Record Quarterly Revenues of $61.7 million, Up 38% Year-Over-Year and Free Cash Flows of $9.0 millionCumulative Spend Under Management Surpasses $840 Billion

SAN MATEO, Calif., Sept. 04, 2018 (GLOBE NEWSWIRE) -- Coupa Software (NASDAQ: COUP), a leader in business spend management (BSM), today announced financial results for its second fiscal quarter ended July 31, 2018.

“Our commitment to developing a fast growing and vibrant customer community and our strong alignment around our three core values – ensuring customer success, focusing on results, and striving for excellence – continue to support our ability to deliver on our business and financial objectives,” said Rob Bernshteyn, CEO of Coupa. “Our Q2 results demonstrate our continued strong execution and the rapid and systematic implementation of our value-as-a-service solutions; further expanding our leadership position in business spend management globally.”

Fiscal Second Quarter Results

-- Total revenues were $61.7 million, an increase of 38% compared to the same period last year. Subscription revenues were $55.4 million, an increase of 39% compared to the same period last year. -- GAAP operating loss was $10.6 million, compared to a loss of $14.4 million for the same period last year. Non-GAAP operating income was $4.0 million, compared to a loss of $5.7 million for the same period last year. -- GAAP net loss was $13.9 million, compared to a loss of $13.7 million for the same period last year. GAAP net loss per basic and diluted share was $0.24, compared to a loss of $0.26 for the same period last year. Non-GAAP net income was $3.3 million, compared to a loss of $5.4 million for the same period last year. Non-GAAP net income per diluted share was $0.05, compared to a loss of $0.10 per basic and diluted share for the same period last year. -- Operating cash flows and free cash flows for the quarter ended July 31, 2018, were $11.3 million and $9.0 million, respectively.

Business Outlook:

The following forward-looking statements reflect Coupa’s expectations as of September 4, 2018. Guidance is based on the new revenue recognition standard, ASC 606, which Coupa adopted on February 1, 2018.

Third quarter of fiscal 2019:

-- Total revenues are expected to be between $62.0 and $63.0 million. -- Subscription revenues are expected to be between $56.5 and $57.5 million. -- Professional services and other revenues are expected to be approximately $5.5 million. -- Non-GAAP loss from operations is expected to be between $1.0 and $2.0 million. -- Non-GAAP net loss per share is expected to be between $0.01 loss and $0.04 loss per share. -- Basic and diluted weighted average share count is expected to be approximately 57.9 million shares.

Full year fiscal 2019:

-- Total revenues are expected to be between $243 and $245 million. -- Non-GAAP loss from operations is expected to be between $1.0 and $4.0 million. -- Non-GAAP net loss per share is expected to be between $0.06 loss and $0.11 loss per share. -- Basic and diluted weighted average share count is expected to be approximately 57.5 million shares.

See the section titled “Non-GAAP Financial Measures” and the reconciliation tables below for important details regarding Coupa’s non-GAAP measures. We define free cash flows as operating cash flows less purchases of property and equipment.

Recent Business Highlights:

-- Coupa added new customers in Q2, including but not limited to: Telenor, McCain Foods, Leprino Foods, US Concrete, Wabash National Corporation, Hubert Burda Media, Boyd Gaming, Veeam Software, Tencent, The NPD Group, Inchcape, and Benteler. -- Coupa acquired the technology assets of DCR Workforce, a leading SaaS application provider for contingent workforce and services procurement management. The acquisition further solidifies Coupa’s vision of enabling organizations to manage all their business spend, including contingent workforce spend, within a comprehensive BSM platform. -- Coupa was named a Leader in Gartner’s Magic Quadrant for Procure-to-Pay Suites for the third time in a row. -- Coupa will be branding a space in KPMG’s Ignition Center in Nanjing, China where KPMG customers and prospects can come to learn more about BSM and how Coupa can be part of their digital transformation initiatives.

Conference Call Information:

Coupa will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today.

-- Parties in the U.S. and Canada can access the call by dialing (800) 239-9838, using conference code 2563613. -- International parties can access the call by dialing +1 (323) 994-2093, using conference code 2563613.

A live webcast will be accessible on Coupa’s investor relations website at http://investors.coupa.com. A replay will be available through the same link. A telephonic replay of the conference call will be available through Tuesday, September 11, 2018. To access the replay, parties in the U.S. and Canada should call (888) 203-1112 and enter conference code 2563613. International parties should call +1 (719) 457-0820 and enter conference code 2563613.

Non-GAAP Financial Measures:

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures that exclude share-based compensation expense, amortization of acquired intangible assets, amortization of debt discount and issuance costs from convertible notes, and related tax effects. Coupa believes these non-GAAP measures are useful in evaluating its operating performance and regularly reviews these measures as it evaluates its business.

Coupa believes these non-GAAP measures provide investors and other users of its financial information consistency and comparability with its past financial performance and facilitate period to period comparisons of operations. Coupa believes these non-GAAP measures are useful in evaluating its operating performance compared to that of other companies in its industry, as they generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance.

Coupa uses these non-GAAP measures in conjunction with GAAP measures as part of its overall assessment of its performance, including the preparation of its annual operating budget and quarterly forecasts, to evaluate the effectiveness of its business strategies and to communicate with its board of directors concerning its financial performance. The definitions of its non-GAAP measures may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, Coupa’s non-GAAP measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

Coupa compensates for these limitations by providing investors and other users of its financial information a reconciliation of non-GAAP measures to the related GAAP financial measures. Coupa encourages investors and others to review its financial information in its entirety, not to rely on any single financial measure and to view its non-GAAP measures in conjunction with GAAP financial measures. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures attached to this release.

With respect to Coupa’s guidance as provided under “Business Outlook” above, Coupa has not reconciled its expectations for non-GAAP loss from operations to GAAP loss from operations or non-GAAP net loss per share to GAAP net loss per share because certain items excluded from non-GAAP operating loss and net loss, such as charges related to share-based compensation expense, amortization of acquired intangible assets, amortization of debt discount and issuance costs from our convertible notes, and related tax effects, cannot be reasonably calculated or predicted at this time. The effect of these excluded items may be significant.

Coupa also uses key metrics such as cumulative spend under management, which represents the aggregate amount of money that has been transacted through its core platform for all of its customers collectively since it launched its platform. Coupa calculates this metric by aggregating the actual transaction data, such as invoices, purchase orders and expenses, from customers on its core platform. While Coupa does not believe this metric is directly correlated to its financial results, it believes that the adoption of its core platform, as evidenced by growth in cumulative spend under management, drives additional value to its customers, which will enhance its ability to acquire new customers and to increase renewals and upsells to existing customers.

Forward-Looking Statements:

This release includes forward-looking statements. All statements other than statements of historical facts, including the statements of management and statements in “Business Outlook" are forward-looking statements. These forward-looking statements are based on Coupa’s current expectations and projections about future events and trends that Coupa believes may affect its financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially, including: Coupa has a limited operating history, which makes it difficult to predict its future operating results; if Coupa is unable to attract new customers, the growth of its revenues will be adversely affected; because its platform is sold to large enterprises with complex operating environments, Coupa encounters long and unpredictable sales cycles; risks and liabilities related to breach of its security measures or unauthorized access to customer data; the markets in which Coupa participates are intensely competitive; Coupa’s business depends substantially on its customers renewing their subscriptions and purchasing additional subscriptions; if Coupa fails to develop widespread brand awareness cost-effectively, its business may suffer; and if Coupa fails to manage its recent rapid growth effectively, Coupa may be unable to execute its business plan, maintain high levels of service, or adequately address competitive challenges.

These and other risks and uncertainties that could affect Coupa’s future results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Coupa’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on June 6, 2018, which is available at investors.coupa.com and on the SEC’s website at www.sec.gov. Further information on potential risks that could affect actual results will be included in other periodic filings Coupa makes with the SEC.

The forward-looking statements in this release reflect Coupa’s expectations as of September 4, 2018. Coupa undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.

About Coupa Software Coupa Software (NASDAQ:COUP) is the leading provider of BSM solutions. We offer a comprehensive, cloud-based BSM platform that has connected hundreds of organizations with more than four million suppliers globally. Our platform provides greater visibility into and control over how companies spend money. Using our platform, businesses are able to achieve real, measurable value and savings that drive their profitability. Learn more at www.coupa.com. Read more on the Coupa Blog or follow @Coupa on Twitter.

Investor Relations:NMN Advisors for Coupa Nicole Noutsios(510) 315-1003 ir@coupa.com

Media Contact: Global Public Relations Stefanie Gordish(415) 590-9722 stefanie.gordish@coupa.com

COUPA SOFTWARE INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (unaudited) Three Months Ended Six Months Ended July 31, July 31, ------------------------ ------------------------ 2018 2017 2018 2017 - ------- - - ------- - - ------- - - ------- - Revenues: Subscription services $ 55,374 $ 39,764 $ 105,340 $ 75,428 Professional services and other 6,277 4,787 12,663 10,260 - ------- - - ------- - - ------- - - ------- - Total revenues 61,651 44,551 118,003 85,688 Cost of revenues: Subscription services 11,773 9,025 22,947 17,021 Professional services and other 6,867 5,923 13,818 11,424 - ------- - - ------- - - ------- - - ------- - Total cost of revenues 18,640 14,948 36,765 28,445 - ------- - - ------- - - ------- - - ------- - Gross profit 43,011 29,603 81,238 57,243 - ------- - - ------- - - ------- - - ------- - Operating expenses: Research and development 13,415 10,720 26,616 19,892 Sales and marketing 26,580 23,812 51,240 44,490 General and administrative 13,640 9,430 26,075 17,607 - ------- - - ------- - - ------- - - ------- - Total operating expenses 53,635 43,962 103,931 81,989 - ------- - - ------- - - ------- - - ------- - Loss from operations (10,624 ) (14,359 ) (22,693 ) (24,746 ) Interest expense (3,122 ) (6 ) (6,095 ) (6 ) Interest income and other, net 372 713 450 1,147 - ------- - - ------- - - ------- - - ------- - Loss before provision for income taxes (13,374 ) (13,652 ) (28,338 ) (23,605 ) Provision for income taxes 480 90 970 175 - ------- - - ------- - - ------- - - ------- - Net loss $ (13,854 ) $ (13,742 ) $ (29,308 ) $ (23,780 ) - ------- - - ------- - - ------- - - ------- - Net loss per share attributable to common stockholders, $ (0.24 ) $ (0.26 ) $ (0.52 ) $ (0.46 ) basic and diluted - ------- - - ------- - - ------- - - ------- - Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic 56,966 52,749 56,429 51,681 and diluted - ------- - - ------- - - ------- - - ------- -

COUPA SOFTWARE INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) (unaudited) July 31, January 31, 2018 2018 - -------- - - -------- - Assets Current assets: Cash and cash equivalents $ 282,061 $ 412,903 Marketable securities 161,310 — Accounts receivable, net of allowances 49,777 61,366 Prepaid expenses and other current assets 9,193 10,952 Deferred commissions, current portion 5,464 3,756 - -------- - - -------- - Total current assets 507,805 488,977 Property and equipment, net 7,610 5,186 Deferred commissions, net of current portion 13,848 3,896 Goodwill 44,410 44,410 Intangible assets, net 17,850 20,020 Other assets 5,358 9,961 - -------- - - -------- - Total assets $ 596,881 $ 572,450 - -------- - - -------- - Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 3,275 $ 1,342 Accrued expenses and other current liabilities 30,320 26,643 Deferred revenue, current portion 127,809 125,714 Convertible senior notes, net 168,652 — - -------- - - -------- - Total current liabilities 330,056 153,699 Convertible senior notes, net — 163,010 Deferred revenue, net of current portion 1,130 2,316 Other liabilities 13,008 12,880 Total liabilities 344,194 331,905 - -------- - - -------- - Stockholders’ equity: Preferred stock, $0.0001 par value per share — — Common stock, $0.0001 par value per share 6 6 Additional paid-in capital 481,543 445,318 Accumulated other comprehensive loss (221 ) (298 ) Accumulated deficit (228,641 ) (204,481 ) - -------- - - -------- - Total stockholders’ equity 252,687 240,545 Total liabilities and stockholders’ equity $ 596,881 $ 572,450 - -------- - - -------- -

COUPA SOFTWARE INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) Six Months Ended July 31, ------------------------- 2018 2017 - -------- - - ------- - Cash flows from operating activities Net loss $ (29,308 ) $ (23,780 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 3,997 3,613 Accretion of discounts on marketable securities, net (295 ) — Amortization of deferred commissions 2,660 2,011 Amortization of debt discount and issuance costs 5,642 — Stock-based compensation 24,870 12,916 Other (541 ) 202 Changes in operating assets and liabilities: Accounts receivable 11,583 11,854 Prepaid expenses and other current assets 625 1,802 Other assets 130 676 Deferred commissions (5,285 ) (1,873 ) Accounts payable 1,955 (299 ) Accrued expenses and other liabilities 5,260 5,158 Deferred revenue 2,651 3,841 Net cash provided by operating activities 23,944 16,121 - -------- - - ------- - Cash flows from investing activities Purchase of marketable securities (160,500 ) — Acquisitions, net of cash acquired (1,178 ) (39,073 ) Purchase of property and equipment (3,416 ) (2,101 ) Net cash used in investing activities (165,094 ) (41,174 ) - -------- - - ------- - Cash flows from financing activities Payment of issuance costs for the issuance of convertible senior notes (639 ) — Proceeds from issuance of common stock, net of underwriting — 22,264 discounts, commissions and offering costs Proceeds from the exercise of common stock options 6,810 6,383 Proceeds from issuance of common stock for employee stock purchase plan 4,137 3,025 Net cash provided by financing activities 10,308 31,672 - -------- - - ------- - Net (decrease) increase in cash, cash equivalents, and restricted cash (130,842 ) 6,619 Cash, cash equivalents, and restricted cash at beginning of year 412,976 201,972 Cash, cash equivalents, and restricted cash at end of period $ 282,134 $ 208,591 - -------- - - ------- - Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets Cash and cash equivalents 282,061 208,340 Restricted cash included in prepaid expenses and other current assets — 251 Restricted cash included in other assets 73 — Total cash, cash equivalents, and restricted cash $ 282,134 $ 208,591 - -------- - - ------- -

COUPA SOFTWARE INCORPORATED Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended July 31, 2018 (in thousands, except per share amounts) (unaudited) Amortiza Amortizati tion of Share-Based on of Debt GAAP Compensatio Acquired Discount Non-GAAP n Intangible Expenses and Assets Issuance Costs ----------- ---------- --------- ------- ---------- Costs and expenses: Costs of subscription services $ 11,773 $ (1,093 ) $ (844 ) — $ 9,836 Costs of professional services and other 6,867 (1,069 ) — — 5,798 Gross profit 69.8 % 3.5 % 1.4 % 0.0 % 74.6 % Research and development 13,415 (2,958 ) — — 10,457 Sales and marketing 26,580 (3,863 ) (251 ) — 22,466 General and administrative 13,640 (4,575 ) — — 9,065 Income (loss) from operations (10,624 ) 13,558 1,095 — 4,029 Operating margin -17.2 % 22.0 % 1.8 % 0.0 % 6.5 % Interest expense (3,122 ) — — 2,894 (228 ) Interest income and other, net 372 — — — 372 Income (loss) before provision for income taxes (13,374 ) 13,558 1,095 2,894 4,173 Provision for income taxes 480 371 25 — 876 Net income (loss) (13,854 ) 13,187 1,070 2,894 3,297 Net income (loss) per share attributable to common (0.24 ) 0.06 stockholders, basic (1) $ $ Net income (loss) per share attributable to common (0.24 ) 0.05 stockholders, diluted (1) $ $ (1) GAAP net loss per share is calculated based upon 56,966 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 56,966 basic and 66,157 diluted weighted-average shares of common stock.

COUPA SOFTWARE INCORPORATED Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended July 31, 2017 (in thousands, except per share amounts) (unaudited) Amortizat Share-Based ion of GAAP Compensatio Acquired Non-GAAP n Expenses Intangibl e Assets ----------- ---------- -------- ---------- Costs and expenses: Costs of subscription services $ 9,025 $ (529 ) $ (788 ) $ 7,708 Costs of professional services and other 5,923 (716 ) — 5,207 Gross profit 66.4 % 2.8 % 1.8 % 71.0 % Research and development 10,720 (1,647 ) — 9,073 Sales and marketing 23,812 (2,340 ) (189 ) 21,283 General and administrative 9,430 (2,406 ) — 7,024 Loss from operations (14,359 ) 7,638 977 (5,744 ) Operating margin -32.2 % 17.1 % 2.2 % -12.9 % Interest expense (6 ) — — (6 ) Interest income and other, net 713 — — 713 Loss before provision for income taxes (13,652 ) 7,638 977 (5,037 ) Provision for income taxes 90 188 119 397 Net loss (13,742 ) 7,450 858 (5,434 ) Net loss per share attributable to common stockholders, basic (0.26 ) (0.10 ) and diluted (1) $ $ (1) Calculated based upon 52,749 basic and diluted weighted-average shares of common stock

COUPA SOFTWARE INCORPORATED Reconciliation of GAAP to Non-GAAP Financial Measures Six Months Ended July 31, 2018 (in thousands, except per share amounts) (unaudited) Amortiza tion of Share-Based Amortizatio n Debt GAAP Compensatio of Discount Non-GAAP n Acquired Expenses Intangible and Assets Issuance Costs ----------- ---------- ---------- ------- ---------- Costs and expenses: Costs of subscription services $ 22,947 $ (1,924 ) $ (1,628 ) — $ 19,395 Costs of professional services and other 13,818 (2,015 ) — — 11,803 Gross profit 68.8 % 3.3 % 1.4 % 0.0 % 73.6 % Research and development 26,616 (5,505 ) — — 21,111 Sales and marketing 51,240 (6,833 ) (541 ) — 43,866 General and administrative 26,075 (8,593 ) — — 17,482 Income (loss) from operations (22,693 ) 24,870 2,169 — 4,346 Operating margin -19.2 % 21.1 % 1.8 % 0.0 % 3.7 % Interest expense (6,095 ) — — 5,642 (453 ) Interest income and other, net 450 — — — 450 Income (loss) before provision for income taxes (28,338 ) 24,870 2,169 5,642 4,343 Provision for income taxes 970 540 73 — 1,583 Net income (loss) (29,308 ) 24,330 2,096 5,642 2,760 Net income (loss) per share attributable to common (0.52 ) 0.05 stockholders, basic (1) $ $ Net income (loss) per share attributable to common (0.52 ) 0.04 stockholders, diluted (1) $ $ (1) GAAP net loss per share is calculated based upon 56,429 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 56,429 basic and 64,623 diluted weighted-average shares of common stock.

COUPA SOFTWARE INCORPORATED Reconciliation of GAAP to Non-GAAP Financial Measures Six Months Ended July 31, 2017 (in thousands, except per share amounts) (unaudited) Amortizatio Share-Based n of GAAP Compensatio Acquired Non-GAAP n Intangible Expenses Assets ----------- ---------- ---------- ----------- Costs and expenses: Costs of subscription services $ 17,021 $ (884 ) $ (1,274 ) $ 14,863 Costs of professional services and other 11,424 (1,280 ) — 10,144 Gross profit 66.8 % 2.5 % 1.5 % 70.8 % Research and development 19,892 (2,799 ) — 17,093 Sales and marketing 44,490 (3,940 ) (189 ) 40,361 General and administrative 17,607 (4,013 ) — 13,594 Loss from operations (24,746 ) 12,916 1,463 (10,367 ) Operating margin -28.9 % 15.1 % 1.7 % -12.1 % Interest expense (6 ) — — (6 ) Interest income and other, net 1,147 — — 1,147 Loss before provision for income taxes (23,605 ) 12,916 1,463 (9,226 ) Provision for income taxes 175 363 119 657 Net loss (23,780 ) 12,553 1,344 (9,883 ) Net loss per share attributable to common stockholders, (0.46 ) (0.19 ) basic and diluted (1) $ $ (1) Calculated based upon 51,681 basic and diluted weighted-average shares of common stock

COUPA SOFTWARE INCORPORATED Reconciliation of GAAP Cash Flows from Operations to Free Cash Flows (A Non-GAAP Financial Measure) (in thousands) (unaudited) Three Months Ended Six Months Ended July 31, July 31, ---------------------- ---------------------- 2018 2017 2018 2017 - ------ - - ------ - - ------ - - ------ - (in thousands) (in thousands) Net cash provided by operating activities $ 11,308 $ 9,178 $ 23,944 $ 16,121 Less: purchases of property and equipment (2,292 ) (1,105 ) (3,416 ) (2,101 ) - ------ - - ------ - - ------ - - ------ - Free cash flows $ 9,016 $ 8,073 $ 20,528 $ 14,020 - ------ - - ------ - - ------ - - ------ -