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Coupa (COUP) Q4 Earnings and Revenues Surpass Estimates

Zacks

Coupa Software Inc. COUP reported fourth-quarter fiscal 2019 non-GAAP earnings of 5 cents per share, surpassing the Zacks Consensus Estimate of breakeven. Also, the bottom line increased from 2 cents reported in the year-ago quarter.

Revenues surged 39% from the year-ago quarter to $74.9 million, driven by growth of 45% in subscription services, which totaled $67.5 million. Professional services & other revenues also increased 3.8% to $7.4 million.

Further, the figure surpassed the consensus estimate of $68 million.

The top line was primarily driven by expanding customer base. Further, rising adoption of Coupa’s platform is boosting subscription services revenues. Billing during the quarter came in at $127 million, up 51% year over year.


The company’s shares went up 3.4% yesterday, following the results. Notably, the stock has returned 96.9% in the past year, substantially outperforming the 5.9% rally of its industry.

Customer Base Expands

Coupa provides a unified, cloud-based spend management platform that helps enterprises keep a tab on daily expenditures. The company’s customer base continued to expand in the reported quarter.

Notable customer wins in the quarter include Air Methods, Bank of Hope, BDP International, BJ Services, Botanic-Serres Du Saleve, Canadian Tire, Copa Holdings, Elekta, Erco Worldwide, Evelo Biosciences, Freshworks and Guardian Industries. Other new customers added in the fiscal fourth quarter include InvestRes, InVisionApp, Kin Group, KPMG Australia, Looker, Munich Re, North Queensland Airport Group, Novo Nordisk, Pacific Life Insurance, Peloton Interactive and Randstad US, etc.

Operating Details

Non-GAAP gross margin contracted 90 basis points from the year-ago quarter to 72.5%.

Non-GAAP operating income came in at $2.4 million compared with $884K reported in the year-ago quarter. Non-GAAP operating margin came in at 3.1% compared with 1.7% a year ago.

Balance Sheet

As on Jan 31, 2019, Coupa had cash and cash equivalents of $141.3 million, down from $227.6 million in the previous quarter.

Cash flow from operations came in at $37.4 million during the 12 months ended Jan 31, 2019. Free cash flow was $6.8 million during the fiscal fourth quarter.

Guidance

For first-quarter fiscal 2020, revenues are anticipated between $73.5 million and $74 million. The Zacks Consensus Estimate for revenues is currently pegged at $70.6 million. Subscription revenues are expected between $67.5 million and $68 million, while professional services revenues are anticipated to be approximately $6 million.

Non-GAAP loss from operations is estimated to be in the range of $2-$3.5 million. Non-GAAP net loss is projected to be 3-6 cents per share.

For fiscal 2020, total revenues are expected between $352 million and $327 million. The Zacks Consensus Estimate for revenues is currently pegged at $312.1 million.

Non-GAAP income from operations is now anticipated in the $3-$7 million range. Non-GAAP net income is expected to be 4-10 cents per share.

Zacks Rank & Key Picks

Coupa currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Cadence Design Systems, Inc CDNS, Synopsys, Inc. SNPS and Symantec Corporation SYMC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cadence Design, Synopsys and Symantec have a long-term earnings growth rate of 12%, 10% and 7.9%, respectively.

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