Coupa Software, a procurement and accounts payable management software, reported a non-GAAP EPS of USD 0.15 for Q3 FY2023 (ending January; down 51.6% YoY), beating consensus estimates for an EPS of USD 0.11. Meanwhile, Q3 revenue rose 17.0% YoY to USD 217.3 million, also beating analyst expectations by 2.3% and the higher end of its guidance by 1.6%. 

The revenue growth was driven by an increase in subscription revenue (up 20.4% YoY; accounting for 91.3% of revenue in Q3 FY2023), despite a decline in professional services and other revenue (down 10.2% YoY). Meanwhile, the number of customers with annualized subscription revenue exceeding USD 100,000 rose 18.6% YoY to 1,560. 

Coupa’s gross margin remained relatively stable at 59.6% in Q3 FY2023 (up 1.4 percentage points YoY). However, the non-GAAP operating profit margin fell 7.4 percentage points YoY to 7.6%, albeit in line with the high-end of its guidance. The decline in the operating margin was due to non-GAAP sales and marketing expenses rising 38.1% YoY (accounting for 55.3% of non-GAAP operating expenses). 

In addition to the earnings release, the company also announced entering a definitive agreement to be acquired by Thoma Bravo for USD 8 billion. The transaction is expected to close in 1H 2023, subject to customary closing conditions and regulatory approval, after which the company will be privately held.