Coupa Software is one of the leading providers of Business Spend Management (BSM) solutions. Its cloud-based platform helps aid over 2,500 customers in mitigating supply chain risk and to increase business agility to adapt to change in spending trends.
The company's BSM platform unifies all business spend — from sourcing to contracts and invoicing to payments, thereby enabling enterprises to be more resilient and ultimately spend smarter.
Coupa Software is the pioneer of procure-to-pay solutions. The company’s procurement module aids customers to determine spend policies, and streamline purchase requisition and purchase order processes.
Q2 Results Spark Upward EPS Move
In early September, Coupa reported solid Q2 fiscal 2023 (ends January) results with record revenues and healthy momentum in the subscription business. Both the bottom line and top line beat estimates.
The healthy results were backed by Coupa providing companies with visibility and control over their business spending, resiliency in back-office operations and aiding in making strategic and data-driven decisions to yield positive outcomes for their business.
GAAP net loss in the quarter was $75.3 million or a loss of 99 cents per share compared with a net loss of $91.5 million or a loss of $1.24 per share in the prior-year quarter. Non-GAAP net income during the quarter was $16.5 million or 20 cents per share compared with $20.3 million or 26 cents per share in the prior-year quarter, beating the Zacks Consensus Estimate by 11 cents.
Revenues were record high at $211.1 million compared with $179.2 million in the prior-year quarter, beating the Zacks Consensus Estimate of $203 million. The growth was backed by the strong performance in the North America enterprise market, with more customers preferring its ROI-driven business spend management platform to optimize their spend.
Subscription revenues were record high at $192.7 million compared with $156.2 million, backed by the strengthening of the U.S. dollar against the euro. Professional services revenues during the quarter were $18.4 million compared with $23 million in the year-earlier quarter.
Subscription revenues aggregated 91.3% of total revenues in second-quarter fiscal 2023, while Professional services & other contributed the remaining 8.7%.
Guidance: Softer Sales, Higher Profits
For fiscal 2023, the company has updated its revenue guidance from $838-$848 million to $838-$844 million. Subscription revenues are expected to be in the range of $766-$771 million.
Professional services and other revenues are expected to be $72-$73 million. Non-GAAP earnings are likely to be in the range of 37-44 cents per share, up from earlier expectations of 21-27 cents.
While this jump in profit expectations made COUP a Zacks #1 Rank, it should be noted that even at the top of that 44-cent guide, the company would still post an annual EPS decline of 47%.
The good news is that analysts took next year's estimates higher too, with the profit consensus rising 24.5% to 71-cents. And that would represent 62% EPS growth.
For investors looking for an entry point in the stock, now might be an attractive time with the company trading at a $4 billion valuation against next year's sales growth of 19% to cross $1 billion. That puts the price/sales ratio at 4X, below average for the SaaS space.
More About the Business and Customer Services
Businesses can track and manage purchases in real-time, and reduce time and cost with purchase orders being automatically sent to suppliers for fulfillment and invoicing.
The company’s invoicing module aids suppliers to create electronic invoices that comply with government regulations allowing businesses to eliminate paper and further reduce invoice processing costs, all while reducing invoice payment fraud risk.
Expense management module with innovative mobile capabilities such as GPS and geo-location aids customers to gain real-time expense visibility. Coupa Software also offers additional travel management capabilities, including travel price assurance to help companies capture savings from flight and hotel price decreases that occur after the booking has been placed.
Meanwhile, the company’s Coupa Pay is a set of solutions that help customers consolidate and optimize their processes to manage working capital and make payments to suppliers and contractors, and employees for travel & expense reimbursements.
Coupa Software faces significant competition from SAP’s Ariba, Fieldglass and Concur solutions, and Oracle’s Procurement Cloud offerings.
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Bull of the Day: Coupa Software (COUP)
Coupa Software is one of the leading providers of Business Spend Management (BSM) solutions. Its cloud-based platform helps aid over 2,500 customers in mitigating supply chain risk and to increase business agility to adapt to change in spending trends.
The company's BSM platform unifies all business spend — from sourcing to contracts and invoicing to payments, thereby enabling enterprises to be more resilient and ultimately spend smarter.
Coupa Software is the pioneer of procure-to-pay solutions. The company’s procurement module aids customers to determine spend policies, and streamline purchase requisition and purchase order processes.
Q2 Results Spark Upward EPS Move
In early September, Coupa reported solid Q2 fiscal 2023 (ends January) results with record revenues and healthy momentum in the subscription business. Both the bottom line and top line beat estimates.
The healthy results were backed by Coupa providing companies with visibility and control over their business spending, resiliency in back-office operations and aiding in making strategic and data-driven decisions to yield positive outcomes for their business.
GAAP net loss in the quarter was $75.3 million or a loss of 99 cents per share compared with a net loss of $91.5 million or a loss of $1.24 per share in the prior-year quarter. Non-GAAP net income during the quarter was $16.5 million or 20 cents per share compared with $20.3 million or 26 cents per share in the prior-year quarter, beating the Zacks Consensus Estimate by 11 cents.
Revenues were record high at $211.1 million compared with $179.2 million in the prior-year quarter, beating the Zacks Consensus Estimate of $203 million. The growth was backed by the strong performance in the North America enterprise market, with more customers preferring its ROI-driven business spend management platform to optimize their spend.
Subscription revenues were record high at $192.7 million compared with $156.2 million, backed by the strengthening of the U.S. dollar against the euro. Professional services revenues during the quarter were $18.4 million compared with $23 million in the year-earlier quarter.
Subscription revenues aggregated 91.3% of total revenues in second-quarter fiscal 2023, while Professional services & other contributed the remaining 8.7%.
Guidance: Softer Sales, Higher Profits
For fiscal 2023, the company has updated its revenue guidance from $838-$848 million to $838-$844 million. Subscription revenues are expected to be in the range of $766-$771 million.
Professional services and other revenues are expected to be $72-$73 million. Non-GAAP earnings are likely to be in the range of 37-44 cents per share, up from earlier expectations of 21-27 cents.
While this jump in profit expectations made COUP a Zacks #1 Rank, it should be noted that even at the top of that 44-cent guide, the company would still post an annual EPS decline of 47%.
The good news is that analysts took next year's estimates higher too, with the profit consensus rising 24.5% to 71-cents. And that would represent 62% EPS growth.
For investors looking for an entry point in the stock, now might be an attractive time with the company trading at a $4 billion valuation against next year's sales growth of 19% to cross $1 billion. That puts the price/sales ratio at 4X, below average for the SaaS space.
More About the Business and Customer Services
Businesses can track and manage purchases in real-time, and reduce time and cost with purchase orders being automatically sent to suppliers for fulfillment and invoicing.
The company’s invoicing module aids suppliers to create electronic invoices that comply with government regulations allowing businesses to eliminate paper and further reduce invoice processing costs, all while reducing invoice payment fraud risk.
Expense management module with innovative mobile capabilities such as GPS and geo-location aids customers to gain real-time expense visibility. Coupa Software also offers additional travel management capabilities, including travel price assurance to help companies capture savings from flight and hotel price decreases that occur after the booking has been placed.
Meanwhile, the company’s Coupa Pay is a set of solutions that help customers consolidate and optimize their processes to manage working capital and make payments to suppliers and contractors, and employees for travel & expense reimbursements.
Coupa Software faces significant competition from SAP’s Ariba, Fieldglass and Concur solutions, and Oracle’s Procurement Cloud offerings.