COUP - Earnings call transcript Q4 2018

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Operator

Good day, everyone. Welcome to the Coupa Software Fourth Quarter Fiscal 2018 Earnings Conference. Today’s call is being recorded. At this time, for opening remarks, I’d like to turn the program over to Nicole Noutsios. Please go ahead, ma’am.

Nicole Noutsios

to fourth welcome conference and afternoon, Coupa quarter Software’s call. Good

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

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

results be may actual different. Our materially

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

Rob Bernshteyn

calculated we believe to our the ever And the are delivering results that positive. net that testament increasing, customers. QX our strong. flows income that the producing fiscal and margins us. delivered billings, Revenues, we're non-GAAP thank excellent report across business for for and proud in were best in came we and and close board a value-as-a-service results everyone performance Hello, culture you differentiated cash highly out the all joining our company of financial for our for XXXX. to to period first strength company the time, in very history, I’m I

Square. of Let's talk becoming Day we day theme The was the December, first about revenue billion a in our to NASDAQ company. ever held our our the opportunity. In Analyst Times dollar at MarketSite path

presentation, and in key laid on that drivers company XXXX fiscal as focused out we During a forward. our strategic we the are

customer enterprise driving sales global mid-market and expansion capability. and First,

Secondly, and generation. expanding global brand awareness demand

developing greater proposition. core culture. Fourth, key winning share our and expanding Third, and drive driven acquiring to to cultivating importantly, partner a perhaps And assets wallet. our launching ecosystem. of broaden innovations Fifth, value most finally, a values

all - dollars. roughly in billion Executing our TAM by grown business our these addressable these unified substantial has are intend share drivers These principles call as one company market results calculations, in to a mentioned core $XX spend and tandem. at and on I’ve total on developing the market in in everything continue and aggressively we company values striving focusing pursue ensuring our customer public as for success, we together unite our market us both our earnings As by tackling massive time, And date, taking excellence. customer and do, we organizing management growth market our opportunity. to serve values values, our to

benefits as growing Source to fit on has $X the platform Mexico progress, significant our our and we complex Shops platform. highlight and evolved intelligence many There for also manage under for to accumulation success, cumulative commerce, and prescriptive world's value customers. instantly actionable fast business. now diverse monitor transaction, selected that based data spend billion spend get we to each in driving Coupa baking because lululemon into several Coupa’s to customers into fiscal let across on drive smarter, and in commitment our increased our management to of billion me XXXX, operational competitive lines based no Pay now that Grupo this are translating new speaking year. of with one $XXX track retail organizations fit and us, City, transactional this Pay to fiscal a we surpass As Source we In our our and trillion Coupa proven on believe all expect doubt ability Source management the under to demonstrated non-financial lifetime from across largest power track closely customer And exciting we selected Bimbo, Bass applications vast is cultural and customers. wins of $XXX We moat the for this grows distributed while company metric is a our Pro to spend and metric with the data Coupa key some based sector. expenses Pay Coupa proven based to the best community in its global QX. infrastructure. record value selected be And

service Procure control Incorporated to in ability ongoing customers that, door mean success, to Razer objective of customer platform’s continents. primary company of and is a world’s The Taiwan China, standardized spending. across we Coupa NASDAQ very our Germany. that go and DoorDash is services world's I'd headquartered gaming at years to on Source a our activities. and successful the call are XX live of Dasa, technology, example e-sports best core with technology better San only by in went assertive step and Hong to deliver California. of and initial San our rapid has through hardware, of customer Mateo is services. with long side, goals. facilitating Company, hand This quarter of a like focused in pioneer of a is is out Coupa dual is Works Zinc of Water Bank the continuously Mateo, Canadian delivery is information with - US, National The headquarters is Coupa we and lifestyle term. company values. Kong, connects Razer live include libraries deployment is door their exchange go a Commerce in over Corporation, and and Grupo visibility phase went Coupa on a Group, by signing achieved services. one listing to County spend with many Group, implemented Airways, deployment. businesses good to lives. But deployment San Gallery brand. course working ensuring hand trading, American National many, their and to address Razer of local know, growth the CIBC, customers of Co-op I Some ecosystem just Exabeam, success, our engaged them. American Qatar the as side a manage Singapore, a other of into software signing Farmers people With new leading the the the partnership with which rapid other Expenses in by to is clearing, right agility own six customer added built Their here DoorDash partner focused a you purchasing value The of and offices Pay. Pay company their largest on live, Solution public customers provider to Jobvite, in Grid, better a pre-approvals Francisco to or weeks, Recycling Imperial the leading as and and for Coupa Coupa with control largest recent our during gamer DoorDash valued our QX NASDAQ global hometown next few Singapore. around From

action. example share that an me in of value Let

ways that longtime he in Ben, And our and dozens meticulous, his and difference industry, we positive month, oriented Coupa Truly is over he focused approach remarked on Solutions one palpable our last values Just our on employees colleague, project projects Fellow promoted acutely a of was on. each results takes to Architect differentiate is attitude, applying living others never from customer or success, Ben for Director. the always here customers. of core consistently tiring dozens our at the is taken to driven, years. losing has the

But in XX% revenues they management ability from about countries, depth. bread compliance perspective, three our lists much continued talk to payment ago, to subscription discounts let’s grow of expense RXX financial today, across expense complex now platform, of management, more approach host a management, Services covering with management, than excited perspective, government major products such most more more I'm intelligence, invoice came the a to against just supplier our our pre-approvals, years our in and QX from a short offerings. and services risk added information with than RXX and platform. addresses reduction in through XX%, Coupa coming suppliers release with request is the XX pre-approvals, features a spend Maestro, applications. launched and and capabilities trip over contract supply additional share we figure new both management procurement as So Accelerate. new From core less From of fresh early recent Overall, screen that other to much, more. restricted community and called e-invoice chain areas key RXX.

delivering into results oriented solutions core incredible This expect, play. approach. value you’d As requires results is a on comes focus of where our

years an Let the back, for an engineering Coupa incredible A team opportunity give few our example. me mobile recognized Android.

obsessed app a Aaron users. colleague, stellar was Our Android for with delivering

in were new January, core its values, is Applications. Those capabilities accolades Also, led dimensions ensures IDC’s rolled In last for now Expense setting few effort the set enhancements leader, the commitment IDC two this out mention to strategies. is out customers, highest its a us user of as be the our SaaS recognized made dimensional iOS available for In as were and both shown let released It's a our of was helps recently evaluated to our encode to well-known, Enabled we're leader being same in and MarketScape he we we Coupa personal, Android vein, first very on that Management proud shortly And me what report ranking that the Cloud thereafter. this dimensions. specific Each that Worldwide unprecedented he to receiving are Procurement time the chart, area for report and an do. values, Travel So released born experience. MarketScape receive. bar. named IDC & well. out, feature proud level as ever Monday, to the bar to continue a industry

Innovative support who and warmly at On Technology we category vision the XXXX our time competition. the it. industry understand my thank Coupa win annual Sourcing to honored of behalf also fully and in all the Awards of taken our Year those the PayStream have are Advisors myself, We colleagues to

in announced Now, key heavily investing our the local simultaneously in acquisition in Basel, The deep will acquisition team expand into strategy is based Simeno, open industry. acquiring increases we and this also discussed component execution previously advanced area, one depth our R&D. assets our Swiss offering, us expertise has our to organic presence consider catalog to the our while provide management and the of quest in our further in help breadth markets. domain platform to Switzerland. Simeno’s and of German continue key in growth most strategic of December, our Continuing

We results quarter. we generated joined about with from are Overall, excited pleased colleagues our and our that business during very the us have financial new I'm progress very Simeno. the

With our Before community to to analysts, to and maintain financials With common highly shared over hand and Coupa a it I for let valued hand to our breakdown world. the partners, and call friends, that, I'd my of customers, of Todd. the a like continue prosperous. we growing colleagues guidance, to values, thank and course of Todd take detailed purpose be over around moment can and industry me

Todd Ford

everyone. good Rob, Thanks, and afternoon

our metrics. breakout year key company, in million. results $XX.X As for a the the Rob reflected grew quarter Total and and financial fourth year over that quarter noted, was revenues QX XX% for to is

Professional the subscription recognized of QX, $XX.X and $X customer of and XX% deferred revenues million, professional $X.X services one-time being go-live. nature, in revenues year representing that up million XX% revenue. year services were last revenues comprised instances were was over which were approximately upon For million, total of

engagements and we reminder, in performance were customer ago go-live. a a to that, As prior upon QX deferred to signed and recognized proportional transitioned year

were up was benefited approximately income of up X% year operating million QX, year. the $XXX,XXX positive million, calculated non-GAAP period. over X% $XXX billings in the In Our billings year renewed XX%. year a normally few revenue, $X.X compared to renewed deferred end who or million in and by XX% ago a customers year a negative Calculated to over million, for of related representing ago, Total revenue at $XXX year have QX. that backlog would $XXX early year was from increase year

on or these balance invoiced, billings able sheet period. our they're amount invoice. future backlog revenue considered as as on in calculated contracts in recognized reminder, revenues, that us yet period, by the revenues, define not in consolidated deferred the backlog. statements, not we amounts the revenue Until for non-countable the during we be deferred As a multi-year contractually change recorded are are Further, and to to define we elsewhere receivable accounts are financial plus

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

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

of non-GAAP Our $X.XX non-GAAP and income margin I professional $X.X of services was which in to gross in and fourth revenue the model, margin revenues services ago. other, by on shares. subscriptions was diluted XX%. share delivered income gross the QX and professional XX million non-GAAP positive we performance XX%, our quarter from strong benefiting leverage Non-GAAP net Driven a financial quarter XX%, million was per noted similar onetime gross earlier. margin our And year from from

Now X% and expectations. in bond we the the year, let's was in issued commitment positive ahead at well be the were $XXX.X to for Simeno for fourth end flow million, quarter were Cash million $XX.X from negative revenue million balance cash flows. of This Cash positive positive year, ahead and January. $X.X acquisition, again convertible quarter on includes million $X.X our cash to the million net or move $X.X for $X.X the positive which year. excludes for $XXX operations the the million our from the for well from the of to fourth sheet slightly the for cash end $XXX were quarter, million of original QX. year, up at of and Free flows negative million breakeven

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

we ASC February, let’s XXX. In Now turn to adopted guidance.

approximately of incorporates billings deferred trailing XX factored adoption expect that QX. a guidance one-time Our revenue a of With month of impact of the approximately QX, on calculated expect of a we the this we XX% basis new with write-off rate XXX. adoption the standard. In million $X in, exiting of growth

$XX million. For to between subscription between million total quarter, of expect $XX the includes revenues $XX.X professional and approximately we revenues be first $XX.X million, and services and This million $X.X million. of revenues

subscription by because subscription days the million to be addition in negatively number QX. the three there revenues revenue to of impact QX on based of In quarter, and days will $X.X in compared XXX, are impacted approximately we recognize fewer QX as

XX% the expect to Simeno We between XX%, integrating completed which of margins QX we non-GAAP December. reflects impact be last gross the and acquisition

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

average $X.XX weighted We expect of per share $X.XX net shares loss to the for non-GAAP XX.X million on quarter.

XXXX, non-GAAP range XX% be we million revenues fiscal to the the and million, For of ending year to XX, with expect $XXX January margins between in XX%. total $XXX gross

million. million be $XX and non-GAAP expect for from $XX the We to year loss operations between

our in user QX will May approximately in annual conference, and X this which May San reminder, marketing from a year by be due million to to $X.X sales held our As X. spiked Francisco expense

share non For loss $X.XX, $X.XX the based net million to the upon weighted GAAP full year, an average in estimated shares range the expect year. for XX.X we per of

of terms cash providing To year guidance revenue. up strategy are remains flows, specific over year, as a flows both but total and We absolute for we free of expect to our unchanged. in percentage be not cash conclude, dollars,

market our sustainable are profitable engine and We for long building go term growth. to

market that marketing in have large efficiency are as And operating to our opportunity continue and us. before show metrics margins growing flow on we as sales cash leverage. reflected lies winning a We this focused approach and and we disciplined

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

Operator

We’ll from Thank her you. Stan Stanley. Morgan [Operator Instructions]. Zlotsky first with

Stan Zlotsky

was to QX, out with Hey really there guys. in could Rob. drivers taking as thank saw that quarter? way the finish stood in question. couple really Good the your mind things performance to the you question - the in afternoon at your outstanding much that of Maybe and When you the highlight off just for what you so start Really for look to an performance you a a key year.

Rob Bernshteyn

Stan. to frame some of business, question. move do been and align the with deliver I our not that that it and I in with and you. criteria calls these success knowhow willingness we that their on One and continually to had Sure, measurable felt called values which have on of be, customers as of other to we on the platform legitimacy I the a and some see and for thing at the to measurable and that about two is core behalf practices with their the business, much the and to only best to we've whatever engage to it. sales past that Good phase majority are going execution driving in early really say very gaining us hear our in time, into industry us. that of would of in the sales much us it, analysts when I is prospects, the and which look leader, seen over it to most buckets. us talked and the from and out the team, the for to I together very of quarter, Thanks that if greater is more course about, of the to the I our have prospective adopter And put wonderful our takes, some I'd close side it's cycles from talking use and continues but want and on then results earnings being cycles being locking the seen the years of of early our helping the customers say, into is heart legitimacy prospective the the think of as of would and we our how marketplace being market. ways the

So establishment around our it. secondly, in two And the marketplace we're things, and our frame that. changes focus seeing continued internally That’s wider I’d leader, as our of and again, the customers. how our with recognition a step execution

Stan Zlotsky

when for for fiscal at And way quick guidance prior the any setting versus up done ’XX, year to the changes years? Perfect. you Todd, approach you've you a that's process then you. it your for Todd. And in follow what me. Thank look

Todd Ford

Stan. Thanks, Yes.

Our guidance changed. hasn’t strategy

to to to model the in while XX% of leverage growth, continue organization support flow plus make cash across We sustained our our investments continuing drive margins.

Our in And subscription guidance was initial growth primarily guidance year XXXX. year of throughout go-live growth from roughly XX% driven incremental revenue we'll execution. when the well accordingly FY revenues implies last based and numbers in revenue, similar flat lack growth, initial year to XX% in the guidance update our revenue and professional professional services over our customer below to year services on

Stan Zlotsky

Perfect. Thank you guys.

Operator

JPMorgan. hear Mark from with Murphy We’ll next

Mark Murphy

curious and congrats. of in the tail years? of Yes. smaller grow Or Thank my And long sort suppliers many the coming a that network the going end. you you've attracted reach point network and lot to suppliers it do that kind add year a onto you I’ll continuing remains are at tail consistent? essentially of are your long already Todd, to on see how we where entire I'm

Todd Ford

first. mind, take happy Mark, to you that if I'm wouldn’t

problem and you smarter they help is organizations for spend to apply to the information of as all using get company vision, how money. the technology better Our know

vision, in is to been millions our up focus value onto we've primary of our and proposition them. with and because because picking directly of interact millions platform how our terms as And the selected our is So that vision suppliers that spenders. on tied we we've

is internal inviting to get that go way we and friction organically or are an folks something target million out to actively low because like four buyers grow So have of continues to says, their a million X.X very nature. business. suppliers doing understanding are or that of and we'd that didn’t That this own them

overly not not or going can metrics say eight, it's seven, you, about. tell So the XX, it's one I that's concerned hard grow of or whether nine but to to we're that five,

helping money, on optimize focus every them spend largely smarter, Our way spend organizations they is spending. company around get value their help dollar the of

Mark Murphy

factors? is, is more or company any you moving what well, strength separate in mean I the possible And specific ahead tax quickly any reform Rob CFOs QX to uplift the CIOs demand Okay. do managers in potentially or And out or by as versus sense any because environment? macro purchasing broader of it execution that other

Rob Bernshteyn

don't in enough, see and and - call statistically now took but to force small a that would closed month last I for sample quarter enterprise out. year, that actually to something. the nothing right we a enterprise big I all I somewhere. in sales would I it deals or I front When is XXX - have significant markets deals me one feel three up have of can kind over deals the the -interestingly enough some typical sets, Big some I here’s instance were that proven of cycle took four days our

have we dataset significant a support think don't have I of - enough forward. you're putting there’s definitely what or and don’t we to refuse enough of statistically So argument a

Mark Murphy

me, The one final Okay. Todd. for

that or at this prior just over You the Is And years? or of amount for of XX% typical the heard - any the this goal from by I years. material guidance seven for sort I unusual we've have to XX%. is you that out of you conservatism XXX coming made. over spread is is being comment of in the this it And clarify. anything sustained wanted adoption year, seen that impacted topline year any five about to for then there that

Todd Ford

from XXX. I would say changed. revenue be I there clearly going guidance is hasn't strategy impact some mean to

up it's million because well a $X XXX. FY’XX. writing And than QX less on million deferred over We’re basis, while $X of $X of it’s in basically million for quarterly

go the there’s were proportion a revenues perspective, some then services addition that the in being of lives some performance. in recognized and definitely to revenue there. on And professional impact - professional customer So to from last year services clearly benefited we

it's consistent numbers. I for mean credit execute few but small strategy our It’s it's then a us million I and with think of let dollars, us give So it.

Mark Murphy

Thank you.

Operator

And move to from Raimo Barclays, Lenschow. we’ll

Raimo Lenschow

of as can Hey. they international you mean will well. and a build to the of go Europe this. a It terms acquisition for you you kind of of now US software bit base starting lot Rob, or acquired a looks of about little it do kind how point if of about Congrats like me talk nice Can companies out? me continental bit little from help what I in have. to for there? really you go understand kind nice Simeno struggle the a the international a expansion

Rob Bernshteyn

Sure.

look a land we time. accounts. marquee, you that for a over last and put mindset years referenceable make way them Raimo, continuing in way the into environment. emerging then some come grow nine kind given lot of in been leverage as We It's a we're success and key that’s payback highly successful wait an We always We in that in organically. organic folks or back, markets. environment, grown into and typically go the don't If to expand. And We so. put new people this business of a fashion. we've few period longer to We a the new measurable and enter of highly do the a we

platform advanced management. an catalog support really components to of two provide this was is there the is of And overall Mark. are we case Now, call just open vision to domain I in in us. our component value just the of discussing One our with interest in the proposition expertise are Simeno, to and industry part what that

of opportunity So they have and local excited we and Swiss that. can the team hired them those set And looking where together, customers here to the around to secondarily, who sort are business And organically, and happen here They some entity. present don't have develop has in why forward thing. part And prospects but that values, the pick with we've markets. that's join to of them. in next. area interesting in new in expertise our actually ascribe week like who important colleagues to markets, presence folks are the to of Switzerland German very to are those up we're who much interactions Coupa have very us. the here one come in feel here, domain a already us common with some The not very are markets they I'm is build of been already team our members we many after the have the of business and and visiting acquired that

Raimo Lenschow

And in services in Perfect. think overall is keeps you then professional like, ’XX, flat question I other had Thank you. about as nicely. the but the business growing

seeing So that to before. are you're the about me integrators SI suggests that on around in a than more even getting board bit what talk little the system market you Can Coupa?

Rob Bernshteyn

was some it. like because implications maybe - Sure. And this has also potential it to could we’ll it question but - had both broad, I address the Todd and sounds financial

feeling timeframe, customers rapid that with meaningful there's integrators of about fair think be and continue say are able to customers large with a to I systems we're in in very well something that promote. that working Coupa a to these with world. get momentum and it. relationships to value strong prospective very we have There’s host the whole working they us There’s to And systems a continued will it's of will safety look measurable over all So the question integrators. seeing no with

to We’re folks of integrators systems continuing on Coupa. these from certify each

go don’t doing some We in enough fact, that. like enough almost possible. have certify to and as fast markets as to trying ability up feel we're we areas, and some to fast In we're catching

robust. targets professional to measurable services build of and are around each they're They’re healthy. out revenue themselves, real working platform. very growing these are for they'd Coupa relationships the the So putting like folks that

very healthy. So

Todd Ford

Raimo, the And we've years, increase several of looked a first, at the providing revenues services services financial customer business, driver then from as but a professional oversight. expect would next I never growth still perspective, over professional we're to because

big still making investment in that We’re organization. a

trend. an more would long a anomaly term as I view FY’XX So of than

Raimo Lenschow

Okay. Perfect. Thank you.

Operator

BTIG. We'll hear Fishbein with now from Joel

Joel Fishbein

quarter. great helpful. qualitative a I here guess, information there on us adopting appears would on there a you I just larger give Any pipeline again question are congrats deal have be and can you Thank commentary sizes. as Any it quicker? customers and Rob

Rob Bernshteyn

Thanks Sure. question. the for

the things that by of customers to recurring the up, with that value we’ll grow subscription that offer these forever One our that’Xs tying to revenue we very the business important to with we build we preferably continue customers. us the have that to continue

very, to very is this So important us.

we're when the things the qualitatively That up. to quarter. that go subscriptions quantitatively, every XX go It’s to continues of every tell or not I will virtually And one last annual look seeing the I quarter. back over Now, average from up. it’s you, customers continues quarters, our

Now, the to commiserate value more offering goes we’re is platform every robust. again quarter, up that that with our With customers.

practices stronger. of deployment is the best Our

Our something the on the and stumbled stumbles customers ability we've or existing back that - lean done done success from either very, the well, things and been where well. to accelerate metrics tie very we've learn

that's us about direction. and that it. the very much a doubt right So healthy trending metric in for we very it's No track,

Joel Fishbein

Great. you. Thank

Operator

open. Ross now Markets. MacMillan Capital RBC is your with Mr. MacMillan, move to We’ll line

You us muted. may have

Ross MacMillan

about that. Sorry

now. I hear can was think I you on me mute. Hopefully

Rob, congratulations. So

which And just $XXX an larger versus impressive think year, driving your that. your management, there love what are spend primary on math which by revenue of You given was lot subscription going magnitude means drivers that, seeing incrementally on the thoughts under And take of biggest what's think a I'd on your and obviously spend of your you the that to theirs. is billion take I management my I And number I your the was well. that kind your obviously scale curious, on is over was - in commented interested on which Thanks. as orders but XXX, spend under we're rate, up. then super also are competitor than on incremental in drivers

Rob Bernshteyn

Well, much for thanks Sure. question. very the

tell of keep I'll As to that we calls the are kind of across think management one adoption first said, because earnings that ago, into really it's there we is leading couple in And customer spending play the strong that the all wanted non-financial you, to of indicator measure, care that. was such we're call base and we you our and metric about a apprised that the our of things quarterly a I pace six seeing it adoption.

is of can to you implement have to subscribe customers you the right? the course So them. of wins, pace begin have before One that

robust greater services big more projects products, wins, to whether that and spend, take into long big, that. be indirect, attempt more wins, cross that plays sort aspirational tail, on direct, wins, of more So of all categories it

thing. big a is spend thing. wins is a expansion of So big Categories

three at harder very, well you get weren't their So with able customers us. or six one, for where categories to those goals in they before. organizations that year year They've in five reach to have tackling they're two, maybe have done very highly four, simply even and addressed categories distributed

very, Now, user they organization, sticky the very is buyer even categories very through intuitive, gotten aspirational that can that across highly the get to has centric undertake. technology empowers our about more

of we go dozens And have So that’s third quarterly and the lives. here pace a dozens And on go lives, lives basis. happening of second. go is simply just

go I out. When calling year, you spend as you half of just very and end appreciate is live, of that. through. the but was a begins run so last to roughly it say it $XXX And And rewarding cumulative, billion they it thing more at

this it’s and leading of delivering the and to for to proud we’re - that very customers, value for it's be us, something accelerating So of feels is value healthy. indicator a our that because the

Ross MacMillan

you. most deferred Todd, assume math. write then And a for the QX, QX? billings I down we’re should question the great. those on early calculated thinking about into would Should our we on we as well That's And maybe as that include you have heard as of guess renewals on billings. quick for I fallen

Todd Ford

was were Those renewed in QX definitely of that And part that QX. those and correct. renewals within upsells That's expansion accounts.

So definitely the write-off they’ll of would will billings. them a be quarterly XXX lot renewal yes, QX all times, the at then related boundaries to something and once. impact that calculated do But

Ross MacMillan

Understood. Congrats again.

Operator

We’ll Foresi Fitzgerald. Cantor with go next Joseph to

Joseph Foresi

out break thoughts us for year. Hi. any expenses in just if again about upcoming I the wonder maybe could you

and we I you just of talked to different remarks, lines expenses building in in couple the of couple QX CapEx. for you But should in maybe that conference. about your be think items a could a initial point

Todd Ford

the For other CapEx income? operating or

Joseph Foresi

if to. both you wanted take I’d

Todd Ford

CapEx very $X.X million From you low somewhere on said CapEx. and perspective, that Typically obviously looking CapEx Okay. first, Coupa. I between basis, million. requirements thought $X it's quarterly at a at a

the other a will there. a full Simeno our say So number support I the cost to acquisition people in look on professional And the we're continue perspective, than our fair noted QX a material and organization, then organization, at we you lines, from there. to wouldn’t of a there's that, cost as services some of related anything But of expense when going other hire that pickup in headcount quarter cost to sales sales to of etc. impact in have of sales

expense kind would that as normal I of So rate run increasing. view

from heavily invest We’re of going in something first to be we're on aggressively R&D hiring market, last upon a and That’s half I Certainly down thing. the recently this the gotten through Sales how what look to come G&A year, same and M&A in marketing, compared just of expect That's We've lot revenue, year. based as adjust a to more the a we're historically. at kind particularly the XXX, of and second we a you people. performed. R&D SOC, that FY’XX. we perspective seeing continuing of half actually basis to quarterly percentage of activity would see in in

would the So G&A trend several of next expect over as it revenues expenses and a higher year to were percentage years. definitely I last

Joseph Foresi

maybe couple guess I about, do And a and know talked you Got just a from you can and functionality you it's it it. then categories, highlight in maybe geographically for areas two standpoint. I of RXX. could us of growth different then

So maybe both color some give areas. you could Thanks. just on those us

Rob Bernshteyn

Sure.

over then functional something spend something to in and of by and more the necessarily strategy, address individuals of spend. that and go used into whole of deeper important value areas, the take underlying to course power all permutation understand I’ll but any of continuing everyone applications, certain get this but spend that across deeper be spend maybe that's And the virtually think engine exhaustive and terms we’ve includes collectively which time, an to is we're So it’s you invoicing, expenses procurement transactional I shared which organic those ongoing a out three help to call and host in what able user that ongoing be will different company, spend used more we won’t optimize that applications by is approaches.

spend a management we our forward in we're And and we do done our strategy more much to continue So inventory this contracts, at collaboration our in to our strides plan management looking lifecycle, make here what Inspire and we've analytics capabilities, our of May. supplier more. Conference to capability, lot with sharing capabilities, information management engine, contracts what upcoming in

best so buck as we recently we and continue expansion, the carefully into geographic all more started for strategies depth on into expansion, monitor of well in countries and the expenditures the APAC, of down terms historically company. in breadth and to product those land and States, around United Europe, America, and both for and market us our been areas, Australia in we areas emerging certain accounts into going execute geographic and marquee and south in areas areas America both we're build the and getting areas around delivering and again key terms then expanded that our our Canada, of around APAC, that. initial that depth In the north South have specific bang expansion, And of of be future can best accordingly business where

Joseph Foresi

Thank you.

Operator

Robinson from And from Tillman. hear we’ll Terry Humphrey, SunTrust

Terry Tillman

in Nice those have I’ll Hey, guess analytics intelligence larger put intelligence? intelligence, the comments. and able quarter with to first of markets, at where And US cycle in how been echo of question Rob, has or some and renewals on I postmortem, are the play wins signature is, some good And look relevant in emerging and gentlemen. in strength the post see monetization quarter. country or terms the some in you community of the you potentially deals? other analytics to even of people's these deals, job a new afternoon community those community

Rob Bernshteyn

in question a Sure, questions. opportunity area so clearly front energy us. very Terry. focused on of for us Thanks lot an that exciting an the area is we no our There's the that’s This and because of see and for just is in geographies that across a community prospect planning about our some done on understanding community what of do in the had as to of deals are intelligence. larger we well have deals, mid-market we what behalf of component intelligence

And be and to quicker a lifetime all community the and you insights are customers sanitize can once to today intelligence, around smarter data intelligence that transactional multi really and operational, this prescriptive host $XXX made get individual can work to fine to spending. we in suppliers store key opportunity should tune or this have that in their a billion you about data available should normalize of take community smarter from employ shouldn’t they operations doing make with, We way around huge they so domain better. spend areas, that distill or or areas of

our vision, very, as to something with. but And we're our is beginning we we've the prospective releases, our gaining absolutely in think of well customers at not are what So reality many of using, as only very that the this created customers of date and are just now that.

has how that been In strategy for be plays our from delivering. the paid fairly always again out perspective, of that a value we're terms monetization to

command value we customers, greater the the deliver price So to likelihood we'll more our be point. right the to the able

iceberg what's we community our can possible part again, about the very Inspire. But more these so of that forward at ways much things, that and whole different the got of tip at we're of us. doing. way, charge we I'm to a or can looking And as for And sharing this many the for intelligence. dissect We've products charge different platform host of

Terry Tillman

good. you sounds to of this. not you, I just guess, one keep That for Todd, out

a terms be velocity Thank in as One may you're of investments to where are of and things in create more mid-market, of I some making perfectly you been seeing in volume and business But not and fruits that right. purposeful repeatable the investments coming of the are to labor and there? you. articulating you that the to to very investments mid that in. focused orders the is we've see make watching some opposed markets just

Todd Ford

one. this take Rob let to going I’m

Rob Bernshteyn

question, to Happy appreciate take I it sure. and Yes, the Terry.

that break in but sector, we're better one, me focused also identify the on little parts. of would I we bit that doing, to absolutely in in are number that targets talk able let's every let a say So about terms being things two sector.

is and much So work propensity industries offer getting that. getting much the a more likelihood We're higher where strategy at overall us. specific there's or industries We're we about so smarter package desire to likely our need that things formulating better prospective with packaging that to or customer at sub that and better properly.

than We parts. deployments of because deployment enterprise for a bit types there be streamlined much also more large more may little they practices those more where many are moving better tend customers, be a getting to the best at

we're and think price better I markets. getting business right at points more commanding the in winning those

efficiency perspective well. time, At that way both very that be So all as about just a thoughtful tell efficiency the is sales an I thoughtful careful we from and overall to same very and the of company marketing our will continue going resources, executives. and we you spend perspective

want term. that over we to eggs the not So may all put don't certain of our longer produce baskets may or in

you, positive growth to element tell a very that I very to and ongoing contributes changing thoughtful, be soon. it. very of But very, don't continues our anytime see careful about we're that business our So I'll

Terry Tillman

you. thank Okay,

Operator

We’ll go next to Koji Ikeda with Oppenheimer.

Koji Ikeda

questions. my the taking for on quarter great you Congrats Great. and thank

a got Just question the partner network. here quick on

enthusiastic growth? on of about guess next that’s we Coupa investing I to heavily way the in practices there is a to the the hear what's XX out months and your Coupa partner to best network big the positives think contribution that there. One partner its network over XX very the

Rob Bernshteyn

Yes, thank thoughtful you very question. that for questions. are Those

one build for than and the one very partner would - partners that and equals customer, Coupa, open such for working two, in provide X.X to capabilities open equals it one products designed with stands plus the can and that a O be do technology plus but very, seamlessly. our Coupa more when Now, to quickly we've rather one

see that competency use cases coming the grow their are things core that for building anytime products those could to but and we to be near future, and may technology us customer. that more are continue We not program more in and our that help

anticipate that grow. continuing would we to So

post-modern open ERP the see four three for deployments the solution global to spirit seamlessly existing of three doing, other in I ERP just The we third continually of area ERP we're ERP XX, providers these partners, of of choice and top XX and is paradigm on them. cloud ERP, a technology all times, talk sits many system. Coupa others another work we different one with any of think instances with incumbent one times, times, ERP of that In could is that XX, openness working getting so instances of certified all about. but of Gartner spending ERP, not and

So end on we’re way applications should the be we to growing the and of this want and very we think way going and that. to in it's future, continue really approaches front be the

Koji Ikeda

much on quarter. again so the you Thank Great. and congrats

Operator

JMP Securities Pat Walravens. hear from from we’ll And

Matthew Spencer

on this great of Spencer executives Customer you any about Matthew hire for Pat. should and Thanks? Mark made quarter. Thank you brought Officer we talk year? a And last changes C-level questions Coupa is as expect taking other since Chief Riggs to has on This on Could end congratulations any you year? Hi. for him our

Rob Bernshteyn

question, Thanks the for Matt.

recipe past open He's mindset all, them getting colleagues understanding not think of and past, of enjoyed the to and brought in Mark, know First also is the a behalf team. a experience, and really customer just approaches we a my that management to all I in of on here necessary having the been for I success success. officer on a deal speak replicating in taking great very

better. good area to get well-structured say had Now, way, as it better continue organization. to continues make only sure that we that of the and that a scale it want business, we not stays future, in But to but we've very our would I and into

core value play. excellence third Our of comes into strive for

and by conducted processes not with certain smarter leaders to to headquarters, get That senior have on self-service, coming that thoughtfulness tickets great how more the how and and to to seen to of how more repeat to certain how find ways really responsive we them, anticipate departments, customers. and prioritize his and continually getting have more about leadership is but efficient out we're as create So smarter that excited scale customer and sub continue to in areas, tickets more get area be more in area. more something operationally real business. how to oriented been meetings And we some we leverage have that more about him to specialize manage

Matthew Spencer

some your what's Thanks. just high provide driving offerings? maybe bullet Thank beyond points you're you. seeing And the level could procurement traction you core on

Rob Bernshteyn

to theirs. of are and platform they're that, that's dozens you meet And been you functions that to because dozens requirements see ending And some better features to in think with well They One future never a largest to starting most ago, of us a releases. the want the and I tested you for is it it's to that do area? measurable drive a companies a takes rewarding we see company that's Well, matter second the that years that’s a see simply of five results lot willing is still company there was platform. and area, we're But story and customers betting obviously for phenomenal, of six of has that it their are platform, We’re for the world. They management we’re they're and what ago, to modern work technology is this us business platform. really out Sure. technology becoming. We’ve aligned with - of of on proud by us. see spend When that can better. one the do it them that now the We've companies of, or that. things want a I platform values And what this get of have past a piece as using speaking better of were growing of twofold. we sub years that the is that seeing of as think done really course, see.

Matthew Spencer

helpful. That's Thank much. very you

Operator

Analysis. We’ll hear Wang Ken next from with First

Ken Wang

a you comment just a Any strong a sales it marketing? and was close and Thanks was question for can my be or I color wondering, mean revenue that sales It congratulations on year. percentage would QX. success just quite of on any very down to as bit I'm helpful. the bit taking in productivity? really there was a upsell

Rob Bernshteyn

Yes.

was both. a it bit of I think

things some to expanding above of been of historically some QX, that I One dollar range. actually larger in we XXX the our caution with that that's and has expansion necessarily the And based with of was would long yet. rate the earlier a term know in customers trend range. I it saw renewals that that XXX our don't

ourselves sense look the of but if part new legitimacy well referenced, quite out, growth. we we there, And the break you but wouldn't ACV number QX, that well. of the the as in as see they integrators, with organization, And I significant So don't systems also sales the expansions at that executed is did as market. traction ahead Rob of get in definitely

made the roles. year, last he's some over Steve's to the that well. those to wholesale changes started QX see we organization, all some credit sales So contribute things And as to changes, to but sales And of key not in impact efficiency. in

overall just wouldn't I So solid thing, but specific point necessarily one execution. to

Ken Wang

net And That's rate any retention helpful. the change in Thank gross notable or during quarter? you.

Rob Bernshteyn

was historically or XX% gross it in the QX, that quarters slightly past in So over the XX% rate should range. been above has to renewal several say I range. the And

mentioned some in once again, on renewal the than the And did albeit we rate, definitely as trending direction. right pickup greater gross net see rate, but it in So was the retention then I small XXX%.

Ken Wang

again. Thank you. Congratulations

Operator

Peterson with hear We’ll from James. Brian Raymond now

Brian Peterson

the and on Thanks question a quarter. for taking great congrats, guys

on just hit quick wanted So to few a ones.

towards we of moving Todd, trying ramp the through about to there's that customer billings. the parts, - just particularly quarter billings you can think should anything I as fourth sure going there? get of we mean forward? Todd, seasonality but seasonality, So update Just thinking to And should share it relates any increasingly I count? lot more guess But how obviously a I'm K, model we'll on in that?

Todd Ford

Yes.

first. question billings the take me let So

by if seasonality a lower billings an followed especially business, the then clearly biggest look basis, from dollars absolute historically and and QX are the by you perspective. our a from QX perspective, QX new on is So quarters. ACV number there’s QX And in far

we're now guys, best the customer going continue. right do So would to And from is K. respect as that update will that to count definitely customer you we communicate that that's we the With trend the way what through have things we are expect of to in count, to well. one because acquisitions

to it. that update Thanks, find time. at K out the that represent way we'll and Todd. Got best the So that in

Operator

move Needham We’ll Peter to Company's & Levine.

Peter Levine

congrats a on best for I and Great. the guys good saved feel quarter. last. like Thanks

Just metric, your know questions can that obviously influenced? the incentivizing site, to piggy guys. change services, prior partners. meet But you quantify to they you implementations, partner - the And back funnel off percentage the any attach entering ACV if that’s terms the rates for partner some better impact of of bookings, in bookings deal or I of provide you led to don’t the gave but in were these can

Rob Bernshteyn

of at sentence. of the end the cut the last the You What sentence? part off very was

Peter Levine

Oh, is the or percentage of that influenced. bookings ACV partner

Rob Bernshteyn

And XX% effect a and correlation customers is right anywhere seen really thirds we've around. and obviously have or large and the influence. definitely direct direction. there it. not and - Got exactly this over business the in way there’s between influence are Partner But partner a historically, word, us, - nor right no our portion cause a partner a so seeing handing market or the in maybe directly causal new influenced. and what that's influenced. That’s to is deployments between two other This positive of that we're of

continues us that encouraging to in the for be that range. continues that of be very - it's kind So to metric

And of getting so on we're terms focused wider wider is awareness. and what in

their help around there's a from with relationships perspective but clients themselves hear us, And they're optimize help prospective business of the practices but deep folks can all branding that only also a them that partners it solution can a spending. not hear in them So realize them world, great and way. implement the best that management us of for their clients for

as well. So very areas encouraging in that

Peter Levine

one for about the you Has can Just sales period commissions? amortization ASC your question. changed? XXX, more talk Todd, that for

Todd Ford

will but not to the think. It FY’XX as be FY’XX, over period. Yes. sheet offset muted. the is benefit the is in remaining in expensed the approximately years back for And going the It’s increased as pulled be is amortization that balance onto to you the but by again million might three, already a impact changed, fact is years being five has and $XX prior expensed to amortization much period we've compared but positive

So recapitalized years. a over off slight we these expense. won't for FY’XX the start few of it’s positive seeing majority have until But benefit bled to expenses a meaningful the net-net, next sales

Peter Levine

Thank for my taking Great. you questions.

Operator

conclude will us. today's all joining conference do you thank that today. And for for We

now disconnect. may You

Coupa Software (COUP) 13 Mar 182018 Q4 Earnings call transcript