Coupa Software (COUP) Q1 Earnings & Revenues Beat Estimates
Coupa Software Inc. COUP reported first-quarter fiscal 2021 non-GAAP earnings of 20 cents per share that surpassed the Zacks Consensus Estimate by 185.7%. Further, the bottom line soared 566.7% from the year-ago quarter’s figure.
Revenues of $119.2 million outpaced the Zacks Consensus Estimate by 6.6%. Further, the top line improved 47% from the prior-year quarter.
Subscription revenues (88.7% of total revenues) increased 45% year over year to $105.7 million. Meanwhile, Professional services & other revenues (11.3%) climbed 6.1% year over year to $13.5 million.
The top line was primarily driven by robust adoption of the company’s Business Spend Management (BSM) offerings and traction witnessed Coupa Pay offerings. Moreover, the company witnessed growth in traction of spend management offerings amid coronavirus crisis-triggered macroeconomic weakness and work-from-home wave.
Utilizing Coupa Software’s offerings, enterprises were able to manage spend and procurement amid remote working trends. Moreover, macroeconomic weakness led by coronavirus crisis has increased need to optimize spend patterns, which benefited the company’s performance in the fiscal first quarter.
Expanding Clientele Remains Noteworthy
Coupa Software’s customer base continued to expand in the reported quarter. Notable new deal wins in the quarter include Black Diamond Therapeutics BDTX, Clearway Energy CWEN, Workiva WK, Accent Therapeutics, CentralSquare Technologies, Vroom.com and AutoScout24.
Moreover, ongoing momentum in solutions such as Accelerate, Invoice payments and Virtual Cards for Pos drove the fiscal first-quarter top line. The company has extended these solutions to partners like American Express, Citibank, Transfermate, Stripe and PayPal. The company recently added BNP Paribas as a partner, which is expected to bolster clientele. Notably, the company is supporting approximately 100 customers utilizing Coupa Pay.
Year-to-Date Price Performance
An expanding clientele is instilling optimism in the company’s stock. Notably, shares of Coupa Software, currently carrying a Zacks Rank #2 (Buy), have returned 50.9% year to date, outperforming the industry’s rally of 35.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We believe that innovation and product enhancements will enable Coupa Software to strengthen its position in the BSM market amid ongoing digital transformation triggered by coronavirus crisis.
Margin Details
Non-GAAP gross margin expanded 100 basis points (bps) from the prior-year quarter level to 73.6%.
Non-GAAP Research and development expenses climbed 21.4% year over year to $20.6 million.
Non-GAAP Sales and marketing expenses surged 31.7% year over year to $36.6 million.
Non-GAAP General and administrative expenses increased 29.7% year over year to $15.7 million.
Non-GAAP operating income soared to $14.9 million from $2.2 million reported in the year-ago quarter. Non-GAAP operating margin came in at 12.5% compared with year-ago quarter figure of 2.7%.
Balance Sheet & Cash Flow
As of Apr 30, 2020, Coupa Software had cash and cash equivalents and marketable securities of $705.8 million compared with $767.2 million as of Jan 31, 2020.
Cash flow from operations came in at $15.4 million compared with $22.3 million in the last reported quarter. Free cash flow totaled $22.4 million during the fiscal first quarter compared with free cash flow of $20.2 million in the last reported quarter.
Coupa Software, Inc. Price, Consensus and EPS Surprise
Coupa Software, Inc. price-consensus-eps-surprise-chart | Coupa Software, Inc. Quote
Guidance
For second-quarter fiscal 2021, revenues are anticipated in the range of $118-$119 million. The Zacks Consensus Estimate for revenues is currently pegged at $117.27 million. While Subscription revenues are expected between $107 million and $108 million, professional services revenues are anticipated to be approximately $11 million.
Non-GAAP income from operations is estimated in the range of $5-$6.8 million. Non-GAAP net income is projected in the band of 6-8 cents per share. The Zacks Consensus Estimate for earnings is currently pegged at 5 cents per share.
For fiscal 2021, Coupa Software now anticipates total revenues between $489 million and $491 million, compared with previous range of $488-$490 million. The Zacks Consensus Estimate for revenues is currently pegged at $489.15 million.
Non-GAAP income from operations is anticipated in the range of $28-$30 million compared with the previous range of $21-$23 million. Non-GAAP net income is now expected in the band of 36-38 cents per share, compared with prior guided range 30-33 cents. The Zacks Consensus Estimate for earnings is currently pegged at 35 cents.
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