Coveo Reports First Quarter Fiscal 2026 Financial Results

Growth rate reaccelerates to 16% for the Coveo core platform⁽²⁾

Generative AI solutions drove ~50% of new business during the quarter

Broadens relationship with SAP

Coveo reports in U.S. dollars and in accordance with International Financial Reporting Standards (“IFRS”)

MONTREAL and SAN FRANCISCO, July 31, 2025 /PRNewswire/ – Coveo (TSX: CVO), the leader in AI-Relevance, delivering best-in-class search and generative experiences that maximize business outcomes at every point-of-experience, today announced financial results for its first quarter of fiscal year 2026 ended June 30, 2025.

“Fiscal 2026 is off to a strong start; we committed to reaccelerating revenue growth, and that is what we are delivering” said Laurent Simoneau, Co-Founder and Chief Executive Officer of Coveo. “We are seeing clear momentum in our market as enterprises increasingly recognize the uniqueness and necessity of our platform to improve their commerce outcomes and support their agentic and generative AI transformation efforts.”

“The groundwork we’ve laid over more than a decade in AI is paying off, and I believe we are positioned to further accelerate our growth and leadership” said Louis Têtu, Executive Chairman of Coveo. “Our ongoing success with strategic customers and partners such as SAP and others reflects the growing recognition of the role we are playing in this evolving landscape.”

First Quarter Fiscal 2026 Summary Financial Highlights

The following table summarizes Coveo’s financial results for the first quarter of fiscal year 2026:

First Quarter Fiscal 2026 Financial Highlights

(All comparisons are relative to the three-month period ended June 30, 2024, unless otherwise stated)

• SaaS Subscription Revenue⁽¹⁾ of $34.2 million, an increase of 12% compared to $30.6 million. Within this, SaaS Subscription Revenue⁽¹⁾ for Coveo’s core Platform⁽²⁾ was $33.1 million, an increase of 16%.
• Total revenue was $35.5 million compared to $32.2 million, an increase of 10%.
• Gross margin was 77% and Product gross margin was 81%, comparable to the prior period.
• Operating loss was $10.9 million compared to $8.2 million. Net loss was $15.1 million compared to $6.1 million.
• Adjusted EBITDA⁽⁴⁾ was ($1.9) million compared to ($1.7) million last year.
• Cash flow from operating activities was $7.1 million compared to $3.0 million in the prior year.
• Cash and cash equivalents were $128.5 million as of June 30, 2025.
• Net Expansion Rate⁽¹⁾ of 105% as of June 30, 2025. Net Expansion Rate⁽¹⁾ was 108% excluding customer attrition from customers using the Qubit Platform⁽⁵⁾, up 100 bps sequentially.

Other Business Highlights

• New business momentum continues:
  • New business bookings were encouraging once again in Q1, and were the highest Q1 result in the company’s history.
  • New business bookings were diversified across all use cases and regions and came from new and existing customers including Watchguard, National Bank of Canada, Conforama Iberia, Hercules Sealing Products, Loto-Québec, and many others.
• Coveo’s suite of Generative AI solutions had another strong quarter:
  • Generative AI solutions once again showed significant momentum and drove ~50% of new business bookings in the quarter.
  • Traction continued across all use cases, with adoption from new and existing customers including SAP, UKG, and Advanced Micro Devices (AMD).
• Customer momentum in Commerce continues:
  • Commerce continues to be the fastest growing use case, generating over half of the company’s new customer wins and driven in part by the successful partnership with SAP.
  • New customer wins included  SanMar, S.Oliver Group and others who selected Coveo’s AI solutions to optimize their digital commerce experiences.
  • Named a Leader for the second consecutive year in the 2025 Gartner® Magic Quadrant™ for Search and Product Discovery⁽⁹⁾.
• Significant expansion with SAP:
  • SAP significantly expanded its usage of Coveo’s suite of Generative AI solutions, leading to a significant expansion transaction that positions Coveo as a key AI partner. Building on the success of Coveo’s GenAI implementation at SAP Concur, SAP is expanding its use of Coveo as a foundation to support its broader customer experience strategy globally, including agentic deployments.
• Coveo continues to lead on agentic innovation:
  • In June, Coveo was featured as a launch partner for Salesforce’s Agentforce 3 offering.
  • In July, Coveo announced it is joining the expansion of Salesforce AgentExchange with MCP Servers. This expansion of the partnership with Salesforce further enhances the ability for organizations to access relevant, accurate, and secure enterprise data to ground their GenAI and Agentforce efforts.
  • Also in July, Coveo announced it is now available in the new AWS Marketplace AI Agents and Tools Category. Customers can now use AWS Marketplace to easily discover, buy and deploy Coveo using their AWS accounts and augmenting AWS Bedrock foundational models, accelerating AI agent and agentic workflow development.
• Other Business Highlights:
  • During the quarter, Coveo purchased for cancelation 510,988 subordinate voting shares at a weighted average price of C$7.23 per share for total consideration of $2.7 million under its normal course issuer bid (“NCIB”).
  • From the launch of the NCIB on July 17, 2024 to the end of the quarter on June 30, 2025, Coveo repurchased for cancellation the maximum of 2,690,573 subordinate voting shares allowed to be repurchased under the NCIB, at a weighted average price of C$6.43 per share, for total consideration of $12.6 million.
  • On July 15, 2025, Coveo renewed its normal course issuer bid to purchase for cancellation up to a maximum of 5,423,244 subordinate voting shares over the twelve-month period commencing on July 17, 2025. Coveo further renewed its automatic securities purchase plan with a designated broker.

Financial Outlook

The company’s first quarter results track well towards delivering the previously communicated improved revenue growth rates while maintaining positive cash from operations.

Coveo anticipates SaaS Subscription Revenue⁽¹⁾, Total Revenue, and Adjusted EBITDA⁽⁴⁾ for Q2 FY’26  and full year FY’26 as follows:

The company continues to expect to deliver positive operating cash flows of approximately $10 million for Fiscal 2026.

These statements are forward-looking and actual results may differ materially. Coveo’s outlook constitutes “financial outlook” within the meaning of applicable securities laws and is provided for the purpose of, among other things, assisting investors and others in understanding certain key elements of Coveo’s expected financial results, as well as Coveo’s objectives, strategic priorities and business outlook, and in obtaining a better understanding of Coveo’s anticipated operating environment. Investors and others are cautioned that it may not be appropriate for other purposes. Please refer to the “Forward-Looking Information” and “Financial Outlook Assumptions” sections below for additional information on the factors that could cause Coveo’s actual results to differ materially from these forward-looking statements and a description of the assumptions underlying same.

Q1 Conference Call and Webcast Information

Coveo will host a conference call today at 5:00 p.m. Eastern Time to discuss its financial results for the first quarter of fiscal year 2026. The call will be hosted by Laurent Simoneau, Co-Founder and Chief Executive Officer, Louis Têtu, Executive Chairman, and Brandon Nussey, Chief Financial Officer.

Non-IFRS Measures and Ratios

Coveo’s unaudited condensed interim consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. The information presented in this press release includes non-IFRS financial measures and ratios, namely (i) Adjusted EBITDA; (ii) Adjusted Gross Profit, Adjusted Product Gross Profit, and Adjusted Professional Services Gross Profit (collectively referred to as Coveo’s “Adjusted Gross Profit Measures”); (iii) Adjusted Gross Margin, Adjusted Product Gross Margin, and Adjusted Professional Services Gross Margin (collectively referred to as Coveo’s “Adjusted Gross Margin Measures”); (iv) Adjusted Sales and Marketing Expenses, Adjusted Research and Product Development Expenses, and Adjusted General and Administrative Expenses (collectively referred to as Coveo’s “Adjusted Operating Expense Measures”); and (v) Adjusted Sales and Marketing Expenses (%), Adjusted Research and Product Development Expenses (%), and Adjusted General and Administrative Expenses (%) (collectively referred to as Coveo’s “Adjusted Operating Expense (%) Measures”). These measures and ratios are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures and ratios are provided as additional information to complement IFRS measures by providing further understanding of the company’s results of operations from management’s perspective.

Accordingly, these measures and ratios should not be considered in isolation nor as a substitute for analysis of the company’s financial information reported under IFRS. Adjusted EBITDA, the Adjusted Gross Profit Measures, the Adjusted Gross Margin Measures, the Adjusted Operating Expense Measures, and the Adjusted Operating Expense (%) Measures are used to provide investors with supplemental measures and ratios of the company’s operating performance and thus highlight trends in Coveo’s core business that may not otherwise be apparent when relying solely on IFRS measures and ratios. The company’s management also believes that securities analysts, investors, and other interested parties frequently use non-IFRS financial measures and ratios in the evaluation of issuers. Coveo’s management uses non-IFRS financial measures and ratios in order to facilitate operating performance comparisons from period to period, and to prepare annual operating budgets and forecasts.        

See the “Non-IFRS Measures” section of Coveo’s MD&A for the quarter ended June 30, 2025, which is available as of the date hereof under Coveo’s profile on SEDAR+ at www.sedarplus.ca for a description of these measures. Please refer to the financial tables appended to this press release for additional information including a reconciliation of (i) Adjusted EBITDA to net loss; (ii) Adjusted Gross Profit to gross profit; (iii) Adjusted Product Gross Profit to product gross profit; (iv) Adjusted Professional Services Gross Profit to professional services gross profit; (v) Adjusted Sales and Marketing Expenses to sales and marketing expenses; (vi) Adjusted Research and Product Development Expenses to research and product development expenses; and (vii) Adjusted General and Administrative Expenses to general and administrative expenses.

Key Performance Indicators

This press release refers to “SaaS Subscription Revenue” and “Net Expansion Rate”. They are operating metrics used in Coveo’s industry. Coveo monitors its key performance indicators to help evaluate its business, measure its performance, identify trends, formulate business plans, and make strategic decisions. Coveo’s key performance indicators provide investors with supplemental measures of Coveo’s operating performance and thus highlight trends in Coveo’s core business that may not otherwise be apparent when relying solely on IFRS measures. Coveo also believes that securities analysts, investors, and other interested parties frequently use industry metrics in the evaluation of issuers. Certain of Coveo’s key performance indicators are measures that do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures presented by other issuers and cannot be reconciled to a directly comparable IFRS measure. Coveo’s key performance indicators may be calculated and designated in a manner different than similar key performance indicators used by other companies.

“SaaS Subscription Revenue” means the company’s SaaS subscription revenue, as presented in Coveo’s  financial statements in accordance with IFRS.

“Net Expansion Rate” is calculated by considering a cohort of customers at the end of the period 12 months prior to the end of the period selected and dividing the SaaS Annualized Contract Value (“SaaS ACV”, as defined below) attributable to that cohort at the end of the current period selected, by the SaaS ACV attributable to that cohort at the beginning of the period 12 months prior to the end of the period selected. Expressed as a percentage, the ratio (i) excludes any SaaS ACV from new customers added during the 12 months preceding the end of the period selected; (ii) includes incremental SaaS ACV made to the cohort over the 12 months preceding the end of the period selected; (iii) is net of the SaaS ACV from any customers whose subscriptions terminated or decreased over the 12 months preceding the end of the period selected; and (iv) is currency neutral and as such, excludes the effect of currency variation.

In this section and throughout this press release, “SaaS Annualized Contract Value” means the SaaS annualized contract value of a customer’s commitments calculated based on the terms of that customer’s subscriptions, and represents the committed annualized subscription amount as of the measurement date.

Please also refer to the “Key Performance Indicators” section of Coveo’s latest MD&A, which is available under Coveo’s profile on SEDAR+ at www.sedarplus.ca, for additional details on the abovementioned key performance indicators.

Forward-Looking Information

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable securities laws, including with respect to Coveo’s “financial outlook” (within the meaning of applicable securities laws) and related assumptions (as set forth below and elsewhere in this press release) for the three months ending September 30, 2025 and the year ending March 31, 2026 (for greater certainty, for operating cash flows, solely the year ending March 31, 2026) (collectively, “forward-looking information”). This forward-looking information is identified by the use of terms and phrases such as “may”, “would”, “should”, “could”, “might”, “will”, “achieve”, “occur”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “target”, “opportunity”, “strategy”, “scheduled”, “outlook”, “forecast”, “projection”, or “prospect”, the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. In addition, any statements that refer to expectations, intentions, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates, and projections regarding future events or circumstances.

Forward-looking information is necessarily based on a number of opinions, estimates, and assumptions (including those discussed under “Financial Outlook Assumptions” below and those discussed immediately hereunder) that Coveo considered appropriate and reasonable as of the date such statements are made. Although the forward-looking information contained herein is based upon what Coveo believes are reasonable assumptions, actual results may vary from the forward-looking information contained herein. Certain assumptions made in preparing the forward-looking information contained in herein include, without limitation (and in addition to those discussed under “Financial Outlook Assumptions” below):  Coveo’s ability to capitalize on growth opportunities and implement its growth strategy; Coveo’s  ability to attract new customers, both domestically and internationally; Coveo’s ability to expand its relationships with existing customers, and have existing customers renew their subscriptions; the success of Coveo’s efforts to expand its product portfolio and market reach; Coveo’s ability to maintain successful strategic relationships with partners and other third parties; market awareness and acceptance of enterprise artificial intelligence solutions in general and Coveo’s products in particular; the market penetration of Coveo’s generative AI and other new solutions, both with new and existing customers, and Coveo’s ability to continue to capture the AI opportunities; assumptions regarding Coveo’s future capital requirements, and availability of capital generally; the accuracy of Coveo’s estimates of market opportunity, growth forecasts, and expectations around operating cash flows; Coveo’s success in identifying and evaluating, as well as financing and integrating, any acquisitions, partnerships, or joint ventures; the significant influence of Coveo’s principal shareholders; Coveo’s ability to generate pipeline, and to convert pipeline into bookings, and the timeframe thereof; and Coveo’s ability to execute on its expansion and growth plans more generally. Moreover, forward-looking information is subject to known and unknown risks, uncertainties, and other factors, many of which are beyond Coveo’s control, that may cause the actual results, level of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to current and prospective macro-economic uncertainties, including without limitation as a result of trade and monetary policy worldwide, and the risk factors described under “Risk Factors” in the company’s most recently filed Annual Information Form and under “Key Factors Affecting our Performance” in the company’s most recently filed MD&A, both available under Coveo’s profile on SEDAR+ at www.sedarplus.ca. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information, which speaks only as of the date made. Although Coveo has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to Coveo or that Coveo presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.

You should not rely on this forward-looking information, as actual outcomes and results may differ materially from those contemplated by this forward-looking information as a result of such risks and uncertainties. Additional information will also be set forth in other public filings that Coveo makes available under its profile on SEDAR+ at www.sedarplus.ca from time to time. The forward-looking information provided in this press release relates only to events or information as of the date hereof, and is expressly qualified in their entirety by this cautionary statement. Except as required by law, Coveo does not assume any obligation to update or revise any forward-looking information, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Financial Outlook Assumptions

Coveo’s financial outlook under the “Financial Outlook” section above and elsewhere in this press release is based on several assumptions, including the following, in addition to those set forth under the “Financial Outlook” section above and under the “Forward-Looking Information” section above:

• Remaining Qubit SaaS ACV⁽⁶⁾ will continue to churn in the second quarter of fiscal 2026 and until the end of fiscal 2026, with the revenue impact being that the SaaS Subscription Revenue⁽¹⁾ recognized in fiscal 2026 for subscriptions to the Qubit Platform will decline by approximately half as compared to last fiscal year.
• Accelerated bookings performance throughout fiscal 2026.
• Maintaining gross retention rates⁽⁷⁾ at their historical levels.
• Achieving expected levels of sales of SaaS subscriptions to new and existing customers, including timing of those sales, as well as expected levels of renewals of SaaS subscriptions with existing customers.
• Achieving expected levels of implementations and other sources of professional services revenue.
• Maintaining planned levels of operating margin represented by Coveo’s Adjusted Gross Profit Measures⁽⁴⁾ and Adjusted Gross Margin Measures⁽⁸⁾.
• The market for Coveo’s solutions showing ongoing improvements in customer buying behaviors.
• Coveo’s ability to attract and retain key personnel required to achieve its plans.
• Foreign exchange rates environment remaining consistent with end of Q1 levels, and similar or better inflation rates, interest rates, customer spending, and other macro-economic conditions.
• Coveo’s ability to collect from its customers as planned, and to otherwise manage its cash inflows (including government grants and tax credits) and outflows as it currently expects.
• Expected financial performance as measured by Coveo’s Adjusted Operating Expense Measures⁽⁴⁾ and Adjusted Operating Expense (%) Measures⁽⁸⁾.

Coveo’s financial outlook does not include the impact of acquisitions that may be announced or closed from time to time.

Notes to this press release:

About Coveo

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.

The Coveo AI-Relevance™ Platform enables enterprises to deliver hyper-personalization at every point-of-experience, unifying all their data securely, with the highest level of contextual and prescriptive accuracy while simultaneously optimizing business outcomes.

Coveo brings AI-Relevance to the digital experiences of many of the world’s premier and most innovative brands, serving millions of people across billions of interactions.

What Coveo believes is bold: Digital is everywhere, Relevance is not. It’s the only way to win in the digital age.

The Coveo AI-Relevance Platform is ISO 27001 and ISO 27018 certified, SOC2 compliant, and HIPAA compatible, with a 99.999% SLA available. Coveo is an AWS Marketplace Partner, Salesforce AppExchange Partner, an SAPⓇ Endorsed App, an Adobe Technology Gold Partner, a MACH Alliance member, Optimizely Partner, Shopify Partner and a Genesys AppFoundryⓇ ISV Partner.

Coveo is a trademark of Coveo Solutions Inc.

Stay up to date on the latest Coveo news and content by subscribing to the Coveo blog, and following Coveo on LinkedIn, Twitter, and YouTube.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(expressed in thousands of U.S. dollars, except share and per share data, unaudited)

The following table presents share-based payments and related expenses recognized by the company:

Reconciliation of Net Loss to Adjusted EBITDA

(expressed in thousands of U.S. dollars, unaudited)

Reconciliation of Adjusted Gross Profit Measures and Adjusted Gross Margin Measures

(expressed in thousands of U.S. dollars, unaudited)

Reconciliation of Adjusted Operating Expense Measures and Adjusted Operating Expense (%) Measures

(expressed in thousands of U.S. dollars, unaudited)

Condensed Interim Consolidated Statements of Financial Position

(expressed in thousands of U.S. dollars, unaudited)

Condensed Interim Consolidated Statements of Cash Flows

(expressed in thousands of U.S. dollars, unaudited)

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SOURCE Coveo Solutions Inc.