0001385867-21-000031 | 10-Q | XBRL Viewer

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Cover Page - shares	9 Months Ended
Cover Page - shares	Oct. 31, 2021	Dec. 03, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 31, 2021
Document Transition Report	false
Entity File Number	001-37901
Entity Registrant Name	COUPA SOFTWARE INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-4429448
Entity Address, Address Line One	1855 S. Grant Street
Entity Address, City or Town	San Mateo
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94402
City Area Code	650
Local Phone Number	931-3200
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	COUP
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		74,680,462
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001385867
Current Fiscal Year End Date	--01-31

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 31, 2021	Jan. 31, 2021
Current assets:
Cash and cash equivalents	$ 458,195	$ 323,284
Marketable securities	209,660	283,036
Accounts receivable, net of allowances	179,278	196,009
Prepaid expenses and other current assets	32,283	36,381
Deferred commissions, current portion	18,848	15,541
Total current assets	898,264	854,251
Property and equipment, net	30,161	28,266
Deferred commissions, net of current portion	42,623	36,832
Goodwill	1,515,141	1,480,847
Intangible assets, net	543,628	632,173
Operating lease right-of-use assets	38,183	41,305
Other assets	35,853	31,491
Total assets	3,103,853	3,105,165
Current liabilities:
Accounts payable	5,279	4,831
Accrued expenses and other current liabilities	96,716	80,271
Deferred revenue, current portion	352,198	356,115
Current portion of convertible senior notes, net (Note 8)	633,641	609,068
Operating lease liabilities, current portion	12,401	11,222
Total current liabilities	1,100,235	1,061,507
Convertible senior notes, net (Note 8)	952,285	897,525
Deferred revenue, net of current portion	14,058	5,773
Operating lease liabilities, net of current portion	27,174	31,845
Other liabilities	68,210	67,915
Total liabilities	2,161,962	2,064,565
Commitments and contingencies (Note 9)
Redeemable non-controlling interests	10,044	0
Other temporary equity	0	369
Stockholders’ equity:
Preferred stock, $0.0001 par value per share; 25,000,000 shares authorized at October 31, 2021 and January 31, 2021; zero shares issued and outstanding at October 31, 2021 and January 31, 2021	0	0
Common stock, $0.0001 par value per share; 625,000,000 shares authorized at October 31, 2021 and January 31, 2021; 74,613,510 and 72,753,659 shares issued and outstanding at October 31, 2021 and January 31, 2021, respectively	7	7
Additional paid-in capital	1,724,042	1,556,865
Accumulated other comprehensive income	8,748	9,165
Accumulated deficit	(800,950)	(525,806)
Total stockholders’ equity	931,847	1,040,231
Total liabilities, redeemable non-controlling interests, other temporary equity and stockholders’ equity	$ 3,103,853	$ 3,105,165

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Oct. 31, 2021	Jan. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	625,000,000	625,000,000
Common stock, shares issued (in shares)	74,613,510	72,753,659
Common stock, shares outstanding (in shares)	74,613,510	72,753,659

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 31, 2021	Oct. 31, 2020	Oct. 31, 2021	Oct. 31, 2020
Revenues:
Total revenues	$ 185,816	$ 132,964	$ 531,991	$ 378,099
Cost of revenues:
Total cost of revenues	77,620	50,787	236,566	142,064
Gross profit	108,196	82,177	295,425	236,035
Operating expenses:
Research and development	39,990	30,528	125,625	87,459
Sales and marketing	83,779	53,204	237,902	149,831
General and administrative	40,513	32,092	116,139	69,941
Total operating expenses	164,282	115,824	479,666	307,231
Loss from operations	(56,086)	(33,647)	(184,241)	(71,196)
Interest expense	(31,130)	(29,308)	(90,854)	(61,820)
Other income (expense), net	(1,298)	746	(2,746)	8,833
Loss before benefit from income taxes	(88,514)	(62,209)	(277,841)	(124,183)
Benefit from income taxes	(476)	(1,411)	(2,697)	(5,453)
Net loss	(88,038)	(60,798)	(275,144)	(118,730)
Net loss attributable to redeemable non-controlling interests	(273)	0	(790)	0
Adjustment attributable to redeemable non-controlling interests	3,438	0	8,673	0
Net loss attributable to Coupa Software Incorporated	$ (91,203)	$ (60,798)	$ (283,027)	$ (118,730)
Net loss per share, basic, attributable to Coupa Software Incorporated (in dollars per share)	$ (1.23)	$ (0.88)	$ (3.85)	$ (1.76)
Net loss per share, diluted, attributable to Coupa Software Incorporated (in dollars per share)	$ (1.23)	$ (0.88)	$ (3.85)	$ (1.76)
Weighted-average number of shares used in computing net loss per share , basic (in shares)	74,133	68,941	73,514	67,349
Weighted-average number of shares used in computing net loss per share , diluted (in shares)	74,133	68,941	73,514	67,349
Subscription
Revenues:
Total revenues	$ 164,745	$ 118,083	$ 461,079	$ 335,399
Cost of revenues:
Total cost of revenues	52,279	36,528	154,701	99,335
Professional services and other
Revenues:
Total revenues	21,071	14,881	70,912	42,700
Cost of revenues:
Total cost of revenues	$ 25,341	$ 14,259	$ 81,865	$ 42,729

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 31, 2021	Oct. 31, 2020	Oct. 31, 2021	Oct. 31, 2020
Income Statement [Abstract]
Net loss	$ (88,038)	$ (60,798)	$ (275,144)	$ (118,730)
Other comprehensive gain (loss) in relation to defined benefit plans, net of tax	258	(53)	313	34
Changes in unrealized loss on marketable securities, net of tax	(227)	(1,421)	(285)	(335)
Foreign currency translation adjustments, net of tax	(92)	(1,833)	(507)	4,456
Comprehensive loss	(88,099)	(64,105)	(275,623)	(114,575)
Less comprehensive loss attributable to redeemable non-controlling interests:
Net loss attributable to redeemable non-controlling interests	(273)	0	(790)	0
Foreign currency translation adjustments, net of tax, attributable to redeemable non-controlling interests	(51)	0	(62)	0
Comprehensive loss attributable to redeemable non-controlling interests	(324)	0	(852)	0
Comprehensive loss attributable to Coupa Software Incorporated	$ (87,775)	$ (64,105)	$ (274,771)	$ (114,575)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Balance (in shares) at Jan. 31, 2020		64,528,970
Balance at Jan. 31, 2020	$ 445,657	$ 7	$ 790,468	$ 871	$ (345,689)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for acquisitions (in shares)		432,634
Issuance of common stock for acquisitions	41,841		41,841
Issuance of common stock for employee share purchase plan (in shares)		209,306
Issuance of common stock for employee share purchase plan	15,631		15,631
Exercise of stock options (in shares)		1,363,416
Exercise of stock options	15,122	$ 0	15,122
Stock-based compensation expense	95,862		95,862
Vested restricted stock units (in shares)		999,828
Settlement of convertible senior notes and 2023 Notes (in shares)		2,176,412
Settlement of convertible senior notes and 2023 Notes	(385,218)		(385,218)
Equity component of 2026 Notes, net of issuance costs	501,053		501,053
Purchase of capped calls in relation to 2026 Notes	(192,786)		(192,786)
Deferred tax related to convertible senior notes	(9,588)		(9,588)
Temporary equity reclassification	(185)		(185)
Other comprehensive income (loss)	4,155			4,155
Net loss attributable to Coupa Software Incorporated, including adjustment to redeemable non-controlling interests	(118,730)				(118,730)
Balance (in shares) at Oct. 31, 2020		69,710,566
Balance at Oct. 31, 2020	412,814	$ 7	872,200	5,026	(464,419)
Balance (in shares) at Jul. 31, 2020		68,778,343
Balance at Jul. 31, 2020	426,916	$ 7	822,197	8,333	(403,621)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for acquisitions (in shares)		0
Issuance of common stock for acquisitions	0		0
Issuance of common stock for employee share purchase plan (in shares)		104,488
Issuance of common stock for employee share purchase plan	8,240		8,240
Exercise of stock options (in shares)		375,612
Exercise of stock options	5,513		5,513
Stock-based compensation expense	37,106		37,106
Vested restricted stock units (in shares)		341,543
Settlement of convertible senior notes and 2023 Notes (in shares)		110,580
Settlement of convertible senior notes and 2023 Notes	(804)		(804)
Temporary equity reclassification	(52)		(52)
Other comprehensive income (loss)	(3,307)			(3,307)
Net loss attributable to Coupa Software Incorporated, including adjustment to redeemable non-controlling interests	(60,798)				(60,798)
Balance (in shares) at Oct. 31, 2020		69,710,566
Balance at Oct. 31, 2020	412,814	$ 7	872,200	5,026	(464,419)
Balance (in shares) at Jan. 31, 2021		72,753,659
Balance at Jan. 31, 2021	1,040,231	$ 7	1,556,865	9,165	(525,806)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for acquisitions (in shares)		22,370
Issuance of common stock for acquisitions	0		0
Issuance of common stock for employee share purchase plan (in shares)		156,810
Issuance of common stock for employee share purchase plan	21,626		21,626
Exercise of stock options (in shares)		597,586
Exercise of stock options	7,431		7,431
Stock-based compensation expense	145,982		145,982
Vested restricted stock units (in shares)		951,082
Settlement of convertible senior notes and 2023 Notes (in shares)		132,098
Settlement of convertible senior notes and 2023 Notes	(348)		(348)
Temporary equity reclassification	369		369
Other comprehensive income (loss)	(417)			(417)
Net loss attributable to Coupa Software Incorporated, including adjustment to redeemable non-controlling interests	(283,027)		(7,883)		(275,144)
Balance (in shares) at Oct. 31, 2021		74,613,605
Balance at Oct. 31, 2021	931,847	$ 7	1,724,042	8,748	(800,950)
Balance (in shares) at Jul. 31, 2021		73,991,612
Balance at Jul. 31, 2021	958,657	$ 7	1,662,804	8,758	(712,912)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee share purchase plan (in shares)		74,348
Issuance of common stock for employee share purchase plan	11,149		11,149
Exercise of stock options (in shares)		185,723
Exercise of stock options	2,713		2,713
Stock-based compensation expense	50,641		50,641
Vested restricted stock units (in shares)		286,897
Settlement of convertible senior notes and 2023 Notes (in shares)		75,025
Settlement of convertible senior notes and 2023 Notes	(108)		(108)
Temporary equity reclassification	8		8
Other comprehensive income (loss)	(10)			(10)
Net loss attributable to Coupa Software Incorporated, including adjustment to redeemable non-controlling interests	(91,203)		(3,165)		(88,038)
Balance (in shares) at Oct. 31, 2021		74,613,605
Balance at Oct. 31, 2021	$ 931,847	$ 7	$ 1,724,042	$ 8,748	$ (800,950)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Cash flows from operating activities
Net loss attributable to Coupa Software Incorporated	$ (283,027)	$ (118,730)
Net loss attributable to redeemable non-controlling interests	7,883	0
Net loss	(275,144)	(118,730)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	109,900	36,529
Amortization of premium on marketable securities, net	625	869
Amortization of deferred commissions	13,335	10,102
Amortization of debt discount and issuance costs	85,716	58,727
Stock-based compensation	145,251	94,851
Loss (gain) on conversion of convertible senior notes	357	(3,166)
Repayments of convertible senior notes attributable to debt discount (Note 8)	(1,338)	(27,208)
Other	(3,204)	3,923
Changes in operating assets and liabilities net of effects from acquisitions:
Accounts receivable	21,433	22,519
Prepaid expenses and other current assets	4,529	1,591
Other assets	13,968	(2,730)
Deferred commissions	(22,445)	(11,355)
Accounts payable	500	(1,435)
Accrued expenses and other liabilities	6,795	4,941
Deferred revenue	3,630	(11,630)
Net cash provided by operating activities	103,908	57,798
Cash flows from investing activities
Purchases of marketable securities	(116,583)	(788,047)
Maturities of marketable securities	94,142	351,973
Sales of marketable securities	94,916	830,125
Acquisitions, net of cash acquired	(46,719)	(94,121)
Purchases of other investments	(10,000)	0
Purchases of property and equipment	(10,256)	(9,559)
Net cash provided by investing activities	5,500	290,371
Cash flows from financing activities
Investment from redeemable non-controlling interests	2,223	0
Proceeds from issuance of convertible senior notes, net of issuance costs	0	1,355,066
Purchase of capped calls	0	(192,786)
Repayments of convertible senior notes	(5,748)	(554,244)
Proceeds from the exercise of common stock options	7,444	14,425
Proceeds from issuance of common stock for employee stock purchase plan	21,626	15,631
Net cash provided by financing activities	25,545	638,092
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash	(178)	128
Net increase in cash, cash equivalents, and restricted cash	134,775	986,389
Cash, cash equivalents, and restricted cash at beginning of year	327,589	268,280
Cash, cash equivalents, and restricted cash at end of period	462,364	1,254,669
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	458,195	1,251,006
Restricted cash included in other assets	$ 4,169	$ 3,663
Restricted cash, asset, statement of financial position [Extensible List]	Other assets	Other assets
Total cash, cash equivalents, and restricted cash	$ 462,364	$ 1,254,669
Supplemental disclosure of cash flow data
Cash paid for income taxes	3,181	2,495
Cash paid for interest	3,101	533
Supplemental disclosure of non-cash investing and financing activities
Property and equipment included in accounts payable and accrued expenses and other current liabilities	$ 468	$ 323

Organization and Description of Business	9 Months Ended
Organization and Description of Business	Oct. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Organization and Description of Business Coupa Software Incorporated (the “Company”) was incorporated in the state of Delaware in 2006. The Company provides a comprehensive, cloud-based business spend management (or “BSM”) platform that provides greater visibility into and control over how companies spend money. The BSM platform enables businesses to achieve savings that drive profitability. The Company is based in San Mateo, California. The Company’s fiscal year ends on January 31.

Significant Accounting Policies	9 Months Ended
Significant Accounting Policies	Oct. 31, 2021
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 filed with the SEC on March 18, 2021 (the “Form 10-K”). The condensed consolidated financial statements include the results of the Company, its wholly-owned subsidiaries, as well as subsidiaries in which the Company has a controlling interest. All significant intercompany transactions and balances have been eliminated during consolidation. The condensed consolidated balance sheet as of January 31, 2021, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods, but are not necessarily indicative of the results to be expected for the full fiscal year or any other period. There have been no changes to the significant accounting policies described in the Form 10-K for the year ended January 31, 2021. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates its significant estimates including, but not limited to, the valuation of accounts receivable, the lives of tangible and intangible assets, the fair value of certain equity awards, the fair value of contingent purchase consideration, the valuation of acquired intangible assets and the recoverability or impairment of intangible assets, including goodwill, revenue recognition, redemption value of redeemable non-controlling interests, convertible senior notes fair value, the benefit period of deferred commissions, and provision for (benefit from) income taxes. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Foreign Currency Translation The functional currency of the Company's foreign operations is primarily the U.S. dollar, while a few of its subsidiaries use the local currency as their functional currency for the nine months ended October 31, 2021. In cases where the Company uses a foreign functional currency, the Company translates the foreign functional currency financial statements to U.S. dollars using the exchange rates at the balance sheet date for assets and liabilities, the period average exchange rates for revenues and expenses, and the historical exchange rates for equity. The effects of foreign currency translation adjustments are recorded in other comprehensive income as a component of stockholders' equity and the related periodic movements are presented in the condensed consolidated statements of comprehensive loss. Foreign currency transaction gains and losses are included in other income (expense), net, in the condensed consolidated statements of operations for the period. Concentration of Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, marketable securities, and accounts receivable. Cash deposits may, at times, exceed amounts insured by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation (“SIPC”). Marketable securities balances may, at times, also exceed SIPC limits. The Company has not experienced any losses on its deposits of cash and cash equivalents to date. Refer to Note 14, “Significant Customers and Geographic Information” for additional information on significant customers during the period. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss consists of net loss, other comprehensive gain (loss) in relation to defined benefits plans, net of tax, changes in unrealized gain (loss) on marketable securities, net of tax, and foreign currency translation adjustments, net of tax. The other comprehensive gain (loss) in relation to defined benefits plans represents net deferred gains and losses and prior service costs and credits for the defined benefit pension plans. Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings or other comprehensive loss when they occur. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurement or assumptions that market participants would use in pricing the assets or liabilities, such as inherent risk, transfer restrictions and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: •Level 1 - Quoted prices in active markets for identical assets or liabilities. •Level 2 - Observable inputs other than quoted price in active markets for identical assets or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. •Level 3 - Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the assets or liabilities. Revenue Recognition The Company derives its revenues primarily from subscription fees, professional services fees and other. Revenues are recognized when control of these services are transferred to the Company’s customers in an amount that reflects the consideration expected to be entitled to in exchange for those services. Revenues are recognized net of applicable taxes imposed on the related transaction. The Company’s revenue recognition policy follows guidance from Accounting Standards Codification 606, Revenue from Contracts with Customers (Topic 606). The Company determines revenue recognition through the following five-step framework: •Identification of the contract, or contracts, with a customer; •Identification of the performance obligations in the contract; •Determination of the transaction price; •Allocation of the transaction price to the performance obligations in the contract; and •Recognition of revenue when, or as, the Company satisfies a performance obligation. Subscription Revenues The Company offers subscriptions to its cloud-based business spend management platform, including procurement, invoicing and expense management. Subscription revenues consist primarily of fees to provide the Company’s customers access to its cloud-based platform, which includes routine customer support. Subscription contracts do not provide customers with the right to take possession of the software, are in general, non-cancelable, and do not contain general rights of return. Generally, subscription revenues are recognized ratably over the contractual term of the arrangement, beginning on the date that the service is made available to the customer. Subscription contracts typically have a term of three years with invoicing occurring in annual installments at the beginning of each year in the subscription period. Term-based licenses are sold as bundled arrangements that include the rights to a term license and post-contract customer support (“PCS”). Accordingly, the Company allocates the transaction price to each performance obligation. The revenues related to the amount allocated to PCS are included in subscription revenue, which are recognized ratably over the contract term beginning on the license delivery date. Professional Services Revenues and Other The Company offers professional services which primarily include deployment services, optimization services, and training. Professional services are generally sold on a fixed-fee or time-and-materials basis. For services billed on a fixed-fee basis, invoicing typically occurs in advance, and revenue is recognized over time based on the proportion performed. For services billed on a time-and-materials basis, revenue is recognized over time as services are performed. Term-based licenses are sold as bundled arrangements that include the rights to a term license and PCS. Accordingly, the Company allocates the transaction price to each performance obligation. The revenues related to the amount allocated to term-based licenses are included in other revenue, which is recognized at the start of the license term when delivery is complete. Refer to Note 14, “Significant Customers and Geographic Information” for additional information related to disaggregated revenue during the period. Significant Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. Subscription services, professional services, term-based licenses, and related PCS are distinct performance obligations that are accounted for separately. In contracts with multiple performance obligations, the transaction price is allocated to separate performance obligations on a relative standalone selling price ("SSP") basis. The determination of SSP for each distinct performance obligation requires judgment. The Company determines SSP for performance obligations based on overall pricing objectives, which take into consideration market conditions and entity-specific factors. This includes a review of historical data related to the size of arrangements, the applications being sold, customer demographics and the numbers and types of users within the arrangements. The Company uses a range of amounts to estimate SSP for performance obligations. There is typically more than one SSP for individual products and services due to the stratification of those products and services by considerations such as size and sales regions. Contract Balances The timing of revenue recognition may differ from the timing of invoicing for contracts with customers. The Company records a receivable when revenue is recognized prior to invoicing. Deferred revenue primarily consists of billings or payments received in advance of revenue recognition. Subscription and fixed-fee professional services arrangements are commonly billed in advance, recognized as deferred revenue, and then amortized into revenue over time. The Company's term-based license contracts are billed annually in advance, recognized as deferred revenue, and then recognized as revenues upfront for the license component and ratably over the term license for the PCS component. However, other professional services arrangements, primarily those recognized on a time-and-materials basis, are billed in arrears following services that have been rendered. In addition, for multi-year term-based license contracts, the revenue allocated to license component is recognized upfront while the billing is on annual basis. This may result in revenue recognition greater than invoiced amounts which results in a receivable balance. Receivables represent an unconditional right to payment. As of October 31, 2021 and January 31, 2021, the balance of accounts receivable, net of the allowance for credit losses, was $179.3 million and $196.0 million, respectively. Of these balances, $20.3 million and $24.2 million represent unbilled receivable amounts as of October 31, 2021 and January 31, 2021, respectively. In addition, as of October 31, 2021 and January 31, 2021, the balance of long-term unbilled receivables was approximately $2.6 million and $7.1 million, respectively, which were included in other assets on the Company's condensed consolidated balance sheet. When the timing of revenue recognition differs from the timing of invoicing, the Company uses judgment to determine whether the contract includes a significant financing component requiring adjustment to the transaction price. Various factors are considered in this determination including the duration of the contract, payment terms, and other circumstances. Generally, the Company determined that contracts do not include a significant financing component. The Company applies the practical expedient for instances where, at contract inception, the expected timing difference between when promised goods or services are transferred and associated payment will be one year or less. Payment terms vary by contract type, however arrangements typically stipulate a requirement for the customer to pay within 30 days. At any point in the contract term, the transaction price may be allocated to performance obligations that are unsatisfied or are partially unsatisfied. These amounts relate to remaining performance obligations on non-cancelable contracts which include both the deferred revenue balance and amounts that will be invoiced and recognized as revenue in future periods. As of October 31, 2021, approximately $1,182.7 million of the transaction price from contracts with customers is allocated to the remaining performance obligations. The Company expects to recognize revenue on approximately three-fourths of these remaining performance obligations within the next 24 months and the remainder thereafter. The Company applies the practical expedient to exclude remaining performance obligations that are part of contracts with an original expected duration of one year or less and contracts where revenue is being recognized under the as-invoiced method. During the three and nine months ended October 31, 2021, the revenue recognized from performance obligations satisfied in prior periods was approximately $1.2 million and $1.6 million, respectively. Accounts Receivable and Allowances for Credit Losses The Company extends credit to its customers in the normal course of business and does not require cash collateral or other security to support the collection of customer receivables. The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period and provides a reserve when needed based on an assessment of various factors including the aging of the receivable balance, historical experience, and expectations of forward-looking loss estimates. When developing the expectations of forward-looking loss estimates, the Company takes into consideration forecasts of future economic conditions, information about past events, such as historical trends of write-offs, and customer-specific circumstances, such as bankruptcies and disputes. Accounts receivable are written off when deemed uncollectible. The allowances for credit losses were not material as of October 31, 2021 and January 31, 2021. Marketable Securities Marketable securities consist of financial instruments such as U.S. treasury securities, U.S. agency obligations, corporate notes and bonds, commercial paper, asset backed securities and certificates of deposit. The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All marketable securities are recorded at estimated fair value. Credit losses related to the marketable securities are recorded in other income (expense), net in the condensed consolidated statements of operations through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. No credit losses related to marketable securities were recorded by the Company during the three and nine months ended October 31, 2021. Any remaining unrealized losses, or any unrealized gains, for marketable securities are included in accumulated other comprehensive income, a component of stockholders’ equity. If quoted prices for identical instruments are available in an active market, marketable securities are classified within Level 1 of the fair value hierarchy. If quoted prices for identical instruments in active markets are not available, fair values are estimated using quoted prices of similar instruments and are classified within Level 2 of the fair value hierarchy. Other Investments Other investments consist of non-marketable debt and equity investments in privately-held companies without readily determinable fair values in which the Company does not have a controlling interest or significant influence. The Company records non-marketable debt investments at their estimated fair value on a recurring basis with changes in fair value recorded in accumulated other comprehensive income, a component of stockholders’ equity. The Company elected to apply the measurement alternative for non-marketable equity securities, measuring them at cost, less any impairment, and adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These non-marketable debt and equity investments are included in other assets on the Company's condensed consolidated balance sheets. Deferred Revenue Deferred revenue consists of non-cancelable customer billings or payments received in advance of the recognition of revenue and is recognized as revenue as the revenue recognition criteria are met. The Company generally invoices its customers annually for the forthcoming year of service. Accordingly, the Company’s deferred revenue balance does not include revenue for future years of multiple year non-cancelable contracts that have not yet been billed. During the three and nine months ended October 31, 2021, the Company recognized revenue of $153.1 million and $314.8 million that was included in the deferred revenue balance as of July 31, 2021 and January 31, 2021, respectively. During the three and nine months ended October 31, 2020, the Company recognized revenue of $107.8 million and $228.0 million that was included in the deferred revenue balance as of July 31, 2020 and January 31, 2020, respectively. Deferred Commissions Commissions are earned by sales personnel upon the execution of the sales contract by the customer, and commission payments are made shortly after they are earned. Commission costs can be associated specifically with subscription, professional services and license arrangements. Commissions earned by the Company’s sales personnel are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit of five years. The Company determined the period of benefit by taking into consideration its past experience with customers, future cash flows expected from customers, industry peers and other available information. For commissions earned from the sale of term-based license contracts, the Company allocates the costs of commission in proportion to the allocation of transaction price of license and PCS performance obligations. Commissions associated with the license component are expensed at the time the related revenue is recognized. Commissions allocated to PCS are deferred and then amortized over five years. The Company capitalized commission costs of $9.1 million and $5.3 million, and amortized $4.8 million and $3.6 million to sales and marketing expense in the accompanying condensed consolidated statements of operations during the three months ended October 31, 2021 and 2020, respectively. The Company capitalized commission costs of $22.4 million and $11.4 million, and amortized $13.3 million and $10.1 million to sales and marketing expense in the accompanying condensed consolidated statements of operations during the nine months ended October 31, 2021 and 2020, respectively. Redeemable Non-Controlling Interests During the quarter ended April 30, 2021, the Company established a joint venture in Japan ("Coupa K.K."), which is a variable interest entity, obtaining a 51% controlling interest. Accordingly, the Company consolidated the financial results of the joint venture. The share of the loss in the joint venture attributable to the redeemable non-controlling interests was approximately $273,000 and $790,000 during the three and nine months ended October 31, 2021, respectively. The agreements with the minority investors of Coupa K.K. contain redemption features whereby the interest held by the minority investors is redeemable either (i) at the option of the minority investors or (ii) at the option of the Company, both beginning on the tenth anniversary of the initial capital contribution. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. The resulting changes in the estimated redemption amount are recorded with corresponding adjustments against additional paid-in-capital due to the absence of retained earnings. The carrying amount of the redeemable non-controlling interests is recorded on the Company's condensed consolidated balance sheets as temporary equity. Leases Leases arise from contracts that convey the right to control the use of identified property or equipment for a period of time in exchange for consideration. The Company’s leasing arrangements are primarily for office space used to conduct operations. Leases are classified at commencement as either operating or finance leases. As of October 31, 2021, all of the Company’s leases were classified as operating leases. Rent expense for operating leases is recognized using the straight-line method over the term of the agreement beginning on the lease commencement date. At commencement, the Company records a lease liability at the present value of future lease payments, net of any future lease incentives to be received. Lease agreements may include options to renew the lease term, which is not included in the lease periods to calculate future lease payments unless it is reasonably certain the Company will renew the lease. The Company estimates its incremental borrowing rate (“IBR”) based on the information available at the lease commencement date in determining the present value of lease payments. In determining the appropriate IBR, the Company considers information including, but not limited to, the lease term and the currency in which the arrangement is denominated. At commencement, the Company also records a corresponding right-of-use asset, which is calculated based on the amount of the lease liability, adjusted for any advance lease payments made and initial direct costs incurred. Right-of-use assets are subject to evaluation for impairment or disposal on a basis consistent with other long-lived assets. As of October 31, 2021, the Company was not a material lessor in leasing arrangements or a party to material sublease arrangements. Recent Accounting Guidance New Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments. The guidance removes certain accounting models that separate the embedded conversion features from the host contract for convertible instruments, requiring bifurcation only if the convertible debt feature qualifies as a derivative under ASC 815 or for convertible debt issued at a substantial premium. The ASU removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception, permitting more contracts to qualify for it. In addition, the guidance eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The ASU is effective for annual reporting periods beginning after December 15, 2021, including interim reporting periods within those annual periods, with early adoption permitted no earlier than the fiscal year beginning after December 15, 2020. The ASU allows entities to use a modified or full retrospective transition method. Under the modified approach, entities will apply the guidance to all financial instruments that are outstanding as of the beginning of the year of adoption. The Company will adopt the new guidance for the fiscal year beginning February 1, 2022, using the modified retrospective approach with the cumulative effect of adoption recognized at the date of initial application through an adjustment to the opening balance of retained earnings. The Company expects the adoption of this guidance will result in a material reclassification from equity to debt as well as a reduction in non-cash interest expense. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). The amendments in this ASU require that an acquirer recognizes and measures contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of this new standard on its consolidated financial statements and related disclosures.

Investments

9 Months Ended

Oct. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Investments

Marketable Securities

The following is a summary of available-for-sale marketable securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheets (in thousands):


	October 31, 2021
	Amortized Costs		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities	$	208,520	$	8	$	(166)	$	208,362
Corporate notes and bonds	1,297		1		—		1,298
Total marketable securities	$	209,817	$	9	$	(166)	$	209,660


	January 31, 2021
	Amortized Costs		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities	$	268,141	$	29	$	(1)	$	268,169
Corporate notes and bonds	14,487		100		—		14,587


Certificates of deposit	280		—		—		280
Total marketable securities	$	282,908	$	129	$	(1)	$	283,036

As of October 31, 2021, the fair values of available-for-sale marketable securities, by remaining contractual maturity, were as follows (in thousands):


Due within one year	$	135,900
Due in one year through five years	73,760
Total	$	209,660

The Company's marketable securities consist primarily of U.S. Treasury securities. The Company views its marketable securities as available to support its current operations, therefore these marketable securities have been classified as short-term available-for-sale securities.

During the three and nine months ended October 31, 2021 and 2020, there were no material gross realized gains or losses from the sale of certain available-for-sale marketable securities that were reclassified out of accumulated other comprehensive loss.

The Company regularly reviews the changes to the rating of its debt securities by rating agencies as well as reasonably monitors the surrounding economic conditions to assess the risk of expected credit losses. As of October 31, 2021, the unrealized losses and the related risk of expected credit losses were insignificant.

Other Investments

The Company's other investments include non-marketable debt and equity investments in privately-held companies, which do not have a readily determinable fair value. As of October 31, 2021 and January 31, 2021, the balance of non-marketable debt and equity investments was $10.0 million and zero, respectively. Since the initial investments, there have been no impairments or adjustments to the carrying amount of the debt and equity investments during the three and nine months ended October 31, 2021.

Fair Value Measurements

9 Months Ended

Oct. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis at October 31, 2021 (in thousands):


	Level 1		Level 2		Level 3		Total
Cash equivalents:(1)
Money market funds	$	220,198	$	—	$	—	$	220,198
Marketable securities:
U.S. treasury securities	—		208,362		—		208,362
Corporate notes and bonds	—		1,298		—		1,298
Other investments:
Privately-held debt investments	—		—		5,000		5,000
Total assets	$	220,198	$	209,660	$	5,000	$	434,858

(1)Included in cash and cash equivalents.

The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis at January 31, 2021 (in thousands):


	Level 1		Level 2		Level 3		Total
Cash equivalents:(1)
Money market funds	$	90,437	$	—	$	—	$	90,437

Marketable securities:
U.S. treasury securities	—		268,169		—		268,169
Corporate notes and bonds	—		14,587		—		14,587


Certificates of deposit	—		280		—		280
Total assets	$	90,437	$	283,036	$	—	$	373,473
Derivative liabilities:(2)
Foreign currency forward contracts not designated as hedges	$	—	$	47	$	—	$	47
Total liabilities	$	—	$	47	$	—	$	47

(1)Included in cash and cash equivalents.

(2)The derivative liabilities were related to foreign currency forward contracts at a notional amount of $2.9 million. The derivative liabilities were included in accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets at January 31, 2021. The foreign currency forward contracts matured during the three months ended April 30, 2021 and were not renewed.

Other Investments

The Company's other investments include non-marketable debt investments, which are recorded at fair value on a recurring basis, and non-marketable equity investments, which are measured under the measurement alternative on a non-recurring basis. The estimation of fair value for non-marketable debt investments requires the use of significant unobservable inputs; as a result, the Company classifies these assets as Level 3 within the fair value hierarchy.

The table above does not include the Company's non-marketable equity investments. As of October 31, 2021 and January 31, 2021, the carrying value of non-marketable equity investments was $5.0 million and zero, respectively.

Convertible Senior Notes

The Company has $1,380.0 million in aggregate principal amount of 0.375% convertible senior notes due in 2026 (the “2026 Notes”), $805.0 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (the “2025 Notes”) and $1.8 million in aggregate principal amount of 0.375% convertible senior notes due in 2023 (the “2023 Notes” and, together with the 2025 Notes and 2026 Notes, the “Convertible Notes”) outstanding as of October 31, 2021. Refer to Note 8, “Convertible Senior Notes” for further details on the Convertible Notes.

The Company carries the Convertible Notes at par value less the portion allocated to equity and the related unamortized discount and issuance costs on its condensed consolidated balance sheets and presents the fair value for disclosure purposes only. The estimated fair value of the 2026 Notes, 2025 Notes and 2023 Notes, based on a market approach as of October 31, 2021, was approximately $1,517.0 million, $1,257.1 million and $9.0 million, respectively, which represents a Level 2 valuation estimate. The estimated fair value of the 2026 Notes, 2025 Notes and 2023 Notes, based on a market approach as of January 31, 2021, was approximately $1,775.0 million, $1,617.5 million and $61.2 million, respectively, which represents a Level 2 valuation estimate. The estimated fair value was determined based on the estimated or actual bids and offers of the Convertible Notes in an over-the-counter market on the last trade completed prior to the end of the period.

Business Combinations

9 Months Ended

Oct. 31, 2021

Business Combination and Asset Acquisition [Abstract]

Business Combinations

Pana Industries, Inc.

On February 1, 2021, the Company acquired all of the equity interest in Pana Industries, Inc. ("Pana"), a corporate travel booking solution company. The purchase consideration was approximately $48.5 million in cash (of which $7.1 million is being held in escrow for fifteen months after the transaction closing date).

In addition, the Company issued 23,822 shares of unvested common stock with an approximate fair value of $7.6 million to two of Pana's shareholders. These shares are subject to service-based vesting conditions including continued employment with the Company. The value assigned to the unvested common stock will be recorded as post-acquisition compensation expense as the shares vest and has been excluded from the purchase consideration.

The acquisition was accounted for as a business combination and, accordingly, the total fair value of purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date. The major classes of assets and liabilities to which the Company has allocated the total fair value of purchase consideration were as follows (in thousands):


	February 1, 2021
Cash and cash equivalents	$	3,413
Intangible assets	12,200
Other assets	772
Goodwill	34,409
Accounts payable and other liabilities	(2,255)
Total consideration	$	48,539

The purchase price allocation is preliminary. The Company continues to collect information with regard to its estimates and assumptions, including potential liabilities and contingencies. The Company will record adjustments to the fair value of the assets acquired, liabilities assumed and goodwill within the twelve month measurement period, if necessary. The goodwill recognized was primarily attributed to the assembled workforce and increased synergies that are expected to be achieved from the integration of Pana and is not deductible for income tax purposes. The Company determined the fair values of intangible assets acquired and liabilities assumed. The identifiable intangible assets acquired were as follows (in thousands):


	Fair Value		Useful life (in Years)
Developed technology	$	10,500	4
Customer relationships	1,700		4
Total	$	12,200

The Company incurred costs related to this acquisition of approximately $440,000 for the nine months ended October 31, 2021. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations.

The revenue and earnings of the acquired business have been included in the Company’s results since the acquisition date and are not material to the Company’s condensed consolidated financial results. Pro forma results of operations for this acquisition have not been presented as the financial impact on the Company’s condensed consolidated financial statements would be immaterial.

LLamasoft, Inc.

On November 2, 2020, the Company completed the acquisition of Laurel Parent Holdings, Inc. and its subsidiaries ("LLamasoft"), a supply chain design and analysis software and solutions company, with total purchase consideration of approximately $1.4 billion. Refer to the Company's fiscal 2021 Form 10-K for further information. There have been no significant changes to the preliminary purchase price allocation performed when the acquisition was completed.

Property and Equipment, Net

9 Months Ended

Oct. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment consisted of the following (in thousands):


	October 31, 2021		January 31, 2021
Furniture and equipment	$	14,394	$	11,955
Software development costs	53,054		43,857
Leasehold improvements	7,051		5,465
Construction in progress	357		848
Total property and equipment	74,856		62,125
Less: accumulated depreciation and amortization	(44,695)		(33,859)
Property and equipment, net	$	30,161	$	28,266

Depreciation and amortization expense related to property and equipment, excluding software development costs, was approximately $1.3 million and $900,000 for the three months ended October 31, 2021 and 2020, respectively, and $3.8 million and $2.2 million for the nine months ended October 31, 2021 and 2020, respectively.

Amortization expense related to software development costs was approximately $2.6 million and $2.0 million for the three months ended October 31, 2021 and 2020, respectively, and $7.2 million and $5.0 million for the nine months ended October 31, 2021 and 2020, respectively.

Goodwill and Other Intangible Assets

9 Months Ended

Oct. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill

The following table represents the changes in goodwill (in thousands):


Balance at January 31, 2021	$	1,480,847
Additions from acquisitions	34,409
Foreign currency translation adjustments	(343)
Other adjustments	228
Balance at October 31, 2021	$	1,515,141

Other Intangible Assets

The following table summarizes the other intangible assets balances (in thousands):


	As of
	October 31, 2021							January 31, 2021
	Weighted Average Remaining Useful Lives (in Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	5.3	$	484,510	$	(130,726)	$	353,784	$	474,120	$	(69,560)	$	404,560
Customer relationships	3.9	256,082		(66,241)		189,841		254,437		(27,727)		226,710
Trademarks	0.1	2,419		(2,416)		3		2,419		(1,516)		903
Total other intangible assets		$	743,011	$	(199,383)	$	543,628	$	730,976	$	(98,803)	$	632,173

Amortization expense related to other intangible assets was approximately $33.5 million and $11.1 million for the three months ended October 31, 2021 and 2020, respectively, and $100.6 million and $30.3 million for the nine months ended October 31, 2021 and 2020, respectively.

As of October 31, 2021, the future amortization expense of other intangible assets is as follows (in thousands):


Year Ending January 31,
2022 (remaining three months)	$	32,965
2023	128,111
2024	121,994
2025	102,849
2026	78,559
Thereafter	79,150
Total	$	543,628

Convertible Senior Notes

9 Months Ended

Oct. 31, 2021

Debt Disclosure [Abstract]

Convertible Senior Notes

2026 Notes

In June 2020, the Company issued the 2026 Notes in aggregate principal amount of $1,380.0 million in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The net proceeds from the issuance of the 2026 Notes were $1,162.3 million, net of debt issuance costs, including the underwriting discount and the cash used to purchase the capped call discussed below. The 2026 Notes have an initial conversion rate of 3.3732 shares of common stock per $1,000 principal (equivalent to an initial conversion price of approximately $296.45 per share of common stock). The interest rate is fixed at 0.375% per annum for the 2026 Notes and is payable semi-annually in arrears on June 15 and December 15 of each year, which commenced on December 15, 2020. Refer to the Company’s consolidated financial statements for the year ended January 31, 2021 for details of the issuance and accounting of 2026 Notes.

The 2026 Notes were not convertible at October 31, 2021, as none of the 2026 Notes conversion conditions were met.

The Company may redeem for cash all or any portion of the 2026 Notes, at its option, on or after June 20, 2023 and prior to the 21st scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.

2025 Notes

In June 2019, the Company issued the 2025 Notes in aggregate principal amount of $805.0 million in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The net proceeds from the issuance of the 2025 Notes were $667.4 million, net of debt issuance costs, including the underwriting discount and the cash used to purchase the capped call, discussed below. The 2025 Notes have an initial conversion rate of 6.2658 shares of common stock per $1,000 principal (equivalent to an initial conversion price of approximately $159.60 per share of common stock). The interest rate is fixed at 0.125% per annum for the 2025 Notes and is payable semi-annually in arrears on June 15 and December 15 of each year, which commenced on December 15, 2019. Refer to the Company’s consolidated financial statements for the year ended January 31, 2020 for details of the issuance and accounting of 2025 Notes.

The conversion condition for the 2025 Notes was initially met during the three months ended July 31, 2020 and it continued to be met during the three months ended October 31, 2021. As a result, the 2025 Notes continued to be convertible at the option of the holders and remained classified as current liabilities on the condensed consolidated balance sheet as of October 31, 2021. For the three and nine months ended October 31, 2021, the conversions of the 2025 Notes were not material.

As of October 31, 2021, approximately $805.0 million principal amount of 2025 Notes remained outstanding. From November 1, 2021 to the date of this filing, the Company has received conversion requests for an immaterial principal amount of the 2025 Notes, which are expected to be settled during the quarter ended January 31, 2022.

The Company may redeem for cash all or any portion of the 2025 Notes, at its option, on or after June 20, 2022, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.

2023 Notes

In January 2018, the Company issued the 2023 Notes in aggregate principal amount of $230.0 million in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The net proceeds from the issuance of the 2023 Notes were $200.4 million, net of debt issuance costs, including the underwriting discount and the cash used to purchase the capped call, discussed below. The 2023 Notes have an initial conversion rate of 22.4685 shares of common stock per $1,000 principal (equivalent to an initial conversion price of approximately $44.5068 per share of common stock). The interest rate is fixed at 0.375% per annum for the 2023 Notes and is payable semi-annually in arrears on July 15 and January 15 of each year, which commenced on July 15, 2018. Refer to the Company’s consolidated financial statements for the year ended January 31, 2019 for details of the issuance of 2023 Notes.

The conversion condition for the 2023 Notes was initially met during the three months ended April 30, 2019, and has been met for each subsequent fiscal quarter. As a result, the 2023 Notes were convertible at the option of the holders and remained classified as current liabilities on the condensed consolidated balance sheet as of October 31, 2021. For the nine months ended October 31, 2021, the Company settled conversion requests on the principal amount of the 2023 Notes totaling approximately $7.1 million by paying cash for the principal amount of $7.1 million and issuing 132,088 shares of the Company’s common stock, bearing a fair value of approximately $32.3 million. Correspondingly, for the nine months ended October 31, 2021, the Company recognized a loss of approximately $0.4 million on the conversion of the 2023 Notes representing the fair value in excess of the net carrying amount of the liability component of the converted notes on the respective settlement dates. The amount is included in other income (expense), net in the Company’s condensed consolidated statement of operations.

As of October 31, 2021, approximately $1.8 million principal amount of 2023 Notes remained outstanding. In addition, from November 1, 2021 to the date of this filing, the Company has not received any additional conversion requests for the 2023 Notes.

The Company may redeem for cash all or any portion of the 2023 Notes, at its option, on or after January 20, 2021, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2023 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. During the nine months ended October 31, 2021, the Company did not redeem any of the 2023 Notes.

The 2026 Notes, 2025 Notes and 2023 Notes consisted of the following (in thousands):


	As of						As of
	October 31, 2021						January 31, 2021
	2026 Notes		2025 Notes		2023 Notes		2026 Notes		2025 Notes		2023 Notes
Liability:
Principal	$	1,380,000	$	804,993	$	1,752	$	1,380,000	$	804,999	$	8,832
Unamortized debt discount and issuance costs (1)	(427,715)		(172,962)		(142)		(482,475)		(203,638)		(1,125)
Net carrying amount	$	952,285	$	632,031	$	1,610	$	897,525	$	601,361	$	7,707
Carrying amount of the equity component (2)	$	501,053	$	246,966	$	460	$	501,053	$	246,966	$	1,560

(1)Included in the condensed consolidated balance sheets within Convertible senior notes, net and amortized over the remaining lives of the convertible senior notes. The 2026 Notes are classified as long-term liabilities, and the 2025 Notes and 2023 Notes are classified as current liabilities.

(2)Included in the condensed consolidated balance sheets within additional paid-in capital and temporary equity.

The effective interest rates of the liability component of the 2026 Notes, 2025 Notes and 2023 Notes, excluding each tranche of notes’ conversions options, is 8.83%, 7.05% and 7.66%, respectively. As of October 31, 2021 the if-converted value of the 2026 Notes did not exceed the principal amount and as of January 31, 2021 the if-converted value of the 2026 Notes exceeded the principal amount by $62.5 million. As of October 31, 2021 and January 31, 2021, the if-converted value of the 2025 Notes exceeded the principal amount by $343.5 million and $757.9 million, respectively. As of October 31, 2021 and January 31, 2021, the if-converted value of the 2023 Notes exceeded the principal amount by $7.2 million and $52.7 million, respectively.

During the three months ended October 31, 2021 and 2020, the Company recognized $29.5 million and $27.4 million, respectively, of interest expense related to the amortization of debt discount and issuance costs, and $1.5 million and $1.6 million, respectively, of coupon interest expense. During the nine months ended October 31, 2021 and 2020, the Company recognized $85.7 million and $58.7 million, respectively, of interest expense related to the amortization of debt discount and issuance costs, and $4.6 million and $2.8 million, respectively, of coupon interest expense.

As of October 31, 2021, the remaining life of the 2026 Notes, 2025 Notes and 2023 Notes is approximately 4.6 years, 3.6 years and 1.2 years, respectively.

Capped Calls

In conjunction with the issuance of the 2026 Notes, 2025 Notes and 2023 Notes, the Company entered into capped call transactions (the “Capped Calls”) on the Company’s common stock with certain counterparties at a price of $192.8 million, $118.7 million and $23.3 million, respectively.

The Capped Calls exercise price is equal to the initial conversion price of each of the Convertible Notes, and the cap price is $503.415 per share for 2026 Notes, $295.550 per share for 2025 Notes and $63.821 per share for 2023 Notes, each subject to certain adjustments under the terms of the Capped Call transactions. If any tranche of convertible notes’ conversion option is exercised, the corresponding convertible note capped call will become exercisable on the same date. As of the date of filing, the Company has not exercised the Capped Calls in relation to the conversion of 2023 Notes or 2025 Notes.

By entering into the Capped Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event the conversion is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion its stock price exceeds the conversion price.

The cost of the Capped Calls is not expected to be tax-deductible as the Company did not elect to integrate the Capped Calls into the respective convertible notes for tax purposes. The cost of the Capped Calls was recorded as a reduction of the Company’s additional paid-in capital in the accompanying condensed consolidated financial statements.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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+ Details

Commitments and Contingencies

9 Months Ended

Oct. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments

The Company leases office space under non-cancelable operating leases with various expiration dates through February 2030. For the three months ended October 31, 2021 and 2020, lease costs in relation to long-term leases were approximately $3.7 million and $2.8 million, respectively, and $10.7 million and $8.1 million for the nine months ended October 31, 2021 and 2020, respectively. For the three months ended October 31, 2021 and 2020, short-term lease costs were approximately $500,000 and $300,000, respectively, and $1.5 million and $800,000 for the nine months ended October 31, 2021 and 2020, respectively. Variable lease costs were immaterial for the three and nine months ended October 31, 2021 and 2020. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments or the lease right-of-use asset/lease liability.

For the three months ended October 31, 2021 and 2020, cash paid for operating lease liabilities was approximately $4.0 million and $2.7 million, respectively, and $11.2 million and $8.0 million for the nine months ended October 31, 2021 and 2020, respectively. For the three months ended October 31, 2021 and 2020, right-of-use assets obtained in exchange of lease obligations was approximately $2.7 million and $0.9 million, respectively, and $5.7 million and $3.9 million for the nine months ended October 31, 2021 and 2020, respectively. As of October 31, 2021, the weighted-average remaining lease term was 3.5 years, and the weighted-average discount rate was 6.3%.

As of October 31, 2021, the remaining maturities of operating lease liabilities and future purchase obligations are as follows (in thousands):


Year Ending January 31,	Operating Lease Obligations		Future Purchase Obligations
2022 (remaining three months)	$	3,731	$	15,304
2023	14,230		45,266
2024	12,531		42,670
2025	6,990		54,142
2026	3,690		53,884
Thereafter	3,067		—
Total payments	44,239		$	211,266
Less imputed interest	(4,664)
Total	$	39,575

The Company's future purchase obligations in the table above primarily includes contractual purchase obligations for hosting services and other services to support the Company's business operations.

Contingencies

On June 10, 2021, the Company was served with notice of a complaint filed in U.S. District Court for the Southern District of Florida by DCR Workforce, Inc., as plaintiff, against Coupa Software Incorporated, as defendant. The complaint alleged breach of contract and other claims, and sought various damages from the Company including 206,065 shares of the Company’s common stock. The complaint related to the Company’s purchase of DCR’s vendor management software (VMS) business in August 2018. Under the purchase agreement, the Company agreed to issue additional stock to DCR as contingent (earn-out) consideration if the VMS business achieved certain revenue-related milestones during three measurement periods that continue through December 31, 2022. The VMS business met the target for the first measurement period and DCR was issued stock. It did not meet the target for the second measurement period. After DCR was notified, it filed the complaint.

On August 4, 2021, pursuant to a forum selection provision in the purchase agreement, the district court granted the Company’s motion to transfer venue to the U.S. District Court for the Northern District of California. On October 13, 2021, the court granted the Company’s motion to dismiss in its entirety and dismissed the case with prejudice. On November 11, 2021, DCR filed a notice of appeal of the district court’s decision. Given the early stage of the appeal, the amount of any loss or range of loss that may occur cannot be reasonably estimated as of the date of this filing.

In addition, the Company may become involved in other legal proceedings or be subject to claims arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the

final outcome of these current matters will not have a material adverse effect on the Company’s business, operating results, financial condition or cash flows. The Company accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Warranties and Indemnifications

The Company’s cloud-based software platform and applications are typically warranted against material decreases in functionality and to perform in a manner consistent with general industry standards and in accordance with the Company’s online documentation under normal use and circumstances.

The Company includes service level commitments to its customers, typically regarding certain levels of uptime reliability and performance and if the Company fails to meet those levels, customers can receive credits and, in some cases, terminate their relationship with the Company. To date, the Company has not incurred any material costs as a result of such commitments.

The Company generally agrees to defend and indemnify its customers against legal claims that the Company’s platform infringes patents, copyrights or other intellectual property rights of third parties. To date, the Company has not been required to make any payment resulting from such infringement claims and has not recorded any related liabilities. In addition, the Company has indemnification agreements with its directors and certain of its officers that require the Company to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, the Company has not incurred any material costs, and not accrued any liabilities in its condensed consolidated financial statements, as a result of these obligations.

Common Stock and Stockholders' Equity

9 Months Ended

Oct. 31, 2021

Equity [Abstract]

Common Stock and Stockholders' Equity

Common Stock and Stockholders’ Equity

Common Stock

Each share of common stock has the right to one vote. The holders of the common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors of the Company (the “Board of Directors”), subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared or paid since inception.

Preferred Stock

As of October 31, 2021, the Company had authorized 25,000,000 shares of preferred stock, par value $0.0001, of which no shares were issued and outstanding.

2016 Equity Incentive Plan

The 2016 Equity Incentive Plan (the “2016 Plan”) provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights and performance cash awards. The 2016 Plan replaced the Company’s 2006 Stock Plan; however, awards outstanding under the 2006 Stock Plan will continue to be governed by their existing terms. As of October 31, 2021, the Company had 12,747,822 shares of its common stock available for future issuance under the 2016 Plan.

In addition, the Company has the 2016 Employee Stock Purchase Plan (the “ESPP”). The ESPP allows eligible employees to purchase shares of common stock through payroll deductions and is intended to qualify under Section 423 of the Internal Revenue Code. The purchase price for each share of common stock purchased under the ESPP will be 85% of the lower of the fair market value per share on the first day of the applicable offering period or the fair market value per share on the applicable purchase date. As of October 31, 2021, the Company had 2,326,540 shares of its common stock available for future issuances under the ESPP. As of October 31, 2021, the total unrecognized compensation cost related to the 2016 ESPP was $18.3 million, which will be amortized over a weighted-average period of approximately 1.8 years.

Restricted Stock Units (“RSUs”)

The following table summarizes the activity related to the Company’s RSUs during the nine months ended October 31, 2021:


	Number of RSUs Outstanding	Weighted- Average Grant Date Fair Value
Awarded and unvested at January 31, 2021	2,530,280	$	123.56
Awards granted	1,002,689	$	245.71
Awards vested	(951,082)	$	102.18
Awards forfeited	(233,263)	$	183.64
Awarded and unvested at October 31, 2021	2,348,624	$	176.95

(1)The above table includes restricted share units with market and service-based conditions.

As of October 31, 2021, there was approximately $393.7 million of total unrecognized compensation cost related to unvested restricted stock units granted to employees under the 2016 Plan. This unrecognized compensation cost is expected to be recognized over an estimated weighted-average amortization period of approximately 2.7 years.

Market-based Options and Awards

In March 2021, the Board of Directors of the Company granted market-based restricted stock unit awards (the “2021 PSU Grant”) to certain members of management. The target number of market-based restricted stock unit awards granted was 109,249. The number of shares that could be earned will range from 0% to 200% of the target number of shares, based on the relative growth of the per share price of the Company’s common stock as compared to the Nasdaq Composite Index over the three-year performance period ending on the third anniversary of the date of grant and subject to continuous employment through such date. Additionally, if necessary, the payout percentage will be decreased so that the overall value delivered to the award holder (total payout number of shares multiplied by the stock price on the vesting date) will be capped at four times the target value (target number of shares multiplied by the stock price on the date of grant). The fair value of the 2021 PSU Grant was determined using a Monte Carlo simulation approach. The Company amortizes the fair value of the 2021 PSU Grant using the straight-line method over the three-year performance term.

In March 2020, the Board of Directors of the Company granted market-based restricted stock unit awards (the “2020 PSU Grant”) to certain members of management. As of October 31, 2021, the three-year performance period related to the 2020 PSU Grant and 2021 PSU Grant had not been completed. Refer to the Company's fiscal 2021 Form 10-K for further information.

In September 2016 and March 2018, certain service and market-based options were granted to the Chief Executive Officer. Refer to the Company's fiscal 2021 Form 10-K for further information. As of October 31, 2021, all market-based milestones of the stock options granted to the Chief Executive Officer were achieved.

Stock-based compensation expense recognized for market-based awards was approximately $3.4 million and $1.7 million for the three months ended October 31, 2021 and 2020, respectively, and approximately $9.7 million and $5.3 million for the nine months ended October 31, 2021 and 2020, respectively.

Stock Options

The following table summarizes stock option activity under the Company’s 2006 Stock Plan and the 2016 Plan during the nine months ended October 31, 2021 (aggregate intrinsic value in thousands):


	Options Outstanding
	Outstanding Stock Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value
Balance at January 31, 2021	2,608,640	$	20.65	5.6	$	754,478
Option grants	—	$	—	—	$	—
Options exercised	(597,586)	$	12.43
Options forfeited	(4,843)	$	61.43
Balance at October 31, 2021	2,006,211	$	23.00	4.8	$	410,681
Exercisable at October 31, 2021	1,904,832	$	20.53	4.7	$	394,619

(1)The above table includes 761,839 stock options with market and service based conditions.

The aggregate intrinsic value of exercised options was $144.6 million and $296.0 million for the nine months ended October 31, 2021 and 2020, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date.

As of October 31, 2021, there was approximately $2.1 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over an estimated weighted-average amortization period of approximately 1.2 years.

The Company’s total stock-based compensation expense was as follows (in thousands):


	Three Months Ended October 31,				Nine Months Ended October 31,

	2021		2020		2021		2020
Cost of revenue:
Subscription	$	4,162	$	2,836	$	11,063	$	7,641
Professional services and other	4,729		2,939		12,984		8,303
Research and development	11,357		7,691		33,075		21,131
Sales and marketing	13,217		9,790		36,668		26,558
General and administrative	16,994		13,555		51,461		31,218
Total	$	50,459	$	36,811	$	145,251	$	94,851

Income Taxes	9 Months Ended
Income Taxes	Oct. 31, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company is subject to federal and various state income taxes in the United States as well as income taxes in foreign jurisdictions in which it conducts business. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are reinvested indefinitely. The Company recorded a tax benefit of approximately $0.5 million and $1.4 million for the three months ended October 31, 2021 and 2020, respectively. The Company recorded a tax benefit of approximately $2.7 million for the nine months ended October 31, 2021, representing an effective tax rate of 0.97%, which was primarily attributable to a reversal of a U.S. deferred tax liability, foreign excess tax benefits related to stock-based compensation, and remeasurement of deferred tax assets due to tax rate changes in the UK, offset by income taxes related to foreign and state jurisdictions in which the Company conducts business. The Company recorded a tax benefit of approximately $5.5 million for the nine months ended October 31, 2020, representing an effective tax rate of 4.39%, which was primarily attributable to excess tax benefits related to stock-based compensation, offset by income taxes related to foreign and state jurisdictions in which the Company conducts business. The difference between the U.S. federal statutory rate of 21% and the Company's effective tax rate in all periods presented is primarily due to a full valuation allowance related to the Company's U.S. deferred tax assets, reversal of a U.S. deferred tax liability as a result of current year intangible amortization and convertible note original issue discount amortization, and foreign expense on the Company's profitable jurisdictions. The Company's material income tax jurisdictions are the United States (federal) and California. As a result of net operating loss carryforwards, the Company is subject to audits for tax years 2006 and onward for federal purposes and 2009 and onward for California purposes. There are tax years which remain subject to examination in various other state and foreign jurisdictions that are not material to the Company's financial statements. On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act). The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits. The Company does not expect there to be a significant tax impact on its condensed consolidated financial statements at this time and will continue to assess the implications of the CARES Act and its continuing developments and interpretations.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Net Loss per Share

9 Months Ended

Oct. 31, 2021

Earnings Per Share [Abstract]

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities as they do not share in losses. During periods when the Company is in a net loss position, basic net loss per share is the same as diluted net loss per share as the effects of potentially dilutive securities are antidilutive given the net loss of the Company.

The following table sets forth the computation of the basic and diluted net loss per share attributable to Coupa Software Incorporated (in thousands, except per share amounts):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2020		2021		2020
Numerator:
Net loss attributable to Coupa Software Incorporated	$	(91,203)	$	(60,798)	$	(283,027)	$	(118,730)
Denominator:
Weighted-average common shares outstanding	74,133		68,941		73,514		67,349
Net loss per share, basic and diluted, attributable to Coupa Software Incorporated	$	(1.23)	$	(0.88)	$	(3.85)	$	(1.76)

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	As of October 31,
	2021	2020
Options to purchase common stock	2,006,211	2,866,008
RSUs	2,348,624	2,806,482
Unvested common shares subject to repurchase	137,143	208,766
Shares committed under the ESPP	22,498	22,580
Contingent stock consideration for DCR acquisition	171,073	377,138
Total	4,685,549	6,280,974

Additionally, approximately 4.7 million, 5.0 million and 39 thousand shares underlying the conversion option in the 2026 Notes, 2025 Notes and 2023 Notes, respectively, are not considered in the calculation of diluted net loss per share as the effect would be anti-dilutive. These numbers of shares are subject to adjustment up to approximately 6.2 million, 6.8 million and 0.1 million shares for the 2026 Notes, 2025 Notes and 2023 Notes, respectively, if certain corporate events occur prior to the maturity date or if the Company issues a notice of redemption. The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion option on diluted net income per share attributable to Coupa Software Incorporated, if applicable. During the three months ended October 31, 2021, the average market price of the Company’s common stock exceeded the conversion price of the 2023 Notes and 2025 Notes of $44.51 per share and $159.60 per share, respectively, and did not exceed the conversion price of the 2026 Notes of $296.45 per share.

Business Segment Information	9 Months Ended
Business Segment Information	Oct. 31, 2021
Segment Reporting [Abstract]
Business Segment Information	Business Segment InformationThe Company’s chief operating decision maker is the Chief Executive Officer (“CEO”). The CEO reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates in a single reporting segment: cloud platform.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Significant Customers and Geographic Information

9 Months Ended

Oct. 31, 2021

Geographic Areas, Revenues from External Customers [Abstract]

Significant Customers and Geographic Information

No customer balance comprised 10% or more of total accounts receivable at October 31, 2021 or January 31, 2021.

During the three and nine months ended October 31, 2021 and October 31, 2020, revenues by geographic area, based on billing addresses of the customers, were as follows (in thousands):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2020		2021		2020
United States	$	112,808	$	81,865	$	318,017	$	239,239
Foreign countries	73,008		51,099		213,974		138,860
Total revenues	$	185,816	$	132,964	$	531,991	$	378,099

No single foreign country represented more than 10% of the Company’s revenues in any period. Additionally, no single customer represented more than 10% of the Company’s revenues in any period.

Related Parties	9 Months Ended
Related Parties	Oct. 31, 2021
Related Party Transactions [Abstract]
Related Parties	Related PartiesOne of the Company’s customers, T. Rowe Associates, Inc., is also an investment adviser of certain of the Company’s stockholders. T. Rowe Associates, Inc. held more than 10% of the Company’s voting common stock during the three and nine months ended October 31, 2021. The Company recognized subscription revenue from this customer of approximately $0.3 million for both the three months ended October 31, 2021 and 2020, respectively, and approximately $0.8 million for both the nine months ended October 31, 2021 and 2020. The Company had no receivables balance from this customer at October 31, 2021 or January 31, 2021.

Significant Accounting Policies (Policies)	9 Months Ended
Significant Accounting Policies (Policies)	Oct. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 filed with the SEC on March 18, 2021 (the “Form 10-K”). The condensed consolidated financial statements include the results of the Company, its wholly-owned subsidiaries, as well as subsidiaries in which the Company has a controlling interest. All significant intercompany transactions and balances have been eliminated during consolidation. The condensed consolidated balance sheet as of January 31, 2021, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods, but are not necessarily indicative of the results to be expected for the full fiscal year or any other period. There have been no changes to the significant accounting policies described in the Form 10-K for the year ended January 31, 2021.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates its significant estimates including, but not limited to, the valuation of accounts receivable, the lives of tangible and intangible assets, the fair value of certain equity awards, the fair value of contingent purchase consideration, the valuation of acquired intangible assets and the recoverability or impairment of intangible assets, including goodwill, revenue recognition, redemption value of redeemable non-controlling interests, convertible senior notes fair value, the benefit period of deferred commissions, and provision for (benefit from) income taxes. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations.
Foreign Currency Translation	Foreign Currency Translation The functional currency of the Company's foreign operations is primarily the U.S. dollar, while a few of its subsidiaries use the local currency as their functional currency for the nine months ended October 31, 2021. In cases where the Company uses a foreign functional currency, the Company translates the foreign functional currency financial statements to U.S. dollars using the exchange rates at the balance sheet date for assets and liabilities, the period average exchange rates for revenues and expenses, and the historical exchange rates for equity. The effects of foreign currency translation adjustments are recorded in other comprehensive income as a component of stockholders' equity and the related periodic movements are presented in the condensed consolidated statements of comprehensive loss. Foreign currency transaction gains and losses are included in other income (expense), net, in the condensed consolidated statements of operations for the period.
Concentration of Risk	Concentration of Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, marketable securities, and accounts receivable. Cash deposits may, at times, exceed amounts insured by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation (“SIPC”). Marketable securities balances may, at times, also exceed SIPC limits. The Company has not experienced any losses on its deposits of cash and cash equivalents to date. Refer to Note 14, “Significant Customers and Geographic Information” for additional information on significant customers during the period.
Comprehensive Loss	Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss consists of net loss, other comprehensive gain (loss) in relation to defined benefits plans, net of tax, changes in unrealized gain (loss) on marketable securities, net of tax, and foreign currency translation adjustments, net of tax. The other comprehensive gain (loss) in relation to defined benefits plans represents net deferred gains and losses and prior service costs and credits for the defined benefit pension plans.
Fair Value Measurements	Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings or other comprehensive loss when they occur. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurement or assumptions that market participants would use in pricing the assets or liabilities, such as inherent risk, transfer restrictions and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: •Level 1 - Quoted prices in active markets for identical assets or liabilities. •Level 2 - Observable inputs other than quoted price in active markets for identical assets or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. •Level 3 - Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the assets or liabilities.
Revenue Recognition	Revenue Recognition The Company derives its revenues primarily from subscription fees, professional services fees and other. Revenues are recognized when control of these services are transferred to the Company’s customers in an amount that reflects the consideration expected to be entitled to in exchange for those services. Revenues are recognized net of applicable taxes imposed on the related transaction. The Company’s revenue recognition policy follows guidance from Accounting Standards Codification 606, Revenue from Contracts with Customers (Topic 606). The Company determines revenue recognition through the following five-step framework: •Identification of the contract, or contracts, with a customer; •Identification of the performance obligations in the contract; •Determination of the transaction price; •Allocation of the transaction price to the performance obligations in the contract; and •Recognition of revenue when, or as, the Company satisfies a performance obligation. Subscription Revenues The Company offers subscriptions to its cloud-based business spend management platform, including procurement, invoicing and expense management. Subscription revenues consist primarily of fees to provide the Company’s customers access to its cloud-based platform, which includes routine customer support. Subscription contracts do not provide customers with the right to take possession of the software, are in general, non-cancelable, and do not contain general rights of return. Generally, subscription revenues are recognized ratably over the contractual term of the arrangement, beginning on the date that the service is made available to the customer. Subscription contracts typically have a term of three years with invoicing occurring in annual installments at the beginning of each year in the subscription period. Term-based licenses are sold as bundled arrangements that include the rights to a term license and post-contract customer support (“PCS”). Accordingly, the Company allocates the transaction price to each performance obligation. The revenues related to the amount allocated to PCS are included in subscription revenue, which are recognized ratably over the contract term beginning on the license delivery date. Professional Services Revenues and Other The Company offers professional services which primarily include deployment services, optimization services, and training. Professional services are generally sold on a fixed-fee or time-and-materials basis. For services billed on a fixed-fee basis, invoicing typically occurs in advance, and revenue is recognized over time based on the proportion performed. For services billed on a time-and-materials basis, revenue is recognized over time as services are performed. Term-based licenses are sold as bundled arrangements that include the rights to a term license and PCS. Accordingly, the Company allocates the transaction price to each performance obligation. The revenues related to the amount allocated to term-based licenses are included in other revenue, which is recognized at the start of the license term when delivery is complete. Refer to Note 14, “Significant Customers and Geographic Information” for additional information related to disaggregated revenue during the period. Significant Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. Subscription services, professional services, term-based licenses, and related PCS are distinct performance obligations that are accounted for separately. In contracts with multiple performance obligations, the transaction price is allocated to separate performance obligations on a relative standalone selling price ("SSP") basis. The determination of SSP for each distinct performance obligation requires judgment. The Company determines SSP for performance obligations based on overall pricing objectives, which take into consideration market conditions and entity-specific factors. This includes a review of historical data related to the size of arrangements, the applications being sold, customer demographics and the numbers and types of users within the arrangements. The Company uses a range of amounts to estimate SSP for performance obligations. There is typically more than one SSP for individual products and services due to the stratification of those products and services by considerations such as size and sales regions. Contract Balances The timing of revenue recognition may differ from the timing of invoicing for contracts with customers. The Company records a receivable when revenue is recognized prior to invoicing. Deferred revenue primarily consists of billings or payments received in advance of revenue recognition. Subscription and fixed-fee professional services arrangements are commonly billed in advance, recognized as deferred revenue, and then amortized into revenue over time. The Company's term-based license contracts are billed annually in advance, recognized as deferred revenue, and then recognized as revenues upfront for the license component and ratably over the term license for the PCS component. However, other professional services arrangements, primarily those recognized on a time-and-materials basis, are billed in arrears following services that have been rendered. In addition, for multi-year term-based license contracts, the revenue allocated to license component is recognized upfront while the billing is on annual basis. This may result in revenue recognition greater than invoiced amounts which results in a receivable balance. Receivables represent an unconditional right to payment. As of October 31, 2021 and January 31, 2021, the balance of accounts receivable, net of the allowance for credit losses, was $179.3 million and $196.0 million, respectively. Of these balances, $20.3 million and $24.2 million represent unbilled receivable amounts as of October 31, 2021 and January 31, 2021, respectively. In addition, as of October 31, 2021 and January 31, 2021, the balance of long-term unbilled receivables was approximately $2.6 million and $7.1 million, respectively, which were included in other assets on the Company's condensed consolidated balance sheet. When the timing of revenue recognition differs from the timing of invoicing, the Company uses judgment to determine whether the contract includes a significant financing component requiring adjustment to the transaction price. Various factors are considered in this determination including the duration of the contract, payment terms, and other circumstances. Generally, the Company determined that contracts do not include a significant financing component. The Company applies the practical expedient for instances where, at contract inception, the expected timing difference between when promised goods or services are transferred and associated payment will be one year or less. Payment terms vary by contract type, however arrangements typically stipulate a requirement for the customer to pay within 30 days. At any point in the contract term, the transaction price may be allocated to performance obligations that are unsatisfied or are partially unsatisfied. These amounts relate to remaining performance obligations on non-cancelable contracts which include both the deferred revenue balance and amounts that will be invoiced and recognized as revenue in future periods. As of October 31, 2021, approximately $1,182.7 million of the transaction price from contracts with customers is allocated to the remaining performance obligations. The Company expects to recognize revenue on approximately three-fourths of these remaining performance obligations within the next 24 months and the remainder thereafter. The Company applies the practical expedient to exclude remaining performance obligations that are part of contracts with an original expected duration of one year or less and contracts where revenue is being recognized under the as-invoiced method. During the three and nine months ended October 31, 2021, the revenue recognized from performance obligations satisfied in prior periods was approximately $1.2 million and $1.6 million, respectively.
Accounts Receivable and Allowances for Credit Losses	Accounts Receivable and Allowances for Credit Losses The Company extends credit to its customers in the normal course of business and does not require cash collateral or other security to support the collection of customer receivables. The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period and provides a reserve when needed based on an assessment of various factors including the aging of the receivable balance, historical experience, and expectations of forward-looking loss estimates. When developing the expectations of forward-looking loss estimates, the Company takes into consideration forecasts of future economic conditions, information about past events, such as historical trends of write-offs, and customer-specific circumstances, such as bankruptcies and disputes. Accounts receivable are written off when deemed uncollectible. The allowances for credit losses were not material as of October 31, 2021 and January 31, 2021.
Marketable Securities and Other Investments	Marketable Securities Marketable securities consist of financial instruments such as U.S. treasury securities, U.S. agency obligations, corporate notes and bonds, commercial paper, asset backed securities and certificates of deposit. The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All marketable securities are recorded at estimated fair value. Credit losses related to the marketable securities are recorded in other income (expense), net in the condensed consolidated statements of operations through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. No credit losses related to marketable securities were recorded by the Company during the three and nine months ended October 31, 2021. Any remaining unrealized losses, or any unrealized gains, for marketable securities are included in accumulated other comprehensive income, a component of stockholders’ equity. If quoted prices for identical instruments are available in an active market, marketable securities are classified within Level 1 of the fair value hierarchy. If quoted prices for identical instruments in active markets are not available, fair values are estimated using quoted prices of similar instruments and are classified within Level 2 of the fair value hierarchy. Other Investments Other investments consist of non-marketable debt and equity investments in privately-held companies without readily determinable fair values in which the Company does not have a controlling interest or significant influence. The Company records non-marketable debt investments at their estimated fair value on a recurring basis with changes in fair value recorded in accumulated other comprehensive income, a component of stockholders’ equity. The Company elected to apply the measurement alternative for non-marketable equity securities, measuring them at cost, less any impairment, and adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These non-marketable debt and equity investments are included in other assets on the Company's condensed consolidated balance sheets.
Deferred Revenue	Deferred RevenueDeferred revenue consists of non-cancelable customer billings or payments received in advance of the recognition of revenue and is recognized as revenue as the revenue recognition criteria are met. The Company generally invoices its customers annually for the forthcoming year of service. Accordingly, the Company’s deferred revenue balance does not include revenue for future years of multiple year non-cancelable contracts that have not yet been billed. During the three and nine months ended October 31, 2021, the Company recognized revenue of $153.1 million and $314.8 million that was included in the deferred revenue balance as of July 31, 2021 and January 31, 2021, respectively. During the three and nine months ended October 31, 2020, the Company recognized revenue of $107.8 million and $228.0 million that was included in the deferred revenue balance as of July 31, 2020 and January 31, 2020, respectively.
Deferred Commissions	Deferred Commissions Commissions are earned by sales personnel upon the execution of the sales contract by the customer, and commission payments are made shortly after they are earned. Commission costs can be associated specifically with subscription, professional services and license arrangements. Commissions earned by the Company’s sales personnel are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit of five years. The Company determined the period of benefit by taking into consideration its past experience with customers, future cash flows expected from customers, industry peers and other available information. For commissions earned from the sale of term-based license contracts, the Company allocates the costs of commission in proportion to the allocation of transaction price of license and PCS performance obligations. Commissions associated with the license component are expensed at the time the related revenue is recognized. Commissions allocated to PCS are deferred and then amortized over five years. The Company capitalized commission costs of $9.1 million and $5.3 million, and amortized $4.8 million and $3.6 million to sales and marketing expense in the accompanying condensed consolidated statements of operations during the three months ended October 31, 2021 and 2020, respectively. The Company capitalized commission costs of $22.4 million and $11.4 million, and amortized $13.3 million and $10.1 million to sales and marketing expense in the accompanying condensed consolidated statements of operations during the nine months ended October 31, 2021 and 2020, respectively.
Redeemable Non-Controlling Interests	Redeemable Non-Controlling Interests During the quarter ended April 30, 2021, the Company established a joint venture in Japan ("Coupa K.K."), which is a variable interest entity, obtaining a 51% controlling interest. Accordingly, the Company consolidated the financial results of the joint venture. The share of the loss in the joint venture attributable to the redeemable non-controlling interests was approximately $273,000 and $790,000 during the three and nine months ended October 31, 2021, respectively. The agreements with the minority investors of Coupa K.K. contain redemption features whereby the interest held by the minority investors is redeemable either (i) at the option of the minority investors or (ii) at the option of the Company, both beginning on the tenth anniversary of the initial capital contribution. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. The resulting changes in the estimated redemption amount are recorded with corresponding adjustments against additional paid-in-capital due to the absence of retained earnings. The carrying amount of the redeemable non-controlling interests is recorded on the Company's condensed consolidated balance sheets as temporary equity.
Leases	Leases Leases arise from contracts that convey the right to control the use of identified property or equipment for a period of time in exchange for consideration. The Company’s leasing arrangements are primarily for office space used to conduct operations. Leases are classified at commencement as either operating or finance leases. As of October 31, 2021, all of the Company’s leases were classified as operating leases. Rent expense for operating leases is recognized using the straight-line method over the term of the agreement beginning on the lease commencement date. At commencement, the Company records a lease liability at the present value of future lease payments, net of any future lease incentives to be received. Lease agreements may include options to renew the lease term, which is not included in the lease periods to calculate future lease payments unless it is reasonably certain the Company will renew the lease. The Company estimates its incremental borrowing rate (“IBR”) based on the information available at the lease commencement date in determining the present value of lease payments. In determining the appropriate IBR, the Company considers information including, but not limited to, the lease term and the currency in which the arrangement is denominated. At commencement, the Company also records a corresponding right-of-use asset, which is calculated based on the amount of the lease liability, adjusted for any advance lease payments made and initial direct costs incurred. Right-of-use assets are subject to evaluation for impairment or disposal on a basis consistent with other long-lived assets. As of October 31, 2021, the Company was not a material lessor in leasing arrangements or a party to material sublease arrangements.
Recent Accounting Guidance	Recent Accounting Guidance New Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments. The guidance removes certain accounting models that separate the embedded conversion features from the host contract for convertible instruments, requiring bifurcation only if the convertible debt feature qualifies as a derivative under ASC 815 or for convertible debt issued at a substantial premium. The ASU removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception, permitting more contracts to qualify for it. In addition, the guidance eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The ASU is effective for annual reporting periods beginning after December 15, 2021, including interim reporting periods within those annual periods, with early adoption permitted no earlier than the fiscal year beginning after December 15, 2020. The ASU allows entities to use a modified or full retrospective transition method. Under the modified approach, entities will apply the guidance to all financial instruments that are outstanding as of the beginning of the year of adoption. The Company will adopt the new guidance for the fiscal year beginning February 1, 2022, using the modified retrospective approach with the cumulative effect of adoption recognized at the date of initial application through an adjustment to the opening balance of retained earnings. The Company expects the adoption of this guidance will result in a material reclassification from equity to debt as well as a reduction in non-cash interest expense. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). The amendments in this ASU require that an acquirer recognizes and measures contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of this new standard on its consolidated financial statements and related disclosures.