Coupa Software Incorporated
COUP
reported strong third-quarter fiscal 2023 results with solid revenues and healthy momentum in the subscription business. Both the bottom line and top line beat respective estimates. The robust quarterly performance was backed by the strength of the comprehensive portfolio that offers increased visibility and control to firms over their business spending and facilitates data-driven decisions for improved operations.
Quarter Details
GAAP net loss in the quarter was $84.7 million, or a loss of $1.11 per share compared with a net loss of $91.2 million or a loss of $1.23 per share in the prior-year quarter. Non-GAAP net income during the quarter was $11.6 million or 15 cents per share compared with $23.5 million or 31 cents per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 4 cents.
Coupa Software, Inc. Price, Consensus and EPS Surprise
Coupa Software, Inc. price-consensus-eps-surprise-chart
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Coupa Software, Inc. Quote
Revenues improved to $217.3 million from $185.8 million in the year-earlier quarter, beating the Zacks Consensus Estimate of $212 million. The growth was backed by the strong performance in the North America enterprise market, with more customers preferring its ROI-driven business spend management platform to optimize their spend.
Subscription revenues improved 20% year over year to $198.4 million, backed by the strengthening of the U.S. dollar against the euro. Professional services revenues during the quarter were $18.9 million compared with $21.1 million in the year-ago quarter.
Operating Details
Gross profit improved to $129.6 million from $108.2 million in the prior-year quarter, driven by top-line growth. GAAP operating loss was $77.4 million compared with an operating loss of $56.1 million a year ago. Non-GAAP operating income in the quarter was $16.5 million compared with $27.9 million in the year-earlier quarter.
Cash Flow & Liquidity
In the first nine months of fiscal 2023, the company generated operating cash flow of $150.1 million compared with $103.9 million in the prior-year period. As of Oct 31, 2022, the company had $521.6 million of cash and cash equivalents with net convertible senior notes of $2,161.5 million.
Merger Agreement
During the quarter, Coupa inked a definitive agreement with Thomas Bravo to merge its business with the software investment firm. The all-cash transaction, with an enterprise value of $8.0 billion, is likely to be completed in the first half of 2023, subject to mandatory closing conditions and regulatory approvals. Post completion of the deal, Coupa will operate as a privately held company retaining its brand name.
Zacks Rank & Stocks to Consider
Coupa currently carries a Zacks Rank #3 (Hold).
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TESSCO Technologies Incorporated
TESS
, sporting a Zacks Rank #1, delivered an earnings surprise of 126.1%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 44.3% since December 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Harmonic Inc.
HLIT
, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 55.5%, on average, in the trailing four quarters. Earnings estimates for Harmonic for the current year have moved up 48.6% since March 2021.
Harmonic provides video delivery software, products, system solutions and services worldwide. With more than three decades of experience, it has revolutionized cable access networking via the industry’s first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit Internet service to consumers’ homes and mobile devices.
AudioCodes Ltd.
AUDC
, sporting a Zacks Rank #1, is likely to benefit from the secular tailwinds related to IP-based communications. Incorporated in 1992 and headquartered in Lod, Israel, it offers advanced communications software, products and productivity solutions for the digital workplace. It has a long-term earnings growth expectation of 9%.
AudioCodes aims to leverage its long-term partnership with Microsoft to further strengthen its market position. It is also likely to benefit from its continued focus on high-margin businesses.
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