COUP - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen and welcome to the Coupa Software fourth quarter fiscal year 2019 earnings release conference call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. [Operator Instructions].

As a reminder, this call is being recorded. to host like call, today's now Ms. would introduce for your conference I Relations. Noutsios, Nicole Investor Ms. may you conference. Noutsios, your begin

Nicole Noutsios

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

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

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

may be results actual different. Our materially

we are replayed in or disclaim this assumptions filed XX-Q. recently Forward-looking risks, and uncertainties most update and to statements obligation call contain the beliefs assumptions forward-looking any our presented based statements any involve today If current our may not information. and that after are described statements. information on These accurate forward-looking today, is

access in I same can included non-GAAP measures. this the a the which against you GAAP the year. replay also release period phone, release. and of our in you both you to over can call We growth find turn are is stated, also Relations will that, With earnings prefer A if of today's financial otherwise prior replay present the website. A to comparisons on earnings via certain and information will of available reconciliation that be Investor call Rob. find measures Unless of these

Rob Bernshteyn

closed year of To we Analyst in performance continue for a shared I Square revenues at for financial to first and flow the us opened at we free for the NASDAQ Manhattan. our share our billion speak located and path second we objectives Day. company. ever revenue, full Financial delivering profitable Day cash we Analyst Subscription holding margins grew am as Hello newly everyone and pleased our $X thank Tomorrow, of XX% XX.X%. as be year, you theme fiscal to from will start, we on MarketSite Times you our offices are fiscal that midtown joining out with in our as the strongest we a New City to XXXX York financial

full to invoicing, their live their spend. towards a with the went went The global initial procurement to UK to are here deployment and on their globally. helping XX,XXX planned share BSM. athletica in During as Copa electronic part luxury Fuel three management National systemwide achieved will UK savings organization coming to aircraft, over in through operating their increased software within quarters. the recently them internal spend. to DXP with our invoice cycle platform is important XX BSM strategy. initiative has we than represents fleet National global commitment has will rollout of a up designer, Coupa goal of this for fiscal Coupa with with XX% live the impact presentation, highlight for success rollout. start Well defined phase fashion, early Grid, lead global rolling next implementation, and first operations XXX field It's They spend. with across size, deployments win excess inspired in me with for we over increased of key with market S/XHANA time. DXP of invoicing control let's primarily all Airlines, electronic discounts. progress recently go-live their technology to operational phases it time, live countries procurement to of Enterprises, went we just the Their phase be today. in with payment few total Global BSM energy action reach a BSM the in live the technology online. spend significant their for of called a Coupa Coupa their Copa's life athletic forge forward look of you of We increasing that Coupa. of details order organization that invoices distributor accessories a suppliers approval XXXX why company, entire capture and our for XXXX innovating focusing North BSM sense two their real-time an included now invoices on Coupa customers increased that, first Coupa the in very and our enabling Lululemon and give depth XX,XXX of and a planned optimizing Lululemon meaningful customers. with with Grid retailer make broader AP date went visibility look reducing is increases Since for and enterprise under year. enabled live deliver and personnel. we technical note than recently first continues uniquely management to end utilities contract times self-service as a with in metrics more by invoicing, SAP spend With with of Coupa and and certified transformation an industry. is positioned KPMG and over ecosystem XX% the through of KPMG believe processed continuing a fuel. processed Farfetch, requisition countries partner went Coupa go-live, aggressive XXX-plus of America more rollout for FTSEXXX live over went healthy function driven in company, U.K.-wide improved style BSM on we XXX partners our expansive alone as using a partner proliferate. stores implementations partnership the customers, being and the essential XX% let efficiency apparel supplier To distribution a and to these business

than next six less This first that months in two in faculty, Coupa accelerate excited helping University, across rollout transformation. In known Australia, is staff. A with ranging their SAP. time X,XXX with the Coupa the the are of for largest months of integration the Lululemon to Coupa Monash typical university-wide the Coupa. to helping students value three We phases is live also and from And eight digital implementation to deployments achieve as level BSM university a speed our letter is in a customers, in length, in of went

moving management. Now this many customers quarter we Value-as-a-Service signed with on, great aligned to oriented new spend success our are business who approach

overall to deployments. upon look States billion pricing, new user-centric our nature $XX.X share Australia, the others. spend higher providing core Electric, Guardian Service, Nordisk, forward to annually, Peloton the Re, New Tire, lifecycle United customers also federal a one all Coupa selected and States The is customers procurement Coupa our the of solution user Interactive, rates in customer Postal We Telia, Provident Pacific am many Munich Group, completing platform marquee has Randstad Freshworks, U Prudential I Novo widespread the Shopify, costs. and Coupa United to largest of Bank with Life its Looker, in world in Canadian Service Insurance QX in organizations included Africa, stronger many, eBuy+ BSM visibility, US, InVisionApp, of better financial help their adoption for capitalize Asia, contract controls, letter Hope, government. achieve Air with new compliance drive Methods, successful helping lower Sibanye-Stillwater Industries, proud KPMG Postal program. Kin our Emerson improved exceeding very upon and to spend in Company, the management

Now, are noted deep our we Analyst as we I our earlier market capture go tomorrow plan positioned on Day, at to to why uniquely opportunity.

on business by one this data platform under cumulative based during week. significant the they and our massive indicators surpassing and and very identifies XXXX do management. customers spend benchmarking levels spend explore we Benchmark our growth management. allows The prospects earlier puts released on peers. driving of platform the $X trillion their aggregated some milestone achieved the data innovation performance in Coupa One Report For we example processes performance company's this on This of It possess position innovative Coupa report this to through of might best things. us a QX industry is of how fact for profitability that starters, optimize own key transactional to is aggregation

at Another in spend plan industries. Coupa going rates which key Coupa our average per BSI all suggests example course, By share of Coupa varying preview, approval was some area this major BSI business spend of approval cycle of release of degrees. our The this all metrics to across into we the that for include employee sentiment will January data months way innovation year is spend positive across and broadly. spend aggregate in industries, to coming insights index the or calendar times, in

P that measured were, again, compared has To page significantly known prescriptive end, most insights our been area pronounced spend and in see and clearly, continue data has QX more game-changing increased for powerful QX, as intelligence accessed offering developed each community that customers, aggregated Coupa. capabilities letter that these we anonymized of is area. traction So generate in the customers benefits. this with where to also usage sanitized with community our by strong of in once our In value our majority to the is are more this as to continually But views. the fully

highlight, help we capabilities quarter the intelligence. full Spend risky that prevention significant exciting uses in of By release just is Risk platform, also leveraging intelligently the More not Coupa of the processing, known of information broadly, and noticed expense to As C product a in intelligence in an we one an decisions generally Guard, availability that during suppliers of example methods that and of as applies community community to evolve have chain game changer. spend intelligence SVP minimize conduct with insights a is Lymphoma our article, fraud which a risk. risk I latest and available is management real-time includes JR our of comprehensive to Miller, and across Leukemia way procurement, supply innovations real-time solution, RXX invoice otherwise. across industry-first and a the artificial This our capabilities one example of prevention recovery of Controller & letter intelligence nature at Coupa. fraud fraud offering flags supply major This community of from make extensive antiquated called me Finance customers leverage that noted would real-time Forbes general the Society, and AI launched community analytics Aware. helps our RXX, Coupa also after-the-fact customer community course

with recently $XXX,XXX in In invoices they one using our Guard, Spend of to by identified good, that then address. fact, on able day, one customers immediately numbers not different invoice duplicate were

payment potential the our generally cross-border invoice most continue support both will payments market, user point Pay be natural solutions supports and the this of customers. the developing areas leverage our payment on extend solution spectrum, our interface Coupa competencies platform program our to access payments and available, expertise. domestic workflow AP the to in in transactional able module. are Coupa once next early as our Coupa Next, Over Unlike for dynamic to other payment design, intuitive of proven other we This for the time, the to business space, an automation, the has development excited the we management deployed launch the spend to Pay step widely we ability the which, in core are invoice invoice.

with our more of are our help go across, to addition new positioned and Coupa future current working money see. Accelerate early, received Virtual continually come overcome. more on the the have and generally still that excited developing closely are we Coupa about uniquely problems customers Cards and problems roadmap, Pay's vision These this for of Coupa we are one payments feedback customers platform. we we the available. are POs course, very capabilities are Now we In to set already very our great Though of we core and our

in experience in part Staples, Google new Supplies Finally, Business, of Depot, the bringing Coupa suppliers Amazon RXX, representing Coupa search, now or Amazon, Imperial letter the generate are BXB intuitive O results within our improved search and Open many to from Coupa. highly cross an Searches as and a platform, Buy open other catalog nature Office fashion. of innovations seamless like in

to Now acquisitions. on move let's

been corruption addressed growing General and risk advanced integrate have and a then management of this the of We Hiperos, our unified historically know, third-party seamlessly you In distinct Regulation, has the QX, technology security, leading new and/or Data privacy third-party regulations as acquisition can come probably the our risk provider, technology many we as user bribery, engine inefficiently on into known that adding key solutions. data acquiring As components advanced that transactional a initiative completed such Protection also addresses acquisition engine. strategy as risks is whose information GDPR. with area to enhance organic compliance power focused applications like demanding we of see point

BSM evaluating with need full part integral of an base. themselves they platform, As protect the advanced of Hiperos customers to equip their risk technology help our the will supply by comprehensively

capabilities Additionally, partners only for but future. engine the will transactional be and core to customers our our not and community value colleagues. in the welcome warmly component risk thereby Hiperos each again power seamlessly colleagues data Coupa's the team become intelligence, a once will user I of key My its our the into customers, of integrated of increasing Coupa supply Hiperos community

of at core out on where, highlight to performers, Coupa many on that Coupa, includes annual as counseling Coupa, have shuffle. transferred The come the agile counseled This we you keeps I results to our new as is XX part learn about is a XX. example of the shuffle our exceptional the called real customer there ways. striving and key excellence. upon our of are we we individuals year, an component of success, that us, and discussions, meritocratic for to here assessment success transfers ago authentic of it a through founded Seven focusing three us Now and and cultivating XXX joint a of within shuffle our one colleagues, promotions at instituted roles desire and years determined performance often culture promoted out point. and values ensuring mismatch is

shy dealing issues. to three won was to handout Michael won Silva success, approach Now ensuring voted da during award and Faustino collaborative colleagues and focusing knowledge". values to doesn't difficult for Celeste, and Johnson and to and customer And always necessary willingness of inspired. customer position. our the customer for Hsu around striving her Fernanda it's insightful due thoughtful, as excited Coupa that results if of situations "her one efforts scope say when from even a results, in-depth with success. internally at awards, lives the drive never-ending for on Michael's I winner based tireless breathes he each a for proactive colleagues away takes outside upon anything around-the-clock Big do excellence Celeste finally, congratulations support quote for Michael, to and outstanding were core MVP her our and product Fernanda approach we the QX, by globe. the

few finishing up, more me let before on highlights. a Now touch

the Payable First, CLM SaaS MarketScape: seek appreciate proud community greatly the consistently the marketplace. best and is be Management. for around we XXXX supports named are Lifecycle Vendor for We to collaborate a in Report leader and QX to our willingness and the IDC Worldwide Wave Source-To-Contract what and industry in Applications of input analyst XXXX Cloud-Enabled Assessment their Forrester Contract Accounts

organic Rica efforts such week a working projects to the on Secondly, I community courtesy as kitchens. Costa upon planting also to XXX to be I to feels gardens in painting and good school now report Coupa this charitable have to so It able Advantage, proud am some March, would local, traveling Coupa spend through to like colleagues to of outreach way. will sustainable community of pouring In our program. centers, develop more organizations. Coupa touch at donations group we foundation XX community of community our Cares made of and for that be than give our local tiling a

ever developing public With had this, confident billion company me we Xfirst new Todd? into and information our So industry. and sharing I that call we hand of of CFO, execution, as our my look more to continue mind XXthe with future excited our Coupa over we are quarter as our are call tomorrow, At a in in let and our colleagues now reaching about earnings wealth fellow the as jointly revenue, a Ford. Day forward than Analyst to path Coupa. in and $X to about our the Todd now we

Todd Ford

was we afternoon on to a good we commitments deliver and company stakeholders. execute our year Last made and the to year on all fronts continued for have everyone. Rob Thanks as record the

results reflected and execution in key metrics. is financial our Our

highlights revenues were year-over-year. look revenues of up now for year. and million, $XX quarter the fourth XX% year, were $XXX million, some at revenues Total Let's for XX% QX for were XX% total also to the for QX year-over-year. up subscription billings Furthermore, fiscal and billings year. the QX for were XX% up year-over-year. And million, up contributed for Calculated up XX% year-over-year factors a largest the $XXX a quarter the million Two, perspective strong $XXX representing in $X increase was going up of Hiperos XX%. the end and acquisition. quarter QX. at Hiperos ACV One, year-end our ever. three, new backlog the approximately at deferred million total included this And ever. year-over-year From million, visibility Deferred acquisition. ago, our revenue billings largest from year, revenue a into QX revenue $XXX from contribution year renewal from of the Several

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

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

from up of operating turn full-time a the business ending operations. X,XXX and acquisition XXX ahead headcount at significant the the significant with came margins at year to XX% made our in margins In fourth non-GAAP year. in also of margins XX% exceeded investments non-GAAP of expectations new XX.X% ending Hiperos results guidance X.X%. now with previous of employees, and Even to gross Let's we last our with QX, quarter and investments, these

the and X%. operating were margins were fiscal non-GAAP For non-GAAP our margins year, gross our XX%

let's and discuss delivered non-GAAP earnings income strong by we QX net revenue in million financial million per net $X.X income our diluted non-GAAP $X.XX Now and and performance results. our share XX.X shares. EPS model, leverage Driven of on of

and of offset investments in which the were activities. at in and and was million, flows. financing at million Hiperos of positive $XX million million end from million flow free Cash for $XXX Now the includes $X quarter-end onto $X paid down short-term positive from balance moving QX. cash by This sheet $XXX QX, cash cash

For the year-over-year year, on of cash XX.X% and percentage million basis as of an free $XX fiscal flows a dollar revenue, were up absolute or revenue. both

Now let's turn to guidance.

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

$X expenses $X expect to gross to full first of subscription reminder, negatively loss a excess in quarter days result QX from days be are the revenues a margins and to are As in the on number will revenues the in from QX. This million. XX% number impacted by we non-GAAP recognize quarter every the in of impact quarter reduction because $X.X revenue expect X%, the With subscription and million. are reflect in backdrop, subscription we operations the days non-GAAP QX QX, three also between of fewer to Hiperos million and be this based QX approximately approximately impacted acquisition.

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

expect a expected be to we expect $XX for million. clarity margins Although approximately growth due XX-month flows. To billings flows cash we don't approximately to to in QX, provide free the on basis additional cash trailing impacted billings free to XX% or to be near-term be material are impact a and acquisitions,

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

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

to approximately which expense Conference, Annual to million $X User from in in marketing our XX $X be year QX by Las As Vegas a to June XX. held million reminder, June spiked due will this and sales our

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

this year, of similar up free and We providing and confident are total a guidance by market last win cash opportunity in ability commitments terms delivering results as both to are employees in have for expect we shareholders. our absolute and dollars continue focusing specific conclude, execute to flows, cash flows year-over-year to our but we and make To large we percentage to on revenue. be on not the of customers,

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

Operator

we take our [Operator ahead. will first Zlotsky Please Stan Instructions]. go question Morgan And from from Stanley.

Your line is open.

Stan Zlotsky

and to guys so for question strong really end Thank much Perfect. congrats on taking year. you the my the

So that the produced What productivity maybe a you. you in in then did first you guidance just from as of the year What standpoint Thank numbers? see results? are baking sales from the quick on on guys XXXX. And quarter. contributions me at fiscal the guys that on strong into organization your one revenue end for for performance the as execution inorganic a follow-up for Todd the far

Rob Bernshteyn

Thanks Stan.

see as enterprise. team, you in high across have very come very execution internationally, from reps and mid-market contribution as our from domestically of organization. both as well and us, sales individual Very, terms the continued strong in So to

continued the Todd? organization the of continuation execution healthy around our team very of So and scaling sales global world. that

Todd Ford

renewals, it during mindful haircut reach the you caution incremental of to for Yes, revenue billings Stan. Hiperos to run historical billings. year we and Hiperos quarters recognized end rate. the take need some year the I in on there from that be will at that several revenues the incremental acquisition million was timing revenue deferred into about XXXX, the call, acquisition would the be as the the the from noted $X factored from Hi will additional due and of to or revenue revenue obviously deferred But

calls, them acquired XXXX. well. the the of into at And assumed contribution of just in In as our FY deferred prior we still lines, revenue minimal we given small beyond balance have process we business end from product addition, and noted acquire integrating revenue Hiperos is DCR as the are contribution the and in

Stan Zlotsky

that's then So contribution fiscal implied to is is your guidance acquisitions XXXX in revenue fair it from quite say minimal? the that

Rob Bernshteyn

right. the typical credit. them execute us all of second of acquisitions, done especially since half these then our and historic with last us were are give let And That's fashion, new in year,

Stan Zlotsky

Perfect. Thank you.

Operator

take We our MacMillan from Markets. will next question now RBC ahead. Ross from Capital go Please

Your line is open.

Ross MacMillan

me much and from well. for questions. first Rob. so Thanks Maybe Two congratulations as one

As you things procurement and lot go that payment look cards. opportunity, down have payment, early Accelerate think moves the the a of I virtual down with been around like financing the

about have rails just you Hiperos. you be Todd, As e-payment the the offering Thank be And I for how you. contribution that the an in material? about on I just maybe timing maybe us subscription on then e-payment a to had thoughts will fiscal wondered revenue and specific QX, market? follow-up could give enhancing third-party if you you around maybe just data of the Will think that your opportunity, expect evolve? could sort you in

Rob Bernshteyn

Well, very Ross. for much thanks the questions,

Coupa very we release in So go through of in products. in Pay, terms of Coupa of typical stages terms fashion, three

first development. something is we have in declaring The that

virtual with available, it making by access when deployments development, certain and a early of is that generally say through used and now for we generally thirdly that quite means means actually leverage. available And that which a Second and those customers, to is it available. of course. any generally our is with getting is available early And the learn set began customer cards we GA our went and order nice launching Pay in Coupa few for customers from is in very developing. And pipeline available deployment access with customers prospective of with it

discount as in think Accelerate us leverage, we a to access something early along And solution. what invoice called of on is want Currently The cross-border. out, you have available. whether for companies to now development, called very Coupa early area it batch to a Coupa access pay fit began host and interesting This might rails that generally payment delve is, payments. our second indeed It or early run we which is is invoice allows this payment whole bank-to-bank runs into. in

to believe it will available, ready so from known. broadly to we we is that a obviously available, out part we And general as generally rich And getting are when early we will take of market. what make the access make we that be

Todd Ford

Ross. Yes,

of performance So and strong Hiperos, revenue very strong result subscription was of driven most which in QX revenue bookings. the December particular, for contribution that on the month Steve organization the the the in and our of the from and linearity new quarter, by largest ever in sales a obviously bookings was

If balance you the that majority million, was bleed of on anyhow. sheet year, Hiperos, $X the the that it at revenue obviously deferred look revenue of will next the into over

but kind deferred that the So some infer separately. the of amount opening you for QX from there balance was minimal out that was could call but nothing I would

Ross MacMillan

you. Thank

Operator

go Please take Chris from ahead. Sachs. Merwin from Goldman not our will question We next

open. line Your is

Chris Merwin

for wanted touch on I intelligence. just first Great. Thanks guess my community questions. taking to Okay. I

it like about increased or fee Rob, the talked your the the in in Risk I of you I Aware new now, the platform separately. product. of Guard And some think As in remarks, offerings some understand are of Spend included offerings usage and monetized

can relates about it to a maybe community and just adoption bit newer incremental the you So talk intelligence just opportunity products? as monetization follow-up. for had Thanks. And a of I

Rob Bernshteyn

get information fuel are and whole of Spend use host they it. think the understand customers those for the but equip just from applications. the is well, to could to actually Guard little to applications. I intelligence on the leverage and a purpose it will Community expand data community, Aware it is Sure. community I to incorporated of really Well, a Risk powerful two platform pretty of you throughout

is here it's the evolution this for like the more quarters We real the incremental value value data see delivering. obviously been fairly course, is customer anticipate that company every XX and virtually opportunity ourselves the ones it's from testament them get monetization subscribing and is the to subscription now a average am perspective but from know pricing incremental up customers per apps our to not I continue platform of quarter the you more the and With time. Now I presented really of for are of actual pay customers. we Coupa, just we XX the to described But the as you anonymized, annual tell when quarters, over only that, to more we to deliver the customers. here a aggregated, has our to a Value-as-a-Service for us proud which value gone continue normalized

Chris Merwin

non-GAAP little looks then it's is as in know And a there and great. I in the software. the are think, of model lot a bit in op it unit up to like put relates That's XXXX, leverage just XXXX. out economics guidance fiscal you there below, it the what fiscal operating And Okay. I income for

So can you for accounted there acquisitions investments is just in the are in and business from maybe any being some making you guidance about you of as the that well? talk if impact the

Rob Bernshteyn

Yes.

number gross So obviously, revenues year, margins of as in QX, down kind typical we because you that the to quarter. it's the the given the work you months, steady a to are reach midterm about talk of of And XX% subscription through to the upfront are through in of targets, state with lower the from and what we days by we look expense a detail to more the obviously the look of cetera. of one margin taking we XX are the for to in the this respect you and XX the range. of the XX% And impact over when will et before a we all tomorrow profile. contribution QX the expect if revenue going first that But impacted take do the reaches expenses range Hiperos getting the expenses. to and up few if acquisitions at go going are expenses next be It's quarters have profile revenue indicated versus as new well, be kind catches to quarter with we

is here. with acquisitions shareholder going of significant continuing. think back that's of scale amount So the the a impact value Obviously, we the are in there taking be to we steps but is obviously the a created couple of model long-term

Chris Merwin

you. Okay. Great. Thank

Operator

Peterson Raymond Brian go from take James. now ahead. our Please will from We question next

Your line is open.

Brian Peterson

Hi.

mute. that about Sorry I guys. was on

question. So the thanks for taking

comments. to So on Rob, wanted one follow-up your of I

across, with as curious, products, particularly you mentioned what value say see. to of of the are going maybe more customers? money they the you I You money these about generated you on for some price just will the more am modules the your more come points

Rob Bernshteyn

of question. and Brian, we also a to through begin Pay customers customers lot are look at buying integrations, about forms for and if a are of payments, to Coupa to able great we runs, went Sure. complexity the these And ways through of being paying handle us when We thanks in complex The reconciliation. why we that say, with. lot look, really come that Coupa, really can't to doing rails different it Coupa? did had deal interesting the by was thing And complex of in host we around whole driven payment, see batch customers be a of problems terms a problems. of is

is have leveraged We be But will areas in have specific drive talk there. there been of model onion intuitive distinct ready everything determining as into peeling we problem not pay, transactional to can where strategically the for can at the value meaningful we really that the and in our for most some some will fruit, doing our to hanging through back offer we core deeper we same be on customers publicly We most with value very monetized monetized a our sit fair customers. the digging penalize what competencies scenarios tax We go customers. where is more the about to and be our software. areas low on this leverage And core. And don't solve. the of moment. So And them. share don't we We subscription recurring that the charge side we them. are price our models deeper with

the early market, no are will it. bring in more, capabilities as and course newest some share question access with we We them we about to of of

Brian Peterson

maybe you. Todd, And Rob. one Thanks for Understood.

mentioned the you revenue just the share retention? renewals. record Thanks You on based guys. dollar Anything can

Todd Ford

Yes.

rates, highlighted trend basically expansion, small range that dollar renewal we based look both within improvements So at last quarter-over-quarter the same when gross quarter. you the continues, and same but

Operator

Joseph ahead. question will Foresi Please our go from from Fitzgerald. take now We Cantor next

open Your line is

Drew Kootman

highlight couple Kootman, is Drew a growth, This you wondering and if functionality? Hi. maybe areas Joe. I for could on was of geography by

Rob Bernshteyn

to but slice. question, tough interesting question a very a That's

have things relationship at customers low we of lot There the moment solutions of is paper-based they the their work not maturity automating usability wherever on one on they incumbents. are from very most ourselves being to with their via pride have They model. really struggling with enter expense might Coupa whatever at So able processing. of spend reports. their and the be in a there of may have might They They might contract. be

from We a we strong in wherever and So further the the perspective point go is midmarket then seeing market enter take from in a or are business. functional perspective, and biggest a value maturity there. geographic the and we folks our up From pain further biggest value driver very where we growth curve. perspective is

on are international cultivation continued are obviously investments. perspective, enterprise. now in We seeing of domestically seeing return the our and investment strong in very From marketing sales market a we opportunity

So sector, seeing we strong very in growth. are every

We as would business question. best effect I we way And nice portfolio out have will be our your that build the a address organically.

Drew Kootman

in and Perfect. the any can that you expectations the are macro And environment baked demand how overall discuss guidance looks?

Todd Ford

respect new we lot cetera. and more more resulting And pipeline continuing would our of good with like ACV, obviously guidance customers our macro look we et actually the how anytime can it and pipeline, I in tomorrow will look you how macro what perspective, to getting only The that's targeting Steve highlight the things good out, a from in from strong Chandar go Rob to thing are sizes see and that prescriptive change And we feel stuff of a rates. set how close we look to that how from some are towards do continue build strong. to continue and see we trends about call does deal data up,

and visibility that at we the we have. how look that's guidance So

Drew Kootman

Thank Great. you.

Operator

We will now ahead. take our next question from Ryan MacDonald from Needham go & Company. Please

open. line Your

Ryan MacDonald

hear Hi. around to I what color, year Good Obviously then seeing you And there? and government question in also federal opportunity. federal is is love it on Todd. here? the XXXX guess maybe USPS you great see heading more fiscal are evening, the Rob really scalability the the pipeline a and can, first would deal to the if little into on potential vertical government

Rob Bernshteyn

Yes. Sure, happy to address that, Ryan.

this obviously million So specifically, annual in revenue. over but in $X spend the the a of in terms over largest United world, Their States obviously of dollars. Service of half billions is billion one people, managed is it's organizations well-known, in Postal

this the the on dollars spend top going this lifecycle measured you of of improving experience of in looking are transaction initial are a at head. improving whole host all is displays, really And for, XX,XXX-plus these to project errors, to visibility. off ROI And searchability, across things and higher rates. millions categories name the like their contract compliance repair my improving And annually. using and overall this and categorization they we pricing, The they and millions marketing, kind great that signage We of are costs, invoice reducing strong, users, a known are from item of streamlining five-year the their user lower things and for just overall be it. are driving doing management of some spend really, maintenance

usability, it's for XX/X large-scale customer capabilities a transactional success where support very, we with well on suited greatest types these of basis strong So deliver federal and competencies projects a are to team. very government the core customer our really high-volume that are around

this overall excited So pipeline to develop we about the nicely. continues and opportunity are

long. concerned of some we see have a drop of that quite to really we starting were of labor at great this areas the long is and time that. is been starting But quite is to for obviously the USPS our entering example bit a to we fruits the federal close about One and is payback are and good

Ryan MacDonald

some Great. question, heard similar And offer procurement. seems procurement from functionality engine? a the some the on with And platform Based base around approvals driving developing workflows color you have functionality dynamic customer you around, just process. to And we with, what I recent core it's look that say, for of see follow-up fieldwork, procurement is of for sort trying for like the our demand within ServiceNow workflows. then my around workflow it that am specifically around

Rob Bernshteyn

Sure. have that Well, workflow I elements capabilities. core software every large-scale product firmly has of some believe to enterprise

processes You automating are business some in way. some

that. companies large-scale the majority doing So are cover I may imagine you enterprise or of into software vast run

doing are obviously more a that. great deal than We

business process. having that the management thought and Our workflow engine is highly process, dynamic suited deliver for it's through been spend to highly to

of are that think no our to So we very good doubt. in continue part to as we a platform, position scale

Ryan MacDonald

the quarter. Great. on Thanks for the Congrats questions.

Rob Bernshteyn

you. Thank

Operator

from will Lenschow We ahead. go our next Please now Raimo take question from Barclays.

line Your open. is

Raimo Lenschow

any new bit do my sure your for new a start question. we of are And one sales Rob, in renewal you changes am you the once the in the getting, cross-sell next force new with into to kind point? way Thanks day a structure of, talk Do terms sales them? year, you straightaway now. a taking the is Can modules force it's kickoff acquired I at force Hi. of you you modules little you meeting into the get Thank to had about you. go as what compensation sales cross-sell? for or then, coming do of Todd, force, you we terms year? accounts incentivized go financial any as in how Or sales the the sales

Rob Bernshteyn

entire Sure. our Well, and marketing been the all, And really share annual company years. local much overall. of actually and kick-off. and do many that quarter time and time the get we practices QBRs, fact, that. across online thanks Raimo. quarterly don't business We best all have sales in into we have interact teams, We one for we very have first for reviews don't doing the moving We

moving very, very and we of quickly are we proud So that. are

quickly making and two see One these is, the integrate is into on core In acquire, very our capabilities on it both user perspectives. terms go-to-market team as materials as platform. prospects power capabilities our we we that need which to base the positioning of create rewarding side transactional and acquisition well both the the customer I to that now that have base latest, side see. to by team you products go that, integrated our we part can as a done, of large customer that with every usability been new platform of is well the And the permission done tell very, the in the as including quickly side. strategy, overarching happen. development and our and very And on we Great already has the company with work to work we acquired

demos Our platform. the showcase integrated

addresses have solution the our that solution. And that positioning on have looking one these gotten business prospective we with comprehensive adjusted that delivering Our showcases closer And closer and every of spend of reality the pricing management Raimo, we one customers accordingly. our acquisitions done, platform is management all platform. spend is, are needs. integrated And their for

Todd Ford

very now Raimo. you respect proactive in been on the maybe he and minor thoughtful been look doing, a people the some promoting places than to were right team, that up our that Hi where building very in been if cases sales has organization, sales and at two-and-a-half made, the he here bit years With has adjustments or in CRO, little what Steve front. has longer

hiring bit So heavily starting nothing talked before, in new your I invest And of out noted a would expansion you QX. we acquiring in pretty international to as some and more and the job of tracker in pin we to have surveys, in as little went about sales QX, the ordinary. talent really hard say on

we Steve to it. capitalize think great has on right opportunity team a the and I see there So got

Raimo Lenschow

Perfect. Congrats. you. Thank

Operator

take from go now question Terry next Tillman our will ahead. SunTrust We Please from Robinson Humphrey.

Your line is open.

Terry Tillman

Can me? Hi. gentlemen. Good hear you afternoon

Rob Bernshteyn

Yes, we can.

Terry Tillman

the quarter. been questions a have Most with of XX on questions. Congrats list I but my started of answered

few. actually a I still So have

one maybe have could about about where provide more lot got possibly the momentum maybe guess a opportunities? investment? partner sounds and Just geographies like little on channel. quantification Is it but any with of are you you or It bit verticals? I partners So Rob, like color incremental partner a talk thing.

Rob Bernshteyn

first own see we a broadly wonderful SIs, that, investing happening. terms and you Coupa, to tell all let folks on look, Well, me of certified which their are is Terry. thing absolutely their Sure, more trained dollars in speaking of get

bringing the talent own is customer demand. driven us of into have A customers. prospective to lot by And Some them is of deals. desire driven seeing base we their their that right that secondly, by more with are involved

us are as into as We see ground game. domestically internationally. well we them deals a And bringing this as really seeing more

are the developing the marquee relationships most with We some of integrators. world all systems very strong over

those many to coming with verticals the of in highly customers portfolio are of service. relationships a We that they successful

anticipated And we simply we have so those the relationships initially are coming than track record might of because quicker together developed. have

very overall, So healthy.

Terry Tillman

anything or to it? metrics Okay. And Or hear part And XXXX? adept need they more of force, in to workflow you Thank the through procure-to-pay going we whether do can are way sales all payment are processing it's FY the on I that am payment some cycle, the tomorrow. at selling you. people? and But of just Coupa to you other overlay Pay, say Coupa billings the assuming about materiality Pay,

Rob Bernshteyn

Yes.

a two-part that's question. So

some required in to comp kinds folks huge there be just all really to the of Coupa relatively always that and overlay platform doing of area we we team start done, in talking with and think, a the process overlay there. new of certain specialists that have some cases. jump double some can help what are Coupa will I am about overall some I work nature. extent, that's sales But things a not

placed have for invest we marketing invest on So certainly, but a the same will constraints now will and within there we decade. sales there, we highly efficient over that us

I early area. In materialize, terms the of as in model days that mentioned, will it's how

some In the customers. are already GA. several products, taking of have we We

and very very transactions We we strong have Pay is seen in Coupa pipeline. thousands a develop continue to promising of which

of happened deal has be we and work to a about. done are really that great work a of So lot excited

Terry Tillman

you. All right. Thank

Operator

take question JPMorgan. from Mark will go next We our Murphy Please from ahead. now

Your open. is line

Mark Murphy

sounded the industries bit seen and your that your spend a you was into spend for for Yes. on bit. increased rejection and had quite a this that amounts certain that had to Thank longer also was approval you, the had index I mentioned quite requests looked that positive Rob, you quarter the year. last commentary so listening to and data time taking in

changed approval that am wondering, and has all recent I the So diminished months? Has to that or diminished amounts? time trend the rejection at in with just

Rob Bernshteyn

Well, question. thanks the for Mark

apart talk pipeline is what's question remains so positioned and we well complete business, clarity. it execute our about When our are we industry. Let that leader our we break me to our to first the in extend there strong position pertains and in a really as business as feel our business happening and

very a all come look Spend data Coupa there's But Business deal data. have the bullishness part Index be the January. as insights surely industries coming bringing of when seen into Now we from great this look a that on that and everyone, okay metric some at we then you that to will we instance, bit overall Generally, time, at longer at if of out, interesting for approve, happening to and time you the per so QX in services QX January we look an suddenly approvals in actually bursts of taken the over of average saw financial of has if first average month basis. user

QX in So really something growth January. saw QX at retail, marked sudden average in and we into like time looking speed look you over That's and a approval when deceleration in then coming that spend at per strong growth in XXXX. person. burst Alternatively, spend

a at you increase look into at spend XXXX average rejections high-tech, rates, and decelerating January. marked approval into growth an coming you If industry we in like look spend saw coming

happening of the Coupa we much as when to all testing could when these of that statistically here as will across at point different is, well and matter interesting backwards these I indicators just BSI. examples to, of is and which sure as be significant enough thing large. leading making yourselves part are distilled industry launch the for our around process seeing that are of that And it, some So what's like the folks down we industries

Mark Murphy

you. makes accounting coming Todd, try think follow-up, just Yes, temporary I the Thank very as some a Hiperos, of sense. noise. Okay. to out strip to to clear. It back

to that's high is little look I it? of help at trying ARR for a was we you all are think ACV company we run are or the just acquired kind the that. rate what wondering level, at around a level time on the I think the

Todd Ford

Sure.

that back we got of did So acquisition out which those was things a had, filed their call of rate an we before the in slightly XX we into were the, said, one And material since was advance. business run higher. range, process company is, it, and with Hiperos the in numbers, the I to as of one $XX in was of end you if it. and year it bill days historical that And X-K spun entities we million acquired December, the acquired there two

for So enterprise software, most in have to benefit. strong of QX entered you in our seasonally billings that the QX didn't a that

So And to get that a going also non-GAAP revenue time basis. QX billings come will by the was the in have year of on that and start throughout end-quarter is that's a the rate. you billings then that lot to to breakeven when, run business roughly and

margins, roughly although it and from that what's So a was really taking, additional if near-term you impacting we operating about of perspective. that's think flow the the amount are breakeven free gross margins expense cash

Mark Murphy

Okay.

to just the got of out So remaining clarify, million? of the after is part spun portion it run rate $XX

Todd Ford

bit Yes. more little A million. than $XX

Mark Murphy

Okay. Thank congrats. you and Understood.

Todd Ford

Mark. Thanks

Operator

Please now We next from go from ahead. Ikeda take our Koji Oppenheimer. will question

line Your is open.

Koji Ikeda

quarter question my here. taking results for congrats on Thanks the and fourth Great.

into target, is success products that target? Just Coupa products thinking that $X about even of and Coupa much $X billion built Coupa billion revenue Pay Pay, Pay how too revenue existing of from future the

Rob Bernshteyn

Thanks Koji.

and roughly we at time IPO, third. the procurement revenue was from the product Analyst about of we Day if coming be our like of sharing now tomorrow. But something XX% began, XXX% interesting look our business our will things this One and where at you some it's a of and by our core of

management that, of have are to seeing to desire comprehensive these mentioned customer and is of all business components, So a if solution. you technology by happening this Raimo's what's as part these overall a that question, spend will, information are I we of solution earlier modules, all

isn't annual from module the to difficult for come to see now So XX not out or how to grown is difficult What very break module subscription customer quarters. do or per what and is revenue for do. that will that's whether very, us this average to portion

management capabilities overall of impact have we billion. and set. is So Rest just that It's set to believe key drive assured, that of some to we us some modeled payments how as we that is solution toward. part $X business platform crazy getting going we our to vision model continue the to around working haven't spend to another massive are

Koji Ikeda

or Super USPS the that. a required to USPS Rob previous to on visible the quarter. had level win? taking Coupa's I my certification question. question FedRAMP to Thanks just if for some end And clear. winning to secure hear in certification on question follow-up path win that of a Thanks Curious for

Rob Bernshteyn

question to to So that the through it, is complex to yes. you in there's requirements But answer of very order Koji, broader be serve the takes to the think that in position that a them. I whole is context host a government

through and the get time. once, third So them second second the you the you through get help they help once you time, you them time they

federal or to done Service have the think months the very of so the to customers in XX positions down road. United for we so well other partner us that prepare a last And work very, ourselves of we States a become and Postal lot

Operator

no today. further the conference do At all joining thank time, you We for there this us. concludes are questions. for This

You may disconnect. know

Coupa Software (COUP) 11 Mar 192019 Q4 Earnings call transcript