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TICKERS: COUP

Coupa Software Shares Rise 10% on Q2 Earnings

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Enterprise cloud software firm Coupa Software's shares are trading 10% higher today after the company announced Q2/20 earnings and issued a cautious macroeconomic outlook for the rest of 2019.

Business Spend Management software company Coupa Software Inc. (COUP:NASDAQ) announced financial results yesterday for its second fiscal quarter ended July 31, 2019. Shares are trading up more than 10% today on the news even after the company issued a subsequent release today noting a cautionary enterprise business spending environment outlook for the rest of calendar year 2019.

Coupa reported that in Q2/20 total revenues were $95.1 million, an increase of 54% compared to Q2/19. Subscription revenues in the same period were $83.5 million, an increase of 51% compared to Q2/19.

The company reported a GAAP operating loss of $22.8 million in Q2/20, compared to a loss of $10.6 million in Q2/19. Non-GAAP operating income increased to $4.8 million in Q2/20, compared to $4.0 million in Q2/19. The firm advised that the GAAP net loss in Q2/20 was $20.0 million, compared to a net loss of $13.9 in Q2/19. GAAP net loss per basic and diluted share was $0.32, compared to a net loss of $0.24 for the same period last year. Non-GAAP net income was $5.3 million, compared to Non-GAAP net income of $3.3 million for the same period last year. Non-GAAP net income per diluted share was $0.07, compared to Non-GAAP net income per diluted share of $0.05 for the same period last year.

Coupa indicated that it added many new customers in Q2/20 including Affirmed Networks, ASB Bank, Carousell, Comfortdelgro Corporation, Commonwealth Bank of Australia, Las Vegas Valley Water District, Lucid Software, Lucozade Ribena Suntory, Messer-US, Pochteca Materias Primas, PSSI Group, Rakuten, Redfin, Sainsbury's Supermarkets, SAUR Group, The Nebu Group, Tullow Oil, University of St. Augustine, Venafi, Volkswagen Group Australia, Waste Management and Wawa.

The company noted that it was named as a leader in the Gartner 2019 Magic Quadrant for Procure-to-Pay Suites for the fourth consecutive time, and for the first time, ranked highest on both axes, Completeness of Vision and Ability to Execute. The firm also reiterated that it unveiled new Community Intelligence innovations in 2019 as well as Coupa Pay partnerships with Citi Commercial Cards, PayPal, Stripe and Transfermate.

The company's president and CEO Rob Bernshteyn commented, "We delivered a strong second quarter with record revenues of $95 million, up 54% year-over-year, and calculated billings of $108 million, up 57% year-over-year...By extending our leadership standing in Business Spend Management (BSM), we feel well positioned on our path to $1 billion in revenue."

The company also updated its Q3/20 estimates advising that it expects total revenues of $95.596.5 million, subscription revenues of $86.087.0 million, and professional services and other revenues of approximately $9.5 million. The company expects non-GAAP income from operations of $3.55.5 million and non-GAAP net income per diluted share between $0.05 and $0.08 per share.

For full year FY/20 the firm estimates that total revenues are expected to be between $369.0 and $372.0 million. Non-GAAP income from operations is expected to be between $10.0 and $$13.0 million, with non-GAAP net income per diluted share is expected to be between $0.11 and $0.16 per share.

Just one day following the earnings release, the company issued a cautionary statement on macro Q3/20 global business spend. Today, the company announced the findings of the Q3/20 Coupa Business Spend Index (BSI), which revealed that globally, businesses appear to be growing more cautious about the economy through at least the end of 2019. The firm advised that by analyzing billions of dollars of business spend transactions in the Coupa BSM Platform, the Coupa BSI reflects businesses' confidence in the economy, serving as an early warning system for economic health. Coupa asserts that BSI is an early indicator based on actual business behavior, which can be a realistic predictor of future economic growth.

Rob Bernshteyn stated, "Companies are always looking to economic indicators that they can trust to make smart decisions about their business...At Coupa, we believe that the wisdom from our BSM community is a powerful tool to help companies of all sizes spend smarter together. The Coupa BSI analyzes hundreds of global companies and their real-time spend behavior, showcasing implications on the growth prospects of the global economy."

The company suggests from its data that in aggregate over the coming months, business optimism heading into the second half of 2019 is weaker than it was in the early part of this year. According to the Q3 Coupa BSI, all industries, with the exception of manufacturing and technology, are less optimistic about economic growth through 2019. Specifically, sentiment in Financial Services appears to be weakening, Health and Life Sciences appears to be above trend, but weakening, High Tech somewhat surprisingly is slightly up, Manufacturing seems to be increasing although slightly below trend, and looking forward, retailers' confidence in economic growth appears to be slowing from where it has been.

Coupa Software Inc. is based in San Mateo, Calif., and states that it is a leading provider of BSM solutions that offers a comprehensive, cloud-based BSM platform that has connected hundreds of organizations with more than five million suppliers globally. The Coupa BSM believes the platform provides greater visibility into and control over how companies spend money. Using the Coupa BSM platform, businesses are able to achieve real, measurable value and savings that drive their profitability.

Shares of Coupa Software opened higher today at $149.49 (+$15.09, +11.23%) over yesterday's close of $134.40. Shares set a 52-week high earlier today and have traded between $145.50 and $155.44 . The stock is currently trading at $147.90 (+$13.50, +10.04%).

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