customer’s conservative business case estimates hundreds of millions of U.S. dollars in incremental revenue over three years, driven by improved conversion, average order value, reduced manual maintenance and improved service-oriented architecture performance.

Generative AI also continued to expand across new customers and existing accounts. Hamel said Coveo nearly doubled its GenAI customer count year over year, and GenAI solutions now represent 13% of total annual recurring revenue. Net expansion for generative AI SKUs remained above 150%.

Management Emphasizes Strategic Enterprise Customers

Coveo executives repeatedly drew a distinction between the company’s strategic growth areas and more mature customer cohorts. Têtu said strategic growth areas include B2B, commerce, GenAI and large complex enterprises deploying Coveo across multiple use cases. He said those segments now represent the “vast majority” of Coveo’s overall ARR and nearly all new logo acquisition focus.

At the same time, management said some more mature service and workplace cohorts with simpler search use cases have more modest renewal and expansion profiles. During the question-and-answer session, Têtu said Coveo is no longer focused on smaller, simpler use cases where customers may be evaluating whether basic AI models can answer questions on their own.

“We’re no longer seeing the world as service versus commerce versus websites,” Têtu said, describing the company’s focus on broader enterprise deployments that combine commerce, service, knowledge and other digital experiences.

Hamel said Coveo’s core platform net expansion rate was 103%, excluding the impact of the Qubit deprecation. She said the reported metric reflects several factors, including isolated churn events during the year and a significant Salesforce-related event in the second quarter, while strategic cohorts continue to show stronger expansion dynamics.

Customer Organization and AI Product Strategy

Simoneau said Coveo is changing its customer operating model to bring account management, forward deployed engineering, technical programs, professional services and support into a more unified customer motion. The goal, he said, is to accelerate deployment, support adoption and uncover additional enterprise opportunities.

He also said Coveo has hired a new chief sales officer to lead its North American new customer team. The executive is expected to join in June and has more than 20 years of enterprise sales leadership experience, including roles at large software companies.

On the product side, Simoneau highlighted Coveo’s hosted MCP server, launched in the prior quarter, to support interoperability between Coveo and AI assistants and agentic frameworks. He also said Coveo has rolled out Coveo Search Agents to select customers, adding conversational and reasoning capabilities across commerce, service and other enterprise experiences.

Têtu said the company also sees potential opportunities in Canadian public sector and regulated industries seeking sovereign AI deployments. Coveo previously announced a memorandum of understanding with the Canadian government and, in the fourth quarter, a strategic agreement with Bell AI Fabric. However, Têtu said Coveo is not including revenue from that opportunity in guidance because of its scope, geopolitical factors and unpredictable timing.

Fiscal 2027 Outlook Calls for Growth and Positive EBITDA

For the first quarter of fiscal 2027, Coveo expects SaaS subscription revenue of $37.1 million to $37.6 million, representing about 12% to 14% growth for the Coveo core platform. Total revenue is expected to be $38.2 million to $38.7 million.

For the full year, the company expects SaaS subscription revenue of $154 million to $158 million, representing about 10% to 13% growth for the Coveo core platform. Total revenue is expected to be $160 million to $164 million.

Coveo expects adjusted EBITDA of negative $1.5 million to negative $0.5 million in the first quarter, reflecting seasonally higher costs. For the full year, the company expects adjusted EBITDA of $2 million to $7 million and operating cash flow of more than $10 million.

Hamel said the outlook reflects healthy adoption and expansion in strategic growth areas, but also a balanced view of the broader environment, measured expansion in mature cohorts and timing uncertainty around large strategic opportunities.

About Coveo Solutions TSE: CVO

Coveo brings superior AI-Relevance to every point-of-experience, transforming how enterprises connect with their customers and employees to maximize business outcomes. Relevance is about moving from persona to person, the degree to which the enterprise-wide content, products, recommendations, and advice presented to a person online aligns easily with their context, needs, preferences, behavior and intent, setting the competitive experience gold standard. Every person's journey is unique, and only AI can solve the complexity of tailoring experiences across massive, diverse audiences and large volumes and variety of content and products.

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