COUP - Earnings call transcript Q3 2018

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Operator

Please stand by, we are about to begin. Good day, everyone. And welcome to the Coupa Software Third Quarter Fiscal 2018 Earnings Call. Today’s call is being recorded. At this time, I would like to turn the conference over to Mr. Hutchinson. Ryan sir. ahead, go Please

Ryan Hutchinson

you. Good fiscal Coupa’s quarter welcome afternoon. conference call. And XXXX to third Thank

Joining are Coupa’s CFO. me Todd and today Rob Bernshteyn, CEO; Coupa’s Ford,

remarks competitive position and potential growth about strategies Our plans, and forward-looking of and products, results operations, guidance size, market opportunities. include today future statements

actual Our may materially be results different.

information If disclaim XX-Q. information. statements. update you and and if replayed are statements today’s GAAP today, based call our beliefs be risks, forward-looking A Forward-looking access are in call this of forward-looking prefer replay statements can after on release. phone, uncertainties involve in to our These the to A and find the against that, our this the website. described via today, contain year. both same any GAAP and included release, measures. period the available Investor is over Rob. not may reconciliation you current information link Unless be find comparisons growth I’ll we assumptions Relations is to of and you the replay to are that With presenting any We’ll presented will to also non-GAAP which that financial otherwise prior the assumptions most of stated, call or non-GAAP obligation recently filed accurate the can in on turn also earnings

Rob Bernshteyn

by today’s community. Thank today. all you start like call the thanking everyone. members Hello, for us our joining of to of Coupa I’d

to and for our to for support. unleashing you but our core continued investments in is our the we their Thank are And you success, commitment success. you Coupa values, pledge employees to vital to friends to our least real commitment now continually for you our and strive sharing than have analysts value partners, customer on the continued three ever more colleagues our and remain our thank thank customers excellence. to to ensure Thank not shareholders their unwavering for Coupa as focus and to my they First, results great for last XXX world vision. strategic around strong organization. which been industry

The customer for just desire focusing any our success, challenges customers, but or measurable customer for customer ensuring tangible on satisfaction first ensuring success, all face. may that not is results overcoming we

are time The and human second fear and where and working is and and are environment focusing And measurable, improving without to feeling an passionate collaborative, making colleagues integrity striving relevant bound to achieve learning relentlessly results, life specific boundaries, for excellence, attainable, as high on living setting safe, thirdly, committing and they professionals them. authentic, our all goals mistakes, beings. pushing

letters at annual our the I time are Lastly, we see five up the developing explain ecosystem build continuing in can our of headquarters, global and that The event. capabilities global The drive a share scaling with our C-O-U-P-A. simply our winning customer attacking of fundamental broken our value to wallet vision very team market make on along are our partner healthy proposition, around we market camaraderie, and with and maintaining to our the out management and laid thoughtfully. are greater dinner innovations San opportunity capacity, ago. the and Coupa full the success-oriented a to we final enterprise Cultivating generation, In five differentiated is just business, to we execute be year approach company. Coupa. add-on huge key we the market culture, Board assets a into and and offering Board discipline doing strategy to so in and meeting member broaden and expanding expanding of inspired strategic the customer and go-to-market growth down a brand was awareness at name, dialogue had IPO further launching over acquiring components, year toward demand midmarket Mateo continuing it special commitment

or vision these User feature The integration Prescriptive we is we more website intent Coupa I those up one on and that areas. With be of Centric, areas. we can Comprehensive, blog last investment with forth, every on make, is bolster acquisition call new finished the found our Accelerated. series, are develop, interested. mentioned Our recently built I a blog set we Open, offering for to quarter’s in vision our these and

competitive Last Now landing key let’s at Spend reached Management. data offering amazing really the related can figure our also does the suppressing and run have Spend the meaningful Management. and track our $XXX help that you sum Intelligence at smarter our data talk consider of of about barriers Under through billion progress, gets Under With non-financial to new grow entry. pace, $XXX with This at Cumulative we It’s some customers. track, our billion QX. element an to continues as use milestones end we that value transactional for Community spend each created colossal we fast of platform, I our thing. information the quarter to we measure has one in

we free both financial revenues that QX. of quarterly say of to XX, the of did in $XX flows in positive and across that, proud million, that $XX.X results delivered with operating free we million $XXX QX. and Earlier QX, generated cash let’s a Year-to-date flows say in we record free and positive I million. cash million flows this results QX at have flows So million. XXXX. I positive am the take we have quarter and for to $XX.X we look again again of as operating cash operating of positive strong flows ending and year so including drove $X.X key of delighted Board, some cash positive am million cash with $X.X cash October

highlight natural engines, diesel gas the industrial months the kicking earlier me quarter, diesel live and year. who after gone live the we turbines world’s with already at in their has let just first leading electric Coupa and equipment, construction off location this of Caterpillar, us While gas took and locomotives, with manufacturer project customers mining many

insurer Now, wins of in plenty of automotive Toyota services, services, financial as exciting as course, well, and to selected of unified Toyota based and provider usability incumbent that Coupa primarily financial leveraging customer Coupa’s we of Insurance, process, financial source-to-pay leading solution, their as global contract platform and management and these replacing and power innovation. local serve a products markets streamline QX an have multiline and management, to source-to-pay on product core offering Zürich in customers expense Coupa course, leading synergy. new source-to-pay a suite of well customers employee adoption, the dealers selected lifecycle

added Group, in we include CHEP Host many quarter the Asia-Pacific, Some Analytics, during retailer of P.F. the others. USA, Razer Chang, SoftServe, CrossCountry, largest TeamHealth, Dansk the Moovel, CrossFit, Edge, customers in Denmark Auction Supermarked Bristol other Hospice, and

finish energy we included excited Conference, Annual with The Inspire world’s Accenture, are featured Coupa, simply some look for Spend thus and a customers left and to Maersk, My We the Coupa all of IKEA, debate year. the with ‘XX Airbus, partners flowed these of Management what alignment atmosphere discussion and to has I In colleagues both year in Deloitte, invigorating. very innovation from Coupa with and sense hosted and partner was London as others. next a leading partners. London. our successful new The and around and we far European which Inspire been brands, of October, customers event conference Pearson value-based and renewed prepare speakers

and buy] access In year Amazon Coupa [to customer, Overall, the on Coupa last be and to Management just is of giving now will of week quickly [ph]. marketplace. we addition to guide game believe Business discover Also next Marketplace with customers agenda Buy subscribe of Spend Next announced Inspire AWS the can where options the solutions. Business. and the we partner in Release supplier which be expand Francisco San this that the a Open we a are customer to set Intelligence. suppliers we Amazon Release to to London connected buying At strategic agenda for and Coupa. planned. want to also far valued thus XX in key risk enhances the has on Coupa management Coupa prescriptive offering compliance spending user XX currently Advantage announced to changer of announced availability general with Today our our October audit Coupa Inspire customers relationship general XX. continue we includes increased excited further catalog Amazon, and expands XXXX, being to to dollars new This unified the We management for optimization. I the QX moment is sourcing by RXX through slated employees availability are large are to small outstanding. management, industry. and business Reception the customers platform. discounts, and negotiated advancements evidence recommendations of is Community been Other platform by Coupa that take RXX in continues streamlined spend innovation which Coupa capabilities, the platform through enhanced the the more Coupa with to program. of our for than modernizes transactional from Coupa redefines touch offers simply for experience running and supplier leveraging our a invoice which Advantage identified capabilities. the with Coupa billions RXX platform

Advantage New recognizing additional savings right customers’ start free right for hard dollar up charge bat. and the away, of sign off

well towards and over portion generated sustainability, from the have causes employees a inspiring blogged that civic responsibility donated the proceeds around diversity areas, as and year under hours Coupa main which is advantage around a as three funding principle focused on our volunteer core is Now of corporate cares the world. X,XXX engagement, program, we world, not-for-profit are

when out we time our invest Moving the carefully acquisitions continue on, our in potential of development heavily evaluate modern and right laid platform as cloud opportunities organic on to we at themselves. IPO, present the

Deep our in helping Intelligence individual customers of analytics The application with suspicious our be Our we fraud Bay we our In to our and into in based transactions. identify and of Deep key Relevance Deep decades. vision latest continues relationship here engine. to have over through we strategy our uses proud and platform a to to Artificial user and reduce successfully technology accelerate San other acquisitions of power upon then aimed our transactional can key Intelligence. the this are the October employee collusive strategy unified enhance that Francisco technology executed announce the adding Community past Area. allowed Relevance series Consistent that integrate acquisition fraud Relevance components addition

conflict of expanding Officer integrity, fraudulent bring Community around Some very maximizing Customer here XX at technology what announce -- I a Intelligence our the help duplicate Mark customers. personal to cloud claims, spending. experience our business Riggs and brings record will value with teams this Mark across of as areas and bidding will deployment our over Coupa. Chief track it excited platform customers and the to with detection small. unified interest, expense us the and inflated this Coupa building am expenses organizations mode expenses. customer-facing was are continue for consistent I of technology of and Recently of fraud to of our Mark value pleased includes is lifetime we invoices, of creating about of scaling for new large years

are very to Board. have on We Mark excited

are Coupa many will New the form team the accomplishments, team, management with there at of MarketSite to which you as is and see I new our us for next the Day many In of go-forward Analyst first-ever meet York you -- perfect Day, our to to business be community seeing the and to December fact we review most investment an week. take to of Monday, will our our importantly, very next plan in Mark opportunity the our In rest some strategy give look at better Financial Cooper’s level. next members forward we of City. Analyst and held pleased we understand XXth performance. NASDAQ QX management summary, team

fiscal very in XX business in laser continue upon we year execute. market position we QX on a the out we and perspective. finishing are have as strong the goals successful To-date We consecutive strong. together row put in a both focused the us, With quarters financial are to from

the in and our detail over year. fiscal our who Todd? me for financials outlook call review full QX Let to turn now will Todd QX provide and

Todd Ford

once were year-over-year, million. and Total Thanks, and results execute for the quarter for delivered quarter. good The to third strong Rob, afternoon, everyone. $XX.X continues XX% company revenues the again

of revenue XX% For up year-over-year $XX.X revenue. total was QX comprised subscription million, and XX%

XX%. Total in operating million, $XX compared rate growth million from end up in XX% months previous XXXX the QX the of non-GAAP year. of billings the year-over-year, $X.X ago Total XX for at revenue was $XX.X calculated were which or was up negative X% end period. deferred $XXX.X negative loss trailing slightly trailing up X% was at revenue XX ended million our Our from of billings to October months XX, million, the quarter year

change reminder, As recognized deferred a define for the in revenue on calculated was sheet as a period revenue period. we billing the during the balance

Our seasonality, annual of timing often due deferred revenue of fluctuate contracted billings. results calculated on billings to and basis and quarterly timing a renewals

Let’s to results expenses operations. turn operating of now and

Our XX.X% the margin in year. third same last XX.X%, quarter gross compared non-GAAP to was period

on of QX million million results were $X.X to continued expenses and net line Operating professional non-GAAP and the share services negative average was to net per organizations, Although, $X.XX XX% expectation professional in weighted Non-GAAP loss with negative have services from gross of our invest our we and shares. margin loss in was non-GAAP with a gross margin from our continue margin XX.X performance show a support other and X%. subscriptions gross we of and improvement.

loss in in net stock and calculation. stock that per are position, anti-dilutive loss included Given are options equivalents all and outstanding not share we the a common

$XX.X were cash and on our Now third positive basis, and marks the QX. from move Cash million the trailing positive Cash year-to-date. third in cash million quarter the time free flows was at $XXX end quarter let’s expectations. $XXX on flow a been $X.X to million, from the million quarter Free that and has year-to-date. end flow $X.X also up for the original balance at of QX cash million positive was XX-month first $XX flows. exceeding operations sheet million

year. business, our last to cash That of QX. said, in negative flows we we QX free be Given current and positive for expect year, to fiscal in the operating expecting to similar are seasonality flows be cash the

flow we flow As impact cash operating plus define as of for cash cash acquisitions. paid the a cash reminder, any flow investing free minus

$XX.X $XX.X guidance, and revenues and and services $X.X for expect million. turn million. quarter $XX.X approximately of revenues million includes revenues between to million let’s total between expected $XX.X to subscription million fourth This Now we the be of professional

We are XX% be between expecting to QX non-GAAP margins gross XX%. and

to $X.X from non-GAAP operations million expect be loss $X We between million. and

non-GAAP negative estimated quarter. net upon share of per the weighted negative in share per $X.XX shares million share expect We to based range XX.X $X.XX loss an per average the for

For margins the QX of high-end million year January XX%. non-GAAP given revenues coming in $XXX.X we ending near the $XXX full XXXX, to the expect with be of total to gross and range for XX, between million, XX%

million estimated We per $X.XX from and in to the operations upon to we $X.XX year. expect non-GAAP million net for loss between million, $XX $XX.X expect non-GAAP be and an weighted average share loss XX shares of the range full based

provide you few our like next regarding begin but QX next models call, to you your to of year roll I’d will guidance a FYXX on forward. things remind We as

QX. subscription the QX number quarter. the we three the our First, to days February, be revenue recognize to has in compared on based lower steady-state days Since fewer in of QX in X% as revenues due approximately quarter will

of will effect. recognition year, QX the in take next Secondly, revenue new

revenue We our corresponding expect finalized remains calculated conclude, will and need however, deferred same. yet our QX impact eliminated to our some will To have a on the have revenue which be not strategy we analysis, billings.

with We for are growth opportunity maximize and the investing financial to disciplined a strategy results. market long-term,

Now we to questions. take would happy your Operator? be

Operator

Instructions] with [Operator come your Zlotsky will Stanley. from you. Stan Thank Morgan question And first

Stan Zlotsky

just and question. my to sounds And couple certainly off, there seen last various and there partnership. over what you has the Good of opportunity and what do that a for of Amazon customer walk certainly look this from there a start guys we’ve partnership? -- partnership, the you it the kind months as lot more profile kind through, guys. what’s the webinars maybe us afternoon you for much see Amazon have then marketing that is been you around been taking thank the so Hey, the just of movement Maybe see of lot advertising, there target like

Rob Bernshteyn

like take I earnings regarding business comments, new and the and to formally shared is the we Thanks, call nothing in same sure very Stan. our them reported really we thinks advantage much the that what Amazon good Well, what we part would of When partnership. to as we are opportunities there of see beyond report way. opening

we a relationship a described. I partner on We ways a an to of with advantage company opportunity great that together. we for a ones are the a market vertical different host whole as just every customers and of the of about customer, found in every synergies supplier across take Amazon We size as the some have of to bringing initiatives and see host like

Stan Zlotsky

impact broader just -- puts you revenue the the what maybe it cause are will recognized? Todd, what maybe with are headwind and And you far I ASC for guessing ‘XX. just and what it. am as, Got XXX still there to Can much as from as QX to one the and fiscal takes evaluating, also being

Todd Ford

I’d say bank prior when to different we that have been under go the services next professional year method. beginning adopt lives due with XXX to respect impacted may BEST,

be impact will just you think small of it gets overall if a going close a frankly, eliminated. won’t at but that quite look revenue it amount out earnings and but on want from QX no to the million call is perspective surprises be we there so what is that the So it until least will at We call. few be to is it there we we dollars know next QX,

Stan Zlotsky

pro that that -- right? And that you of line, on pressure of you services -- expect most most place take

Todd Ford

under revenue, Yeah. revenue It we some that eliminate different a things have calculated will on. subscription were that to be methods also allocation

Stan Zlotsky

Understood. it. Got

Thank Okay. much. very you

Todd Ford

Thanks, Stan.

Operator

Mark JP Morgan, From Murphy.

Mark Murphy

very you QX. congrats and in on the much execution Thank Yes.

that in on to any in? bringing management potentially volume are with you And Intelligence Any impressive So, Community spend swayed Rob, you’ll of been organizations? look table commentary the by data and those percent of layering were Dansk Zürich under the newer AI the also what terms wins are of the have capabilities that very you of the or they with have scale. or

Rob Bernshteyn

Sure. Thanks for that question.

goals. opportunity amount I things round for and very amount cases are with and Spend goals customer. as Spend often value to our One getting that do are of customers maybe Management is customers like unique of whatever at certain of Management some to those every non-financial very not and of Under one investments, of optimize capturing going think key confidential continue one propositions exploration our organization, value identifying delivering at Management Spend grow have for end for quite it’s We the value to targets, because faster it, optimizing is the and if certain special set and and are them, Under to as every this value are faster. the clear it. you the seen we greater have And faster we you of into and day our an use look they that don’t Under with the you that around savings measurable numbers measure of specific market Very in the then

there delivered. So clearly value acceleration with there’s being it’s an and correlated

Mark Murphy

a Deep size number of to then, run any for acquisition, the Relevance in scale or the you, and Todd, of question of that bookings And or employees anything organization? the Okay. us terms do of would approximate rate, customers, help just metrics you number revenue, the have

Todd Ford

Apple groups. Mark. would classify strategy Thanks, we’ve It’s consistent an other This the, I hire with done. of Yeah. more smaller one our M&A

standpoint. be would that nothing customer the would call from I revenue So out

Mark Murphy

we billings $X.X just and rec? for change million $X in as services have well, do and on I QX, a like then back for million Todd roughly in round relating going rev think, numbers QX of still something are for, professional the the track And benefit Okay. to you

Todd Ford

you particular revenue to billing We seeing that were was are in the services professional QX definitely if year-over-year headwind look the down X%. at subside, --

we did pronounced turn positive you’ll while I see wasn’t I So originally it QX. that faster but QX slight anticipated, see as would a impact in as in have think

Mark Murphy

Thanks.

Rob Bernshteyn

to the Zurich you your want of second I understood, Insurance, want -- I don’t part is This trying try I because that, I Rob. think hear to I to was sure answer I I second make well. Hey, try question answer couldn’t said addressed you Mark. the

In deliver terms Coupa Community which others, proposition of Zurich the Intelligence we P customers, which customers like the Prescriptive in is method the to right. by our and stands value capabilities to the for

hundreds We of taken already Inspire our which and Insights supplier billion advantage are over customers Intelligence like. we many running risk as of as spending benchmarks the see Risk latest our on of question the of Prescriptive our vision about operational event. product to many that around across able course be the of across value last with at the Without dollars information as focused well and of them year to that Aware company, which Fit Perfect recognize made and Community are available generally the them release such

essentially this an platform. doubt for one area in of data, billions interest a and the customers the of to that huge given the be on spend without us to unified hundreds tracking our cloud continues one build of that prospective for So dollar data is high we are barriers continues marketplace

Mark Murphy

Thank you.

Operator

question Raimo come Next Barclays. Lenschow will with from

Raimo Lenschow

be questions. more Thanks success would my progress? there moment? - on for partner with assume with one quarter taking because you Can like to of and evolution for Rob the -- Caterpillar kind the I talk first way happy you around are about How now lot big before. you their and wins Zurich had your with of what’s work Hey. AR Unilever and is going ecosystem at there, Rev you the can you the your And coming

Rob Bernshteyn

beginning should complete. not real a Coupa as notes of that’s build Well, we their significant going systems continuing are key they optimizing every with to and All them Coupa integrators spend leveraging such as with engages their the clients we are happy primary where to goal we around system there. our targets. But doubt progress say are make is will consider practices be able revenue partner until to biggest and be to platform without tell the integrators

the world that Coupa adopter continuing many lies market phases implement early are stage $XX around continuing the early are well we to this of progress are make market past we certify type the of continuing in think to We share. times and equipped stage hundreds that the the customers of very early to you moving the of consultants take we majority heart as to we billion know to where we are shared and is the believe as

Raimo Lenschow

Perfect. had next And how be like Caterpillar that? that account of do then for on is of you installation mentioned like can is parts guys huge are rollout think big to one Caterpillar, going a like to is already how level, think the about it terms you like how on, I Coupa do you a of that and unit we -- in the live, about looks business like in take it through us it level, we timing, have regional on

Rob Bernshteyn

the bottleneck. the want said be us. we and is indicators think adopt internally never recognize we that adoption to customer never internally we Like willing you is way it. think be some as it to give how way to to fast obstacle the about leading We we about the will to The want we as

often for or change Coupa asking have do you around constraints. although we do programs or run that sitting transformation this management Now Coupa and the very what initiatives can around deployment, are sales tumor technical we in

They business geography share The they adopt? indicator that They an go key Management. leading want may of have by the agility to in adopt measure is But concert of value in much the division. desire. quickly adoption them metric to category. product A one customers category They may process is agility to So that of we by deployed. process. in customer non-financial the continue system and geography. work they allow go by which that we with to then possible the may we business the may integrators to course How and as is product way go Under Spend get as by division course get Coupa. They to We Accelerated provide

Raimo Lenschow

Yeah.

you you that give and what’s some in U.S. of is impacted well the same subscription solutions -- for case mentioned QX small Todd, or mentioned question And a have how then Okay. well. you XXX kind guys? hence vendors have change Is recognition. as that some you that for And and Todd, the headwinds can anything last you side some parts have earlier as on on primary other in of -- one for as revenue subscription driving business you be the

Todd Ford

a whole between Yeah. process scheme solutions have -- as the a where have times revenue much and it long-term material in thing allocations made you company There different based very that professional revenue. it’s from is are minimal are very, of BEST upon more noted XXX. impact certainly a subscription and services

example, giving subscription and free for way that reallocate it’s to for you implementation, professional of is a For have revenue. services some big a

able to the so new will know how So while be rules those recognize a corner it’s the under revenue, be eliminated. deferred a very much case achieve to completely we to situations that would like that they

those cases revenue exist So it’s few the no that -- longer recognize going forward. that of be would

Raimo Lenschow

Okay. that. Make for Thanks sense.

Okay.

Operator

Joel BTIG, Fishbein. From

Joel Fishbein

just is you well doing to how fantastic ramp sales metrics? your your productivity as sprint. how My are and sales a on congrats for to hear you, also ramping Rob on love

Rob Bernshteyn

that Sure. you you. for Thank question. Thank

are think we scale reps utilize when overall sales to discretionary of about So carefully. we marketing managing obviously our this looking and out consistently expense the our business, and effectively and and build our at marketing continue

asking that aspects we we are training systems product metrics, go many a creating from training but course reps how ground pipeline continue regional of collateral, think, our developing of about, we for lot of are Raimo develop would elements, driving. this the a sales program pull, talent is are I marketing business. brand, we perspective, was the our coverage talent course, the and how the into are integrator discretionary our there how aligning is, So on the One maturity marketing that

negatives we the about three we opportunity, against team expenditures the our balancing the ground to to maximize the putting are in pillars continue that putting the better on in and better of all all the So those, business. are feel place and we

business and the area it. we continued focus a for absolutely of continue So to mature investment and

Joel Fishbein

you. Thank Great.

Operator

Next with we Ross from Markets. MacMillan will Capital RBC hear

Ross MacMillan

of so your I Rob, I at as congrats also much the and One at actually that the year well. all, Management number. discloses look and Management my last in I $XXX that’s for Spend first larger billion, big Thanks that’s look incremental the Under up Under think, when network metric, competitor much when business Spend than your incremental

smaller, kind that that on diversified or perspective number the to you’re just So curious of your to evolving? we point? core that’s number you how time in of is curious is XX% is you’re about Thanks. how know that And sense think was to becoming, at rate, procure-to-pay, just I much get as a I faster so of growing I success the guess, your procure-to-pay how IPO are for but the I getting

Rob Bernshteyn

for thanks it quarter-over-quarter, think, absolutely to the I the we looking question. to continues It look capability and diversify. at to continues When back our comments those quarters, as mix as far customers subscribing XX Ross are broaden.

are with So richer year. a continues of to a not buying, product, value get they customize and border subscriptions buying they come with we release buying that as our buying are as whatever really the well module, value the three offering times not will out are is that we they are value service

We how effectively. to implement more the are solution also learning

in We Accelerated are it, I mentioned, as doing way.

we of So pace. why continues all grow such to those -- they at part capabilities a Management number of that I Spend Under think are are fast developing are

Ross MacMillan

big Analyst how to -- are keep the for Day? other the or possible pieces mix should talk we those to non-procurement try better within it yet Is

Rob Bernshteyn

we so Yeah. give into to will on I you to that share color was just look that. our of suggest information pace, go at some some forward more going to planning

Ross MacMillan

given wondered just maybe those have one I you Todd, base to the on, numbers follow-up TTM net us dollar retention if just Historically, rate. you for gross then. And Great.

Todd Ford

remained the quarters, past They last Yeah. for three so virtually trending flat for new same the exactly It’s the basically there. three quarters. no updates real

Ross MacMillan

Thanks so congratulations. and much

Rob Bernshteyn

Ross. Thanks,

Operator

Raymond From James, Peterson. Brian

Brian Peterson

the congrats and guys. Thanks Hi. on quarter

with a in billion that a you data have this strategy really am that’s about customers think $XXX going of that if more level that thinking how just point? guys are opportunity into clearly at evolve or think curious about So maybe you would growth where the spend, you front monetization be perspective, that new I opportunity we high the in acquiring you, actually to about to going a

Rob Bernshteyn

early question. I sharing ultimately the question. this It’s great was in Look a

these value We a are offering as customers service.

Community the at use and we particular more the fairly. for we need the paid to with or and that we intelligence the and the cases and we are them valuable a have value many offer Intelligence customer incremental more fairly so hope which more of that that the particular going we given to to being be being paid business decision, develop So to elevate make anticipate is more point we data the for user

the they the So as ways we a well have side as able anyone that there’s market, for part more significant question through but aggregation and subscription, will and Coupa term. look we else building more for the created marketplace, customer and leverage and the to great that importantly, no Community most as longer this near-term a entering we entry network are that Intelligence, of barrier think for the bring effect to value of drive to out for of the capabilities drive different Advantage these created we deal buy in we value are

Brian Peterson

you a the maybe Thanks gross bit quick, one Rob. for there? you XX% Thanks guidance, And it. Any parts to guys. moving on Todd, XX%, highlight margin it’s want to Got just little the real down sequentially.

Todd Ford

so I and call margin, Just nothing groups have guide. that areas significant and payments professional services all continued QX may would then organization and in the support out associated contribution different that investments a of bonuses and with

Rob Bernshteyn

Operator, next question.

Operator

with JMP come Walravens That from Securities. will Pat

Pat Walravens

Great. really to moving Oh! big all starting SAP wondering guess, the push I cloud. the picture that in created as workday Oracle to and Rob, I’m and are -- congratulations Does as financials you you tailwind? guys. Thank

Rob Bernshteyn

competition look, many with although, Well, players, here a we as large and working this ourselves. The daily of think customers, earnings times as real. always on market, is I someone have said ultimately calls prospects witnessed I is in plenty the opportunity the only very there size be a is the, and basis

provider We any system just very out are seamlessly are a financial Spend a Management about provider that application not ERP we ERP there. work that’s

sales we manage how three and we all market thoughtful you and this flow very margins cash we to think operating know markets. into efficiency have are and long-term how market so So and our pillars, scaling about growth, first our build being are revenue our opportunity big as we we

So for the any there consider, management just to for that We very the work but that that we going they more are solutions about folks and you be seamlessly us companies know signing more of are with and to options sign thoughtful and ones name. can cloud-based stage the continue we that. of there future are becoming many of on with up majority early modern for

Pat Walravens

going learning is what out, what now, to that do do journey, but up -- we on or like machine of Okay. can’t to able you to sort years years And be two your XX this vision, end years three would not from where are you AI what today?

Todd Ford

goes area worth the and is is best Look about of vision others way that in I AI AI simply… our deeper one talking no that think is the

Pat Walravens

Yeah.

Todd Ford

can that the the the with interface some machine they and value. of have where machine sort the can areas handle should human the do If strongly processing decisions themselves to being make work in

places where to that ways interaction value. on we there streamline where data our say would going through a around all analysis -- overall drive that. can our as biggest machine of are of comes spend in lower do of spend need through the we lot data. to areas that need capabilities. system I So to surface. within you a savings, for can end-user of the we Intelligence tasks doing host repeated proactive as are and InvoiceSmash that be with we one to will give consistently want to permutations examples, the The of drive we The will capabilities remove give or And to machine process understanding is is two categories I machine lot opportunities in whole up that for opportunities somewhere learning, one thinking can focus deep of you a clearly on for are capabilities through sort learning off-site about entry them opportunity for Community you focused a example remove cost data so automated to and learning of

So transactional what and their of billions daily, from around hundred the data and inside are the help smarter spend each leveraging world a smarter information gets happening for the that’s of way without and millions spend of value we doubt. sanitized build organizations that’s dollars drive customer about applying transactions, are money and

Pat Walravens

you. Awesome. Thank

Operator

From Northland Capital Robert Markets, Breza.

Robert Breza

think had for business the maybe margins, headcount, employees picture now, in. America, big specifically a as Thanks. fitting a me about from I side some you the perspectives? how mentioned think international going model you Rob want forward from XXX you the question, Thanks thinking do devising just Hi. employee go-forward the insight the investments you about to get you versus with you how on headcount really are North customers that about just

Rob Bernshteyn

Sure.

cross and obviously every investments function our annually. business those in business we manage So the

we band -- manage marketing also From investment quarterly. to we the We marketing and have and of staying within efficiency. the perspective business sales manage committed tight sales

have band for quarters. XX within that stayed now We

our of accounts shorter-term might business, our pays that in efficient the beginning longer markets that areas, are international the we and where of In term, some we we we So get some be for payoff invest less be, penetration broader good have may some in as we to base continue to to-date. -- investments our of midmarket feel accordingly. but areas the good are efficient example we that will deeper where some build recurring revenue federal perhaps overly of our our

how think So that that’s about line. we

through drive consultants of the where of us down but we not the always build and not people about and idle can bring having platform well, just of down systems about the we to basis can make want as down and at not going to missed that integrators talent push quarterly going to value always cost need The that’s look support how such the we want too our exactly of we opportunity how we of goods of help the longer-term. then we develop platform customers on we need for ecosystem type we we not looking type only the that and and moving given look annual cost, to on infrastructure need go we too And to sold of our to sure knowing places contribute, to -- the sit looking least, the this As bear we money carefully I oversight this we to breath to out cannot our and team assured on we and say carefully relates how and we and fast as thinking are internationally, out services be about slow rest they all good customers. manage that areas proud result we operating as kind maintain has am that to been of thoughtful support been think level move Dublin way I look the and how to we that at margins And the that have spent. since to-date think as at capability more Amazon, at created think we have we be date there the with the Rhino carefully the -- manage last I number recurring like a to resources we -- money internal we to have development not in more in but conservative our certainly services quarters those thrifty for bring thinking Pune. the talk our and revenue plan about and to continue it come. burned money amount much more be to of than of We inception. ways

Robert Breza

Sounds very great. you Thank much.

Operator

Foresi. Fitzgerald, Cantor From Joseph

Mike Reid

maybe the international for demand I Europe This this Hi, question. guys. taking a appreciate there outlook our question, in more performance had period? if outside just is big detail of wins I you Joe. on Reid Mike any was on

Rob Bernshteyn

the some there’s I would that on. focus be showcase elevated of to attention that to said this internationally your time happening certain would that capital we want to now look wouldn’t of can back off. way built very pipeline worthy that something be nothing say nearly bets we we revenue an we certain moment. some we of Europe our attractions we in and We When XX% earnings at supports marquee that build began believe current call closures base. the which to earning good call for to carefully markets there marquee we say have Having building and good is taking big would transcript are and play material of I accounts, country seen the and or them a around off similar the key making referenceable world. by lending other very the each in that strategy markets we highly

Mike Reid

All and on specifically more coming up new are capabilities there right. soon? to any are out there And Thanks. that want then call any RXX, you releases

Rob Bernshteyn

Sure.

modules. releases that releases, gives channel year through in the and Inspire whole We communicate year. our at such three It as prospects with a webinars times details customer a committed host continuing our And release to and community. of on hundred our more customers XX. would on than committee highest of we dimensions capabilities, our level The which -- also voted future three those per share One latest RXX have event. of We obviously from we online they go distill our say the capabilities hit I deeper those our new in has XX across is key different feature strategy. three which

innovative that we will but also continued never those there a of in done thirdly is to And demonstrations you through show functional are area. develop time at coming of been before our and go and market of and wish application in something enhance with Analyst have everything to set. seeing you that Community Day many done broadly our and Intelligence each to much breadth but cover second certainly more I that’s the go The module deeper. had I that we share to wider

Mike Reid

Great. Thanks guys.

Operator

to with First Wang Analysis. [Operator We’ll Instructions] go Ken

Ken Wang

strong Great. and question Thanks for the on congratulations my taking quarter.

see Just might can you suite currently? you the on functionality wondering potential commentary gaps any Coupa just where in if offer

Rob Bernshteyn

importantly ‘XX, my driven by concept many software process is back it much you usable to more wasn’t more were mind a tell actually have capabilities matter and the and get there that selection value, how gap to whether the that trying largely the to something more driven we think or when value your and how features capabilities about discovered late But what have amount is features show to customer is, not it how likely later were, a I be were those would feature-based that to I chosen. drivers of is was by they features tied and go that customers very was you you deep Well, you in get. decade way the the the you the of much were measurable live most how

areas the and recognize what on for of of expense majority, here. the and and to strategy driving the come breadth those collectively, management, stage spend spent with we So manner. measurable dollars nail ability invoice an full moving build capabilities I get procurement, our our well or are the in that flow growing, in we over that we tell focusing have Under user adopter through been chosen that capabilities transactional we the very collectively our planning line build value get on millions power once way, function the many in on acquire that value into in we incumbent have get is that’s have want you focus is the in customers to way both going off to in are Accelerated very do this get an all years with is will solution to early particularly parity be a of providers, platform to customers to of understands the four exhaustive that much straightforward. last and management that and and early begin of more transactional able years of able to Management and the to spend Spend And three years We then area we particularly feature the hundreds we doesn’t is company optimize can get focus and to how be that

Ken Wang

again. Congratulations Thanks. Perfect.

Operator

question-and-answer then session Thank your concludes participation. that And for conference. and you today’s

You now disconnect. may

Coupa Software (COUP) 5 Dec 172018 Q3 Earnings call transcript