Coupa (COUP) Earnings And Revenues Beat Estimates In Q3

Coupa Software Inc. (NASDAQ:COUP) reported third-quarter fiscal 2019 non-GAAP earnings of 8 cents per share, in contrast with the Zacks Consensus Estimate of a loss of 3 cents. Notably, the company reported a loss of 5 cents in the year-ago quarter.

Revenues surged 42% from the year-ago quarter to $67.5 million, driven by growth of 42% in subscription services, which totaled $60.6 million. However, professional services & other revenues increased 51.7% to $6.9 million.

Further, the figure surpassed the Zacks Consensus Estimate of $63 million.

The top line was primarily driven by expanding customer base. Further, rising adoption of Coupa’s platform is driving subscription services revenues and gross margin.

The company’s shares went up 6.8% on Dec 3, following the results. Notably, the stock has returned 120.4% year to date, substantially outperforming the 6.5% rally of its industry.

Customer Base Expands

Coupa provides a unified, cloud-based spend management platform that helps enterprises keep a tab on daily expenditures. The company’s customer base continued to expand in the reported quarter. The company’s platform enables customers save any amount between a penny and a dime.

Notable customer wins in the quarter include United Airlines, Finnair, ISS Group, Golden State Warriors, Coors Distribution Company, Darden Restaurants (NYSE:DRI), Cvent, AAA Club Alliance, Lime Bike, Axiata Group, Genesis Energy, SkillSoft, Consolis, KPMG Canada, POWDR, Informa Exhibitions and Santos Limited, among others.

Operating Details

Non-GAAP gross margin expanded 70 basis points (bps) from the year-ago quarter to 73.3%, driven by higher subscription revenues.

Non-GAAP operating income came in at $5.8 million against a loss of $2.4 million in the year-ago quarter. Non-GAAP operating margin during the reported quarter came in at 8.5%.

Balance Sheet

As on Oct 31, 2018, Coupa had cash and cash equivalents of $227.6 million, down from $282.1 million in the previous quarter.

Cash flow from operations came in at $27.9 million during the nine months ended Oct 31, 2018. Free cash flow was $2.6 million during the third quarter.

Guidance

For fourth-quarter fiscal 2019, revenues are anticipated between $67.8 and $68.3 million. The Zacks Consensus Estimate for revenues is currently pegged at $63.9 million. Subscription revenues are forecast between $62 million and $62.5 million, while professional services revenues are anticipated at approximately $5.8 million.

Moreover, non-GAAP income from operations is anticipated to be at a break-even. Non-GAAP net income is also anticipated to be at a break-even.

For fiscal 2019, total revenues are now expected between $253 million and $253.5 million. The Zacks Consensus Estimate for revenues is currently pegged at $244.6 million.

Non-GAAP income from operations is now anticipated between $9.5 million and $10.5 million. Non-GAAP net income is expected in the range of 11-13 cents per share.

Zacks Rank & Key Picks

Coupa carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Upland Software (NASDAQ:UPLD) , Tesla, Inc. (NASDAQ:TSLA) and Twitter, Inc. (NYSE:TWTR) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Upland Software, Tesla and Twitter is currently pegged at 20%, 35% and 22.1%, respectively.

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