Coupa Software Reports Second Quarter Fiscal 2022 Financial Results

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Coupa Software Reports Second Quarter Fiscal 2022 Financial Results
- Record Quarterly Revenues of $179 Million, 42% Year-Over-Year Growth
- Quarterly Calculated Billings of $195 Million, 49% Year-Over-Year Growth
- Quarterly Operating Cash Flows and Adjusted Free Cash Flows of $41 Million and $37 Million, Respectively

SAN MATEO, Calif., Sept. 7, 2021 /PRNewswire/ -- Coupa Software (NASDAQ: COUP) today announced financial results for its second fiscal quarter ended July 31, 2021.

"We are proud to report another fantastic quarter where we delivered record revenue, strong calculated billings growth, and our third year of consecutive quarterly non-GAAP profitability," said Rob Bernshteyn, chairman and chief executive officer at Coupa. "Digitizing and optimizing back-office operations is being prioritized as a key strategic initiative for our customers, and the Coupa platform is critical for their ability to develop agility and adaptability in these rapidly changing times."

Second Quarter Results:

  • Total revenues were $179.2 million, an increase of 42% compared to the same period last year. Subscription revenues were $156.2 million, an increase of 40% compared to the same period last year.
  • GAAP operating loss was $54.3 million, compared to $31.9 million for the same period last year. Non-GAAP operating income was $26.7 million, compared to $12.3 million for the same period last year.
  • GAAP net loss attributable to Coupa Software Incorporated was $91.5 million, compared to $43.1 million for the same period last year. GAAP net loss per basic and diluted share attributable to Coupa Software Incorporated was $1.24, compared to $0.64 for the same period last year. Non-GAAP net income attributable to Coupa Software Incorporated was $20.3 million, compared to $15.2 million for the same period last year. Non-GAAP net income per diluted share attributable to Coupa Software Incorporated was $0.26, compared to $0.21 for the same period last year.
  • Operating cash flows and adjusted free cash flows were positive $40.8 million and $36.9 million, respectively.

See the section titled "Non-GAAP Financial Measures" and the reconciliation tables below for important information regarding the non-GAAP financial measures used by Coupa.

Business Outlook:

The following forward-looking statements reflect Coupa's expectations as of September 7, 2021.

Third quarter of fiscal 2022:

  • Total revenues are expected to be $177.0 to $178.0 million.
  • Subscription revenues are expected to be $158.0 to $159.0 million.
  • Professional services and other revenues are expected to be approximately $19.0 million.
  • Non-GAAP income from operations is expected to be $6.0 to $7.0 million.
  • Non-GAAP net income per diluted share attributable to Coupa Software Incorporated is expected to be $0.01 to $0.03 per share.
  • Diluted weighted average share count is expected to be approximately 77.0 million shares.

Full year fiscal 2­­022:

  • Total revenues are expected to be $706.0 to $708.0 million.
  • Non-GAAP income from operations is expected to be $40.0 to $41.0 million.
  • Non-GAAP net income per diluted share attributable to Coupa Software Incorporated is expected to be $0.27 to $0.29 per share.
  • Diluted weighted average share count is expected to be approximately 76.5 million shares.

Coupa has not reconciled its expectations for non-GAAP income from operations to GAAP loss from operations, or non-GAAP net income per diluted share attributable to Coupa Software Incorporated to GAAP net loss per share attributable to Coupa Software Incorporated because certain items excluded from non-GAAP income from operations and non-GAAP net income per diluted share attributable to Coupa Software Incorporated, such as charges related to stock-based compensation expenses, amortization of acquired intangible assets, amortization of debt discount and issuance costs, gain or loss on conversion of convertible senior notes, the adjustment attributable to non-controlling interests, and related tax effects, including non-recurring income tax adjustments, cannot be reasonably calculated or predicted at this time. In addition, the effect of the anti-dilutive impact of the capped call transactions entered into in connection with the company's offerings of convertible notes in 2018, 2019 and 2020, respectively, cannot be reasonably calculated or predicted at this time. The effect of these items may be significant.

Recent Business Highlights:

  • Welcomed many new customers into the Coupa community in Q2, including the following: Adastria Co., AR Holdings, Asklepios BioPharmaceutical, Cuprum, DiCE Molecules, Fairlead Integrated, FIFA, Foghorn Therapeutics, Garrett Motion, Greenstone Financial Services, Groupe Lapointe Dentaire, Imago BioSciences, JG Summit Holdings, JGC Holdings, Jubin Frères, mobilezone, Novelis, PACT Group, Progress Rail Services, ProSciento, Sasol, SCG Packaging, Schwan's Company, Sumitomo Dainippon Pharma, Suzano, Unilab, Walker & Dunlop, WestJet Airlines, and Workato.
  • Launched Coupa App Marketplace, connecting businesses with certified, pre-built solutions to tap into a global ecosystem.
  • Reached a milestone of more than 100 issued and pending U.S. patents.
  • Welcomed accounting workflow automation provider FloQast to its portfolio of Coupa Ventures investments.
  • Released its inaugural Environmental, Social, and Governance (ESG) report.
  • Hosted a Smarter Together virtual event, showcasing the resilience, agility, and adaptability of the Business Spend Management community.
  • Named to Fortune's Best Places to Work for Millennials and Best Medium Workplaces lists1.
  • Recognized by Spend Matters in its ESG vendor profile report, highlighting how Source-to-Pay (S2P) suites address sustainability efforts2.
  • Awarded $75,000 to 15 students in North America through its Coupa Cares scholarship and mentorship program.

Conference Call Information:

Coupa will host a conference call and live webcast for analysts and investors at 4:30 p.m. Eastern time today.

The live webcast will be accessible on Coupa's investor relations website at http://investors.coupa.com. A replay will be available through the same link.

Non-GAAP Financial Measures:

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including non-GAAP operating (loss) income, non-GAAP net (loss) income attributable to Coupa Software Incorporated, non-GAAP net (loss) income per basic and diluted share attributable to Coupa Software Incorporated, and adjusted free cash flows. Coupa believes these non-GAAP measures are useful in evaluating its operating performance and Coupa's management regularly reviews and uses these measures for business planning and other purposes.

Non-GAAP operating (loss) income and non-GAAP net (loss) income attributable to Coupa Software Incorporated exclude certain items from the corresponding GAAP measures, including: stock-based compensation expenses; amortization of acquired intangible assets; the change in fair value of contingent consideration related to an acquisition; amortization of debt discount and issuance costs; gain or loss on conversion of convertible senior notes; the adjustment attributable to non-controlling interests; and related tax effects, including non-recurring income tax adjustments. In addition, the weighted average diluted shares figure used to calculate non-GAAP net income per share attributable to Coupa Software Incorporated reflects the anti-dilutive impact of the capped call transactions entered into in connection with the company's offerings of convertible notes.

Adjusted free cash flows is defined as net cash provided by operating activities, less purchases of property and equipment, plus repayments of convertible senior notes attributable to debt discount, plus one-time payout of legacy unvested equity awards accelerated in conjunction with a business combination. Coupa has the ability to settle obligations related to its senior notes through the use of cash, shares of its common stock, or a combination of both, at its election.

Coupa believes these non-GAAP measures are useful to investors and other users of its financial information because they provide a way to measure and evaluate Coupa's underlying operating performance and the strength of its core business consistently across the periods presented. Coupa believes these non-GAAP measures are also useful for comparing its operating performance to that of other companies in its industry, because they eliminate the effects of certain items that may vary between companies for reasons unrelated to their operating performance. Coupa believes that adjusted free cash flows also provides a useful measure of the company's capital strength and liquidity, although it is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures.

Coupa uses these non-GAAP measures in conjunction with GAAP measures as part of its overall assessment of its performance and liquidity, including the preparation of its annual operating budget and quarterly forecasts, to evaluate the effectiveness of its business strategies, and to communicate with its board of directors concerning its financial performance and liquidity. Coupa's definitions of its non-GAAP measures may differ from those used by other companies for similarly-titled measures, and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, Coupa's non-GAAP measures should be considered in addition to, not as substitutes for, or in isolation from, the company's GAAP results.

Coupa encourages investors and others to review its financial information in its entirety, not to rely on any single financial measure, and to view its non-GAAP measures in conjunction with GAAP financial measures. In addition, Coupa compensates for the limitations of its non-GAAP financial measures by providing a reconciliation of each non-GAAP measure to the most directly comparable GAAP financial measure. These reconciliations are included in the tables attached to this release.

Forward-Looking Statements:

This release includes forward-looking statements. All statements other than statements of historical facts, including the statements of management and statements in "Business Outlook," are forward-looking statements. These forward-looking statements are based on Coupa's current expectations and projections about future events and trends that Coupa believes may affect its financial condition, results of operations, strategy, short- and long-term business operations and objectives, cash flows, liquidity and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, without limitation: the uncertain impact of the COVID-19 pandemic, including new variants such as the Delta variant; Coupa has a limited operating history at its current scale, which makes it difficult to predict its future operating results; Coupa may not be able to manage its recent rapid growth effectively; risks related to past and future business acquisitions, including their integration with Coupa's existing business model, operations and culture; if Coupa is unable to attract new customers, the growth of its revenues will be adversely affected; because its platform is sold to large enterprises with complex operating environments, Coupa encounters long and unpredictable sales cycles; the markets in which Coupa participates are intensely competitive; Coupa's business depends in part on its customers renewing their subscriptions and purchasing additional subscriptions; Coupa may not be successful in expanding its sales efforts or developing widespread brand awareness in a cost-effective manner; risks and liabilities related to breach of its security measures or unauthorized access to customer data; the impact of foreign currency exchange rates and global economic conditions; and risks relating to analyst coverage of its stock.

These and other risks and uncertainties that could affect Coupa's future results are included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in Coupa's quarterly report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on June 8, 2021, which is available at investors.coupa.com and on the SEC's website at www.sec.gov. Further information on potential risks that could affect actual results will be included in other periodic filings Coupa makes with the SEC.

The forward-looking statements in this release reflect Coupa's expectations as of September 7, 2021. Coupa undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.

About Coupa Software

Coupa empowers companies around the world with the visibility and control they need to spend smarter and safer. To learn more about how Coupa can help you spend smarter, visit www.coupa.com. Read more on the Coupa Blog or follow @Coupa on Twitter.

1 "Fortune Best Workplaces for Millennials™ 2021", and "Fortune Best Small & Medium Workplaces™ 2021"
2 Spend Matters, "ESG Vendor Profiles", August 4, 2021

COUPA SOFTWARE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)



Three Months Ended

July 31,


Six Months Ended

July 31,




2021


2020


2021


2020

Revenues:








Subscription

$

156,230



$

111,581



$

296,334



$

217,316


Professional services and other

23,016



14,340



49,841



27,819


Total revenues

179,246



125,921



346,175



245,135


Cost of revenues:








Subscription

51,398



33,805



102,423



62,807


Professional services and other

27,822



14,634



56,524



28,470


Total cost of revenues

79,220



48,439



158,947



91,277


Gross profit

100,026



77,482



187,228



153,858


Operating expenses:








Research and development

41,799



30,212



85,636



56,931


Sales and marketing

76,279



50,488



154,122



96,627


General and administrative

36,248



28,705



75,625



37,849


Total operating expenses

154,326



109,405



315,383



191,407


Loss from operations

(54,300)



(31,923)



(128,155)



(37,549)


Interest expense

(30,621)



(20,223)



(59,724)



(32,512)


Other income (expense), net

(1,983)



4,759



(1,448)



8,087


Loss before benefit from income taxes

(86,904)



(47,387)



(189,327)



(61,974)


Benefit from income taxes

(155)



(4,271)



(2,221)



(4,042)


Net loss

(86,749)



(43,116)



(187,106)



(57,932)


Net loss attributable to non-controlling interests

(517)





(517)




Adjustment attributable to non-controlling interests

5,235





5,235




Net loss attributable to Coupa Software Incorporated

$

(91,467)



$

(43,116)



$

(191,824)



$

(57,932)


Net loss per share, basic and diluted, attributable to Coupa Software Incorporated

$

(1.24)



$

(0.64)



$

(2.62)



$

(0.87)


Weighted-average number of shares used in computing net loss per share, basic and diluted

73,526



67,597



73,200



66,545


 

COUPA SOFTWARE INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)



July 31, 2021


January 31, 2021

Assets




Current assets:




Cash and cash equivalents

$

432,009



$

323,284


Marketable securities

201,555



283,036


Accounts receivable, net of allowances

170,171



196,009


Prepaid expenses and other current assets

35,422



36,381


Deferred commissions, current portion

17,428



15,541


Total current assets

856,585



854,251


Property and equipment, net

29,578



28,266


Deferred commissions, net of current portion

39,783



36,832


Goodwill

1,515,477



1,480,847


Intangible assets, net

577,146



632,173


Operating lease right-of-use assets

38,296



41,305


Other assets

34,980



31,491


Total assets

$

3,091,845



$

3,105,165


Liabilities, Redeemable Non-Controlling Interests, Other Temporary Equity and
Stockholders' Equity




Current liabilities:




Accounts payable

$

4,621



$

4,831


Accrued expenses and other current liabilities

94,209



80,271


Deferred revenue, current portion

351,933



356,115


Current portion of convertible senior notes, net

626,819



609,068


Operating lease liabilities, current portion

12,362



11,222


Total current liabilities

1,089,944



1,061,507


Convertible senior notes, net

933,439



897,525


Deferred revenue, net of current portion

7,308



5,773


Operating lease liabilities, net of current portion

27,717



31,845


Other liabilities

67,819



67,915


Total liabilities

2,126,227



2,064,565


Redeemable non-controlling interests

6,952




Other temporary equity

9



369


Stockholders' equity:




Preferred stock, $0.0001 par value per share




Common stock, $0.0001 par value per share

7



7


Additional paid-in capital

1,662,804



1,556,865


Accumulated other comprehensive income

8,758



9,165


Accumulated deficit

(712,912)



(525,806)


Total stockholders' equity

958,657



1,040,231


Total liabilities, redeemable non-controlling interests, other temporary equity and stockholders' equity

$

3,091,845



$

3,105,165


 

COUPA SOFTWARE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)



Six Months Ended

July 31,



2021


2020

Cash flows from operating activities




Net loss attributable to Coupa Software Incorporated

$

(191,824)



$

(57,932)


Net loss and adjustment attributable to redeemable non-controlling interests

4,718




Net loss


(187,106)




(57,932)


Adjustments to reconcile net loss to net cash provided by operating activities:




Depreciation and amortization

73,146



22,920


Amortization of premium on marketable securities, net

755



1,099


Amortization of deferred commissions

8,554



6,437


Amortization of debt discount and issuance costs

56,262



31,357


Stock-based compensation

94,792



58,040


Loss (gain) on conversion of convertible senior notes

129



(3,202)


Repayments of convertible senior notes attributable to debt discount

(517)



(26,336)


Other

(3,176)



3,300


Changes in operating assets and liabilities net of effects from acquisitions:




Accounts receivable

30,444



19,583


Prepaid expenses and other current assets

1,396



7,053


Other assets

9,585



901


Deferred commissions

(13,394)



(6,051)


Accounts payable

(248)



(1,741)


Accrued expenses and other liabilities

5,703



1,289


Deferred revenue

(3,432)



(17,920)


Net cash provided by operating activities

72,893



38,797


Cash flows from investing activities




Purchases of marketable securities

(72,392)



(246,586)


Maturities of marketable securities

69,523



284,090


Sales of marketable securities

83,630



25,013


Acquisitions, net of cash acquired

(45,766)



(87,338)


Purchases of other investments

(7,500)




Purchases of property and equipment

(6,662)



(7,028)


Net cash provided by (used in) investing activities

20,833



(31,849)


Cash flows from financing activities




Investment from redeemable non-controlling interests

2,223




Proceeds from issuance of convertible senior notes, net of issuance costs



1,355,367


Purchase of capped calls



(192,786)


Repayments of convertible senior notes

(2,446)



(549,278)


Proceeds from the exercise of common stock options

4,727



9,609


Proceeds from issuance of common stock for employee stock purchase plan

10,477



7,391


Net cash provided by financing activities

14,981



630,303


Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash

(41)



241


Net increase in cash, cash equivalents, and restricted cash

108,666



637,492


Cash, cash equivalents, and restricted cash at beginning of year

327,589



268,280


Cash, cash equivalents, and restricted cash at end of period

$

436,255



$

905,772


Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets




Cash and cash equivalents

$

432,009



$

905,612


Restricted cash included in other assets

4,246



160


Total cash, cash equivalents, and restricted cash

$

436,255



$

905,772


 

COUPA SOFTWARE INCORPORATED

Reconciliation of GAAP to Non-GAAP Financial Measures

Three Months Ended July 31, 2021

(in thousands, except percentages and per share amounts)

(unaudited)



GAAP


Stock-Based

Compensation

Expenses


Amortization of

Acquired

Intangible Assets


Amortization of

Debt Discount and

Issuance Costs


Other (2)


Non-GAAP

Costs and expenses:












Costs of subscription

$

51,398



$

(3,596)



$

(14,525)



$



$



$

33,277


Costs of professional services and other

27,822



(4,357)



(5,852)







17,613


Gross profit

55.8

%


4.4

%


11.4

%


0.0

%


0.0

%


71.6

%













Research and development

41,799



(11,055)









30,744


Sales and marketing

76,279



(12,230)



(13,141)







50,908


General and administrative

36,248



(16,262)









19,986


Income (loss) from operations

(54,300)



47,500



33,518







26,718


Operating margin

(30.3)

%


26.5

%


18.7

%


0.0

%


0.0

%


14.9

%

























Interest expense

(30,621)







28,872





(1,749)


Other income (expense), net

(1,983)











(1,983)


Income (loss) before provision for (benefit from) income taxes

(86,904)



47,500



33,518



28,872





22,986


Provision for (benefit from) income taxes

(155)



769



1,889





746



3,249


Net income (loss)

(86,749)



46,731



31,629



28,872



(746)



19,737


Net loss attributable to non-controlling interests

(517)











(517)


Adjustment attributable to non-controlling interests

5,235









5,235




Net income (loss) attributable to Coupa Software Incorporated


(91,467)




46,731




31,629




28,872



4,489




20,254














Net income (loss) per share, basic, attributable to Coupa Software Incorporated (1)

$

(1.24)











$

0.28


Net income (loss) per share, diluted, attributable to Coupa Software Incorporated (1)

$

(1.24)











$

0.26




(1)

GAAP net loss per share attributable to Coupa Software Incorporated is calculated based upon 73,526 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share attributable to Coupa Software Incorporated is calculated based upon 73,526 basic and 76,561 diluted weighted-average shares of common stock. The company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes.

(2)

Other consists of the removal of a one-time income tax benefit associated with the remeasurement of foreign deferred tax assets and an adjustment attributable to non-controlling interests to its redemption amount.

 

COUPA SOFTWARE INCORPORATED

Reconciliation of GAAP to Non-GAAP Financial Measures

Three Months Ended July 31, 2020

(in thousands, except percentages and per share amounts)

(unaudited)



GAAP


Stock-Based

Compensation

Expenses


Amortization of

Acquired

Intangible Assets


Amortization of

Debt Discount and

Issuance Costs


Gain on

Conversion of

Convertible

Senior Notes


Other (2)


Non-GAAP

Costs and expenses:














Costs of subscription

$

33,805



$

(2,647)



$

(7,548)



$



$



$



$

23,610


Costs of professional services and other

14,634



(2,952)



(200)









11,482


Gross profit

61.5

%


4.4

%


6.2

%


0.0

%


0.0

%


0.0

%


72.1

%















Research and development

30,212



(7,316)











22,896


Sales and marketing

50,488



(9,255)



(2,614)









38,619


General and administrative

28,705



(11,673)











17,032


Income (loss) from operations

(31,923)



33,843



10,362









12,282


Operating margin

(25.4)

%


26.9

%


8.2

%


0.0

%


0.0

%


0.0

%


9.8

%















Interest expense

(20,223)







19,407







(816)


Other income (expense), net

4,759









(631)





4,128


Income (loss) before provision for income taxes

(47,387)



33,843



10,362



19,407



(631)





15,594


Provision for income taxes

(4,271)



3,444



(103)



1,109





182



361


Net income (loss) attributable to Coupa Software Incorporated

(43,116)



30,399



10,465



18,298



(631)



(182)



15,233
















Net income (loss) per share, basic, attributable to Coupa Software Incorporated (1)

$

(0.64)













$

0.23


Net income (loss) per share, diluted, attributable to Coupa Software Incorporated (1)

$

(0.64)













$

0.21




(1)

GAAP net loss per share attributable to Coupa Software Incorporated is calculated based upon 67,597 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share attributable to Coupa Software Incorporated is calculated based upon 67,597 basic and 73,019 diluted weighted-average shares of common stock. The company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes.

(2)

Other consists of the release of valuation allowances against deferred tax assets.

 

COUPA SOFTWARE INCORPORATED

Reconciliation of GAAP to Non-GAAP Financial Measures

Six Months Ended July 31, 2021

(in thousands, except percentages and per share amounts)

(unaudited)



GAAP


Stock-Based

Compensation

Expenses


Amortization of

Acquired

Intangible Assets


Amortization of

Debt Discount and

Issuance Costs


Loss on

Conversion of

Convertible

Senior Notes



Other (2)


Non-GAAP

Costs and expenses:















Costs of subscription

$

102,423



$

(6,901)



$

(28,411)



$



$




$



$

67,111


Costs of professional services and other

56,524



(8,255)



(12,374)










35,895


Gross profit

54.1

%


4.4

%


11.8

%


0.0

%


0.0

%



0.0

%


70.2

%
















Research and development

85,636



(21,718)












63,918


Sales and marketing

154,122



(23,451)



(26,273)










104,398


General and administrative

75,625



(34,467)












41,158


Income (loss) from operations

(128,155)



94,792



67,058










33,695


Operating margin

(37.0)

%


27.4

%


19.4

%


0.0

%


0.0

%



0.0

%


9.7

%
















Interest expense

(59,724)







56,262








(3,462)


Other income (expense), net

(1,448)









129






(1,319)


Income (loss) before provision for (benefit from) income taxes

(189,327)



94,792



67,058



56,262



129






28,914


Provision for (benefit from) income taxes

(2,221)



1,817



3,818








746



4,160


Net income (loss)

(187,106)



92,975



63,240



56,262



129




(746)



24,754


Net loss attributable to non-controlling interests

(517)














(517)


Adjustment attributable to non-controlling interests

5,235












5,235




Net income (loss) attributable to Coupa Software Incorporated


(191,824)




92,975




63,240




56,262




129





4,489




25,271

















Net income (loss) per share, basic, attributable to Coupa Software Incorporated  (1)

$

(2.62)














$

0.35


Net income (loss) per share, diluted, attributable to Coupa Software Incorporated (1)

$

(2.62)














$

0.33




(1)

GAAP net loss per share attributable to Coupa Software Incorporated is calculated based upon 73,200 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share attributable to Coupa Software Incorporated is calculated based upon 73,200 basic and 76,431 diluted weighted-average shares of common stock. The company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes.

(2)

Other consists of the removal of a one-time income tax benefit associated with the remeasurement of foreign deferred tax assets and an adjustment attributable to non-controlling interests to its redemption amount.

 

COUPA SOFTWARE INCORPORATED

Reconciliation of GAAP to Non-GAAP Financial Measures

Six Months Ended July 31, 2020

(in thousands, except percentages and per share amounts)

(unaudited)



GAAP


Stock-Based

Compensation

Expenses


Amortization of

Acquired

Intangible Assets


Change in Fair
Value of
Contingent
Consideration
Liability


Amortization of

Debt Discount and

Issuance Costs


Gain on
Conversion
of
Convertible
Senior Notes


Other (2)


Non-GAAP

Costs and expenses:
















Costs of subscription

$

62,807



$

(4,805)



$

(14,158)



$



$



$



$



$

43,844


Costs of professional services and other

28,470



(5,364)



(400)













22,706


Gross profit

62.8

%


4.1

%


5.9

%


0.0

%


0.0

%


0.0

%


0.0

%


72.9

%

















Research and development

56,931



(13,440)













43,491


Sales and marketing

96,627



(16,768)



(4,670)











75,189


General and administrative

37,849



(17,663)





12,500









32,686


Income (loss) from operations

(37,549)



58,040



19,228



(12,500)









27,219


Operating margin

(15.3)

%


23.7

%


7.8

%


(5.1)

%


0.0

%


0.0

%


0.0

%


11.1

%

















Interest expense

(32,512)









31,357







(1,155)


Other income (expense), net

8,087











(3,202)





4,885


Income (loss) before provision for (benefit from) income taxes

(61,974)



58,040



19,228



(12,500)



31,357



(3,202)





30,949


Provision for (benefit from) income taxes

(4,042)



4,031



(152)





1,109





310



1,256


Net income (loss) attributable to Coupa Software Incorporated

(57,932)



54,009



19,380



(12,500)



30,248



(3,202)



(310)



29,693


















Net income (loss) per share, basic, attributable to Coupa Software Incorporated (1)

$

(0.87)















$

0.45


Net income (loss) per share, diluted, attributable to Coupa Software Incorporated (1)

$

(0.87)















$

0.41




(1)

GAAP net loss per share attributable to Coupa Software Incorporated is calculated based upon 66,545 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share attributable to Coupa Software Incorporated is calculated based upon 66,545 basic and 71,603 diluted weighted-average shares of common stock. The Company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes.

(2)

Other consists of the release of valuation allowances against deferred tax assets.

 

COUPA SOFTWARE INCORPORATED

Reconciliation of GAAP Cash Flows from Operations to Adjusted Free Cash Flows and Adjusted Free Cash Flows Margin

(Non-GAAP Financial Measures)

(in thousands, except percentages)

(unaudited)



Three Months Ended July 31,


Six Months Ended July 31,


2021


2020


2021


2020

Net cash provided by operating activities

$

40,811



$

23,389



$

72,893



$

38,797


Less: purchases of property and equipment

(3,908)



(3,429)



(6,662)



(7,028)


Add: repayments of convertible senior notes attributable to debt discount



15,732



517



26,336


Adjusted free cash flows

$

36,903



$

35,692



$

66,748



$

58,105









Trailing Twelve Months Ended July 31,


2021


2020

Net cash provided by operating activities

$

112,298



$

86,908


Less: purchases of property and equipment

(11,126)



(12,825)


Add: repayments of convertible senior notes attributable to debt discount

1,589



26,336


Add: one-time payout of legacy unvested equity awards accelerated in conjunction with a business combination

19,428




Adjusted free cash flows


122,189




100,419


Divided by: total revenues

$      642,683



$      458,371


Adjusted free cash flows margin

19.0

%


21.9

%

 

 

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SOURCE Coupa Software

Investor Relations: Steven Horwitz, (650) 338-1340, ir@coupa.com