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customers. •Capture. At the core of our platform is our transactional engine •Analyze. Our spending analytics capabilities provide intuitive spend analysis dashboards and reports that deliver real-time analytical insights •Control. We help our customers control and streamline their spending activity, realize efficiencies that result in real savings, and reduce supplier •Value.Within a short timeframe, we help our customers realize measurable value by taking advantage of pre-negotiated supplier discounts, achieving contract compliance, improving process efficiencies, and reducing redundant and wasteful spending, as well as •Procure:Our procurement •Invoice: •Pay: Solutions spend, and associated back-office processes: Customers can track additional supplier attributes related to sustainability, diversity and inclusion, and other measures and then report on program performance against sustainability and diversity and inclusion goals. •Coupa Supplier Portal.This portal is a tool for suppliers to easily do business with our customers. The Supplier Portal lets suppliers manage content and settings on a customer-by-customer basis, including managing company information, setting up purchase order transmission preferences, creating and managing online catalogs, managing procurement orders and invoices across multiple customers and gaining visibility •Coupa Supplier Actionable Notifications.These notifications enable suppliers to receive HTML purchaser orders and convert these purchase orders into invoices right from the procurement order e-mail, which represents the easiest way to submit electronic invoices through our platform. •Direct Connection via cXML and EDI.Our platform supports various communication formats such as cXML or EDI for suppliers that want to automate their invoicing through a tighter integration with our platform. •Direct E-mail.Suppliers can choose to send PDF invoices simply through e-mail. and Coupa Source Together Connections spend. •Rapid time to value through fast deployment cycles and low cost of ownership of a cloud-based model. •Opportunity to achieve significant and sustainable savings that can translate into improved profitability. •High employee adoption of our easy-to-use BSM platform, which enables better visibility into spend and liquidity, allowing both procurement and sourcing professionals to better manage their time. •Access to extensive spending data in •Ability to stay agile and adapt to changes in operating and regulatory environments with our easily configurable platform. •Process efficiency improvements that allow businesses to free up valuable resources and staff who can be deployed effectively elsewhere in the organization. •Enhanced compliance with governmental regulations through greater auditability, documentation and control of spending activity. •Intuitive and simple user experience that shields users from complexity and enables adoption of our platform with minimal training. •Efficiency improvements as employees are more rapidly able to procure the goods and services they need to fulfill their job responsibilities. •Mobile access from anywhere in the world. •Convenience to employees, as our platform gathers data on historical activity and leverages the insights to help populate requests and minimize data entry. •Faster reimbursement to employees due to more efficient expense management processes. •Participating in our Coupa Open Business •Fast registration process and flexibility to interact with customers through the Coupa Supplier Portal, direct integration or simply by use of direct email. •Elimination of manual processes and efficiency improvements through electronic invoicing and streamlined procurement and payment processes. •Real-time visibility into invoice status, often through direct push notifications without having to log in to a portal. •Seamless audit, documentation and archiving of electronic purchase orders and invoices that helps suppliers comply with changing government regulations, as well as avoid risks. Sales and Marketing •our annual •field marketing events for customers and prospective customers; •development of our ideal customer profile (ICP), which helps identify the accounts with the highest propensity to buy, for each of our sales segments; •territory development representatives who respond to incoming leads to convert them into new sales opportunities; •participation in, and sponsorship of, user conferences, executive events, trade shows, and industry events; •focused cross-channel campaigns with existing customers to drive expansion; •public relations, industry analyst relations, and social media initiatives; •thought leadership development in the form of books, blogs, and third-party content; •cooperative marketing efforts with partners, including joint press announcements, joint trade show activities, channel marketing campaigns, and joint seminars; •customer programs, including regional user group meetings; and •use of our website to provide application and company information, as well as learning opportunities for potential •Referral Partners. Our referral partners provide global, national and regional expertise in business spend management, procurement and expense management. They help organizations through operational transformation by leveraging process, best practices and new technology. These partners may refer customer prospects to us and assist us in selling to them. In return, we typically pay these partners a percentage of the first-year subscription revenue generated by the customers they refer. •Reseller Partners.Our reseller partners enhance our customer impact and extend our global presence with integrated technologies, applications, business process outsourcing (BPO) services and region-specific offerings. All of our reseller partners have been trained to demonstrate and promote our applications suites. •Financial Services Company Partners. Our financial services company partners provide deep expertise as well as transactional solutions for executing payments. Partners include leading card issuers American Express, Bank of America, Barclaycard, Citibank, HSBC, J.P. Morgan Chase, and money-movement provider Transfermate, as well as others. These partner-provided solutions let customers use their existing bank relationships to move money globally. •Large enterprise software vendors such as Oracle Corporation, We believe the principal competitive factors in our market include the following: •focus on customer success; •ability to deliver measurable value and savings; •ability to offer a comprehensive BSM platform; •ease of use; •widespread adoption by users; •time to deployment; •cloud-based architecture; •total cost of ownership; •configurability and agility; •rich reporting capabilities; •product extensibility and ability to integrate with other technology infrastructures; contribute a portion of their wages towards the purchase of our stock at a discount. During the year ended January 31, 2022, our overall ESPP participation rate was approximately 74% which remains strong relative to the global benchmark. We believe that a compensation program with both short-term and long-term incentives provides fair and competitive compensation and aligns employee and stockholder interests. In addition to cash and equity compensation, we also offer employees benefits such as life and health (medical, dental and vision) insurance, paid time off, paid parental leave, and a 401(k) plan. italicized subcaptions further below. future operating results is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. This risk is exacerbated to the extent that we enter new product areas or introduce new solutions, particularly in cases where the revenue model differs from our traditional subscription model. We have encountered and will encounter risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described The systems enhancements and improvements necessary to support our business as we continue to •customers’ budgetary constraints and priorities; •the timing of customers’ budget cycles; •the need by some customers for lengthy evaluations; and The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be adversely affected. business spend management cash flow. •the efficacy of our marketing efforts; •our ability to offer high-quality, innovative and error- and bug-free •our ability to retain existing customers and obtain new customers; •the ability of our customers to achieve successful results by using our platform; •the quality and perceived value of our platform; •our ability to successfully differentiate our offerings from those of our competitors; •actions of competitors and other third parties; •our ability to provide customer support and professional services; •any misuse or perceived misuse of our platform and •interruptions, delays or attacks on our platform or •litigation, legislative or regulatory-related developments. condition. Furthermore, we focus many of our sales and marketing efforts on large enterprise customers and this customer segment commonly demands more configuration and integration services which generally increases our upfront investment in sales and deployment efforts - even for deployments that are handled primarily by one of our implementation partners - with no guarantee that these customers will increase the scope of their subscription in order to offset our greater upfront costs. standardized across our customers and can be subject to differing interpretations, which could result in disputes with our customers from time to time. If our customers notify us of a contract breach or otherwise dispute our contract, the resolution of such disputes in a manner adverse to our interests could negatively affect our operating results. Furthermore, entry into adversarial legal proceedings with our customers, including in varying geographic jurisdictions, could harm our reputation and adversely impact our ability to attract new customers and retain existing customers. other services provided by AWS. Currently, most of our cloud service infrastructure is run on AWS. Given this, we cannot easily switch our AWS operations to another cloud provider, so any disruption of or interference with our use of AWS would adversely affect our operations and potentially our business. If we fail to manage our technical operations infrastructure, our existing customers may experience service outages and our new customers may experience delays in the implementation of our platform. •loss or delayed market acceptance and sales; •breach of warranty claims; •sales credits or refunds for prepaid amounts related to unused subscription services; •loss of customers; •diversion of development and customer service resources; and •negative publicity and injury to our reputation. attention and result in adverse publicity which harms our reputation. financial condition. and may fail to identify in a timely manner, if at all, every instance of infringement or attempted theft of our intellectual property. Any failure to identify, assess and expediently resolve attempted or actual theft, infringement or other unauthorized use of our technology or intellectual property could adversely impact our business and reputation. condition, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section. Even after the pandemic has subsided, we may continue to experience an adverse impact to our business as a result of its global economic impact, including any recession that has occurred or may occur in the future. •limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes; •limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general business purposes; •require us to use a substantial portion of our cash flow from operations to make debt service payments; •limit our flexibility to plan for, or react to, changes in our business and industry; •place us at a competitive disadvantage compared to our less leveraged competitors; and •increase our vulnerability to the impact of adverse economic and industry conditions. 2022. calculated assuming that all the Convertible Notes are converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the if-converted method may change previously reported per share results. See Note 2 “Significant Accounting Policies — Recent Accounting Guidance” in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. •price and volume fluctuations in the overall •our operating performance and the performance of other similar companies; •announcements of new and changes in our existing projected or target operating results and key metrics that we provide to the public, as well as those published by research analysts that follow our stock, our failure to meet or exceed these projections or targets or changes in recommendations by securities analysts; •disruptions in our services due to computer hardware, software or network •announcements of customer additions and customer cancellations or delays in customer purchases; •the impact of integrated acquired businesses and technologies on our operating results in the short-term and the expected impact in the medium- and long-term; •the economy as a whole, including changes to fiscal and monetary policy of the Federal Reserve, market conditions in our industry and the industries of our customers; •extraordinary expenses such as litigation or other dispute-related expenses or settlement payments; •conversion of the Convertible Notes; •any other factors discussed in this In addition, because we award restricted stock units (RSUs) to many of our employees as part of their total compensation package, and the value of those RSUs depends directly on our stock price, a sharp or prolonged decline in our stock price may make it more difficult for us to retain our employees or result in us granting more awards in the aggregate to retain our employees. •the requirement of a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; •the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; •the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; •a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; •the requirement that a special meeting of stockholders be called only by a majority vote of our entire board of directors, the chairman of our board of directors or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including to remove directors; A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision. Market Information for Common Stock , in privately negotiated transactions not involving any public offering or solicitation. For the year ended January 31, 2019 2018 2017 2016 2015 (in thousands, except per share data) Consolidated Statements of Operations Data: Revenues: Subscription services $ 233,428 $ 164,865 $ 117,788 $ 75,667 $ 43,051 Professional services and other 26,938 21,915 15,987 8,011 7,794 Total revenues 260,366 186,780 133,775 83,678 50,845 Cost of revenues: Subscription services(1) 53,153 36,481 25,055 16,804 8,813 Professional services and other(1) 30,301 23,425 21,214 15,107 9,911 Total cost of revenues 83,454 59,906 46,269 31,911 18,724 Gross profit 176,912 126,874 87,506 51,767 32,121 Operating expenses: Research and development(1) 61,608 44,536 30,262 22,767 11,887 Sales and marketing(1) 105,659 88,722 68,562 54,713 33,724 General and administrative(1) 57,005 38,578 24,106 19,540 13,146 Total operating expenses 224,272 171,836 122,930 97,020 58,757 Loss from operations (47,360 ) (44,962 ) (35,424 ) (45,253 ) (26,636 ) Interest expense (12,518 ) (502 ) (14 ) — — Interest income and other, net 3,817 3,307 (1,321 ) (568 ) (563 ) Loss before provision for (benefit from) income taxes (56,061 ) (42,157 ) (36,759 ) (45,821 ) (27,199 ) Provision for (benefit from) income taxes (537 ) 1,648 848 335 101 Net loss $ (55,524 ) $ (43,805 ) $ (37,607 ) $ (46,156 ) $ (27,300 ) Net loss per share attributable to common stockholders, basic and diluted(2) $ (0.96 ) $ (0.83 ) $ (1.88 ) $ (9.81 ) $ 9.10 Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted(2) 57,716 52,999 19,988 4,704 2,999 Other Financial Data: Non-GAAP operating profit (loss) $ 12,466 $ (11,833 ) $ (24,869 ) $ (32,355 ) $ (17,818 ) Non-GAAP net profit (loss) $ 11,583 $ (11,319 ) $ (27,125 ) $ (33,258 ) $ (18,482 ) Free cash flows $ 29,908 $ 15,138 $ (25,446 ) $ (25,937 ) $ (14,299 ) For the year ended January 31, 2019 2018 2017 2016 2015 (in thousands) Cost of revenues: Subscription services $ 4,285 $ 2,105 $ 715 $ 235 $ 109 Professional services and other 4,269 2,722 772 1,014 110 Research and development 11,841 6,928 1,766 1,236 337 Sales and marketing 14,786 8,476 3,130 1,347 433 General and administrative 17,765 9,464 3,069 6,736 818 Total stock-based compensation $ 52,946 $ 29,695 $ 9,452 $ 10,568 $ 1,807 As of January 31, 2019 2018 2017 2016 2015 (in thousands) Consolidated Balance Sheet Data: Cash and cash equivalents $ 141,250 $ 412,903 $ 201,721 $ 92,348 $ 41,974 Marketable securities 180,169 — — — — Working capital 32,051 335,278 153,039 48,601 13,278 Total assets 740,064 572,450 283,864 139,926 69,606 Deferred revenue, current and non-current 182,587 128,030 90,840 64,926 40,739 Convertible senior notes, net 174,615 163,010 — — — Convertible preferred stock — — — 164,950 88,444 Total stockholders’ equity (deficit) 313,281 240,545 173,892 (106,239 ) (72,569 ) For the year ended January 31, 2019 2018 2017 2016 2015 (in thousands) Non-GAAP operating profit (loss) $ 12,466 $ (11,833 ) $ (24,869 ) $ (32,355 ) $ (17,818 ) Non-GAAP net profit (loss) 11,583 (11,319 ) (27,125 ) (33,258 ) (18,482 ) Free cash flows 29,908 15,138 (25,446 ) (25,937 ) (14,299 ) For the year ended January 31, 2019 2018 2017 2016 2015 (in thousands) Loss from operations $ (47,360 ) $ (44,962 ) $ (35,424 ) $ (45,253 ) $ (26,636 ) Stock-based compensation 52,946 29,695 9,452 10,568 1,807 Litigation-related costs — — 151 1,943 6,958 Amortization of acquired intangible assets 6,880 3,434 952 387 53 Non-GAAP operating profit (loss) $ 12,466 $ (11,833 ) $ (24,869 ) $ (32,355 ) $ (17,818 ) For the year ended January 31, 2019 2018 2017 2016 2015 (in thousands) Net loss $ (55,524 ) $ (43,805 ) $ (37,607 ) $ (46,156 ) $ (27,300 ) Stock-based compensation 52,946 29,695 9,452 10,568 1,807 Litigation-related costs — — 151 1,943 6,958 Amortization of acquired intangible assets 6,880 3,434 952 387 53 Amortization of debt discount and issuance costs 11,605 459 — — — Aggregate adjustment for income taxes (4,324 ) (1,102 ) (73 ) — — Non-GAAP net profit (loss) $ 11,583 $ (11,319 ) $ (27,125 ) $ (33,258 ) $ (18,482 ) For the year ended January 31, 2019 2018 2017 2016 2015 (in thousands) Net cash provided by (used in) operating activities $ 37,436 $ 19,626 $ (20,955 ) $ (22,069 ) $ (11,929 ) Less: purchases of property and equipment (7,528 ) (4,488 ) (4,491 ) (3,868 ) (2,370 ) Free cash flows $ 29,908 $ 15,138 $ (25,446 ) $ (25,937 ) $ (14,299 ) The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. As discussed in the section titled “Note About Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, impacts on our business and general economic conditions due to the current COVID-19 pandemic, those identified below, those discussed in “Note About Forward-Looking Statements” and those discussed in the section titled “Risk Factors” under Part I, Item 1A in this Annual Report on Form 10-K. Our platform provides greater visibility into and control over how companies spend finance. As of January 31, 2022, we have invested a total of approximately $10.0 million principal amount in portfolio companies. initially incurred to acquire the customer. We calculate the lifetime value of our customers and associated customer acquisition costs for a particular year by comparing (i) gross profit from net new subscription revenues for the year multiplied by the inverse of the estimated subscription renewal rate to (ii) total sales and marketing expense incurred in the preceding year. On this basis, we estimate that for each of fiscal Other companies may calculate lifetime value and customer acquisition costs differently than our chosen method and, therefore, may not be directly comparable. As of January 31, 2019 2018 2017 Cumulative spend under management ($ billions) $ 1,079.2 $ 680.2 $ 364.6 Backlog ($ millions) $ 349.0 $ 230.8 $ 168.2 Deferred revenue ($ millions) $ 182.6 $ 128.0 $ 90.8 Total customers 988 717 535 annual subscription revenue. solutions. For the license component from the sales of term-based licenses, we recognize revenues at the start of the license term when delivery is complete. administrative expenses included a benefit of $12.5 million related to the reversal of the Yapta contingent consideration payable. Refer to the Company’s consolidated financial statements for the year ended January 31, 2021 for details of the contingent consideration payable. For the year ended January 31, 2019 2018 2017 (in thousands) Revenues: Subscription services $ 233,428 $ 164,865 $ 117,788 Professional services and other 26,938 21,915 15,987 Total revenues 260,366 186,780 133,775 Cost of revenues: Subscription services 53,153 36,481 25,055 Professional services and other 30,301 23,425 21,214 Total cost of revenues 83,454 59,906 46,269 Gross profit 176,912 126,874 87,506 Operating expenses: Research and development 61,608 44,536 30,262 Sales and marketing 105,659 88,722 68,562 General and administrative 57,005 38,578 24,106 Total operating expenses 224,272 171,836 122,930 Loss from operations (47,360 ) (44,962 ) (35,424 ) Interest expense (12,518 ) (502 ) (14 ) Interest income and other, net 3,817 3,307 (1,321 ) Loss before provision for (benefit from) income taxes (56,061 ) (42,157 ) (36,759 ) Provision for (benefit from) income taxes (537 ) 1,648 848 Net loss $ (55,524 ) $ (43,805 ) $ (37,607 ) For the year ended January 31, 2019 2018 2017 Revenues: Subscription services 90 % 88 % 88 % Professional services and other 10 12 12 Total revenues 100 100 100 Cost of revenues: Subscription services 20 20 19 Professional services and other 12 13 16 Total cost of revenues 32 33 35 Gross profit 68 67 65 Operating expenses: Research and development 24 24 23 Sales and marketing 41 48 51 General and administrative 22 21 18 Total operating expenses 87 93 92 Loss from operations (19 ) (26 ) (27 ) Interest expense (5 ) — — Interest income and other, net 1 2 (1 ) Loss before provision for (benefit from) income taxes (23 ) (24 ) (28 ) Provision for (benefit from) income taxes — 1 1 Net loss (23 ) % (25 ) % (29 ) % 2021 For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) Subscription services $ 233,428 $ 164,865 $ 117,788 42 % 40 % Professional services and other 26,938 21,915 15,987 23 % 37 % Total revenues $ 260,366 $ 186,780 $ 133,775 39 % 40 % For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) Subscription services $ 53,153 $ 36,481 $ 25,055 46 % 46 % Professional services and other 30,301 23,425 21,214 29 % 10 % Total cost of revenues $ 83,454 $ 59,906 $ 46,269 39 % 29 % For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) Gross profit $ 176,912 $ 126,874 $ 87,506 39 % 45 % For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) Research and development $ 61,608 $ 44,536 $ 30,262 38 % 47 % For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) Sales and marketing $ 105,659 $ 88,722 $ 68,562 19 % 29 % For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) General and administrative $ 57,005 $ 38,578 $ 24,106 48 % 60 % For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) Interest expense $ 12,518 $ 502 $ 14 NM NM For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) Interest income and other, net $ 3,817 $ 3,307 $ (1,321) 15% NM For the year ended January 31, 2018 to 2019 2017 to 2018 2019 2018 2017 % Change % Change (in thousands) Provision for (benefit from) income taxes $ (537 ) $ 1,648 $ 848 -133 % 94 % our common stock. As of January 31, 2022, all the capped calls for the 2023 Notes, 2025 Notes and 2026 Notes remained outstanding. consolidated financial statements included elsewhere in this Annual Report on Form 10-K. short-term marketable securities. Payments due by period Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years (in thousands) Convertible senior notes(1) $ 230,000 $ — $ — $ 230,000 $ — Aggregate interest obligation(1)(2) 3,451 863 1,725 863 — Operating lease obligations 33,694 7,349 13,791 11,323 1,231 Purchase obligations 24,500 12,500 12,000 — — Total contractual obligations $ 291,645 $ 20,712 $ 27,516 $ 242,186 $ 1,231 Critical Accounting estimates and therefore involve a greater degree of estimation uncertainty. We offer subscriptions to our cloud-based business spend management platform, including procurement, invoicing, and expense management. Subscription and Other For services billed on a time-and-materials basis, revenue is recognized over time as services are performed. Evaluating the terms and conditions included within our customer contracts for appropriate revenue recognition and determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgement. sales regions. SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. 2022. Balance as of beginning of year Additions Deductions Balance as of end of year Year ended January 31, 2019 Allowance for doubtful accounts $ 9 $ 94 $ (33 ) $ 70 Year ended January 31, 2018 Allowance for doubtful accounts $ 672 $ 105 $ (768 ) $ 9 Year ended January 31, 2017 Allowance for doubtful accounts $ 115 $ 562 $ (5 ) $ 672 Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date Filed Herewith 2.1 8-K 001-37901 2.1 4/7/2017 2.2 8-K 001-37901 2.1 12/10/2018 3.1 Amended and Restated Certificate of Incorporation of Registrant. 10-Q 001-37901 3.1 12/9/2016 3.2 10-Q 001-37901 3.2 12/9/2016 4.1 S-1 333-213546 4.1 9/8/2016 4.2 S-1/A 333-217105 4.1.2 4/10/2017 4.3 8-K 001-37901 4.1 1/18/2018 10.1* S-1/A 333-213546 10.1 9/23/2016 10.2* 2006 Stock Plan, as amended, and forms of agreements thereunder. S-1/A 333-213546 10.2 9/23/2016 10.3* Registrant’s 2016 Equity Incentive Plan and forms of agreements thereunder. S-1/A 333-213546 10.3 9/23/2016 10.4* Registrant’s 2016 Employee Stock Purchase Plan and form of Participation Agreement thereunder. S-1/A 333-213546 10.4 10/4/2016 10.5* S-1 333-213546 10.5 9/8/2016 10.6* S-1 333-213546 10.6 9/8/2016 Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date Filed Herewith S-1 333-213546 10.8 9/8/2016 10.8* X 10.9* Offer Letter, dated August 25, 2016, between the Registrant and Steven Winter. S-1 333-213546 10.10 9/8/2016 10.10* S-1 333-213546 10.9 9/8/2016 10.11 S-1 333-213546 10.11 9/8/2016 10.11.1 10-Q 001-37901 10.1 9/8/2017 10.12* 10-Q 001-37901 10.1 9/6/2018 10.13 8-K 001-37901 99.1 1/18/2018 10.14 8-K 001-37901 99.2 1/18/2018 10.15 10-K 001-37901 10.14 3/28/2018 21.1 X 23.1 X 24.1 Power of Attorney (contained in the signature page to this Annual Report on Form 10-K). 31.1 X Exhibit No. Description Form File No. Exhibit Filing Date Filed Herewith X X X Inline XBRL Instance Document X Inline XBRL Taxonomy Extension Schema Inline XBRL Taxonomy Extension Calculation Linkbase Document X Inline XBRL Taxonomy Extension Definition Linkbase X Inline XBRL Taxonomy Extension Label Linkbase X Inline XBRL Taxonomy Extension Presentation Linkbase Document X Date: March /s/ Robert Bernshteyn Chief Executive Officer and Director March Robert Bernshteyn (Principal Executive Officer) / Chief Financial Officer March (Principal Financial Officer) /s/ Chief Accounting Officer March (Principal Accounting Officer) /s/ Michelle Brennan Director March Leslie Campbell /s/ Roger Siboni Director March Roger Siboni /s/ Tayloe Stansbury Director March Tayloe Stansbury /s/ Scott Thompson Director March Scott Thompson /s/ Frank van Veenendaal Director March Frank van Veenendaal assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. As of January 31, 2019 2018 Assets Current assets: Cash and cash equivalents $ 141,250 $ 412,903 Marketable securities 180,169 — Accounts receivable, net of allowances 95,274 61,366 Prepaid expenses and other current assets 10,343 10,952 Deferred commissions, current portion 7,324 3,756 Total current assets 434,360 488,977 Property and equipment, net 10,549 5,186 Deferred commissions, net of current portion 18,904 3,896 Goodwill 209,560 44,410 Intangible assets, net 55,925 20,020 Other assets 10,766 9,961 Total assets $ 740,064 $ 572,450 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 5,485 $ 1,342 Accrued expenses and other current liabilities 41,792 26,643 Deferred revenue, current portion 179,967 125,714 Convertible senior notes, net (Note 9) 174,615 — Total current liabilities 401,859 153,699 Convertible senior notes, net (Note 9) — 163,010 Deferred revenue, net of current portion 2,620 2,316 Other liabilities 22,304 12,880 Total liabilities 426,783 331,905 Commitments and contingencies (Note 10) Stockholders’ equity: Preferred stock, $0.0001 par value per share; 25,000,000 shares authorized at January 31, 2019 and 2018; zero shares issued and outstanding at January 31, 2019 and 2018 — — Common stock, $0.0001 par value per share; 625,000,000 shares authorized at January 31, 2019 and January 31, 2018; 60,455,381 and 55,712,342 shares issued and outstanding as of January 31, 2019 and January 31, 2018, respectively 6 6 Additional paid-in capital 567,797 445,318 Accumulated other comprehensive income (loss) 335 (298 ) Accumulated deficit (254,857 ) (204,481 ) Total stockholders’ equity 313,281 240,545 Total liabilities and stockholders’ equity $ 740,064 $ 572,450 For the year ended January 31, 2019 2018 2017 Revenues: Subscription services $ 233,428 $ 164,865 $ 117,788 Professional services and other 26,938 21,915 15,987 Total revenues 260,366 186,780 133,775 Cost of revenues: Subscription services 53,153 36,481 25,055 Professional services and other 30,301 23,425 21,214 Total cost of revenues 83,454 59,906 46,269 Gross profit 176,912 126,874 87,506 Operating expenses: Research and development 61,608 44,536 30,262 Sales and marketing 105,659 88,722 68,562 General and administrative 57,005 38,578 24,106 Total operating expenses 224,272 171,836 122,930 Loss from operations (47,360 ) (44,962 ) (35,424 ) Interest expense (12,518 ) (502 ) (14 ) Interest income and other, net 3,817 3,307 (1,321 ) Loss before provision for (benefit from) income taxes (56,061 ) (42,157 ) (36,759 ) Provision for (benefit from) income taxes (537 ) 1,648 848 Net loss $ (55,524 ) $ (43,805 ) $ (37,607 ) Net loss per share attributable to common stockholders, basic and diluted $ (0.96 ) $ (0.83 ) $ (1.88 ) Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted 57,716 52,999 19,988 For the year ended January 31, 2019 2018 2017 Net loss $ (55,524 ) $ (43,805 ) $ (37,607 ) Other comprehensive income (loss) in relation to defined benefit plans, net of tax 598 (298 ) — Unrealized gain on marketable securities, net of tax 35 — — Comprehensive loss $ (54,891 ) $ (44,103 ) $ (37,607 ) Convertible Preferred Stock Common Stock Additional Paid-In Accumulated Other Comprehensive Accumulated Total Stockholders Equity Shares Amount Shares Amount Capital Loss Deficit (Deficit) Balance at January 31, 2016 33,431,855 $ 164,950 5,758,338 $ 1 $ 16,629 $ — $ (122,869 ) $ (106,239 ) Initial public offering, net of issuance costs of $5,344 — — 8,510,000 1 137,112 — — 137,113 Conversion of preferred stock (33,431,855 ) (164,950 ) 34,610,979 3 164,947 — — 164,950 Issuance of common stock for acquisitions — — 150,545 — 2,357 — — 2,357 Exercise of Series E preferred stock warrants — — 36,971 — 924 — — 924 Exercise of stock options — — 1,184,708 — 2,186 — — 2,186 Vesting of early exercised stock options — — — — 606 — — 606 Stock-based compensation expense — — — — 9,551 — — 9,551 Excess income tax benefit — — — — 51 — — 51 Net loss — — — — — — (37,607 ) (37,607 ) Balance at January 31, 2017 — — 50,251,541 5 334,363 — (160,476 ) 173,892 Secondary offering, net of issuance costs of $816 — — 959,618 — 22,263 — — 22,263 Equity component of convertible senior notes, net of issuance costs — — — — 60,470 — — 60,470 Purchase of capped calls — — — — (23,322 ) — — (23,322 ) Issuance of common stock for acquisitions — — 369,733 — — — — — Issuance of common stock for employee share purchase plan — — 441,124 — 6,824 — — 6,824 Exercise of stock options — — 3,399,499 1 12,498 — — 12,499 Vesting of early exercised stock options — — — — 2,219 — — 2,219 Stock-based compensation expense — — — — 29,803 — — 29,803 Vested restricted stock units — — 290,827 — — — — — Impact of the adoption of new accounting pronouncements — — — — 200 — (200 ) — Other comprehensive loss — — — — — (298 ) — (298 ) Net loss — — — — — — (43,805 ) (43,805 ) Balance at January 31, 2018 — $ — 55,712,342 $ 6 $ 445,318 $ (298 ) $ (204,481 ) $ 240,545 Issuance of common stock for acquisitions (Note 4) — — 553,746 — 46,157 — — 46,157 Issuance of common stock for employee share purchase plan — — 505,717 — 8,778 — — 8,778 Exercise of stock options — — 2,824,836 — 13,606 — — 13,606 Vesting of early exercised stock options — — — — 333 — — 333 Stock-based compensation expense — — — — 53,605 — — 53,605 Vested restricted stock units — — 858,740 — — — — — Impact of the adoption of new accounting pronouncements (Note 2) — — — — — — 5,148 5,148 Other comprehensive income — — — — — 633 — 633 Net loss — — — — — — (55,524 ) (55,524 ) Balance at January 31, 2019 — $ — 60,455,381 $ 6 $ 567,797 $ 335 $ (254,857 ) $ 313,281 For the year ended January 31, 2019 2018 2017 Cash flows from operating activities Net loss $ (55,524 ) $ (43,805 ) $ (37,607 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 10,442 7,562 4,575 Accretion of discounts on marketable securities, net (1,621 ) — — Amortization of deferred commissions 5,791 4,001 4,004 Amortization of debt discount and issuance costs 11,605 459 — Stock-based compensation 52,945 29,694 9,452 Change in fair value of preferred stock warrant liability — — 627 Others 282 41 355 Changes in operating assets and liabilities net of effects from acquisitions: Accounts receivable (28,493 ) (10,710 ) (20,041 ) Prepaid expenses and other current assets 410 (390 ) (4,600 ) Other assets (3,402 ) (746 ) (1,136 ) Deferred commissions (15,332 ) (5,667 ) (4,468 ) Accounts payable 3,182 (4,005 ) 224 Accrued expenses and other liabilities 11,399 7,120 1,772 Deferred revenue 45,752 36,072 25,888 Net cash provided by (used in) operating activities 37,436 19,626 (20,955 ) Cash flows from investing activities Purchases of marketable securities (302,922 ) — — Maturities of marketable securities 124,139 — — Acquisitions, net of cash acquired (143,885 ) (46,075 ) (6,750 ) Purchases of property and equipment (7,528 ) (4,488 ) (4,491 ) Net cash used in investing activities (330,196 ) (50,563 ) (11,241 ) Cash flows from financing activities Proceeds from issuance of convertible senior notes, net of issuance costs (639 ) 223,675 — Purchase of capped calls — (23,322 ) — Proceeds from issuance of common stock, net of underwriting discounts, commissions and offering costs — 22,264 137,216 Proceeds from the exercise of common stock options 12,964 12,500 4,252 Excess tax benefit from stock-based compensation — — 51 Proceeds from issuance of common stock for employee stock purchase plan 8,778 6,824 — Proceeds from the exercise of preferred stock warrants — — 50 Net cash provided by financing activities 21,103 241,941 141,569 Net increase (decrease) in cash, cash equivalents, and restricted cash (271,657 ) 211,004 109,373 Cash, cash equivalents, and restricted cash at beginning of period 412,976 201,972 92,599 Cash, cash equivalents, and restricted cash at end of period $ 141,319 $ 412,976 $ 201,972 Supplemental disclosure of cash flow data Cash paid for income taxes $ 4,910 $ 1,314 $ 390 Interest income received $ 920 $ — $ — Supplemental disclosure of non-cash investing and financing activities Issuance of common stock in connection with acquisitions $ 46,157 $ — $ 2,357 Vesting of early exercised stock options $ 333 $ 2,219 $ 606 Property and equipment included in accounts payable and accrued expenses and other current liabilities $ 832 $ 70 $ 84 Conversion of convertible preferred stock to common stock $ — $ — $ 164,950 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets Cash and cash equivalents $ 141,250 $ 412,903 201,721 Restricted cash, included in other assets 69 73 251 Total cash, cash equivalents, and restricted cash $ 141,319 $ 412,976 $ 201,972 including costs incurred to defend legal cases, relationships with customers and market perception, and the financial impact of any judicial decisions, could have a material adverse effect on the Company’s business and operating results. 2021. For the year ended January 31, 2019 2018 2017 United States $ 161,494 $ 121,440 $ 90,449 Foreign countries 98,872 65,340 43,326 Total revenues $ 260,366 $ 186,780 $ 133,775 of the periods presented. of the periods presented. •Identification of the contract, or contracts, with a customer; •Identification of the performance obligations in the contract; •Determination of the transaction price; •Allocation of the transaction price to the performance obligations in the contract; and •Recognition of revenue when, or as, the Company satisfies a performance obligation. For services billed on a time-and-materials basis, revenue is recognized over time as services are performed. sales regions. In addition, as of January 31, 2022 and 2021, the balance of long-term unbilled receivables was approximately $1.9 million and $7.1 million, respectively, which are included in other assets on the Company's consolidated balance sheet. $1.6 million. Credit Losses 2021. not include revenue for future years of multiple year 2021 and 2020, respectively. redeemable non-controlling interests is recorded on the Company's consolidated balance sheets as temporary equity. As of January 31, 2018 As Previously Reported Adjustments for the New Revenue Standard As Adjusted Assets Deferred commissions, current portion $ 3,756 $ 778 $ 4,534 Deferred commissions, net of current portion 3,896 8,257 12,153 Liabilities and Stockholders’ Equity Deferred revenue, current portion 125,714 (1,732 ) 123,982 Deferred revenue, net of current portion 2,316 (10 ) 2,306 Accumulated deficit (204,481 ) 10,777 (193,704) As of January 31, 2019 Prior to Adoption of the New Revenue Standard Adjustments for the New Revenue Standard As Adjusted Assets Deferred commissions, current portion $ 5,353 $ 1,971 $ 7,324 Deferred commissions, net of current portion 5,581 13,323 18,904 Liabilities and Stockholders’ Equity Deferred revenue, current portion 182,509 (2,542 ) 179,967 Deferred revenue, net of current portion 2,539 81 2,620 Accumulated deficit (272,612 ) 17,755 (254,857 ) decrease of approximately $738.9 million to additional paid-in capital to remove the equity component separately recorded for the conversion features associated with the convertible notes, a decrease of approximately $201.8 million to accumulated deficit, and a decrease of approximately $4.8 million to deferred tax liabilities, as of February 1, 2022. Amortized Cost Unrealized Gain Unrealized Losses Fair Value U.S. agency obligations $ 40,284 $ 16 $ (5 ) $ 40,295 U.S. treasury securities 84,805 29 (4 ) 84,830 Corporate notes and bonds 29,322 10 (6 ) 29,326 Commercial paper 14,876 — — 14,876 Asset backed securities 10,835 9 (2 ) 10,842 Total marketable securities $ 180,122 $ 64 $ (17 ) $ 180,169 Due within one year $ 157,376 Due in one year through five years 22,793 $ 180,169 the related risk of expected credit losses were insignificant. December 7, 2018 Cash and cash equivalent $ 167 Accounts receivable 3,904 Intangible assets 17,585 Other assets 1,025 Goodwill 83,891 Accounts payable and other current liabilities (2,792 ) Deferred revenue (7,938 ) Other non-current liabilities (1,000 ) Total consideration $ 94,842 Fair Value Useful life (in Years) Developed technology $ 10,000 6 Customer relationships 7,400 5 Trademarks $ 185 1 Total intangible assets $ 17,585 Fiscal Year 2019 2018 Pro forma total revenues $ 277,888 $ 206,610 Pro forma net loss $ (54,653 ) $ (59,858 ) October 12, 2018 Accounts receivable $ 1,511 Intangible assets 12,400 Other assets 1,104 Goodwill 41,898 Accounts payable and other liabilities (1,610 ) Deferred revenue (2,609 ) Deferred tax liability, net (3,174 ) Total consideration $ 49,520 Fair Value Useful life (in Years) Developed technology $ 8,900 5 Customer relationships 3,500 5 Total intangible assets $ 12,400 August 1, 2018 Other current assets $ 46 Intangible assets 12,800 Goodwill 39,361 Total consideration $ 52,207 Fair Value Useful life (in Years) Developed technology $ 9,500 5 Customer relationships 3,300 5 Total intangible assets $ 12,800 December 1, 2017 Cash and cash equivalents $ 747 Accounts receivable 1,912 Intangible assets 3,820 Other assets, net 616 Goodwill 7,264 Accounts payable and other liabilities (1,405 ) Pension plan obligation (4,226 ) Total consideration $ 8,728 Fair Value Useful life (in Years) Developed technology $ 2,300 4 Customer relationships 1,520 4 Total intangible assets $ 3,820 May 3, 2017 Cash and cash equivalents $ 2,016 Accounts receivable 1,172 Intangible assets 12,960 Other assets 2,086 Goodwill 30,840 Accounts payable and other liabilities (8,125 ) Total consideration $ 40,949 Fair Value Useful life (in Years) Developed technology $ 9,700 7 Customer relationships 3,100 5 Trademarks 160 1 Total intangible assets $ 12,960 has been excluded from the purchase consideration. Balance at January 31, 2017 $ 6,306 Additions from acquisitions 38,104 Balance at January 31, 2018 44,410 Additions from acquisitions 165,150 Balance at January 31, 2019 $ 209,560 As of January 31, 2019 2018 Weighted Average Remaining Useful Lives (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 4.8 $ 48,435 $ (9,198 ) $ 39,237 $ 19,385 $ (4,153 ) $ 15,232 Customer relationships 4.4 18,894 (2,363 ) 16,531 4,694 (597 ) 4,097 Trademarks 0.8 345 (188 ) 157 160 (119 ) 41 In-process research and development — — — — 650 — 650 Total other intangible assets $ 67,674 $ (11,749 ) $ 55,925 $ 24,889 $ (4,869 ) $ 20,020 Year Ending January 31, 2020 $ 12,627 2021 12,450 2022 12,026 2023 9,732 2024 7,316 Thereafter 1,774 Total $ 55,925 As of January 31, 2019 2018 Furniture and equipment $ 3,595 $ 1,897 Software development costs 23,444 16,574 Leasehold improvements 1,255 557 Construction in progress 183 149 Total property and equipment 28,477 19,177 Less: accumulated depreciation and amortization (17,928 ) (13,991 ) Property and equipment, net $ 10,549 $ 5,186 2020, respectively. Amortization expense related to software development costs was approximately Level 1 Level 2 Level 3 Total January 31, 2019 Cash equivalents:(1) Money market funds $ 118,204 $ — $ — $ 118,204 U.S. agency obligations — 6,986 — 6,986 Commercial paper — 2,997 — 2,997 Marketable securities: U.S. agency obligations — 40,295 — 40,295 U.S. treasury securities — 84,830 — 84,830 Corporate notes and bonds — 29,326 — 29,326 Commercial paper — 14,876 — 14,876 Asset backed securities — 10,842 — 10,842 January 31, 2018 Money market funds (1) 389,357 — — 389,357 As of January 31, 2019 2018 Accrued compensation $ 23,112 $ 11,606 Accrued expenses 11,898 6,190 Income tax payable 2,231 5,092 Other current liabilities 4,551 3,755 Total accrued expenses and other current liabilities $ 41,792 $ 26,643 •during the •after the Company’s issuance of a notice of redemption and prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or •upon the occurrence of specified corporate events, as defined in the Indenture. As of January 31, 2019 2018 Liability: Principal $ 230,000 $ 230,000 Less: debt discount, net of amortization (55,385 ) (66,990 ) Net carrying amount $ 174,615 $ 163,010 Equity $ 60,470 $ 60,470 Year Ended January 31, 2019 2018 Contractual interest expense $ 863 $ 36 Amortization of debt issuance costs 876 36 Amortization of debt discount 10,734 423 Total $ 12,473 $ 495 2025 Notes and 2023 Notes is approximately 4.4 years, 3.4 years and 1.0 years, respectively. Calls million, respectively. of 2023 Notes or 2025 Notes. The Capped Calls relating to the 2026 Notes were not exercisable. price. consolidated financial statements. Year Ending January 31, 2020 $ 19,849 2021 19,094 2022 6,697 2023 6,066 2024 5,257 Thereafter 1,231 Total $ 58,194 Options Outstanding Outstanding Stock Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Balance, January 31, 2018 9,301,253 $ 7.19 7.30 $ 288,713 Option grants 553,697 48.47 Options exercised (2,824,836 ) 4.82 Options forfeited (179,186 ) 9.49 Balance, January 31, 2019 6,850,928 11.44 6.84 $ 517,353 Exercisable at January 31, 2019 4,744,831 7.30 6.43 $ 377,978 Number of RSUs Outstanding Weighted-Average Grant Date Fair Value Awarded and unvested at January 31, 2018 1,971,778 $ 27.14 Awards granted 2,015,384 $ 52.54 Awards vested (858,740 ) $ 32.99 Awards forfeited (336,305 ) $ 35.90 Awarded and unvested at January 31, 2019 2,792,117 $ 42.62 1.6 years. and Awards For the year ended January 31, 2019 2018 2017 Cost of revenue: Subscription services $ 4,285 $ 2,105 $ 715 Professional services and other 4,269 2,722 772 Research and development 11,841 6,928 1,766 Sales and marketing 14,786 8,476 3,130 General and administrative 17,765 9,464 3,069 Total $ 52,946 $ 29,695 $ 9,452 For the year ended January 31, 2019 2018 2017 Employee Stock Options Expected term (years) 6.0 6.0 6.0 Volatility 42.2% 46.0% 48.0% Risk-free interest rate 2.8% 1.9% - 2.2% 1.3% - 2.1% Dividend yield — — — Employee Stock Purchase Plan Expected term (years) 0.5 - 2.0 0.5 - 2.0 0.4 - 1.9 Volatility 31.1% - 34.1% 37.3% - 42.6% 48.0% Risk-free interest rate 2.0% - 2.8% 0.9% - 1.4% 0.5% - 0.8% Dividend yield — — — Market-Based Awards Expected term (years) 7.1 — 7.4 Volatility 43.7% — 48.0% Risk-free interest rate 2.8% — 1.6% Dividend yield — — — •Fair Value of Common Stock. •Expected Term. The expected term •Risk-Free Interest Rate. The Company bases the risk-free interest rate on the yields of U.S. •Expected Volatility. For the year ended January 31, 2019 2018 2017 United States $ (59,070 ) $ (44,977 ) $ (38,926 ) Foreign 3,009 2,820 2,167 Loss before provision for income taxes $ (56,061 ) $ (42,157 ) $ (36,759 ) For the year ended January 31, 2019 2018 2017 Current income taxes: Federal $ — $ — $ — State 151 116 82 Foreign 3,514 4,248 976 Total current income taxes 3,665 4,364 1,058 Deferred income taxes: Federal (2,701 ) (26 ) 13 State (365 ) 7 1 Foreign (1,136 ) (2,697 ) (224 ) Total deferred income taxes (4,202 ) (2,716 ) (210 ) Total provision for (benefit from) income taxes $ (537 ) $ 1,648 $ 848 For the year ended January 31, 2019 2018 2017 Federal statutory income tax rate 21.0 % 33.8 % 34.0 % Tax reform rate change impact — (80.7 ) — State tax, net of federal benefit 2.9 2.6 2.6 Change in valuation allowance (98.1 ) (23.6 ) (36.2 ) Stock-based compensation 71.6 63.5 (2.7 ) Other non-deductible items (2.1 ) (3.5 ) (1.8 ) Foreign rate differential (2.9 ) (0.5 ) (1.4 ) Tax credits 8.6 4.5 3.2 Total 1.0 % (3.9 )% (2.3 )% As of January 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 110,485 $ 61,671 Accruals and reserves 3,209 3,259 Stock-based compensation 5,852 4,476 Tax credits 9,250 5,636 Gross deferred tax assets 128,796 75,042 Valuation allowance (113,497 ) (58,027 ) Total deferred tax assets, net of valuation allowance 15,299 17,015 Deferred tax liabilities: Fixed assets and intangibles assets (1,693 ) (1,495 ) Accruals and reserves (951 ) (98 ) Discount on convertible notes (12,047 ) (14,803 ) Gross deferred tax liabilities (14,691 ) (16,396 ) Net deferred tax assets $ 608 $ 619 As of January 31, 2022, the Company had foreign net operating loss carryforwards of $45.0 million, the majority of which may be carried forward indefinitely. litigation processes, based on technical merit. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognized in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. For the year ended January 31, 2019 2018 2017 Unrecognized tax benefit—beginning of year $ 12,663 $ 5,441 $ 3,304 Gross increases —prior year tax positions 295 — 472 Gross decreases —prior year tax positions (8 ) (5 ) (248 ) Gross increases — current year tax positions 7,127 7,227 1,913 Unrecognized tax benefit—end of year $ 20,077 $ 12,663 $ 5,441 months, aside from $3.7 million related to ongoing audit activity which the Company expects to settle. $1.4 million as of January 31, 2021. January 31, 2019 2018 2017 Numerator: Net loss attributable to common stockholders $ (55,524 ) $ (43,805 ) $ (37,607 ) Denominator: Weighted-average common shares outstanding 57,716 52,999 19,988 Net loss per share attributable to common stockholders, basic and diluted $ (0.96 ) $ (0.83 ) $ (1.88 ) As of January 31, 2019 2018 2017 Options to purchase common stock 6,850,928 9,301,253 13,016,402 RSUs 2,792,117 1,971,778 77,883 Unvested common shares subject to repurchase 193,894 458,214 335,116 Shares committed under the ESPP 189,168 195,497 144,685 Contingent stock consideration for DCR acquisition 377,138 — — Holdback shares for Aquiire acquisition 37,570 — — Total 10,440,815 11,926,742 13,574,086 Three months ended Jan. 31, Oct. 31, Jul. 31, Apr. 30, Jan. 31, Oct. 31, Jul. 31, Apr. 30, 2019 2018 2018 2018 2018 2017 2017 2017 (in thousands) Total revenues $ 74,908 $ 67,455 $ 61,651 $ 56,352 $ 53,752 $ 47,340 $ 44,551 $ 41,137 Gross profit 49,883 45,791 43,011 38,227 37,286 32,345 29,603 27,640 Loss from operations 14,749 9,918 10,624 12,069 9,057 11,159 14,359 10,387 Net loss 16,571 9,645 13,854 15,454 8,723 11,302 13,742 10,038 Net loss per share attributable to common stockholders, basic and diluted $ 0.28 $ 0.17 $ 0.24 $ 0.28 $ 0.16 $ 0.21 $ 0.26 $ 0.20 short- andshort-and long-term business operations and objectives, and financial needs. The forward-looking statements are contained principally in “Management’s Discussion and Analysis of Financial Condition and ResultResults of Operations”Operations,” "Business" and “Risk Factors.”business spend managementBusiness Spend Management (“BSM”) solutions. We offer a comprehensive, cloud-based BSM platform that has connected hundreds of organizationsour customers with more than fourseven million suppliers globally. Our platform provides greater visibility into and control over how companies spend money.money, optimize supply chains, and manage liquidity. Using our platform, businesses are able to achieve real, measurable value and savings that drive their profitability. cloud-based BSM platform has beenis designed for the modern global workforce that is mobile and expects real-time results, flexibility, and agility from software solutions. We empower employeesThe look, feel and functionality of our intuitive, mobile and browser-based interface evoke a familiar e-commerce experience that is intended to acquireappeal to users across an entire organization, rather than just a small group of power users with specialized training. The simplicity and accessibility of our solution encourages widespread adoption within an organization—and the goods and services they need to do their jobs by applying a distinctivebroader the user adoption, the more spend under management that an organization achieves. In this way, our user-centric approach that provides a consumer Internet-like experience, drives widespread adoption ofenables organizations to gain greater control over their procurement, invoicing, payment and other related spend activities, and to manage these processes more efficiently than with traditional, legacy solutions. By de-centralizing BSM workflows and removing unnecessary complexity, our platform and, therefore, significantly increasesreduces an organization’s spend under management. We referdependence on its often-backlogged back-office functions, and empowers personnel across the organization to the process companies use tosource and purchase goods and services as business spend management and to the money that they manage with this process as spend under management. Increased user adoption and spend under management drive betteron their own—without sacrificing visibility and control of a company’s spend, resulting in greater savings and increased compliance.Economic conditions, intense competition and the global regulatory environment are forcing businesses to find new ways to drive operational efficiencies, track processes, reduce costs, fund business growth and innovation, and enhance profitability and cash flow. Therefore, managing business spend has increasingly become a major strategic imperative to help businesses achieve cost savings. Indirect spend, which refers to goods and services that support a company’s operations as opposed to direct spend that flows into the products a company manufactures, is particularly difficult to manage due to inefficient employee spending behavior and disparate systems that obstruct spend visibility.We offer a comprehensive cloud-basedover spending. that delivers a broad range of capabilities that would typically require the purchase and use of multiple disparate point applications. The core of our platform consists of procurement, invoicing, expense management, and payments modulespayment solutions that form the transactional engine for managing a company’s business spend. In addition, our platform offers supporting modulesspecialized solutions targeted for power users, to help companies further manage their spend,more technical and strategic areas of BSM, including areas such as strategic sourcing, spend analysis, contract management, contingent workforce, inventory management, supplier risk management, supply chain design and planning, treasury management, and contingent workforce management. Our Coupa Community Intelligence solutions provide benchmarkingspend analysis.insightssupplier populations continue to grow. As more businesses subscribe to our BSM platform, the collective spend under management on our BSMplatform grows. The greater the total amount of spend under management on our platform, the more attractive our platform is to suppliers.As more suppliers join our platform, our buyers benefit from a broader range of purchasing options, which in turn encourages greater use of our platform by existing customers, while also attracting new customers to our platform. In addition, the increasing number of transactions on our platform leads to incrementally powerful prescriptive spend insights and risk management recommendations from our Coupa Community.ai capabilities, creating more value for customers and providing additional incentives for increased adoption. As we generate more revenue from the increase in customer subscriptions to our services, we are able to make greater investments into our platform, for example, to add new features or improve the functionality and user interface of our solutions, and these enhancements further encourage greater adoption of our platform by businesses, enhancing the network effects that benefit all constituencies.a purchasing program,programs, such as Coupa Instant Advantage, that leverages the collective buying power of Coupa customerswhich offers access to provide advantageous, pre-negotiated discounts from various suppliers.suppliers, and Coupa Sourcing Advantage, which connects community members to engage in group sourcing events, allowing them to leverage pooled buying power to achieve better contracting terms and capture greater savings. Moreover, through our Coupa Open Business Network, suppliers of all sizes can easilylist their goods and services, establish pricing, and interact with buyers electronically, thus significantly reducing paper, improving operating efficiencies, and reducing costs.Ourand our interactions with customers are driven byis built on three guiding principles (which we refer to as our core values):values: (1) ensuring customer success, (2) focusing on resultsresults; and (3) striving for excellence. In particular, this strongWe emphasize these principles continuously through formal training and informal messaging within the organization, and the results of our annual employee surveys consistently demonstrate that our employees have adopted and strive to embody them. These principles inform how we treat each other within our organization, and how we approach interactions with our customers, suppliers, partners, and others with whom we do business. Our unwavering focus on customer success which includes deliveringmeans that we expect to deliver quantifiable business value to our customers by helping them maximize their spend under management,management.We believe this mindset serves as the foundation for the successful execution of our strategy, and, as a result, is critical to our growth. With aWe focus on results. Our market leading technology supports rapid time-to-deployment, typically ranging from a few weeks to several months, achieving swift time to value. We strive for excellence in many ways, one example of which is through our product release and anupdate cycles. Here, we seek to improve product design iteratively, based on user feedback, as we look to build ever-more intuitive, easy-to-use interface that shieldsinterfaces to shield users from unnecessarythe complexity associated with more traditional, legacy enterprise resource planning (“ERP”) and procurement solutions. Our relentless commitment to the embodiment of our customers can achieve widespread user adoption quickly and generatecore values supports the creation of meaningful, measurable customer value within a short timeframe, thus benefitting fromresulting in a rapid return on investment.We benefit from powerful network effects. As more businesses subscribe toinvestment for our BSM platform, the collective spend under management on our platform grows. Greater aggregate spend under management on our platform attracts more suppliers, which in turn attracts more businesses that want to take advantage of the goods and services available through our platform. In addition, as more businesses and employees use our platform, the amount of spend under management continues to increase. This leads to increasingly more powerful prescriptive spend management and risk management recommendations from our Coupa Community Intelligence solutions, helping to create more value for customers and improving our ability to attract more businesses. The resulting increase in sales1enables us to further invest in our platform and to improve our functionality and user interface to continue to attract more businesses and suppliers to our platform, which enhances the network effects that benefit all parties.our partner-led implementations and sales referrals from our partners to continue to increase over time.platform which is currently subscribed to by nearly 1,000 customers.platform. Our cumulative spend under management is highlighted below:
2019, 2018,2022, 2021, and 2017,2020, our cumulative spend under management was $1,079$3,340 billion, $680$2,359 billion and $365$1,655 billion, respectively. Cumulative spend under management does not directly correlate to our revenue or results of operations because we do not generally charge our customers based on actual usage of our BSM platform. However, we believe that cumulative spend under management illustrates the adoption, scale, and value of our platform, which we believe enhances our ability to maintain existing customers and attract new customers.2019, 2018,2022, 2021, and 2017,2020, our total revenues were $260.4$725.3 million, $186.8$541.6 million and $133.8$389.7 million, respectively, and our net losses were $55.5$379.0 million, $43.8$180.1 million and $37.6$90.8 million, respectively, as we focused on growing our business.We offer a comprehensive cloud-based BSM platform that delivers a broad range of capabilities that would otherwise require the purchase and use of multiple disparate point applications. The core of our platform consists of procurement, invoicing, expense management and payments modules that form our transactional engine and capture a company’s business spend. In addition, our platform offers supporting modules to help companies further manage their spend, including strategic sourcing, spend analysis, contract management, supplier management, and contingent workforce management. comprehensive BSM platform provides businesses with real-time visibility and control of spending.spend and liquidity. The platform’s modern, user-centric interface enables businesses to drive adoption of the platform, andto capture, analyze, and control thistheir spend, and to achieve real, measurable value and savings, and directly improve their profitability:Drive Adoption. •Adopt. Our platform applies a distinctive user-centric approach that shields users from complexity and provides a mobile-enabled consumer Internet-likeintuitive customer experience, thus enabling widespread adoption of our platform by users across the entire organization, and across the customer’s supplier base, as well.that is comprised of our procurement, invoicing, expense management, and payment management modules,capabilities, which comprehensively help capture and manage spend within an organization. GivenBecause purchase orders, invoices, expense reports, and payments flow through our platform and the data is stored centrally in a clean and organized fashion, businesses are able to observe their spending activities in real time.thatto help businesses identify problems and make better spending decisions. Real-time analytical and prescriptive insights are critical to helping identify savings opportunities and risks, isolating problem areas in the spending process, and providing recommendations to target improvement efforts.risk.and other third party risks. Our platform has extensive functionality that enables managers to prevent excessive spend, reduce spend through efficiencies and cost savings associated with strategic sourcing and contract compliance, and identify and manage risky suppliers across numerous levelsvarious layers of the supply base.enableenabling strategic sourcing via reverse auctions in whichwhere suppliers bid down prices at which they are willing to sell their goods and services to businesses.3 comprehensive, cloud-based BSM platform includes the following capabilities:
modules:solutions:modulesolution enables customers to strategically establish spend policies and approval rules to govern company spending. The application provides a consumerized e-commercean intuitive, e-commerce-type shopping experience so that employees can easily and quickly find the goods and services they need to do their jobs. For example, employees searching for goods can see inventory on-handinventory-on-hand balances in the search results, which eliminates redundant spending. They also can access a marketplace of approved providers directly from the application. Our procurement modulesolution streamlines purchasingpurchase requisition and purchase order processes, allowing businesses to track and manage purchases in real time,real-time, thus reducing time and cost. Upon approval of an employee request, purchase orders are automatically sent to suppliers for fulfillment and invoicing. Benchmark data allows customers to spot process inefficiencies, while ease of configuration ease enables businesses to effortlessly adjust business processes to meet continually changing business requirements. Our invoicing module enables customers to improve cash management through the effective management of supplier invoices via embedded dashboards and work queues that prioritize invoices with early payment discount opportunities. Customers may quickly configure invoice approval and matching rules so invoices can be routed without accounts payable team member effort and cost. Easy, no-cost means for suppliers to create electronic invoices that comply with government regulations allow businesses to eliminate paper and further reduce their invoice processing costs, all while reducing invoice payment fraud risk.4create expense reports on-the-go so businesses gain real-time expense visibility. Frugal meter capabilities automatically assess the appropriateness of employee charges based on the customer’s configured business processes. Seamless connectivity to credit card providers feed charges into our expense management module for added visibility and reporting ease.We recently introduced a new component of our Coupa transactional engine that we call Coupa Pay. This new componentPay represents a set of solutions that will help customers consolidate and optimize their business-to-business payment processing. For example, withprocesses to manage working capital and make payments to suppliers and contractors, as well as to employees for travel and expense reimbursements. With Coupa Pay, customers can make payments using different methods, including domestic and international bank transfers, one-time-use virtual credit cards, digital checks, and digital wallets. Coupa's comprehensive approach to payments removes silos between Procurement, Accounts Payable, and Treasury, thus increasing process efficiency, reducing invoice volume through the use of secure virtual credit cards at the time of purchase order, and unlocking the opportunity to take advantage of early pay discounts. Customers are equipped with a single portal to manage all payments across multiple banks, and their suppliers get visibility into payment discountsstatus. The process to create, approve, and pay authorized suppliersrelease payments is automated to save time and avoid potential error and fraud. This process is secured with one-time-use credit cards, known as virtual cards.access controls and encrypted transmission and storage of payment-related information. With payments management as a core capability within aour unified BSM platform, all types of payment transactions can be directly tiedare automatically reconciled to backingsupporting documentation for better visibility and control of business spend.Modulesmodulessolutions that help companies further manage their spend:modulesolution enables customers to find the best suppliers for the goods or services they need to run their businesses. It also offers advanced capabilities for the sourcing of complex sourcing categories such as direct raw materials and logistics. Customers easily create sourcing events containing the specifics of their business needs and invite suppliers to participate. Suppliers are able to review and bid effortlessly and without any fees to participate. Collaboration capabilities enable employees to review bids and provide feedback that is automatically compiled and scored. For the sourcing of complex categories, Coupa applies advanced mathematical optimization techniques, allowing customers to analyze price and non-price elements to find the combination of suppliers and goods and services that meet the constraints they specify.modulesolution enables customers to let their employees author new contracts within “guardrails” to manage risk while improving efficiency for their legal teams. Higher-risk contract terms can be escalated for legal review, while lower-risk choices can be pre-approved. Once negotiated, approved and signed, customers can operationalize contracts, and make themmaking these contracts easily available for purchasinguse by employees across the organization. Contract compliance increasesBuying under the terms of negotiated contracts can increase savings as employees make purchases using negotiated rates. Real-time contract enforcementthrough the use of pre-agreed rates and spendmitigate risk through contractual protections. Customers get visibility is provided throughinto how contracts affect spending with embedded dashboards at both the contract and summary level. Full text searchAdvanced contract analysis capabilities give customers visibility into contract terms and risk, while automatic alerts remind employees to review contracts prior to expiration or auto-renewal dates.modulesolution enables customers to gain better visibility, control and optimization of services spend, as part of their holistic business spend management program. Customers can easily initiate requests for temporary work or advanced SOW-based projects as well as source and collect bids. Having better visibility to preferred suppliers helps customers optimize costs by selecting appropriate vendors with competitive rates. Onboarding and offboarding contingent workers is fast and secure, while tracking worker performance and ensuring compliance with company policies is simplified for both customers and contingent workers.modulesolution enables customers to collect the supplier information required to manage and pay suppliers and provides data about potential risks associated with a given supplier. Customers can also use this modulesolution to help ensure compliance and mitigate third-party risk by extensively evaluating their supplier base onagainst critical risk domains, including information security, anti-bribery and anti-corruption, and GDPR compliance, while also staying informed on potential supplier risk by leveraging credit ratings and other searches of publicly available databases.modulesolution provides managers a large set of built-in reports and dashboards that allow users to see spending activity, find bottlenecks in workflows, analyze granular data by commodity, supplier, location and cost center, and drill-downdrill down into the spend transactions. Customers can also leverage Community.ai and our artificial intelligence capabilities to automate complex business spend data classification.classification and identify potentially fraudulent transactions within our system. We have created more than one hundred out-of-the-box reports covering some of the most important business metrics, such as unified spend for purchase orders, invoices or expense reports, spend trends over time, and spend by commodity, supplier and contract; however, userscontract. Users can also create new metrics, reports and dashboards with our intuitive user interface, as well as include external data like corporate and travel expenses or integrate with third-party systems, to get a holistic view of their spend patterns.5businessesbusiness customers and suppliers, providing businesses with a platform that is accessible to suppliers of all sizes—even those typically ignored by fee-based closed networks—to drive success. Suppliers have a variety of options to connect with businesses including:tointo the status of invoices.become compliantimprove compliance with government mandates,regulations, increase profitability, and reduce costs by driving electronic transactions away from paper-based transactions. Our Coupa Open Business Network user interface is easy to navigate and requires little to no training for suppliers to instantly manage transactions.suppliers. Businesses are able to interact with thousandsmillions of suppliers already using our Coupa Supplier Portal, assess the suppliers' suitability for their business, quickly onboard new suppliers, integrate directly or simply use our smart e-mail tools. Businesses can also use the Coupa Open Business Network to layer on top of their existing technology, including third-party systems such as Oracle iProcurement, SAP SRM, material resource planning (“MRP”) solutions, and others. Suppliers of all sizes benefit, as they are able to join the networked economy without changing their technology or spending money on transaction fees.IntelligenceIntelligenceConnections capabilities connect industry practitioners across companies to foster best practice knowledge sharing and mutually beneficial relationships in the BSM space. These capabilities are embedded throughout our platform and include, for example: informative discussion forums surfaced in-context to users as they make spend decisions within Coupa; the ability to find and message BSM professionals at other organizations; and a spend matchmaking capability that automatically recommends connections with community experts to provide input or work together on a sourcing event, among others. These capabilities, combined with the scale of Coupa’s customer base and the volume of educational content and programming produced on Coupa for the entire BSM community, produce a network effect that enables us to provide more value to our customers.extendsextend across our BSM platform, provides information to Coupa customers by applying artificial intelligence-powered analysis to the structured, normalized data collected from the comprehensive set of business spend transactions that have occurred on the Coupa platform. This innovative analysis provides Coupa customers with prescriptive recommendations to optimize their spend decisions, improve operational efficiency, and reduce risk.risk based on best practices from the Coupa community. Participating customers are able to contribute to and benefit from Community Intelligence,Insights, with use cases spanning various areas of spend management, includingincluding: Supplier Insights and Supplier Risk AwareManagement which help companies find and evaluate new and existing suppliers to reduce the risk levels of suppliers,levels; operational insights which helpshelp businesses measure their own performance on key operational metrics against other Coupa customers and follow best practices to drive efficiency and savings, Commodity and Procurable Insights which help companies identify spend consolidation and savings opportunities, and Spend Guard, which surfacesleverages artificial intelligence on behavior patterns to automatically surface potential errors and fraud across all business spend, including invoices and employee expense reports.6•High employee adoption of our easy-to-use BSM platform, which enables better visibility into spend, allowing both procurement and sourcing professionals to better manage their time.real time,real-time, which leads to superior decision-making that can result in significant cost savings.Network.Opportunity to display supplier information and catalog of products and services on the Coupa Open Business Network for existing and prospective customers.Our Competitive StrengthsComprehensive Platform With Powerful Functionality. We offer a comprehensive BSM platform that is tightly integrated and delivers a broad range of capabilities to manage different types of spend that would otherwise require the purchase and use of multiple disparate point applications. By offering a platform with powerful functionality that integrates different modules, we deliver a comprehensive solution for customers to drive adoption, and capture, analyze and control spend across their entire company, thus significantly enhancing savings potential.7Easy and Intuitive User Interface that Enables Widespread Employee Adoption. Our focus on an intuitive and simple user experience shields our users from complexity and results in superior employee adoption.Powerful Network Effects. As more businesses subscribe to our platform, the collective spend under management on our platform grows. Greater aggregate spend under management on our platform attracts more suppliers, which in turn attracts more businesses that want to take advantage of the goods and services available through our platform, thereby creating powerful network effects. In addition, as more businesses and employees use our platform, the amount of spend under management continues to increase. By harnessing the collective insights from our platform’s transactional spend data, Coupa Community Intelligence delivers prescriptive spend and risk management insights and performance benchmarking to customers. This leads to more value for customers and improves our ability to attract more businesses. The resulting increase in sales enables us to further invest in our platform and to improve our functionality and user interface to continue to attract more businesses and suppliers to our platform, which enhances the network effects that benefit all parties.Fast Time-to-Value. We are built from the ground up as a SaaS application delivered via the cloud. As a result, our total cost of ownership is low, our deployment times are short and we can seamlessly deploy the latest updates and upgrades to all our customers via our cloud-based platform.Rich Partner Ecosystem. We have developed strong strategic relationships with a number of leading partners including global systems integrators, implementation partners, resellers and technology partners. While implementation partners such as Accenture, Deloitte and KPMG help us scale our business by extending our global reach and driving increased market penetration, our various technology partners help extend and enhance the capabilities of our platform by facilitating integrations that can deliver a higher level of value to customers.Results-Driven Culture. We have a relentless focus on real measurable customer success and work extensively with customers to achieve significantly improved business value in the form of savings through the use of our platform.Higher Supplier Adoption. We do not charge suppliers any upfront or ongoing fees to participate in our Coupa Open Business Network and offer suppliers an easy and flexible way to interact with customers with minimal friction. As a result, suppliers are motivated to join our network and adopt our platform, which represents a significant competitive advantage over legacy vendors that often struggle with supplier adoption.Community Intelligence Enables Superior Insights. Our platform presents spend activity data that managers can easily analyze using powerful built-in reports and dashboards. Using our platform’s data, we are able to provide benchmarking analytics and evaluate supplier performance, which can help decision makers at our customers identify areas of improvement and realize cost savings. As the amount of spend through our platform grows, we acquire more data that enables us to provide unique insights to our customers, thus strengthening our powerful value proposition.Growth StrategyKey elements of our strategy include:driving enterprise and mid-market customer expansion and global sales capability;expanding global brand awareness, acquisition and advocacy for our solutions;8acquiring key assets to broaden our value proposition;launching innovations to drive a greater share of an organization’s spending; andcultivating a winning culture and community.INSPIRE user conference,Coupa Inspire conferences which isare held in multiple jurisdictions and over multiple days to connect customers, disseminate best practices, and reinforce our brand among existing and new customers.development of our ideal customer profile (ICP), which are the accounts with the highest propensity to buy, for each of our sales segments;customers;•Referral Partners. Our referral partners provide global, national and regional expertise in business spend management, procurement and expense management. They help organizations through9operational transformation by leveraging process, best practices and new technology. These partners may refer customer prospects to us and assist us in selling to them. In return, we typically pay these partners a percentage of the first-year subscription revenue generated by the customers they refer.Boomi, SabreEcovadis, and Thomson ReutersDocuSign that enhance the capabilities of our platform by facilitating integrations that can deliver a higher level of value to customers. As a core part of our strategy, we have developed an ecosystem of partners to extend our sales capabilities and coverage, to broaden and complement our application offerings and to provide a broad array of services that lie outside of our primary areas of focus. Many of these partners are featured in the Coupa App Marketplace.modulessolution capabilities are native cloudcloud-native and designed to scale to millions of users. We utilize a modern technology stack to take advantage of advancements in web-design, open sourceweb design, open-source technologies, scalability and security. We have implemented industry-standard security practices to help us protect our customers’ critical information.and SAP AG and Workday that predominantly focus on database and ERP software solutions. SAP acquired both Ariba, Inc., Fieldglass, Inc. and Concur Technologies, Inc. in 2012, 2014, and 2015, respectively, to formsolutions;core of their cloud offerings that compete with us.capabilities we provide or predominantly focus on narrow industry verticals.10•Niche software vendors that either address only a portion of the capabilities we provide or predominantly focus on narrow industry verticals.independence; andsuppliers.suppliers;112019, we have 9882022, our customers that are doing business in more than 10070 countries and our platform isproducts are offered in more than 2030 languages. We generally define a customer as a separate and distinct buying entity such(such as a company or an educational or government institution, orinstitution), a distinct business unit of a large corporation or a partner organization, in each case that hashave an active contract with us or our partner to access our platform.services. Our customers include leading businesses in a diverse set of industries, including healthcare and pharmaceuticals, retail, financial services, manufacturing, and technology.Employees2019,2022, we had 1,2023,076 full-time employees globally, of which 7281,590 work in the U.S. Noneand 1,486 work in our international locations. Coupa was named on Fortune's “Best Workplaces in Technology” for 2021, Fortune's “100 Best Medium Workplaces” for 2021 and 2020.U.S.global employees participated in our annual survey, 93% of our employees believe the organization works hard to ensure customer success, 94% believe there is a strong focus on results, and 93% are encouraged to strive for excellence day to day.represented byempowered to drive their career progression and professional development. Our Coupa University platform provides our employees with access to a labor union or arewide range of training and development programs, as well as virtual learning resources on-demand to help them excel in their careers. Employees may also participate in our student loan repayment assistance program to help pay off their student loans faster.of a collective bargaining agreement.to continued service. We have not experienced any work stoppages, and we consider our relations withalso offer an employee stock purchase plan which allows our employees to be good.Risks Related to Our BusinessIndustry
Risks Related to Global Economic Trendsmodulesolution shortly thereafter and overthereafter. Over time we have invested in building a comprehensive, integrated platform of business spend management (“BSM”) services, and in marketing, selling and supporting this platform. Although in recent years our integrated platform. quarterly and annual revenues have consistently increased on a year-over-year basis, in future periods, our revenue growth rate could slow or our revenues could decline for a number of reasons, including any reduction in demand for our platform or existing services, increased competition, contraction of our overall market, international or domestic economic instability, downturns or other events, such as the COVID-19 pandemic, our inability to accurately forecast demand for our platform or our failure, for any reason, to capitalize on growth opportunities.12herein.in this report. If our assumptions regarding these risks and uncertainties (which we use to plan our business) are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations and our business could suffer.Any successmay experiencewill continue to expand our operations and headcount, including internationally, in the futurenear future. Our success will depend in large part on our ability to manage this growth effectively. The rapid growth in our headcount and operations has placed and will continue to place significant demands on our management and our administrative, operational and financial infrastructure. As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees, while maintaining the risks discussed hereineffectiveness of our business execution and the beneficial aspects of our corporate culture. In particular, we intend to continue to make directed and substantial investments to expand our research and development, sales and marketing, and general and administrative organizations, as well as our international operations.retain•enhancing information and communication systems to ensure that our employees and offices around the world are well-coordinated and can effectively communicate with each other and our growing base of customers and channel partners;customer base on a cost-effective basis;successfully competerisk management activities to keep up with the growth in our markets;addscale will require significant capital expenditures and allocation of valuable management and employee resources. If we fail to implement these improvements effectively, our ability to manage our expected growth, ensure uninterrupted operation of key business systems and comply with the rules and regulations that are applicable to public reporting companies will be impaired. Additionally, failure to effectively manage growth could result in difficulty or delays in deploying customers, challenges identifying, integrating and maintaining implementation partners, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features and/or other operational difficulties, any of which could adversely affect our business performance and functionalityresults of operations.platformbusiness, dilute stockholder value, and adversely affect our operating results and financial condition.meet customer demand;increase revenues from existing customers as they add usersacquire or purchase additional modules;continue to invest in research and development;scale our internal business operations in an efficient and cost-effective manner;scale our global customer success organization to make our customers successful in their business spend management deployments;help our partners to be successful in deployments of our platform;successfully expand our business domestically and internationally;successfully protect our intellectual property and defend against intellectual property infringement claims;hire, integrate and retain professional and technical talent; andsuccessfully integrate companies andbusinesses, products or technologies that we acquire.must addhave historically depended more on the addition of new customers increaseto our platform, particularly large enterprise customers, than on increasing the number of users at existing customers and sellor selling additional modulessolutions to current customers. Asthem. The expansion of our industry maturescustomer base is critical to our ability to continue the growth of our revenues. If we do not grow our customer base, our revenues will slow in future periods or ifwill start to decline, as a result of customers not renewing.and/or differentiated products or services that are perceived to compete with ours or are better able to adapt to changing market conditions (such as by addressing shifts in existing and prospective customer needs as a result of the COVID-19 pandemic), or if competitors are willing to provide concessions such as extended billing terms or price discounts in order to win customers amidst the changing business environment , our ability to sell based on factors such as pricing, technology and functionality could be impaired. As a result, we may be unable to attract new customers at rates or on terms that would be favorable or comparable to prior periods, which could have an adverse effect on the growth of our revenues.widespread acceptanceour ability to continue to attract large enterprises to our platform and grow this segment of our platform by large enterprises. As we targetcustomer base. We expect to continue to focus a substantial portion of our sales efforts aton these customers in the near future. Accordingly, we will continue to face greater costs, longer sales cycles and less predictability in completing some of our sales. Assales, than would be expected from selling to a result of the variability and length of the sales cycle, we have only a limited ability to forecast the timing of sales.predominantly mid-market target customer base. A delay in or failure to complete salesclose a large sale to one or more prospective new enterprise customers could cause us to fail to meet the expectations of management or analysts, harm our business and financial results, and could cause our financial results to vary significantly from period to period.varies widely, reflecting differences in potential customers’ decision-making processes, procurement requirements and budget cycles, and is subjectranges from three to significant risks overnine months. The wide range reflects a number of timing factors that can vary significantly between prospective customers, many of which we have little or nocannot control, including:13decision; therefore,decision requiring integration of our platform across operations spanning numerous jurisdictions. In addition, large enterprise customers also generally demand more configuration and integration services, as well as customized features and functions, than our mid-market customer base, which generally increases our upfront investment in related sales efforts. Therefore, these types of sales require us to access and address more frequent requests with respect to configuration, integration and customization services and to provide greater levels of education regarding the use and benefits of our platform, which causes us to expend substantial time, effort and money educating them aswith respect to individual prospective enterprise customers. In addition, we have no assurance that a prospective customer will ultimately purchase any services from us at all, regardless of the valueamount of our platform. In addition, becausetime or resources we are a relatively new company with a limited operating history, our target customers may prefer to purchase software that is critical to their business from one of our larger, more established competitors. Our typical sales cycle can range from three to nine months, and it's possible that sales cycles may continue to be lengthy or increase. Longer sales cycles could cause our operating and financial results to suffer in a given period.If our security measures are breached or unauthorized access to customer data is otherwise obtained,have spent on the opportunity. For example, our platform does not currently permit customers to modify our code. If prospective customers require customized features or functions that we do not offer and that would be difficult for them to deploy themselves, they may be perceived as not being secure, customers may reducedecide to utilize a competing solution which allows the usedesired level of or stop using our platform and we may incur significant liabilities.Our platform involves the storage and transmission of our customers’ sensitive proprietary information, including their spending and other related data. customization.unauthorized access or security breaches could result inof the lossvariability and length of information, litigation, indemnity obligations and other liability. Whilethe sales cycle associated with large enterprise customers, we have security measures in place that are designed to protect customer information and prevent data loss and other security breaches, if these measures are breached asonly a result of third-party action, employee error, malfeasance or otherwise, and someone obtains unauthorized access to our customers’ data, we could face loss of business, regulatory investigations or orders, our reputation could be severely damaged, we could be required to expend significant capital and other resources to alleviate the problem, as well as incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers or other business partners in an effort to maintain business relationships after a breach.We cannot assure you that any limitations of liability provisions in our contracts would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security lapse or breach. We also cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims related to a security breach, or that the insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation.14Cyber-attacks and other malicious Internet-based activities continue to increase generally. Because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, third parties may attempt to fraudulently induce employees or users to disclose information to gain access to our data or our customers’ data. While it did not involve any customer data, we have previously suffered the loss of certain employee information related to an employee error. If any of these events occur, our or our customers’ information could be accessed or disclosed improperly. Any or all of these issues could negatively affect ourlimited ability to attract new customers, cause existing customers to elect to not renew their subscriptions, result in reputational damage or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affectforecast the timing of sales, and our operating results.Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.Our quarterly results of operations as well as our key metrics discussed elsewhere in this annual report, including the levels of our revenues, gross margin, cash flow and deferred revenue, may vary significantly in the future and period-to-period comparisons of our operating results and key metrics may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Our quarterly financial results and metrics may fluctuate as a result of a variety of factors, many of which are outside of our control, as a result they may not fully reflect the underlying performance of our business. These quarterly fluctuations may negatively affect the value of our common stock. Factors that may cause these fluctuations include, without limitation:our ability to attract new customers;the addition or loss of large customers, including through acquisitions or consolidations;the timing of recognition of revenues;the amount and timing of operating expenses;general economic, industry and market conditions, both domestically and internationally;the timing of our billing and collections;customer renewal and expansion rates;significant security breaches of, technical difficulties with, or interruptions to the delivery and use of our products on our platform;the amount and timing of completion of professional services engagements;increases or decreases in the number of users for our platform, increases or decreases in the modules purchased for our platform or pricing changes upon any renewals of customer agreements;changes in our pricing policies or those of our competitors;seasonal variations in sales of our software subscriptions, which have historically been highest in the fourth quarter of a calendar year but may vary in future quarters;the timing and success of new module introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners;changes in foreign currency exchange rates;extraordinary expenses such as litigation or other dispute-related expenses or settlement payments;sales tax and other tax determinations by authorities in the jurisdiction in which we conduct business;the impact of new accounting pronouncements and the adoption thereof;fluctuations in stock-based compensation expense;15the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill or intangibles from acquired companies. and, SAP AG (“SAP”) and Workday, Inc. (“Workday”), well-established providers of business spend managemententerprise resource planning solutions, including BSM software, that have long-standing relationships with many customers. Some customers may be hesitant to switch vendors or to adopt cloud-based software such as ours for this part of their business and prefer to maintain their existing relationships with their legacy software vendors. Oracle, SAP and SAPWorkday are larger and have greater name recognition, much longer operating histories, larger marketing budgets and significantly greater resources than we do. These vendors, as well as other competitors, may offer business spend management software on a standalone basis at a low price or bundled as part of a larger product sale. In order to take advantage of customer demand for cloud-based software, legacy vendors are expanding their cloud-based software through acquisitions and organic development. For example, SAP acquired Ariba, Inc. and Concur Technologies, Inc. Legacy vendors may also seek to partner with other leading cloud providers. We also face competition from custom-built software vendors and from vendors of specific applications, some of which offer cloud-based solutions.Manyservices.services, including with respect to concessions (such as extended billing terms or price discounts) granted in order to win customers in the challenging business environment created by the COVID-19 pandemic and overall global geopolitical events. Furthermore, our current or potential competitors may be acquired by third parties with greater available resources and the ability to initiate or withstand substantial price competition. In addition, many of our competitors have established marketing relationships, access to larger customer bases and major distribution agreements with consultants, system integrators and resellers. Our competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their product offerings or resources. If our platform does not become more accepted relative to our competitors’, or if our competitors are successful in bringing their products or services to market earlier than ours, or if their products or services are more technologically capable than ours, then our revenues could be adversely affected. In addition, some of our competitors may offer their products and services at a lower price. If we are unable to achieve our target pricing levels, our operating results will be negatively affected. Pricing pressures and increased competition could result in reduced sales, reduced margins, losses or a failure to maintain or improve our competitive market position, any of which could adversely affect our business.substantiallysignificantly on our customers renewing their subscriptions and purchasing additional subscriptions from us.subscriptions. Any decline in our customer renewals would harm our future operating results.modulessolutions to their subscriptions. Our customers have no obligation to renew their subscriptions, and we cannot assure you that our customers will renew subscriptions with a similar contract period or with the same or a greater number of authorized users and modules.solutions. Some of our customers have elected not to renew their agreements with us, and we may not be able to accurately predict renewal rates.or reductions in our customers’ spending levels. Our future success also dependslevels or changing customer needs due to temporary or permanent changes to their operating models and business spend management patterns adopted in part on our ability to add additional authorized users and modulesresponse to the subscriptions of our current customers.COVID-19 pandemic. If our customers do not renew their subscriptions, renew on less favorable terms or fail to add more authorized users or additional16modules,solutions, our revenues may decline or fail to increase in line with expectations, and we may not realize improved operating results from our customer base.We have experienced rapid growth and expect our growth to continue and if wemanagepay us in accordance with the terms of their agreements, necessitating action by us to compel payment.growth effectively,customers. If customers fail to pay us under the terms of our agreements, we may be unableadversely affected both from the inability to executecollect amounts due and the cost of enforcing the terms of our business plan, maintain high levelscontracts, including litigation. The risk of service or adequately address competitive challenges.We have experienced a rapid growth in our business, headcount and operations since inception. We have also significantly increasedsuch negative effects increases with the sizeterm length of our customer base. We anticipate that we will continue to expand our operations and headcount, including internationally. This growth has placed, and future growth will place, a significant strain on our management, administrative, operational and financial infrastructure. Our success will depend in part on our ability to manage this growth effectively. To manage the expected growtharrangements. Furthermore, some of our operations and personnel, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures. Failure to effectively manage growth could result in difficulty or delays in deploying customers declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features and/may seek bankruptcy protection or other operational difficulties, anysimilar relief and fail to pay amounts due to us, or pay those amounts more slowly, either of which could adversely affect our business performance and results of operations.Acquisitions could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our operating results, and financial condition.We have in the past acquired and may in the future seek to acquire or invest in businesses, products or technologies that we believe could complement or expand our platform, enhance our technical capabilities or otherwise offer growth opportunities. For example, we acquired Hiperos LLC in December 2018, acquired Vinimaya, Inc. (d/b/a Aquiire) in October 2018 and acquired certain assets from DCR Workforce in August 2018. Acquisitions may disrupt our business, divert our resources and require significant management attention that would otherwise be available for development of our existing business. In addition, we have limited experience in acquiring other businesses and we may not be able to integrate the acquired personnel, operations and technologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:inability to integrate or benefit from acquired technologies or services in a profitable manner;unanticipated costs, accounting charges or other liabilities associated with the acquisition;incurrence of acquisition-related costs;difficulty integrating the accounting systems, internal controls, operations and personnel of the acquired business;difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business, including due to language, geographical or cultural differences;difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenues, licensing, support or professional services model of the acquired company;adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;the potential loss of key employees;use of resources that are needed in other parts of our business; anduse of substantial portions of our available cash to consummate the acquisition.17In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets. Goodwill must be assessed for impairment at least annually, and other intangible assets are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations. In addition, our exposure to risks associated with various claims, including the use of intellectual property, may be increased as a result of acquisitions of other companies. For example, we may have a lower level of visibility into the development process with respect to intellectual property or the care taken to safeguard against infringement risks with respect to the acquired company or technology. In addition, third parties may make infringement and similar or related claims after we have acquired technology that has not been asserted prior to our acquisition. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquired business fails to meet our expectations, our operating results, business and financial position may suffer.Because we recognize subscription revenues over the term of the contract, fluctuations in new sales and renewals may not be immediately reflected in our operating results and may be difficult to discern.We generally recognize subscription revenues from customers ratably over the terms of their contracts, which are typically three years, although some customers commit for longer or shorter periods. As a result, most of the subscription revenues we report on each quarter are derived from the recognition of deferred revenue relating to subscriptions entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any single quarter would likely have only a small impact on our revenues for that quarter. However, such a decline would negatively affect our revenues in future quarters. Accordingly, the effect of significant downturns in sales and market acceptance of our platform, and potential changes in our pricing policies or rate of renewals, may not be fully apparent from our reported results of operations until future periods.We may be unable to adjust our cost structure to reflect the changes in revenues. In addition, a significant majority of our costs are expensed as incurred, while subscription revenues are recognized over the life of the customer agreement. As a result, increased growth in the number of our customers could result in our recognition of more costs than revenues in the earlier periods of the terms of our agreements. Our subscription model also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as revenues from new customers must be recognized over the applicable subscription term.modules;modules;18modules;solutions; andconsuming,consuming, and such efforts may not ultimately be successful.Changes in privacy laws, regulations,standards may causeexpand our businessmarketing and sales capabilities could harm our ability to suffer.Our customers can useincrease our platform to collect, usecustomer base and store certain types of personal or identifying information regarding their employees and suppliers. Federal, state and foreign government bodies and agencies have adopted, are considering adopting or may adopt laws and regulations regarding the collection, use, storage and disclosure of personal information obtained from consumers and individuals, such as compliance with the Health Insurance Portability and Accountability Act and the recently created EU-U.S. Privacy Shield. The costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to the businessesachieve broader market acceptance of our customers may limit the useplatform.adoptionachieve broader market acceptance of our platform and reduce overall demand or leadwill depend to a significant fines, penalties or liabilities for any noncompliance with such privacy laws. Furthermore, privacy concerns may causeextent on our customers’ employees to resist providing the personal data necessary to allow our customers to use our platform effectively. Even the perception of privacy concerns, whether or not valid, may inhibit market adoption of our platform in certain industries.All of these domestic and international legislative and regulatory initiatives may adversely affect our customers’ process, handle, store, useexpand our marketing and transmit demographicsales operations, both domestically and personal information from their employees, customersinternationally. We plan to continue expanding our direct sales force and suppliers, which could reduce demand for our platform. The European Union (“EU”) and many countries in Europe have stringent privacy laws and regulations, which may affect our ability to operate cost effectively in certain European countries. In particular, the EU has adopted the General Data Protection Regulation (“GDPR”) which went into effect on May 25, 2018 and contains numerous requirements and changes, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies. Specifically, the GDPR introduced numerous privacy-related changes for companies operatingengaging additional partners that can provide sales referrals in the EU, including greater control for data subjects (e.g., the “right to be forgotten”), increased data portability for EU consumers, data breach notification requirements, and increased fines. In particular, under the GDPR, fines of up to 20 million Euros or up to 4% of the annual global revenue of the noncompliant company, whichever is greater, could be imposed for violations of certain of the GDPR’s requirements. Complying with the GDPR may cause us to incur substantial operational costs ornear future. This expansion will require us to change ourinvest significant financial and other resources. Our business practices. Despiteand operating results will be harmed if our efforts to bring practices into compliance with the GDPR, wedo not generate a corresponding increase in revenues. We may not be successful either dueachieve anticipated revenue growth from expanding our direct sales force if we are unable to internalhire and develop talented direct sales personnel, if our new direct sales personnel are unable to achieve desired productivity levels in a reasonable period of time or external factors such as resource allocation limitationsif we are unable to retain our existing direct sales personnel. It often takes six months or a lacklonger before our sales representatives are fully-trained and productive. We also may not achieve anticipated growth in revenues from ourpartners if we are unable to attract, train, support and retain additional motivated partners, if any existing or future channel partners fail to successfully market, resell, implement or support our platform for their customers, or if they represent multiple providers and devote greater resources to market, resell, implement and support the products and solutions of vendor cooperation. Non-compliance could result in proceedings against us by governmental entities, customers, data subjects or others. We may also experience difficulty retaining or obtaining new European or multi-national customers due to the compliance cost, potential risk exposure, and uncertainty for these entities, and we may experience significantly increased liability with respect to these customers pursuant to the terms set forth in our engagements with them. We may find it necessary to establish systems to maintain personal data originating from the EU in the European Economic Area, which may involve substantial expense and distraction from other aspectsproviders. For example, some of our business. In the meantime, there could be uncertainty as to how to comply with EU privacy law.19In addition, California enacted the California Consumer Privacy Act of 2018 which takes effect on January 1, 2020partners also sell or provide integration and will broadly define personal information, give California residents expanded privacy rights and protections and provideadministration services for civil penalties for violations. The effects of this legislation are potentially far-reaching and may require us to modify our data management practices and to incur substantial expense in an effort to comply.Because the interpretation and application of many privacy and data protection laws along with contractually imposed industry standards are uncertain, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of ourcompetitors’ products, and platform capabilities. If so, in additionif such partners devote greater resources to the possibility of fines, lawsuits,marketing, reselling and other claims and penalties, wesupporting competing products, this could be required to fundamentally change our business activities and practices or modify our products and platform capabilities, which could have an adverse effect on our business. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable privacy and data security laws, regulations, and policies, could result in additional cost and liability to us, damage our reputation, inhibit sales, and adversely affect our business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our products. Privacy and data security concerns, whether valid or not valid, may inhibit market adoption of our products, particularly in certain industries and foreign countries. If we are not able to adjust to changing laws, regulations, and standards related to the Internet, our business may be harmed.We may be sued by third parties for various claims including alleged infringement of their proprietary rights.We are involved in various legal matters arising from normal course of business activities. These may include claims, suits, and other proceedings involving alleged infringement of third-party patents and other intellectual property rights, as well as commercial, corporate and securities, labor and employment, wage and hour, and other matters. In particular, there has been considerable activity in our industry to develop and enforce intellectual property rights. Our success depends upon our not infringing upon the intellectual property rights of others. Our competitors, as well as a number of other entities and individuals, may own or claim to own intellectual property relating to our industry. In the past third parties have claimed and in the future third parties may claim that we are infringing upon their intellectual property rights, and we may be found to be infringing upon such rights. For example, between March 2012 and August 2014 and between May 2014 and September 2015, we and Ariba, Inc. were involved in patent and trade secret litigation cases, each of which eventually resulted in a settlement agreement that requires us to maintain certain ongoing compliance measures that if challenged, could be costly, time-consuming and divert the attention of our management and key personnel from our business operations.We may experience future claims that our platform and underlying technology infringe or violate others’ intellectual property rights, and we may be found to be infringing upon such rights. We may be unaware of the intellectual property rights that others may claim cover some or all of our technology or services. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our services or require that we comply with other unfavorable terms. We may also be obligated to indemnify our customers and business partners or to pay substantial settlement costs, including royalty payments, in connection with any such claim or litigation and to obtain licenses, modify our platform or refund fees, which could be costly. Even if we were to prevail in such a dispute, any litigation regarding our intellectual property could be costly, distracting and time-consuming and could harm our brand, business, results of operations and financial condition.annual report.Annual Report. The lifetime value of our customers and customer acquisition costs has and will continue to fluctuate from one period to another depending upon the amount of our net new subscription revenues (which depends on the number and segment mix of new customers in a period, upsells of additional modulessolutions to existing customers and changes in subscription fees charged to existing customers), gross margins (which depends on investments in and other changes to our cost of customer support and allocated overhead), sales and marketing expenses and renewal rates (which depend on our ability to maintain or grow subscription fees from customers). These amounts have fluctuated from quarter to quarter and will continue to fluctuate in the future. We may not experience lifetime value to customer acquisition cost ratios in future years or periods similar to those we have achieved to date. Other companiesFurthermore, as a result of the ongoing global COVID-19 pandemic, it is possible that customers may calculatereduce the scope of their subscriptions in response to evolving operating models and related needs, may not renew their subscriptions at all or may temporarily halt paying us, which would adversely affect our lifetime value metrics.acquisition costs differently thanto commence bankruptcy proceedings, restructure itself, dissolve or otherwise cease operations. We believe the risk of such events has increased with the ongoing COVID-19 pandemic and will further increase as the pandemic continues. In addition, acquisitions of our chosen methodcustomers by unrelated third parties could lead to cancellation of our contracts with those customers or by the acquiring companies, thereby reducing the number of our existing and therefore,potential customers.directly comparable.If we cannot maintain our company culture as we grow, we could loseinnovation, teamwork, passion and focus on execution that we believe contributeUnited States or with international operations expose us to our success and our business may be harmed.We believe that a critical componentrisks inherent in international sales.success has beengrowth strategy is to expand our company culture, which isinternational operations and develop a worldwide customer base. For example, in March 2021 we established a joint venture in Japan intended to enable us to support Japanese companies looking to utilize BSM solutions. The revenues from non-U.S. regions, as determined based on our core values of ensuring customer success, focusing on results and striving for excellence. We have invested substantial time and resources in building our team within this company culture. As we grow and develop the infrastructure of a public company, we may find it difficult to maintain these important aspectsbilling address of our company culture. If we fail to preservecustomers, constituted 40%, 38% and 36% of our culture, our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives could be compromised, potentially harming our business.21We have a history of cumulative losses, and we do not expect to be profitabletotal revenues for the foreseeable future.We have incurred significant losses in each period since our inception in 2006. We incurred net losses of $55.5 million, $43.8 million, and $37.6 million in the fiscal years ended January 31, 2019, 2018,2022, 2021 and 2017,2020, respectively. Operating in international markets requires significant resources and management attention and subjects us to regulatory, economic and political risks that are different from those in the United States. While we are gaining additional experience with international operations, our international expansion efforts may not be successful in creating additional demand for our platform outside of the United States or in effectively selling subscriptions to our platform in all of the international markets we enter. There can be no assurance that we will be able to grow our combined revenues from non-U.S. regions as a percentage of our total revenues. In addition, we face risks in doing business internationally that could adversely affect our business, including:hadmay face exposure to foreign currency exchange rate fluctuations, which could adversely affect our business, results of operations and financial condition.accumulated deficitincreasing portion of $254.9 million at January 31, 2019. Our losses and accumulated deficit reflect the substantial investments we made to acquire new customers and develop our platform. We expect ourinternational contracts may be denominated in local currencies. Therefore, as exchange rates vary, revenues, cost of revenues, operating expenses to increaseand other operating results, when re-measured, may differ materially from expectations. The effects of movements in the future due to anticipated increases in sales and marketing expenses, research and development expenses, operations costs and general and administrative costs, and, therefore, we expect our losses to continue for the foreseeable future. Furthermore,currency exchange rates will become more pronounced to the extent our transaction volume in local currencies increases. In the future, we may use foreign currency forward and option contracts and/or other derivative instruments to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place. Additionally, the use of hedging instruments may introduce additional risks if we are successfulunable to structure effective hedges with such instruments. These effects of movements in increasingcurrency exchange rates could also affect our customer base, we will also incur increased losses because costs associated with acquiring customers are generally incurred up front, while subscription revenues are generally recognized ratably over the termscustomers. A strengthening of the agreements (typically three years, although some customers commit for longer or shorter periods). You should not consider our recent growth in revenues as indicativeU.S. dollar could increase the real cost of our future performance. Accordingly,platform to our customers outside of the United States, which could adversely affect our business, operating results, financial condition, and cash flows.weany limitations of liability provisions in our contracts would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security lapse or breach. We also cannot be sure that our existing insurance coverage will achieve profitabilitycontinue to be available on acceptable terms or will be available in the future,sufficient amounts to cover one or more large claims related to a security breach, or that if we do become profitable, wethe insurer will sustain profitabilitynot deny coverage as to any future claim. The successful assertion of one or achievemore large claims against us that exceed available insurance coverage, or the occurrence of changes in our target margins on a midterminsurance policies, including premium increases or long-term basis.We do notthe imposition of large deductible or co-insurance requirements, could have a long history withmaterial adverse effect on our subscriptionbusiness, including our financial condition, operating results, and reputation.pricing modelssabotage systems change frequently and changesgenerally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, third parties may attempt to fraudulently induce employees or users to disclose information to gain access to our data or our customers’ data. If any of these events occur, our or our customers’ information could be accessed or disclosed improperly. Any or all of these issues could negatively affect our ability to attract new customers, cause existing customers to elect to not renew their subscriptions, result in reputational damage or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect our operating results.We have limited experience with respect to determining the optimal prices and contract length for our platform. As the markets for our software subscriptions grow, as new competitors introduce new products or services that compete with ours or as we enter into new international markets, we may be unable to attract new customers at the same price or based on the same pricing model as we have used historically. For example, customers may demand pricing models that include price adjustments that are correlated to the savings they realize using our products and services. While this is not and has not been our pricing model, we have discussed it with some customers in the past and may choose to implement it in the future. Moreover, regardless of pricing model used, large customers, which are the focus of our sales efforts, may demand higher price discounts than in the past. As a result, in the future we may be required to reduce our prices, offer shorter contract durations or offer alternative pricing models, which could adversely affect our revenues, gross margin, profitability, financial position and cash flow.modules,solutions, we may lose existing customers or fail to attract new customers and our revenues and financial performance may suffer.modulessolutions or new modulessolutions that achieve market acceptance or to integrate technology, products and services that we acquire into our platform, our business and operating results could be adversely affected. The success of enhancements, new features and modulessolutions depends on several factors, including the timely completion, introduction and market acceptance of the enhancements or new features or modules.solutions. Failure in this regard may significantly impair the growth of our revenues. We have experienced, and may in the future experience, delays in the planned release dates of enhancements to our platform, and we have discovered, and may in the future discover, errors in new releases after their introduction. Either situation could result in adverse publicity, loss of sales, delay in market acceptance of our platform or customer claims, including, among other things, warranty claims against us, any of which could cause us to lose existing customers or affect our ability to attract new customers. heavily on Amazon Web Services to deliver our platform and modulessolutions to our customers, and any disruption in service from Amazon Web Services or material change to our arrangement with Amazon Web Services could adversely affect our business. heavily upon Amazon Web Services (“AWS”) to operate certain aspects of our platform and any disruption of or interference with our use of AWS could impair our ability to deliver our platform and modulessolutions to our customers, resulting in customer dissatisfaction, damage to our reputation, loss of customers and harm to our business. We have architected our software and computer systems to use data processing, storage capabilities and22modulessolutions for a small period of time. Despite precautions taken at these data centers, the occurrence of spikes in usage volume, a natural disaster, an act of terrorism, vandalism or sabotage, a decision to close a facility without adequate notice or other unanticipated problems at a facility could result in lengthy interruptions in the availability of our platform. Even with current and planned disaster recovery arrangements, our business could be harmed. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. These factors in turn could further reduce our revenues, subject us to liability and cause us to issue credits or cause customers to fail to renew their subscriptions, any of which could harm our business.If we are unable to maintain effective internal controls over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.As a public company, we are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) requires that we evaluate and determine the effectiveness of our internal controls over financial reporting and provide a management report on the internal controls over financial reporting, which must be attested to by our independent registered public accounting firm. In accordance with guidance issued by the Securities and Exchange Commission (“SEC”), companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred. After that time, however, the internal controls of companies that we have acquired must be included in our management report on internal controls over financial reporting and the attestation of our independent registered public accounting firm. If we have a material weakness in our internal controls over financial reporting (including in the control environment of our acquired companies), we may not detect errors on a timely basis and our financial statements may be materially misstated. While we were able to determine the effectiveness of our internal controls over financial reporting in our management’s report as of January 31, 2019, as well as provide an unqualified attestation report from our independent registered public accounting firm to that effect, in the future, we may not be able to complete our evaluation, testing, and any required remediation in a timely fashion, or otherwise assert that our internal controls are effective, and additionally, our independent registered public accounting firm may not be able to formally attest to the effectiveness of our internal controls over financial reporting.If in the future we identify material weaknesses in our internal controls over financial reporting (including in the control environment of our acquired companies), if we are unable to comply with the requirements of Section 404 in a timely manner, if we are unable to assert that our internal controls over financial reporting are effective or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become23subject to investigations by the SEC, stock exchange or other regulatory authorities, which could require additional financial and management resources to address.Sales to customers outside the United States or with international operations expose us to risks inherent in international sales.A key element of our growth strategy is to expand our international operations and develop a worldwide customer base. The combined revenues from non-U.S. regions, as determined based on the billing address of our customers, constituted 38%, 35%, and 32% of our total revenues for the fiscal years ended January 31, 2019, 2018, and 2017, respectively. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that are different from those in the United States. Because of our limited experience with international operations, our international expansion efforts may not be successful in creating additional demand for our platform outside of the United States or in effectively selling subscriptions to our platform in all of the international markets we enter. There can be no assurance that we will be able to continue to grow our combined revenues from non-U.S. regions as a percentage of our total revenues. In addition, we will face risks in doing business internationally that could adversely affect our business, including:the need to localize and adapt our platform for specific countries, including translation into foreign languages and associated expenses;data privacy laws that require customer data to be stored and processed in a designated territory;difficulties in staffing and managing foreign operations and working with foreign partners;different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues;new and different sources of competition;weaker protection for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights outside of the United States;laws and business practices favoring local competitors;compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, tax, privacy and data protection laws and regulations;increased financial accounting and reporting burdens and complexities;restrictions on the transfer of funds;fluctuations in currency exchange rates, which could increase the price of our products outside of the United States, increase the expenses of our international operations and expose us to foreign currency exchange rate risk;adverse tax consequences;unstable regional and economic political conditions; andthe fragmentation of longstanding regulatory frameworks caused by Brexit.24As we continue to expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these and other risks associated with our international sales and operations. Our failure to manage any of these risks successfully, or to comply with these laws and regulations, could harm our operations, reduce our sales and harm our business, operating results and financial condition. For example, in certain foreign countries, particularly those with developing economies, certain business practices that are prohibited by laws and regulations applicable to us, such as the Foreign Corrupt Practices Act, may be more commonplace. Although we have policies and procedures designed to ensure compliance with these laws and regulations, our employees, contractors and agents, as well as channel partners involved in our international sales, may take actions in violation of our policies. Any such violation could have an adverse effect on our business and reputation.Some of our business partners also have international operations and are subject to the risks described above. Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks.satisfiedsuccessful with the implementation services provided by us or our partners.satisfymake our customers successful, both with respect to our platform and modulessolutions and the professional services that are performed to help our customers use features and functions that address their business needs. Professional services may be performed by our own staff, by a third-party partner or by a combination of the two. Our strategy is to work with partners to increase the breadth of capability and depth of capacity for delivery of these services to our customers, and we expect the number of our partner-led implementations to continue to increase over time.customers. If a customer is not satisfied with the quality of work performed by us or a partner or with a virtual implementation or with the type of professional services or modulessolutions delivered, we may incur additional costs to in addressing the situation, the profitability of that work might be impaired and the customer’s dissatisfaction with our services or those of our partners could damage our ability to retain that customer or expand the number of modulessolutions subscribed to by that customer. In addition, negative publicity related to our customer relationships, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers.25modulessolutions are implemented, our customers depend on our support organization to resolve technical issues relating to our modules.solutions. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services. We also may be unable to modify the format of our support services to compete with changes in support services provided by our competitors. Increased customer demand for these services, without corresponding revenues, could increase costs and adversely affect our operating results. In addition, our sales process is highly dependent on our platform and business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation, our ability to sell subscriptions to our modulessolutions to existing and prospective customers and our business, operating results and financial position.Failure to adequately expand our direct sales force will impede our growth.We will need to continue to expand and optimize our sales infrastructure in order to grow our customer base and our business. We plan to continue to expand our direct sales force, both domestically and internationally. Identifying and recruiting qualified personnel and training them in the use of our software requires significant time, expense and attention. It often takes six months or longer before our sales representatives are fully-trained and productive. Our business may be adversely affected if our efforts to expand and train our direct sales force do not generate a corresponding increase in revenues. In particular, if we are unable to hire, develop and retain talented sales personnel or if new direct sales personnel are unable to achieve desired productivity levels in a reasonable period of time, we may not be able to realize the expected benefits of this investment or increase our revenues.The loss of one or more of our key customers could negatively affect our ability to market our platform.We rely on our reputation and recommendations from key customers in order to promote subscriptions to our platform. The loss of any of our key customers could have a significant impact on our revenues, reputation and our ability to obtain new customers. In addition, acquisitions of our customers could lead to cancellation of our contracts26with those customers or by the acquiring companies, thereby reducing the number of our existing and potential customers.Weakened global economic conditions may harm our industry, business and results of operations.Our overall performance depends in part on worldwide economic conditions. Global financial developments and downturns seemingly unrelated to us or the enterprise software industry may harm us. The United States and other key international economies have been affected from time to time by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, and overall uncertainty with respect to the economy, including with respect to tariff and trade issues. In particular, the economies of countries in Europe have been experiencing weakness associated with high sovereign debt levels, weakness in the banking sector and uncertainty over the future of the Euro zone, including instability surrounding “Brexit,” the United Kingdom’s decision to exit the European Union. We have operations, as well as current and potential new customers, throughout most of Europe. If economic conditions in Europe and other key markets for our platform continue to remain uncertain or deteriorate further, many customers may delay or reduce their information technology spending.The growth of our revenues and potential profitability of our business depends on demand for platform and modules generally, and business spend management specifically. In addition, our revenues are dependent on the number of users of our modules. Historically, during economic downturns there have been reductions in spending on enterprise software as well as pressure for extended billing terms or pricing discounts, which would limit our ability to grow our business and negatively affect our operating results. These conditions affect the rate of enterprise software spending and could adversely affect our customers’ ability or willingness to subscribe to our platform, delay prospective customers’ purchasing decisions, reduce the value or duration of their subscriptions or affect renewal rates, all of which could harm our operating results.Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results for periods prior and subsequent to such change. For example, recent new standards issued by the FASB that could materially impact our financial statements include revenue from contracts with customers, accounting for leases, and implementation costs incurred in a hosting arrangement that is a service contract. We may adopt one or more of these standards retrospectively to prior periods and the adoption may result in an adverse change to previously reported results. Additionally, the adoption of these standards may potentially require enhancements or changes in our systems and will require significant time and cost on behalf of our financial management.We adopted the new revenue recognition standard on February 1, 2018 using a modified retrospective approach. One of the impacts of the new standard on us is the removal of the previous limitation on contingent revenue. In addition, commissions accounting under the new standard is significantly different than our previous capitalization policy. The new standard results in additional types of costs that are capitalized and amounts that are amortized over a period longer than our previous policy of amortizing the deferred amounts over the specific revenue contract-terms. Specifically, incremental contract costs will be deferred and amortized over an estimated customer life of five years, which is calculated based on quantitative and qualitative factors. The new standard also requires incremental disclosures including information about the remaining performance obligations. We have implemented control activities related to the new standard, particularly related to evaluating the impact of the standard on our revenue recognition policies, the determination of average customer life, and the new disclosure requirements, and did not require the implementation of new information technology systems.The prescribed periods of adoption of these standards and other pending changes in accounting principles generally accepted in the United States, are further discussed in Note 2 “Significant Accounting Policies—Recent Accounting Guidance” in the notes to our consolidated financial statements.27We may face exposure to foreign currency exchange rate fluctuations, which could adversely affect our business, results of operations and financial condition.As our international operations expand, our exposure to the effects of fluctuations in currency exchange rates grows because our international contracts are sometimes denominated in local currencies, in particular with respect to the Euro, British Pound Sterling, Swedish Krona, Swiss Franc, and Australian Dollar. Over time, an increasing portion of our international contracts may be denominated in local currencies. Therefore, as exchange rates vary, revenue, cost of revenue, operating expenses and other operating results, when re-measured, may differ materially from expectations. We do not currently engage in currency hedging activities to limit the risk of exchange rate fluctuations. However, in the future, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place. Additionally, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments. Moreover, we anticipate growing our business further outside of the United States, and the effects of movements in currency exchange rates will increase as our transaction volume outside of the United States increases.If we cannot continue to expand the use of our platform, our ability to grow our business may be harmed and the growth rate of our revenues may decline.Our ability to grow our business depends in part on our ability to compete in the market for the additional modules on our platform, including strategic sourcing, inventory, contracts, supplier management and spend analysis. Our efforts to market these other modules is relatively new, and it is uncertain whether these other modules will ever result in significant revenues for us. While we have recently acquired businesses related to certain of these modules, there can be no assurance that these acquisitions will facilitate our efforts to market and sell these other modules. Further, the introduction of new modules beyond these markets may not be successful.Large customers often demand more configuration and integration services, or customized features and functions that we do not offer, which could adversely affect our business and operating results.Large customers may demand more configuration and integration services, which increase our upfront investment in sales and deployment efforts, with no guarantee that these customers will increase the scope of their subscription. As a result of these factors, we must devote a significant amount of sales support and professional services resources to individual customers, increasing the cost and time required to complete sales. Additionally, our platform does not currently permit customers to modify our code. If prospective customers require customized features or functions that we do not offer and that would be difficult for them to deploy themselves, then the market for our platform will be more limited and our business could suffer.28modulessolutions through their Internet service providers.ISPs. If a service provideran ISP fails to provide sufficient capacity to support our modulessolutions or otherwise experiences service outages, such failure could interrupt our customers’ access to our modulessolutions and adversely affect their perception of our modules’solutions’ reliability. In addition to potential liability, if we experience interruptions in the availability of our platform, our reputation could be adversely affected and we could lose customers.attention.growthsuccess depends in part onupon our not infringing upon the successintellectual property rights of our strategic relationships with third parties.We have established strategic relationships withothers. Our competitors, as well as a number of other companies.entities and individuals, may own or claim to own intellectual property relating to our industry. In orderthe past third parties have claimed and in the future third parties may claim that our platform and underlying technology are infringing upon or otherwise violating their intellectual property rights, and we may be found to growbe infringing upon such rights.business,technology or services. As a result of our acquisition of businesses and technologies, we anticipatemay be subject to infringement claims arising subsequent to the consummation of such acquisitions with respect to the acquired technology. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we will continue to establish and maintain relationships with third parties, such as implementation partners, system integrator partners and technology providers. Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. Our competitors may be effective in providing incentives to third parties to favor their productspay substantial damages or ongoing royalty payments, prevent us from offering our services or require that we comply with other unfavorable terms. In the event a claim is brought against us with respect to preventan acquired technology, there can be no assurance that an applicable indemnification we obtained (if any) will be sufficient to cover all or reduce subscriptionsany portion of liability arising under such claim. We may also be obligated to indemnify our services. In addition, acquisitions of ourcustomers and business partners by our competitors could resultor to pay substantial settlement costs, including royalty payments, in a decrease in the number of our currentconnection with any such claim or litigation and potential customers, as our partners may no longer facilitate the adoption ofto obtain licenses, modify our platform by potential customers.If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenuesrefund fees, which could be impaired and our operating results could suffer.costly. Even if we are successfulwere to prevail in such a dispute, any litigation regarding our strategic relationships, we cannot assure you that these relationships will result in increased customer usageintellectual property could be costly, distracting and time-consuming and could harm our brand, business, results of our platform or increased revenues.Our estimates of market opportunityoperations and forecasts of market growth that we have publicly disclosed may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates.Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. Our estimates and forecasts relating to the size and expected growth of our market that we have publicly disclosed may prove to be inaccurate. Even if the market in which we compete meets our size estimates and forecasted growth, our business could fail to grow at similar rates.our ability to protectthe value of our proprietary technology and damage our brand.29We have incurred and will continue to incur significantly increased costs and devote substantial management time as a result of operating as a public company.As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses that we did not incur as a private company. For example, we are subject tosreporting requirementsimplementation of our platform, impair the Securities Exchange Actfunctionality of 1934, as amended,our platform, delay introductions of new solutions, result in our substituting inferior or more costly technologies into our platform, or injure our reputation.are requiredany failure to comply with the applicableterms of one or more of these open source licenses could negatively affect our business.Sarbanes-Oxley Actsoftware. Many of the risks associated with the use of open source software cannot be eliminated and could negatively affect our business.Dodd-Frank Wall Street Reforminability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business.Consumer Protection Act, as well as rulesdevelopment tools from third parties in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of the software used in our platform with new third-party software may require significant work and regulations subsequently implementedrequire substantial investment of our time and resources. Also, to the extent that our platform depends upon the successful operation of third-party software in conjunction with our software, any undetected errors or defects in this third-party software could prevent the deployment or impair the functionality of our platform, delay new solution introductions, result in a failure of our solutions and injure our reputation. Our use of additional or alternative third-party software would require us to enter into license agreements with third parties, which may be time consuming to negotiate or result in increased licensing costs and/or less favorable terms.SECCOVID-19 pandemic. The pandemic has adversely affected the macroeconomic environment and the Nasdaq Global Select Market, including the establishmentincreased economic and maintenance of effective disclosurestock market volatility and financial controlsuncertainty.Restrictions on business activities, such as stay-at-home orders, whether imposed by governments or otherwise, may continue to adversely affect our sales activities, employee morale, operations and growth prospects.These restrictions, together with changes in corporate governance practices. Compliance with these requirements has increased our legalconsumer and financial compliance costs and made some activities more time consuming and costly. In addition, our managementbusiness spending behavior prompted by the pandemic, have caused businesses in the United States and other personnel needjurisdictions to divert attentionreduce or suspend their operations, lay-off employees, and in some cases shutdown operations—a pattern of global economic phenomena for which there is little precedent in modern times.operational and other business matterssales to devote substantial timeenterprise customers (a segment that may be more resilient to these public company requirements. In particular, we are incurring significant expenses and devoting substantial management effort toward ensuring ongoing compliance with the requirementseconomic volatility), a prolonged economic downturn is likely to impact many of Section 404our enterprise customers adversely.The extent of the Sarbanes-Oxley Act, which have increased now that we are no longer an emerging growth company, as defined by the JOBS Act. We have hired and may needdamage to continue to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and maintain an internal audit function. We cannot predict or estimate the amountthis segment of additional costs we may incur as a result of becoming a public company or the timing of such costs.Weour customer base may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.We have funded our operations since inception primarily through equity and debt financings and prepayments by customers. We do not know when or if our operations will generate sufficient cash to fund our ongoing operations. In the future, we may require additional capital to respond to business opportunities, challenges, acquisitions, a decline in the level of customer prepayments or unforeseen circumstances and may determine to engage in equity or debt financings or enter into credit facilitiesapparent as quickly as for other reasons,segments, and is likely to differ by industry.secure additional debt or equity financingmanner and on favorable terms or at all. Any debt financing obtained by usacceptable to us.could involve restrictive covenants relatingrevenue and profitability fail to meet investor and analyst expectations for any particular financial period, our stock price may experience a substantial decline, even if our revenues have increased or our margins have improved relative to past periods.capital raising activities and other financial and operational matters, whichperformance. A decline in stock price may make it more difficult for us to obtain additionalraise capital and to pursue business opportunities, including potential acquisitions. If we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock or our outstanding noteholders. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.Our customers may fail to pay us in accordance with the terms of their agreements, necessitating action by us to compel payment.We typically enter into multiple year, non-cancelable arrangements with our customers. If customers fail to pay us under the terms of our agreements, we may be adversely affected both from the inability to collect amounts due and the cost of enforcing the terms of our contracts, including litigation. The risk of such negative effects increases with the term length of our customer arrangements. Furthermore, some of our customers may seek bankruptcy protection or other similar relief and fail to pay amounts dueacceptable to us or pay those amounts more slowly, either ofat all.could adversely affect our operating results, financial position and cash flow.Contractual disputes with our customers could be costly, time-consuming and harm our reputation.Our business is contract intensive and we are partythe COVID-19 pandemic continues to contracts with our customers all over the world. Our contracts can contain a variety of terms, including service levels, security obligations, indemnification and regulatory requirements. Contract terms may not always be standardized across our customers and can be subject to differing interpretations, which could result in disputes with our customers from time to time. If our customers notify us of a contract breach or otherwise dispute our contract, the resolution of such disputes in a manner adverse to our interests could negatively affect our operating results.30Pursuant to agreements with certain of our customers, we have placed, and in the future may be required to place in escrow the source code of some of our modules. Under these escrow arrangements, the source code pertaining to the modules may, in specified circumstances, be made available to our customers. This factor may increase the likelihood of misappropriation or other misuse of our modules.Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, data security breaches or terrorism.Our corporate headquarters are located in the San Francisco Bay Area, a region known for seismic activity. A significant natural disaster, such as an earthquake, fire or flood, occurring at our headquarters, at one of our other facilities or where a business partner is located could adversely affectimpact our business, results of operations and financial condition. Further, if a natural disastercondition will depend on future developments, which are highly uncertain and difficult to predict, including, but not limited to, the duration and severity of the pandemic, the availability and efficacy of new and existing vaccines in limiting infection and transmission, the emergence of potential new and more virulent or man-made problem were to affect Internet service providers, this could adversely affectcontagious variants, the ability of our customers to use our products and platform. Although we maintain incident management and disaster response plans,actions taken in the event of a major disruption caused by a natural disasterUnited States and globally to contain the virus or man-made problem, we may be unableaddress its impact, and how quickly and to continue our operationswhat extent normal economic and may endure system interruptions, reputational harm, delays in our developmentoperating activities lengthy interruptions in service, breaches of data security and loss of critical data, any of which couldcan resume. To the extent the COVID-19 pandemic adversely affectaffects our business, results of operations and financial condition.On December 22, 2017, the U.S. government enacted comprehensive federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The Tax Act makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, that will generally be effective for taxable years beginning after December 31, 2017. These changes could have a material adverse impact on the valueU.S. deferred tax assets, result in significant one-time charges in the current or future taxable yearsliability is subject to review by applicable United States and increaseforeign tax authorities. Any adverse outcome of such a review could harm our future U.S. tax expense. For example, while the Tax Act allows for federal net operating losses incurred in tax years beginning after December 31, 2017 to be carried forward indefinitely, the Tax Act also imposes an 80% limitation on the use of net operating losses that are generated in tax years beginning after December 31, 2017. We are continuing to evaluate the Tax Act and its requirements, as well as its application to our business and its impact on our effective tax rate. At this stage, it is unclear how many U.S. states will incorporate these federal law changes, or portions thereof, into their tax codes. The implementation by us of new practices and processes designed to comply with, and benefit from, the Tax Act and its rules and regulations could require us to make substantial changes to our business practices, allocate additional resources, and increase our costs, which could negatively affect our business, results of operations and financial condition.31convertible senior notesConvertible Senior Notes due 2023, orwhich we refer to as the 2023 Notes, in June 2019, we issued $805 million aggregate principal amount of our 0.125% Convertible Senior Notes due 2025, which we refer to as the 2025 Notes, and in June 2020, we issued $1,380 million aggregate principal amount of our 0.375% Convertible Senior Notes due 2026, which we refer to as the 2026 Notes, which we collectively refer to as the Convertible Notes. As of January 31, 2022, we had $1,720.6 million in total long-term liabilities, comprised primarily of $1,614.3 million related to the carrying amount of the 2025 Notes and 2026 Notes. Our indebtedness may:indentureindentures governing the Convertible Notes doesdo not restrict our ability to incur additional indebtedness and we and our subsidiaries may incur substantial additional indebtedness in the future, subject to the restrictions contained in any future debt instruments existing at the time, some of which may be secured indebtedness.WeFor example, the Federal Reserve’s discount rate may increase, and/or other monetary policy may change, which could ultimately result in higher short-term and/or long-term interest rates and could otherwise impact the general availability of credit. Higher prevailing interest rates and/or a tightening supply of credit would adversely affect the terms upon which we would be able to refinance our indebtedness, if at all. As a result, we may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.32indentureindentures governing the Convertible Notes (the “indenture”“indentures”)) before the maturity date at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Convertible Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Convertible Notes surrendered therefor or pay cash with respect to Convertible Notes being converted.9 of10, “Convertible Senior Notes” in the notes to our consolidated financial statements, the conditional conversion feature of the 2023 Notes and the 2025 Notes was triggered as of January 31, 2019, and the Convertible Notes are currently convertible at the option of the holders as of January 31, 2019 through April 30, 2019. As disclosed in Note 9 of notes to our consolidated financial statements, because the conditional conversion feature was triggered as of January 31, 2019, the Convertible Notes have remained classified as current liabilities on the consolidated balance sheet as of January 31, 2019.both the amortization of the debt discount, and the instrument’s non-convertible coupon interest rate, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of the Convertible Notes.We cannot be sure thatIn August 2020, the Financial Accounting Standards Board issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) to amend current accounting standards in the future will continue to permit the use of the treasury stock method. If we are unable or otherwise elect not to useeliminate the treasury stock method in accounting for the shares issuable upon conversionconvertible instruments and instead require application of the Convertible Notes, then our“if-converted” method. Under that method, diluted earnings per share couldwill generally be adversely affected.33hashave ranged from $22.50 to $87.00$377.04 through January 31, 2019. The2022. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:performance of the equity markets;that elect to followinitiate or maintain coverage of our company;stock;34
stock in the public market;•announcements of technological innovations, pricing changes, new software or enhancements to services, acquisitions, strategic alliances or significant agreements by us or by our competitors;problems;annual report.In addition, the and the trading price of the Convertible Notes to decline or make it more difficult for our stockholders to sell their common stock at a time and price that they deem appropriate and could impair our ability to raise capital through the sale of additional equity or equity linked securities. In addition, we have filed a registration statement to register shares reserved for future issuance under our equity compensation plans. Subject to the satisfaction of applicable exercise periods and, in the case of shares held by affiliates or control persons, compliance with the volume restrictions of Rule 144, the shares issued upon exercise of outstanding stock options, settlement of outstanding restricted stock units, or conversion of the Convertible Notes into common stock will be available for immediate resale in the United States in the open market.35ceaseceases coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume, and the trading price of the Convertible Notes, to decline.indentureindentures for our Convertible Notes could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock and Convertible Notes.36indenture prohibitsindentures prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Convertible Notes.indentureindentures and in Delaware law could deter or prevent a third party from acquiring us or could make it more difficult for stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including to delay or impede a merger, tender offer, or proxy contest involving our company. The existence of these provisions could negatively affect the price of our common stock and the trading price of the Convertible Notes and limit opportunities for you to realize value in a corporate transaction.37UnresolvedUnresolved Staff Comments.Cincinnati, Pittsburgh, Boca Raton,Reno, San Diego, Seattle, St. Louis and Reno.Somerville. We also have international offices in Australia, Canada, China, France, Germany, India, Ireland, Italy, Mexico, the Netherlands,Japan, Singapore, Sweden, Switzerland, United Arab Emirates and the United Kingdom, and Japan.Kingdom. We may further expand our facilities capacity as our employee base grows. We believe that we will be able to obtain additional space on commercially reasonable terms.From timetime we may become involved in legal proceedings or be subjectNote 11, “Commitments and Contingencies” to claims arising in the ordinary course of business. As our growth continues, we may become party to an increasing number of litigation matters and claims. AlthoughCompany’s consolidated financial statements for the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business, operating results, financial condition or cash flows. Regardlessdisclosure of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.Company’s legal proceedings.3820192022 there were 10972 registered stockholders of record of our common stock and we believe a substantially greater number of beneficial owners who hold shares through brokers, banks or other nominees.On August 1, 2018, the Company completed thethe technology assetsPana Industries Inc. (“Pana”) in February 2021, we issued a total of DCR Workforce Inc. ("DCR") for aggregate cash consideration of $25.0 million paid at closing (of which $3.8 million is being held back by the Company until the second anniversary after closing of the acquisition) and certain contingent stock consideration that may be earned and issued in the future. The maximum contingent stock consideration that may be earned and issued is up to 668,74023,822 shares of the Company’s common stock. The payout of the contingent stock consideration will be determined based on the achievement of distinct revenue performance targets for each of three separate measurement periods that continue through December 31, 2022. During the year ended January 31, 2019, the revenue performance target for the first measurement period ending October 31, 2019 has been fully met, and therefore the Company issued 291,602 shares of the Company’s common stock to thetwo Pana shareholders that are subject to service-based vesting conditions, including continued employment. The issuance of DCR in the fourth quarter ending January 31, 2019. This transactionthese shares was exemptmade pursuant to an exemption from registration under the Securities Act pursuant toof 1933, as amended, available under Section 4(a)(2) of the Securities Act.39
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Selected Financial Data.The following selected consolidated financial data should be read in conjunction with “Management’s[Reserved]Operations” and the consolidated financial statements and related notes included within this Annual Report on Form 10-K. The consolidated statements of operations data for the fiscal years ended January 31, 2019, 2018 and 2017, and the consolidated balance sheet data as of January 31, 2019 and 2018 are derived from our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The consolidated statements of operations data for the fiscal years ended January 31, 2016 and 2015, and the consolidated balance sheet data as of January 31, 2017, 2016 and 2015 are derived from audited consolidated financial statements that are not included in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of our future results. The selected consolidated financial data in this section are not intended to replace our consolidated financial statements and the related notes, and are qualified in their entirety by the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. Since we adopted the new revenue standard effective on February 1, 2018 using the modified retrospective method, the financial data for fiscal 2019 were prepared under the new revenue standard, and the financial data for the years from fiscal 2015 to 2018 were prepared prior to the adoption of the new revenue standard. See Note 2 “Significant Accounting Policies—Recent Accounting Guidance—Recently Adopted Accounting Pronouncements.”Operations.41(2)See Note 13 to our consolidated financial statements for an explanation of the method used to calculate basic and diluted net loss per share attributable to common stockholders.Non‑GAAP Financial MeasuresIn addition to our results determined in accordance with U.S. generally accepted accounting principles, or GAAP, we believe the following non‑GAAP measures are useful in evaluating our operating performance. We regularly review the measures set forth below as we evaluate our business.We define non‑GAAP operating profit (loss) as operating profit (loss) before stock‑based compensation, litigation‑related costs, and amortization of acquired intangible assets. We define non‑GAAP net profit (loss) as net profit (loss) before stock‑based compensation, litigation‑related costs and amortization of acquired intangible assets, amortization of debt discount and issuance costs, and related tax effects including non-recurring income tax adjustments. We define free cash flows as operating cash flows less purchases of property and equipment.We believe non‑GAAP operating profit (loss) and non-GAAP net profit (loss) provide investors and other users of our financial information consistency and comparability with our past financial performance and facilitate period to period comparisons of operations. We believe non‑GAAP operating profit (loss) and non-GAAP net profit (loss) are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. We believe information regarding free cash flows provides useful information to investors because it is an indicator of the strength and performance of our business operations.42We use non‑GAAP operating profit (loss), non-GAAP net profit (loss) and free cash flows in conjunction with traditional GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. Our definitions 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, our non‑GAAP operating profit (loss), non-GAAP net profit (loss) and free cash flows should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.We compensate for these limitations by providing investors and other users of our financial information a reconciliation of non‑GAAP operating profit (loss) to loss from operations, non-GAAP net profit (loss) to net loss, and free cash flows, to the related GAAP financial measure. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non‑GAAP operating profit (loss), non-GAAP net profit (loss), and free cash flows in conjunction with loss from operations, net loss, and the consolidated statements of cash flows. The following tables provide a reconciliation of loss from operations to non‑GAAP operating profit (loss), from net loss to non-GAAP net profit (loss), and from net cash provided by (used in) operating activities to free cash flows:43Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.business spend managementBusiness Spend Management (“BSM”) solutions, withsolutions. We offer a comprehensive, cloud-based BSM platform that connectshas connected our customers with more than fourseven million suppliers globally.money.money, optimize supply chains, and manage liquidity. Using our platform, businesses are able to achieve real, measurable value and savings that drive their profitability; we call this “Value as a Service.” profitability.We offer a comprehensive, cloud-basedOur BSM platform that is tightly integrated and delivers a broad range of capabilities that would otherwisetypically require the purchase and use of multiple disparate point applications. The core of our platform consists of procurement, invoicing, and expense management, modulesand payment solutions that form ourthe transactional engine and capturefor managing a company’s business spend. In addition, our platform offers supporting modulesspecialized solutions targeted for power users, to help companies further manage their spend,more technical and strategic areas of BSM, including areas such as strategic sourcing, spend analysis, contract management, supplier management, contingent workforce, supplier risk management, supply chain design and inventory management. planning, treasury management, and spend analysis.offer aprovide purchasing program,programs, such as Coupa Advantage, that leverages the collectivewhich offers access to pre-negotiated discounts from various suppliers, and Source Together, which connects community members to engage in group sourcing events, allowing them to leverage pooled buying power of Coupa customers,to achieve better contracting terms and we provide benchmarking and insights to customers on our BSM platform through a solution we refer to as Community Intelligence.capture greater savings. Moreover, through our Coupa Open Business Network, suppliers of all sizes can easilylist their goods and services, establish pricing, and interact with buyers electronically, thus significantly reducing paper, improving operating efficiencies, and reducing costs.modulessolutions for select employees and procurement specialists, whowhom we refer to as power users. Therefore, we are typically able to capture a majority of the expected annual recurring revenue opportunity at the inception of our customer relationships, rather than targeting specific power users at the outset of the customer relationship with the intention of expanding and gettingcapturing more annual recurring revenue at later stages of the customer relationship. Customers can rapidly implement our platform, with implementation periods typically ranging from a few weeks to several months. Customers also benefit from software updates that typically require little downtime.2019, 20182022, 2021 and 2017,2020, respectively.leads driven byleveraging the referral resources of our partner ecosystem. Our initial contract terms are typically three years, although some customers commit for longer or shorter periods. Substantially allThe large majority of our customers pay annually, one year in advance. We provide a scaled pricing model based on the number of users per module—as the number of users increases, the subscription price per user decreases. Our subscription fee includes access to our service, technical support and management of the hosting infrastructure. We generally recognize revenues from our subscription fees ratably over the contractual term of the arrangement. We do not charge suppliers who are on our platform to transact with our customers. We believe this approach helps attract more suppliers to our platform and increases the value of our platform to customers.44modulessolutions to meet the evolving needs of our customers and to take advantage of our market opportunity. We intend to continue to increase our investment in sales and marketing, as we further expand our sales teams, increase our marketing activities, and grow our international operations. Internationally, we currently offer our platform in Europe, the Middle East and Africa, (“EMEA”), Latin America (“LATAM”) and Asia-Pacific, (“APAC”), including Japan. The combined revenues from non-U.S. regions, as determined based on the billing address of our customers, constituted 38%40%, 35%38% and 32%36%, respectively, of our total revenues for the years ended January 31, 2019, 20182022, 2021 and 2017.2020. We believe there is further opportunity to increase our international revenues in absolute dollars and as a percentage of our total revenues. As a result, we are increasingly investing in our international operations and we intend to expand our footprint in international markets.Because of our limitedWhile we are gaining additional experience with international operations, our international expansion efforts may not be successful in creating additional demand for our platform outside of the United States or in effectively selling subscriptions to our platform in any or all of the international markets we enter.August 2018,February 2021, we completed the acquisitionacquired all of the technology assets of DCR Workforceequity interest in Pana Industries, Inc. ("DCR"(“Pana”), a provider of contingent workforce management and services procurement software, for aggregate cash consideration of $25.0 million paid at closing (of which $3.8 million is being held back until the second anniversary of the closing of the acquisition) and contingent stock consideration that may be earned and issued in the future.corporate travel booking solution company. The maximum contingent stock consideration that may be earned and issued is up to 668,740 shares of Coupa’s common stock. The payout of the contingent stock consideration is determined based on the achievement of distinct revenue performance targets for each of three separate measurement periods that continue through December 31, 2022. The fair value of the contingent stockpurchase consideration was determined to be $27.2 million, resulting in a total purchase consideration of $52.2 million. During the year ended January 31, 2019, the revenue performance target for the first measurement period ending October 31, 2019 was fully met, and therefore we issued 291,602 shares of our common stock to the shareholders of DCR in the fourth quarter ending January 31, 2019.In October 2018, we completed the acquisition of Vinimaya, Inc., a real-time supplier catalog search company, which conducted business as Aquiire. We paid aggregate consideration of approximately $49.5 million, comprised of $30.5$48.5 million in cash (of which $3.8$7.1 million is being held in escrow for 18 months after the transaction closing date) and 300,560 shares of Coupa’s common stock with fair value of approximately $19.0 million (of which 37,570 shares are being held back by Coupa for 18 months after closing of the acquisition).In December 2018, we completed the acquisition of Hiperos, LLC, a leading third-party risk management provider. We paid aggregate consideration of approximately $94.8 million in cash (of which $8.6 million is being held in escrow for 18fifteen months after the transaction closing date). The Hiperos acquisition extended Coupa’s capabilityIn addition, we issued 23,822 shares of unvested common stock with an approximate fair value of $7.6 million to two of Pana's shareholders. These shares are subject to service-based vesting conditions including continued employment with us.third-party risktheir spend, aligning processes and compliance including advanced risks such as information security, briberydecisions across supply chain, procurement, and corruption, and demanding new data privacy regulations like the General Data Protection Regulation.modulessolutions and more users. However, these costs are significantly less than the costs452019, 20182022 and 2017,2021, the calculated lifetime value of our customers has exceeded six times the associated cost of acquiring them.As of January 31, 2022 2021 2020 Cumulative spend under management (in billions) $ 3,340.2 $ 2,359.3 $ 1,655.2 Remaining performance obligations (in millions) $ 1,283.7 $ 952.3 $ 724.9 Deferred revenue (in millions) $ 491.4 $ 361.9 $ 261.8 Trailing twelve months calculated billings (in millions) $ 854.8 $ 641.7 $ 468.9 Customers with annualized subscription revenue above $100,000 1,370 1,082 813 amountdollar value of money that has been transactedtransactions through our core Coupa platform for all of our customers collectively since we launched our core platform. We define our core platform for purposes of this metric as our procurement, invoicing and expense management modules. We calculate this metric by aggregating the actual transaction data for purchase orders, invoices and expenses from customers onusing our core Coupa platform. Cumulative spend under management does not include spending data or transactions associated with modules from acquired companies. We regularly review our process for calculating this metric and periodically make adjustments to improve its accuracy. We believe that any such adjustments are immaterial unless otherwise stated.metricsmetric presented above dodoes not directly correlate to our revenue or results of operations because we do not generally charge our customers based on actual usage of our core platform. However, we believe the cumulative spend under management metrics dometric does illustrate the adoption, scale and value of our platform, which we believe enhances our ability to maintain existing customers and attract new customers.BacklogBacklog represents future non-cancellabletothat will be invoiced and recognized as revenue in future periods. In calculating the remaining performance obligation amount, we elected to apply the two expedients under our agreements. the revenue standard to exclude remaining performance obligations amounts related to contracts that are twelve months or less and contracts where revenue is being recognized under the as-invoiced method.sign multiple-year subscription contracts and invoice an initial annual amount at contract signing followed by subsequent annual invoices. At any point in the contract term, there can be amounts that we have not yet been contractually able to invoice. Until such time as these amounts are invoiced, they are not recorded in our consolidated financial statements, and are considered by us to be backlog. We expect backlog to fluctuate up or down from period to period for several reasons, including the timing and duration of customer contracts, varying billing cycles and the timing and duration of customer renewals.In addition, our deferred revenue consists of amounts that have been invoiced but that have not yet been recognized as revenues as of the end of a reporting period. We generally signexecute multiple year subscription contracts for our platform and invoice an initial amount at contract signing followed by subsequent annual invoices. At any point in the contract term, there might be amounts that are not due for billing yet. These amounts are not recorded in our consolidated financial statements, and are considered to be part of the remaining performance obligations amount.Together,sumperiod of consecutive twelve months ended January 31, 2022 and 2021 plus the change in deferred revenue for each of those same periods. Trailing twelve month calculated billings is comprised of subscription contracts with existing customers (including renewal contracts and backlog representsadd-on contracts), subscription contracts with new customers, term-based license contracts, and contracts for professional services, training and other revenues.billed and unbilled contract value and provides visibility into future revenue streams.46Wenumber of customers that contributed subscription revenues in excess of $25,000 during the relevant fiscal quarter, which corresponds to $100,000 on an annualized basis. For purposes of this metric, we generally define a customer as a separate and distinct buying entity such(such as a company or an educational or government institution, orinstitution), a distinct business unit of a large corporation or a partner organization, in each case that has ana distinctive active contract with us or our partner to access our services. WeMost of the subscription revenue we recognize each quarter is attributable to customers that accounted for more than $25,000 of that revenue during the quarter, and our sales and marketing strategy focuses heavily on the acquisition of customers that have the potential to contribute at least $100,000 in subscription revenues annually. Accordingly, we believe the number of total customersthat this metric is a useful tool to aid investors in understanding a key indicatorfactor that drives changes in our subscription revenues from period to period and in assessing trends in our growth, penetration of our core customer market, penetration, growth and future revenues. Our ability to attract new customers is primarily affected by the effectiveness of our marketing programs and our direct sales force. Accordingly,overall performance. Because the dollar threshold is tied to the actual revenue recognized during a particular quarter, customers that we acquired midway through or at the end of the quarter may not yet be included in this count, even if they have aggressively investedplaced orders representing more than $100,000 in and intend to continue to invest in our direct sales force. In addition, we are continuing to pursue additional partnerships with global systems integrators and other strategic partners.management.management and pay. We derive our revenues primarily from subscription fees, and professional services fees. fees and other.training.revenues allocated to license component for the sales of term-based licenses. Subscription revenues are a function of renewal rates, the number of customers, the number of users at each customer, the number of modulessolutions subscribed to by each customer, and the price of our modules.ourthe notes to our consolidated financial statements.service.service and revenues allocated to the license component for sales of term-based licenses. Professional services are generally sold on a time-and-materials or fixed-fee basis. Revenue for both time-and-material and fixed-fee arrangements are recognized over-time as the services are performed. We have the ability to reasonably measure progress toward complete satisfactiontowards completion of the professional services arrangement.arrangements. For fixed-fee and time-and-material arrangements, we recognize revenue on the basis of performed hours relative to the total estimated hours to complete satisfaction of the professional service arrangement. Services services consists primarily of expenses related to hosting our service and providing customer support. Significant expenses are comprised of data center capacity costs; personnel and related costs directly associated with our cloud infrastructure and customer support, including salaries, benefits, bonuses and stock-based compensation; allocated overhead; and amortization of acquired developed technology and capitalized software development costs.47vendors;vendors, amortization of acquired developed technology; and allocated overhead. These costs are generally expensed in the period incurred.third partythird-party vendors invoice us for services performed for our customers, those fees are accrued over the requisite service period.modulessolutions throughout our history. We have aggressively invested, and intend to continue to invest, in developing technology to support our growth. We capitalize certain software development costs that are attributable to developing new modulessolutions and features and adding incremental functionality to our platform, and we amortize such costs as costs of subscription revenues over the estimated life of the new application or incremental functionality, which is either two years ortypically three years.noncancellablenon-cancelable subscription contract are deferred and amortized over a period of benefit that we have determined to be five years. For commissions earned from the sale of term-based license contracts, we allocate the costs of commission in proportion to the allocation of the transaction price of license and PCS performance obligations. Commissions associated with the license component are expensed at the time the related revenue is recognized. Commissions allocated to PCS are deferred and then amortized over five years. Other sales and marketing costs include promotional events to promote our brand, including our INSPIREInspire conferences, web advertising, television media, events, allocated overhead and amortization of customer relationships and trademark.services;services and allocated overhead costs;costs. During fiscal 2021, general and legal settlements.notes issued in January 2018.Interestnotes.and (Expense), NetNetInterest income and Other,(expense), net consists primarily of interest income earned on our investments in marketable securities and cash and cash equivalents, and gain or loss on conversion of convertible senior notes, in addition to the effects of exchange rates on our foreign currency-denominated asset and liability balances. All translation adjustmentsbalances which are recorded as foreign currency gains (losses) in the consolidated statements of operations.Provision for (Benefit from)Provision forconsistsis primarily related to the reversal of U.S. and foreign deferred tax liabilities as a result of current year intangible and convertible note original issue discount amortization, foreign excess tax benefits related to stock-based compensation, and remeasurement of deferred tax assets due to tax rate changes in the UK, partially offset by income taxes related to foreign and state jurisdictions in which we conduct business. Benefit from income taxes is primarily related to the release of a valuation allowance for deferred tax assets for the year ended January 31, 2019, partially offset by income taxes related to foreign and state jurisdictions. We maintain a full valuation allowance on net deferred tax assets of our U.S. and the majority of our international entities as we have concluded that it is not more likely than not that the deferred assets will be utilized.48On December 22, 2017, the Tax Act was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions that affect our business, such as imposing a one-time transition tax on deemed repatriation of deferred foreign income, reducing the U.S. federal statutory tax rate, and adopting a modified territorial tax system.For the year ended January 31, 2022 2021 2020 (in thousands, except percentages) Revenues: Subscription Subscription $ 634,034 87 % $ 470,341 87 % $ 345,261 89 % Professional services and other 91,255 13 71,302 13 44,458 11 Total revenues 725,289 100 541,643 100 389,719 100 Cost of revenues: Subscription Subscription 209,799 29 147,374 27 89,452 23 Professional services and other 103,437 14 74,327 14 49,764 13 Total cost of revenues 313,236 43 221,701 41 139,216 36 Gross profit 412,053 57 319,942 59 250,503 64 Operating expenses: Research and development 166,486 23 133,842 25 93,089 24 Sales and marketing 327,786 45 236,312 44 155,216 40 General and administrative 161,865 22 116,341 21 75,623 19 Total operating expenses 656,137 90 486,495 90 323,928 83 Loss from operations (244,084) (34) (166,553) (31) (73,425) (19) Interest expense (122,741) (16) (91,271) (17) (37,658) (10) Other income (expense), net Other income (expense), net (4,883) (1) 13,321 2 9,316 2 Loss before benefit from income taxes Loss before benefit from income taxes (371,708) (51) (244,503) (46) (101,767) (27) Benefit from income taxes Benefit from income taxes (2,602) — (64,386) (12) (10,935) (3) Net loss (369,106) (51) (180,117) (34) (90,832) (24) Net loss attributable to redeemable non-controlling interests Net loss attributable to redeemable non-controlling interests (1,063) — — — — — Adjustment attributable to redeemable non-controlling interests Adjustment attributable to redeemable non-controlling interests 10,996 1 — — — — Net loss attributable to Coupa Software Incorporated Net loss attributable to Coupa Software Incorporated $ (379,039) (52) % $ (180,117) (34) % $ (90,832) (24) % 492019, 20182022 and 2017For the year ended
January 31,% Change 2022 2021 (in thousands) Subscription Subscription $ 634,034 $ 470,341 35 % Professional services and other 91,255 71,302 28 % Total revenues $ 725,289 $ 541,643 34 % $260.4$725.3 million for the fiscal year ended January 31, 2019,2022 compared to $186.8$541.6 million for the fiscal year ended January 31, 2018,2021, an increase of $73.6$183.6 million, or 39%34%. Subscription services revenues were $233.4$634.0 million, or 90%87% of total revenues, for the fiscal year ended January 31, 2019,2022, compared to $164.9$470.3 million, or 88%87% of total revenues, for the fiscal year ended January 31, 2018.2021. This increase in absolute dollars was primarily due to the acquisition of new customers, the sale of additional users or modules to existing customers, and to a lesser extent, new revenues generatedpredominantly driven by the acquisitions completed duringincrease in the fourth quarter endednumber of customers with annualized subscription revenue above $100,000, which was 1,370 as of January 31, 2018 and the fiscal year ended2022, compared to 1,082 as of January 31, 2019.2021. Professional services and other revenues were $26.9$91.3 million for the fiscal year ended January 31, 2019,2022 compared to $21.9$71.3 million for the fiscal year ended January 31, 2018. This2021. The increase of $5.0$20.0 million, or 23%28%, was primarily due to new revenues generated from acquisitions completed duringincreases in implementation services provided to our customers.fiscal year ended January 31, 2019COVID-19 pandemic carefully and increase in training services.50Total revenues were $186.8For the year ended
January 31,% Change 2022 2021 (in thousands) Subscription $ 209,799 $ 147,374 42 % Professional services and other 103,437 74,327 39 % Total cost of revenues $ 313,236 $ 221,701 41 % 2018,2022 compared to $133.8$147.4 million for the fiscal year ended January 31, 2017,2021, an increase of $53.0$62.4 million, or 40%. Subscription services revenues were $164.9 million, or 88% of total revenues, for the fiscal year ended January 31, 2018, compared to $117.8 million, or 88% of total revenues, for the fiscal year ended January 31, 2017. This increase in absolute dollars was primarily due to the acquisition of new customers, the sale of additional users or modules to existing customers, and to a lesser extent, new revenues generated by the acquisitions completed during the fiscal year ended January 31, 2018. Professional services revenues were $21.9 million for the fiscal year ended January 31, 2018, compared to $16.0 million for the fiscal year ended January 31, 2017. This increase of $5.9 million, or 37%, was primarily due to an increase in customers and a favorable impact from the timing of completion of various projects for which revenue was recognized under the completed performance method of accounting.Cost of RevenuesCost of subscription services was $53.2 million for the fiscal year ended January 31, 2019, compared to $36.5 million for the fiscal year ended January 31, 2018, an increase of $16.7 million, or 46%42%. The increase in cost of subscription services was primarily due to an increase of $6.8$27.7 million in hosting feesamortization of developed technology assets related to accommodate our increased customer footprint and increased consumption by our recent acquisitions, an increase of $6.0$12.5 million in employee compensation costs related to higher headcount, including stock-based compensation costs, an increase of $2.6$8.9 million in hosting fees to accommodate increased customer spend, an increase of $6.2 million in software costs to manage our platform, an increase of $2.7 million in amortization of intangible assets due to acquisitions completed during the fourth quarter ended January 31, 2018 and the fiscal year ended January 31, 2019,capitalized development costs, and an increase of $2.4$4.4 million related to allocated facilitiesin third party services and other costs driven by our overall growth. These increases were offset by a $1.1 million decrease in amortization of capitalized software development costs during the year.subscriptionprofessional services was $36.5$103.4 million for the fiscal year ended January 31, 2018,2022, compared to $25.1$74.3 million for the fiscal year ended January 31, 2017,2021, an increase of $11.4$29.1 million, or 46%. The increase in cost of subscription services was primarily due to an increase of $4.0 million in employee related expenses largely due to higher stock-based compensation costs, an increase of $2.4 million in hosting fees to accommodate customer growth, an increase of $2.3 million in amortization of capitalized software development costs and intangible assets due to acquisitions completed during the year, an increase of $2.7 million related to allocated facilities and other costs driven by our overall growth.Cost of professional services was $30.3 million for the fiscal year ended January 31, 2019, compared to $23.4 million for the fiscal year ended January 31, 2018, an increase of $6.9 million, or 29%39%. The increase in cost of professional services was primarily due to an increase of $5.7$16.7 million in employee related expensescompensation costs related to higher headcount, including stock-based compensation costs, and an increase of $1.2$11.1 million in amortization of developed technology assets related to allocated facilities and travelacquisitions, an increase of $2.8 million in other costs driven by our overall growth. Costgrowth, partially offset by a decrease of professional$1.5 million in third party implementation services.For the year ended
January 31,% Change 2022 2021 (in thousands) Gross profit $ 412,053 $ 319,942 29 % $23.4$412.1 million for the fiscal year ended January 31, 2018,2022, compared to $21.2$319.9 million for the fiscal year ended January 31, 2017,2021, an increase of $2.2$92.1 million, or 10%29%. Gross margin was 57% for the fiscal year ended January 31, 2022, compared to 59% for the fiscal year ended January 31, 2021. The increasedecrease in cost of professional servicesgross margin was primarily due to anthe increase in amortization of $5.0 million in employee related expenses largely due to higher stock-based compensation costs, and an increase of $1.1 milliondeveloped technology assets related to allocated facilitiesacquisitions.travel costs driven by our overall growth. These increasesDevelopmentFor the year ended
January 31,% Change 2022 2021 (in thousands) Research and development $ 166,486 $ 133,842 24 % offset by a $3.9 million decrease in costs associated with work performed by subcontractors for engagements where we or our partner firms had contracted directly with the customer to perform the professional services.51Gross profit was $176.9$166.5 million for the fiscal year ended January 31, 2019,2022 compared to $126.9$133.8 million for the fiscal year ended January 31, 2018,2021, an increase of $50.0$32.6 million, or 39%. The increase in gross profit was primarily due to the acquisition of new customers, and the sale of new additional users or modules to existing customers, in addition and to a lesser extent, new revenues generated by the acquisitions completed during the fourth quarter ended January 31, 2018 and the fiscal year ended January 31, 2019. Gross margin percentage, defined as gross profit divided by total revenues, was 68% for the fiscal year ended January 31, 2019, compared to 67% for the fiscal year ended January 31, 2018.Gross profit was $126.9 million for the fiscal year ended January 31, 2018, compared to $87.5 million for the fiscal year ended January 31, 2017, an increase of $39.4 million, or 45%. The increase in gross profit was primarily due to the acquisition of new customers, and the sale of new additional users or modules to existing customers, in addition and to a lesser extent, new revenues generated by the acquisitions completed during the fiscal year ended January 31, 2018. In addition, professional services gross profit improved, driven by a favorable impact from the timing of completion of various projects for which revenue was recognized under the completed performance method of accounting. Gross margin percentage, defined as gross profit divided by total revenues, was 67% for the fiscal year ended January 31, 2018, compared to 65% for the fiscal year ended January 31, 2017.Operating ExpensesResearch and DevelopmentResearch and development expenses were $61.6 million for the fiscal year ended January 31, 2019, compared to $44.5 million for the fiscal year ended January 31, 2018, an increase of $17.1 million, or 38%24%. The increase was primarily due to an increase of $13.0$27.3 million in employee compensation costs related expenses largely due to higher headcount, andincluding stock-based compensation costs, an increase of approximately $2.0$2.8 million primarily related to contracted consultant costs of acquired entities,in hosting fees, and an increase of $2.1$2.5 million related to allocated facilities, travel andin other costs driven by our overall growth. We expect researchdevelopment expenses will continue to increase in absolute dollars in fiscal 2020 as we continue to invest in researchMarketingFor the year ended
January 31,% Change 2022 2021 (in thousands) Sales and marketing $ 327,786 $ 236,312 39 % development activities.Research and developmentmarketing expenses were $44.5$327.8 million for the fiscal year ended January 31, 2018,2022, compared to $30.3$236.3 million for the fiscal year ended January 31, 2017,2021, an increase of $14.2$91.5 million, or 47%39%. The increase was primarily due to an increase of $12.4$40.3 million in employee compensation costs related expenses largely due to higher headcount, andincluding stock-based compensation costs, an increase of $31.9 million in amortization of customer relationship assets related to acquisitions, an increase of $12.5 million primarily related to advertising campaigns and marketing events, and an increase of $1.8$6.8 million related to allocated facilities, travel andin other costs driven by our overall growth.52MarketingAdministrativeFor the year ended
January 31,% Change 2022 2021 (in thousands) General and administrative $ 161,865 $ 116,341 39 % Salesmarketingadministrative expenses were $105.7$161.9 million for the fiscal year ended January 31, 2019,2022 compared to $88.7$116.3 million for the fiscal year ended January 31, 2018,2021, an increase of $17.0$45.5 million, or 19%39%. The increase was primarily due to an increase of $10.4$29.9 million in employee compensation costs related expenses largely due to higher headcount, andincluding stock-based compensation costs, a non-recurring prior year benefit of $12.5 million arising from the reversal of the Yapta contingent consideration liability, an increase of $3.1$4.4 million in marketing, travelthird party services, such as recruiting expenses and event costs,legal service fees, an increase of $2.3$2.0 million related to allocated facilities costs andin other costs driven by our overall growth, and an increasepartially offset by a release of $1.2 millionallowances for the amortizationcredit losses of customer relationships arising from acquisitions. We expect sales and marketing expenses will continue to increase in absolute dollars and as a percentage of revenue in fiscal 2020 as we continue to expand our operations.Sales and marketing expenses were $88.7$3.3 million.For the year ended
January 31,% Change 2022 2021 (in thousands) Interest expense $ 122,741 $ 91,271 34 % 2018,2022, compared to $68.6$91.3 million for the fiscal year ended January 31, 2017, an increase of $20.12021. The $31.5 million or 29%. The increase was primarily due to an increase of $15.4 million in employee related expenses largely due to higher headcount and stock-based compensation costs, an increase of $2.8 million in marketing, travel and event costs, an increase of $1.9 million related to allocated facilities costs and other costs driven by our overall growth.General and AdministrativeGeneral and administrative expenses were $57.0 million for the fiscal year ended January 31, 2019, compared to $38.6 million for the fiscal year ended January 31, 2018, an increase of $18.4 million, or 48%. The increase was primarily due to an increase of $14.3 million in employee related expenses largely due to higher headcount and stock-based compensation costs, $2.5 million for professional and outside services primarily related to acquisition cost for the completed acquisitions during the year and recruiting expenses, and an increase of $1.6 million related to allocated facilities costs, travel and other costs driven by our overall growth. We expect general and administrative expenses will continue to increase in absolute dollars in fiscal 2020 due to the growth of our company.General and administrative expenses were $38.6 million for the fiscal year ended January 31, 2018, compared to $24.1 million for the fiscal year ended January 31, 2017, an increase of $14.5 million, or 60%. The increase was primarily due to an increase of $10.5 million in employee related expenses largely due to higher headcount and stock-based compensation costs, $3.4 million for professional and outside services due to the continued transition to being a public company, and an increase of $0.6 million related to allocated facilities costs, travel and other costs driven by our overall growth.Interest Expense53Interest expense was $12.5 million for the fiscal year ended January 31, 2019, compared to an interest expense of $0.5 million for the fiscal year ended January 31, 2018, an increase of $12.0 million. The increase in interest expense was primarily due to the interest accrued on the convertible notes and amortization of the debt discount and issuance costs on our convertible senior notesthe 2026 Notes issued in the fourthmiddle of the second quarter of fiscal 2018.Interest2021.For the year ended
January 31,% Change 2022 2021 (in thousands) Other income (expense), net $ (4,883) $ 13,321 N/M $0.5$4.9 million for the fiscal year ended January 31, 2018,2022 compared to an interest expenseother income, net of $14,000 for the fiscal year ended January 31, 2017, an increase of $488,000. The increase in interest expense was primarily due to the interest accrued on the convertible notes and amortization of the debt discount and issuance costs on our convertible senior notes issued in the fourth quarter of fiscal 2018.Interest Income and Other, NetInterest income and other, net was $3.8$13.3 million for the fiscal year ended January 31, 2019, compared2021. The fluctuation of $18.2 million was primarily due to an interest$9.2 million in unfavorable fluctuations related to foreign currency exchange rates, a decrease of $5.5 million in income earned from our investments in marketable securities and othersmoney market funds primarily as a result of $3.3a lower market yield and reduced amount of investments, a decrease of $3.5 million in gains from early conversions on the 2023 Notes.For the year ended
January 31,% Change 2022 2021 (in thousands) Benefit from income taxes $ (2,602) $ (64,386) (96) % 2018, an increase of $0.5 million. The increase in interest income and other net was due2022, compared to a $4.6 million increase in interest income and accretion income earned from our greater investment in marketable securities and money market funds, offset by a $4.1 million unfavorable change in foreign currency exchange impact, primarily driven by the weakened British Pound and Euro during the fiscal year.Interest income and other, net was $3.3tax benefit of $64.4 million for the fiscal year ended January 31, 2018, compared2021. The $61.8 million decrease in benefit from income taxes was primarily due to the significant income tax benefits recorded in fiscal 2021 related to acquisitions completed during the year. We maintain a full valuation allowance on net lossdeferred tax assets of $1.3 millionour U.S. entity as we have concluded that it is not more likely than not that the deferred tax assets will be utilized.2017, an increase of $4.6 million. The increase was due to $3.1 million of favorable foreign currency impact, primarily driven by the strengthened British Pound and Euro during the period, $0.9 million increase in interest income, and $0.6 million mark-to-market expense related to an outstanding warrant that was recorded in fiscal year 2017.Provision for (Benefit From) Income TaxesThe benefit from income taxes was $0.5 million for the year ended January 31, 2019, compared to an income tax provision of $1.6 million for income taxes for the year ended January 31, 2018. The $2.1 million decrease primarily relates to an income tax benefit of $3.1 million due to the release of valuation allowance which resulted from the recording of deferred income tax liabilities associated2021, filed with the Aquiire acquisition during the year ended January 31, 2019. This decrease was partially offset by increased tax expense primarily in foreign jurisdictions.Provision for income taxes was $1.6 million for the fiscal year ended January 31, 2018, compared to $0.8 million for the year ended January 31, 2017, an increase of $0.8 million. This increase is driven by our increased tax expense primarily in foreign jurisdictions.542019,2022, we had cash and cash equivalents of $506.5 million, and marketable securities of $223.0 million.principal sources of liquidity wereexisting cash and cash equivalents and marketable securities will be sufficient to meet our projected operating requirements for at least the next 12 months from the filing of approximately $321.4 million. this Annual Report.an outstanding debt in the form2023 Notes, 2025 Notes and 2026 Notes with principal amounts of convertible senior notes with a $230$1.8 million, principal amount$805.0 million and $1,380.0 million, respectively, as of January 31, 2019. For more than twenty trading days during2022. We have the thirty consecutive trading days ended January 31, 2019,ability to settle the last reported sale priceConvertible Notes in cash, shares of our common stock, exceeded 130%or a combination of cash and shares of our common stock at our own election. As of January 31, 2022, there were no unsettled conversion requests. It is our current intent to settle conversions of the remaining 2023 Notes, 2025 Notes and 2026 Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion pricevalue over the principal amount in shares of the convertible senior notes. As a result, the convertible senior notes were convertible at the option of the holders and the $174.6 million carrying amount of the convertible senior notes was classified as a short-term liability which reduced the net working capital compared to the prior year.convertible senior notes,Convertible Notes, we entered into a capped call transactiontransactions that reducesreduce our exposure to additional cash payments above the $230 million principal balancebalances in the event of a cash conversion of the senior convertible notes.Convertible Notes. We may owe additional cash to the note holdersnoteholders upon early conversion if our stock price exceeds $63.821 per share.share for the 2023 Notes, $295.550 for the 2025 Notes, or $503.415 for the 2026 Notes. Although our incremental exposure to the additional cash payment above the principal amount of the senior convertible notesConvertible Notes is reduced by the capped call, wecalls, conversion of the Convertible Notes by noteholders and our related settlement of any portion thereof in shares of our common stock may experiencecause dilution to the ownership interests of existing stockholders.cash equivalents are comprised primarilynon-cancelable purchase obligations consists of bank depositshosting services and money market funds. We believeother services that support our existing cashbusiness operations. As of January 31, 2022, the value of our current and cash equivalents willnoncurrent purchase obligations was approximately $44.5 million and $160.7 million, respectively. Information regarding our operating lease obligations and contractual purchase obligations can be sufficientfound in Note 11, “Commitments and Contingencies” in the notes to meet our projected operating requirements for at least the next 12 months.may in the future enter into arrangementscontinually assess potential acquisitions and expect to acquirecontinue to pursue acquisitions of or investinvestments in complementary businesses, services and technologies and intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition would be adversely affected.For2019, cash provided by operating activities2022 was $37.4$168.1 million compared to $19.6$78.2 million for the year ended January 31, 2018.2021. This increase was primarily driven by growth in customer billings andcash collections on accounts receivable, partially offset by increased payments for operating expenses which were higher compared to the previous year due to increased headcount and overall growth.Cash provided by operating activities of $19.6 million for the fiscal year ended January 31, 2018, was primarily due to stock-based compensation of $29.7 million, depreciation and amortization, including deferred commissions, of $11.6 million, and a change in the working capital of $21.7 million, offset by a net loss of $43.8 million. The net change in operating assets and liabilities was primarily due to a favorable change from the deferred revenue balance of $36.1 million and accrued expenses and other liabilities of $7.1 million partially offset by the unfavorable change in accounts receivable of $10.7 million, deferred commissions of $5.7 million, accounts payable of $4.0 million and prepaid and other assets of $1.1 million.Cash used in operating activities of $21.0 million for the fiscal year ended January 31, 2017, was primarily due to a net loss of $37.6 million, partially offset by stock-based compensation of $9.5 million, and depreciation and amortization, including deferred commissions, of $8.6 million. The net change in operating assets and liabilities was primarily due to an unfavorable change from increases in accounts receivable of $20.0 million, deferred commissions of $4.5 million and prepaid and other assets of $5.7 million, partially offset by the favorable change in the deferred revenue balance of $25.9 million and accrued expenses, accounts payable and other liabilities of $2.0 million.5520192022 of $330.2$12.7 million was primarily related to the net purchase of marketable securities of $178.8$47.3 million $143.9in cash used for acquisitions, $13.9 million spent on business acquisitions, net of cash acquired, andfor the purchases of property and equipment, and $10.0 million for other investments, partially offset by $58.5 million of $7.5 million.Cash used in investing activities for the fiscal year ended January 31, 2018,net cash receipts from purchases, maturities and sales of $50.6 million was primarily related to the acquisitions of Trade Extensions and Simeno for $46.1 million and purchases of property and equipment of $4.5 million.Cash used in investing activities for the fiscal year ended January 31, 2017, of $11.2 million was primarily related to the acquisition of Spend360 for $6.8 million and purchases of property and equipment of $4.5 million.20192022 of $21.1$27.5 million was primarily due to approximately $31.1 million of proceeds from the issuance of common stock under the ESPP and exercise of stock options, and issuance$2.2 million of our common stock undercash received from the stock purchase and stock option plans,non-controlling shareholder of Coupa K.K., partially offset by the payment$5.8 million of $0.6 million in issuance costs related to the issuance of our convertible notes.Cash provided by financing activitiesrepayments for the fiscal year ended January 31, 2018, of $241.9 million, was primarily due to the net proceeds obtained from the issuanceconversions of the convertible notes net of issuance costs incurred and costs to purchase the capped call for approximately $200.4 million, cash raised in our follow-on common stock offering net of underwriting discount, commissions and offering costs for $22.3 million and $19.3 million in proceeds from the exercise of stock options and issuance of our common stock under the stock purchase and stock option plans. Cash provided by financing activities for the fiscal year ended January 31, 2017, of $141.6 million, was primarily due to the net proceeds raised in our IPO for $137.2 million and $4.3 million in proceeds from the exercise of stock options. Off-Balance Sheet ArrangementsThrough January 31, 2019, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.Commitments and Contractual ObligationsOur principal commitments and contractual obligations consist of our senior notes due in 2023 obligations under operating leases for office facilities and contractual purchase obligations for hosting services that support our business operations. The following table summarizes our non-cancelable contractual obligations as of January 31, 2019.(1)The conversion period for the Convertible Notes was open as of January 31, 2019, and as such the net carrying value of the Convertible Notes is included within current liabilities on our Consolidated Balance Sheet. The principal balances of the Convertible Notes are reflected in the payment period in the table above based on the contractual maturity assuming no conversion.56(2)Represents estimated aggregate interest obligations for our outstanding Convertible Notes that are payable in cash.Policies and Estimates Weestimates.professional services fees. other. Revenues are recognized when control of these services are transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Revenues are recognized net of applicable taxes imposed on the related transaction. Our revenue recognition policy follows guidance from Accounting Standards Codification 606, Revenue from Contracts with Customers (Topic 606).We determine revenue recognition through the following five-step framework:Identification of the contract, or contracts, with a customer;Identification of the performance obligations in the contract;Determination of the transaction price;Allocation of the transaction price to the performance obligations in the contract; andRecognition of revenue when, or as, the Company satisfies a performance obligation.Subscription Services Revenues services revenues consist primarily of fees to provide our customers access to our cloud-based platform, which includes routine customer support. Subscription service contracts do not provide customers with the right to take possession of the software, are in general, non-cancelable, and do not contain general rights of return. Generally, subscription revenues are recognized ratably over the contractual term of the arrangement, beginning on the date that the service is made available to the customer. Subscription contracts typically have a term of three years with invoicing occurring in annual installments at the beginning of each year in the subscription period.basis or fixed-fee basis. For services billed on a time-and-materials basis, revenue is recognized over time as services are performed. For services billed on a fixed-fee basis, invoicing typically occurs in advance, and revenue is recognized over time based on the proportion performed.57and professional services, term-based licenses, and related post-contract customer support are both distinct performance obligations that are accounted for separately. In contracts with multiple performance obligations, we assess each promise separately and allocate the transaction price is allocated to each separate performance obligations on a relative standalone selling price (“SSP”) basis.(“SSP”) for each distinct performance obligationsobligation requires judgment. We determine SSP for performance obligations based on overall pricing objectives, which take into consideration market conditions and entity-specific factors. This includes a review of historical sales data related to the size of arrangements, the cloud applications being sold, customer demographics and the numbers and types of users within the arrangements. We use a range of amounts to estimate SSP for performance obligations. There is typically more than one SSP for individual products and services due to the stratification of those products and services by certain considerations such as size and type of customer.and professional services, and license arrangements. Commissions earned by our sales personnel are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit of five years. We determinedDetermining the period of benefit by takingrequires judgement for which we take into consideration our past experience with customers, future cash flows expected from customers, industry peers and other available information.We capitalized commission costs of $15.3 million, $5.7 million$4.5 million and amortized $5.8 million, $4.0 million and $4.0 million to sales and marketing expense inassumptions at the accompanying consolidated statements of operations during the years ended January 31, 2019, 2018 and 2017, respectively. This increase of capitalized commissions costs during the fiscal year ended January 31, 2019, was primarily due to our adoption of ASC 606 on February 1, 2018.Capitalized Software Development CostsWe capitalize certain development costs incurred in connection with software development for our cloud-based platform. Costs incurred in the preliminary stages of development are expensed as incurred.Once software has reached the application development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. These software development costs are recorded as part of property and equipment. Capitalized software development costs are amortized on a straight-line basis over the technology’sacquisition date, including estimated useful life, which is generally two to three years. During the fiscal year ended January 31, 2019 we capitalized $5.6 million in software development costs. Amortization expense related to software development costs was approximately $3.1 million for the fiscal year ended January 31, 2019. We capitalized software development costs of $4.2 million and amortized $3.9 million to expense during the fiscal year ended January 31, 2018. We capitalized software development costs of $4.3 million and amortized $3.3 million to expense during the fiscal year ended January 31, 2017.Costs incurred in the maintenance and minor upgrade and enhancement of Company’s software platform without adding additional functionality are expensed as incurred.Stock-Based CompensationStock-based compensation expense is measured and recognized in the financial statements based on the fair value of the awards granted.acquired intangible assets, and related amortization period. The estimates of fair value require management to also make estimates of, stock options and shares issued from our employee share purchase plan are estimated onamong other things, future expected cash flows, discount rates, expected costs to reproduce an asset or the grant date using the Black-Scholes option-pricing model. The fair value of an RSU is58measured using the fair value of our common stock on the datedetermination of the grant. The fair valueuseful life of market-based awards is determined using a Monte Carlo simulation approach. Stock-based compensation expense is recognized overfinite-live intangible assets. Although we believe the requisite service periods of the awards, which is generally four years.Our use of the Black-Scholes option-pricing model requires the input of subjective assumptions, including the fair value of our underlying common stock, expected term of the option, expected volatility of the price of our common stock, risk-free interest rates and the expected dividend yield of our common stock. The assumptions used in our option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.These assumptions and estimates we have made in the past have been reasonable and appropriate, these estimates are as follows:Fair Value of Common Stock. Prior to our initial public offering in October 2016, our stock was not publicly tradedbased on historical experience and we estimatedinformation obtained from the fair value of common stock using various methodologies, including valuation analyses performed by third-party valuation firms. After the initial public offering, we used the publicly quoted price as the fair value of our common stock.Expected Term. The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. To determine the expected term, we generally apply the simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration datemanagement of the award as we do not have sufficient historical exercise data to provide a reasonable basis for an estimate of expected term.Risk-Free Interest Rate. We base the risk-free interest rate on the yields of U.S. Treasury securities with maturities approximately equal to the term of employee stock option awards.Expected Volatility. As we do not have an extensive trading history for our common stock, the expected volatility for our common stock has been estimated by taking the historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option awards. Industry peers consist of several publicacquired companies in our industry.Dividend Rate. We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. As a result, we use a dividend rate of zero.We will continue to use judgment in evaluating the assumptions related to our stock-based compensation on a prospective basis. As we continue to accumulate additional data related to our common stock, we may have refinements to our estimates, which could materially impact our future stock-based compensation expense.Business Combinations and Valuation of Goodwill and Other Acquired Intangible Assets and Assumed LiabilitiesWe account for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations. For acquired businesses, we record tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. The excess of the purchase price over those fair values is recorded as goodwill.are inherently uncertain. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations.Accounting for business combinations requires our management to make significant estimates and assumptions at the acquisition date, including estimated fair value of acquired intangible assets, and related amortization period. The estimates of fair value require management to also make estimates of, among other things, future expected cash flows, discount rates or expected costs to reproduce an asset. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, these estimates are based on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.59We review goodwill for impairment annually during the fourth quarter or more frequently if events or changes in circumstances would more likely than not reduce the fair value of our single reporting unit below its carrying value. As of January 31, 2019, no impairment of goodwill has been identified.Acquired finite-lived intangible assets are amortized over their estimated useful lives. We evaluate the recoverability of our intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. We have not recorded any significant impairment charges during the years presented.In addition to the recoverability assessment, we routinely review the remaining estimated useful lives of our finite-lived intangible assets. If we modify the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized over the revised estimated useful life.NotesNotes”) as separate liability and equity components.components associated with the conversion feature. The carrying amountvaluation of the conversion feature in the Convertible Notes involves estimation of the fair value of the liability component wasof the Convertible Notes on a stand-alone basis. The fair value of the liability component is calculated by measuring the fair value of a similar liability that does not have an associated conversion feature. The carrying amount ofconvertible feature using a discounted cash flow model with a discount rate associated with each convertible note. In addition, for the equity component representing2026 Notes, the conversion option was determined by deductingCompany also used lattice models to determine the discount rate. Determining discount rates require judgement, and the fair value of the liability component from the par value of the Convertible Notes as a whole. This difference represents a debt discount that is amortizedsensitive to interest expense over the term of the Convertible Notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. We allocated issuance costs incurred to the liability and equity components. Issuance costs attributable to the liability component are being amortized to expense over the respective term of the Convertible Notes, and issuance costs attributable to the equity component were netted with the respective equity component in Additional paid-in capital.Income TaxesWe account for income taxes under the asset and liability method. We record deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable incomechanges in the years in which we expect to recover or settle those temporary differences. We recognize the effect of a change in tax rates on deferred tax assets and liabilities in the results of operations in the period that includes the enactment date. We assess the likelihood that deferred tax assets will be realized, and we recognize a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. This assessment requires judgment as to the likelihood and amounts of future taxable income by tax jurisdiction.We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is more likely than not that the position will be sustained upon examination. We recognize potential accrued interest and penalties associated with unrecognized tax positions within our global operations in income tax expense.The Tax Cuts and Jobs Act, or the Tax Act, was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requiring companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. In connection with the initial analysis of the impact of the Tax Act during the fiscal year ended January 31, 2018, we remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. The remeasurement of our deferred tax balance was offset by application of our valuation allowance. As of January 31, 2019, there are no specific impacts of Tax Reform that could not be reasonably estimated which the Company accounted for under prior tax law.The SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, we previously provided a provisional estimate of the effect of the Tax Act in our financial statements. In the fourth quarter of fiscal 2019, we completed our analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of January 31, 2019.60Notesnotes to Consolidated Financial Statementsconsolidated financial statements included elsewhere in this Annual Report for analysis of recent accounting pronouncements that are applicable to our business.For the year ended January 31, 2022 2021 2020 (in thousands) Loss from operations $ (244,084) $ (166,553) $ (73,425) Stock-based compensation 199,895 168,850 81,376 Amortization of acquired intangible assets 133,542 62,897 23,976 Change in fair value of contingent consideration payable — (12,500) — Non-GAAP operating income $ 89,353 $ 52,694 $ 31,927 For the year ended January 31 2022 2021 2020 (in thousands) Net loss attributable to Coupa Software Incorporated $ (379,039) $ (180,117) $ (90,832) Stock-based compensation 199,895 168,850 81,376 Amortization of acquired intangible assets 133,542 62,897 23,976 Change in fair value of contingent consideration payable — (12,500) — Amortization of debt discount and issuance costs 115,688 86,541 35,922 Loss (gain) on conversion of convertible senior notes 357 (3,154) — (18,245) (66,792) (13,826) Adjustment attributable to redeemable non-controlling interests 10,996 — — Non-GAAP net income attributable to Coupa Software Incorporated $ 63,194 $ 55,725 $ 36,616 For the year ended January 31 2022 2021 2020 (in thousands) Net cash provided by operating activities $ 168,090 $ 78,202 $ 68,156 Less: purchases of property and equipment (13,853) (11,492) (11,970) Add: repayments of convertible senior notes attributable to debt discount 1,338 27,409 — Add: one-time payout of legacy unvested equity awards accelerated in conjunction with a business combination — 19,428 — Adjusted free cash flows $ 155,575 $ 113,547 $ 56,186 and British Pound Sterling. Due to the relative size ofSterling, and Australian Dollar. We expect our international operations to date,continue to grow in the future and we are continually monitoring our foreign currency exposure has been limitedto determine whether and thuswhen we have not institutedshould begin a formal hedging program.20192022 and determined that a 10% change in the value of the U.S. dollar would result in an approximate $3.3 million impact on our current year net loss. We performed a sensitivity analysis as of January 31, 2018 and determined that a 10% change in the value of the U.S. dollar would result in an approximate $3.1 million impact on our prior year net loss.2021, respectively. We expect our international operations to continue to grow in the near term and the effects of movements in currency exchange rates will increase as our transaction volume outside of the United States increases. In addition, we are continually monitoringwill continue to monitor the COVID-19 pandemic carefully and its impact on our foreign currency exposure to determine when we should begin a hedging program. Mostcurrencies. The majority of our agreements have been and we expect will continue to be denominated in U.S. dollars.January 2018,June 2020, we issued $230$1,380.0 million aggregate principal amount of 0.375% convertible senior notes due 2023. Our Convertible2026. In June 2019, we issued $805.0 million aggregate principal amount of 0.125% convertible senior notes due 2025. In January 2018, we issued $230.0 million aggregate principal amount of 0.375% convertible senior notes due 2023, of which approximately $228.2 million aggregate principal amount had been settled by January 31, 2022. The 2026 Notes, 2025 Notes and 2023 Notes have fixed annual interest rates at 0.375%, 0.125% and 0.375%, respectively, and, therefore, we do not have economic interest rate exposure on our Convertible Notes. However, the values of the Convertible Notes are exposed to interest rate risk. Generally, the fair market value of our fixed interest rate Convertible Notes will increase as interest rates fall and decrease as interest rates rise. In addition, the fair values of the Convertible Notes are affected by our stock price. The fair value of the convertible senior notes will generally increase as our common stock price increases and will generally decrease as our common stock price declines in value. Additionally, we carry the convertible senior notesConvertible Notes at face value less unamortized discount and issuance costs on our balance sheet, and we present the fair value for required disclosure purposes only.equivalents and marketable securities.equivalents. Fluctuations in interest rates impact the yield of the investment. A hypothetical 100 basis points increase in interest rates would have impacted interest income by $2.8$2.2 million and $3.1 million for the yearyears ended January 31, 20192022 and $2.0 million for the year ended January 31, 2018.2021, respectively.
a)Evaluation of Disclosure Controls and Procedures.a)Evaluation of Disclosure Controls and Procedures.Chief Executive Officerprincipal executive officer and our Chief Financial Officer,principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of January 31, 2019.2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the612019,2022, our Chief Executive Officerprincipal executive officer and Chief Financial Officerprincipal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.b)Management's Report on Internal Control Over Financial ReportingCEOprincipal executive officer and CFO,principal financial officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). In accordance with guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred. We have excluded from our evaluation of the internal control over financial reporting current year acquisitions, all of which are included in the January 31, 2019 consolidated financial statements and constituted collectively less than 3% of total assets and 3% of total revenues as of and for the year ended January 31, 2019. Based on the results of this evaluation, our management concluded that our internal control over financial reporting was effective as of January 31, 2019.20192022 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included elsewhere herein.c)Changes in Internal Control Over Financial Reporting.20192022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic.d)Inherent Limitations on Effectiveness of Controls.6220192022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended January 31, 20192022 (Proxy Statement) and is incorporated herein by reference.63F-10Balance as of beginning of year Additions Deductions Balance as of end of year Year ended January 31, 2022 Allowance for credit losses $ 3,447 $ 552 $ (3,780) $ 219 Year ended January 31, 2021 Allowance for credit losses $ 61 $ 3,448 $ (62) $ 3,447 Year ended January 31, 2020 Allowance for credit losses $ 70 $ 76 $ (85) $ 61 6465Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date Filed Herewith 2.1 8-K 001-37901 2.1 4/16/2019 2.2 8-K 001-37901 2.1 11/2/2020 3.1 10-Q 001-37901 3.1 12/9/2016 3.2 10-Q 001-37901 3.2 12/9/2016 4.1 S-1 333-213546 4.1 9/8/2016 4.2 S-1/A 333-217105 4.1.2 4/10/2017 4.3 8-K 001-37901 4.1 1/18/2018 4.4 8-K 001-37901 4.1 6/11/2019 4.5 8-K 001-37901 4.1 6/16/2020 4.6 8-K 001-37901 2.2 11/2/2020 4.7 10-K 001-37901 4.5 3/20/2020 10.1* S-1/A 333-213546 10.1 9/23/2016 10.2* S-1/A 333-213546 10.2 9/23/2016 10.3* S-1/A 333-213546 10.3 9/23/2016 10.4* S-1/A 333-213546 10.4 10/4/2016 10.5* S-1 333-213546 10.5 9/8/2016 66Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date Filed Herewith 10.6* S-1 333-213546 10.6 9/8/2016 10.6.1* 10-Q 001-37901 10.1 12/3/2019 10.7* S-1 333-213546 10.8 9/8/2016 10.7.1* 10-Q 001-37901 10.4 12/3/2019 10.8* 10-K 001-37901 10.8 3/27/2019 10.8.1* 10-Q 001-37901 10.2 12/3/2019 10.9* 10-Q 001-37901 10.1 6/8/2021 10.9.1* 10-Q 001-37901 10.1.1 6/8/2021 10.10* 10-Q 001-37901 10.1 9/8/2021 10.10.1* 10-Q 001-37901 10.1.1 9/8/2021 10.11 S-1 333-213546 10.11 9/8/2016 10.11.1 10-Q 001-37901 10.1 9/8/2017 10.12* 10-Q 001-37901 10.1 9/6/2018 10.13* 10-Q 001-37901 10.1 12/8/2020 10.14 8-K 001-37901 99.1 1/18/2018 10.15 8-K 001-37901 99.2 1/18/2018 10.16 8-K 001-37901 99.1 6/11/2019 10.17 8-K 001-37901 99.2 6/11/2019 10.18 8-K 001-37901 99.1 6/16/2020 10.19 8-K 001-37901 99.2 6/16/2020 10.20 10-K 001-37901 10.14 3/28/2018 Incorporated by Reference 21.1 X 31.2X 24.1 31.1 X 31.2 32.1 32.132.2 32.2101.INS 101.INS101.SCH 101.SCHDocumentX101.CAL 101.CAL101.DEF 101.DEFDocument101.LAB 101.LABDocument101.PRE 101.PRE104 The cover page for the Company’s Annual Report on Form 10-K for the year ended January 31, 2022, has been formatted in Inline XBRL. X *Indicates a management contract or compensatory plan.67Coupa Software Incorporated 27, 2019By: By:Todd Ford,Anthony Tiscornia, and each of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.NameTitleDateName Title Date /s/ Robert Bernshteyn 27, 2019s/ Todd Ford27, 2019Todd FordAnthony Tiscornia27, 2019Anthony TiscorniaDirector March 16, 2022 Michelle Brennan /s/ Leslie Campbell 27, 201927, 201927, 201927, 201927, 201968F-10RegisteredRegistered Public Accounting Firm20192022 and 2018,2021, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the three years in the period ended January 31, 2019,2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company atas of January 31, 20192022 and 2018,2021, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2019,2022, in conformity with U.S. generally accepted accounting principles.2019,2022, based on criteria established in Internal Control —- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 27, 201916, 2022 expressed an unqualified opinion thereon.Adoption of ASU No. 2014-09As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for revenue from contracts with customers, and incremental costs to acquire contracts with customers in the year ended January 31, 2019, due to the Company’s adoption of ASC No. 2014-09, Revenue from contracts with customers./s/ Ernst & Young LLPRevenue recognition - Identifying and evaluating terms and conditions in contracts We have served asDescription of the Company’s auditor since 2015.San Jose, CaliforniaMarch 27, 2019F-22019,2022, based on criteria established in Internal Control —- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Coupa Software Incorporated (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2019,2022, based on the COSO criteria.As indicated in the accompanying Management's Report on Internal Control over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls over current year acquisitions, which are included in the 2019 consolidated financial statements of the Company and collectively constituted less than 3% of total assets as of January 31, 2019, and less than 3% of revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting over current year acquisitions.20192022 consolidated balance sheets of the Company as of January 31, 20192022 and 2018,2021, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the three years in the period ended January 31, 20192022 and the related notes and schedule and our report dated March 27, 201916, 2022 expressed an unqualified opinion thereon.F-3/s/ Ernst & Young LLPSan Jose, CaliforniaMarch 27, 2019Inin thousands, except share and per share amounts)As of January 31, 2022 2021 Assets Current assets: Cash and cash equivalents $ 506,459 $ 323,284 Marketable securities 223,032 283,036 Accounts receivable, net of allowances 226,191 196,009 Prepaid expenses and other current assets 38,270 36,381 Deferred commissions, current portion 21,096 15,541 Total current assets 1,015,048 854,251 Property and equipment, net 30,576 28,266 Deferred commissions, net of current portion 48,562 36,832 Goodwill 1,514,550 1,480,847 Intangible assets, net 510,663 632,173 Operating lease right-of-use assets Operating lease right-of-use assets 42,659 41,305 Other assets 31,121 31,491 Total assets $ 3,193,179 $ 3,105,165 Liabilities, Redeemable Non-Controlling Interests, Other Temporary Equity and Stockholders’ Equity Liabilities, Redeemable Non-Controlling Interests, Other Temporary Equity and Stockholders’ Equity Current liabilities: Accounts payable $ 4,610 $ 4,831 Accrued expenses and other current liabilities 79,160 80,271 Deferred revenue, current portion 468,783 356,115 Current portion of convertible senior notes, net (Note 10) Current portion of convertible senior notes, net (Note 10) 1,639 609,068 Operating lease liabilities, current portion Operating lease liabilities, current portion 12,760 11,222 Total current liabilities 566,952 1,061,507 Convertible senior notes, net (Note 10) Convertible senior notes, net (Note 10) 1,614,257 897,525 Deferred revenue, net of current portion 22,655 5,773 Operating lease liabilities, net of current portion Operating lease liabilities, net of current portion 31,172 31,845 Other liabilities 52,481 67,915 Total liabilities 2,287,517 2,064,565 Commitments and contingencies (Note 11) Commitments and contingencies (Note 11) 0 0 Redeemable non-controlling interests (Note 3) Redeemable non-controlling interests (Note 3) 12,084 — Other temporary equity (Note 10) Other temporary equity (Note 10) — 369 Stockholders’ equity: Preferred stock, $0.0001 par value per share; 25,000,000 shares authorized at January 31, 2022 and 2021; zero shares issued and outstanding at January 31, 2022 and 2021 Preferred stock, $0.0001 par value per share; 25,000,000 shares authorized at January 31, 2022 and 2021; zero shares issued and outstanding at January 31, 2022 and 2021 — — Common stock, $0.0001 par value per share; 625,000,000 shares authorized at January 31, 2022 and 2021; 75,060,139 and 72,753,659 shares issued and outstanding as of January 31, 2022 and 2021, respectively Common stock, $0.0001 par value per share; 625,000,000 shares authorized at January 31, 2022 and 2021; 75,060,139 and 72,753,659 shares issued and outstanding as of January 31, 2022 and 2021, respectively 7 7 Additional paid-in capital 1,778,840 1,556,865 Accumulated other comprehensive income Accumulated other comprehensive income 9,643 9,165 Accumulated deficit (894,912) (525,806) Total stockholders’ equity 893,578 1,040,231 Total liabilities, redeemable non-controlling interests, other temporary equity and stockholders’ equity Total liabilities, redeemable non-controlling interests, other temporary equity and stockholders’ equity $ 3,193,179 $ 3,105,165 Inin thousands, except per share amounts)For the year ended
January 31,2022 2021 2020 Revenues: Subscription Subscription $ 634,034 $ 470,341 $ 345,261 Professional services and other 91,255 71,302 44,458 Total revenues 725,289 541,643 389,719 Cost of revenues: Subscription Subscription 209,799 147,374 89,452 Professional services and other 103,437 74,327 49,764 Total cost of revenues 313,236 221,701 139,216 Gross profit 412,053 319,942 250,503 Operating expenses: Research and development 166,486 133,842 93,089 Sales and marketing 327,786 236,312 155,216 General and administrative 161,865 116,341 75,623 Total operating expenses 656,137 486,495 323,928 Loss from operations (244,084) (166,553) (73,425) Interest expense (122,741) (91,271) (37,658) Other income (expense), net Other income (expense), net (4,883) 13,321 9,316 Loss before benefit from income taxes Loss before benefit from income taxes (371,708) (244,503) (101,767) Benefit from income taxes Benefit from income taxes (2,602) (64,386) (10,935) Net loss (369,106) (180,117) (90,832) Net loss attributable to redeemable non-controlling interests Net loss attributable to redeemable non-controlling interests (1,063) — — Adjustment attributable to redeemable non-controlling interests Adjustment attributable to redeemable non-controlling interests 10,996 — — Net loss attributable to Coupa Software Incorporated Net loss attributable to Coupa Software Incorporated $ (379,039) $ (180,117) $ (90,832) Net loss per share, basic and diluted, attributable to Coupa Software Incorporated Net loss per share, basic and diluted, attributable to Coupa Software Incorporated $ (5.13) $ (2.63) $ (1.45) Weighted-average number of shares used in computing net loss per share, basic and diluted Weighted-average number of shares used in computing net loss per share, basic and diluted 73,816 68,559 62,484 Inin thousands)For the year ended
January 31,2022 2021 2020 Net loss $ (369,106) $ (180,117) $ (90,832) Other comprehensive gain in relation to defined benefit plans, net of tax Other comprehensive gain in relation to defined benefit plans, net of tax 693 287 119 Changes in unrealized gain (loss) on marketable securities and non-marketable debt securities, net of tax Changes in unrealized gain (loss) on marketable securities and non-marketable debt securities, net of tax 241 (484) 417 Foreign currency translation adjustments, net of tax Foreign currency translation adjustments, net of tax (528) 8,491 — Comprehensive loss $ (368,700) $ (171,823) $ (90,296) Less comprehensive loss attributable to redeemable non-controlling interests: Less comprehensive loss attributable to redeemable non-controlling interests: Net loss attributable to redeemable non-controlling interests Net loss attributable to redeemable non-controlling interests (1,063) — — Foreign currency translation adjustments, net of tax, attributable to redeemable non-controlling interests Foreign currency translation adjustments, net of tax, attributable to redeemable non-controlling interests (72) — — Comprehensive loss attributable to redeemable non-controlling interests Comprehensive loss attributable to redeemable non-controlling interests (1,135) — — Comprehensive loss attributable to Coupa Software Incorporated Comprehensive loss attributable to Coupa Software Incorporated $ (367,565) $ (171,823) $ (90,296) CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)Inin thousands, except share amounts)Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders' Equity Shares Amount Additional Paid-In Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders' Equity Balance at January 31, 2019 Balance at January 31, 2019 60,455,381 $ 6 Equity component of 2025 Notes, net of issuance costs Equity component of 2025 Notes, net of issuance costs — — 246,967 — — 246,967 Purchase of capped calls Purchase of capped calls — — (118,738) — — (118,738) Cancellation of common stock issued from acquisitions Cancellation of common stock issued from acquisitions (7,784) — — — — — Issuance of common stock for employee share purchase plan Issuance of common stock for employee share purchase plan 215,472 — 11,455 — — 11,455 Exercise of stock options 2,712,063 1 17,419 — — 17,420 Stock-based compensation expense — — 82,403 — — 82,403 Vested restricted stock units Vested restricted stock units 1,153,838 — — — — — Temporary equity reclassification Temporary equity reclassification — — (16,835) — — (16,835) Other comprehensive income Other comprehensive income — — — 536 — 536 Net loss — — — — (90,832) (90,832) Balance at January 31, 2020 Balance at January 31, 2020 64,528,970 7 790,468 871 (345,689) 445,657 Issuance of common stock for acquisitions 2,849,537 — 668,026 — — 668,026 Issuance of common stock for employee share purchase plan 209,306 — 15,631 — — 15,631 Exercise of stock options 1,615,784 — 19,245 — — 19,245 Stock-based compensation expense — — 150,578 — — 150,578 Vested restricted stock units 1,348,975 — — — — — Equity component of 2026 Notes, net of issuance costs Equity component of 2026 Notes, net of issuance costs — — 501,053 — — 501,053 Purchase of capped calls in relation to 2026 Notes Purchase of capped calls in relation to 2026 Notes — — (192,786) — — (192,786) Settlement of 2023 Notes Settlement of 2023 Notes 2,201,087 — (385,393) — — (385,393) Deferred tax related to convertible senior notes Deferred tax related to convertible senior notes — — (9,588) — — (9,588) Temporary equity reclassification Temporary equity reclassification — — (369) — — (369) Other comprehensive income Other comprehensive income — — — 8,294 — 8,294 Net loss — — — — (180,117) (180,117) Balance at January 31, 2021 Balance at January 31, 2021 72,753,659 7 1,556,865 9,165 (525,806) 1,040,231 Issuance of common stock for acquisitions Issuance of common stock for acquisitions 22,370 — — — — — Issuance of common stock for employee share purchase plan 156,810 — 21,626 — — 21,626 Exercise of stock options 759,390 — 9,431 — — 9,431 Stock-based compensation expense — — 200,830 — — 200,830 Vested restricted stock units 1,235,810 — — — — — Settlement of convertible senior notes (Note 10) Settlement of convertible senior notes (Note 10) 132,100 — (348) — — (348) Temporary equity reclassification Temporary equity reclassification — — 369 — — 369 Other comprehensive loss Other comprehensive loss — — — 478 — 478 Net loss attributable to Coupa Software Incorporated, including adjustment to redeemable non-controlling interests Net loss attributable to Coupa Software Incorporated, including adjustment to redeemable non-controlling interests — — (9,933) — (369,106) (379,039) Balance at January 31, 2022 Balance at January 31, 2022 75,060,139 $ 7 $ 1,778,840 $ 9,643 $ (894,912) $ 893,578 Inin thousands)For the year ended
January 31,2022 2021 2020 Cash flows from operating activities Net loss attributable to Coupa Software Incorporated Net loss attributable to Coupa Software Incorporated $ (379,039) $ (180,117) $ (90,832) Net loss and adjustment attributable to redeemable non-controlling interests (Note 3) Net loss and adjustment attributable to redeemable non-controlling interests (Note 3) 9,933 — — Net loss (369,106) (180,117) (90,832) Adjustments to reconcile net loss to net cash provided by operating activities: Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 146,392 72,105 28,553 Amortization of premium on marketable securities, net Amortization of premium on marketable securities, net 377 1,038 325 Amortization of deferred commissions 18,600 14,704 9,556 Amortization of debt discount and issuance costs 115,688 86,541 35,922 Stock-based compensation 199,895 149,423 81,376 Loss (gain) on conversion of convertible senior notes Loss (gain) on conversion of convertible senior notes 357 (3,154) — Repayments of convertible senior notes attributable to debt discount (Note 10) Repayments of convertible senior notes attributable to debt discount (Note 10) (1,338) (27,409) — Other Other (2,876) 3,761 (1,381) Changes in operating assets and liabilities net of effects from acquisitions: Accounts receivable (25,752) (36,757) (11,154) Prepaid expenses and other current assets (1,447) 2,954 (16,380) Other assets 23,266 6,786 9,176 Deferred commissions (35,906) (24,157) (26,231) Accounts payable (326) (851) (3,720) Accrued expenses and other liabilities (28,569) (65,995) (20,727) Deferred revenue 128,835 79,330 73,673 Net cash provided by operating activities Net cash provided by operating activities 168,090 78,202 68,156 Cash flows from investing activities Purchases of marketable securities (176,716) (1,017,751) (583,151) Maturities of marketable securities 140,300 396,595 66,363 Sale of marketable securities Sale of marketable securities 94,916 835,123 199,314 Acquisitions, net of cash acquired (47,312) (863,597) (308,406) Purchases of other investments Purchases of other investments (10,000) — — Purchases of property and equipment (13,853) (11,492) (11,970) Net cash used in investing activities (12,665) (661,122) (637,850) Cash flows from financing activities Investment from redeemable non-controlling interests Investment from redeemable non-controlling interests 2,223 — — Proceeds from issuance of convertible senior notes, net of issuance costs — 1,355,066 786,157 Purchase of capped calls — (192,786) (118,738) Repayments of convertible senior notes Repayments of convertible senior notes (5,751) (555,352) — Proceeds from the exercise of common stock options 9,446 19,232 17,781 Proceeds from issuance of common stock for employee stock purchase plan 21,626 15,631 11,455 Net cash provided by financing activities 27,544 641,791 696,655 Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash (219) 438 — Net increase in cash, cash equivalents, and restricted cash Net increase in cash, cash equivalents, and restricted cash 182,750 59,309 126,961 Cash, cash equivalents, and restricted cash at beginning of year Cash, cash equivalents, and restricted cash at beginning of year 327,589 268,280 141,319 Cash, cash equivalents, and restricted cash at end of period $ 510,339 $ 327,589 $ 268,280 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets Cash and cash equivalents $ 506,459 $ 323,284 $ 268,045 Restricted cash included in other assets Restricted cash included in other assets 3,880 4,305 235 Total cash, cash equivalents, and restricted cash $ 510,339 $ 327,589 $ 268,280 For the year ended
January 31,2022 2021 2020 Supplemental disclosure of cash flow data Cash paid for income taxes $ 5,006 $ 3,328 $ 2,294 Cash paid for interest $ 6,195 $ 3,640 $ 1,489 Supplemental disclosure of non-cash investing and financing activities Issuance of common stock in connection with acquisitions $ — $ 668,026 $ — Property and equipment included in accounts payable and accrued expenses and other current liabilities $ 632 $ 321 $ 337 provideprovides greater visibility into and control over how companies spend money. The BSM platform enables businesses to achieve savings that drive profitability. The Company is based in San Mateo, California. Certain amounts in the consolidated financial statements and notes to the consolidated financial statements for prior years have been reclassified to conform to the presentation for the year ended January 31, 2019. Net operating results have not been affected by these reclassifications.stock-based compensation, the fair value of certain equity awards, the fair value of contingent stockpurchase consideration, the valuation of acquired intangible assets and the recoverability or impairment of tangible and intangible assets, including goodwill, revenue recognition, the fairredemption value of marketable securities,redeemable non-controlling interests, convertible senior notes fair value, the benefit period of deferred commissions, and provision for (benefit from) income taxes. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations.Company’slarge majority of the Company's foreign operations is the U.S. dollar.dollar, while a few of its subsidiaries use the local currency as their functional currency for the year ended January 31, 2022. In cases where the Company uses a foreign functional currency, the Company translates the foreign functional currency financial statements to U.S. dollars using the exchange rates at the balance sheet date for assets and liabilities, the period average exchange rates for revenues and expenses, and the historical exchange rates for equity. The effects of foreign currency translation adjustments are recorded in other comprehensive income as a component of stockholders' equity and the related periodic movements are presented in the consolidated statements of comprehensive loss. Foreign currency transaction gains and losses are included in “Interestother income and other, net”(expense), net, in the consolidated statements of operations for the period. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate prevailing on the balance sheet date. Revenues and expenses are translated at the transaction spot rate. For the years ended January 31, 2019, 20182022, 2021 and 2017,2020, realized foreign currency transaction gains and losses were comprised of a net loss of $225,000,$1.0 million, a net gain of $292,000,$568,000, and a net loss of $638,000,$523,000, respectively.F-1020192022 or 2018.2019, 20182022, 2021 and 2017,2020, revenues by geographic area, based on billing addresses of the customers, was as follows (in thousands):For the year ended
January 31,2022 2021 2020 United States $ 436,079 $ 338,084 $ 248,107 Foreign countries 289,210 203,559 141,612 Total revenues $ 725,289 $ 541,643 $ 389,719 period.period.and marketable securities, and contingent cash consideration payable are reported at fair value. The recorded carrying amount of trade receivables, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature. The Company carries convertible senior notes at facethe allocated liability value less unamortized debt discount and issuance costs on its consolidated balance sheet, and it presents the fair value of the convertible senior notes for disclosure purposes only.and asset backed securities.securities and certificates of deposit. The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All marketable securities are recorded at estimated fair value.F-11Unrealized Credit losses related to the marketable securities are recorded in other income (expense), net in the consolidated statements of operations through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. No credit losses related to marketable securities were recorded by the Company during the years ended January 31, 2022 and 2021. Any remaining unrealized gains andor losses for available-for-salemarketable securities are included in accumulated other comprehensive loss,income, a component of stockholders’ equity. The Company evaluates its marketable securities to assess whether those with unrealized loss positions are other than temporarily impaired. Impairments are considered to be other than temporary if they are related to a deterioration in credit risk or if it is likely that the Company will sell the securities before recovering its cost basis. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in interest income and other, net in the consolidated statements of operations.Advertising CostsAdvertising costs are expensed as incurred and are primarily included in sales and marketing expense in the accompanying consolidated statements of operations. Advertising expense totaled $2.2 million, $1.6 million and $446,000 for the years ended January 31, 2019, 2018 and 2017, respectively.platform.platform and software used in operations. Costs incurred in the preliminary stages of development are expensed as incurred. Once the software has reached the development stage, internal and external costs, if direct and incurred for adding incremental functionality to the Company’s platform, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. These software development costs are recorded as part of property and equipment.two to three years. During the years ended January 31, 2019, 20182022, 2021 and 2017,2020, the Company capitalized $5.6$11.9 million, $4.2$10.5 million and $4.3$8.4 million, respectively, in software development costs.F-12professional services fees. other. Revenues are recognized when control of these services are transferred to the Company’s customers in an amount that reflects the consideration expected to be entitled to in exchange for those services. Revenues are recognized net of applicable taxes imposed on the related transaction. The Company’s revenue recognition policy follows guidance from Accounting Standards Codification 606,Revenue from Contracts with Customers (Topic 606).Services Revenuesexpense management.payment solutions. Subscription services revenues consist primarily of fees to provide the Company’s customers access to its cloud-based platform, which includes routine customer support. Subscription service contracts do not provide customers with the right to take possession of the software, are in general non-cancelable, and do not contain general rights of return. Generally, subscription revenues are recognized ratably over the contractual term of the arrangement, beginning on the date that the service is made available to the customer. Subscription contracts typically have a term of three years with invoicing occurring in annual installments at the beginning of each year in the subscription period.or fixed-fee basis. For services billed on a time-and-materials basis, revenue is recognized over time as services are performed. For services billed on a fixed-fee basis, invoicing typically occurs in advance, and revenue is recognized over time based on the proportion performed.and professional services, term-based licenses, and related PCS are both distinct performance obligations that are accounted for separately. In contracts with multiple performance obligations, the transaction price is allocated to separate performance obligations on a relative standalone selling price (“SSP”) basis.F-13standalone selling price (“SSP”)SSP for each distinct performance obligationsobligation requires judgment. The Company determines SSP for performance obligations based on overall pricing objectives, which take into consideration market conditions and entity-specific factors. This includes a review of historical sales data related to the size of arrangements, the cloud applications being sold, customer demographics and the numbers and types of users within the arrangements. The Company uses a range of amounts to estimate SSP for performance obligations. There is typically more than one SSP for individual products and services due to the stratification of those products and services by considerations such as size and type of customer. services and fixed-fee professional services arrangements are commonly billed in advance, recognized as deferred revenue, and then amortized into revenue over time. The Company's term-based license contracts are billed annually in advance, recognized as deferred revenue, and then recognized as revenues upfront for the license component and ratably over the term license for the PCS component. However, other professional services arrangements, primarily those recognized on a time-and-materials arrangement,basis, are billed in arrears following services that have been rendered. In addition, for multi-year term-based license contracts, the revenue allocated to license component is recognized upfront while the billing is on annual basis. This may result in revenue recognition greater than invoiced amounts which results in a receivable balance. Receivables represent an unconditional right to payment. As of January 31, 20192022 and 2018,2021, the balance of accounts receivable, net of the allowance for doubtful accounts,credit losses, was $95.3$226.2 million and $61.4$196.0 million, respectively. Of these balances, $1.5$13.9 million and $1.2$24.2 million represent unbilled receivable amounts as of January 31, 20192022 and 2018,2021, respectively.2019,2022, approximately $1,283.7 million of the aggregate amounttransaction price from contracts with customers is allocated to the remaining performance obligations. The Company expects to recognize revenue on approximately three-fourths of these remaining performance obligations that are unsatisfied was approximately $498.6 million, a majority of which is related to multi-year subscription arrangements. Approximately three fourths of this amount is expected to be recognized as revenue within the next 24 months and the remainder thereafter. The Company applies the practical expedient to exclude remaining performance obligations for which revenue is recognized on the basis when invoices are issued and remaining obligations that are part of contracts with an original expected duration of one year or less.less and contracts where revenue is being recognized under the as-invoiced method. During the year ended January 31, 2019,2022, the revenue recognized from performance obligations satisfied in prior periods was approximately $825,000.AllowanceAllowances for Doubtful Accountscommunications with customers,expectations of forward-looking loss estimates. When developing the expectations of forward-looking loss estimates, the Company takes into consideration forecasts of future economic conditions, information about past events, such as historical trends of write-offs, and provides a reserve when needed.customer-specific circumstances, such as bankruptcies and disputes. Accounts receivable are written off when deemed uncollectible. The allowanceallowances for doubtful accounts wascredit losses were not material at January 31, 20192022 and 2018.F-14non-cancellablenon-cancelable contracts that have not yet been billed. During the yearyears ended January 31, 2019,2022 and 2021, the Company recognized revenue of $125.6$352.9 million and $253.2 million that was included in the deferred revenue balance as of January 31, 2018.and professional services and license arrangements. Commissions earned by the Company’s sales personnel are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit of five years. The Company determined the period of benefit by taking into consideration its past experience with customers, future cash flows expected from customers, industry peers and other available information.$15.3$35.9 million, $5.7$24.2 million and $4.5$26.2 million and amortized $5.8$18.6 million, $4.0$14.7 million and $4.0$9.6 million to sales and marketing expense in the accompanying consolidated statements of operations during the years ended January 31, 2019, 20182022, 2021 and 2017,2020, respectively.increaseagreements with the minority investors of Coupa K.K. contain redemption features whereby the interest held by the minority investors is redeemable either (i) at the option of the minority investors or (ii) at the option of the Company, both beginning on the tenth anniversary of the initial capital contribution. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. The resulting changes in capitalized commission costs during the year was primarilyestimated redemption amount are recorded with corresponding adjustments against additional paid-in-capital due to the adoptionabsence of retained earnings. The carrying amount of the new revenue standard. fair valuemarket price of the Company’s common stock on the date of the grant.F-15The Company records stock-based compensation expense from stock-based awards granted to non-employees at the estimated fair value of the awards upon vesting. The Company values options granted to non-employees using the Black-Scholes option pricing model. These awards are remeasured over their term until vested, exercised, cancelled or expired.feature.feature using a discounted cash flow model with a discount rate associated with each convertible note. The discount rates were determined primarily using observable yields for stand-alone debt instruments with a comparable credit rating and term. In addition, for the 2026 Notes, the Company also used lattice models to determine the discount rate. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Convertible Notes as a whole. This difference represents a debt discount that is amortized to interest expense over the term of the Convertible Notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The Company has allocated issuance costs incurred to the liability and equity components. Issuance costs attributable to the liability component are being amortized to expense over the respective term of the Convertible Notes, and issuance costs attributable to the equity components were netted with the respective equity component in additional paid in capital.incomegain (loss) in relation to defined benefits plans, net of tax, and anchanges in unrealized gain (loss) on marketable debt securities, net of tax, and foreign currency translation adjustments, net of tax. The other comprehensive incomegain (loss) in relationshiprelation to defined benefits plans represents net deferred gains and losses and prior service costs and credits for the defined benefit pension plans.Recently AdoptedMay 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) which provided a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Topic 606 superseded the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of Topic 606 is to recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Topic 606 also includes Subtopic 340-40 which provides accounting guidance for incremental costs of obtaining a contract with a customer. The Company refers to Topic 606 and Subtopic 340-40 collectively as the “new revenue standard.”The Company adopted the new revenue standard effective on February 1, 2018 using the modified retrospective method applied to all contracts not completed as of the adoption date. Results for reporting periods beginning on February 1, 2018 are presented under the new revenue standard, while comparative results have not been restated. The primary impact of adopting the new revenue standard relates to Subtopic 340-40 and the deferral of incremental commission costs to obtain contracts with customers. Under Topic 605, the Company deferred only direct and incremental commission costs to obtain a contract and amortized those costs over the non-cancelable contract term. Under the new revenue standard, the Company defers all incremental commission costs to obtain the contract. The Company amortizes these costs over a period of benefit of five years. The adoption of the new revenue standard also removed the limitation on contingent revenue under Topic 605 which impacted revenue recognition and is reflected in the changes to the Company’s revenue recognition accounting policy.F-16The following table summarizes the cumulative impact of adoption of the new revenue standard for revenue recognition on line items within the Consolidated Balance Sheets (in thousands): The impact of adoption on the consolidated statements of cash flows for the year ended January 31, 2019 was immaterial. The impact to sales and marketing expense within the consolidated statements of operations was a decrease of approximately $1.7 million for the year ended January 31, 2019, due to deferred commission costs that would have been expensed prior to adoption of the new standard. The impact to total revenues within the consolidated statements of operations was an increase of approximately $810,000 for the year ended January 31, 2019, due to subscription and professional service revenues that would have not been recognized during the period prior to the adoption of the new standard. The following table summarizes the effects of the new revenue standard for revenue recognition on line items within the Consolidated Balance Sheets (in thousands):In October 2016,August 2020, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16"). ASU 2016-16 requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. As of January 31, 2018, the Company had an aggregate prepaid tax asset of $5.6 million recorded in prepayments and other current assets and other long-term assets, which represents tax expense that was deferred in accordance2020-06, GAAP prior to adoption of ASU 2016-16. The Company adopted this standard on February 1, 2018 and reversed the deferred tax charge of $5.6 million through a cumulative-effect adjustment to the accumulated deficit.In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires an entity to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows, and an entity will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. This guidance is effective for annual and interim reporting periods, beginning after December 15, 2017. Entities are required to apply the standard’s provisions on a retrospective basis. The Company adopted this standard on February 1, 2018, which did not have material impact on the Company consolidated statement of cash flows.In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715), (“ASU 2017-07”). ASU 2017-07 provides guidance on the presentation of the service cost component and the other components of net period pension cost in theF-17consolidated statements of operations. The standard is effective for annual and interim reporting periods beginning after December 15, 2017 and requires retrospective adoption. The Company adopted this standard on February 1, 2018, which did not have a material impact on the Company’s consolidated financial statements and related disclosures.In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which provides clarified guidance on applying modification accounting to changes in the terms or conditions of a share-based payment award. ASU 2017-09 is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted. This change is required to be applied prospectively to an award modified on or after the adoption date. The Company adopted this standard on February 1, 2018, which did not have impact on the Company’s consolidated financial statements and related disclosures.New Accounting Pronouncements Not Yet AdoptedIn February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”) which provides guidance for lease accounting. Since the issuance of ASU 2016-02, the FASB has also issued ASU 2017-13, ASU 2018-01, ASU 2018-10 and ASU 2018-11, all of which clarify certain aspects of ASU 2016-02. The new lease standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new lease standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and early adoption is permitted. A modified retrospective transition approach is required for lessees with capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available.The Company will adopt this new standard as of February 1, 2019, and has elected to adopt the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carry forward historical lease classifications. The Company will also elect the practical expedient related to comparative periods, allowing it to carry forward its current accounting treatment for leases up to the date of adoption, and the practical expedient to not separate lease and non-lease components. The Company will make an accounting policy election to keep leases with an initial term of twelve months or less off of the balance sheet. The Company will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term.The adoption of the standard will result in recognition of additional lease assets and lease liabilities between $26 million to $30 million as of February 1, 2019. The difference between the lease assets and lease liabilities will be recorded as an adjustment to retained earnings. The standard is not expected to materially affect the Company’s consolidated net earnings or liquidity. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-GoodwillConversion and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”)Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)goodwill impairments by eliminating step twoconvertible instruments. The guidance removes certain accounting models that separate the embedded conversion features from the goodwill impairment test. Instead,host contract for convertible instruments, requiring bifurcation only if the carrying amount ofconvertible debt feature qualifies as a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equalderivative under ASC 815 or for convertible debt issued at a substantial premium. The ASU removes certain settlement conditions required for equity contracts to that excess, limitedqualify for the derivative scope exception, permitting more contracts to qualify for it. In addition, the total amount of goodwill allocatedguidance eliminates the treasury stock method to that reporting unit. ASU 2017-04 also clarifiescalculate diluted earnings per share for convertible instruments and requires the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity’s testing of reporting units for goodwill impairment, and clarifies that an entity should consider income tax effects from any tax deductible goodwill on the carrying amountuse of the reporting unit when measuring the goodwill impairment loss, if applicable.if-converted method. The guidance is effective for annual reporting periods beginning after January 1, 2020 and interim periods within those fiscal years. The Company has elected to early adopt this standard on February 1, 2019 and is not expecting the adoption to have an impact on its historical financial statements.In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-Employee Share Based Payment Accounting (“ASU 2018-07”), with an intent to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees. The amendments in ASU 2018-07 provide for the simplification of the measurement of share-based payment transactions for acquiring goods and services from non-employees. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. This standard expands theF-18scope of Topic 718 to include share-based payments issued to nonemployees for goods or services, aligning the accounting for share-based payments to nonemployees and employees. ASU 2018-17 is effective for annual reporting periods beginning after December 15, 2018,2021, including interim reporting periods within those periods, and early adoption is permitted. annual periods. The ASU allows entities to use a modified or full retrospective transition method. Under the modified approach, entities will apply the guidance to all financial instruments that are outstanding as of the beginning of the year of adoption.does not believe thatwill adopt the new guidance for the fiscal year beginning February 1, 2022, using the modified retrospective approach with the cumulative effect of adoption recognized at the date of initial application through an adjustment to the opening balance of accumulated deficit, which will result in reduced interest expense in future periods. In the consolidated balance sheets as of February 1, 2022, the adoption of this standard will havenew guidance is estimated to result in an increase of approximately $541.9 million to the total carrying value of the Convertible Notes to reflect the full principal amount of the Convertible Notes outstanding net of unamortized issuance costs, a material impact on its consolidated financial statements.August 2018,October 2021, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements2021-08, Business Combinations: Accounting for Fair Value Measurement (“ASU 2018-13”), which amends ASC 820, Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The effective date is the first quarter of fiscal year 2021,Contract Assets and Contract Liabilities from Contracts with early adoption permitted for the removed disclosures and delayed adoption until fiscal year 2021 permitted for the new disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company is currently evaluating the impact of adopting ASU 2018-13 on its consolidated financial statements.In August 2018, the FASB issued ASU No. 2018-14, which amends FASB ASC Topic 715, "Compensation - Retirement Benefits."Customers (Topic 805)guidance modify the disclosure requirements for employersASU require that sponsor defined benefit pension or other postretirement plans. The amendments in this guidance remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosuresan acquirer recognizes and add disclosure requirements identified as relevant. This guidance is effective for annual reporting periods ending after December 15, 2020, with early adoption permitted,measures contract assets and is required to be adopted retrospectively. The Company is currently evaluating the method of adoption and related impact of ASU 2018-14 on its consolidated financial statements.In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-use Software (subtopic 350-40): Customer’s Accounting for Implementation Costs Incurredcontract liabilities acquired in a Cloud Computing Arrangement thatbusiness combination in accordance with Topic 606. The ASU is a Service Contract (“ASU 2018-15”). The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The effective date is for fiscal years beginning after December 15, 2019,2022, including interim periods within those fiscal years with earlyand should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption allowed.is permitted. The Company is currently evaluatingintends to adopt this new guidance in the timing andfirst quarter of fiscal year 2023 with no expected material impact of its adoption of this standard on itsthe Company's historical consolidated financial statements.January 31, 2022 Balance at beginning of period $ — Investment by redeemable non-controlling interests 2,223 Net loss attributable to redeemable non-controlling interests (1,063) Foreign currency translation adjustments, net of tax (72) Adjustment to redeemable non-controlling interest 10,996 Balance at end of period $ 12,084 at January 31, 2019 (in thousands):January 31, 2022 Amortized Costs Unrealized Gains Unrealized Losses Fair Value U.S. treasury securities $ 223,950 $ 23 $ (941) $ 223,032 Total marketable securities $ 223,950 $ 23 $ (941) $ 223,032 January 31, 2021 Amortized Costs Unrealized Gains Unrealized Losses Fair Value U.S. treasury securities $ 268,141 $ 29 $ (1) $ 268,169 Corporate notes and bonds 14,487 100 — 14,587 Certificates of deposit 280 — — 280 Total marketable securities $ 282,908 $ 129 $ (1) $ 283,036 2019,2022, the fair values of available-for-sale marketable securities, by remaining contractual maturity, were as follows (in thousands):Due within one year $ 120,093 Due in one year through five years 102,939 Total $ 223,032 does not believe that any unrealized losses represent other-than-temporary impairments based onviews its evaluation of available evidence. To determine whether a decline in value is other-than-temporary, theF-19Company evaluates, among other factors: the duration and extent to which the fair value has been less than the carrying value and its intent and ability to retain the marketable securities for a period of time sufficient to allow for any anticipated recovery in fair value. The Company considers all marketable securities as available for use into support its current operations, including those with maturity dates beyond one year, and therefore classifies these marketable securities have been classified as current assets inshort-term available for sale securities.accompanying consolidated balance sheets.Note 4. Business CombinationsAcquisitions in Fiscal Year Endedyears ended January 31, 2019Hiperos, LLCOn December 7, 2018,2022, 2021 and 2020, there were no material gains or losses from the sale of available-for-sale marketable securities that were reclassified out of accumulated other comprehensive loss.acquired allregularly reviews the outstanding equitychanges to the rating of its debt securities of Hiperos, LLC, a Delaware limited liability company, and GTCR/Opus Blocker Corp., a Delaware corporation, (together herein referredby rating agencies as well as reasonably monitors the surrounding economic conditions to as “Hiperos”) for a purchase price of approximately $94.8 million in cash, subject to adjustments based on the amount of working capital of Hiperos. Approximately, $8.6 million of the purchase consideration is being held in escrow for 18 months after the transaction closing date. Hiperos is a third-party risk management provider, and the acquisition enables the Company’s business spend management solution with the advanced technology to extensively evaluateassess the risk of supplier base to further protect brandexpected credit losses. As of January 31, 2022, the unrealized losses and bottom line.acquisition was accounted for as a business combination and, accordingly,following table summarizes the totalCompany’s fair value of purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date. The major classes ofhierarchy for its financial assets and liabilities measured at fair value on a recurring basis at January 31, 2022 (in thousands):Level 1 Level 2 Level 3 Total Money market funds $ 233,705 $ — $ — $ 233,705 Marketable securities: U.S. treasury securities — 223,032 — 223,032 Other investments: Non-marketable debt investments — — 6,434 6,434 Total assets $ 233,705 $ 223,032 $ 6,434 $ 463,171 Level 1 Level 2 Level 3 Total Money market funds $ 90,437 $ — $ — $ 90,437 Marketable securities: U.S. treasury securities — 268,169 — 268,169 Corporate notes and bonds — 14,587 — 14,587 Certificates of deposit — 280 — 280 Total assets $ 90,437 $ 283,036 $ — $ 373,473 Foreign currency forward contracts not designated as hedges $ — $ 47 $ — $ 47 Total liabilities $ — $ 47 $ — $ 47 whichforeign currency forward contracts at a notional amount of $2.9 million. The derivative liabilities were included in accrued expenses and other current liabilities on the Company’s consolidated balance sheets at January 31, 2021. The foreign currency forward contracts matured during the three months ended April 30, 2021 and were not renewed.has allocatedholds; as a result, the Company classifies these assets as Level 3 within the fair value hierarchy.purchase consideration were as follows (in thousands):The Company continues to collect information with regards to its estimates and assumptions and will record any adjustmentsJanuary 31, 2022, the balance of non-marketable debt investments was $6.4 million, which includes an unrealized gain of $1.3 million. There have been 0 impairments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. The goodwill recognized was primarily attributed to increased synergies that are expected to be achieved from the integration of Hiperos, and is partially deductible for income tax purposes. The Company determined the fair values of intangible assets acquired and liabilities assumed with the assistance of third party valuation consultants. Based on this valuation, the intangible assets acquired are (in thousands): The Company incurred costs related to this acquisition of approximately $1.0 million for the year ended January 31, 2019. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statements of operations.F-20The revenue and earningsamortized cost of the acquired business have been included in the Company’s results since the acquisition date and are not material to the Company’s consolidated financial results. The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if Hiperos had been acquired as of the beginning of the comparable prior annual reporting period, giving effect on a pro forma basis to purchase accounting adjustments such as amortization of intangible assets and acquisition-related costs. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of the Company’s fiscal year 2018 or of the results of the Company’s future operations of the combined business (in thousands).Vinimaya, Inc. (d/b/a Aquiire)On October 12, 2018, the Company completed its acquisition of Vinimaya, Inc. which conducted business as Aquiire. Aquiire is a real-time supplier catalog search company, and the acquisition extended the Company’s capability to deliver a comprehensive business-to-business shopping experience spanning real-time, cached, and localized catalog search.The acquisition was accounted for as a business combination and, accordingly, the total fair value of purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date. The total fair value of the purchase consideration was approximately $49.5 million, comprised of $30.5 million in cash (of which $3.8 million is being held back by the Company for 18 months after closing of the acquisition) and 300,560 shares of the Company’s common stock with fair value of approximately $19.0 million (of which 37,570 shares are being held back by the Company for 18 months after closing of the acquisition). The major classes of assets and liabilities to which the Company has allocated the fair value of purchase consideration were as follows (in thousands):F-21Other assets include indemnification assets totaling approximately $1.1 million due to an assumed liability for which the seller is responsible. The Company will continue to collect information and reevaluate the estimates and assumptions and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. The goodwill recognized was primarily attributed to increased synergies that are expected to be achieved from the integration of Aquiire and is not expected to be deductible for income tax purposes. The Company determined the fair values of intangible assets acquired and liabilities assumed with the assistance of third party valuation consultants. Based on this valuation, the intangible assets acquired are (in thousands): The Company incurred costs related to this acquisition of approximately $517,000non-marketable debt investments during the year ended January 31, 2019. All acquisition related costs were expensed as incurred and2022.recorded in general and administrative expenses in the accompanying consolidated statements of operations.The revenue and earnings of the acquired business have been included in the Company’s results since the acquisition date and are not material to the Company’s consolidated financial results. Pro forma results of operations for this acquisition have not been presented as the financial impact to the Company’s consolidated financial statements would be immaterial.DCR Workforce, Inc.On August 1, 2018, the Company completed the acquisition of the technology assets of DCR Workforce Inc. ("DCR") for aggregate cash consideration of $25.0 million paid at closing (of which $3.8 million is being held back by the Company until the second anniversary after closing of the acquisition) and contingent stock consideration that may be earned and issued in the future. The maximum contingent stock consideration that may be earned and issued is up to 668,740 shares of the Company’s common stock. The payout of the contingent stock consideration will be determined based on the achievement of distinct revenue performance targets for each of three separate measurement periods that continue through December 31, 2022.The acquisition was accounted for as a business combination. The contingent stock consideration for each of three separate measurement periods may individually result in the delivery of a fixed number of shares and as a result it was classified as equity on the Company’s consolidated balance sheet. The fair value of the contingent consideration as of the acquisition date was determined using the Monte Carlo simulation method. This estimate was based on level 3 inputs under the fair value measurement and disclosure guidance which are not observable in the market including estimated amount and timing of future revenues and discount rate. During the year ended January 31, 2019, the revenue performance target for the first measurement period ending October 31, 2019 has been fully met, and therefore the Company issued 291,602 shares of the Company’s common stock to the shareholders of DCR in the fourth quarter ending January 31, 2019.The aggregate fair value of purchase consideration of $52.2 million, comprised of $25.0 million cash consideration and $27.2 million stock consideration, was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date.F-22The major classes of assets to which the Company has allocated the fair value of purchase consideration were as follows (in thousands):There were no liabilities assumed by the Company for the DCR acquisition. The Company continues to collect information and reevaluate the estimates and assumptions and records anyimpairments or adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. The goodwill recognized was primarily attributed to increased synergies that are expected to be achieved from the integration of DCR and is expected to be deductible for income tax purposes. The Company determined the fair values of intangible assets acquired with the assistance of third party valuation consultants. Based on this valuation, the intangible assets acquired are as follows (in thousands): The Company incurred costs related to this acquisition of approximately $327,000 during year ended January 31, 2019. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statements of operations.The revenue and earningscarrying amount of the acquired business have been included in the Company’s results since the acquisition date. Pro forma results of operations for this acquisition have not been presented as the financial impact to the Company’s consolidated financial statements would be immaterial.In conjunction with the acquisition of technology assets of DCR, the Company signed a license agreement with DCR pursuant to which the Company granted DCR a limited, non-sublicensable, non-transferable, and nonexclusive license right to use certain of the intellectual property that the Company acquired from DCR. The Company also signed a transition service agreement, pursuant to which DCR will provide administrative services to the Company during a transitional service period to support the continuing operation of the acquired business. In addition, the Company signed a three-year office lease agreement beginning from August 1, 2018 with an entity that is wholly owned by the shareholders of DCR. Refer to Note 16 Related Parties for additional disclosure on the agreements.Acquisitions in Fiscal Year Ended January 31, 2018Simeno Holdings AGOn December 1, 2017, the Company acquired all of the issued and outstanding capital stock held by of Simeno Holdings AG (“Simeno”), a Switzerland based cross-catalog search and catalog management company.The acquisition was accounted for as a business combination and, accordingly, the total fair value of purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date. The total purchase consideration was $8.7 million in cash, of which $1.5 million is being held until the second anniversary after closing of the acquisition. In addition, approximately $8.0 million in the form of 221,257 shares of the Company’s common stock was issued to the selling shareholder of Simeno and this stock is subject to service vesting conditions including continued employment with the Company. The value assigned to the common stock issued will be recorded as post-acquisition compensation expense over the requisite service period and has been excluded from the purchase consideration.F-23The major classes of assets and liabilities to which the Company has allocated the fair value of purchase consideration were as follows (in thousands):The goodwill recognized was primarily attributed to increased synergies that are expected to be achieved from the integration of Simeno and is not expected to be deductible for income tax purposes. The Company determined the fair values of intangible assets acquired and liabilities assumed with the assistance of third party valuation consultants. Based on this valuation, the intangible assets acquired are as follows (in thousands): Simeno maintained a pension plan covering employees in Switzerland pursuant to the requirements of Swiss pension law, which has been assumed by the Company upon the completion of the acquisition. The pension plan is accounted for as a defined benefit pension plan, which requires the Company to recognize the underfunded status of the plan as a liability in the consolidated balance sheets and changes in the funded status of defined benefit pension plan through other comprehensive loss. As of the acquisition date in December 2017, the Company recorded net liabilities of $4.2 million on its consolidated balance sheet in connection with this pension plan.The Company incurred costs related to this acquisition of approximately $445,000equity investments during the year ended January 31, 20182022.no significant costs were incurred during$1.8 million in aggregate principal amount of 0.375% convertible senior notes due in 2023 (the “2023 Notes” and together with the year ended2025 Notes and 2026 Notes, the “Convertible Notes”), outstanding as of January 31, 2019. All acquisition2022. Refer to Note 10, “Convertible Senior Notes” for further details on the Convertible Notes.were expensed as incurredon its consolidated balance sheets and have been recorded in general and administrative expenses in the accompanying consolidated statements of operations.Trade Extensions TradeExt ABOn May 3, 2017, the Company acquired substantially all of the issued and outstanding capital stock held by shareholders of Trade Extensions TradeExt AB (“Trade Extensions”), a Swedish corporation. The acquisition enabled the Company to broaden its cloud platform for business spend, particularly in the area of strategic sourcing.Upon the closing of the acquisition, the Company paid aggregate consideration of approximately $40.9 million in cash, of which $7.2 million was being held in escrow for 18 months after the transaction closing date. In November 2018, substantially all of the amount that was being held in escrow was released after deducting certain amounts to cover indemnification obligations and associated contractual provisions.In addition, approximately $4.1 million in the form of 148,476 shares of the Company’s common stock was issued to certain key employees of Trade Extensions, which stock is subject to service vesting conditions including continued employment with the Company. The value assigned to the common stock issued will be recorded as post-acquisition compensation expense and has been excluded from the purchase consideration.F-24The major classes of assets and liabilities to which the Company has allocatedpresents the fair value for disclosure purposes only. The estimated fair value of purchase consideration werethe 2026 Notes, 2025 Notes and 2023 Notes, based on a market approach as follows (in thousands):Other assets include indemnification assets totaling $1.4 million due to assumed liability for which the seller is responsible. The goodwill recognized was primarily attributed to increased synergies that are expected to be achieved from the integration of Trade Extensions and is not expected to be deductible for income tax purposes. The Company determined the fair values of intangible assets acquired with the assistance of third party valuation consultants. Based on this valuation, the intangible assets acquired are (in thousands):The Company incurred costs related to this acquisition of approximately $526,000 during the year ended January 31, 2018. All acquisition related costs were expensed2022 was approximately $1,227.1 million, $895.0 million and $5.3 million, respectively, which represents a Level 2 valuation estimate. The estimated fair value of the 2026 Notes, 2025 Notes and 2023 Notes, based on a market approach as incurredof January 31, 2021 was approximately $1,775.0 million, $1,617.5 million and have been recorded$61.2 million, respectively, which represents a Level 2 valuation estimate. The estimated fair value was determined based on the estimated or actual bids and offers of the Convertible Notes in general and administrative expenses inan over-the-counter market on the accompanying consolidated statementslast trade completed prior to the end of operations.5. Goodwill6. Business CombinationsOther Intangible AssetsGoodwillfollowing table representsacquisition was accounted for as a business combination and, accordingly, the changes in goodwilltotal fair value of purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date. The major classes of assets and liabilities to which the Company has allocated the total fair value of purchase consideration were as follows (in thousands):F-25February 1, 2021 Cash and cash equivalents $ 3,413 Intangible assets 12,200 Other assets 772 Goodwill 33,817 Accounts payable and other liabilities (1,662) Total consideration $ 48,540 following table summarizesgoodwill recognized was primarily attributed to the otherassembled workforce and increased synergies that are expected to be achieved from the integration of Pana and is not deductible for income tax purposes. The Company determined the fair values of intangible asset balancesassets acquired and liabilities assumed. The identifiable intangible assets acquired were as follows (in thousands):Fair Value Useful life
(in Years)Developed technology $ 10,500 4 Customer relationships 1,700 4 Total $ 12,200 Amortization expenseother intangible assets wasthis acquisition of approximately $6.9 million, $3.4 million and $952,000$440,000 for the yearsyear ended January 31, 2019, 20182022. All acquisition related costs were expensed as incurred and 2017, respectively. Ashave been recorded in general and administrative expenses in the consolidated statements of operations.2019,2021future amortizationCompany completed the acquisition of Laurel Parent Holdings, Inc. and its subsidiaries (“LLamasoft”), a supply chain design and analysis software and solutions company. The acquisition strengthens Coupa’s supply chain capabilities, enabling businesses to drive greater value through Business Spend Management. In connection with the acquisition, all outstanding equity securities of LLamasoft were cancelled with the payment by the Company of approximately $1.4 billion, of which approximately $792.2 million was paid in cash, and the remainder was paid in the form of 2,371,014 shares of the Company's common stock with a fair value of approximately $634.5 million. Approximately $15.0 million of the cash paid is being held in escrow for fifteen months after the transaction closing date as security for the former LLamasoft stockholders' indemnification obligations.other intangible assetslegacy LLamasoft employee stock awards in connection with the acquisition.Total cash paid $ 792,170 Fair value of share consideration 634,507 Less: One-time stock-based compensation expense (27,750) Total purchase consideration $ 1,398,927 November 2, 2020 Cash and cash equivalents $ 1,389 Accounts receivable 39,564 Goodwill 931,815 Intangible assets 517,600 Operating lease right-of-use assets 14,820 Other assets 23,389 Accounts payable and other current liabilities (9,743) Deferred revenue (14,798) Operating lease liabilities (14,644) Deferred tax liability, net (76,091) Other noncurrent liabilities (14,374) Total consideration $ 1,398,927 which has one reporting unit, performed an annual testdetermined the fair values of intangible assets acquired and liabilities assumed with the assistance of third-party valuation consultants. Based on this valuation, the intangible assets acquired were (in thousands):Fair Value Useful life
(in Years)Developed technology $ 316,100 7 Customer relationships 200,300 5 Trademarks 1,200 1 Total intangible assets $ 517,600 goodwill impairmentthe year ended January 31, 2021. All acquisition related costs were expensed as incurred and determined that goodwill was not impaired. In addition, there have been no significant events or circumstances affectingrecorded in general and administrative expenses in the valuationaccompanying consolidated statements of operations.subsequentwhich is primarily attributed to assembled workforce and expected synergies. The goodwill is not deductible for income tax purposes. The other assets acquired and liabilities assumed were not material.Company’s annual assessment. Furthermore, no events or changesCompany acquired all of the equity interest in circumstances have occurred to suggestBellin Treasury International GmbH (“Bellin”), a cloud-based treasury management software platform that improves visibility and control over cash and optimizes treasury processes. The purchase consideration was approximately $121.0 million, comprised of $79.1 million in cash (of which $8.0 million is being held in escrow for eighteen months after the carrying amounts for anytransaction closing date) and 186,300 shares of the Company’s long-lived assets or identifiablecommon stock with a fair value of approximately $41.8 million as of the transaction close date. In addition, the Company issued 208,766 shares of common stock with an approximate fair value of $46.9 million to one of the sellers who became a Coupa employee. These shares are subject to service-based vesting conditions including continued employment with the Company. The value assigned to the unvested common stock will be recorded as post-acquisition compensation expense as the shares vest and has been excluded from the purchase consideration.may be non-recoverable. As such,acquired and liabilities assumed based on their fair values on the acquisition date. The major classes of assets and liabilities to which the Company has allocated the total fair value of purchase consideration were as follows (in thousands):June 9, 2020 Cash and cash equivalents $ 4,783 Accounts receivable 5,345 Intangible assets 42,745 Other assets 4,932 Goodwill 86,674 Accounts payable and other current liabilities (3,479) Deferred revenue (4,230) Deferred tax liability, net (12,946) Other noncurrent liabilities (2,851) Total consideration $ 120,973 requireddeductible for income tax purposes. The Company determined the fair values of intangible assets acquired and liabilities assumed with the assistance of third-party valuation consultants. Based on this valuation, the intangible assets acquired were (in thousands):Fair Value Useful life
(in Years)Developed technology $ 27,800 5 Customer relationships 14,700 5 Trademarks 245 0.5 Total intangible assets $ 42,745 reevaluatethis acquisition of approximately $1.2 million for the recoverabilityyear ended January 31, 2021. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statements of its long-lived assets.operations.May 1, 2020 Intangible assets $ 1,900 Other assets 540 Goodwill 8,519 Accounts payable and other liabilities (967) Total consideration $ 9,992 Fair Value Useful life
(in Years)Developed technology $ 1,900 4 Total intangible assets $ 1,900 6.7. Property and Equipment, NetAs of January 31, 2022 2021 Furniture and equipment $ 15,584 $ 11,955 Software development costs 55,733 43,857 Leasehold improvements 7,193 5,465 Construction in progress 471 848 Total property and equipment 78,981 62,125 Less: accumulated depreciation and amortization (48,405) (33,859) Property and equipment, net $ 30,576 $ 28,266 $849,000, $532,000$5.2 million, $3.6 million and $432,000$1.7 million for the years ended January 31, 2019, 20182022, 2021 and 2017,F-26$3.1$9.9 million, $3.9$7.1 million and $3.3$3.6 million for the years ended January 31, 2019, 20182022, 2021 and 2017,2020, respectively.7. Fair Value MeasurementsFair value is8. Goodwill and Other Intangible Assets exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings or other comprehensive loss when they occur. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurement or assumptions that market participants would use in pricing the assets or liabilities, such as inherent risk, transfer restrictions and credit risk.The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:Level 1 - Quoted prices in active markets for identical assets or liabilities.Level 2 - Observable inputs other than quoted price in active markets for identical assets or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially full term of assets or liabilities.Balance at January 31, 2020 $ 442,112 Additions from acquisitions 1,030,924 Foreign currency translation adjustments 6,784 Adjustments 1,027 Balance at January 31, 2021 1,480,847 Additions from acquisitions 33,817 Foreign currency translation adjustments (343) Other adjustments 229 Balance at January 31, 2022 $ 1,514,550 Level 3 - Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the assets or liabilities.Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basisother intangible asset balances (in thousands):(1)Included in cash and cash equivalents As of January 31, 2022 2021 Weighted Average Remaining Useful
Lives
(in years)
Gross Carrying AmountAccumulated Amortization
Net Carrying Amount
Gross Carrying AmountAccumulated Amortization
Net Carrying AmountDeveloped technology 5.1 $ 484,510 $ (150,910) $ 333,600 $ 474,120 $ (69,560) $ 404,560 Customer relationships 3.7 256,082 (79,019) 177,063 254,437 (27,727) 226,710 Trademarks 0.0 2,419 (2,419) — 2,419 (1,516) 903 Total other intangible assets $ 743,011 $ (232,348) $ 510,663 $ 730,976 $ (98,803) $ 632,173 The Company carries Convertible Senior Notes (the “Convertible Notes”) at face value less unamortized discountissuance costs on its consolidated balance sheet$24.0 million for the years ended January 31, 2022, 2021 and presents the fair value for required disclosure purposes only. 2020, respectively.2019,2022, the fair valuefuture amortization expense of other intangible assets is as follows (in thousands):Year Ending January 31, 2023 $ 128,111 2024 121,994 2025 102,849 2026 78,559 2027 45,157 Thereafter 33,993 Total $ 510,663 Convertible Notes was $428.4 million. The estimated fair values of the Convertible Notes, whichCompany’s long-lived assets or identifiable intangible assets may be non-recoverable. As such, the Company has classified as Level 2 financial instruments, were determined based onwas not required to reevaluate the quoted bid pricesrecoverability of the Convertible Notes on the last trading day of each reporting period. As of January 31, 2018, the fair value of the Convertible Notes approximated its carrying amount at that time. For Note 9 for further information on the Convertible Notes.F-27
long-lived assets.8.9. Accrued Expenses and Other Current LiabilitiesAs of January 31, 2022 2021 Accrued compensation $ 43,019 $ 45,120 Accrued expenses 20,201 17,500 Other current liabilities 11,415 13,238 Income tax payable 3,930 2,396 Holdback payable 595 2,017 Total accrued expenses and other current liabilities $ 79,160 $ 80,271 yearyears ended January 31, 20192022 and 2018,2021, the Company had accrued $4.3$9.3 million and $3.2$8.3 million of employee stock purchase plan contributions received, respectively. For further information on the Company’s employee stock purchase plan see Note 11.12, “Common Stock and Stockholders' Equity”.9.10. Convertible Senior NotesJanuary 2018,June 2020, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with certain counterparties relating toissued the Company’s sale of $230.0 million2026 Notes in aggregate principal amount of its 0.375% Convertible Senior Notes due 2023 (the “Convertible Notes”) to the counterparties$1,380.0 million in a private placement in reliance on Section 4(a)(2) ofto qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and for initial resale by the Initial Purchasers to qualified institutional buyers pursuantamended. The 2026 Notes are subject to the exemption from registration provided by Rule 144A under the Securities Act. The Convertible Notes consistedterms and conditions of a $200.0 million initial placement and an overallotment option that provided the initial purchasers of the Convertible Notes with the option to purchase an additional $30.0 million of the Convertible Notes, which was exercised in full by the counterparties prior to the Convertible Notes issuance. On January 17, 2018, for a total of $230.0 million, the Convertible Notes were issued in accordance with an Indenture (the “Indenture”) between the Company and Wilmington Trust, National Association, as trustee.Convertible2026 Notes are $200.4were $1,162.3 million, net of debt issuance costs, including the underwriting discount and the cash used to purchase the capped calldiscussed below.Convertible2026 Notes are senior, unsecured obligations of the Company, and interest is payable semi-annually in cash at a rate of 0.375% per annum on JanuaryJune 15 and JulyDecember 15 of each year, beginning on JulyDecember 15, 2018.2020. The Convertible2026 Notes will mature on JanuaryJune 15, 20232026 unless redeemed, repurchased or converted prior to such date. Prior to the close of business on the business day immediately preceding OctoberMarch 15, 2022,2026, the Convertible2026 Notes are convertible at the option of holders during certain periods, upon satisfaction of certain conditions.conditions as described below. On or after OctoberMarch 15, 2022,2026, the Convertible2026 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Convertible2026 Notes will have an initial conversion rate of 22.46853.3732 shares of common stock per $1,000 principal (equivalent(equivalent to an initial conversion price of approximately $44.5068$296.4544 per share of its common stock). The conversion rate is subject to customary adjustments for certain events as described in the Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election. It is the Company’s current intent to settle conversions of the Convertible2026 Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock.Convertible2026 Notes, at their option, prior to the close of business on the business day immediately preceding October March 15, 2022,2026, in multiples of $1,000 principal amount, only under the following circumstances:F-28the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;five5 business day period after any five10 consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of the Convertible2026 Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sales price of the Company’s common stock and the conversion rate for the 2026 Notes on each such trading day;Convertible2026 Notes. The fundamental change repurchase price is equal to 100% of the principal amount of the Convertible2026 Notes to be repurchased,redeemed, plus any accrued and unpaid interest up to, but excluding the fundamental change repurchaseredemption date. If holders elect to convert their Convertible2026 Notes in connection with a make-whole fundamental change or during a redemption period, as described in the Indenture, the Company will, to the extent provided in the Indenture, increase the conversion rate applicable to the Convertible2026 Notes.Convertible2026 Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of its indebtedness that is expressly subordinated in right of payment to the Convertible2026 Notes, and equal in right of payment to any of its indebtedness that is not so subordinated.subordinated, including the 2023 Notes and the 2025 Notes. The Convertible2026 Notes are effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) and any preferred equity of its current or future subsidiaries.Convertible2026 Notes and provides that upon certain events of default occurring and continuing, the Trustee may, and the Trustee at the request of holders of at least 25% in principal amount of the Convertible2026 Notes shall,the Trustee is required to, declare all principal and accrued and unpaid interest, if any, of the Convertible2026 Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving us or a significant subsidiary,the Company, all of the principal of and accrued and unpaid interest on the Convertible2026 Notes will automatically become due and payable.Convertible2026 Notes, the Company separated the Convertible2026 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature.feature using a discounted cash flow model with a discount rate associated with the 2026 Notes. The discount rate was determined primarily using observable yields for stand-alone debt instruments with a comparable credit rating and term. In addition, the Company also used lattice models to determine the discount rate. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Convertible2026 Notes as a whole. The difference between the principal amount of the Convertible2026 Notes and the liability component, equal to $62.3$510.3 million (the “debt discount”), is amortized to interest expense using the effective interest method over the term of the Convertible2026 Notes. The equity component of the Convertible2026 Notes will not be remeasured as long as it continues to meet the conditions for equity classification.in $7.0$24.9 million of transaction costs related to the issuance of the Convertible2026 Notes. The Company allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Convertible2026 Notes. Issuance costs attributable to the liability component are being amortized to interest expense over the term of the Convertible2026 Notes using the effective interest method, and issuance costs attributable to the equity component are included along with the equity component in stockholders' equity.F-29Convertible2026 Notes consistedwere not convertible at January 31, 2022, as none of the following (in thousands):2026 Notes conversion conditions were met.2019 and 2018,2022, approximately $805.0 million principal amount of 2025 Notes remained outstanding.debt discount2025 Notes, at its option, on the Convertible Notes will be amortized over the remaining period of approximately 4 years and 5 years, respectively.For more than twenty trading days during the thirty consecutive trading days ended January 31, 2019,or after June 20, 2022, if the last reported sale price of the Company’s common stock exceededhas been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the Convertibleprincipal amount of the 2025 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.Convertible2023 Notes were convertible at the option of the holders and remained classified as current liabilities on the consolidated balance sheet as of January 31, 2019. 2022. For the year ended January 31, 2022, the Company settled conversion requests on the principal amount of the 2023 Notes totaling approximately $7.1 million by paying cash for the principal amount of $7.1 million and issuing approximately 132,088 shares of the Company’s common stock, bearing a fair value of approximately $32.3 million. For the year ended January 31, 2022, the Company recognized a loss of approximately $400,000 on the conversion and repurchase of the 2023 Notes representing the fair value in excess of the net carrying amount of the liability component of the converted notes on the respective settlement dates. The amount is included in other income (expense), net in the Company’s consolidated statement of operations.nonethe Company has not received any additional conversion requests for the 2023 Notes.holdersfollowing (in thousands):As of January 31, 2022 As of January 31, 2021 2026 Notes 2025 Notes 2023 Notes 2026 Notes 2025 Notes 2023 Notes Liability: Principal $ 1,380,000 $ 804,990 $ 1,752 $ 1,380,000 $ 804,999 $ 8,832 (408,467) (162,266) (113) (482,475) (203,638) (1,125) Net carrying amount $ 971,533 $ 642,724 $ 1,639 $ 897,525 $ 601,361 $ 7,707 $ 501,053 $ 246,966 $ 460 $ 501,053 $ 246,966 $ 1,560 Convertibleconvertible senior notes. The 2026 Notes have submitted requests for conversion.The following table sets forth interest expense recognized related toand 2025 Notes were classified as noncurrent liabilities, and the Convertible2023 Notes (dollarswas classified as current liabilities.thousands):the consolidated balance sheets within additional paid-in capital and temporary equity.Convertible2026 Notes, 2025 Notes and 2023 Notes, excluding each tranche of notes’ conversions options, is 8.83%, 7.05% and 7.66%., respectively. As of January 31, 2019,2022, the if-converted value of the Company’s Convertible2026 Notes did not exceed the principal amount and as of January 31, 2021 the if-converted value of the 2026 Notes exceeded the principal amount of by $62.5 million. As of January 31, 2022, the if-converted value of the 2025 Notes did not exceed the principal amount and as of January 31, 2021 the if-converted value of the 2025 Notes exceeded the principal amount of by $757.9 million. As of January 31, 2022 and January 31, 2021, the if-converted value of the 2023 Notes exceeded the principal amount by $219.4 million. $3.5 million and $52.7 million, respectively.2018,2022, the if-converted valueremaining life of the Company's Convertible2026 Notes, did not exceed the principal amount.CallConvertible2026 Notes, 2025 Notes and 2023 Notes, the Company purchased the Capped Call optionsentered into capped call transactions (the “Capped Calls”) on the Company’s common stock with certain counterparties at a price of $192.8 million, $118.7 million and $23.3 million.CallCalls exercise price is equal to the Convertible Note’s initial conversion price of each of the Convertible Notes, and the cap price is $503.415 per share for 2026 Notes, $295.550 per share for 2025 Notes and $63.821 per share for 2023 Notes, each subject to certain adjustments under the terms of the Capped Call transactions. If any tranche of convertible notes’ conversion option is exercised, the corresponding convertible note capped call transactions. The Capped Call options arewill become exercisable on the same date. As of the date whenof filing, the Company has not exercised the Capped Calls in relation to the conversion option is exercised.Call,Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event the conversion is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion its stock price exceeds the conversion price under the Convertible Notes.capped callCapped Calls is not expected to be tax deductibletax-deductible as the Company did not elect to integrate the capped callCapped Calls into the Convertible Notesrespective convertible notes for tax purposes. The cost of the capped callCapped Calls was recorded as a reduction of the Company’s additional paid-in capital in the accompanying Consolidated Financial Statements.10.11. Commitments and ContingenciesApril 2024. Rent expense, which is being recognized on a straight-line basis over the lease term, was $7.4 million, $5.8 million and $3.8 million duringFebruary 2030. For the years ended January 31, 2019, 20182022, 2021 and 2017,2020, lease costs in relation to long-term leases were approximately $14.5 million and $11.5 million, and $8.6 million respectively. The difference betweenFor the years ended January 31, 2022, 2021 and 2020, short-term leases costs were approximately $2.3 million, $1.6 million and $1.6 million, respectively. Variable lease costs were immaterial for the years ended January 31, 2022, 2021 and 2020. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments madeor the lease right-of-use asset/lease liability.expense recognized to date using the straight-line method is recordedliabilities and future purchase obligations are as a liability and included within accrued expenses and other current liabilitiesfollows (in thousands):Year Ending January 31, Operating Lease Obligations Future Purchase Obligations 2023 $ 15,617 $ 44,483 2024 14,643 48,271 2025 9,184 58,534 2026 5,988 53,883 2027 4,587 — Thereafter 489 — Total payments 50,508 $ 205,171 Less: imputed interest (6,576) Total $ 43,932 accompanying consolidated balance sheet. Additionally, the Company has currenttable above primarily includes contractual purchase obligations for hosting services thatand other services to support the Company's business operations.Future minimum paymentsyearDCR Workforce, Inc., as plaintiff, against Coupa Software Incorporated, as defendant. The complaint alleged breach of contract and other claims, and sought various damages from the Company including 206,065 shares of the Company’s common stock. The complaint related to the Company’s purchase of DCR’s vendor management software (VMS) business in August 2018. Under the purchase agreement, the Company agreed to issue additional stock to DCR as contingent (earn-out) consideration if the VMS business achieved certain revenue-related milestones during three measurement periods that continue through December 31, 2022. The VMS business met the target for our non-cancelable leasesthe first measurement period and DCR was issued stock. It did not meet the target for the second measurement period. After DCR was notified, it filed the complaint.
On August 4, 2021, pursuant to a forum selection provision in the purchase obligationsagreement, the district court granted the Company’s motion to transfer venue to the U.S. District Court for the Northern District of California. On October 13, 2021, the court granted the Company’s motion to dismiss in its entirety and dismissed the case with prejudice. On November 11, 2021, DCR filed a notice of appeal of the district court’s decision. Given the early stage of the appeal, the amount of any loss or range of loss that may occur cannot be reasonably estimated as of January 31, 2019 are as follows (in thousands):the date of this filing.ContingenciesTheIn addition, the Company may become involved in other legal proceedings or be subject to claims arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary coursecurrent matters will not have a material adverse effect on the Company’s business, operating results, financial condition or cash flows. The Company accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.on-lineonline documentation under normal use and circumstances. certain patents, copyrights or other intellectual property rights of third parties. To date, the Company has not been required to make any payment resulting from such infringement claims and has not recorded any related liabilities.F-31
In addition, the Company has indemnification agreements with its directors and certain of its officers that require the Company to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, the Company has not incurred any material costs, and not accrued any liabilities in its consolidated financial statements, as a result of these obligations.11.12. Common Stock and Stockholders’ Equity2019,2022, the Company had authorized 25,000,000 shares of preferred stock, par value $0.0001, of which no shares were issued and outstanding.or 2016 Plan,(the “2016 Plan”) was approved by the Company’s stockholders in September 2016. The 2016 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights and performance cash awards. Awards could be granted under the 2016 Plan beginning on the effective date of the registration statement relating to the Company’s initial public offering, October 5, 2016. The 2016 Plan replaced the Company’s 2006 Stock Plan,Plan; however, awards outstanding under the 2006 Stock Plan will continue to be governed by their existing terms.Thehas reserved 5,955,764had 12,682,224 shares of its common stock available for future issuance under the 2016 Plan. The number of shares reserved for issuance under the 2016 Plan will automatically increase on the first day of each fiscal year during the term of the 2016 Plan by a number of shares equal to 5% of its outstanding shares of common stock on the last day of the prior fiscal year. The number and class of shares reserved under the Company’s 2016 Plan will be adjusted in the event of a stock split, stock dividend or other changes in its capitalization.20192022 (aggregate intrinsic value in thousands):Options Outstanding Outstanding Stock Options Weighted- Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Balance, January 31, 2021 2,608,640 $ 20.65 5.6 $ 754,478 Options exercised (759,390) $ 12.42 — — Options forfeited (8,303) $ 70.45 — — Balance, January 31, 2022 1,840,947 $ 23.82 4.7 $ 203,339 Exercisable at January 31, 2022 1,784,435 $ 22.13 4.7 $ 200,107 exercisable as of January 31, 2019 include options that are exercisable prior to vesting. with market and service based conditions.20192022 is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of January 31, 2019.2022. The aggregate intrinsic value of exercised options was $157.6$172.1 million, $89.3$375.7 million and $11.0$318.2 million for the years ended January 31, 2019, 20182022, 2021 and 2017,2020, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date.yearsyear ended January 31, 2019, 2018 and 20172020 was $15.93, $11.58 and $4.65$41.81 per share, respectively. F-32
The total grant date fairvalueof options vested during fiscal 2019, 20182022, 2021 and 20172020 was $9.0$3.9 million,$9.7 million $8.0 million and $5.0 million,$8.6 million, respectively.Early Exercises of Stock OptionsCertain option grants under the 2006 Stock Plan are allowed to be exercised prior to vesting. The unvested shares of common stock exercised are subject to the Company’s right to repurchase at the lower of the original exercise price or the fair market value of the share at the time the repurchase right is exercised. Early exercises of options are not deemed to be substantive exercises for accounting purposes and accordingly, amounts received for early exercises are initially recorded in accrued expenses and other current liabilities and reclassified to additional paid-in capital as the underlying shares vest. At January 31, 2019, the Company had no early exercise stock options recorded in accrued expenses and other current liabilities related to early exercises of stock options.RSUs:RSUs during the year ended January 31, 2022:Number of RSUs Outstanding Weighted- Average Grant Date Fair Value Awarded and unvested at January 31, 2021 Awarded and unvested at January 31, 2021 2,530,280 $ 123.56 Awards granted 1,153,149 $ 238.07 Awards vested (1,235,810) $ 109.21 Awards forfeited (322,970) $ 186.22 Awarded and unvested at January 31, 2022 Awarded and unvested at January 31, 2022 2,124,649 $ 184.56 boardBoard of directorsDirectors adopted the 2016 Employee Stock Purchase Plan (the “ESPP”) in September 2016 and it has been approved by the Company’s stockholders. The ESPP allows eligible employees to purchase shares of common stock through payroll deductions and is intended to qualify under Section 423 of the Internal Revenue Code.2019,2022, the Company had 931,4932,326,540 shares of its common stock available for future issuances under the ESPP. The number of shares reserved for issuance under the ESPP will automatically increase on the first day of each fiscal year during the term of the ESPP by a number of shares equal to the least of (i) 1% of its outstanding shares of common stock on the last day of the prior fiscal year, (ii) 1,250,000 shares or (iii) a lesser number of shares determined by the board of directors. The number and class of shares reserved under the ESPP will be adjusted in the event of a stock split, stock dividend or other changes in its capitalization.endsended on September 15, 2018, and new 24 month offering periods will begin on each March 16 and September 16 thereafter. Currently, each offering period consists of four4 consecutive purchase periods, of approximately 6six months duration, at the end of which payroll contributions are used to purchase shares of the Company’s common stock. Participants may purchase the Company’s common stock through payroll deductions, up to a maximum of 15% of their eligible compensation. Participants may withdraw from the ESPP and receive a refund of their accumulated payroll contributions at any time prior to a purchase date. Unless changed by the administrator, the purchase price for each share of common stock purchased under the ESPP will be 85% of the lower of the fair market value per share on the first day of the applicable offering period (or, in the case of the initial offering period, the price at which one share of common stock is offered to the public in its IPO) or the fair market value per share on the applicable purchase date.F-33were purchased under the 2016 ESPP.ESPP during the years ended January 31, 2022 and 2021, respectively. The Company selected the Black-Scholes option-pricing model as the method for determining the estimated fair value for the Company’s 2016 ESPP. As of January 31, 2019,2022, total unrecognized compensation cost related to the 2016 ESPP was $5.8$15.3 million which will be amortized over a weighted-average period of approximately one year.valuevalues of the 2016 and 2018 CEO Grants were determined using a Monte Carlo simulation approach. The Company amortizes the fair value of the option awards using the graded-vesting method.2019,2022, all performance-basedmarket-based milestones of the 2016 CEO Grant and 2018 CEO Grant were achieved, resulting in 317,407544,127 shares and 320,794 shares, respectively, being vested and exercisable. As of January 31, 2019,2022, the performance-based milestone wasthree-year performance period related to the 2020 PSU Grant and 2021 PSU Grant had not achieved on the 2018 CEO Grant,been completed, both resulting in no shares being vested andor exercisable. Stock-based compensation expense recognized for market-based awards was approximately $2.2$13.3 million, $6.6 million and $1.6$1.7 million for the yearyears ended January 31, 20192022, 2021 and 2018,2020, respectively.For the year ended
January 31,2022 2021 2020 Cost of revenue: Subscription Subscription $ 14,920 $ 11,438 $ 6,982 Professional services and other 16,991 15,563 7,773 Research and development 44,119 37,685 20,159 Sales and marketing 52,109 48,414 23,352 General and administrative 71,756 55,750 23,110 Total $ 199,895 $ 168,850 $ 81,376 capitalizedincluded in capitalized software development costs was approximately $1.0$4.2 million and $332,000$3.2 million at January 31, 20192022 and 2018,2021, respectively.optionsawards granted to non-employees were immaterial for all periods presented.20192022, 2021 and 2018,2020, there was approximately $16.1$1.6 million, $4.5 million and $19.3$11.5 million, respectively, of total unrecognized compensation cost related to unvested stock options granted to employees and non-employee service providers under the 2006 Stock Plan and 2016 Equity Incentive Plan.granted. This unrecognized compensation cost as of January 31, 20192021, is expected to be recognized over an estimated weighted-average amortization period of approximately 21.1 years.20192022, 2021 and 2018,2020, there was approximately $110.8$352.0 million, $319.6 million and $48.4$186.3 million, respectively, of total unrecognized compensation cost related to unvested restricted stock units granted to employees under the 2016 Equity Incentive Plan.employees. This unrecognized compensation cost as of January 31, 20192022 is expected to be recognized over an estimated weighted-average amortization period of approximately 32.7 years.F-342019, 20182022, 2021 and 20172020 were estimated using the following assumptions:For the year ended
January 31,2022 2021 2020 Employee Stock Options: Employee Stock Options: Expected term (in years) Expected term (in years) — — 6.0 Volatility — — 42.7% Risk-free interest rate — — 2.4% Dividend yield — — — Employee Stock Purchase Plan: Employee Stock Purchase Plan: Expected term (in years) Expected term (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Volatility 42.1 % - 61.2 % 48.6 % - 60.7 % 44.4 % - 65.9 % Risk-free interest rate 0.0% - 0.2 % 0.1 % - 0.4 % 1.7 % - 2.5 % Dividend yield — — — Market-Based Awards: Market-Based Awards: Expected term (in years) Expected term (in years) 3.0 3.0 — Volatility 54.6% 48.4% — Risk-free interest rate 0.3% 0.4% — Dividend yield — — — After the initial public offering, theThe Company used the publicly quoted price as reported on the Nasdaq Global Select Market as the fair value of its common stock.representsfor the weighted-averageemployee stock purchase plan ranges from six months, the length of one purchase period, thatto two years, the stock options arelength of one offering period. The market-based awards have a three-year expected to remain outstanding. To determine the expected term, the Company generally applies the simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award as the Company does not have sufficient historical exercise data to provide a reasonable basis for an estimate of expected term.Treasurytreasury securities with maturities approximately equal to the term of employee stock option or market-based awards.As theThe Company does not have an extensiveuses its historical trading history for its common stock,prices to calculate the expected volatility forin determining the fair value of the shares granted under the ESPP and market-based awards. In addition, beginning from the first quarter of fiscal year 2020, the Company began using its common stock has been estimated by taking the historic priceown historical volatility for industry peers based on daily price observations over a period equivalentin combination with publicly traded peers’ volatility to determine the expected termvolatility of the stock option awards. Industry peers consist of several public companies in its industry.12.13. Income Taxesprovision forbenefit from income taxes for the periods presented (in thousands):F-35For the year ended
January 31,2022 2021 2020 United States $ (380,337) $ (243,435) $ (106,743) Foreign 8,629 (1,068) 4,976 Loss before benefit from income taxes $ (371,708) $ (244,503) $ (101,767) provision forbenefit from income taxes is composed of the following (in thousands):For the year ended
January 31,2022 2021 2020 Current income taxes: State $ 615 $ 216 $ 126 Foreign 11,178 2,891 2,246 Total current income taxes 11,793 3,107 2,372 Deferred income taxes: Federal (8,727) (52,715) (10,125) State 348 (7,991) (1,510) Foreign (6,016) (6,787) (1,672) Total deferred income taxes (14,395) (67,493) (13,307) Total benefit from income taxes $ (2,602) $ (64,386) $ (10,935) For the year ended
January 31,2022 2021 2020 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State tax, net of federal benefit 3.8 3.4 3.2 Change in valuation allowance (33.8) (48.9) (107.1) Stock-based compensation 12.3 45.2 90.3 Other non-deductible items (3.8) (0.1) 0.8 Foreign rate differential (0.6) 1.9 (1.4) Tax credits 1.8 3.8 3.9 Total 0.7 % 26.3 % 10.7 % As of January 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 488,163 $ 412,850 Accruals and reserves 15,773 9,209 Lease liabilities Lease liabilities 11,177 11,217 Stock-based compensation 10,650 8,994 Tax credits 29,858 23,116 Gross deferred tax assets 555,621 465,386 Valuation allowance (305,271) (177,918) Total deferred tax assets, net of valuation allowance 250,350 287,468 Deferred tax liabilities: Fixed assets and intangibles assets (121,854) (146,441) Accruals and reserves (1,466) (1,874) Right-of-use assets Right-of-use assets (10,867) (10,743) Discount on convertible notes (132,657) (158,438) Gross deferred tax liabilities (266,844) (317,496) Net deferred tax (liabilities) assets Net deferred tax (liabilities) assets $ (16,494) $ (30,028) Company’sCompany's historical operating losses, and lack of taxable income, the Company provided a full valuation allowance against the deferred tax assets for the U.S. and some of the international entities. The valuation allowance increased by $55.5$127.4 million, $3.4$17.4 million and $13.1$47.0 million during the years ended January 31, 2019, 20182022, 2021 and 2017,2020, respectively.2019,2022, the Company had net operating loss carryforwards of approximately $457.6 million$2.0 billion and $237.9 million$1.2 billion available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. The U.S. federal and California state net operating loss carryforwards will begin to expire in 20262028 and 2029,2023, respectively. As of January 31, 2019,2022, the Company had research and development credit carryforwards of approximately $13.0$24.2 million and $11.2$17.0 million available to reduce its future tax liability, if any, for federal and California state income tax purposes, respectively. The federal credit carryforwards begin to expire in 2031.2029. California credit carryforwards have no expiration date. As of January 31, 2019,2022, the Company has U.S. federal foreign tax credits carryforwards of $698,000$700,000 that will begin to expire in 2025.2019,2022, the Company did not have unremitted earnings when evaluating the outside basis difference relating to its U.S. investment in foreign subsidiaries. However, there could be local withholding taxes payable due to various foreign countries if certain lower tier earnings are distributed. Withholding taxes and state income taxes that would be payable upon remittance of these lower tier earnings were not material as of January 31, 2019.F-37For the year ended
January 31,2022 2021 2020 Unrecognized tax benefit — beginning of year $ 20,592 $ 14,864 $ 20,077 Gross increases — prior year tax positions 1,806 52 620 Gross decreases — prior year tax positions — (160) (11,538) Gross increases — acquisitions — 3,282 4,174 Gross increases — current year tax positions 3,715 2,586 1,531 Foreign currency remeasurement (679) — — Settlements — (32) — Unrecognized tax benefit — end of year $ 25,434 $ 20,592 $ 14,864 2019, 2018,2022, 2021 and 2017, $14.92020, $11.8 million, $8.0$10.2 million, and $5.3$6.4 million of the unrecognized tax benefits were accounted for as a reduction in the Company’s deferred tax assets. Due to the Company’s valuation allowance, only $5.2$14.3 million of the $20.1$25.4 million of unrecognized tax benefits would affect the Company’s effective tax rate, if recognized. The Company does not believe it is reasonably possible that its unrecognized tax benefits will significantly change in the next twelve months.an immaterial amount$2.0 million of accrued interest and penalties related to unrecognized tax benefits as of January 31, 20192022, and 2018.20062008 and forward for federal purposes and 2009 and forward for California purposes. There are tax years which remain subject to examination in various other jurisdictions that are not material to the Company’s financial statements.In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, we previously provided a provisional estimate of the effect of the Tax Act in our financial statements. The Company completed its analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of January 31, 2019.While the Tax Act provides for a modified territorial tax system, beginning in 2018, GILTI will be applied providing an incremental tax on certain foreign income. The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. Under GAAP, the Company is allowed to make an accounting policy election of either (1) treating taxes due on the future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred, or the period cost method, or (2) factoring such amounts into the Company's measurement of its deferred taxes, or the deferred method. The Company has selected the period cost method as its accounting policy with respect to the new GILTI tax rules.F-3813.14. Net Loss per Share Attributable to Common Stockholders attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities as they do not share in losses. During periods when the Company is in a net loss position, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders as the effects of potentially dilutive securities are antidilutive given the net loss of the Company.common stockholdersCoupa Software Incorporated during the years ended January 31, 2019, 20182022, 2021 and 20172020 (in thousands, except per share amounts):January 31, 2022 2021 2020 Numerator: Net loss attributable to Coupa Software Incorporated $ (379,039) $ (180,117) $ (90,832) Denominator: Weighted-average common shares outstanding 73,816 68,559 62,484 Net loss per share, basic and diluted, attributable to Coupa Software Incorporated $ (5.13) $ (2.63) $ (1.45) attributable to common stockholders is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:As of January 31, 2022 2021 2020 Options to purchase common stock 1,840,947 2,608,640 4,233,435 RSUs 2,124,649 2,530,280 2,830,782 Unvested common shares subject to repurchase 118,677 243,775 66,450 Shares committed under the ESPP 85,120 64,456 80,775 Contingent stock consideration for DCR acquisition 171,073 377,138 377,138 Holdback shares for Aquiire acquisition — — 37,570 Total 4,340,466 5,824,289 7,626,150 5.24.7 million, 5.0 million and 39,000 shares underlying the conversion option in the Convertible2026 Notes, 2025 Notes and 2023 Notes, respectively, are not considered in the calculation of diluted net loss per share as the effect would be anti-dilutive. These numbers of shares are subject to adjustment up to approximately 6.2 million, 6.8 million and 0.1 million shares for the 2026 Notes, 2025 Notes and 2023 Notes, respectively, if certain corporate events occur prior to the maturity date or if the Company issues a notice of redemption. The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion option on diluted net income per share attributable to Coupa Software Incorporated, if applicable. During the year ended January 31, 2019,2022, the average market price of the Company’s common stock exceeded the conversion price of the Convertible2023 Notes and 2025 Notes of $44.51 per share and $159.60 per share, respectively, and did not exceed the conversion price of the 2026 Notes of $296.45 per share.14.15. Business Segment InformationF-3915.16. Employee Benefit Plan2019, 20182022, 2021 and 2017,2020, the Company’s contributions to the 401(k) Plan amounted to approximately $2.0$5.2 million, $1.5$3.9 million and $1.4$2.9 million, respectively.16.17. Related Partiesstockholders and a Company customer.stockholders. T. Rowe Associates, Inc. held more than 10% of the Company’s voting common stock during the year ended January 31, 2022. The Company recognized subscription revenue from this customer of approximately $580,000, $573,000$1.0 million, $1.1 million and $509,000$700,000 for the periodyears ended January 31, 2019, 20182022, 2021 and 2017,2020, respectively. The Company had no receivables balance outstanding receivables from this customer as ofat January 31, 2019 and January 31, 2018.As disclosed in Note 4 Business Combination, in conjunction with the acquisition of technology assets of DCR on August 1, 2018, the Company signed a lease, license agreement and Transition Service Agreement with DCR. For the year ended January 31, 2019, the Company recognized $1.1 million of revenue for the license agreement, and recorded $4.3 million for expenses which primarily include compensation for employees and contractors that DCR agreed to pay on behalf of the Company during the transitional period. As of January 31, 2019, outstanding accruals and payables due to DCR were $1.3 million. There were no outstanding receivables due from DCR related to the license agreement. Note 17. Selected Quarterly Financial Data (unaudited)The following tables set forth selected unaudited quarterly consolidated statements of operations data for each of the eight quarters in fiscal 2019 and 2018 (in thousands except per share data). Since the Company adopted the new revenue standard effective on February 1, 2018 using the modified retrospective method, the financial data for each quarter in fiscal 2019 were prepared according to the new revenue standard, and the financial data for each quarter in fiscal 2018 were prepared prior to the adoption of the new revenue standard.F-40