Coupa Software Inc(NASDAQ: COUP) stock rose over 2.9% on Jan 18th, 2018 (as of 1:59PM EST; Source: Google finance) post the analysts from Needham & Company coverage on the stock with a Buy rating. The analysts set a target of $39.00. Peter Levine, analyst from Needham & Company sees that the group is “one of the most innovative vendors” in the spend management space. During the second quarter of 2018, the group crossed $500 billion in Cumulative Spend under Management. For the third quarter of 2018, the delivered $570 billion at the end of the period. They won several major clients during the third quarter like Caterpillar, who went live with Coupa at their first location.
The group reported overall revenues rise 34% year-over-year, to $47.3 million during the third quarter of 2018. Subscription revenue surged 39% yoy to $42.8 million, which accounted 90% of total revenue. Non-GAAP operating loss reached $2.4 million or negative 5% of revenue against negative 8% in the year ago period. Total calculated billings for the trailing 12 months ended October 31, 2017 rose 37% yoy to $195.7 million, against their trailing 12 months billings growth rate at the end of Q2 of 36%. Total deferred revenue at quarter end was $97.6 million, rising from $73 million in the previous year.
The group’s third quarter non-GAAP gross margin reached 72.6%, from 69.4% in the same period last year. They invested in their professional services and support organizations, and continued to show gross margin improvement. Non-GAAP gross margin from subscriptions was 81% and non-GAAP gross margin from professional services and other was negative 5%.
Meanwhile, the group intends to offer $200 million of convertible unsecured senior notes to enhance liquidity. Coupa would give the initial purchasers of the notes an option to buy up to an additional $30 million aggregate principal amount of the notes to cover any over-allotment. This option will be exercisable for 13 days. Interest on the notes would be paid semi-annually and would mature in 2023, subject to customary closing conditions.
The group earlier acquired Simeno, a provider of cross-catalog search and catalog management. With this move, the group leveraged Simeno’s tech to grow its Open Buy Program and to increase its local presence in German and Swiss markets.