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Coupa Software Reports First Quarter Fiscal 2022 Financial Results

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- Record Quarterly Revenues of $167 Million, 40% Year-Over-Year Growth

- Quarterly Calculated Billings of $149 Million, 46% Year-Over-Year Growth

- Quarterly Operating Cash Flows and Adjusted Free Cash Flows of $32 Million and $30 Million, Respectively

SAN MATEO, Calif., June 7, 2021 /PRNewswire/ -- Coupa Software (NASDAQ: COUP) today announced financial results for its first fiscal quarter ended April 30, 2021.

Coupa Software (PRNewsfoto/Coupa Software)
Coupa Software (PRNewsfoto/Coupa Software)

"During the first quarter, we delivered record revenue, generated meaningful free cash flows, and added dozens of new customers to the Coupa Community," said Rob Bernshteyn, chairman and chief executive officer at Coupa. "With supply chain disruptions and an emphasis on frugality impacting the way companies approach Business Spend Management, our customers depend on us to help them build the agility and resiliency needed to strategically navigate a challenging but improving economic environment."

First Quarter Results:

  • Total revenues were $166.9 million, an increase of 40% compared to the same period last year. Subscription revenues were $140.1 million, an increase of 33% compared to the same period last year.

  • GAAP operating loss was $73.9 million, compared to a GAAP operating loss of $5.6 million for the same period last year. Non-GAAP operating income was $7.0 million, compared to a non-GAAP operating income of $14.9 million for the same period last year.

  • GAAP net loss was $100.4 million, compared to a GAAP net loss of $14.8 million for the same period last year. GAAP net loss per basic and diluted share was $1.38, compared to a GAAP net loss per basic and diluted share of $0.23 for the same period last year. Non-GAAP net income was $5.0 million, compared to a non-GAAP net income of $14.5 million for the same period last year. Non-GAAP net income per diluted share was $0.07, compared to non-GAAP net income per diluted share of $0.20 for the same period last year.

  • Operating cash flows and adjusted free cash flows were positive $32.1 million and $29.8 million, respectively.

See the section titled "Non-GAAP Financial Measures" and the reconciliation tables below for important information regarding the non-GAAP financial measures used by Coupa.

Business Outlook:

The following forward-looking statements reflect Coupa's expectations as of June 7, 2021.

Second quarter of fiscal 2022:

  • Total revenues are expected to be $162.0 to $163.0 million.

  • Subscription revenues are expected to be $142.0 to $143.0 million.

  • Professional services and other revenues are expected to be approximately $20.0 million.

  • Non-GAAP loss from operations is expected to be $2.0 to $3.0 million.

  • Non-GAAP net loss per basic and diluted share is expected to be $0.05 to $0.07 per share.

  • Basic and diluted weighted average share count is expected to be approximately 73.5 million shares.

Full year fiscal 2022:

  • Total revenues are expected to be $681.0 to $684.0 million.

  • Non-GAAP loss from operations is expected to be $2.0 to $7.0 million.

  • Non-GAAP net loss per basic and diluted share is expected to be $0.14 to $0.20 per share.

  • Basic and diluted weighted average share count is expected to be approximately 74.0 million shares.

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 loss from operations and non-GAAP net loss, such as charges related to stock-based compensation expenses, amortization of acquired intangible assets, 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 company's offerings of convertible notes in 2018, 2019 and 2020, respectively, 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: A Lassonde Inc., Abzena, Acino Pharma, Adevinta, Aileron Therapeutics, American Cybersystems, Apogee Enterprises, Boels Verhuur, Bridgewater Associates, Catalyst Housing, Eagle Bancorp, Eisai Corporation, Flagstone Foods, Frucor Suntory, Hamburger Containerboard, Hopkins Public School District, J.B. Poindexter & Co., Kantar Group, Lagardère Travel Retail, Location d'outils Simplex, Novaria Group, One Medical Group, Osburn Contractors, Praxis Precision Medicines, Progroup AG, Protagonist Therapeutics, Punto Fa SL, Sage Housing, Siegwerk Druckfarben, Silverback Therapeutics, SiteOne Landscape Supply, Skillz, SoftPawa Ltd., Southcross Energy Partners, The Hain Celestial Group, Thumbtack Inc., Tupperware Brands, UserTesting, and Zeta Charter Schools.

  • Announced a strategic partnership with Japan Cloud to establish Coupa K.K., a new joint venture to scale and accelerate Business Spend Management adoption among Japanese companies.

  • Launched Coupa Ventures, a $50M fund to support the next generation of companies shaping the future of Business Spend Management and made our first two strategic investments in Zylo and SourceDay.

  • Named to Inc's Best Workplaces list1 and celebrated in both the "Enduring Impact" and "X-Large Company" categories.

  • Named to Fortune's Best Workplaces in Technology list2.

  • Launched the 2021 Benchmark Report: From Resilience to Renewal, highlighting "The BSM Suite 16" to help businesses improve performance of 16 spend KPIs.

  • Received the Customers' Choice distinction in the Gartner Peer Insights "Voice of the Customer": Procure-to-Pay Suites 2021 report3.

  • Named a leader in Ardent Partners' 2021 ePayables Technology Advisory Report4.

  • Named a leader in 11 Spend Matters Spring 2021 SolutionMaps5, covering every aspect of Source to Pay.

  • Hosted a virtual panel "Women of Impact: A Seat at the Table" for International Women's Day.

Conference Call Information:

Coupa will host a conference call and live webcast for analysts and investors at 4:30 p.m. Eastern time today.

The 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, including non-GAAP operating (loss) income, non-GAAP net (loss) income, non-GAAP net (loss) income per basic and diluted share, and adjusted free cash flows. Coupa believes these non-GAAP measures are useful in evaluating its operating performance and Coupa's management regularly reviews and uses these measures for business planning and other purposes.

Non-GAAP operating (loss) income and non-GAAP net (loss) income exclude certain items from the corresponding GAAP measures, including: stock-based compensation expenses; amortization of acquired intangible assets; the change in fair value of contingent consideration related to an acquisition; 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. In addition, the weighted average diluted shares figure used to calculate non-GAAP net income per share reflects the anti-dilutive impact of the capped call transactions entered into in connection with the company's offerings of convertible notes.

Adjusted free cash flows is defined as net cash provided by operating activities, less purchases of property and equipment, plus repayments of convertible senior notes attributable to debt discount. Coupa has the ability to settle obligations related to its senior notes through the use of cash, shares of its common stock, or a combination of both, at its election.

Coupa believes these non-GAAP measures are useful to investors and other users of its financial information because they provide a way to measure and evaluate Coupa's underlying operating performance and the strength of its core business consistently across the periods presented. Coupa believes these non-GAAP measures are also useful for comparing its operating performance to that of other companies in its industry, because they eliminate the effects of certain items that may vary between companies for reasons unrelated to their operating performance. Coupa believes that adjusted free cash flows also provides a useful measure of the company's capital strength and liquidity, although it is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures.

Coupa uses these non-GAAP measures in conjunction with GAAP measures as part of its overall assessment of its performance and liquidity, 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 and liquidity. Coupa's definitions of its non-GAAP measures may differ from those used by other companies for similarly-titled measures, 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, the company's GAAP results.

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. In addition, Coupa compensates for the limitations of its non-GAAP financial measures by providing a reconciliation of each non-GAAP measure to the most directly comparable GAAP financial measure. These reconciliations are included in the tables 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, cash flows, liquidity 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 from those projected, including, without limitation: the uncertain impact of the COVID-19 pandemic; Coupa has a limited operating history at its current scale, which makes it difficult to predict its future operating results; 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; 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; the markets in which Coupa participates are intensely competitive; Coupa's business depends in part on its customers renewing their subscriptions and purchasing additional subscriptions; if Coupa fails to develop widespread brand awareness cost-effectively, its business may suffer; risks and liabilities related to breach of its security measures or unauthorized access to customer data; 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 18, 2021, 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 7, 2021. 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.

1 Inc., "Best Workplaces 2021: 429 Companies That Make Work Worth It"
2 Fortune, "Best Workplaces In Technology 2021" (small and medium companies category)
3 Gartner, "Peer Insights 'Voice of the Customer': Procure-to-Pay Suites" March 19, 2021
4 Ardent Partners, "The 2021 ePayables Technology Advisor Report" April 6, 2021
5 Spend Matters, "SolutionMap: Source-to-Pay (S2P) – Spring 2021" April 20, 2021

Disclaimers

Gartner Peer Insights Customers' Choice constitute the subjective opinions of individual end-user reviews, ratings, and data applied against a documented methodology; they neither represent the views of, nor constitute an endorsement by, Gartner or its affiliates.

About Coupa Software

Coupa empowers companies around the world with the visibility and control they need to spend smarter and safer. To learn more about how Coupa can help you spend smarter, visit 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,



2021


2020

Revenues:




Subscription

$

140,104



$

105,735


Professional services and other

26,825



13,479


Total revenues

166,929



119,214


Cost of revenues:




Subscription

51,025



29,002


Professional services and other

28,702



13,836


Total cost of revenues

79,727



42,838


Gross profit

87,202



76,376


Operating expenses:




Research and development

43,837



26,719


Sales and marketing

77,843



46,139


General and administrative

39,377



9,144


Total operating expenses

161,057



82,002


Loss from operations

(73,855)



(5,626)


Interest expense

(29,103)



(12,289)


Interest income and other, net

535



3,328


Loss before provision for (benefit from) income taxes

(102,423)



(14,587)


Provision for (benefit from) income taxes

(2,066)



229


Net loss

$

(100,357)



$

(14,816)


Net loss per share, basic and diluted

$

(1.38)



$

(0.23)


Weighted-average number of shares used in computing net loss per share, basic and diluted

72,865



65,468


COUPA SOFTWARE INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)






April 30, 2021


January 31, 2021

Assets




Current assets:




Cash and cash equivalents

$

362,509



$

323,284


Marketable securities

237,836



283,036


Accounts receivable, net of allowances

150,352



196,009


Prepaid expenses and other current assets

43,825



36,381


Deferred commissions, current portion

16,052



15,541


Total current assets

810,574



854,251


Property and equipment, net

28,147



28,266


Deferred commissions, net of current portion

36,812



36,832


Goodwill

1,514,514



1,480,847


Intangible assets, net

610,664



632,173


Operating lease right-of-use assets

39,367



41,305


Other assets

31,779



31,491


Total assets

$

3,071,857



$

3,105,165


Liabilities, Redeemable Non-Controlling Interests, Other Temporary Equity and Stockholders' Equity




Current liabilities:




Accounts payable

$

7,553



$

4,831


Accrued expenses and other current liabilities

79,710



80,271


Deferred revenue, current portion

338,533



356,115


Current portion of convertible senior notes, net

616,400



609,068


Operating lease liabilities, current portion

11,568



11,222


Total current liabilities

1,053,764



1,061,507


Convertible senior notes, net

914,994



897,525


Deferred revenue, net of current portion

5,001



5,773


Operating lease liabilities, net of current portion

29,530



31,845


Other liabilities

66,259



67,915


Total liabilities

2,069,548



2,064,565


Redeemable non-controlling interests

2,223




Other temporary equity



369


Stockholders' equity:




Preferred stock, $0.0001 par value per share




Common stock, $0.0001 par value per share

7



7


Additional paid-in capital

1,617,223



1,556,865


Accumulated other comprehensive income

9,019



9,165


Accumulated deficit

(626,163)



(525,806)


Total stockholders' equity

1,000,086



1,040,231


Total liabilities, redeemable non-controlling interests, other temporary equity and stockholders' equity

$

3,071,857



$

3,105,165


COUPA SOFTWARE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)




Three Months Ended

April 30,



2021


2020

Cash flows from operating activities




Net loss

$

(100,357)



$

(14,816)


Adjustments to reconcile net loss to net cash provided by operating activities:




Depreciation and amortization

36,539



10,502


Amortization of premium on marketable securities, net

326



471


Amortization of deferred commissions

4,213



3,162


Amortization of debt discount and issuance costs

27,390



11,950


Stock-based compensation

47,292



24,197


Loss (gain) on conversion of convertible senior notes

129



(2,571)


Repayments of convertible senior notes attributable to debt discount

(516)



(10,604)


Other

(1,586)



881


Changes in operating assets and liabilities net of effects from acquisitions:




Accounts receivable

47,750



26,633


Prepaid expenses and other current assets

(7,011)



5,945


Other assets

4,836



595


Deferred commissions

(4,706)



(2,007)


Accounts payable

2,799



(885)


Accrued expenses and other liabilities

(5,872)



(20,742)


Deferred revenue

(19,144)



(17,303)


Net cash provided by operating activities

32,082



15,408


Cash flows from investing activities




Purchases of marketable securities

(48,787)



(49,514)


Maturities of marketable securities

41,013



137,143


Sales of marketable securities

52,643



2,929


Acquisitions, net of cash acquired

(45,095)



(3,604)


Purchases of other investments

(2,500)




Purchases of property and equipment

(2,754)



(3,599)


Net cash provided by (used in) investing activities

(5,480)



83,355


Cash flows from financing activities




Investment from redeemable non-controlling interests

2,223




Repayments of convertible senior notes

(2,439)



(81,444)


Proceeds from the exercise of common stock options

2,261



2,938


Proceeds from issuance of common stock for employee stock purchase plan

10,477



7,391


Net cash provided by (used in) financing activities

12,522



(71,115)


Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash

(13)




Net increase in cash, cash equivalents, and restricted cash

39,111



27,648


Cash, cash equivalents, and restricted cash at beginning of year

327,589



268,280


Cash, cash equivalents, and restricted cash at end of period

$

366,700



$

295,928


Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets




Cash and cash equivalents

$

362,509



$

295,806


Restricted cash included in other assets

4,191



122


Total cash, cash equivalents, and restricted cash

$

366,700



$

295,928


COUPA SOFTWARE INCORPORATED

Reconciliation of GAAP to Non-GAAP Financial Measures

Three Months Ended April 30, 2021

(in thousands, except percentages and per share amounts)

(unaudited)














GAAP


Stock-Based

Compensation

Expenses


Amortization of

Acquired

Intangible Assets


Amortization of

Debt Discount and

Issuance Costs


Loss on

Conversion of

Convertible

Senior Notes


Non-GAAP

Costs and expenses:












Costs of subscription

$

51,025



$

(3,305)



$

(13,886)



$



$



$

33,834


Costs of professional services and other

28,702



(3,898)



(6,522)







18,282


Gross profit

52.2

%


4.3

%


12.2

%


0.0

%


0.0

%


68.8

%













Research and development

43,837



(10,663)









33,174


Sales and marketing

77,843



(11,221)



(13,132)







53,490


General and administrative

39,377



(18,205)









21,172


Income (loss) from operations

(73,855)



47,292



33,540







6,977


Operating margin

(44.2)

%


28.3

%


20.1

%


0.0

%


0.0

%


4.2

%













Interest expense

(29,103)







27,390





(1,713)


Interest income and other, net

535









129



664


Income (loss) before provision for (benefit from) income taxes

(102,423)



47,292



33,540



27,390



129



5,928


Provision for (benefit from) income taxes

(2,066)



1,048



1,929







911


Net income (loss)

(100,357)



46,244



31,611



27,390



129



5,017














Net income (loss) per share, basic (1)

$

(1.38)











$

0.07


Net income (loss) per share, diluted (1)

$

(1.38)











$

0.07


(1)

GAAP net loss per share is calculated based upon 72,865 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 72,865 basic and 76,759 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.

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

Compensation

Expenses


Amortization of

Acquired

Intangible Assets


Change in

Fair Value of

Contingent

Consideration

Liability


Amortization of

Debt Discount and

Issuance Costs


Gain on

Conversion of

Convertible

Senior Notes


Other

Expenses (2)


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, basic (1)

$

(0.23)















$

0.22


Net income (loss) per share, 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 Cash Flows from Operations to Adjusted Free Cash Flows

(A Non-GAAP Financial Measure)

(in thousands)

(unaudited)






Three Months Ended April 30,



2021


2020

Net cash provided by operating activities


$

32,082



$

15,408


Less: purchases of property and equipment


(2,754)



(3,599)


Add: repayments of convertible senior notes attributable to debt discount


516



10,604


Adjusted free cash flows


$

29,844



$

22,413


Cision
Cision

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SOURCE Coupa Software