Record Quarterly Revenues of $61.7 million, Up 38% Year-Over-Year and
Free Cash Flows of $9.0 million
Cumulative Spend Under Management Surpasses $840 Billion

SAN MATEO, Calif., Sept. 04, 2018 (GLOBE NEWSWIRE) -- Coupa Software (NASDAQ: COUP), a leader in business spend management (BSM), today announced financial results for its second fiscal quarter ended July 31, 2018.

“Our commitment to developing a fast growing and vibrant customer community and our strong alignment around our three core values – ensuring customer success, focusing on results, and striving for excellence – continue to support our ability to deliver on our business and financial objectives,” said Rob Bernshteyn, CEO of Coupa. “Our Q2 results demonstrate our continued strong execution and the rapid and systematic implementation of our value-as-a-service solutions; further expanding our leadership position in business spend management globally.”

Fiscal Second Quarter Results

  • Total revenues were $61.7 million, an increase of 38% compared to the same period last year. Subscription revenues were $55.4 million, an increase of 39% compared to the same period last year.
     
  • GAAP operating loss was $10.6 million, compared to a loss of $14.4 million for the same period last year. Non-GAAP operating income was $4.0 million, compared to a loss of $5.7 million for the same period last year.
     
  • GAAP net loss was $13.9 million, compared to a loss of $13.7 million for the same period last year. GAAP net loss per basic and diluted share was $0.24, compared to a loss of $0.26 for the same period last year. Non-GAAP net income was $3.3 million, compared to a loss of $5.4 million for the same period last year. Non-GAAP net income per diluted share was $0.05, compared to a loss of $0.10 per basic and diluted share for the same period last year.
     
  • Operating cash flows and free cash flows for the quarter ended July 31, 2018, were $11.3 million and $9.0 million, respectively.

Business Outlook:

The following forward-looking statements reflect Coupa’s expectations as of September 4, 2018. Guidance is based on the new revenue recognition standard, ASC 606, which Coupa adopted on February 1, 2018.

Third quarter of fiscal 2019:

  • Total revenues are expected to be between $62.0 and $63.0 million.
  • Subscription revenues are expected to be between $56.5 and $57.5 million.
  • Professional services and other revenues are expected to be approximately $5.5 million.
  • Non-GAAP loss from operations is expected to be between $1.0 and $2.0 million.
  • Non-GAAP net loss per share is expected to be between $0.01 loss and $0.04 loss per share.
  • Basic and diluted weighted average share count is expected to be approximately 57.9 million shares.

Full year fiscal 2019:

  • Total revenues are expected to be between $243 and $245 million.
  • Non-GAAP loss from operations is expected to be between $1.0 and $4.0 million.
  • Non-GAAP net loss per share is expected to be between $0.06 loss and $0.11 loss per share.
  • Basic and diluted weighted average share count is expected to be approximately 57.5 million shares.

See the section titled “Non-GAAP Financial Measures” and the reconciliation tables below for important details regarding Coupa’s non-GAAP measures. We define free cash flows as operating cash flows less purchases of property and equipment.

Recent Business Highlights:

  • Coupa added new customers in Q2, including but not limited to: Telenor, McCain Foods, Leprino Foods, US Concrete, Wabash National Corporation, Hubert Burda Media, Boyd Gaming, Veeam Software, Tencent, The NPD Group, Inchcape, and Benteler.
  • Coupa acquired the technology assets of DCR Workforce, a leading SaaS application provider for contingent workforce and services procurement management. The acquisition further solidifies Coupa’s vision of enabling organizations to manage all their business spend, including contingent workforce spend, within a comprehensive BSM platform.
  • Coupa was named a Leader in Gartner’s Magic Quadrant for Procure-to-Pay Suites for the third time in a row.
  • Coupa will be branding a space in KPMG’s Ignition Center in Nanjing, China where KPMG customers and prospects can come to learn more about BSM and how Coupa can be part of their digital transformation initiatives.

Conference Call Information:

Coupa will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today.

  • Parties in the U.S. and Canada can access the call by dialing (800) 239-9838, using conference code 2563613.
  • International parties can access the call by dialing +1 (323) 994-2093, using conference code 2563613.

A live webcast will be accessible on Coupa’s investor relations website at http://investors.coupa.com. A replay will be available through the same link. A telephonic replay of the conference call will be available through Tuesday, September 11, 2018. To access the replay, parties in the U.S. and Canada should call (888) 203-1112 and enter conference code 2563613. International parties should call +1 (719) 457-0820 and enter conference code 2563613.

Non-GAAP Financial Measures:

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures that exclude share-based compensation expense, amortization of acquired intangible assets, amortization of debt discount and issuance costs from convertible notes, and related tax effects. Coupa believes these non-GAAP measures are useful in evaluating its operating performance and regularly reviews these measures as it evaluates its business.

Coupa believes these non-GAAP measures provide investors and other users of its financial information consistency and comparability with its past financial performance and facilitate period to period comparisons of operations. Coupa believes these non-GAAP measures are useful in evaluating its operating performance compared to that of other companies in its industry, as they generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance.

Coupa uses these non-GAAP measures in conjunction with GAAP measures as part of its overall assessment of its performance, including the preparation of its annual operating budget and quarterly forecasts, to evaluate the effectiveness of its business strategies and to communicate with its board of directors concerning its financial performance. The definitions of its non-GAAP measures may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, Coupa’s non-GAAP measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

Coupa compensates for these limitations by providing investors and other users of its financial information a reconciliation of non-GAAP measures to the related GAAP financial measures. Coupa encourages investors and others to review its financial information in its entirety, not to rely on any single financial measure and to view its non-GAAP measures in conjunction with GAAP financial measures.  Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures attached to this release.

With respect to Coupa’s guidance as provided under “Business Outlook” above, Coupa has not reconciled its expectations for non-GAAP loss from operations to GAAP loss from operations or non-GAAP net loss per share to GAAP net loss per share because certain items excluded from non-GAAP operating loss and net loss, such as charges related to share-based compensation expense, amortization of acquired intangible assets, amortization of debt discount and issuance costs from our convertible notes, and related tax effects, cannot be reasonably calculated or predicted at this time. The effect of these excluded items may be significant.

Coupa also uses key metrics such as cumulative spend under management, which represents the aggregate amount of money that has been transacted through its core platform for all of its customers collectively since it launched its platform. Coupa calculates this metric by aggregating the actual transaction data, such as invoices, purchase orders and expenses, from customers on its core platform. While Coupa does not believe this metric is directly correlated to its financial results, it believes that the adoption of its core platform, as evidenced by growth in cumulative spend under management, drives additional value to its customers, which will enhance its ability to acquire new customers and to increase renewals and upsells to existing customers.

Forward-Looking Statements:

This release includes forward-looking statements. All statements other than statements of historical facts, including the statements of management and statements in “Business Outlook" are forward-looking statements. These forward-looking statements are based on Coupa’s current expectations and projections about future events and trends that Coupa believes may affect its financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially, including: Coupa has a limited operating history, which makes it difficult to predict its future operating results; if Coupa is unable to attract new customers, the growth of its revenues will be adversely affected; because its platform is sold to large enterprises with complex operating environments, Coupa encounters long and unpredictable sales cycles; risks and liabilities related to breach of its security measures or unauthorized access to customer data; the markets in which Coupa participates are intensely competitive; Coupa’s business depends substantially on its customers renewing their subscriptions and purchasing additional subscriptions; if Coupa fails to develop widespread brand awareness cost-effectively, its business may suffer; and if Coupa fails to manage its recent rapid growth effectively, Coupa may be unable to execute its business plan, maintain high levels of service, or adequately address competitive challenges.

These and other risks and uncertainties that could affect Coupa’s future results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Coupa’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on June 6, 2018, which is available at investors.coupa.com and on the SEC’s website at www.sec.gov. Further information on potential risks that could affect actual results will be included in other periodic filings Coupa makes with the SEC.

The forward-looking statements in this release reflect Coupa’s expectations as of September 4, 2018. Coupa undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.

About Coupa Software

Coupa Software (NASDAQ:COUP) is the leading provider of BSM solutions. We offer a comprehensive, cloud-based BSM platform that has connected hundreds of organizations with more than four million suppliers globally. Our platform provides greater visibility into and control over how companies spend money. Using our platform, businesses are able to achieve real, measurable value and savings that drive their profitability. Learn more at www.coupa.com. Read more on the Coupa Blog or follow @Coupa on Twitter.

Investor Relations:
NMN Advisors for Coupa
Nicole Noutsios
(510) 315-1003
ir@coupa.com

Media Contact:
Global Public Relations
Stefanie Gordish
(415) 590-9722
stefanie.gordish@coupa.com 

  
COUPA SOFTWARE INCORPORATED 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(In thousands, except per share amounts)  
(unaudited) 
        
  Three Months Ended Six Months Ended 
  July 31, July 31, 
   2018   2017   2018   2017  
Revenues:         
Subscription services  $  55,374  $  39,764  $  105,340  $  75,428  
Professional services and other     6,277     4,787     12,663     10,260  
Total revenues     61,651     44,551     118,003     85,688  
Cost of revenues:         
Subscription services     11,773     9,025     22,947     17,021  
Professional services and other     6,867     5,923     13,818     11,424  
Total cost of revenues     18,640     14,948     36,765     28,445  
Gross profit     43,011     29,603     81,238     57,243  
Operating expenses:         
Research and development     13,415     10,720     26,616     19,892  
Sales and marketing     26,580     23,812     51,240     44,490  
General and administrative     13,640     9,430     26,075     17,607  
Total operating expenses     53,635     43,962     103,931     81,989  
Loss from operations     (10,624)    (14,359)    (22,693)    (24,746) 
Interest expense    (3,122)    (6)    (6,095)    (6) 
Interest income and other, net    372     713     450     1,147  
Loss before provision for income taxes     (13,374)    (13,652)    (28,338)    (23,605) 
Provision for income taxes     480     90     970     175  
Net loss $  (13,854) $  (13,742) $  (29,308) $  (23,780) 
Net loss per share attributable to common stockholders, basic and diluted  $  (0.24) $  (0.26) $  (0.52) $  (0.46) 
Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted    56,966     52,749     56,429     51,681  
          


 
COUPA SOFTWARE INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(unaudited)
     
  July 31, January 31,
   2018   2018 
Assets    
Current assets:    
Cash and cash equivalents  $  282,061  $  412,903 
Marketable securities    161,310     — 
Accounts receivable, net of allowances     49,777     61,366 
Prepaid expenses and other current assets     9,193     10,952 
Deferred commissions, current portion     5,464     3,756 
Total current assets     507,805     488,977 
Property and equipment, net     7,610     5,186 
Deferred commissions, net of current portion     13,848     3,896 
Goodwill     44,410     44,410 
Intangible assets, net     17,850     20,020 
Other assets     5,358     9,961 
Total assets  $  596,881  $  572,450 
Liabilities and Stockholders’ Equity    
Current liabilities:    
Accounts payable  $  3,275  $  1,342 
Accrued expenses and other current liabilities     30,320     26,643 
Deferred revenue, current portion     127,809     125,714 
Convertible senior notes, net    168,652     — 
Total current liabilities     330,056     153,699 
Convertible senior notes, net    —     163,010 
Deferred revenue, net of current portion     1,130     2,316 
Other liabilities     13,008     12,880 
Total liabilities     344,194     331,905 
Stockholders’ equity:    
Preferred stock, $0.0001 par value per share    —     — 
Common stock, $0.0001 par value per share    6     6 
Additional paid-in capital     481,543     445,318 
Accumulated other comprehensive loss    (221)    (298)
Accumulated deficit     (228,641)    (204,481)
Total stockholders’ equity    252,687     240,545 
Total liabilities and stockholders’ equity $  596,881  $  572,450 
     


    
COUPA SOFTWARE INCORPORATED 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands) 
(unaudited)
     
  Six Months Ended
  July 31,
   2018   2017 
Cash flows from operating activities    
Net loss  $  (29,308) $  (23,780)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization     3,997     3,613 
Accretion of discounts on marketable securities, net    (295)    — 
Amortization of deferred commissions     2,660     2,011 
Amortization of debt discount and issuance costs    5,642     — 
Stock-based compensation     24,870     12,916 
Other    (541)    202 
Changes in operating assets and liabilities:    
Accounts receivable     11,583     11,854 
Prepaid expenses and other current assets     625     1,802 
Other assets     130     676 
Deferred commissions     (5,285)    (1,873)
Accounts payable     1,955     (299)
Accrued expenses and other liabilities     5,260     5,158 
Deferred revenue     2,651     3,841 
Net cash provided by operating activities     23,944     16,121 
Cash flows from investing activities    
Purchase of marketable securities    (160,500)    — 
Acquisitions, net of cash acquired    (1,178)    (39,073)
Purchase of property and equipment    (3,416)    (2,101)
Net cash used in investing activities     (165,094)    (41,174)
Cash flows from financing activities    
Payment of issuance costs for the issuance of convertible senior notes    (639)    — 
Proceeds from issuance of common stock, net of underwriting
  discounts, commissions and offering costs
    —     22,264 
Proceeds from the exercise of common stock options     6,810     6,383 
Proceeds from issuance of common stock for employee stock purchase plan    4,137     3,025 
Net cash provided by financing activities     10,308     31,672 
Net (decrease) increase in cash, cash equivalents, and restricted cash     (130,842)    6,619 
Cash, cash equivalents, and restricted cash at beginning of year    412,976     201,972 
Cash, cash equivalents, and restricted cash at end of period $  282,134  $  208,591 
    
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated
  balance sheets
    
Cash and cash equivalents    282,061     208,340 
Restricted cash included in prepaid expenses and other current assets    —     251 
Restricted cash included in other assets    73     — 
Total cash, cash equivalents, and restricted cash $  282,134  $  208,591 
    


           
 COUPA SOFTWARE INCORPORATED  
 Reconciliation of GAAP to Non-GAAP Financial Measures  
 Three Months Ended July 31, 2018  
 (in thousands, except per share amounts)  
 (unaudited)  
  GAAP   Share-Based
Compensation
Expenses
 
  Amortization
of Acquired
Intangible
Assets
 
  Amortization of
Debt Discount
and Issuance
Costs
 
  Non-GAAP  
Costs and expenses:          
Costs of subscription services$  11,773  $  (1,093) $  (844)   —  $  9,836  
Costs of professional services and other   6,867     (1,069)    —    —     5,798  
Gross profit 69.8%  3.5%  1.4% 0.0%  74.6% 
Research and development   13,415     (2,958)    —    —     10,457  
Sales and marketing   26,580     (3,863)    (251)   —     22,466  
General and administrative   13,640     (4,575)    —    —     9,065  
Income (loss) from operations   (10,624)    13,558     1,095    —     4,029  
Operating margin -17.2%  22.0%  1.8% 0.0%  6.5% 
Interest expense   (3,122)    —     —    2,894     (228) 
Interest income and other, net   372     —     —    —     372  
Income (loss) before provision for income taxes   (13,374)    13,558     1,095    2,894     4,173  
Provision for income taxes   480     371     25    —     876  
Net income (loss)   (13,854)    13,187     1,070    2,894     3,297  
Net income (loss) per share attributable to common stockholders, basic (1)$  (0.24)       $  0.06  
Net income (loss) per share attributable to common stockholders, diluted (1)$  (0.24)       $  0.05  

(1) GAAP net loss per share is calculated based upon 56,966 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 56,966 basic and 66,157 diluted weighted-average shares of common stock.
 


         
 COUPA SOFTWARE INCORPORATED  
 Reconciliation of GAAP to Non-GAAP Financial Measures  
 Three Months Ended July 31, 2017  
 (in thousands, except per share amounts)  
 (unaudited)  
  GAAP   Share-Based
Compensation
Expenses
 
  Amortization
of Acquired
Intangible
Assets
 
  Non-GAAP  
Costs and expenses:        
Costs of subscription services$  9,025  $  (529) $  (788) $  7,708  
Costs of professional services and other   5,923     (716)    —     5,207  
Gross profit 66.4%  2.8%  1.8%  71.0% 
Research and development   10,720     (1,647)    —     9,073  
Sales and marketing   23,812     (2,340)    (189)    21,283  
General and administrative   9,430     (2,406)    —     7,024  
Loss from operations   (14,359)    7,638     977     (5,744) 
Operating margin -32.2%  17.1%  2.2%  -12.9% 
Interest expense   (6)    —     —     (6) 
Interest income and other, net   713     —     —     713  
Loss before provision for income taxes   (13,652)    7,638     977     (5,037) 
Provision for income taxes   90     188     119     397  
Net loss   (13,742)    7,450     858     (5,434) 
Net loss per share attributable to common stockholders, basic and diluted (1)$  (0.26)     $  (0.10) 

(1) Calculated based upon 52,749 basic and diluted weighted-average shares of common stock
     


           
 COUPA SOFTWARE INCORPORATED  
 Reconciliation of GAAP to Non-GAAP Financial Measures  
 Six Months Ended July 31, 2018  
 (in thousands, except per share amounts)  
 (unaudited)  
  GAAP   Share-Based
Compensation
Expenses
 
  Amortization
of Acquired
Intangible
Assets
 
  Amortization of
Debt Discount
and Issuance
Costs
 
  Non-GAAP  
Costs and expenses:          
Costs of subscription services$  22,947  $  (1,924) $  (1,628)   —  $  19,395  
Costs of professional services and other   13,818     (2,015)    —    —     11,803  
Gross profit 68.8%  3.3%  1.4% 0.0%  73.6% 
Research and development   26,616     (5,505)    —    —     21,111  
Sales and marketing   51,240     (6,833)    (541)   —     43,866  
General and administrative   26,075     (8,593)    —    —     17,482  
Income (loss) from operations   (22,693)    24,870     2,169    —     4,346  
Operating margin -19.2%  21.1%  1.8% 0.0%  3.7% 
Interest expense   (6,095)    —     —    5,642     (453) 
Interest income and other, net   450     —     —    —     450  
Income (loss) before provision for income taxes   (28,338)    24,870     2,169    5,642     4,343  
Provision for income taxes   970     540     73    —     1,583  
Net income (loss)   (29,308)    24,330     2,096    5,642     2,760  
Net income (loss) per share attributable to common stockholders, basic (1)$  (0.52)       $  0.05  
Net income (loss) per share attributable to common stockholders, diluted (1)$  (0.52)       $  0.04  

(1) GAAP net loss per share is calculated based upon 56,429 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 56,429 basic and 64,623 diluted weighted-average shares of common stock.
 


         
 COUPA SOFTWARE INCORPORATED  
 Reconciliation of GAAP to Non-GAAP Financial Measures  
 Six Months Ended July 31, 2017  
 (in thousands, except per share amounts)  
 (unaudited)  
  GAAP   Share-Based
Compensation
Expenses
 
  Amortization
of Acquired
Intangible
Assets
 
  Non-GAAP  
Costs and expenses:        
Costs of subscription services$  17,021  $  (884) $  (1,274) $  14,863  
Costs of professional services and other   11,424     (1,280)    —     10,144  
Gross profit 66.8%  2.5%  1.5%  70.8% 
Research and development   19,892     (2,799)    —     17,093  
Sales and marketing   44,490     (3,940)    (189)    40,361  
General and administrative   17,607     (4,013)    —     13,594  
Loss from operations   (24,746)    12,916     1,463     (10,367) 
Operating margin -28.9%  15.1%  1.7%  -12.1% 
Interest expense   (6)    —     —     (6) 
Interest income and other, net   1,147     —     —     1,147  
Loss before provision for income taxes   (23,605)    12,916     1,463     (9,226) 
Provision for income taxes   175     363     119     657  
Net loss   (23,780)    12,553     1,344     (9,883) 
Net loss per share attributable to common stockholders, basic and diluted (1)$  (0.46)     $  (0.19) 

(1) Calculated based upon 51,681 basic and diluted weighted-average shares of common stock
     


 
 COUPA SOFTWARE INCORPORATED  
 Reconciliation of GAAP Cash Flows from Operations to Free Cash Flows  
 (A Non-GAAP Financial Measure)  
 (in thousands)  
 (unaudited)  
  Three Months Ended Six Months Ended 
  July 31, July 31, 
   2018   2017   2018   2017  
  (in thousands) (in thousands) 
Net cash provided by operating activities  $  11,308  $  9,178  $  23,944  $  16,121  
Less: purchases of property and equipment    (2,292)    (1,105)    (3,416)    (2,101) 
Free cash flows $  9,016  $  8,073  $  20,528  $  14,020