Stansberry Research

Remote-Work Trends, SaaS Business Model Bolster Coupa's Third Quarter

Daniel SmootStansberry NewsWire

Business spend management ("BSM") software company Coupa Software's (COUP) third-quarter results were stronger than expected.

COUP's earnings per share ("EPS") were $0.18 compared to the estimated $0.03. The company's revenue for the quarter was $133 million versus the anticipated $124 million.

Revenue from COUP's subscription services came in at $118.1 million compared to the expected $112.7 million. The company's professional services business saw $14.9 million in revenue, beating the anticipated $11.2 million. Ending deferred revenue came in at $255.9 million, topping the anticipated $242.5 million.

The company's operating margin was 10.7% versus the estimated 3.8%. COUP's cash from operations was $19 million compared to the consensus of $3.5 million. The software company's free cash flow was $17.3 million. Billings were $139.9 million versus the estimated $117.5 million.

Looking ahead to the fourth quarter, COUP forecasts an EPS loss in the range of $0.11 to $0.13 compared to the expected positive EPS of $0.01. Revenue is predicted to come in around $145 million to $146 million, topping Wall Street's estimate of $130 million.

Revenue from subscriptions is poised to come in around $124.5 million to $125.5 million. The company's professional services business and other revenues are estimated to be roughly $20.5 million.

Meanwhile, for full-year 2021, COUP projected that its EPS would be in the range of $0.47 to $0.49 versus its prior guidance of $0.43 to $0.45. The company's revenue is predicted to be around $523 million to $524 million, much higher than its prior outlook of $496 million to $498.5 million.

COUP's results reaffirm a growing trend among Software as a Service ("SaaS") companies. As people continue to work remotely, and as businesses transition to digital platforms, technology firms that offer services to make processes easier will ultimately be winners of the growing trend. That's what we're potentially seeing with COUP, and we can anticipate this momentum to continue for other technology companies as well.