Analyst Note| Victoria Radke |
Narrow-moat Coupa reported solid fourth-quarter results that exceeded the high end of guidance for revenue and adjusted earnings. While results look promising at initial glance, we view the beat as expected given that the company tends to guide conservatively, and find both first-quarter and full-year fiscal 2023 guidance to be meaningfully below our expectations. As Coupa pioneers the business spend management, or BSM, space through aggressive acquisition activity and rapid module expansion, amassing a platform of capabilities and users that we view as unparalleled despite an intense competitive backdrop lined with incumbent ERP giants, we continue to expect a high level of investment into the business. As such, we appreciate the investment year fiscal 2023 is laid out to be as the company executes on numerous growth vectors. That said, looking at fiscal 2023 and beyond, we expected a stronger topline on the back of emerging suite synergies, increasing deal sizes, and a record pipeline exiting fiscal 2022, and as such, expected stronger profitability.