Shares of Coupa Software Inc. (NASDAQ:COUP) were down Tuesday morning after it posted third-quarter earnings on Monday evening. The business spend management software provider’s stock dipped more than 6% before recovering later in the afternoon to settle at around $146 per share, 1.76% off yesterday’s pre-earnings close.
The stock’s decline was unexpected given the company beat analysts’ expectations for both revenue and earnings. Shares of Coupa Software are now up 134% year to date. Over the same period, the S&P 500 Index has gained about 25%.
The company has invested heavily in global expansion over the last several years. The strategy appears to be paying off as the latest quarterly results indicate growth could continue for the foreseeable future.
Highlights for the most recent quarter
Coupa Software posted earnings of 20 cents per share for the third quarter, topping the consensus estimate of 7 cents. This represented a 150% increase from 8 cents in the year-ago quarter.
Revenue of $101.78 million outperformed analyst estimates by 5.47% after growing from $67.46 million last year. The company continues to witness consistent growth in subscription revenue (up 49% in the October quarter to $90.2 million), which accounts for more than 88.6% of the overall top line. On the other hand, professional services and other revenue, which account for about 11.4%, soared 68% to $11.6 million.
Coupa Software attributed the improvement in the top line to the rapid adoption of its business spend management offerings. During the earnings conference call, management also noted it has now topped the $1.5 trillion mark in cumulative spend under management.
Growth looks promising
Looking forward, Coupa Software’s global expansion appears to be taking shape as it continues to add more brands to its growing portfolio of partnerships. During the third quarter, the company added Cloudflare (NYSE:NET), Maersk