Coupa Software Reports First Quarter Fiscal 2021 Financial Results
Record Quarterly Revenues of $119.2 Million, Up 47% Year-Over-Year
Record Quarterly Subscription Revenues of $105.7 Million, Up 45% Year-Over-Year
Operating Cash Flows of $15.4 million, TTM Operating Cash flows of $64.8 million
SAN MATEO, Calif., June 8, 2020 /PRNewswire/ -- Coupa Software (NASDAQ: COUP) today announced financial results for its first fiscal quarter ended April 30, 2020.
"Our strong first quarter results are a clear representation of the value Coupa delivers to customers in all economic climates," said Rob Bernshteyn, chairman and chief executive officer at Coupa. "As we focus on supporting our employees and ensuring all members of the Coupa community emerge from this pandemic stronger, we continue to leverage our thoughtful, disciplined financial approach, the strength of our balance sheet, and a focus on business resilience to foster growth and position ourselves for sustained market leadership well beyond the current crisis."
First Quarter Results:
- Total revenues were $119.2 million, an increase of 47% compared to the same period last year. Subscription revenues were $105.7 million, an increase of 45% compared to the same period last year.
- GAAP operating loss was $5.6 million, compared to a GAAP operating loss of $17.8 million for the same period last year. Non-GAAP operating income was $14.9 million, compared to a Non-GAAP operating income of $2.2 million for the same period last year.
- GAAP net loss was $14.8 million, compared to a GAAP net loss of $20.5 million for the same period last year. GAAP net loss per basic and diluted share was $0.23, compared to a GAAP net loss per basic and diluted share of $0.34 for the same period last year. Non-GAAP net income was $14.5 million, compared to a Non-GAAP net income of $2.1 million for the same period last year. Non-GAAP net income per diluted share was $0.20, compared to a Non-GAAP net income per diluted share of $0.03 for the same period last year.
- Operating cash flows and adjusted free cash flows were positive $15.4 million and $22.4 million, respectively.
See the section titled "Non-GAAP Financial Measures" and the reconciliation tables below for important details regarding Coupa's non-GAAP measures. Coupa defines adjusted free cash flows as net cash provided by operating activities less purchases of property and equipment plus repayments of convertible senior notes attributable to debt discount.
Business Outlook:
The following forward-looking statements reflect Coupa's expectations as of June 8, 2020.
Second quarter of fiscal 2021:
- Total revenues are expected to be $118.0 to $119.0 million.
- Subscription revenues are expected to be $107.0 to $108.0 million.
- Professional services and other revenues are expected to be approximately $11.0 million.
- Non-GAAP income from operations is expected to be $5.0 to $6.8 million.
- Non-GAAP net income per diluted share is expected to be $0.06 to $0.08 per share.
- Diluted weighted average share count is expected to be approximately 73.5 million shares.
Full year fiscal 2021:
- Total revenues are expected to be $489.0 to $491.0 million.
- Non-GAAP income from operations is expected to be $28.0 to $30.0 million.
- Non-GAAP net income per diluted share is expected to be $0.36 to $0.38 per share.
- Diluted weighted average share count is expected to be approximately 73.0 million shares.
Coupa has not reconciled its expectations for non-GAAP income from operations to GAAP loss from operations or non-GAAP net income per share to GAAP net loss per share because certain items excluded from non-GAAP income from operations and non-GAAP net income, such as charges related to stock-based compensation expenses, amortization of acquired intangible assets, the change in fair value of contingent consideration related to acquisition earnout payments, amortization of debt discount and issuance costs, gain or loss on conversion of convertible senior notes, and related tax effects, including non-recurring income tax adjustments, cannot be reasonably calculated or predicted at this time. In addition, the effect of the anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes cannot be reasonably calculated or predicted at this time. The effect of these items may be significant.
Recent Business Highlights:
- Welcomed many new customers into the Coupa community in Q1, including the following: Accent Therapeutics, AutoScout24, Black Diamond Therapeutics, Button Inc, Carta, CentralSquare Technologies, Clearway Energy, CODA Biotherapeutics, Fiege Logistic, InMoment Inc., New Horizons Australia, REIFF Management und Service, Siam City Cement Company, The Howard Hughes Corporation, The Salvation Army (Victoria Australia), TomTom, Transmin, United Urology Group, University of North Carolina, Vroom.com and Workiva.
- Using our Source Together program, engaged with over 250 organizations to assist in the procurement of PPE and other essential supplies; such as N95 masks, hand sanitizers, disinfecting wipes, toilet paper and gloves.
- Conducted multiple webinars including "How to Build a Resilient Supply Chain" featuring IKEA, posted in the webinars section of coupa.com.
Conference Call Information:
Coupa will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today.
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.
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 certain items, including stock-based compensation expenses, amortization of acquired intangible assets, the change in fair value of contingent consideration related to acquisition earnout payments, amortization of debt discount and issuance costs, gain on conversion of convertible senior notes, and related tax effects, including non-recurring income tax adjustments. In addition, the weighted average diluted shares used to calculate non-GAAP net income per share reflect the anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes. 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.
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 at its current scale, which makes it difficult to predict its future operating results; the uncertain impact of the COVID-19 pandemic; 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; 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; the impact of acquisitions on its business, such as integration issues, assumption of unknown or unforeseen liabilities and ability to retain customers; and the impact of foreign currency exchange rates and global economic conditions.
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 annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 20, 2020, 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 June 8, 2020. 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 is a leading provider of BSM solutions. We offer a comprehensive, cloud-based BSM platform that connects our global community of customers with more than five million suppliers around the world. 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.
COUPA SOFTWARE INCORPORATED | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(in thousands, except per share amounts) | ||||
(unaudited) | ||||
Three Months Ended | ||||
April 30, | ||||
2020 | 2019 | |||
Revenues: | ||||
Subscription | $ 105,735 | $ 72,957 | ||
Professional services and other | 13,479 | 8,387 | ||
Total revenues | 119,214 | 81,344 | ||
Cost of revenues: | ||||
Subscription | 29,002 | 17,403 | ||
Professional services and other | 13,836 | 9,926 | ||
Total cost of revenues | 42,838 | 27,329 | ||
Gross profit | 76,376 | 54,015 | ||
Operating expenses: | ||||
Research and development | 26,719 | 21,014 | ||
Sales and marketing | 46,139 | 33,610 | ||
General and administrative | 9,144 | 17,198 | ||
Total operating expenses | 82,002 | 71,822 | ||
Loss from operations | (5,626) | (17,807) | ||
Interest expense | (12,289) | (3,175) | ||
Interest income and other, net | 3,328 | 924 | ||
Loss before provision for income taxes | (14,587) | (20,058) | ||
Provision for income taxes | 229 | 410 | ||
Net loss | $ (14,816) | $ (20,468) | ||
Net loss per share attributable to common stockholders, | $ (0.23) | $ (0.34) | ||
Weighted-average number of shares used in computing | 65,468 | 60,785 | ||
COUPA SOFTWARE INCORPORATED | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(in thousands, except per share amounts) | ||||
(unaudited) | ||||
April 30, | January 31, | |||
2020 | 2020 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 295,806 | $ 268,045 | ||
Marketable securities | 409,974 | 499,160 | ||
Accounts receivable, net of allowances | 90,258 | 118,508 | ||
Prepaid expenses and other current assets | 25,963 | 31,636 | ||
Deferred commissions, current portion | 12,096 | 11,982 | ||
Total current assets | 834,097 | 929,331 | ||
Property and equipment, net | 21,040 | 18,802 | ||
Deferred commissions, net of current portion | 29,652 | 30,921 | ||
Goodwill | 443,086 | 442,112 | ||
Intangible assets, net | 119,795 | 128,660 | ||
Operating lease right-of-use assets | 30,176 | 32,026 | ||
Other assets | 13,316 | 12,221 | ||
Total assets | $ 1,491,162 | $ 1,594,073 | ||
Liabilities, Temporary Equity and Stockholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ 2,568 | $ 3,517 | ||
Accrued expenses and other current liabilities | 45,689 | 54,245 | ||
Deferred revenue, current portion | 240,680 | 257,692 | ||
Current portion of convertible senior notes, net | 114,165 | 187,115 | ||
Operating lease liabilities, current portion | 8,069 | 8,199 | ||
Total current liabilities | 411,171 | 510,768 | ||
Convertible senior notes, net | 571,897 | 562,612 | ||
Deferred revenue, net of current portion | 3,800 | 4,091 | ||
Operating lease liabilities, net of current portion | 23,451 | 25,490 | ||
Other liabilities | 14,969 | 28,620 | ||
Total liabilities | 1,025,288 | 1,131,581 | ||
Temporary equity | 752 | 16,835 | ||
Stockholders' equity: | ||||
Preferred stock, $0.0001 par value per share | — | — | ||
Common stock, $0.0001 par value per share | 7 | 7 | ||
Additional paid-in capital | 822,713 | 790,468 | ||
Accumulated other comprehensive income | 2,907 | 871 | ||
Accumulated deficit | (360,505) | (345,689) | ||
Total stockholders' equity | 465,122 | 445,657 | ||
Total liabilities, temporary equity and stockholders' equity | $ 1,491,162 | $ 1,594,073 | ||
COUPA SOFTWARE INCORPORATED | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(in thousands) | ||||
(unaudited) | ||||
Three Months Ended | ||||
April 30, | ||||
2020 | 2019 | |||
Cash flows from operating activities | ||||
Net loss | $ (14,816) | $ (20,468) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 10,502 | 4,036 | ||
Accretion of discounts on marketable securities, net | 471 | 731 | ||
Amortization of deferred commissions | 3,162 | 1,980 | ||
Amortization of debt discount and issuance costs | 11,950 | 2,961 | ||
Stock-based compensation | 24,197 | 16,845 | ||
Gain on conversion of convertible senior notes | (2,571) | — | ||
Repayments of convertible senior notes attributable to debt discount | (10,604) | — | ||
Other | 881 | 92 | ||
Changes in operating assets and liabilities net of effects from acquisitions: | ||||
Accounts receivable | 26,633 | 29,405 | ||
Prepaid expenses and other current assets | 5,945 | (4,370) | ||
Other assets | 595 | 1,895 | ||
Deferred commissions | (2,007) | (3,763) | ||
Accounts payable | (885) | (788) | ||
Accrued expenses and other liabilities | (20,742) | (3,519) | ||
Deferred revenue | (17,303) | (6,244) | ||
Net cash provided by operating activities | 15,408 | 18,793 | ||
Cash flows from investing activities | ||||
Purchases of marketable securities | (49,514) | (64,789) | ||
Maturities of marketable securities | 137,143 | 44,796 | ||
Sales of marketable securities | 2,929 | 199,314 | ||
Acquisitions, net of cash acquired | (3,604) | — | ||
Purchases of property and equipment | (3,599) | (2,654) | ||
Net cash provided by investing activities | 83,355 | 176,667 | ||
Cash flows from financing activities | ||||
Repayments of convertible senior notes attributable to principal | (81,444) | — | ||
Proceeds from the exercise of common stock options | 2,938 | 4,339 | ||
Proceeds from issuance of common stock for employee stock purchase plan | 7,391 | 5,396 | ||
Net cash provided by (used in) financing activities | (71,115) | 9,735 | ||
Net increase in cash, cash equivalents, and restricted cash | 27,648 | 205,195 | ||
Cash, cash equivalents, and restricted cash at beginning of year | 268,280 | 141,319 | ||
Cash, cash equivalents, and restricted cash at end of period | $ 295,928 | $ 346,514 | ||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed | ||||
Cash and cash equivalents | $ 295,806 | $ 346,446 | ||
Restricted cash included in other assets | 122 | 68 | ||
Total cash, cash equivalents, and restricted cash | $ 295,928 | $ 346,514 | ||
COUPA SOFTWARE INCORPORATED | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||
Three Months Ended April 30, 2020 | |||||||||||||||
(in thousands, except percentages and per share amounts) | |||||||||||||||
(unaudited) | |||||||||||||||
GAAP | Stock-Based | Amortization | Change in | Amortization | Gain on | Other | Non-GAAP | ||||||||
Costs and expenses: | |||||||||||||||
Costs of subscription | $ 29,002 | $ (2,158) | $ (6,610) | $ — | $ — | $ — | $ — | $ 20,234 | |||||||
Costs of professional services and other | 13,836 | (2,412) | (200) | — | — | — | — | 11,224 | |||||||
Gross profit | 64.1% | 3.8% | 5.7% | 0.0% | 0.0% | 0.0% | 0.0% | 73.6% | |||||||
Research and development | 26,719 | (6,124) | — | — | — | — | — | 20,595 | |||||||
Sales and marketing | 46,139 | (7,513) | (2,056) | — | — | — | — | 36,570 | |||||||
General and administrative | 9,144 | (5,990) | — | 12,500 | — | — | — | 15,654 | |||||||
Income (loss) from operations | (5,626) | 24,197 | 8,866 | (12,500) | — | — | — | 14,937 | |||||||
Operating margin | -4.7% | 20.3% | 7.4% | -10.5% | 0.0% | 0.0% | 0.0% | 12.5% | |||||||
Interest expense | (12,289) | — | — | — | 11,950 | — | — | (339) | |||||||
Interest income and other, net | 3,328 | — | — | — | — | (2,571) | — | 757 | |||||||
Income (loss) before provision for income taxes | (14,587) | 24,197 | 8,866 | (12,500) | 11,950 | (2,571) | — | 15,355 | |||||||
Provision for income taxes | 229 | 587 | (49) | — | — | — | 128 | 895 | |||||||
Net income (loss) | (14,816) | 23,610 | 8,915 | (12,500) | 11,950 | (2,571) | (128) | 14,460 | |||||||
Net income (loss) per share attributable to common stockholders, basic (1) | $ (0.23) | $ 0.22 | |||||||||||||
Net income (loss) per share attributable to common stockholders, diluted(1) | $ (0.23) | $ 0.20 | |||||||||||||
(1) GAAP net loss per share is calculated based upon 65,468 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 65,468 basic and 71,724 diluted weighted-average shares of common stock. The Company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes. | |||||||||||||||
(2) Other expenses consists of the release of valuation allowances against deferred tax assets. | |||||||||||||||
COUPA SOFTWARE INCORPORATED | |||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||
Three Months Ended April 30, 2019 | |||||||||
(in thousands, except percentages and per share amounts) | |||||||||
(unaudited) | |||||||||
GAAP | Stock-Based | Amortization | Amortization of | Non-GAAP | |||||
Costs and expenses: | |||||||||
Costs of subscription services | $ 17,403 | $ (1,388) | $ (2,172) | $ — | $ 13,843 | ||||
Costs of professional services and other | 9,926 | (1,445) | — | — | 8,481 | ||||
Gross profit | 66.4% | 3.5% | 2.7% | 0.0% | 72.6% | ||||
Research and development | 21,014 | (4,048) | — | — | 16,966 | ||||
Sales and marketing | 33,610 | (4,839) | (1,006) | — | 27,765 | ||||
General and administrative | 17,198 | (5,125) | — | — | 12,073 | ||||
Income (loss) from operations | (17,807) | 16,845 | 3,178 | — | 2,216 | ||||
Operating margin | -21.9% | 20.7% | 3.9% | 0.0% | 2.7% | ||||
Interest expense | (3,175) | — | — | 2,960 | (215) | ||||
Interest income and other, net | 924 | — | — | — | 924 | ||||
Income (loss) before provision for income taxes | (20,058) | 16,845 | 3,178 | 2,960 | 2,925 | ||||
Provision for income taxes | 410 | 493 | (123) | — | 780 | ||||
Net income (loss) | (20,468) | 16,352 | 3,301 | 2,960 | 2,145 | ||||
Net income (loss) per share attributable to common stockholders, basic (1) | $ (0.34) | $ 0.04 | |||||||
Net income (loss) per share attributable to common stockholders, diluted (1) | $ (0.34) | $ 0.03 | |||||||
(1) GAAP net loss per share is calculated based upon 60,785 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 60,785 basic and 68,945 diluted weighted-average shares of common stock. The Company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects the anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes. | |||||||||
COUPA SOFTWARE INCORPORATED | ||||
Reconciliation of GAAP Cash Flows from Operations to Adjusted Free Cash Flows | ||||
(A Non-GAAP Financial Measure) | ||||
(in thousands) | ||||
(unaudited) | ||||
Three Months Ended | ||||
April 30, | ||||
2020 | 2019 | |||
Net cash provided by operating activities | $ 15,408 | $ 18,793 | ||
Less: purchases of property and equipment | (3,599) | (2,654) | ||
Add: repayments of convertible senior notes attributable to debt discount | 10,604 | — | ||
Adjusted free cash flows | $ 22,413 | $ 16,139 | ||
SOURCE Coupa Software
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