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| 8-K - 8-K - Coupa Software Inc | d62699d8k.htm |
Exhibit 99.1
Coupa Software Reports Second Quarter Fiscal 2021 Financial Results
Record Quarterly Revenues of $125.9 Million
Record Trailing Twelve Months Revenues of $458.4 Million
Quarterly Operating Cash Flows and Adjusted Free Cash Flows of $23.4 Million and $35.7 Million, Respectively
Trailing Twelve Months Operating Cash Flows and Adjusted Free Cash Flows of $86.9 Million and $100.4 Million, Respectively
SAN MATEO, Calif., September 8, 2020 – Coupa Software (NASDAQ: COUP) today announced financial results for its second fiscal quarter ended July 31, 2020.
“Our strong financial results for the second quarter underscore the importance our customers place on business resilience and the value that Coupa is delivering to their organizations, especially amid the everchanging macroeconomic environment,” said Rob Bernshteyn, chairman and chief executive officer at Coupa. “We were proud to deliver record revenues and adjusted free cash flows during the quarter. We also reached a new financial milestone, generating $100 million in adjusted free cash flows over the trailing twelve months, while continuing to assertively invest in our long-term success.”
Second Quarter Results:
| • | Total revenues were $125.9 million, an increase of 32% compared to the same period last year. Subscription revenues were $111.6 million, an increase of 34% compared to the same period last year. |
| • | GAAP operating loss was $31.9 million, compared to a GAAP operating loss of $22.8 million for the same period last year. Non-GAAP operating income was $12.3 million, compared to a non-GAAP operating income of $4.8 million for the same period last year. |
| • | GAAP net loss was $43.1 million, compared to a GAAP net loss of $20.0 million for the same period last year. GAAP net loss per basic and diluted share was $0.64 which includes an unfavorable $0.12 impact from the issuance of the 2026 Notes, compared to a GAAP net loss per basic and diluted share of $0.32 for the same period last year. Non-GAAP net income was $15.2 million, compared to a non-GAAP net income of $5.3 million for the same period last year. Non-GAAP net income per diluted share was $0.21, compared to non-GAAP net income per diluted share of $0.07 for the same period last year. |
| • | Operating cash flows and adjusted free cash flows were positive $23.4 million and $35.7 million, respectively. |
See the section titled “Non-GAAP Financial Measures” and the reconciliation tables below for important information regarding the non-GAAP measures used by Coupa.
Business Outlook:
The following forward-looking statements reflect Coupa’s expectations as of September 8, 2020.
Third quarter of fiscal 2021:
| • | Total revenues are expected to be $123.0 to $124.0 million. |
| • | Subscription revenues are expected to be $112.0 to $113.0 million. |
| • | Professional services and other revenues are expected to be approximately $11.0 million. |
| • | Non-GAAP income from operations is expected to be $4.5 to $5.0 million. |
| • | Non-GAAP net income per diluted share is expected to be $0.02 to $0.03 per share. |
| • | Diluted weighted average share count is expected to be approximately 74.0 million shares. |
Full year fiscal 2021:
| • | Total revenues are expected to be $496.5 to $498.5 million. |
| • | Non-GAAP income from operations is expected to be $33.5 to $35.5 million. |
| • | Non-GAAP net income per diluted share is expected to be $0.43 to $0.45 per share. |
| • | Diluted weighted average share count is expected to be approximately 73.0 million shares. |
Coupa has not reconciled its expectations for non-GAAP income from operations to GAAP loss from operations or non-GAAP net income per share to GAAP net loss per share because certain items excluded from non-GAAP income from operations and non-GAAP net income, such as charges related to stock-based compensation expenses, amortization of acquired intangible assets, the change in fair value of contingent consideration related to acquisition earnout payments, amortization of debt discount and issuance costs, gain or loss on conversion of convertible senior notes, and related tax effects, including non-recurring income tax adjustments, cannot be reasonably calculated or predicted at this time. In addition, the effect of the anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes cannot be reasonably calculated or predicted at this time. The effect of these items may be significant.
Recent Business Highlights:
| • | Welcomed many new customers into the Coupa community in Q2, including the following: 14 West, 2u, ACV Environmental Services, Benson Hill, Canfor Corporation, CECO Environmental Corporation, Confluent Inc., Conseil 2.0, CSC ServiceWorks, Cycle and Carriage Industries, Delly’s, Engen Petroleum, Florida Home-Improvement Associates, GAF Materials, HammondCare, M. Dias Branco S.A. Ind Com de Alimentos, OneMain Financial Holdings, SalesLoft, Samancor Chrome, Schaeffler, Sekisui Chemical, Shorelight Education, Strategic Education, Südwestdeutsche Medienholding, Toyota Finance Australia, Welltok, and Westpac Banking. |
| • | Closed an offering of $1.38 billion in convertible senior notes due 2026. |
| • | Acquired Treasury Management leader, BELLIN Group. |
| • | Introduced product innovations that provide customers with increased spend visibility, help them mitigate supply chain risk and increase business agility to adapt to change. |
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| • | Cited as a leader in the Forrester Wave: Supplier Risk and Performance Management Platforms, Q3 2020, receiving the top score in the performance management criterion and the highest score possible in the corporate strategy criterion. |
Conference Call Information:
Coupa will host a conference call and live webcast for analysts and investors at 4:30 p.m. Eastern time today.
A live webcast will be accessible on Coupa’s investor relations website at http://investors.coupa.com. A replay will be available through the same link.
Non-GAAP Financial Measures:
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including non-GAAP operating profit, non-GAAP net profit and adjusted free cash flows. Coupa believes these non-GAAP measures are useful in evaluating its operating performance and regularly reviews these measures as it evaluates its business.
Non-GAAP operating profit and non-GAAP net profit exclude certain items, including stock-based compensation expenses, amortization of acquired intangible assets, the change in fair value of contingent consideration related to acquisition earnout payments, amortization of debt discount and issuance costs, gain on conversion of convertible senior notes, and related tax effects, including non-recurring income tax adjustments. In addition, the weighted average diluted shares used to calculate non-GAAP net income per share reflect the anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes. Adjusted free cash flows is defined as net cash provided by operating activities less purchases of property and equipment plus repayments of convertible senior notes attributable to debt discount. Coupa has the ability to settle obligations related to this excluded item through the use of cash, shares of its common stock, or a combination of both, at its election.
Coupa believes these non-GAAP measures provide investors and other users of its financial information consistency and comparability with its past financial performance and facilitate period to period comparisons of operations. Coupa believes these non-GAAP measures are useful in evaluating its operating performance compared to that of other companies in its industry, as they generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. Coupa believes that adjusted free cash flows also provides a useful measure of the company’s capital strength and liquidity, although it is not intended and should not be viewed as the amount of residual cash flow available for discretionary expenditures.
Coupa uses these non-GAAP measures in conjunction with GAAP measures as part of its overall assessment of its performance and liquidity, including the preparation of its annual operating budget and quarterly forecasts, to evaluate the effectiveness of its business strategies and to communicate with its board of directors concerning its financial performance and liquidity. The definitions of its non-GAAP measures may differ from the definitions used by other companies
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and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, Coupa’s non-GAAP measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
Coupa compensates for these limitations by providing investors and other users of its financial information a reconciliation of non-GAAP measures to the related GAAP financial measures. Coupa encourages investors and others to review its financial information in its entirety, not to rely on any single financial measure and to view its non-GAAP measures in conjunction with GAAP financial measures. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures attached to this release.
Forward-Looking Statements:
This release includes forward-looking statements. All statements other than statements of historical facts, including the statements of management and statements in “Business Outlook,” are forward-looking statements. These forward-looking statements are based on Coupa’s current expectations and projections about future events and trends that Coupa believes may affect its financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including: Coupa has a limited operating history at its current scale, which makes it difficult to predict its future operating results; the uncertain impact of the COVID-19 pandemic; if Coupa is unable to attract new customers, the growth of its revenues will be adversely affected; because its platform is sold to large enterprises with complex operating environments, Coupa encounters long and unpredictable sales cycles; risks and liabilities related to breach of its security measures or unauthorized access to customer data; the markets in which Coupa participates are intensely competitive; Coupa’s business depends substantially on its customers renewing their subscriptions and purchasing additional subscriptions; if Coupa fails to develop widespread brand awareness cost-effectively, its business may suffer; if Coupa fails to manage its recent rapid growth effectively, Coupa may be unable to execute its business plan, maintain high levels of service, or adequately address competitive challenges; the impact of acquisitions on its business, such as integration issues, assumption of unknown or unforeseen liabilities and ability to retain customers; and the impact of foreign currency exchange rates and global economic conditions.
These and other risks and uncertainties that could affect Coupa’s future results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Coupa’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on June 8, 2020, which is available at investors.coupa.com and on the SEC’s website at www.sec.gov. Further information on potential risks that could affect actual results will be included in other periodic filings Coupa makes with the SEC.
The forward-looking statements in this release reflect Coupa’s expectations as of September 8, 2020. Coupa undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.
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About Coupa Software
Coupa empowers companies around the world with the visibility and control they need to spend smarter and safer. To learn more about how Coupa can help you spend smarter, visit www.coupa.com. Read more on the Coupa Blog or follow @Coupa on Twitter.
Investor Relations:
Steven Horwitz
(650) 338-1340
ir@coupa.com
Media Contact:
Kristi Lewandowski
(650) 485-8506
kristi.lewandowski@coupa.com
5
COUPA SOFTWARE INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenues: |
||||||||||||||||
| Subscription |
$ | 111,581 | $ | 83,482 | $ | 217,316 | $ | 156,439 | ||||||||
| Professional services and other |
14,340 | 11,657 | 27,819 | 20,044 | ||||||||||||
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|||||||||
| Total revenues |
125,921 | 95,139 | 245,135 | 176,483 | ||||||||||||
| Cost of revenues: |
||||||||||||||||
| Subscription |
33,805 | 22,062 | 62,807 | 39,465 | ||||||||||||
| Professional services and other |
14,634 | 12,428 | 28,470 | 22,354 | ||||||||||||
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| Total cost of revenues |
48,439 | 34,490 | 91,277 | 61,819 | ||||||||||||
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|||||||||
| Gross profit |
77,482 | 60,649 | 153,858 | 114,664 | ||||||||||||
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| Operating expenses: |
||||||||||||||||
| Research and development |
30,212 | 23,364 | 56,931 | 44,378 | ||||||||||||
| Sales and marketing |
50,488 | 39,820 | 96,627 | 73,430 | ||||||||||||
| General and administrative |
28,705 | 20,269 | 37,849 | 37,467 | ||||||||||||
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|||||||||
| Total operating expenses |
109,405 | 83,453 | 191,407 | 155,275 | ||||||||||||
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|||||||||
| Loss from operations |
(31,923 | ) | (22,804 | ) | (37,549 | ) | (40,611 | ) | ||||||||
| Interest expense |
(20,223 | ) | (8,511 | ) | (32,512 | ) | (11,686 | ) | ||||||||
| Interest income and other, net |
4,759 | 1,479 | 8,087 | 2,403 | ||||||||||||
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| Loss before benefit from income taxes |
(47,387 | ) | (29,836 | ) | (61,974 | ) | (49,894 | ) | ||||||||
| Benefit from income taxes |
(4,271 | ) | (9,842 | ) | (4,042 | ) | (9,432 | ) | ||||||||
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| Net loss |
$ | (43,116 | ) | $ | (19,994 | ) | $ | (57,932 | ) | $ | (40,462 | ) | ||||
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| Net loss per share attributable to common stockholders, basic and diluted |
$ | (0.64 | ) | $ | (0.32 | ) | $ | (0.87 | ) | $ | (0.66 | ) | ||||
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| Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted |
67,597 | 62,038 | 66,545 | 61,422 | ||||||||||||
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COUPA SOFTWARE INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
| July 31, | January 31, | |||||||
| 2020 | 2020 | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 905,612 | $ | 268,045 | ||||
| Marketable securities |
436,463 | 499,160 | ||||||
| Accounts receivable, net of allowances |
101,120 | 118,508 | ||||||
| Prepaid expenses and other current assets |
26,573 | 31,636 | ||||||
| Deferred commissions, current portion |
12,639 | 11,982 | ||||||
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| Total current assets |
1,482,407 | 929,331 | ||||||
| Property and equipment, net |
23,598 | 18,802 | ||||||
| Deferred commissions, net of current portion |
29,886 | 30,921 | ||||||
| Goodwill |
542,232 | 442,112 | ||||||
| Intangible assets, net |
156,279 | 128,660 | ||||||
| Operating lease right-of-use assets |
31,119 | 32,026 | ||||||
| Other assets |
15,423 | 12,221 | ||||||
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| Total assets |
$ | 2,280,944 | $ | 1,594,073 | ||||
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| Liabilities, Temporary Equity and Stockholders’ Equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 2,107 | $ | 3,517 | ||||
| Accrued expenses and other current liabilities |
72,311 | 54,245 | ||||||
| Deferred revenue, current portion |
244,596 | 257,692 | ||||||
| Current portion of convertible senior notes, net |
595,007 | 187,115 | ||||||
| Operating lease liabilities, current portion |
8,808 | 8,199 | ||||||
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| Total current liabilities |
922,829 | 510,768 | ||||||
| Convertible senior notes, net |
862,523 | 562,612 | ||||||
| Deferred revenue, net of current portion |
4,439 | 4,091 | ||||||
| Operating lease liabilities, net of current portion |
23,980 | 25,490 | ||||||
| Other liabilities |
40,124 | 28,620 | ||||||
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| Total liabilities |
1,853,895 | 1,131,581 | ||||||
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| Temporary equity |
133 | 16,835 | ||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $0.0001 par value per share |
— | — | ||||||
| Common stock, $0.0001 par value per share |
7 | 7 | ||||||
| Additional paid-in capital |
822,197 | 790,468 | ||||||
| Accumulated other comprehensive income |
8,333 | 871 | ||||||
| Accumulated deficit |
(403,621 | ) | (345,689 | ) | ||||
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| Total stockholders’ equity |
426,916 | 445,657 | ||||||
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| Total liabilities, temporary equity and stockholders’ equity |
$ | 2,280,944 | $ | 1,594,073 | ||||
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COUPA SOFTWARE INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Six Months Ended | ||||||||
| July 31, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities |
||||||||
| Net loss |
$ | (57,932 | ) | $ | (40,462 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
22,920 | 11,330 | ||||||
| Accretion of discounts on marketable securities, net |
1,099 | 668 | ||||||
| Amortization of deferred commissions |
6,437 | 4,309 | ||||||
| Amortization of debt discount and issuance costs |
31,357 | 10,998 | ||||||
| Stock-based compensation |
58,040 | 38,113 | ||||||
| Gain on conversion of convertible senior notes |
(3,202 | ) | — | |||||
| Repayments of convertible senior notes attributable to debt discount |
(26,336 | ) | — | |||||
| Other |
3,300 | (95 | ) | |||||
| Changes in operating assets and liabilities net of effects from acquisitions: |
||||||||
| Accounts receivable |
19,583 | 20,450 | ||||||
| Prepaid expenses and other current assets |
7,053 | (7,662 | ) | |||||
| Other assets |
901 | (770 | ) | |||||
| Deferred commissions |
(6,051 | ) | (9,939 | ) | ||||
| Accounts payable |
(1,741 | ) | (4,473 | ) | ||||
| Accrued expenses and other liabilities |
1,289 | (4,061 | ) | |||||
| Deferred revenue |
(17,920 | ) | 1,639 | |||||
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| Net cash provided by operating activities |
38,797 | 20,045 | ||||||
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| Cash flows from investing activities |
||||||||
| Purchases of marketable securities |
(246,586 | ) | (258,991 | ) | ||||
| Maturities of marketable securities |
284,090 | 44,796 | ||||||
| Sale of marketable securities |
25,013 | 199,314 | ||||||
| Acquisitions, net of cash acquired |
(87,338 | ) | (210,468 | ) | ||||
| Purchases of property and equipment |
(7,028 | ) | (6,173 | ) | ||||
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| Net cash used in investing activities |
(31,849 | ) | (231,522 | ) | ||||
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| Cash flows from financing activities |
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| Proceeds from issuance of convertible senior notes, net of issuance costs |
1,355,367 | 786,567 | ||||||
| Purchase of capped calls |
(192,786 | ) | (118,738 | ) | ||||
| Repayments of convertible senior notes |
(549,278 | ) | — | |||||
| Proceeds from the exercise of common stock options |
9,609 | 10,909 | ||||||
| Proceeds from issuance of common stock for employee stock purchase plan |
7,391 | 5,396 | ||||||
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| Net cash provided by financing activities |
630,303 | 684,134 | ||||||
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| Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash |
241 | — | ||||||
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| Net increase in cash, cash equivalents, and restricted cash |
637,492 | 472,657 | ||||||
| Cash, cash equivalents, and restricted cash at beginning of year |
268,280 | 141,319 | ||||||
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| Cash, cash equivalents, and restricted cash at end of period |
$ | 905,772 | $ | 613,976 | ||||
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| Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets |
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| Cash and cash equivalents |
$ | 905,612 | $ | 613,906 | ||||
| Restricted cash included in other assets |
160 | 70 | ||||||
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| Total cash, cash equivalents, and restricted cash |
$ | 905,772 | $ | 613,976 | ||||
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COUPA SOFTWARE INCORPORATED
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended July 31, 2020
(in thousands, except percentages and per share amounts)
(unaudited)
| GAAP | Stock-Based Compensation Expenses |
Amortization of Acquired Intangible Assets |
Change in Fair Value of Contingent Consideration Liability |
Amortization of Debt Discount and Issuance Costs |
Gain on Conversion of Convertible Senior Notes |
Other Expenses (2) |
Non-GAAP | |||||||||||||||||||||||||
| Costs and expenses: |
||||||||||||||||||||||||||||||||
| Costs of subscription |
$ | 33,805 | $ | (2,647 | ) | $ | (7,548 | ) | $ | — | $ | — | $ | — | $ | — | $ | 23,610 | ||||||||||||||
| Costs of professional services and other |
14,634 | (2,952 | ) | (200 | ) | — | — | — | — | 11,482 | ||||||||||||||||||||||
| Gross profit |
61.5 | % | 4.4 | % | 6.2 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 72.1 | % | ||||||||||||||||
| Research and development |
30,212 | (7,316 | ) | — | — | — | — | — | 22,896 | |||||||||||||||||||||||
| Sales and marketing |
50,488 | (9,255 | ) | (2,614 | ) | — | — | — | — | 38,619 | ||||||||||||||||||||||
| General and administrative |
28,705 | (11,673 | ) | — | — | — | — | — | 17,032 | |||||||||||||||||||||||
| Income (loss) from operations |
(31,923 | ) | 33,843 | 10,362 | — | — | — | — | 12,282 | |||||||||||||||||||||||
| Operating margin |
-25.4 | % | 26.9 | % | 8.2 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 9.8 | % | ||||||||||||||||
| Interest expense |
(20,223 | ) | — | — | — | 19,407 | — | — | (816 | ) | ||||||||||||||||||||||
| Interest income and other, net |
4,759 | — | — | — | — | (631 | ) | — | 4,128 | |||||||||||||||||||||||
| Income (loss) before provision for (benefit from) income taxes |
(47,387 | ) | 33,843 | 10,362 | — | 19,407 | (631 | ) | — | 15,594 | ||||||||||||||||||||||
| Provision for (benefit from) income taxes |
(4,271 | ) | 3,444 | (103 | ) | — | 1,109 | — | 182 | 361 | ||||||||||||||||||||||
| Net income (loss) |
(43,116 | ) | 30,399 | 10,465 | — | 18,298 | (631 | ) | (182 | ) | 15,233 | |||||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, basic (1) |
$ | (0.64 | ) | $ | 0.23 | |||||||||||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, diluted (1) |
$ | (0.64 | ) | $ | 0.21 | |||||||||||||||||||||||||||
| (1) | GAAP net loss per share is calculated based upon 67,597 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 67,597 basic and 73,019 diluted weighted-average shares of common stock. The Company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes. |
| (2) | Other expenses consists of the release of valuation allowances against deferred tax assets. |
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COUPA SOFTWARE INCORPORATED
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended July 31, 2019
(in thousands, except percentages and per share amounts)
(unaudited)
| GAAP | Stock-Based Compensation Expenses |
Amortization of Acquired Intangible Assets |
Amortization of Debt Discount and Issuance Costs |
Other Expenses (2) |
Non-GAAP | |||||||||||||||||||
| Costs and expenses: |
||||||||||||||||||||||||
| Costs of subscription |
$ | 22,062 | $ | (1,771 | ) | $ | (4,709 | ) | $ | — | $ | — | $ | 15,582 | ||||||||||
| Costs of professional services and other |
12,428 | (2,023 | ) | — | — | — | 10,405 | |||||||||||||||||
| Gross profit |
63.7 | % | 4.0 | % | 4.9 | % | 0.0 | % | 0.0 | % | 72.7 | % | ||||||||||||
| Research and development |
23,364 | (5,075 | ) | — | — | — | 18,289 | |||||||||||||||||
| Sales and marketing |
39,820 | (6,060 | ) | (1,650 | ) | — | — | 32,110 | ||||||||||||||||
| General and administrative |
20,269 | (6,339 | ) | — | — | — | 13,930 | |||||||||||||||||
| Income (loss) from operations |
(22,804 | ) | 21,268 | 6,359 | — | — | 4,823 | |||||||||||||||||
| Operating margin |
-24.0 | % | 22.4 | % | 6.7 | % | 0.0 | % | 0.0 | % | 5.1 | % | ||||||||||||
| Interest expense |
(8,511 | ) | — | — | 8,038 | — | (473 | ) | ||||||||||||||||
| Interest income and other, net |
1,479 | — | — | — | — | 1,479 | ||||||||||||||||||
| Income (loss) before provision for (benefit from) income taxes |
(29,836 | ) | 21,268 | 6,359 | 8,038 | — | 5,829 | |||||||||||||||||
| Provision for (benefit from) income taxes |
(9,842 | ) | 815 | (123 | ) | — | 9,671 | 521 | ||||||||||||||||
| Net income (loss) |
(19,994 | ) | 20,453 | 6,482 | 8,038 | (9,671 | ) | 5,308 | ||||||||||||||||
| Net income (loss) per share attributable to common stockholders, basic (1) |
$ | (0.32 | ) | $ | 0.09 | |||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, diluted (1) |
$ | (0.32 | ) | $ | 0.07 | |||||||||||||||||||
| (1) | GAAP net loss per share is calculated based upon 62,038 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 62,038 basic and 70,852 diluted weighted-average shares of common stock. The Company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes. |
| (2) | Other expenses consists of the reversal of a valuation allowance against deferred tax assets. |
10
COUPA SOFTWARE INCORPORATED
Reconciliation of GAAP to Non-GAAP Financial Measures
Six Months Ended July 31, 2020
(in thousands, except percentages and per share amounts)
(unaudited)
| GAAP | Stock-Based Compensation Expenses |
Amortization of Acquired Intangible Assets |
Change in Fair Value of Contingent Consideration Liability |
Amortization of Debt Discount and Issuance Costs |
Gain on Conversion of Convertible Senior Notes |
Other Expenses (2) |
Non-GAAP | |||||||||||||||||||||||||
| Costs and expenses: |
||||||||||||||||||||||||||||||||
| Costs of subscription |
$ | 62,807 | $ | (4,805 | ) | $ | (14,158 | ) | $ | — | $ | — | $ | — | $ | — | $ | 43,844 | ||||||||||||||
| Costs of professional services and other |
28,470 | (5,364 | ) | (400 | ) | — | — | — | — | 22,706 | ||||||||||||||||||||||
| Gross profit |
62.8 | % | 4.1 | % | 5.9 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 72.9 | % | ||||||||||||||||
| Research and development |
56,931 | (13,440 | ) | — | — | — | — | — | 43,491 | |||||||||||||||||||||||
| Sales and marketing |
96,627 | (16,768 | ) | (4,670 | ) | — | — | — | — | 75,189 | ||||||||||||||||||||||
| General and administrative |
37,849 | (17,663 | ) | — | 12,500 | — | — | — | 32,686 | |||||||||||||||||||||||
| Income (loss) from operations |
(37,549 | ) | 58,040 | 19,228 | (12,500 | ) | — | — | — | 27,219 | ||||||||||||||||||||||
| Operating margin |
-15.3 | % | 23.7 | % | 7.8 | % | -5.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | 11.1 | % | ||||||||||||||||
| Interest expense |
(32,512 | ) | — | — | — | 31,357 | — | — | (1,155 | ) | ||||||||||||||||||||||
| Interest income and other, net |
8,087 | — | — | — | — | (3,202 | ) | — | 4,885 | |||||||||||||||||||||||
| Income (loss) before provision for (benefit from) income taxes |
(61,974 | ) | 58,040 | 19,228 | (12,500 | ) | 31,357 | (3,202 | ) | — | 30,949 | |||||||||||||||||||||
| Provision for (benefit from) income taxes |
(4,042 | ) | 4,031 | (152 | ) | — | 1,109 | — | 310 | 1,256 | ||||||||||||||||||||||
| Net income (loss) |
(57,932 | ) | 54,009 | 19,380 | (12,500 | ) | 30,248 | (3,202 | ) | (310 | ) | 29,693 | ||||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, basic (1) |
$ | (0.87 | ) | $ | 0.45 | |||||||||||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, diluted (1) |
$ | (0.87 | ) | $ | 0.41 | |||||||||||||||||||||||||||
| (1) | GAAP net loss per share is calculated based upon 66,545 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 66,545 basic and 71,603 diluted weighted-average shares of common stock. The Company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes. |
| (2) | Other expenses consists of the release of valuation allowances against deferred tax assets. |
11
COUPA SOFTWARE INCORPORATED
Reconciliation of GAAP to Non-GAAP Financial Measures
Six Months Ended July 31, 2019
(in thousands, except percentages and per share amounts)
(unaudited)
| GAAP | Stock-Based Compensation Expenses |
Amortization of Acquired Intangible Assets |
Amortization of Debt Discount and Issuance Costs |
Other Expenses (2) |
Non-GAAP | |||||||||||||||||||
| Costs and expenses: |
||||||||||||||||||||||||
| Costs of subscription |
$ | 39,465 | $ | (3,159 | ) | $ | (6,881 | ) | $ | — | $ | — | $ | 29,425 | ||||||||||
| Costs of professional services and other |
22,354 | (3,468 | ) | — | — | — | 18,886 | |||||||||||||||||
| Gross profit |
65.0 | % | 3.8 | % | 3.9 | % | 0.0 | % | 0.0 | % | 72.6 | % | ||||||||||||
| Research and development |
44,378 | (9,123 | ) | — | — | — | 35,255 | |||||||||||||||||
| Sales and marketing |
73,430 | (10,899 | ) | (2,656 | ) | — | — | 59,875 | ||||||||||||||||
| General and administrative |
37,467 | (11,464 | ) | — | — | — | 26,003 | |||||||||||||||||
| Income (loss) from operations |
(40,611 | ) | 38,113 | 9,537 | — | — | 7,039 | |||||||||||||||||
| Operating margin |
-23.0 | % | 21.6 | % | 5.4 | % | 0.0 | % | 0.0 | % | 4.0 | % | ||||||||||||
| Interest expense |
(11,686 | ) | — | — | 10,998 | — | (688 | ) | ||||||||||||||||
| Interest income and other, net |
2,403 | — | — | — | — | 2,403 | ||||||||||||||||||
| Income (loss) before provision for (benefit from) income taxes |
(49,894 | ) | 38,113 | 9,537 | 10,998 | — | 8,754 | |||||||||||||||||
| Provision for (benefit from) income taxes |
(9,432 | ) | 1,308 | (246 | ) | — | 9,671 | 1,301 | ||||||||||||||||
| Net income (loss) |
(40,462 | ) | 36,805 | 9,783 | 10,998 | (9,671 | ) | 7,453 | ||||||||||||||||
| Net income (loss) per share attributable to common stockholders, basic (1) |
$ | (0.66) | $ | 0.12 | ||||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, diluted (1) |
$ | (0.66) | $ | 0.11 | ||||||||||||||||||||
| (1) | GAAP net loss per share is calculated based upon 61,422 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 61,422 basic and 69,563 diluted weighted-average shares of common stock. The Company uses the treasury stock method to calculate the non-GAAP diluted shares related to the convertible notes which reflects any anti-dilutive impact of the capped call transactions entered into in connection with the convertible notes. |
| (2) | Other expenses consists of the release of a valuation allowance against deferred tax assets. |
12
COUPA SOFTWARE INCORPORATED
Reconciliation of GAAP Cash Flows from Operations to Adjusted Free Cash Flows
(A Non-GAAP Financial Measure)
(in thousands)
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net cash provided by operating activities |
$ | 23,389 | $ | 1,252 | $ | 38,797 | $ | 20,045 | ||||||||
| Less: purchases of property and equipment |
(3,429 | ) | (3,519 | ) | (7,028 | ) | (6,173 | ) | ||||||||
| Add: repayments of convertible senior notes attributable to debt discount |
15,732 | — | 26,336 | — | ||||||||||||
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| Adjusted free cash flows |
$ | 35,692 | $ | (2,267 | ) | $ | 58,105 | $ | 13,872 | |||||||
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