It has been about a month since the last earnings report for Coupa Software, Inc. . Shares have added about 13.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Coupa Software, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Coupa Software Q2 Earnings & Revenues Surpass Estimates
Coupa Software Inc. reported second-quarter fiscal 2021 non-GAAP earnings of 21 cents per share that surpassed the Zacks Consensus Estimate by 162.5%. Further, the bottom line soared 200% from the year-ago quarter.
Revenues of $125.9 million outpaced the Zacks Consensus Estimate by 5.96%. Further, the top line improved 32% from the prior-year quarter.
Subscription revenues (88.6% of total revenues) surged 34% year over year to $111.6 million. Meanwhile, Professional services & other revenues (11.4%) climbed 23% year over year to $14.3 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 favored the company’s performance in the fiscal second 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 2U, CECO Environmental Corporation, OneMain, 14 West, Canfor Corporation, Confluent Inc., Cycle and Carriage Industries, HammondCare, SalesLoft, Shorelight Education, Strategic Education, Toyota Finance Australia, and Westpac Banking.
Moreover, ongoing momentum in solutions such as Accelerate, Invoice payments and Virtual Cards for Pos drove the fiscal second-quarter top line. The company has extended these solutions to partners like American Express, Citibank, Transfermate, Stripe, PayPal, and BNP Paribas, which is expected to bolster clientele.
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 contracted 70 basis points (bps) from the prior-year quarter level to 72.1%.
Non-GAAP Research and development expenses climbed 25.2% year over year to $22.9 million. Non-GAAP Sales and marketing expenses surged 20.3% year over year to $38.6 million. Non-GAAP General and administrative expenses increased 22.3% year over year to $17 million.
Non-GAAP operating income soared 154.7% year over year to $12.3 million. Non-GAAP operating margin expanded 470 bps on a year-over-year basis to 9.8%.
Balance Sheet & Cash Flow
As of Jul 31, 2020, Coupa Software had cash and cash equivalents and marketable securities of $1.342 billion compared with $705.8 million as of Apr 30, 2020.
Cash flow from operations came in at $23.4 million compared with $15.4 million in the last reported quarter. Adjusted free cash flow totaled $35.7 million during the fiscal second quarter compared with free cash flow of $22.4 million in the last reported quarter.
Guidance
For third-quarter fiscal 2021, revenues are anticipated in the range of $123-$124 million. While Subscription revenues are expected between $112 million and $113 million, professional services revenues are anticipated to be approximately $11 million.
Non-GAAP income from operations is estimated in the range of $4.5 million to $5 million. Non-GAAP net income is projected in the band of 2-3 cents per share.
For fiscal 2021, Coupa Software now anticipates total revenues between $496.5 million and $498.5 million compared with previous range of $489-$491 million.
Non-GAAP income from operations is anticipated to be $33.5-$35.5 million compared with the previous range of $28-$30 million. Non-GAAP net income is now expected in the band of 43-45 cents per share compared with prior guided range 36-38 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -61.01% due to these changes.
VGM Scores
At this time, Coupa Software, Inc. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Coupa Software, Inc. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Coupa Software, Inc. (COUP) Up 13.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Coupa Software, Inc. . Shares have added about 13.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Coupa Software, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Coupa Software Q2 Earnings & Revenues Surpass Estimates
Coupa Software Inc. reported second-quarter fiscal 2021 non-GAAP earnings of 21 cents per share that surpassed the Zacks Consensus Estimate by 162.5%. Further, the bottom line soared 200% from the year-ago quarter.
Revenues of $125.9 million outpaced the Zacks Consensus Estimate by 5.96%. Further, the top line improved 32% from the prior-year quarter.
Subscription revenues (88.6% of total revenues) surged 34% year over year to $111.6 million. Meanwhile, Professional services & other revenues (11.4%) climbed 23% year over year to $14.3 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 favored the company’s performance in the fiscal second 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 2U, CECO Environmental Corporation, OneMain, 14 West, Canfor Corporation, Confluent Inc., Cycle and Carriage Industries, HammondCare, SalesLoft, Shorelight Education, Strategic Education, Toyota Finance Australia, and Westpac Banking.
Moreover, ongoing momentum in solutions such as Accelerate, Invoice payments and Virtual Cards for Pos drove the fiscal second-quarter top line. The company has extended these solutions to partners like American Express, Citibank, Transfermate, Stripe, PayPal, and BNP Paribas, which is expected to bolster clientele.
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 contracted 70 basis points (bps) from the prior-year quarter level to 72.1%.
Non-GAAP Research and development expenses climbed 25.2% year over year to $22.9 million. Non-GAAP Sales and marketing expenses surged 20.3% year over year to $38.6 million. Non-GAAP General and administrative expenses increased 22.3% year over year to $17 million.
Non-GAAP operating income soared 154.7% year over year to $12.3 million. Non-GAAP operating margin expanded 470 bps on a year-over-year basis to 9.8%.
Balance Sheet & Cash Flow
As of Jul 31, 2020, Coupa Software had cash and cash equivalents and marketable securities of $1.342 billion compared with $705.8 million as of Apr 30, 2020.
Cash flow from operations came in at $23.4 million compared with $15.4 million in the last reported quarter. Adjusted free cash flow totaled $35.7 million during the fiscal second quarter compared with free cash flow of $22.4 million in the last reported quarter.
Guidance
For third-quarter fiscal 2021, revenues are anticipated in the range of $123-$124 million. While Subscription revenues are expected between $112 million and $113 million, professional services revenues are anticipated to be approximately $11 million.
Non-GAAP income from operations is estimated in the range of $4.5 million to $5 million. Non-GAAP net income is projected in the band of 2-3 cents per share.
For fiscal 2021, Coupa Software now anticipates total revenues between $496.5 million and $498.5 million compared with previous range of $489-$491 million.
Non-GAAP income from operations is anticipated to be $33.5-$35.5 million compared with the previous range of $28-$30 million. Non-GAAP net income is now expected in the band of 43-45 cents per share compared with prior guided range 36-38 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -61.01% due to these changes.
VGM Scores
At this time, Coupa Software, Inc. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Coupa Software, Inc. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.