A month has gone by since the last earnings report for Coupa Software (
COUP Quick Quote COUP - Free Report) . Shares have added about 27.6% 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 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 Q1 Earnings & Revenues Top Estimates
Coupa Software reported first-quarter fiscal 2022 non-GAAP earnings of 7 cents per share. The Zacks Consensus Estimate was pegged at a loss per share of 19 cents. However, the bottom line deteriorated 65% from the year-ago quarter’s reported figure.
Revenues of $166.9 million outpaced the Zacks Consensus Estimate by 9.3%. The top line increased 40% from the prior-year quarter’s figure. Subscription revenues (83.9% of total revenues) increased 32.5% year over year to $140.1 million. Meanwhile, Professional services & other revenues (16.1%) surged 99% year over year to $26.8 million. The top line benefited from a strong uptake of the company’s Business Spend Management (BSM) and Coupa Pay offerings including Coupa Treasury and Coupa Supply Chain Management. The company is witnessing robust adoption of spend management offerings amid coronavirus-triggered macroeconomic weakness and the work-from-home wave. Major Highlights
For fiscal first quarter, calculated billings came in at $149 million, up 46% year over year. In February 2021, Coupa Software purchased Pana Industries, Inc, which is a well-known corporate travel-booking company.
The company continued to add clients to its customer base in the reported quarter. Some of the notable new deal wins in the quarter include American Cybersystems, Apogee Enterprises, Eagle Bancorp, Novaria Group, One Medical Group, Osburn Contractors, Praxis Precision Medicines, Progroup AG, Protagonist Therapeutics, UserTesting and Zeta Charter Schools among others. However, the company faces stiff competition in the Peer to Peer Lending (P2P) market along with weak adoption of Coupa Travel Sabre stemming from pandemic-induced lower spend on travel. Margin Details
Non-GAAP gross margin contracted 480 basis points (bps) from the prior-year quarter’s level to 68.8%.
Non-GAAP research and development expenses increased 61.1% year over year to $33.2 million. Non-GAAP sales and marketing expenses surged 46.3% year over year to $53.5 million Non-GAAP general and administrative expenses increased 35.2% year over year to $21.2 million. Non-GAAP operating income declined 53.3% year over year to $7 million. Non-GAAP operating margin contracted 830 bps on a year-over-year basis to 4.2%. Balance Sheet & Cash Flow
Coupa Software had cash and cash equivalents and marketable securities of $600.3 million as of Apr 30, 2021 compared with $606.3 million as of Jan 31, 2021.
For the fiscal first quarter, cash flow from operations came in at $32 million compared with $20.4 million in the previous quarter. Adjusted free cash flow totaled $30 million compared with $38.1 million reported in the prior quarter. Guidance
For second-quarter fiscal 2022, revenues are anticipated in the range of $162-$163 million. While Subscription revenues are expected between $142 million and $143 million, professional services revenues are anticipated to be approximately $20 million.
Non-GAAP loss from operations is estimated in the range of $2-$3 million. Non-GAAP net loss is projected in the range of 5-7 cents per share. For fiscal 2022, Coupa Software projects revenues between $681 million and $684 million. Non-GAAP loss from operations is anticipated in the range of $2-$7 million. Non-GAAP loss per share is now expected in the band of 14-20 cents. How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 20.27% due to these changes.
Currently, Coupa Software has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth 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.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Coupa Software has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.