Shares in Coupa Software plunged Tuesday on its January-quarter earnings report and management's weak guidance for the current fiscal year. The disappointing results for Coupa stock follow several acquisitions.
San Mateo, Calif.-based Coupa reported fourth-quarter earnings after the market close on Monday. Shares plunged 19.2% to close at 72.55 on the stock market today, clawing back a bit from larger losses.
"Revenue/billings both beat by less than usual and saw growth decelerated on an organic basis for the second consecutive quarter," said RBC Capital analyst Rishi Jaluria in a report. "On top of that, guidance was well below consensus and implies further deceleration. Plus, margins are contracting on significant investments in fiscal 2023 with the intent to drive reacceleration in fiscal 2024."
The software maker said that on an adjusted basis, Coupa earnings rose 12% to 19 cents per share. Revenue climbed 18% to $193.3 million.
Analysts expected Coupa earnings of 5 cents on revenue of $186.2 million. A year earlier, Coupa earned 17 cents a share on sales of $163.5 million.
Coupa Stock: Guidance Misses Estimates
In the fourth quarter, billings rose 18% to $318.5 million, the company said. For the current 2023 fiscal year, the maker of business spending management software forecast revenue of $838 million at the midpoint of its guidance vs. estimates of $876.4 million.
Coupa says it expects adjusted profit of 17 cents. Analysts had predicted 73 cents.
Weaker-than-modeled subscription revenue guidance is one issue, said Truist Securities analyst Terry Tillman in a report. "The company tried to explain that it will take upwards of 18 to 24 months for strengthening new business trends to more fully tilt overall subscription revenue growth in a meaningfully higher level," he said.
Heading into the Coupa earnings report, the company's stock owned a Relative Strength Rating of 10 out of a possible 99, according to IBD MarketSmith analysis.
Coupa stock has retreated 46% in 2022.
Coupa's software products cover employee travel and expense management, procurement and invoicing.
Since late 2018, Coupa has been on an acquisition spree. It purchased Llamasoft, Bellin, Hipperos, Exari and Yapta.
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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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