the latest in earnings

the latest in earnings
Nov/Dec 2019

2019 felt like 2018 a bit – strong first half of the year, followed by a more ignoble end of year. I hit a YTD high of +69% on July 28, but then Aug-Sept hit all the SaaS companies, followed by a Oct-Dec that kept things pretty disappointing.

Yet, when I look at the final numbers, I ended 2019 at +40.6% after that high of +69%. 2020 started off strong too, up +15.7% – putting me ever closer back toward that former high. All in all, it’s been quite a successful year following this hypergrowth strategy. My thanks to Saul and everyone here.

It’s funny to think back on those times I had 60+ holdings… trimmed to 30 when I started here… with the thought that I’d narrow those down to 12-15 under Saul’s methods. I am finding my current 9 companies a chore to follow now. But maybe it is because I keep my life full of family and fun. However, I am really liking this condensed portfolio. It is a lot of work every quarter to follow their progress, but… this is NOT something I was ever able to do before! At even 30+ companies, I couldn’t even remember what some of them did. I really like following my companies closely, and, subsequently, feeling at lot more nimble by being able to react to things I am identifying, both good and bad. I am improving greatly in how I look at the numbers and trends thanks to those here. And conversely, I feel I am contributing back on the technical side, just as much as I gain.

Here’s to a lovely 2020 for us all! Fully of many adventures and vacations.


AYX     18% ... got more after post earnings drop
OKTA    15%
TTD     12% ... likely lowering
MDB     11% ... debating lowering
DDOG    10% ... new position that ramped up quick
CRWD    10% ... increased heavily
ZS       9%
ROKU     9%
SMAR     3% ... likely selling

New position: DDOG
Greatly increased: CRWD
Sold: SHOP, TWLO, ESTC. [Yes ESTC! It heads back to the watch list.]

Tier 2: TTD, MDB, ZS, ROKU
Tier 3: SMAR

Prior reports:

Aug/Sep 2019:…
May/Jun 2019:…
Feb/Mar 2019:…
Oct/Nov 2018:…

NOTE on my NOTES below: ^^ is “accelerating”, and !! is an especially important/impressive bit IMHO.


MDB = rev +53%, sub rev +56%, Atlas +185%, opex +56%, custs +92% !!
CRWD = rev +88% !!, sub rev +98% !!, opex +47%, $NER >120%, custs +112% !!
ZS = rev +48%, opex +54%, $NER 120%
SMAR = rev +53%, opex +64%, $NER 134%, custs>100K +120% !!
ESTC = rev +63% ^^, sub rev +65% ^^ (all CCURR), opex +73%, $NER >130%
OKTA = rev +45%, sub rev +48%, rpo +68%, opex +47%, custs +32%, custs>100K +41%
ROKU = rev +50%, platform rev +79%, opex +60%, active accts +36%, stream hrs +68%
DDOG = rev +88% !!, opex +76%, $NER >130, custs +34%, custs>100K +93% !!
TTD = rev +38%, adj income +19.5%, opex +47%
AYX = rev +65% ^^, sub rev +89% !!, $NER 132%, custs +30%
TWLO = organic base rev +47%, opex +116%, $NER 132%
SHOP = rev +45%, sub rev +37%, merch rev +50%, GMV +48%, GPV +51%


MDB - Q320

Phoolio take:…
RGB historical numbers:…
CC transcript:…
CC recap (Starrob):…
CC Q&A (Starrob):…

Revenue 109.4M +52.5%

  • Sub Rev 103.8M +56%
    – Atlas +185%
    … 40% of rev +1900bps, +300bps seq
  • Svcs Rev 5.6M +8%
    Gross Profit 77.3M
    Gross Margin 72.5% -403bps (mLab acq)
    Adj op loss -14.3M (vs -7.8M)
    … margin -13% (vs -12%)
    Adj loss -14.6M (vs -6.9M)
    Adj EPS -0.26 (vs -0.13M)
    Opex 116M +56%
    FCF -13.1M (vs -9.7M)
    … margin -12% (vs -15%)

Custs 15.9k +91.6% !!

  • Custs >100k 688 +40.4%
  • Atlas custs 14.2K +129% (mLab acq was 4200)
    Cash 426M

Sparks on future catalysts:…
Smorgasbord on DocumentDB vs MDB:…
BreakerForce on conv debt offering:…

My stance: Pretty drastic deceleration in hypergrowth, from 78% to 52% in 3Qs (in ASC 606); sub rev went from 82% to 56% – so basically back to growth levels from a year ago. What at first seems like “growing losses” is masked by hypergrowth; op loss margin is flat and FCF margin slightly improved. Great customer growth still. Atlas is still the star performer, but the fantastic burst of growth acceleration it caused over last year is over. New search products Atlas Data Lake and Full-Text Search are still in beta, so there is more to come. We finally lapped the mLab acquire so I can stop talking about it. Thinking about paring down, but Atlas (and its consumption based SaaS pricing) has kept me in thus far.

CRWD - Q320

pre earnings

Bear - losses reducing:…
Saul - other trends to watch:…
Saul - correcting false metrics:…

Bear take:
Saul take:…
Saul sees good signs:…
CC transcript:…
Bear CC tidbit:…

Revenue 125.1M +88% !!

  • Sub Rev 114.2M +98% !!
    ARR 502M +97% !!
    OpEx +47%
    Sub Gross Margin 76% +500bps
    Adj Op Loss -16.5M (vs -28.6M)
    … margin -13% (vs -43%) !!
    Adj Loss -13.4M (vs -28.8M)
    CFFO 39M (vs -4M)
    … margin 31.2% !!
    FCF 7M (vs -13.1M) swung pos !!
    … margin 5.6% (vs -19.7%) !!
    Custs 4561 +112% !!
    Cash 833.7M
    $NER >120%
  • now analyzing 2.5T events/week
  • 50% of custs adopt 4+ products, 30% with 5+

  • new firewall mgmt module to help customers transition from legacy setups
  • introduced Falcon for AWS endpoints, avail in AWS marketplace…
  • partnered with Wipro (IT consulting) to bring CRWD to their custs
  • 7 new 3rd party apps in CrowdStrike Store
  • Gartner customer rating 4.9 of 5 stars
  • received highest score for “Lean Forward” orgs in Gartner’s latest EPP report
  • named by Forrester Research as a Leader in Forrester Wave: Endpoint Security Suites (ESS), Q3 2019 report
  • named best new Endpoint Solution by SE Labs
  • announced partnership with Zscaler (see details under ZS)

Pencils on ZM vs CRWD:…
Bear rebuttal:…

My stance: Impressed. Massive hypergrowth on top line drove incredible bottom line improvements. Greatly increased my allocation from 1% to 10% from ESTC and TWLO sales. FCF swung positive this Q, after CFFO swung positive last Q. Just wow.

[After reading Pencil’s comparison - why do I not own ZM… going to top of watch list.]

ZS - Q120


Brittlerock on new CRO:…
Tinker on lack of competition:

Tedyum take:…
Saul take:…
Monkey take:…
Bear sees slowdown:…
ethan take:
Tinker reducing:…
CC transcript:…
CC highlights:…

Revenue 93.6M +48%
Billings 88.3M +37%
Deferred Rev 245.9M +49%
Adj Op Income 2.9M (vs 1.2M)
… margin 3% (vs 2%)
Adj Income 4.1M (vs 2.3M)
Opex 92.3M +54%
CFFO 21.4M
FCF 9.4M (vs 5.2M)
… margin 10% (vs 8%)
Cash 377.6M
$NER 120% (+200bps)

  • announced new product B2B in beta [see my Flavors of Security writeup on ZS for more details]
    ** builds on existing ZPA Zero Trust features
    ** allows groups of companies to create micro-networks between themselves
  • first cloud security provider to be certified in the Microsoft Networking Partner Program (NPP) for Office 365:…
  • partnered with CrowdStrike to dual market to customers for dual endpoint and traffic protection, and to better integrate ThreatInsight with ZScaler platform
  • once again named Leader in Gartner MQ for SWGs
  • hosted ZenithLive summit in Vegas and Portugal
  • got FedRAMP Ready status at High Impact level…

Marketing has adopted the new Gartner “SASE” term:
Symantec settles patent dispute:…

My stance: I continue to hold my original position, yet did not bolster it at those lower prices over last 4mo, as ZS had something to prove. I see marketing already changing a bit; they adopted the SASE term from Gardner’s latest report pretty quickly. [See the bottom of this part of my Flavors of Security series for more on SASE:… ]. As discussed in the ZS part of Flavors of Security, the new B2B product line is an extremely interesting angle to take with what they have built with Zero Trust in ZPA. With B2B combined with the new marketing revamp, I remain with my full position as I expect growth to rekindle. It has finally rebounded nicely in Jan after 4mo in the doldrums, so patience paid off.

SMAR - Q320

Bear take:…

Revenue 71.5M +53%

  • Sub Rev 64.4M +55%
  • Pro Svcs 7.2M +34%
    Adj Op Loss -20.7M (vs -10.2M)
    … margin -29% (vs -22%)
    Adj Loss -17.7M (vs -9.4M)
    FCF -2.9M (vs -2M)
    OpEx +64%

Custs 83k

  • Custs >50K 770 +114% !!
  • Custs >100K 279 +120% !!
    ACV 3286 +48% !!
    $NER 134%

My stance: Still not sure what to think about Smartsheets (the company or the product), and their execution is not helping matters. Bottom line gets worse and worse. Top line growth remains solid, yet opex is growing faster. But the customers keep on coming and keep spending more, so the company is good at delivering value to their them. I wish things looked different, however, as I don’t feel they need to remain in “land grab” mode as much as other companies I own. I plan on shifting this position into a stronger performer, likely one of the profitable hypergrowth stories. [I am starting to look at COUP and ZM.]

ESTC - Q220

Darth take:…
Bear take:…

Revenue 101.1M +59% (+63% CCURR) ^^

  • Sub Rev 79.4M +64.6% (+67% CCURR) ^^
    – SaaS Rev 20.6M +106% (+114% CCURR) ^^
    Billings 125.3M +41% (+45% CCURR)
    Deferred Rev 201.3M +58%
    Gross Margins 74.4% +101bps
  • Sub GM 80.6%
    Op loss -52M
    Adj Op loss -18.4M
    … margin -18%
    Adj EPS -0.22
    Opex 124.3M +72.5%
    CFFO 0.3M
    FCF -1.4M
    $NER >130%
    Cash 305.2M
    Custs 9700 +10% seq
  • Custs >100K 525 +10.5% seq
  • completed Endgame acq
  • introduced Endpoint Security EPP product that integrates with Elastic SIEM
    ** single price - no per-system pricing
  • new releases of Elastic Stack, v7.4 and v7.5
  • new connectors for Elastic Enterprise Search including MSFT Sharepoint, Office365, OneDrive, as well as ServiceNow
  • had 12 ElasticON events this Q globally
  • Elasticsearch Service now on Google Cloud Platform (GCP) Marketplace
  • Elasticsearch Service now on Azure (preview)
  • new board member, former Cisco SVP

Lawsuit against stolen code, used in Open distro:…
Darth - ESTC vs DDOG:…

My stance: What the what! I sold out of ESTC at the end of the year for tax loss harvesting. The top line is accelerating on CCURR growth, yet opex is growing faster. But like MDB, this is the tale of Elastic Cloud (with its consumption SaaS pricing) that is leading the top line growth. There are so many relevant uses for Elastic Stack – but at the same time it’s a difficult platform to work with. I will reenter this due to the accelerating top line, but for now these funds are shifted to DDOG. See my post on DDOG vs ESTC - I think customers are ultimately finding the convenience more appealing than price.…

OKTA - Q320

PR slide deck:… [<<< good stuff]
Fool recap (Hobo):…
CC recap (Starrob):…
CC Q&A (Starrob):…

Revenue 153M +45%

  • Sub Rev 145M +48%
  • Int’l rev 37%
    Billings 175.6M +42%
    Current RPO 516M +52%
    RPO 1.03B +68% !!
    Adj Op Loss -8.1M (vs -6.5M)
    … margin -5% (vs -6%)
    Adj EPS -0.07
    FCF 9.2M (vs 1.4M)
    … margin 6% +470bps (vs 1.3%)
    Adj Gross Margin 77.8% +200bps
  • Adj Sub GM 82.6% +40bps
    $NER 117% -300bps
    OpEx +47%
    Empl +44%
    Custs 7400 +32%, +5.7% seq
  • Custs >100K 1325 +41%, +8.4% seq
    Cash 1.37B
  • strong Q3 made them raise yearly targets
  • RPO continues to grow faster due to larger new deals, longer terms (bigger customers) [side effect is dropping $NER]
  • continued land and expand into major enterprise custs
    ** signed Fortune 50 telecom onto customer platform (previously used Microsoft)
    ** signed Fortune 500 packaging mfr onto user platform
    ** athenahealth now uses Okta for all patients, providers, caregivers and staff (10s of millions of users)
  • named a Leader in Forrester Wave “Zero Trust eXtended Ecosystem Platform Providers”, Q4 2019, as it did last year
  • held new Okta Showcase event held in Oct 2019 (see write-up of new products in my last report, which came out after the event)
  • announced Access Gateway is now GA [this is their new IAP service (Zero Trust + IAM), making this a competing product to Zscaler’s ZPA, if you recall from my Flavors of Security posts]
  • on Jan 28 will release 6th ed of “Businesses at Work” report that provides in-depth look into their SaaS integrations [WATCH FOR THIS, it is good insight into SaaS usage patterns]

My stance: Highly recommend the slide deck Okta released for the quarter. They hover at losses intentionally, with losses spiking during their Oktane customer conf. New market in Zero Access is unlocking with their Access Gateway product (orig from ScaleFT acq), which competes against Zscaler ZPA. Headcount continues to grow at brisk clip to expand into new geo markets.

One con - Int’l segment dropped from 60% to 45% to 37% over last 3Q. Similar issue to AYX - are local sales teams doing enough? It was asked about in Q&A.

ROKU - Q319

pre earnings

Darth series looking at margins:……

Shareholder letter:…
Beth take:
Fool recap (Sparks):…
BreakerJohn recap:…
CC transcript:…
CC recap (Starrob):…

Revenue 260.9M +50%

  • Platform rev 179.3 +79%
  • Player rev 81.6 +11%
    Gross Profit 118.5 +50%
  • Platform Profit 112.2M +59%
    Gross Margin 45.4% -15bps
  • Platform GM 62.6% -791bps
    Adj op loss -26.55M
    … margin -10.2% vs -6.8%
    Opex 60%
    FCF -13.77M

Player Units +21%
ASP -9% (lowering prices)
Active Accts 32.3M +36%, +5.9% seq
Streaming Hours 10.3B +68%, +9.6% seq
ARPU 22.58 +30%
Cash 388M

  • new lineup of hardware, w/ new low and high end players
  • new soundbar & wireless subwoofer (coming for you, Sonos)
  • Apple TV+ & Disney+ launched
  • monitized video ad impressions doubled again YoY
  • acquired Dataxu demand-side ad platform (TTD competitor)
    ** will integrate into Platform segment (not be separate)
    ** side note: Dataxu was allowed access to Amazon Fire platform w/ TTD, then after Roku acq was dropped w AMZN
  • new RokuOS feature w/ prompt user to close channels that are watched for a long time w/o user interaction (TV left on)
  • entered UK market via Roku OS on Hisense TVs

Vena - kicking off Euro expansion:…
CFO interview - top metrics to watch:…

My stance: The Roku story keeps on chugging along. Execution has been stellar with the move to low-cost players (low margins) to get the platform (premium channels & ad revenue) to be more ubiquitous; aka the razor-blade model. Platform rev growth has been ~79-86% for 4Qs now that I’ve been an owner. Keeping an eye on the falling op loss margins. Acquisition of Dataxu shows them hyper-focused on ad buying on their platform and seems an excellent move.

DDOG - Q319

… see my tech deep dive from December:…

Fool recap (Munarriz):…
Saul take:…
CC transcript:…
CC recap (Starrob):…
Mekong prior numbers:…

Revenue 95.9M +88% !!
Adj op income 0.6M swung pos !!
… margin +0.7% vs -6%
Adj EPS 0.00 !!
FCF -3.7M
Gross Margin 76%
OpEx 76.7M +76%
$NER >130% for 9Qs
Custs 9500 +34%

  • Custs >100K 727 +93% !!
    Cash 771M (709M from IPO)
  • Revenue is all sub rev - doesn’t need Pro Svcs
  • 15+ new products/features/enhancements announced at Dash (annual user conf) in July
  • Network Performance Monitoring
  • Real User Monitoring
  • ML/AI capabilities
  • as of Oct, are ‘in process’ for FedRAMP approval
  • recognized as Leader in Forrester Wave for Intelligent App & Service Monitoring
  • 50% of custs uses 2+ products (+3500bps YoY !!)

New product Security Monitoring:…
Integration with Azure DevOps platform:…

Brittlerock - history of monitoring:…
Saul - ESTC vs DDOG:…
Darth - a look at APM expected growth:…
Hermione - DDOG vs AYX:…
Darth - DDOG vs ESTC:…
Gaucho - DDOG yea or nay:…

My stance: I don’t normally jump into large positions this quickly, but I did so with DDOG after its recent IPO. Incredibly high hypergrowth while bumping on profitable right out of the gate - a combination I like quite a lot. I sold ESTC to harvest tax loss, then used that cash to ramp up investment in DDOG more rapidly. (I will likely get back into ESTC after 30d wash rule.)

TTD - Q319

Fool recap (Sparks):…
Phoolio take:…
Dreamer take:…
CC transcript:…
CC notes (edyboom):…
Dreamer catalysts from here:…
Gaucho look at guidance history:
SoonerAJ tailwinds into 2020:
mekong take:…

Revenue 164.2M +38%

  • Mobile +50%
    – Video +50%
    – In-app +58%
  • CTV +145%
  • Audio +160%
    Adj Income 36.1M +19.5%
    Adj EPS 0.75 +15%
    Opex 142.3M +47%

mekong - TTD is now only 3rd party DSP allowed on FireTV (Dataxu dropped):…
TMF Industry Focus - CTV trends:…
CEO interview highlights:…
Phoolio - segments of ttl rev:…

  • Mobile 47% of ttl
  • Video >25%
  • Display (desktop) >20%
  • Audio 5%

My stance: Bottom line growth is slowing heavily (+19.5% vs +45% last Q), while revenue growth continues to fall pretty drastically. Opex is now growing faster than revenue over last 2Q. CEO says revenue will re-accelerate in 2020, but why the drastic lull? They do continue to make huge strides in CTV/Audio, helped by the fact Amazon FireTV platform was opened up to them. China just beginning. My TTD position may shrink over the next month as I reevaluate.

AYX - Q319

Fool recap:…
FrankDip recap:…
Wouter take:…
GauchoChris take:
CC transcript:…
CC recap (edyboom):…

Revenue 103.4M +65% ^^

  • Sub Rev 53.3M +88.5% !!
  • Svc Rev 49.1M +45%
  • geosegments:
    – US 74.7M +73% !!
    – Int’l 28.7M +48% (-1000bps seq)
    Gross Margin 91%
    Adj Op Income 22.0M +53.8%
    … margin 21.3% (vs 22.8%)
    Adj EPS 0.24 +33%
    $NER 132%
    Custs 5613 +335 +30% (vs +375 last yr)
  • Global 2000 custs 683 +4% seq
    … 34% penetration
    Empl 1176 +55%
  • continued focus on land-and-expand, across larger enterprises
  • customer growth slowing, but focusing on higher quality (Global 2000) and larger deals
  • new deals >$250K grew +92% !! (+4200bps seq?! … wow)
  • have 1/3rd of the Global 2000 right now, continue to focus on it
  • $NER for Global 2000 typically 10% better than avg, kicking in within 4-6Q
  • 20% of revenue is from resellers
  • acquired FeatureLabs ML/AI startup for analytic automation:…
  • convertible note offering in Aug for +$800M cash
  • new COO hired from Hortonworks:…

CFO interview:…
CFO interview (CMLViz):
Wouter tidbits from proxy:…
Jambo highlights from Raymond James conf:
Anecdote on use in PWC:
FrankDip highlights from Needham conf:…

My stance: Accelerating revenue (51% to 59% to 65% over last 3Q) at this level of hypergrowth always gets my attention, and then the stock drops? Well then I must increase my (already high %) holdings! Larger (>$250K) deals nearly doubled. Continued focus on analytics land grab, against little to no competition, and expanding use from there (land-and-expand) – especially focused on Global 2000, who have a ~10% higher $NER.

Something to watch - Int’l rev growth had a sharp drop seq (like Okta), and isn’t keeping up w/ Domestic – which is on fire and driving the rev acceleration. Are the new markets drying up already? Do those newly created localized teams need more time, or do they require an immediate shakeup?

TWLO - Q319

Fool recap:…
Tedyun take:…
Saul take on hiding organic growth:…
Bear selling:
Monkey take:…
CC transcript:…
BwithBike take:…

Revenue 295.1M +75%
Base Rev 275.5M +79%
… organic 47%, SendGrid 32%
Adj Loss -3.6M swung neg
OpEx +116%
$NER 132% (vs -1200bps, -800bps seq)
Cash 1.88B

  • new product Conversations, unified API tools for managing messaging channels
  • new product SendGrid Ads, expanding SendGrid tooling to target email campaigns via display/social ad platforms like Fb, Insta, Google
  • new product Media Streams, API tools to analyze voice calls in real-time (instead of via after-the-fact recordings)
  • new enhancment Verified by Twilio, allowing businesses to preannounce brand on phone calls, then announced add’l feature for Verified SMS

My stance: Bear’s reasons for selling resonated strongly, especially with OpEx going up so much since SendGrid acq, while growth, masked by that acq, is dropping so strongly. Ultimately they are now 47% organic growth (back to Q118’s rate), and, once they lap the acq Feb 1, SendGrid’s lower growth will drag that top line down to low-40s or even possibly lower. I have many higher hypergrowth options to invest in (including more profitable ones), so sold out completely around Thanksgiving.

SHOP - Q319

hrp take:…

Revenue 390.6M +45%

  • Sub Rev 165.6M +37%
    – mRR 50.7M +35%
    — Shopify Plus 13.5M +27%
  • Merchant Sol Rev 225M +50%

GMV 14.8B +48%
GPV 6.2B +51%
Op Loss -35.7M
… margin -9% (vs -12%)
Adj Loss -33.6M
Adj EPS -0.29
Cash 2.67B
Capital 141M loans +85%

  • one time tax provision of 48.3M caused loss
  • 1M merchants globally

  • CBD added in US stores
  • launched Shopify Chat for customer conversations
  • added Turkish, now 19 langs
  • added Italy to Payments, now in 14 countries
  • 44% of merchants in US/Can using Shipping
  • mobile 81% of traffic +400bps, 71% of orders +400bps
  • new extension Shopify Email to allow merchants to run email campaigns (directly compete w/ SendGrid):…

Fulfillment Network:

  • planning 7 warehouses in FY20
  • acquired 6 River Systems (6RS) for robot fleets
  • acquired Handshake B2B wholesale purchasing platform

BwithBike thoughts:…
Anthonyms thoughts on 6RS:…
LifeIsGood take on Black Friday:…

My stance: After the repeated doldrums for SaaS stocks, I finally moved out of SHOP at end of Oct to raise cash for other (faster) hypergrowth stories. Not a good call, as SHOP has risen ~45% since. It is simply still putting up quite good numbers for its size, as they continue to keep solving issues for customers, recently by making moves into having its own Fulfillment Network. It’s probably also still rising on Canadian marijuana speculation too.

If I were holding for 5-10yr w/o paying attn, this would be an easy choice to hold - but if one is more nimble (a lesson from Saul)… there are lots of smaller/faster plays to be had over that time that should result in higher returns over that time.

long many of these, as mentioned
(see my profile for a list of my holdings)


Hi Muji,

You say that Coupa is on your watch list, but I don’t think you are adequately watching it. It had what I thought were awesome results, and it is the only one of my SaaS stocks that didn’t fall much from its July high ($146), then hit a new high of $157 in October, and is now enthusiastically hitting new highs again ($173 Monday, this week).

Revenue growth was up 51%, second only to last quarter’s 54%. The next closest looking back three years was 44%. Note though that a small part of their revenue ($3.7 million) came from an acquisition.

Subscription Revenue was up 49%, and was 88% of revenue.

Calculated billings were up 54%.

Now we get to the GOOD stuff:

Operating Income was $11.6 million. (By comparison the previous 7 quarters were 0.9, 0.3, 4.0, 5.8, 2.4, 2.2, and 4.8. Making $11.6 looks like they are breaking out).

Adjusted Net Income was $14.2 million. (By comparison the previous 7 quarters were 1.4, (0.1), 3.3, 5.5, 3.4, 2.1, and 5.3. Making $14.2 also looks like they are breaking out).

EPS was 20 cents. The previous high ever was 8 cents.

And EVEN BETTER stuff:

Operating Cash Flow and Free Cash Flow were $26 million and $22 million. A year ago they were $4 million and less than $3 million…. Looks awesome to me.

TTM Operating Cash Flow and TTM Free Cash Flow were $55 million and $43 million!

Conference Call
The CEO discusses some of the new products:

Community Intelligence helped the Chief Procurement Officer identify an opportunity to increase the percentage of invoices processed electronically….

Let me also highlight Coupa Source Together, an industry first program that connects members of the Coupa Community to collaborate on group sourcing events… Since launching Source Together midyear, we’ve seen tremendous traction with group sourcing events globally, which have generated millions of dollars in negotiated savings.

Now let’s move onto Coupa Pay. We’re excited to announce American Express as a new Coupa virtual card partner. We continue to see incredible interest and strong early traction for all available pay modules including V Cards, Accelerate and Invoice payments. We are still in the early stages with Pay.

Now let me touch on a few more highlights from the quarter. First-off, We were named a 2019 Gartner Peer Insights Customers’ Choice for Procure-to-Pay Suites. In fact, Coupa was the only Procure-to-Pay platform to receive this distinction. We were also excited to be the only vendor to appear in the customers’ choice zone in Gartner’s Peer Insights Procure-to-Pay Voice of the Customer report. These accolades offer a clear endorsement from our customers.




Sorry, Muji, I forgot to thank you for a really terrific portfolio summary. I know that you put a lot of work into that. Your remark that when you had thirty stocks sometimes you couldn’t remember what they did, echoed my memories exactly. I sometimes couldn’t even remember what the name of the company was that those stock symbol letters referred to.


Saul, at the current price, would you tell someone to create a position with Coupa or at its current levels to hold off for a dip in price? I know my company recently just picked them up and is a way better process/company then what was used previously. Just trying to find a few new companies in which I haven’t fully researched and looking to maybe shift dollars depending on what I find. Figure I may as well ask.



However, I am really liking this condensed portfolio. It is a lot of work every quarter to follow their progress, but… this is NOT something I was ever able to do before! …I really like following my companies closely, and, subsequently, feeling at lot more nimble …I am improving greatly in how I look at the numbers and trends thanks to those here.


I was just talking to my girlfriend about how valuable I feel this board is. We can argue and check each other, as we should, but it is also really comforting to know that none of us is an island. Our opinions on these companies may differ regarding specifics, but we all agree that we’re on the right track with SaaS, concentrated portfolios, focusing on growth, scrutinizing profit potential, etc. Saul’s methods are tried and true, and we each bring a little something new to the table.

I’m not sure if that’s what you meant in the quoted text above, but for me, the community on this board gives me the confidence to run my concentrated portfolio. I don’t feel like I’m out there all alone.

It really is worth a ton. Thanks to all of you for participating.



Saul, at the current price, would you tell someone to create a position with Coupa or at its current levels to hold off for a dip in price?

Hi BarrelHaus,
If you read the KnowledgeBase (on the right panel on this board), you’ll realize that I NEVER would tell someone to hold off waiting for a dip. I’d at least take a starter position. And I had a little cash available today, and added a tiny bit to Coupa today myself.

I know my company recently just picked them up and is a way better process/company then what was used previously.

Glad you like their platform.



Saul, at the current price, would you tell someone to create a position with Coupa or at its current levels to hold off for a dip in price?

Not Saul. Stock prices are essentially a random walk short term, you can’t tell if they are going to go up or down but, by definition, a growth stock will be more likely to go up than down. If uncertain, buy in tranches.

Denny Schlesinger


Saul, at the current price, would you tell someone to create a position with Coupa or at its current levels to hold off for a dip in price?

I’m not Saul but I would love to play him on TV…but David Gardner would say a couple things regarding this inquiry and I paraphrase:

Regarding COUP; I opened a starter position in March '18 at $44.09.

Between March 02, 2018 and January 13, 2020 I added at the following times at the following price points:

03/02/18 $44.09
04/26/18 $48.53
05/14/18 $54.41
07/19/18 $65.55
12/17/18 $60.83
02/01/19 $89.63
06/03/19 $101.81
06/07/19 $120.55
08/07/19 $133.47
01/13/20 $174.10

With the exception of the Dec. '18 pullback; I just added to the winner and let the winner run. Each entry point, with the exception of Dec. '18 was at a higher price than the last.

I stated in previous emails that I have a large portfolio (60 companies); however, with the “add to the winners” philosophy, I end up with a portfolio where:

  • The 30 largest positions in the portfolio account for 69.69% of assets and 81.61% of the gain,
  • The lower tier (30 smaller positions) account for 30% of the assets and 20% of the gain.

Its almost deductively valid that I should just sell off the smaller 30 positions and roll that into my 10 highest conviction positions for now. With the idea that I too would like to get to a more concentrated portfolio with the caveat that I don’t think that would ever be as concentrated as 8-12 companies…maybe more like 20 for me.