Coupa earnings report out

https://investors.coupa.com/news-releases/news-release-detai…

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

sounds good to me but after hours market price blah

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At first glance all the numbers look pretty good. Not a home run report like ZM, DDOG or CRWD but not much to complain about.

Profitability continues to trend in the right direction. Non-GAAP Op Margins of 12.5% looks to be a record. Adj FCF of $22.4M is also a strong number, good for a FCF Margin of 18.8%

I think the AH action is probably driven by the guidance. I know, I know, guidance is typically shrugged off but it is a pretty big drop from their usual forecast. They also only raised FY guidance by $2M. Here are some of Coupa’s last forecast growth rates-

 
Q4 19	Q1 20	Q2 20	Q3 20	Q4 20	Q1 21
31.2%	37.8%	42.2%	36.2%	37.8%	25.1% 

A bit reminiscent of Alteryx’s latest forecast. The market shrugged that off pretty quickly. Looking forward to the CC.

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Here are my somewhat edited notes from the COUP earnings call

Rob Bernshteyn, CEO
Record revenue of $119M

$1.8 trillion spend currently under management at Coupa
Coupa Pay is a new and innovative method for organizations to manage accounts payable

3,500 trained associates around the world

90% of current implementations saw no impact to their implementation schedules since Covid 19

Goal of Coupa is to provide the most comprehensive business spend management in the world.

Coupa Advantage Express provides Coupa customers with pre-set savings with certain suppliers. For instance, one airline corporation was able to purchase 1 million pieces of PPE, which they were unable to successfully procure on their own.

Coupa pay –Electronic payment system. Currently support approx. 100 Coupa customers using Coupa pay, half of which are new customers, and half existing.

CFO –Todd Ford
Total Revenue grew 47% to $119M
Subscription revenue was an increase of 45%
For Q1 Subscription revenue, new bookings were stronger in April than in March
Billings were up 36%
Calc. Billings up 47%
39% YoY deferred revenue
73.6% Operating Margin
Focused on sales and engineering
Delivered non-GAAP net income of 14.5M or 27 cents per share
$15.4M Free cash flow
Q1 was 3rd consecutive quarter of increased free cash flow of more than $20M

Guidance:
Current: Q2 & Q3 will have challenging macro-economics

The upcoming quarter has a larger pipeline than the year ago’s qtr.
Anticipate next qtr’s revenue to be $118-119M including subscription revenue of $108 and prof. svcs. Rev of $11M

Expect Q2 adjusted free cash flow to be break even

For FY 2021 they anticipate subscription revenue of $442M and $47M in professional services

Invoice payments is getting extremely good traction and customer adoption

Coupa Pay has gained 100 customers this quarter.

Regarding Coupa Pay: CFO said that Coupa always want to be on the same side of the table as their customers. Subscription model is a combination of a flat fee and a per transaction fee. All 3 modules of Coupa pay are gaining meaningful traction. They continue to invest in R&D, and expand value for their customers.

ARR per average deal has continued to increase nicely.

Metrics they look at pipeline development to
Pay is typically the driver for the business spend land within their land and expand strategy.
$ based net expansion rate. Historically it’s been 110-112% and it was above this range last quarter and this quarter.

Generally dollar based expansion rate continues to trend strongly above this, but due to current market dynamics, they hesitate to list the specific dollar based net expansion rate.

Not a lot of customers are asking for adjusted payment terms. Coupa is extending terms of payment to 60 days and 90 days, but only for a few companies.

Revenue- Coupa travel manager module has slowed down because business travel has slowed down so much.

One analyst calculated approximately 25% guided growth for next quarter and 18-19% the following quarter. The CFO than said that TTM is expected to be greater than 30%, but given the challenging macro-economic situation, they are guiding very conservatively. Q2 is always the most difficult quarter to project for guidance.

The pace of execution at COUPA has been stunning per the CEO.

Rob- Have been able to leverage Coupa’s suppliers to help Coupa’s customers procure things like PPE for Covid 19.

Question: At what productivity capacity is Coupa currently operating now and at what point do we get back to a normal level? CEO feels that they’re ready to capitalize on full-on mode and able to get their new hires up to speed and serve their customers and secure a substantial amount of work when the world opens back up.

Answer: There’s been a real uptick around Coupa’s sales people getting a seat at the table with perspective customers CXO’s.

sjo

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Thanks SJO.

Seems the company is being cautious, providing a tempered outlook due to COVID impact on their client. Might be a good op to buy the dip on a down day.

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