It has been about a month since the last earnings report for Coupa Software . Shares have lost about 7.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Coupa Software due for a breakout? 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 drivers.
Coupa Software Q3 Earnings Top Estimates, Revenues Up
Coupa Software reported third-quarter fiscal 2022 non-GAAP earnings of 31 cents per share, beating the Zacks Consensus Estimate by 29 cents and jumped 72.2% year over year.
Coupa reported revenues of $185.8 million, up 40% year over year.
Quarter Details
Coupa’s subscription revenues increased 40% year over year to $164.7 million in the reported quarter. Subscription revenues contributed 89% to revenues.
Professional Services and other revenues contributed 11.3% to total revenues. The figure amounted to $21.1 million, up 42% year over year.
In the reported quarter, Coupa added several new customers to its portfolio, including Aptim Holdings, Capsida Biotherapeutics, Compass Minerals International, DEVK Versicherungen, EDEKA Handelsgesellschaft Nord, Endeavor Group and Softbank.
In the third quarter, Coupa made an investment in Interos, a supply chain risk management and operational resilience company.
Non-GAAP gross profit margin expanded 3520 basis points (bps) year over year to 97% compared with 61.8% in the year-ago quarter.
Research & development expenses, as a percentage of revenues, declined 180 bps on a year-over-year basis to 15.4%. General & administrative expenses, as a percentage of revenues, were 12.7%, down 130 bps year over year. Sales and marketing expenses, as a percentage of revenues, reached 30.9% on a year-over-year basis.
Total operating expenses, as a percentage of revenues, were 59%, down 280 bps from the year-ago quarter’s levels.
Operating income was $27.9 million in the reported quarter compared with an operating income of $14.3 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Oct 31, 2021, Coupa had cash, cash equivalents and marketable securities of $667.9 million compared with $606.3 million as of Jan 31, 2020.
Operating cash flows and adjusted free cash flows were $31 million and $28.2 million, respectively, in the reported quarter.
Guidance
For fourth-quarter fiscal 2022, Coupa expects revenues in the range of $185-$186 million.
Subscription revenues are anticipated in the range of $166-$167 million. Professional services and other revenues are forecasted to be approximately $189 million.
Non-GAAP income from operations is expected in the range of $8-$10 million for the fiscal fourth quarter.
Non-GAAP net income per share is anticipated to be in the range of 3-5 cents per share for the fiscal fourth quarter.
For fiscal 2022, Coupa expects total revenues in the range of $717-$718 million.
Non-GAAP income from operations is forecasted to be within $70-$72 million for fiscal 2022.
Non-GAAP income per share is anticipated in the 66-69 cents per share range, for fiscal 2022.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 19.52% due to these changes.
VGM Scores
Currently, Coupa Software has a nice Growth Score of B, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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.
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Why Is Coupa Software (COUP) Down 7.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Coupa Software . Shares have lost about 7.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Coupa Software due for a breakout? 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 drivers.
Coupa Software Q3 Earnings Top Estimates, Revenues Up
Coupa Software reported third-quarter fiscal 2022 non-GAAP earnings of 31 cents per share, beating the Zacks Consensus Estimate by 29 cents and jumped 72.2% year over year.
Coupa reported revenues of $185.8 million, up 40% year over year.
Quarter Details
Coupa’s subscription revenues increased 40% year over year to $164.7 million in the reported quarter. Subscription revenues contributed 89% to revenues.
Professional Services and other revenues contributed 11.3% to total revenues. The figure amounted to $21.1 million, up 42% year over year.
In the reported quarter, Coupa added several new customers to its portfolio, including Aptim Holdings, Capsida Biotherapeutics, Compass Minerals International, DEVK Versicherungen, EDEKA Handelsgesellschaft Nord, Endeavor Group and Softbank.
In the third quarter, Coupa made an investment in Interos, a supply chain risk management and operational resilience company.
Non-GAAP gross profit margin expanded 3520 basis points (bps) year over year to 97% compared with 61.8% in the year-ago quarter.
Research & development expenses, as a percentage of revenues, declined 180 bps on a year-over-year basis to 15.4%. General & administrative expenses, as a percentage of revenues, were 12.7%, down 130 bps year over year. Sales and marketing expenses, as a percentage of revenues, reached 30.9% on a year-over-year basis.
Total operating expenses, as a percentage of revenues, were 59%, down 280 bps from the year-ago quarter’s levels.
Operating income was $27.9 million in the reported quarter compared with an operating income of $14.3 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Oct 31, 2021, Coupa had cash, cash equivalents and marketable securities of $667.9 million compared with $606.3 million as of Jan 31, 2020.
Operating cash flows and adjusted free cash flows were $31 million and $28.2 million, respectively, in the reported quarter.
Guidance
For fourth-quarter fiscal 2022, Coupa expects revenues in the range of $185-$186 million.
Subscription revenues are anticipated in the range of $166-$167 million. Professional services and other revenues are forecasted to be approximately $189 million.
Non-GAAP income from operations is expected in the range of $8-$10 million for the fiscal fourth quarter.
Non-GAAP net income per share is anticipated to be in the range of 3-5 cents per share for the fiscal fourth quarter.
For fiscal 2022, Coupa expects total revenues in the range of $717-$718 million.
Non-GAAP income from operations is forecasted to be within $70-$72 million for fiscal 2022.
Non-GAAP income per share is anticipated in the 66-69 cents per share range, for fiscal 2022.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 19.52% due to these changes.
VGM Scores
Currently, Coupa Software has a nice Growth Score of B, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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.