EL7.AI
StocksMedium•30 October 2026•
4 min read

Coveo Revenue Rises 8% to $40.4 Million in Fiscal Second Quarter

Key Facts

1Total revenue rose 8% to $40.4 million in the second quarter of fiscal 2027, compared with $37.3 million.
2SaaS subscription revenue grew 9% to $39.1 million, and revenue from the core Coveo platform rose 12%.
3Generative AI solutions accounted for more than 50% of new bookings during the quarter.
4Net loss narrowed to $3.1 million from $4.4 million, and adjusted earnings before interest, taxes, depreciation and amortization were $2.0 million, versus $0.6 million.
5The company expects total revenue of $160 million to $162 million for fiscal 2027.

Coveo reported an 8% increase in total revenue to $40.4 million in the second quarter of fiscal 2027, ended September 30, 2026, compared with $37.3 million in the year-earlier period. The company said software-as-a-service subscription revenue was $39.1 million, up 9% from $35.9 million. Subscription revenue from the core Coveo platform grew 12% year over year. The company recorded the strongest quarter for new bookings in its history, according to its earnings announcement. It said generative AI solutions accounted for more than 50% of new bookings during the quarter, without directly linking those solutions to revenue growth.

Revenue exceeded the company's previous quarterly guidance range of $39.7 million to $40.2 million, according to its outlook issued after the first quarter of fiscal 2027. Coveo had reported total revenue of $38.5 million at the time, up 8% year over year, and SaaS subscription revenue of $37.4 million, up 9%. This highlights continued subscription growth in the second quarter, with core platform revenue increasing 12%. On retention and expansion, net expansion rate was 102% as of September 30, an increase of 300 basis points sequentially. The rate rose to 105% excluding customers affected by the discontinuation of the legacy Qubit platform.

On sales, Coveo closed two seven-figure annual deals during the quarter, one with a Fortune Global 500 technology company and the other with Australian Coles Supermarkets. Co-Chief Executive Officer and founder Laurent Simoneau said, "Two seven-figure annual deals helped deliver the strongest quarter for new bookings in our history." The company placed the deals in the context of booking momentum, while generative AI solutions made up more than half of newly booked business. It also reported that more than 70% of Merchandising Agent users interact with it several times. About 50% of users implement the actions recommended by the agent, while more than 20% of storefront improvements were completed through its automated actions.

Profitability indicators improved from the year-earlier period, with net loss narrowing to $3.1 million from $4.4 million. Adjusted earnings before interest, taxes, depreciation and amortization were $2.0 million, compared with $0.6 million a year earlier. Gross margin increased to 80% from 79%, while product gross margin held at 82% in both periods. By contrast, cash used in operating activities was $14.9 million, compared with $10.8 million in the year-earlier period. The company attributed the higher cash use to working capital seasonality and said cash and cash equivalents were $82.7 million as of September 30, 2026.

Alongside its earnings announcement, Coveo announced its acquisition of Anglera in a separate statement. The company described Anglera as a San Francisco-based company backed by Y Combinator that develops an engine for automated product data enrichment. The deal combines its technology with Coveo's commerce search and product discovery. The company said the combination gives manufacturers, distributors and retailers a way to turn raw product data into products customers can find, compare and buy. This includes company websites and AI assistants, according to Coveo's statement.

For the coming period, Coveo set a range of $40.6 million to $41.1 million for total revenue in the third quarter of fiscal 2027, and $39.7 million to $40.2 million for SaaS subscription revenue. For fiscal 2027, it expects total revenue of $160 million to $162 million and subscription revenue of $156 million to $158 million. It also set a range of $2 million to $7 million for adjusted earnings before interest, taxes, depreciation and amortization, and expects operating cash flow to exceed $10 million for the full year. The company had previously forecast annual revenue of $160 million to $164 million, making the upper end of its current outlook lower than the prior range. In trading on October 29, Coveo shares fell 1.04% to 4.77 Canadian dollars, compared with a previous close of 4.82 dollars, according to Investing.com.