Coupa Software
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K (Mark One)☒☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended January 31, 2018OR☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission File Number 001-37901 COUPA SOFTWARE INCORPORATED(Exact name of Registrant as specified in its charter) Delaware20-4429448(State or other jurisdiction ofincorporation or organization)(I.R.S. EmployerIdentification No.) 1855 S. Grant StreetSan Mateo, CA94402(Address of principal executive offices)(Zip Code) Registrant’s telephone number, including area code: (650) 931-3200 Securities registered pursuant to Section 12(b) of the Act: Title of each class-Name of each exchange on which registered Common Stock, par value $0.0001 per share-The Nasdaq Stock Market LLC (Nasdaq Global Select Market) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☒ NO ☐Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO ☒Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and postedpursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post suchfiles). YES ☒ NO ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to thebest of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. Seethe definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ (Do not check if a smaller reporting company) Smaller reporting company ☐ Emerging growth company ☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Ex- change Act. ☐Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒Based on the closing price of the Registrant’s Common Stock on the last business day of the Registrant’s most recently completed second fiscal quarter, which was July 31, 2017, theaggregate market value of its shares (based on a closing price of $30.73 per share) held by non-affiliates was approximately $1.4 billion. Shares of common stock held by eachexecutive officer, director, and their affiliated holders have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily aconclusive determination for other purposes.The number of shares of Registrant’s common stock outstanding as of March 26, 2018 was 56,616,774.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant’s Proxy Statement relating to the 2018 Annual Meeting of Stockholders, scheduled to be filed with the Securities and Exchange Commission within 120 daysafter the end of the Registrant’s fiscal year ended January 31, 2018, are incorporated by reference into Part III of this Annual Report on Form 10-K. COUPA SOFTWARE INCORPORATEDForm 10-K for the Fiscal Year Ended January 31, 2018Table of Contents PagePART I Item 1.Business1Item 1A.Risk Factors12Item 1B.Unresolved Staff Comments35Item 2.Properties35Item 3.Legal Proceedings35Item 4.Mine Safety Disclosures35 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities36Item 6.Selected Financial Data38Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations42Item 7A.Quantitative and Qualitative Disclosures About Market Risk58Item 8.Financial Statements and Supplementary Data59Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure59Item 9A.Controls and Procedures59Item 9B.Other Information60 PART III Item 10.Directors, Executive Officers and Corporate Governance61Item 11.Executive Compensation61Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters61Item 13.Certain Relationships and Related Transactions, and Director Independence61Item 14.Principal Accountant Fees and Services61 PART IV Item 15.Exhibits, Financial Statement Schedules62Item 16.Form 10-K Summary65 iNOTE ABOUT FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical facts contained in thisreport, including statements regarding our future results of operations and financial position, customer lifetime value, strategy and plans, market size andopportunity, competitive position, industry environment, potential growth opportunities product capabilities, expectations for future operations and ourconvertible notes, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,”“could,” “plan,” “potential,” “predict,” “seek,” “should,” “would” or the negative version of these words and similar expressions are intended to identifyforward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and trends thatwe believe may affect our financial condition, results of operations, strategy, short- 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 Result of Operations” and“Risk Factors.”These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” andelsewhere in this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from timeto time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor,or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of theserisks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Annual Report on Form 10-K may not occur and actualresults could differ materially and adversely from those anticipated or implied in the forward-looking statements.You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in theforward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected inthe forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for theaccuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reasonafter the date of this Annual Report on Form 10-K to conform these statements to actual results or to changes in our expectations. iiPART IItem 1. Business.OverviewWe are a leading provider of business spend management, or BSM, solutions. We offer a comprehensive, cloud-based BSM platform that hasconnected hundreds of organizations with more than three million suppliers globally. Our platform provides greater visibility into and control over howcompanies spend money. Using our platform, businesses are able to achieve real, measurable value and savings that drive their profitability.Our cloud-based BSM platform has been designed for the modern global workforce that is mobile and expects real-time results, flexibility and agilityfrom software solutions. We empower employees to acquire the goods and services they need to do their jobs by applying a distinctive user-centric approachthat provides a consumer Internet-like experience, drives widespread adoption of our platform and, therefore, significantly increases an organization’s spendunder management. We refer to the process companies use to purchase goods and services as business spend management and to the money that they managewith this process as spend under management. Increased user adoption and spend under management drive better 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 operationalefficiencies, track processes, reduce costs, fund business growth and enhance profitability and cash flow. Therefore, managing business spend hasincreasingly become a major strategic imperative to help businesses achieve cost savings. Indirect spend, which refers to goods and services that support acompany’s operations as opposed to direct spend that flows into the products a company manufactures, is particularly difficult to manage due to inefficientemployee spending behavior and disparate systems that obstruct spend visibility.We offer a comprehensive, cloud-based BSM platform that is tightly integrated and delivers a broad range of capabilities that would otherwiserequire the purchase and use of multiple disparate point applications. The core of our platform consists of procurement, invoicing and expense managementmodules that form our transactional engine and capture a company’s business spend. In addition, our platform offers supporting modules to help companiesfurther manage their spend, including strategic sourcing, spend analysis, contract management, supplier management and inventory management. We alsooffer a purchasing program, Coupa Advantage, that leverages the collective buying power of Coupa customers, and provide benchmarking and insights tocustomers on our BSM platform through a solution we refer to as Community Intelligence. Moreover, through our Coupa Open Business Network, suppliersof all sizes can easily interact with buyers electronically, thus significantly reducing paper, improving operating efficiencies and reducing costs. We have a strong results-driven and customer success-focused culture. Our focus is on delivering quantifiable business value to our customers byhelping them maximize their spend under management to achieve real, measurable value and savings. With a rapid time to deployment, typically rangingfrom a few weeks to several months, and an easy to use interface that shields users from unnecessary complexity, our customers can achieve widespread useradoption quickly and generate savings within a short timeframe, thus benefitting from a rapid return on investment.We benefit from powerful network effects. As more businesses subscribe to our BSM platform, the collective spend under management on ourplatform grows. Greater aggregate spend under management on our platform attracts more suppliers, which in turn attracts more businesses that want to takeadvantage of the goods and services available through our platform, thereby creating powerful network effects. In addition, as more businesses andemployees use our platform, the amount of spend under management continues to increase. This leads to more value and savings for customers and improvesour ability to attract more businesses. The resulting increase in sales enables us to further invest in our platform and to improve our functionality and userinterface to continue to attract more businesses and suppliers to our platform, which enhances the network effects that benefit all parties.1We have developed a rich partner ecosystem of systems integrators, implementation partners, resellers and technology partners. We work closely withseveral global systems integrators, including KPMG, Deloitte, Accenture, PwC and Wipro, that help us scale our business, extend our global reach and driveincreased market penetration. We expect the number of our partner-led implementations to continue to increase over time, as well as sales referrals from ourpartners.We have achieved rapid growth in customer adoption, cumulative spend under management and transactions conducted through our platform whichis currently subscribed to by more than 700 customers. Our cumulative spend under management is highlighted below: As of January 31, 2018, 2017, and 2016, our cumulative spend under management was $680 billion, $365 billion and $190 billion, respectively.Cumulative spend under management does not directly correlate to our revenue or results of operations because we do not charge our customers based onactual 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. For our fiscal years ended January 31, 2018, 2017, and 2016, our revenues were $186.8 million, $133.8 million and $83.7 million, respectively, andour net losses were $43.8 million, $37.6 million and $46.2 million, respectively, as we focused on growing our business.The Coupa BSM PlatformWe offer a comprehensive, cloud-based BSM platform that can significantly improve savings for businesses. The core of our platform consists ofprocurement, invoicing and expense management modules that form our transactional engine and capture a company’s spend. In addition, our platform offerssupporting modules to help companies further manage their spend, including strategic sourcing, spend analysis, contract management, supplier managementand inventory management. We also offer a purchasing program, Coupa Advantage, that leverages the collective buying power of Coupa customers, andprovide benchmarking and insights to customers on our BSM platform through a solution we refer to as Community Intelligence. Moreover, through ourCoupa Open Business Network, suppliers of all sizes can easily interact with buyers electronically, thus significantly reducing paper, improving operatingefficiencies and reducing costs.2Our BSM platform provides businesses with real-time visibility into spending that is occurring company-wide and enables businesses to driveadoption of the platform and capture, analyze and control this spend, achieve real measurable value and savings and directly improve their profitability: •Drive Adoption. Our platform applies a distinctive user-centric approach that shields users from complexity and provides a mobile-enabledconsumer Internet-like experience, thus enabling widespread adoption of our platform by users across the entire organization as well assuppliers. •Capture. At the core of our platform is our transactional engine that is comprised of our procurement, invoicing and expense managementmodules, which collectively capture spend within an organization. Given purchase orders, invoices and expense reports flow through ourplatform and the data is stored centrally in a clean and organized fashion, businesses are able to observe the company-wide spendingactivities in real time. •Analyze. Our spending analytics capabilities provide intuitive spend analysis dashboards and reports that deliver real-time analyticalinsights that help businesses identify problems and make better spending decisions. Real-time analytical insight is critical to helpingidentify savings opportunities and risks, as well as isolating problem areas in the spending process to target improvement efforts. •Control. We help our customers control and streamline their spending activity, as well as realize efficiencies that result in real savings. Ourplatform has extensive functionality that enables managers to prevent excessive spend and reduce spend through realizing efficiencies andcost savings associated with strategic sourcing and contract compliance. •Save. Within a short timeframe, we help our customers realize measurable value and savings by taking advantage of pre-negotiated supplierdiscounts, achieving contract compliance, improving process efficiencies and reducing redundant and wasteful spending, as well as enablestrategic sourcing via reverse auctions in which suppliers bid down prices at which they are willing to sell their goods and services tobusinesses.Our BSM Platform’s CapabilitiesOur comprehensive, cloud-based BSM platform includes the following capabilities: 3Coupa’s Transactional EngineThe core of our platform is our transactional engine, which is comprised of the following modules: •Procurement. Our procurement module enables customers to strategically establish spend policies and approval rules to govern companyspending. The application provides a consumerized e-commerce shopping experience so that employees can easily and quickly find thegoods and services they need to do their jobs. Our procurement module streamlines purchasing requisition and purchase order processes,allowing businesses to track and manage purchases in 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 processinefficiencies, while configuration ease enables businesses to effortlessly adjust business processes to meet continually changing businessrequirements. •Invoicing. Our invoicing module enables customers to improve cash management through the effective management of supplier invoices viaembedded dashboards and work queues that prioritize invoices with early payment discount opportunities. Customers may quickly configureinvoice approval and matching rules so invoices can be routed without accounts payable team member effort and cost. Easy, no-cost meansfor suppliers to create electronic invoices that comply with government regulations allow businesses to eliminate paper and further reducetheir invoice processing costs, all while reducing invoice payment fraud risk. •Expense Management. Our expense management module enables customers to gain control of the expenses incurred by employees.Innovative mobile capabilities such as GPS and geo-location make it easy for travelers to create expense reports on-the-go so businesses gainreal-time expense visibility. Frugal meter capabilities automatically assess the appropriateness of employee charges based on the customer’sconfigured business processes. Seamless connectivity to credit card providers feed charges into our expense management module for addedvisibility and reporting ease.Supporting ModulesOur platform offers the following supporting modules that help companies further manage their spend:Strategic Sourcing. Our strategic sourcing module enables customers to find the best suppliers for the goods or services they need to run theirbusinesses. It also offers advanced capabilities for the sourcing of complex sourcing categories such as direct raw materials and logistics. Customers easilycreate sourcing events containing the specifics of their business needs and invite suppliers to participate. Suppliers are able to review and bid effortlessly andwithout 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-priceelements to find the combination of suppliers and goods and services that meet the constraints they specify.Inventory. Our inventory module enables customers to manage spending by effectively managing physical goods and virtual licenses. Employeessearching for goods see inventory on hand balances in the search results, which eliminates redundant spending. Embedded dashboards facilitate the move ofinventory from warehouse to warehouse and predict item shortages so inventory managers can easily manage goods and licenses. The application automatesfulfillment and keeps inventory in sync through regular cycle counts, discrepancy reports, and asset tags.Contracts. Our contracts module enables customers to operationalize contracts and make them easily available for purchasing by employees acrossthe organization. Contract compliance increases savings as employees make purchases using negotiated rates. Real-time contract enforcement and spendvisibility is provided through embedded dashboards at both the contract and summary level. Full text search capabilities and automatic alerts remindemployees to review contracts prior to expiration or auto-renewal dates.Supplier Management. Our supplier management module enables customers to collect supplier information required to manage and pay theirsuppliers and also provides data about potential risks associated with certain suppliers. Customers can quickly create data collection web forms using a dragand drop interface. Web forms may4be tailored for country specific rules or supplier types. To make data collection easy, web forms are embedded as part of the natural business processes forprocurement and invoicing. Real-time dashboards and reports show supplier data freshness and upcoming expirations. This module also enables informationregarding supplier risk by leveraging the collective data of Coupa customers, credit ratings and other searches of publicly available databases.Spend Analysis. Our spend analysis module provides managers a large set of built-in reports and dashboards that allow users to see spendingactivity, find bottlenecks in workflows, analyze granular data by commodity, supplier, location and cost center, and drill-down into the spend transactions.Customers can also leverage our artificial intelligence capabilities to automate complex business spend data classification. We have created more than onehundred 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, spend by commodity, supplier and contract; however, users can also create new metrics, reports and dashboards with our intuitive userinterface, as well as include external data like corporate and travel expenses or integrate with third-party systems, to get a holistic view of their spendpatterns. Coupa Open Business NetworkOur Coupa Open Business Network instantly connects businesses and suppliers providing businesses with a platform that is accessible to suppliers ofall sizes—even those typically ignored by fee-based closed networks—to drive success. Suppliers have a variety of options to connect with businessesincluding: •Coupa Supplier Portal. This portal is a tool for suppliers to easily do business with our customers. The Supplier Portal lets suppliers managecontent and settings on a customer-by-customer basis, including managing company information, setting up purchase order transmissionpreferences, creating and managing online catalogs, managing procurement orders and invoices across multiple customers and gainingvisibility to the status of invoices. •Coupa Supplier Actionable Notifications. These notifications enable suppliers to receive HTML purchaser orders and convert thesepurchase orders into invoices right from the procurement order e-mail, which represents the easiest way to submit electronic invoices throughour platform. •Direct Connection via cXML and EDI. Our platform supports various communication formats such as cXML or EDI for suppliers that wantto automate their invoicing through a tighter integration with our platform. •Direct E-mail. Suppliers can choose to send PDF invoices simply through e-mail.By using our Coupa Open Business Network, companies can become compliant with government mandates, increase profitability and reduce costsby driving electronic transactions from purchase order through e-invoice and payment visibility. Our Coupa Open Business Network user interface is easy tonavigate and requires little to no training for suppliers to instantly manage transactions. Businesses are able to interact with thousands of suppliers alreadyusing our Supplier Portal, onboard new suppliers in minutes, integrate directly or simply use our smart e-mail tools. Businesses can also use the Coupa OpenBusiness Network to layer on top of their existing technology, including third-party systems such as Oracle iProcurement, SAP SRM and others. Suppliers ofall sizes benefit, as they are able to join the networked economy without changing their technology or spending money on transaction fees.Coupa AdvantageOur Coupa Advantage program offers customers the opportunity to leverage pre-negotiated discounts from select suppliers in several businesscategories such as office supplies, branded promotional products, background checks, employee perquisites and more. The program leverages the collectivebuying power of Coupa customers to offer potential savings opportunities.5Coupa Community IntelligenceOur Community Intelligence capability, which extends across our BSM platform, provides information to Coupa customers by applying intelligentframeworks to the structured, normalized data collected from the business spend transactions that have occurred on the Coupa platform. Participatingcustomers are able to contribute to and benefit from Community Intelligence, with use cases extending from supplier insights which helps companiesevaluate the risk levels of suppliers, to operational insights which helps businesses measure their own performance on key operational metrics against otherCoupa customers.Key Benefits to Businesses •Rapid time to value through fast deployment cycles and low cost of ownership of 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. •Strong supplier adoption as suppliers are motivated to join our network due to ease of enablement, flexibility and lack of supplier fees. •Access to extensive spending data in real time, which leads to superior decision making that can result in significant cost savings. •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 inthe organization. •Enhanced compliance with governmental regulations through greater auditability, documentation and control of spending activity.Key Benefits to Employees •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 from any device. •Convenience to employees, as our platform gathers data on historical activity and leverages the insights to help populate requests andminimize data entry. •Faster reimbursement to employees due to more efficient expense management processes.Key Benefits to Suppliers •Participating in our Coupa Open Business Network. •Fast registration process and flexibility to interact with customers through the Coupa Supplier Portal, direct integration or simply by use ofdirect email. •Elimination of manual processes and efficiency improvements through electronic invoicing and streamlined procurement and paymentprocesses. •Real-time visibility into invoice status, often through direct push notifications without having to log in to a portal.6 •Seamless audit, documentation and archiving of electronic purchase orders and invoices that helps suppliers comply with changinggovernment regulations, as well as avoid risks. •Opportunity to display supplier information and catalog of products and services on the Coupa Open Business Network for existing andprospective customers.Our Competitive Strengths •Easy and Intuitive User Interface that Enables Widespread Employee Adoption. Our focus on an intuitive and simple user experienceshields our users from complexity and results in superior employee adoption. •Comprehensive Platform With Powerful Functionality. We offer a comprehensive BSM platform that is tightly integrated and delivers abroad range of capabilities to manage different types of spend that would otherwise require the purchase and use of multiple disparate pointapplications. By offering a platform with powerful functionality that integrates different modules, we deliver a comprehensive solution forcustomers to drive adoption, and capture, analyze and control spend across their entire company, thus significantly enhancing savingspotential. •Independence and Interoperability. We are agnostic as to the enterprise resource planning (ERP) system and other back-end systems usedby our customers and our open architecture enables interoperability with numerous software applications, back-end systems and other third-party offerings. Customers can use our application programming interfaces (APIs), flat files, commerce eXtensible Markup Language (cXML)and electronic data interchange (EDI) data formats or custom code to make seamless connections between our platform and their ERPplatform, supplier or other third-party system. •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 takeadvantage of the goods and services available through our platform, thereby creating powerful network effects. In addition, as morebusinesses and employees use our platform, the amount of spend under management continues to increase. This leads to more savings forcustomers and improves our ability to attract more businesses. The resulting increase in sales enables us to further invest in our platform andto improve our functionality and user interface to continue to attract more businesses and suppliers to our platform, which enhances thenetwork effects that benefit all parties. •Cloud Platform. We are built from the ground up as a SaaS application delivered via the cloud. As a result, our total cost of ownership islow, our deployment times are short and we can seamlessly deploy the latest updates and upgrades to all our customers via our cloud-basedplatform. •Rich Partner Ecosystem. We have developed strong strategic relationships with a number of leading partners including global systemsintegrators, implementation partners, resellers and technology partners. While implementation partners such as KPMG, Deloitte, Accenture,PwC and Wipro help us scale our business by extending our global reach and driving increased market penetration, our technology partnersincluding Dell Boomi, Sabre and Thomson Reuters extend and enhance the capabilities of our platform by facilitating integrations that candeliver 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 achievesignificantly 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 andoffer suppliers an easy and flexible way to interact with customers with minimal friction. As a result, suppliers are motivated to join ournetwork and adopt our platform, which represents a significant competitive advantage over legacy vendors that often struggle with supplieradoption.7 •Community Intelligence Enables Superior Insights. Our platform presents spend activity data that managers can easily analyze usingpowerful built-in reports and dashboards. Using our platform’s data, we are able to provide benchmarking analytics and evaluate supplierperformance, which can help decision makers at our customers identify areas of improvement and realize cost savings. As the amount ofspend through our platform grows, we acquire more data that enables us to provide unique insights to our customers, thus strengthening ourpowerful value proposition.Growth StrategyKey elements of our strategy include: •driving enterprise and mid-market customer expansion and global sales capability; •expanding global brand awareness and demand generation for our solutions; •developing and expanding our partner ecosystem; •acquiring key assets to broaden our value proposition; •launching innovations to drive a greater share of an organization’s spending; and •cultivating a winning, core values-driven culture. Sales and MarketingWe sell our software applications through our direct sales organization and our partner program, Coupa Partner Connect. Our direct sales team isglobal and comprised of inside sales and field sales personnel who are organized by geography, account size and application type.We generate customer leads, accelerate sales opportunities and build brand awareness through our marketing programs, including such programs withour strategic relationships. For example, we have joint marketing programs and sponsorship agreements with KPMG, Deloitte and Accenture.Our principal marketing programs include: •use of our website to provide application and company information, as well as learning opportunities for potential customers; •field marketing events for customers and prospective customers; •territory development representatives who respond to incoming leads to convert them into new sales opportunities; •development of our ideal customer profile (ICP), which are the accounts with the highest propensity to buy, for each of our sales segments; •programmatic account-based marketing efforts in close partnership with sales to target the ICP accounts in our respective sales segments; •participation in, and sponsorship of, user conferences, executive events, trade shows and industry events; •customer programs, including regional user group meetings; •integrated marketing campaigns, including direct e-mail, online web advertising, blogs and webinars; •focused cross-channel campaigns with existing customers to drive expansion; •public relations, analyst relations and social media initiatives;8 •cooperative marketing efforts with partners, including joint press announcements, joint trade show activities, channel marketing campaignsand joint seminars; and •our annual INSPIRE user conference, which is held over two and a half days to connect customers, disseminate best practices, and reinforceour brand among existing and new customers.Partnerships and Strategic RelationshipsAs a core part of our strategy, we have developed an ecosystem of partners to extend our sales capabilities and coverage, to broaden and complementour application offerings and to provide a broad array of services that lie outside of our primary areas of focus.Our partnerships increase our ability to grow and scale quickly and efficiently and allow us to maintain greater focus on executing against ourstrategy. •Advisory and Referral Partners. Our Advisory and Referral partners provide global, national and regional expertise in business spendmanagement, 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 typicallypay these partners a percentage of the first-year subscription revenue generated by the customers they refer. •Implementation Partners. In order to offer the full breadth of implementation services, change management, and strategic consultingservices to our customers, we work with leading global and boutique consulting firms. We work closely with global leaders such as KPMG,Deloitte, Accenture, PwC and Wipro, as well as with boutique service providers that focus primarily on delivering implementation servicesfor our applications, like The Hackett Group, Armanino, CrossCountry Consulting, Xoomworks and The Shelby Group. Our strategy is toenable the majority of our projects to be led by implementation partners with additional specialized support from us. Our implementationpartners are highly skilled and trained by our team. When working with implementation partners, we are typically in a “co-sell” arrangementwhere we will sell our subscription directly to the customer and our partner will sell its implementation services directly to the customer. •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 todemonstrate and promote our applications suites. •Technology Partners. Our technology partners provide market-leading technology, complementary products and infrastructure-relatedservices that power and extend our suite of cloud-based business spend management applications. Our technology partners span a wide rangeof solutions providers including Dell Boomi, Sabre and Thomson Reuters that enhance the capabilities of our platform by facilitatingintegrations that can deliver a higher level of value to customers.Technology Infrastructure and OperationsThe technologies used to build our platform and modules are native cloud and designed to scale to millions of users. We utilize a modern technologystack to take advantage of advancements in web-design, open source technologies, scalability and security. We have implemented industry-standard securitypractices to help us protect our servers and our customers’ critical information.We have partnered with leading hosting and infrastructure companies, including AWS, to provide the hardware and infrastructure to support ourBSM platform. With these partnerships, we are able to easily scale the service during peak load periods, allowing us to continuously add users and customerswithout significant downtime or lead-time to procure new capacity. We also have the ability to offer our solutions globally across various different physicallocations, such as the U.S., Europe and Asia-Pacific.9Research and DevelopmentOur ability to compete depends in large part on our continuous commitment to research and development and our ability to rapidly introduce newapplications, technologies, features and functionality. Our research and development organization is responsible for the design, development, testing andcertification of our applications. We focus our efforts on developing new applications and core technologies and further enhancing the usability,functionality, reliability, performance and flexibility of existing applications.Research and development expenses were $44.5 million, $30.3 million and $22.8 million for the fiscal years ended January 31, 2018, 2017 and2016, respectively.CompetitionWe believe the overall market for BSM software is highly competitive, marked by rapid consolidation, fragmented and rapidly evolving due totechnological innovations. We have been recognized, however, as a technology and market leader.Our competitors fall into the following categories: •Large enterprise software vendors such as Oracle Corporation and SAP AG that predominantly focus on database and ERP software solutions.SAP acquired both Ariba, Inc. and Concur Technologies, Inc. in 2012 and 2014, respectively, to form the core of their cloud offerings thatcompete with us. •Niche software vendors that either address only a portion of the capabilities we provide or predominantly focus on narrow industry verticals.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; •independence; and •adoption by suppliers.We believe that we compare favorably on the basis of these factors. However, many of our competitors have greater financial, technical and otherresources, greater name recognition and larger sales and marketing budgets; therefore, we may not compare favorably with respect to some or all of the factorsabove.10Intellectual PropertyWe rely on a combination of trade secrets, patents, copyrights and trademarks, as well as contractual protections, to establish and protect ourintellectual property rights. While we have obtained or applied for patent protection for some of our intellectual property, we do not believe that we arematerially dependent on any one or more of our patents. We require our employees, consultants and other third parties to enter into confidentiality andproprietary rights agreements and control access to software, documentation and other proprietary information.We pursue the registration of domain names, trademarks and service marks in the United States and in various jurisdictions outside the United States.We also actively seek patent protection covering inventions originating from our company.We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls,including contractual protections with employees, contractors, customers, and partners, and our software is protected by U.S. and international intellectualproperty laws. Our policy is to require employees and independent contractors to sign agreements assigning to us any inventions, trade secrets, works ofauthorship, developments and other processes generated by them on our behalf and agreeing to protect our confidential information. In addition, wegenerally enter into confidentiality agreements with our vendors and customers. We also control and monitor access to, and distribution of our software,documentation and other proprietary information.Despite our efforts to protect our proprietary technology and our intellectual property rights, unauthorized parties may attempt to copy or obtain anduse our technology to develop applications with the same functionality as our applications. Policing unauthorized use of our technology and intellectualproperty rights is difficult. In addition, we intend to expand our international operations, and effective protection of our technology and intellectual propertyrights may not be available to us in every country in which our software or services are available.We and others in our industry have been, and we expect that we will continue to be, subject to third-party infringement claims as the number ofcompetitors grows and the functionality of applications in different industry segments overlaps. Moreover, many of our competitors and other industryparticipants have been issued patents and/or have filed patent applications, and have asserted claims and related litigation regarding patent and otherintellectual property rights. From time to time, third parties, including certain of these companies, have asserted patent, copyright, trademark, trade secret andother intellectual property rights within the industry. Any of these third parties might make a claim of infringement against us at any time.Our CustomersAs of January 31, 2018, our more than 700 customers are doing business in more than 100 countries and our platform was offered in more than 20languages. We define a customer as a separate and distinct buying entity, such as a company, an educational or government institution, or a distinct businessunit of a large corporation that has an active contract with us or our partner to access our platform. Our customers include leading businesses in a diverse setof industries, including healthcare and pharmaceuticals, retail, financial services, manufacturing, and technology, amongst others.EmployeesAs of January 31, 2018, we had 833 full-time employees globally, of which 469 work in the U.S. None of our U.S. employees are represented by alabor union or are the subject of a collective bargaining agreement. We have not experienced any work stoppages, and we consider our relations with ouremployees to be good.Corporate InformationWe were incorporated in February 2006 in Delaware. Our principal executive offices are located at 1855 S. Grant Street, San Mateo, CA 94402, andour telephone number is (650) 931-3200. Our website address is www.coupa.com. The information on, or that can be accessed through, our website is not partof this report. We have included our website address as an inactive textual reference only.11A summary of our financial information by geographic location is found in Note 2 in the Notes to Consolidated Financial Statements includedelsewhere in this Annual Report.Available InformationOur Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant toSections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on the Investor Relations section of our website atwww.coupa.com as soon as reasonably practicable after we file such material with the Securities and Exchange Commission (“SEC”). The public may alsoread and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public mayobtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website thatcontains reports and other information regarding issuers, such as Coupa, that file electronically with the SEC. The SEC’s Internet website is located athttp://www.sec.gov. Item 1A. Risk Factors.A description of the risks and uncertainties associated with our business is set forth below. You should carefully consider the risks described below,as well as the other information in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes and“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” particularly before deciding whether to invest in oursecurities. The occurrence of any of the events or developments described below could materially and adversely affect our business, financial condition,results of operations and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of yourinvestment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.Risks Related to Our Business and IndustryWe have a limited operating history, which makes it difficult to predict our future operating results.We were incorporated in 2006 and introduced our first software module shortly thereafter and over time have invested in building our integratedplatform. As a result of our limited operating history, our ability to forecast our future operating results is limited and subject to a number of uncertainties,including our ability to plan for and model future growth. We have encountered and will encounter risks and uncertainties frequently experienced bygrowing companies in rapidly changing industries, such as the risks and uncertainties described herein. If our assumptions regarding these risks anduncertainties (which we use to plan our business) are incorrect or change, or if we do not address these risks successfully, our operating and financial resultscould differ materially from our expectations and our business could suffer.Any success that we may experience in the future will depend, in large part, on our ability to manage the risks discussed herein and to, among otherthings: •retain and expand our customer base on a cost-effective basis; •successfully compete in our markets; •continue to add features and functionality to our platform to meet customer demand; •increase revenues from existing customers as they add users 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;12 •successfully expand our business domestically and internationally; •successfully protect our intellectual property and defend against intellectual property infringement claims; and •hire, integrate and retain professional and technical talent.If we are unable to attract new customers, the growth of our revenues will be adversely affected.To increase our revenues, we must add new customers, increase the number of users at existing customers and sell additional modules to currentcustomers. As our industry matures or if competitors introduce lower cost and/or differentiated products or services that are perceived to compete with ours,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 atrates or on terms that would be favorable or comparable to prior periods, which could have an adverse effect on the growth of our revenues.Because our platform is sold to large enterprises with complex operating environments, we encounter long and unpredictable sales cycles, which couldadversely affect our operating results in a given period.Our ability to increase revenues and achieve profitability depends, in large part, on widespread acceptance of our platform by large enterprises. As wetarget our sales efforts at these customers, we face greater costs, longer sales cycles and less predictability in completing some of our sales. As a result of thevariability and length of the sales cycle, we have only a limited ability to forecast the timing of sales. A delay in or failure to complete sales could harm ourbusiness and financial results, and could cause our financial results to vary significantly from period to period. Our sales cycle varies widely, reflectingdifferences in potential customers’ decision-making processes, procurement requirements and budget cycles, and is subject to significant risks over which wehave little or no control, including: •customers’ budgetary constraints and priorities; •the timing of customers’ budget cycles; •the need by some customers for lengthy evaluations; and •the length and timing of customers’ approval processes.In the large enterprise market, the customer’s decision to use our platform may be an enterprise-wide decision; therefore, these types of sales requireus to provide greater levels of education regarding the use and benefits of our platform, which causes us to expend substantial time, effort and moneyeducating them as to the value of our platform. In addition, because we are a relatively new company with a limited operating history, our target customersmay prefer to purchase software that is critical to their business from one of our larger, more established competitors. Our typical sales cycle can range fromthree to nine months, and we expect that this lengthy sales cycle may continue or increase. Longer sales cycles could cause our operating and financialresults to suffer in a given period.If our security measures are breached or unauthorized access to customer data is otherwise obtained, our platform may be perceived as not being secure,customers may reduce the use 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 relateddata. As a result, unauthorized access or security breaches could result in the loss of information, litigation, indemnity obligations and other liability. Whilewe have security measures in place that are designed to protect customer information and prevent data loss and other security breaches, if these measures arebreached as a result of third-party action, employee error, malfeasance or otherwise, and someone obtains unauthorized access to our customers’ data, wecould face loss of business, regulatory investigations or orders, our reputation could be severely damaged, we could be required to expend significant capitaland other resources to alleviate the problem, as well as incur significant costs and liabilities, including due to litigation, indemnity obligations, damages forcontract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers or other businesspartners in an effort to maintain business relationships after a breach.13We cannot assure you that any limitations of liability provisions in our contracts would be enforceable or adequate or would otherwise protect usfrom 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 insurancecoverage 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 securitybreach, 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 availableinsurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurancerequirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation.Cyber-attacks and other malicious Internet-based activities continue to increase generally. Because the techniques used to obtain unauthorizedaccess or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate thesetechniques or to implement adequate preventative measures. In addition, third parties may attempt to fraudulently induce employees or users to discloseinformation 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 certainemployee 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 our ability to attract new customers, cause existing customers to elect to not renew their subscriptions, resultin reputational damage or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect our operating results.The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be adversely affected.The market for business spend management software is highly competitive, with relatively low barriers to entry for some software or serviceorganizations. Our competitors include Oracle Corporation (“Oracle”) and SAP AG (“SAP”), well-established providers of business spend managementsoftware that have long-standing relationships with many customers. Some customers may be hesitant to switch vendors or to adopt cloud-based softwaresuch as ours and prefer to maintain their existing relationships with their legacy software vendors. Oracle and SAP are larger and have greater namerecognition, much longer operating histories, larger marketing budgets and significantly greater resources than we do. These vendors, as well as othercompetitors, 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 takeadvantage of customer demand for cloud-based software, legacy vendors are expanding their cloud-based software through acquisitions and organicdevelopment. For example, SAP acquired Ariba, Inc. and Concur Technologies, Inc. Legacy vendors may also seek to partner with other leading cloudproviders. We also face competition from custom-built software vendors and from vendors of specific applications, some of which offer cloud-basedsolutions. We may also face competition from a variety of vendors of cloud-based and on-premise software products that address only a portion of ourplatform. In addition, other companies that provide cloud-based software in different target markets may develop software or acquire companies that operatein our target markets, and some potential customers may elect to develop their own internal software. With the introduction of new technologies and marketentrants, we expect this competition to intensify in the future.Many of our competitors are able to devote greater resources to the development, promotion and sale of their products and services. Furthermore, ourcurrent or potential competitors may be acquired by third parties with greater available resources and the ability to initiate or withstand substantial pricecompetition. In addition, many of our competitors have established marketing relationships, access to larger customer bases and major distributionagreements with consultants, system integrators and resellers. Our competitors may also establish cooperative relationships among themselves or with thirdparties that may further enhance their product offerings or resources. If our platform does not become more accepted relative to our competitors’, or if ourcompetitors are successful in bringing their products or services to market earlier than ours, or if their products or services are more technologically capablethan 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 areunable to achieve our target pricing levels, our operating results will be negatively affected. Pricing pressures and increased competition could result inreduced sales, reduced margins, losses or a failure to maintain or improve our competitive market position, any of which could adversely affect our business.14Our business depends substantially on our customers renewing their subscriptions and purchasing additional subscriptions from us. Any decline in ourcustomer renewals would harm our future operating results.In order for us to maintain or improve our operating results, it is important that our customers renew their subscriptions when the initial contract termexpires and add additional authorized users and additional business spend management modules to their subscriptions. Our customers have no obligation torenew their subscriptions, and we cannot assure you that our customers will renew subscriptions with a similar contract period or with the same or a greaternumber of authorized users and modules. Some of our customers have elected not to renew their agreements with us, and we may not be able to accuratelypredict renewal rates.Our renewal rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our subscription service, ourprofessional services, our customer support, our prices and contract length, the prices of competing solutions, mergers and acquisitions affecting our customerbase, the effects of global economic conditions or reductions in our customers’ spending levels. Our future success also depends in part on our ability to addadditional authorized users and modules to the subscriptions of our current customers. If our customers do not renew their subscriptions, renew on lessfavorable terms or fail to add more authorized users or additional business spend management modules, our revenues may decline, and we may not realizeimproved operating results from our customer base.If we fail to develop widespread brand awareness cost-effectively, our business may suffer.We believe that developing and maintaining widespread awareness of our brand in a cost-effective manner is critical to achieving widespreadacceptance of our platform and attracting new customers. For example, widespread awareness of our brand is critical to ensuring that we are invited toparticipate in requests for proposals from prospective customers. Our success in this area will depend on a wide range of factors, some of which are beyond ourcontrol, including the following: •the efficacy of our marketing efforts; •our ability to offer high-quality, innovative and error- and bug-free modules; •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 modules; •positive or negative publicity; •interruptions, delays or attacks on our platform or modules; and •litigation, legislative or regulatory-related developments.Brand promotion activities may not generate customer awareness or increase revenues, and, even if they do, any increase in revenues may not offsetthe expenses we incur in building our brand. If we fail to successfully promote and maintain our brand, or incur substantial expenses, we may fail to attract orretain customers necessary to realize a sufficient return on our brand-building efforts or to achieve the widespread brand awareness that is critical for broadcustomer adoption of our platform.15Furthermore, negative publicity (whether or not justified) relating to events or activities attributed to us, our employees, our partners or othersassociated with any of these parties, may tarnish our reputation and reduce the value of our brand. Damage to our reputation and loss of brand equity couldreduce demand for our platform and have an adverse effect on our business, operating results and financial condition. Moreover, any attempts to rebuild ourreputation and restore the value of our brands may be costly and time consuming, and such efforts may not ultimately be successful.We have experienced rapid growth and expect our growth to continue and if we fail to manage our growth effectively, we may be unable to execute ourbusiness plan, maintain high levels 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 increased the size of ourcustomer base. We anticipate that we will continue to expand our operations and headcount, including internationally. This growth has placed, and futuregrowth will place, a significant strain on our management, administrative, operational and financial infrastructure. Our success will depend in part on ourability to manage this growth effectively. To manage the expected growth of our operations and personnel, we will need to continue to improve ouroperational, financial and management controls and our reporting systems and procedures. Failure to effectively manage growth could result in difficulty ordelays in deploying customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features and/or otheroperational difficulties, any of which could adversely affect our business performance and results of operations.Because we recognize subscription revenues over the term of the contract, fluctuations in new sales will not be immediately reflected in our operatingresults 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 somecustomers commit for shorter periods. As a result, most of the subscription revenues we report on each quarter are derived from the recognition of deferredrevenue relating to subscriptions entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any single quarter wouldlikely 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 ofrenewals, 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 asincurred, while subscription revenues are recognized over the life of the customer agreement. As a result, increased growth in the number of our customerscould 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 difficultfor us to rapidly increase our revenues through additional sales in any period, as revenues from new customers must be recognized over the applicablesubscription term.Professional services are generally sold on a fixed-fee or time-and-materials basis. Revenues for time-and-material arrangements are recognized as theservices are performed. For fixed-fee and other types of arrangements, revenues are generally deferred and recognized upon the completion of the projectunder the completed performance method of accounting. During the fourth quarter of the fiscal year ended January 31, 2017, we developed the ability toaccurately estimate professional services costs on a project basis. As such, revenue for fixed-fee and other types of arrangements entered into after the thirdquarter of the fiscal year ended January 31, 2017 is recognized as services are performed under the proportional performance method of accounting.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, grossmargin, cash flow and deferred revenue, may vary significantly in the future and period-to-period comparisons of our operating results and key metrics maynot be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Our quarterly financialresults and metrics may fluctuate as a result of a variety of factors, many of which are outside of16our control; as a result, they may not fully reflect the underlying performance of our business. These quarterly fluctuations may negatively affect the value ofour 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 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 butmay 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 ourindustry, 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; •expenses in connection with mergers, acquisitions or other strategic transactions; and •the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment ofgoodwill or intangibles from acquired companies.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 couldcomplement or expand our platform, enhance our technical capabilities or otherwise offer growth opportunities. For example, in May 2017, we purchasedsubstantially all of the issued and outstanding capital stock held by shareholders of Trade Extensions TradeExt AB, a Swedish corporation that specializes instrategic sourcing and in December 2017, we acquired Simeno Holdings AG, a catalog management company. Acquisitions may disrupt our business, divertour resources and require significant management attention that would otherwise be available for development of our existing business. 17In addition, we have limited experience in acquiring other businesses and we may not be able to integrate the acquired personnel, operations andtechnologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated benefits from theacquired 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, 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; and •use of substantial portions of our available cash to consummate the acquisition.In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets,which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges toour operating results based on this impairment assessment process, which could adversely affect our results of operations. In addition, our exposure to risksassociated with various claims, including the use of intellectual property, may be increased as a result of acquisitions of other companies. For example, wemay have a lower level of visibility into the development process with respect to intellectual property or the care taken to safeguard against infringementrisks with respect to the acquired company or technology. In addition, third parties may make infringement and similar or related claims after we haveacquired 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.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 proceedingsinvolving alleged infringement of third-party patents and other intellectual property rights, as well as commercial, corporate and securities, labor andemployment, wage and hour, and other matters. In particular, there has been considerable activity in our industry to develop and enforce intellectual propertyrights. Our success depends upon our not infringing upon the intellectual property rights of others. Our competitors, as well as a number of other entities andindividuals, 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 mayclaim that we are infringing upon their intellectual property rights, and we may be found to be infringing upon such rights. For example, between March2012 and August 2014 and between May 2014 and September 2015, we and Ariba, Inc. were involved in patent and trade secret litigation cases, each ofwhich 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.18We may experience future claims that our platform and underlying technology infringe or violate others’ intellectual property rights, and we may befound 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 orservices. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantialdamages or ongoing royalty payments, prevent us from offering our services or require that we comply with other unfavorable terms. We may also beobligated to indemnify our customers and business partners or to pay substantial settlement costs, including royalty payments, in connection with any suchclaim 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, anylitigation regarding our intellectual property could be costly, distracting and time-consuming and could harm our brand, business, results of operations andfinancial condition.The profitability of our customer relationships may fluctuate.Our business model focuses on maximizing the lifetime value of our customer relationships and we need to make significant investments in order toadd new customers to grow our customer base. The profitability of a customer relationship in any particular period depends in part on how long the customerhas been a subscriber on our platform. In general, the upfront costs associated with new customers are higher in the first year than the aggregate revenues werecognize from those new customers in the first year.We review the lifetime value and associated acquisition costs of our customers, as discussed further in “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” in this annual report. The lifetime value of our customers and customer acquisition costs has and willcontinue to fluctuate from one period to another depending upon the amount of our net new subscription revenues (which depends on the number of newcustomers in a period, upsells of additional modules 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 continueto fluctuate in the future. We may not experience lifetime value to customer acquisition cost ratios in future years or periods similar to those we haveachieved to date. Other companies may calculate lifetime value and customer acquisition costs differently than our chosen method and, therefore, may not bedirectly comparable.We depend on our senior management team and the loss of our chief executive officer or one or more key employees or an inability to attract and retainhighly skilled employees could adversely affect our business.Our success depends largely upon the continued services of our key executive officers. In particular, our chief executive officer, Robert Bernshteyn,is critical to our vision, strategic direction, culture and overall business success. We also rely on our leadership team in the areas of research and development,marketing, sales, services and general and administrative functions, and on mission-critical individual contributors in research and development. From timeto time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. Wedo not maintain key-man insurance for Mr. Bernshteyn or any other member of our senior management team. We do not have employment agreements withour executive officers or other key personnel that require them to continue to work for us for any specified period and, therefore, they could terminate theiremployment with us at any time. The loss of one or more of our executive officers or key employees could have a serious adverse effect on our business.To execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense, especially forengineers with high levels of experience in designing and developing software for Internet-related services. We have from time to time experienced, and weexpect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which wecompete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employersmay attempt to assert that these employees or our company have breached their legal obligations, resulting in a diversion of our time and resources. Inaddition, job candidates and existing employees in the San Francisco Bay Area often consider the value of the stock awards they receive in connection withtheir employment. If the perceived value of our stock declines, it may adversely affect our ability to recruit and retain highly skilled employees. If we fail toattract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be adversely affected.19We have a history of cumulative losses, and we do not expect to be profitable for the foreseeable future.We have incurred significant losses in each period since our inception in 2006. We incurred net losses of $43.8 million, $37.6 million and $46.2million in the fiscal years ended January 31, 2018, 2017 and 2016, respectively. We had an accumulated deficit of $204.5 million, $160.5 million and$122.9 million at January 31, 2018, 2017 and 2016, respectively. Our losses and accumulated deficit reflect the substantial investments we made to acquirenew customers and develop our platform. We expect our operating expenses to increase in the future due to anticipated increases in sales and marketingexpenses, research and development expenses, operations costs and general and administrative costs, and, therefore, we expect our losses to continue for theforeseeable future. Furthermore, to the extent we are successful in increasing our customer base, we will also incur increased losses because costs associatedwith acquiring customers are generally incurred up front, while subscription revenues are generally recognized ratably over the terms of the agreements(typically three years, although some customers commit for shorter periods). You should not consider our recent growth in revenues as indicative of our futureperformance. Accordingly, we cannot assure you that we will achieve profitability in the future, or that, if we do become profitable, we will sustainprofitability or achieve our target margins on a midterm or long-term basis.We do not have a long history with our subscription or pricing models and changes 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 softwaresubscriptions grow, as new competitors introduce new products or services that compete with ours or as we enter into new international markets, we may beunable to attract new customers at the same price or based on the same pricing model as we have used historically. For example, customers may demandpricing models that include price adjustments that are correlated to the savings they realize using our products and services. While this is not and has notbeen 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 pricingmodel 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 berequired 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.If we are not able to provide successful and timely enhancements, new features and modifications for our platform and modules, we may lose existingcustomers or fail to attract new customers and our revenues and financial performance may suffer.If we are unable to provide enhancements and new features for our existing modules or new modules that achieve market acceptance or to integratetechnology, products and services that we acquire into our platform, our business could be adversely affected. The success of enhancements, new features andmodules depends on several factors, including the timely completion, introduction and market acceptance of the enhancements or new features or modules.Failure in this regard may significantly impair the growth of our revenues. We have experienced, and may in the future experience, delays in the plannedrelease dates of enhancements to our platform, and we have discovered, and may in the future discover, errors in new releases after their introduction. Eithersituation 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.We rely heavily on Amazon Web Services to deliver our platform and modules to our customers, and any disruption in service from Amazon Web Servicesor material change to our arrangement with Amazon Web Services could adversely affect our business.We rely heavily upon Amazon Web Services (“AWS”) to operate certain aspects of our platform and any disruption of or interference with our use ofAWS could impair our ability to deliver our platform and modules to our customers, resulting in customer dissatisfaction, damage to our reputation, loss ofcustomers and harm to our business. We have architected our software and computer systems to use data processing, storage capabilities and other servicesprovided by AWS. Currently, our cloud service infrastructure is run on AWS. Given this, we cannot easily switch our AWS operations to another cloudprovider, so any disruption of or interference with our use of AWS would adversely affect our operations and potentially our business.20AWS provides us with computing and storage capacity pursuant to an agreement that continues until terminated by either party. AWS may terminatethe agreement for cause with 30 days’ prior written notice, including any material default or breach of the agreement by us that we do not cure within the30 day period. Additionally, AWS has the right to terminate the agreement immediately with notice to us in certain scenarios such as if AWS believesproviding the services could create a substantial economic or technical burden or material security risk for AWS, or in order to comply with the law orrequests of governmental entities. The agreement requires AWS to provide us their standard computing and storage capacity and related support in exchangefor timely payment by us. If any of our arrangements with AWS were terminated, we could experience interruptions in our software as well as delays andadditional expenses in arranging new facilities and services.We utilize third-party data center hosting facilities operated by AWS, located in various facilities around the world. Our operations depend, in part,on AWS’s abilities to protect these facilities against damage or interruption due to a variety of factors, including infrastructure changes, human or softwareerrors, natural disasters, power or telecommunications failures, criminal acts, capacity constraints and similar events. For instance, in February 2017, AWSsuffered a significant outage in the United States that had a widespread impact on the ability of certain of our customers to fully use our modules for a smallperiod of time. Despite precautions taken at these data centers, the occurrence of spikes in usage volume, a natural disaster, an act of terrorism, vandalism orsabotage, a decision to close a facility without adequate notice or other unanticipated problems at a facility could result in lengthy interruptions in theavailability of our platform. Even with current and planned disaster recovery arrangements, our business could be harmed. Also, in the event of damage orinterruption, our insurance policies may not adequately compensate us for any losses that we may incur. These factors in turn could further reduce ourrevenues, 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 implement and maintain effective internal controls over financial reporting in the future, investors may lose confidence in the accuracyand 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 internalcontrols. Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) requires that we evaluate and determine the effectiveness of our internalcontrols over financial reporting and provide a management report on the internal controls over financial reporting, which must be attested to by ourindependent registered public accounting firm. If we have a material weakness in our internal controls over financial reporting, we may not detect errors on atimely 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 for fiscal 2018, as wellas provide an unqualified attestation report from our independent registered public accounting firm to that effect, in the future, we may not be able tocomplete our evaluation, testing, and any required remediation in a timely fashion, or otherwise assert that our internal controls are effective, andadditionally, our independent registered public accounting firm may not be able to formally attest to the effectiveness of our internal control over financialreporting. If in the future we identify material weaknesses in our internal controls over financial reporting, if we are unable to comply with the requirements ofSection 404 in a timely manner, if we are unable to assert that our internal controls over financial reporting are effective or if our independent registeredpublic accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidencein the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could becomesubject to investigations by the Securities and Exchange Commission (“SEC”), stock exchange or other regulatory authorities, which could requireadditional financial and management resources to address.Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our platform and adversely affect our business.Our customers can use our platform to collect, use and store certain types of personal or identifying information regarding their employees andsuppliers. Federal, state and foreign government bodies and agencies have adopted, are considering adopting or may adopt laws and regulations regardingthe collection, use, storage and disclosure of personal information obtained from consumers and individuals, such as compliance with the Health21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 businesses of our customers may limit the use and adoption of our platform and reduce overall demand orlead to significant fines, penalties or liabilities for any noncompliance with such privacy laws. Furthermore, privacy concerns may cause 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’ ability to process, handle, store, useand transmit demographic and personal information from their employees, customers and suppliers, which could reduce demand for our platform. TheEuropean Union (“EU”) and many countries in Europe have stringent privacy laws and regulations, which may affect our ability to operate cost effectively incertain European countries. In particular, the EU has adopted the General Data Protection Regulation (“GDPR”) which will go into effect in early 2018 andcontains numerous requirements and changes, including more robust obligations on data processors and heavier documentation requirements for dataprotection compliance programs by companies. Complying with the GDPR may cause us to incur substantial operational costs or require us to change ourbusiness practices. Despite our efforts to bring practices into compliance before the effective date of the GDPR, we may not be successful either due tointernal or external factors such as resource allocation limitations or a lack of vendor cooperation. Non-compliance could result in proceedings against us bygovernmental entities or others. We may also experience difficulty retaining or obtaining new European or multi-national customers due to the compliancecost, potential risk exposure, and uncertainty for these entities. We may find it necessary to establish systems to maintain personal data originating from theEU in the European Economic Area, which may involve substantial expense and distraction from other aspects of our business. In the meantime, there couldbe uncertainty as to how to comply with EU privacy law.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 keycustomers could have a significant impact on our revenues, reputation and our ability to obtain new customers. In addition, acquisitions of our customerscould lead to cancellation of our contracts with those customers or by the acquiring companies, thereby reducing the number of our existing and potentialcustomers.Our business could be adversely affected if our customers are not satisfied with the implementation services provided by us or our partners.Our business depends on our ability to satisfy our customers, both with respect to our platform and modules and the professional services that areperformed to help our customers use features and functions that address their business needs. Professional services may be performed by our own staff, by athird-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 fordelivery of these services to our customers, and we expect the number of our partner-led implementations to continue to increase over time. If a customer isnot satisfied with the quality of work performed by us or a partner or with the type of professional services or modules delivered, we may incur additionalcosts to in addressing the situation, the profitability of that work might be impaired and the customer’s dissatisfaction with our services could damage ourability to expand the number of modules subscribed to by that customer. In addition, negative publicity related to our customer relationships, regardless of itsaccuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers.22We typically provide service level commitments under our customer contracts. If we fail to meet these contractual commitments, we could be obligated toprovide credits or refunds for prepaid amounts related to unused subscription services or face contract terminations, which could adversely affect ourrevenues.Our customer agreements typically provide service level commitments on a monthly basis. If we are unable to meet the stated service levelcommitments or suffer extended periods of unavailability for our platform, we may be contractually obligated to provide these customers with service credits,typically 10% of the customer’s subscription fees for the month in which the service level was not met, and we could face contract terminations, in which casewe would be subject to refunds for prepaid amounts related to unused subscription services. Our revenues could be significantly affected if we sufferunexcused downtime under our agreements with our customers. Any extended service outages could adversely affect our reputation, revenues and operatingresults.If we fail to integrate our platform with a variety of third-party technologies, our platform may become less marketable and less competitive or obsoleteand our operating results may be harmed.Our platform must integrate with a variety of third-party technologies, and we need to continuously modify and enhance our platform to adapt tochanges in cloud-enabled hardware, software, networking, browser and database technologies. Any failure of our platform to operate effectively with futuretechnologies could reduce the demand for our platform, resulting in customer dissatisfaction and harm to our business. If we are unable to respond to thesechanges in a cost-effective manner, our platform may become less marketable and less competitive or obsolete and our operating results may be negativelyaffected. In addition, an increasing number of individuals within the enterprise are utilizing mobile devices to access the Internet and corporate resources andto conduct business. If we cannot continue to effectively make our platform available on these mobile devices and offer the information, services andfunctionality required by enterprises that widely use mobile devices, we may experience difficulty attracting and retaining customers.Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and our financial results.Once our modules are implemented, our customers depend on our support organization to resolve technical issues relating to our modules. We maybe unable to respond quickly enough to accommodate short-term increases in customer demand for support services. We also may be unable to modify theformat 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 ourplatform and business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality technical support, or amarket perception that we do not maintain high-quality support, could adversely affect our reputation, our ability to sell subscriptions to our modules toexisting 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 toexpand our direct sales force, both domestically and internationally. Identifying and recruiting qualified personnel and training them in the use of oursoftware 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. Inparticular, if we are unable to hire, develop and retain talented sales personnel or if new direct sales personnel are unable to achieve desired productivitylevels in a reasonable period of time, we may not be able to realize the expected benefits of this investment or increase our revenues.23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 fromnon-U.S. regions, as determined based on the billing address of our customers, constituted 35%, 32% and 28% of our total revenues for the fiscal years endedJanuary 31, 2018, 2017 and 2016, respectively. Operating in international markets requires significant resources and management attention and will subjectus to regulatory, economic and political risks that are different from those in the United States. Because of our limited experience with internationaloperations, our international expansion efforts may not be successful in creating additional demand for our platform outside of the United States or ineffectively 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 togrow 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 thatcould 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 intellectualproperty 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, includingemployment, 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 ofour international operations and expose us to foreign currency exchange rate risk; •adverse tax consequences; and •unstable regional and economic political conditions.As we continue to expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these andother risks associated with our international sales and operations. Our failure to manage any of these risks successfully, or to comply with these laws andregulations, could harm our operations, reduce our sales and harm our business, operating results and financial condition. For example, in certain foreigncountries, particularly those with developing economies, certain business practices that are prohibited by laws and regulations applicable to us, such as theForeign Corrupt Practices Act, may be more commonplace. Although we have policies and procedures designed to ensure compliance with these laws andregulations, our employees, contractors and agents, as well as channel partners involved in our international sales, may take actions in violation of ourpolicies. 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 successfullymanage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks.24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 tous or the enterprise software industry may harm us. The United States and other key international economies have been affected by falling demand for avariety 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. In particular, the economies of countries in Europe have been experiencing weaknessassociated with high sovereign debt levels, weakness in the banking sector and uncertainty over the future of the Euro zone, including instabilitysurrounding “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 spendmanagement specifically. In addition, our revenues are dependent on the number of users of our modules. Historically, during economic downturns therehave been reductions in spending on enterprise software as well as pressure for extended billing terms or pricing discounts, which would limit our ability togrow our business and negatively affect our operating results. These conditions affect the rate of enterprise software spending and could adversely affect ourcustomers’ ability or willingness to subscribe to our platform, delay prospective customers’ purchasing decisions, reduce the value or duration of theirsubscriptions 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 havea significant effect on our reported financial results for periods prior and subsequent to such change. For example, recent new standards issued by the FASBthat could materially impact our financial statements include revenue from contracts with customers, certain improvements to employee share-based paymentaccounting, accounting for leases and the Convertible Notes. We may adopt one or more of these standards retrospectively to prior periods and the adoptionmay result in an adverse change to previously reported results. Additionally, the adoption of these standards may potentially require enhancements orchanges in our systems and will require significant time and cost on behalf of our financial management.We have elected to adopt the new revenue recognition standard on February 1, 2018 using a modified retrospective approach. Based on ourassessment to date, the primary impact of the new standard on us is the removal of the current limitation on contingent revenue. In addition, commissionsaccounting under the new standard is significantly different than our current capitalization policy. The new standard results in additional types of costs thatwill be capitalized and amounts that will be amortized over a period longer than our current policy of amortizing the deferred amounts over the specificrevenue contract-terms. Specifically, incremental contract costs will be deferred and amortized over an estimated customer life of five years, which iscalculated based on quantitative and qualitative factors. The new standard also requires incremental disclosures including information about the remainingtransaction price and when we expect to recognize revenue which will begin in the filing of the first quarter Form 10-Q for the year ending January 31, 2019.We have implemented control activities related to the adoption of the new standard, particularly related to evaluating the impact of the standard on ourrevenue recognition policies, the determination of average customer life, and the new disclosure requirements, and did not require the implementation of newinformation 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—Recently Adopted Accounting Pronouncements and New Accounting Pronouncements NotYet Adopted” in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report.25We may face exposure to foreign currency exchange rate fluctuations, which could adversely affect our business, results of operations and financialcondition.As our international operations expand, our exposure to the effects of fluctuations in currency exchange rates grows because our internationalcontracts are sometimes denominated in local currencies, in particular with respect to the Euro, British Pound Sterling, Swedish Krona 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 ofrevenue, operating expenses and other operating results, when re-measured, may differ materially from expectations. We do not currently engage in currencyhedging activities to limit the risk of exchange rate fluctuations. However, in the future, we may use derivative instruments, such as foreign currency forwardand option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not offset any ormore 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 ourtransaction volume outside of the United States increases.If we cannot continue to expand the use of our platform beyond our initial focus on our procurement and invoicing modules, our ability to grow ourbusiness may be harmed and the growth rate of our revenues may decline.To date, most of our sales have involved our procurement and invoicing modules, which are the most mature modules on our platform. Any factoradversely affecting sales of these modules, including software release cycles, market acceptance, product competition, performance and reliability,reputation, price competition and economic and market conditions, could adversely affect our business and operating results. Furthermore, our ability togrow our business depends in part on our ability to compete in the market for the other 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 othermodules will ever result in significant revenues for us. While we have recently acquired businesses related to certain of these modules, there can be noassurance that these acquisitions will facilitate our efforts to market and sell these other modules. Further, the introduction of new modules beyond thesemarkets may not be successful.Large customers often demand more configuration and integration services, or customized features and functions that we do not offer, which couldadversely 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 salessupport and professional services resources to individual customers, increasing the cost and time required to complete sales. Additionally, our platform doesnot currently permit customers to modify our code. If prospective customers require customized features or functions that we do not offer and that would bedifficult for them to deploy themselves, then the market for our platform will be more limited and our business could suffer.If our platform fails to perform properly, our reputation could be adversely affected, our market share could decline and we could be subject to liabilityclaims.Our platform is inherently complex and may contain material defects or errors. Any defects in functionality or that cause interruptions in theavailability of our platform could result in: •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 •injury to our reputation.26The costs incurred in correcting any material defects or errors might be substantial and could adversely affect our operating results.Because of the large amount of data that we collect and manage, it is possible that hardware failures or errors in our systems could result in data lossor corruption or cause the information that we collect to be incomplete or contain inaccuracies that our customers regard as significant. Furthermore, theavailability or performance of our platform could be adversely affected by a number of factors, including customers’ inability to access the Internet, failure ofour network or software systems, security breaches or variability in user traffic for our platform. We may be required to issue credits or refunds for prepaidamounts related to unused services or otherwise be liable to our customers for damages they incur resulting from certain of these events. For example, ourcustomers access our modules through their Internet service providers. If a service provider fails to provide sufficient capacity to support our modules orotherwise experiences service outages, such failure could interrupt our customers’ access to our modules and adversely affect their perception of our modules’reliability. In addition to potential liability, if we experience interruptions in the availability of our platform, our reputation could be adversely affected andwe could lose customers.Our errors and omissions insurance may be inadequate or may not be available in the future on acceptable terms, or at all. In addition, our policy maynot cover all claims made against us and defending a suit, regardless of its merit, could be costly and divert management’s attention.If we fail to manage our technical operations infrastructure, our existing customers may experience service outages and our new customers mayexperience delays in the implementation of our platform.We have experienced significant growth in the number of users, transactions and data that our operations infrastructure supports. We seek to maintainsufficient excess capacity in our operations infrastructure to meet the needs of all of our customers, as well as to facilitate the rapid provision of new customerimplementations and the expansion of existing customer implementations. In addition, we need to properly manage our technological operationsinfrastructure in order to support version control, changes in hardware and software parameters and the evolution of our platform. However, the provision ofnew hosting infrastructure requires significant lead time. We have experienced, and may in the future experience, website disruptions, outages and otherperformance problems. These problems may be caused by a variety of factors, including infrastructure changes, human or software errors, viruses, securityattacks, fraud, spikes in customer usage and denial of service issues. In some instances, we may not be able to identify the cause or causes of theseperformance problems within an acceptable period of time. If we do not accurately predict our infrastructure requirements, our customers may experienceservice outages that may subject us to financial penalties, financial liabilities and customer losses. If our operations infrastructure fails to keep pace withincreased sales, customers may experience delays as we seek to obtain additional capacity, which could adversely affect our revenue as well as our reputation.Our growth depends in part on the success of our strategic relationships with third parties.We have established strategic relationships with a number of other companies. In order to grow our business, we anticipate that we will continue toestablish and maintain relationships with third parties, such as implementation partners, system integrator partners and technology providers. Identifyingpartners, and negotiating and documenting relationships with them, requires significant time and resources. Our competitors may be effective in providingincentives to third parties to favor their products or services or to prevent or reduce subscriptions to our services. In addition, acquisitions of our partners byour competitors could result in a decrease in the number of our current and potential customers, as our partners may no longer facilitate the adoption of ourplatform 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 ourrevenues could be impaired and our operating results could suffer. Even if we are successful in our strategic relationships, we cannot assure you that theserelationships will result in increased customer usage of our platform or increased revenues.27Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.Our success and ability to compete depend in part upon our intellectual property. We primarily rely on copyright, patent, trade secret and trademarklaws, trade secret protection and confidentiality or contractual agreements with our employees, customers, partners and others to protect our intellectualproperty rights. However, the steps we take to protect our intellectual property rights may be inadequate.In order to protect our intellectual property rights, we may be required to expend significant resources to monitor and protect such rights. Litigationbrought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in theimpairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses,counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Our failure to secure, protect and enforce ourintellectual property rights could seriously adversely affect our brand and our business.Our platform utilizes open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affectour business.Our platform utilizes software governed by open source licenses, including for example the MIT License and the Apache License. The terms ofvarious open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be construed in a manner thatimposes unanticipated conditions or restrictions on our ability to market our platform. By the terms of certain open source licenses, if we combine ourproprietary software with open source software in a certain manner, we could be required to release the source code of our proprietary software and make itavailable under open source licenses. In the event that portions of our proprietary software are determined to be subject to an open source license, we couldbe required to publicly release the affected portions of our source code, or to re-engineer all or a portion of our technologies or otherwise be limited in thelicensing of our technologies, each of which could reduce or eliminate the value of our technologies and services. In addition to risks related to licenserequirements, the use of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do notprovide warranties or controls on the origin of the software. Many of the risks associated with the use of open source software cannot be eliminated and couldnegatively affect our business.We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors in the software we licensecould result in increased costs, or reduced service levels, which could adversely affect our business.Our platform incorporates certain third-party software obtained under licenses from other companies. We anticipate that we will continue to rely onsuch third-party software and development tools from third parties in the future. Although we believe that there are commercially reasonable alternatives tothe 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 softwareused in our platform with new third-party software may require significant work and require substantial investment of our time and resources. Also, to theextent that our platform depends upon the successful operation of third-party software in conjunction with our software, any undetected errors or defects inthis third-party software could prevent the deployment or impair the functionality of our platform, delay new module introductions, result in a failure of ourmodules and injure our reputation. Our use of additional or alternative third-party software would require us to enter into license agreements with thirdparties.If we cannot maintain our company culture as we grow, we could lose the innovation, teamwork, passion and focus on execution that we believe contributeto our success and our business may be harmed.We believe that a critical component of our success has been our company culture, which is 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 wegrow and develop the infrastructure of a public company, we may find it difficult to maintain these important aspects of our company culture. If we fail topreserve 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.28We have incurred and will continue to incur significantly increased costs and devote substantial management time as a result of operating as a publiccompany.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 privatecompany. For example, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and are required to comply with theapplicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulationssubsequently implemented by the SEC and the Nasdaq Global Select Market, including the establishment and maintenance of effective disclosure andfinancial controls and changes in corporate governance practices. Compliance with these requirements has increased our legal and financial compliance costsand made some activities more time consuming and costly. In addition, our management and other personnel need to divert attention from operational andother business matters to devote substantial time to these public company requirements. In particular, we are incurring significant expenses and devotingsubstantial management effort toward ensuring ongoing compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, which have increasednow that we are no longer an emerging growth company, as defined by the JOBS Act. We have hired and may need to continue to hire additional accountingand financial staff with appropriate public company experience and technical accounting knowledge and maintain an internal audit function. We cannotpredict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.We 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 whenor if our operations will generate sufficient cash to fund our ongoing operations. In the future, we may require additional capital to respond to businessopportunities, challenges, acquisitions, a decline in the level of customer prepayments or unforeseen circumstances and may determine to engage in equity ordebt financings or enter into credit facilities for other reasons, and we may not be able to timely secure additional debt or equity financing on favorable terms,or at all. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial andoperational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potentialacquisitions. If we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, ourexisting stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could haverights, preferences and privileges senior to those of holders of our common stock or our outstanding noteholders. If we are unable to obtain adequatefinancing 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 businesschallenges 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 riskof such negative effects increases with the term length of our customer arrangements. Furthermore, some of our customers may seek bankruptcy protection orother similar relief and fail to pay amounts due to us, or pay those amounts more slowly, either of which could adversely affect our operating results, financialposition 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 party 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 ourcustomers 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 acontract breach or otherwise dispute our contract, the resolution of such disputes in a manner adverse to our interests could negatively affect our operatingresults.29Pursuant 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 ofour modules. Under these escrow arrangements, the source code pertaining to the modules may, in specified circumstances, be made available to ourcustomers. 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 aspower 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 anearthquake, fire or flood, occurring at our headquarters, at one of our other facilities or where a business partner is located could adversely affect our business,results of operations and financial condition. Further, if a natural disaster or man-made problem were to affect Internet service providers, this could adverselyaffect the ability of our customers to use our products and platform. Although we maintain incident management and disaster response plans, in the event of amajor disruption caused by a natural disaster or man-made problem, we may be unable to continue our operations and may endure system interruptions,reputational harm, delays in our development activities, lengthy interruptions in service, breaches of data security and loss of critical data, any of whichcould adversely affect our business, results of operations and financial condition.We are subject to the tax laws of various jurisdictions, which are subject to unanticipated changes and to interpretation, which could harm our futureresults.We are subject to income taxes in the United States and foreign jurisdictions, and our domestic and international tax liabilities are subject to theallocation of expenses in differing jurisdictions. Our effective tax rate could be adversely affected by changes in the mix of earnings and losses in countrieswith differing statutory tax rates, certain non-deductible expenses as a result of acquisitions, the valuation of deferred tax assets and liabilities, and changesin federal, state, or international tax laws and accounting principles. Further, each jurisdiction has different rules and regulations governing sales and use,value added, and similar taxes, and these rules and regulations are subject to varying interpretations that change over time. Certain jurisdictions in which wedid not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties, and interest, and we may be required tocollect such taxes in the future. In addition, we may be subject to income tax audits by many tax jurisdictions throughout the world, many of which have notestablished clear guidance on the tax treatment of cloud-based companies. Any tax assessments, penalties, and interest, or future requirements may adverselyaffect our results of operations. Moreover, imposition of such taxes on us going forward would effectively increase the cost of our products to our customersand might adversely affect our ability to retain existing customers or to gain new customers in the areas in which such taxes are imposed.In addition, the application of the tax laws of various jurisdictions, including the United States, to our international business activities is subject tointerpretation and depends on our ability to operate our business in a manner consistent with our corporate structure. As we operate in numerous taxingjurisdictions, the application of tax laws can also be subject to diverging and sometimes conflicting interpretations by tax authorities of these jurisdictions.30On December 22, 2017, the U.S. government enacted comprehensive federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of2017 (the “Tax Act”). The Tax Act makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, thatwill generally be effective for taxable years beginning after December 31, 2017. These changes could have a material adverse impact on the value of our U.S.deferred tax assets, result in significant one-time charges in the current or future taxable years and increase our future U.S. tax expense. For example, whilethe Tax Act allows for federal net operating losses incurred in tax years beginning prior to December 31, 2017 to be carried forward indefinitely, the Tax Actalso 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 toevaluate 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 howmany U.S. states will incorporate these federal law changes, or portions thereof, into their tax codes. The implementation by us of new practices and processesdesigned 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.We may not be able to utilize a significant portion of our net operating loss or research tax credit carryforwards, which could adversely affect ourpotential profitability.We have federal and state net operating loss carryforwards due to prior period losses, which if not utilized will begin to expire in 2026 and 2029 forfederal and state purposes, respectively. These net operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities,which could adversely affect our potential profitability.In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), our ability to utilize net operating losscarryforwards or other tax attributes, such as research tax credits, in any taxable year may be limited if we experience an “ownership change.” Such an“ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership bymore than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. As ofour initial public offering and our subsequent follow-on offering we have not had an ownership change that has triggered any material limitation on the useof our tax attributes for purposes of Section 382 of the Code. Subsequent changes in our stock ownership, however, could cause an “ownership change.” It ispossible that an ownership change, or any future ownership change, could have a material effect on the use of our net operating loss carryforwards or other taxattributes, which could adversely affect our potential profitability.Changes in laws and regulations related to the Internet could increase the costs of our services and adversely affect our business.Federal, state or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use ofthe Internet as a commercial medium. Changes in these laws or regulations could require changes in our business in order to comply with these changes. Inparticular, the application of federal, state, local and international tax laws to services provided electronically is evolving. New income, sales, use or other taxlaws, statutes, rules, regulations or ordinances could be enacted at any time (possibly with retroactive effect) and could be applied solely ordisproportionately to services provided over the Internet. These enactments could adversely affect our sales activity due to the inherent cost increase thetaxes would represent and ultimately result in a negative impact on our operating results and cash flows.In addition, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us (possiblywith retroactive effect), which could require us or our customers to pay additional tax amounts, as well as fines or penalties and interest for past amounts. If weare unsuccessful in collecting such taxes from our customers, we could be held liable for such costs, thereby adversely affecting our operating results and cashflows.31Our estimates of market opportunity and forecasts of market growth that we have publicly disclosed may prove to be inaccurate, and even if the market inwhich 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 notprove 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 beinaccurate. Even if the market in which we compete meets our size estimates and forecasted growth, our business could fail to grow at similar rates.Risks Related to Ownership of Our Common StockOur stock price has been subject to fluctuations, and will likely continue to be subject to fluctuations and decline, due to factors beyond our control andyou may lose all or part of your investment.The market price of our common stock is subject to wide fluctuations in response to various factors, some of which are beyond our control. Thesefactors, as well as the volatility of our common stock, could affect the price at which our convertible noteholders could sell the common stock received uponconversion of the Convertible Notes and could also impact the trading price of the Convertible Notes. Since shares of our common stock were sold in ourinitial public offering in October 2016 at a price of $18.00 per share, the reported high and low sales prices of our common stock has ranged from $22.50 to$41.61 through January 31, 2018. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which arebeyond our control, including: •the overall performance of the equity markets; •our operating performance and the performance of other similar companies; •changes in our projected operating results that we provide to the public, our failure to meet or exceed these projections or changes inrecommendations by securities analysts that elect to follow our common stock; •announcements of technological innovations, pricing changes, new software or enhancements to services, acquisitions, strategic alliances orsignificant agreements by us or by our competitors; •disruptions in our services due to computer hardware, software or network problems; •announcements of customer additions and customer cancellations or delays in customer purchases; •recruitment or departure of key personnel; •the economy as a whole, market conditions in our industry and the industries of our customers; •extraordinary expenses such as litigation or other dispute-related expenses or settlement payments; •the size of our market float; and •any other factors discussed in this annual report.In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices ofequity securities of many technology companies. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate tothe operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. Ifwe were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from ourbusiness and adversely affect our business.Sales of a substantial number of shares of our common stock in the public market, or the perception that they might occur, could cause the price of ourcommon stock to decline.The price of our common stock could decline if there are substantial sales of our common stock, particularly sales by our directors, executive officers,and significant stockholders. Our executive officers, directors, substantially all of the selling stockholders who participated in our April 2017 follow-onoffering, as well as certain other holders of our common stock, were subject to a lock-up agreement that expired on July 11, 2017. The shares32held by these persons may now be sold in the public market in the United States, subject to prior registration in the United States, if required, or reliance uponan exemption from United States registration, including, in the case of shares held by affiliates or control persons, compliance with the volume restrictions ofRule 144. In addition, certain of our significant stockholders that are venture capital funds have in the past and may in the future instead choose to distributeshares of our common stock to their limited partners who may at some point sell these shares in the open market. In addition, some of our executive officershave entered into Rule 10b5-1 trading plans under which they have contracted with a broker to sell shares of our common stock on a periodic basis.Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, for whatever reason,could cause the market price of our common stock to decline or make it more difficult for our stockholders to sell their common stock at a time and price thatthey deem appropriate and could impair our ability to raise capital through the sale of additional equity or equity-linked securities.Certain of our stockholders holding approximately 7 million shares of our common stock have rights, subject to some conditions, to require us to fileregistration statements covering their shares to include their shares in registration statements that we may file for ourselves or our stockholders, subject tomarket standoff and lockup agreements. The market price of our common stock and the trading price of the Convertible Notes could decline as a result of thesale of a substantial number of shares of our common stock in the public market or the perception in the market that the holders of a large number ofstockholders intend to sell their shares.In addition, we have filed a registration statement to register shares reserved for future issuance under our equity compensation plans. Subject to thesatisfaction 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 intocommon stock will be available for immediate resale in the United States in the open market.We have also reserved a substantial amount of shares of our common stock in connection with awards issued under our equity incentive plans andupon conversion of the Convertible Notes.We are unable to predict the effect that sales, or the perception that our shares may be available for sale, will have on the prevailing market price ofour common stock and the trading price of the Convertible Notes.If securities or industry analysts do not continue to publish research or publish inaccurate or unfavorable research about our business, our stock price andtrading volume could decline.The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or ourbusiness. If industry analysts cease coverage of us, the trading price for our common stock and the trading price of the Convertible Notes will be negativelyaffected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, ourcommon stock price and the value of the Convertible Notes will likely decline. If one or more of these analysts cease coverage of us or fail to publish reportson us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume, and the trading price of theConvertible Notes, to decline.In addition, independent industry analysts, such as Gartner and Forrester, often provide reviews of our products and platform capabilities, as well asthose of our competitors, and perception of our offerings in the marketplace may be significantly influenced by these reviews. We have no control over whatthese industry analysts report, and because industry analysts may influence current and potential customers, our brand could be harmed if they do not providea positive review of our products and platform capabilities or view us as a market leader.33We do not intend to pay dividends for the foreseeable future.We have never declared nor paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation andexpansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. Consequently, stockholders, including holders ofour Convertible Notes who receive shares of our common stock upon conversion of the Convertible Notes, must rely on sales of their common stock afterprice appreciation, which may never occur, as the only way to realize any future gains on their investment.Delaware law and provisions in our amended and restated certificate of incorporation (“Restated Certificate”) and amended and restated bylaws(“Restated Bylaws”) could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock andConvertible Notes.Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent achange in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the personbecomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our Restated Certificate andRestated Bylaws contain provisions that may make the acquisition of our company more difficult, including the following: •the requirement of a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change themembership 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, includingpreferences 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 theresignation, 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 ourstockholders; •the requirement that a special meeting of stockholders be called only by a majority vote of our entire board of directors, the chairman of ourboard of directors or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or totake action, including to remove directors; •the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the votingstock, voting together as a single class, to amend the provisions of our Restated Certificate relating to the management of our business or ourRestated Bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt; and •advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to beacted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to electthe acquiror’s own slate of directors or otherwise attempting to obtain control of us.In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law. These provisions may prohibit largestockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time.A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to itscertificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision.34These and other provisions in our Restated Certificate, Restated Bylaws and in Delaware law could make it more difficult for stockholders orpotential 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 orimpede a merger, tender offer, or proxy contest involving our company. The existence of these provisions could negatively affect the price of our commonstock and the trading price of the Convertible Notes and limit opportunities for you to realize value in a corporate transaction.Our Restated Certificate provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us andour stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers oremployees.Our Restated Certificate provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceedingbrought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware GeneralCorporation Law, our Restated Certificate or our Restated Bylaws or any action asserting a claim against us that is governed by the internal affairs doctrine.This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or ourdirectors, officers or other employees and may discourage these types of lawsuits. Alternatively, if a court were to find the choice of forum provisioncontained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we might incur additional costsassociated with resolving such action in other jurisdictions.Item 1B. Unresolved Staff Comments.None.Item 2. Properties.We lease approximately 69,220 square feet of space for our corporate headquarters in San Mateo, California pursuant to a master lease that expires inApril 2024.We have additional domestic offices in Chicago, New York and San Diego. We also have international offices in Australia, Canada, Germany, Italy,Mexico, the Netherlands, Singapore, Sweden, Switzerland and the United Kingdom. We also lease offices for our support operations in Reno, Nevada;Dublin, Ireland; and Pune, India. We may further expand our facilities capacity as our employee base grows. We believe that we will be able to obtainadditional space on commercially reasonable terms.Item 3. Legal Proceedings.From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of business. As our growthcontinues, we may become party to an increasing number of litigation matters and claims. Although the results of litigation and claims cannot be predictedwith certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business, operatingresults, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs,diversion of management resources and other factors.Item 4. Mine Safety Disclosures.Not applicable.35PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Market Information for Common StockOur common stock is traded on the Nasdaq Global Select Market under the symbol “COUP.” The following table sets forth for the indicated periodsthe high and low sales prices of our common stock as reported by the Nasdaq Global Select Market. High Low Year ended January 31, 2018 Fourth quarter $38.57 $30.65 Third quarter $36.43 $28.95 Second quarter $37.73 $27.33 First quarter $31.80 $22.50 Year ended January 31, 2017 Fourth quarter $32.96 $23.52 Third quarter (beginning October 6, 2017) $41.61 $24.70 HoldersAs of January 31, 2018 there were 146 registered stockholders of record of our common stock and we believe a substantially greater number ofbeneficial owners who hold shares through brokers, banks or other nominees.DividendsWe have never declared or paid any cash dividends on our capital stock, and we do not currently intend to pay any cash dividends on our capitalstock in the foreseeable future. We currently intend to retain all available funds and any future earnings to support operations and to finance the growth anddevelopment of our business. Any future determination to pay dividends will be made at the discretion of our board of directors subject to applicable lawsand will depend upon, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements. Our future abilityto pay cash dividends on our capital stock may also be limited by the terms of any future debt or preferred securities or future credit facility.Use of ProceedsInitial Public OfferingIn October 2016, we closed our initial public offering, in which we sold 8,510,000 shares of common stock at a price to the public of $18.00 pershare, including shares sold in connection with the exercise of the underwriters’ option to purchase additional shares. The offer and sale of all of the shares inthe IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-211634), which was declared effective by theSEC on October 5, 2016.The remainder of the information required by this item regarding the use of our IPO proceeds has been omitted pursuant to SEC rules because suchinformation has not changed since our last periodic report was filed.Follow-On OfferingIn April 2017, we closed a follow-on offering (the “Offering”), in which we issued and sold 959,618 shares of common stock inclusive of theunderwriters’ option to purchase additional shares, which was exercised in full. The price per share to the public was $25.25. We received aggregateproceeds of $24.0 million from the Offering, net of underwriters’ discounts and commissions, before deducting offering costs of approximately $0.8 millionand inclusive of approximately $1.0 million received from selling stockholders due to the exercise of 244,387 options at an average per share exercise priceof $3.93.36Unregistered Sales of Equity SecuritiesOn December 1, 2017, we issued 221,257 shares of our common stock in connection with the purchase of Simeno Holdings AG, a Swiss corporation.This transaction was exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Regulation S.Performance GraphThe following shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated byreference into any of our other filings under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended.The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Nasdaq CompositeIndex and the Nasdaq Computer Index. The graph assumes $100 was invested at the market close on October 6, 2016, which was our initial trading day, inour common stock. Data for the Nasdaq Composite Index and the Nasdaq Computer Index assume reinvestment of dividends. Our offering price of ourcommon stock in our IPO, which had a closing stock price of $33.28 on October 6, 2016, was $18.00 per share.The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of ourcommon stock. 37Item 6. Selected Financial Data.The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of FinancialCondition and Results of Operations” and the consolidated financial statements and related notes included within this Annual Report on Form 10-K. Theconsolidated statements of operations data for the fiscal years ended January 31, 2018, 2017 and 2016, and the consolidated balance sheet data as ofJanuary 31, 2018 and 2017 are derived from our audited consolidated financial statements and related notes included elsewhere in this Annual Report onForm 10-K. The consolidated statements of operations data for the fiscal year ended January 31, 2015, and the consolidated balance sheet data as of January31, 2016 and 2015 are derived from audited consolidated financial statements that are not included in this Annual Report on Form 10-K. Our historicalresults are not necessarily indicative of our future results. The selected consolidated financial data in this section are not intended to replace our consolidatedfinancial statements and the related notes, and are qualified in their entirety by the consolidated financial statements and related notes included elsewhere inthis Annual Report on Form 10-K. For the year ended January 31, 2018 2017 2016 2015 (in thousands, except per share data) Consolidated Statements of Operations Data: Revenues: Subscription services $164,865 $117,788 $75,667 $43,051 Professional services and other 21,915 15,987 8,011 7,794 Total revenues 186,780 133,775 83,678 50,845 Cost of revenues: Subscription services(1) 36,481 25,055 16,804 8,813 Professional services and other(1) 23,425 21,214 15,107 9,911 Total cost of revenues 59,906 46,269 31,911 18,724 Gross profit 126,874 87,506 51,767 32,121 Operating expenses: Research and development(1) 44,536 30,262 22,767 11,887 Sales and marketing(1) 88,722 68,562 54,713 33,724 General and administrative(1) 38,578 24,106 19,540 13,146 Total operating expenses 171,836 122,930 97,020 58,757 Loss from operations (44,962) (35,424) (45,253) (26,636)Other income (expense), net 2,805 (1,335) (568) (563)Loss before provision for income taxes (42,157) (36,759) (45,821) (27,199)Provision for income taxes 1,648 848 335 101 Net loss $(43,805) $(37,607) $(46,156) $(27,300)Net loss per share attributable to common stockholders, basic and diluted(2) $(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) 52,999 19,988 4,704 2,999 Other Financial Data: Non-GAAP operating loss $(11,833) $(24,869) $(32,355) $(17,818)Non-GAAP net loss $(11,319) $(27,125) $(33,258) $(18,482)Free cash flows $15,316 $(25,446) $(25,937) $(14,299) (1)Includes stock-based compensation expense as follows:38 For the year ended January 31, 2018 2017 2016 2015 (in thousands) Cost of revenues: Subscription services $2,105 $715 $235 $109 Professional services and other 2,722 772 1,014 110 Research and development 6,928 1,766 1,236 337 Sales and marketing 8,476 3,130 1,347 433 General and administrative 9,464 3,069 6,736 818 Total stock-based compensation $29,695 $9,452 $10,568 $1,807 (2)See Note 12 to our consolidated financial statements for an explanation of the method used to calculate basic and diluted net loss per share attributable to commonstockholders. As of January 31, 2017 2018 2017 2016 2015 (in thousands) Consolidated Balance Sheet Data: Cash and cash equivalents $412,903 $201,721 $92,348 $41,974 Working capital 335,278 153,039 48,601 13,278 Total assets 572,450 283,864 139,926 69,606 Deferred revenue, current and non-current 128,030 90,840 64,926 40,739 Convertible senior notes, net 163,010 — — — Convertible preferred stock — — 164,950 88,444 Total stockholders’ equity (deficit) 240,545 173,892 (106,239) (72,569) Non‑GAAP Financial MeasuresIn addition to our results determined in accordance with U.S. generally accepted accounting principles, or GAAP, we believe the followingnon‑GAAP measures are useful in evaluating our operating performance. We regularly review the measures set forth below as we evaluate our business. For the year ended January 31, 2018 2017 2016 2015 (in thousands) Non-GAAP operating loss $(11,833) $(24,869) $(32,355) $(17,818)Non-GAAP net loss (11,319) (27,125) (33,258) (18,482)Free cash flows 15,316 (25,446) (25,937) (14,299) We define non‑GAAP operating loss as operating loss before stock‑based compensation, litigation‑related costs, amortization of acquired intangibleassets and amortization of debt discount and issuance costs. We define non‑GAAP net loss as net loss and comprehensive loss before stock‑basedcompensation, litigation‑related costs and amortization of acquired intangible assets, amortization of debt discount and issuance costs, and related taxeffects. We define free cash flows, a non-GAAP financial measure, as operating cash flows plus investing cash flows, minus the impact of any cash paid foracquisitions.We believe non‑GAAP operating loss and non-GAAP net loss provide investors and other users of our financial information consistency andcomparability with our past financial performance and facilitate period to period comparisons of operations. We believe non‑GAAP operating loss and non-GAAP net loss are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminatethe effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. We believe information regardingfree cash flows provides useful information to investors because it is an indicator of the strength and performance of our business operations.39We use non‑GAAP operating loss, non-GAAP net loss and free cash flows in conjunction with traditional GAAP measures as part of our overallassessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our businessstrategies and to communicate with our board of directors concerning our financial performance. Our definitions may differ from the definitions used by othercompanies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non‑GAAP operatingloss, non-GAAP net loss and free cash flows should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordancewith GAAP.We compensate for these limitations by providing investors and other users of our financial information a reconciliation of non‑GAAP operating lossto loss from operations, non-GAAP net loss to net loss, and free cash flows, to the related GAAP financial measure. We encourage investors and others toreview our financial information in its entirety, not to rely on any single financial measure and to view non‑GAAP operating loss, non-GAAP net loss, andfree cash flows in conjunction with loss from operations, net loss, and the consolidated statements of cash flows. The following tables provide areconciliation of loss from operations to non‑GAAP operating loss, from net loss to non-GAAP net loss, and from net cash provided by (used in) operatingactivities to free cash flows: For the year ended January 31, 2018 2017 2016 2015 (in thousands) Loss from operations $(44,962) $(35,424) $(45,253) $(26,636)Stock-based compensation 29,695 9,452 10,568 1,807 Litigation-related costs — 151 1,943 6,958 Amortization of acquired intangible assets 3,434 952 387 53 Non-GAAP operating loss $(11,833) $(24,869) $(32,355) $(17,818) For the year ended January 31, 2018 2017 2016 2015 (in thousands) Net loss $(43,805) $(37,607) $(46,156) $(27,300)Stock-based compensation 29,695 9,452 10,568 1,807 Litigation-related costs — 151 1,943 6,958 Amortization of acquired intangible assets 3,434 952 387 53 Amortization of debt discount and issuance costs 459 — — — Aggregate adjustment for income taxes (1,102) (73) — — Non-GAAP net loss $(11,319) $(27,125) $(33,258) $(18,482) For the year ended January 31, 2018 2017 2016 2015 (in thousands) Net cash provided by (used in) operating activities $19,770 $(20,955) $(22,069) $(11,929)Net cash used in investing activities (50,529) (11,241) (5,294) (2,370)Less: acquisitions, net of cash acquired (46,075) (6,750) (1,426) - Free cash flows $15,316 $(25,446) $(25,937) $(14,299)40Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial 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 assumptionsthat, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-lookingstatements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, those discussed in “Note AboutForward-Looking Statements” and those discussed in the section titled “Risk Factors” under Part I, Item 1A in this Annual Report on Form 10-K.OverviewWe are a leading provider of business spend management, or BSM, solutions, with a comprehensive, cloud-based platform that connects ourcustomers with more than three million suppliers globally.Our platform provides greater visibility into and control over how companies spend money. Using our platform, businesses are able to achieve real,measurable value and savings that drive their profitability; we call this “Value as a Service.” We refer to the process companies use to purchase goods andservices as business spend management and to the money that they manage with this process as spend under management. We offer a comprehensive, cloud-based BSM platform that is tightly integrated and delivers a broad range of capabilities that would otherwise require the purchase and use of multipledisparate point applications. The core of our platform consists of procurement, invoicing and expense management modules that form our transactionalengine and capture a company’s spend. In addition, our platform offers supporting modules to help companies further manage their spend, including strategicsourcing, spend analysis, contract management, supplier management and inventory management. We also offer a purchasing program, Coupa Advantage,that leverages the collective buying power of Coupa customers, and provide benchmarking and insights to customers on our BSM platform through asolution we refer to as Community Intelligence. Moreover, through our Coupa Open Business Network, suppliers of all sizes can easily interact with buyerselectronically, thus significantly reducing paper, improving operating efficiencies and reducing costs.We offer access to our platform under a Software-as-a-Service (SaaS) business model. At the time of initial deployment, our customers often make aset of common functions available to the majority of their licensed employees, as well as incremental modules for select employees and procurementspecialists, which we refer to as power users. Therefore, we are typically able to capture most of the expected annual recurring revenue opportunity at theinception of our customer relationships, rather than targeting specific power users at the outset of the customer relationship with the intention of expandingand getting more annual recurring revenue at later stages of the customer relationship. Customers can rapidly implement our platform, with implementationperiods typically ranging from a few weeks to several months. Customers also benefit from software updates that typically require little downtime.We market and sell our solutions to a broad range of enterprises worldwide. We have a diverse, multi-national customer base spanning various sizesand industries and no significant customer concentration. No customer accounted for more than 10% of our total revenues for the years ended January 31,2018, 2017 and 2016, respectively.We market our platform primarily through a direct sales force and also benefit from leads driven by our partner ecosystem. Our initial contract termsare typically three years, although some customers commit for longer or shorter periods. Substantially all 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. Oursubscription fee includes access to our service, technical support and management of the hosting infrastructure. We generally recognize revenues from oursubscription fees ratably over the contractual term of the arrangement. We do not charge suppliers who are on our platform to transact with our customers. Webelieve this approach helps attract more suppliers to our platform and increases the value of our platform to customers.41We have continued to make significant expenditures and investments for long-term growth, including investment in our platform and infrastructureto deliver new functionality and modules to meet the evolving needs of our customers and to take advantage of our market opportunity. We intend tocontinue to increase our investment in sales and marketing, as we further expand our sales teams, increase our marketing activities, and grow our internationaloperations. 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 35%, 32% and 28%,respectively, of our total revenues for the years ended January 31, 2018, 2017 and 2016. We believe there is further opportunity to increase our internationalrevenues in absolute dollars and as a percentage of our total revenues. As a result, we are increasingly investing in our international operations and we intendto expand our footprint in international markets.Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and politicalrisks that are different from those in the United States. Because of our limited experience with international operations, our international expansion effortsmay not be successful in creating additional demand for our platform outside of the United States or in effectively selling subscriptions to our platform in anyor all of the international markets we enter.Recent Business DevelopmentsIn April 2017, we closed a follow-on offering (the “Offering”), in which we issued and sold 959,618 shares of common stock inclusive of theunderwriters’ option to purchase additional shares, which was exercised in full. The price per share to the public was $25.25. We received aggregateproceeds of $24.0 million from the Offering, net of underwriters’ discounts and commissions, before deducting offering costs of approximately $0.8 millionand inclusive of approximately $1.0 million received from selling stockholders due to the exercise of 244,387 options at an average per share exercise priceof $3.93.In May 2017, we acquired substantially all of the issued and outstanding capital stock held by shareholders of Trade Extensions TradeExt AB, aSwedish corporation that specializes in strategic sourcing. We paid aggregate consideration of approximately $40.9 million in cash, of which $7.2 million isbeing held in escrow for 18 months after the transaction closing date to secure the indemnification obligations of the Trade Extensions shareholders. Inaddition, approximately $4.1 million in the form of 148,476 shares of our common stock was issued to certain key employees of Trade Extensions, whichstock is subject to service vesting conditions including continued employment with Coupa. The value assigned to the common stock issued will be recordedas post-acquisition compensation expense and has been excluded from the purchase consideration.In December 2017, we completed the acquisition of Simeno Holdings AG (“Simeno”), a cross-catalog search and advanced catalog managementcompany. Simeno creates localized content from third-party supplier sites to power cross-catalog searches, including content from many of the leading B2Bmarketplaces. The acquisition increased our local presence in key German and Swiss markets. The aggregate consideration for the acquisition was $8.7million, paid in cash, of which $1.5 million is being held back for a period of 24 months after the transaction closing date to secure the indemnificationobligations of the Simeno shareholders.In January 2018, we raised approximately $200.4 million in net proceeds (after adjusting for debt issuance costs, including the underwritingdiscount, and the net cash used to purchase the capped call, discussed below) upon completion of a private offering of convertible senior notes (“ConvertibleNotes”).The Convertible Notes pay semi-annual interest in cash at a rate of 0.375% per annum on January 15 and July 15 of each year, beginning on July 15,2018. The Convertible Notes will mature on January 15, 2023 unless redeemed, repurchased or converted prior to such date. Prior to the close of business onthe business day immediately preceding October 15, 2022, the Convertible Notes will be convertible at the option of holders during certain periods, uponsatisfaction of certain conditions. On or after October 15, 2022, the notes will be convertible at any time until the close of business on the second scheduledtrading day immediately preceding the maturity date. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or acombination of cash and shares of our common stock, at our election. It is our current intent to settle the principal balance of the Convertible Notes in cashand any conversion obligation in excess of the principal portion in shares of our common stock.42In conjunction with the issuance of the Convertible Notes, we entered into a Capped Call option on our stock with certain counterparties. Byentering into the Capped Call, we mitigate potential dilution resulting from conversion of the Convertible Notes, effectively increasing the conversion priceof the Convertible Notes. The Capped Call exercise price is equal to the Convertible Note’s initial conversion price of $44.5068 per share and has a cap priceof $63.821 per share which equates to a 43.4% premium over the strike price and is subject to certain adjustments under the terms of the capped calltransactions.Our Business ModelOur business model focuses on maximizing the lifetime value of a customer relationship, and we continue to make significant investments in order togrow our customer base. Due to our subscription model, we recognize subscription revenues ratably over the term of the subscription period. As a result, theprofitability of a customer to our business in any particular period depends in part upon how long a customer has been a subscriber on our platform. Ingeneral, the associated upfront costs with respect to new customers are higher in the first year than the aggregate revenues we recognize from those newcustomers in the first year. We believe that, over time, as our customer base grows and a relatively higher percentage of our subscription revenues areattributable to renewals versus new customers or upsells to existing customers, associated sales and marketing expenses and other allocated upfront costs as apercentage of revenues will decrease, subject to investments we plan to make in our business. Over the lifetime of the customer relationship, we also incursales and marketing costs to manage the account, renew or upsell the customer to more modules and more users. However, these costs are significantly lessthan the costs initially incurred to acquire the customer. We calculate the lifetime value of our customers and associated customer acquisition costs for aparticular year by comparing (i) gross profit from net new subscription revenues for the year multiplied by the inverse of the estimated subscription renewalrate to (ii) total sales and marketing expense incurred in the preceding year. On this basis, we estimate that for each of fiscal 2018, 2017 and 2016, thecalculated lifetime value of our customers has exceeded six times the associated cost of acquiring them.Key MetricsWe review the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate businessplans and make strategic decisions: As of January 31, 2018 2017 2016 Cumulative spend under management ($ billions) $680.2 $364.6 $189.5 Backlog ($ millions) $230.8 $168.2 $131.8 Deferred revenue ($ millions) $128.0 $90.8 $64.9 Total customers 717 535 414Cumulative Spend Under ManagementCumulative spend under management represents the aggregate amount of money that has been transacted through our core Coupa platform for all ofour customers collectively since we launched our core platform. We calculate this metric by aggregating the actual transaction data, such as invoices,purchase orders and expenses, from customers on our core Coupa platform. Cumulative spend under management does not include spending data associatedwith modules from acquired companies, including Spend360, Trade Extensions, and Simeno. The cumulative spend under management metrics presentedabove do not directly correlate to our revenue or results of operations because we do not generally charge our customers based on actual usage of our coreplatform. However, we believe the cumulative spend under management metrics do illustrate the adoption, scale and value of our platform, which we believeenhances our ability to maintain existing customers and attract new customers.43Backlog and Deferred RevenueBacklog represents future non-cancellable amounts to be invoiced under our agreements. We generally sign multiple-year subscription contracts andinvoice an initial annual amount at contract signing followed by subsequent annual invoices. At any point in the contract term, there can be amounts that wehave not yet been contractually able to invoice. Until such time as these amounts are invoiced, they are not recorded in revenues, deferred revenue, accountsreceivable or elsewhere in our consolidated financial statements, and are considered by us to be backlog. We expect backlog to fluctuate up or down fromperiod to period for several reasons, including the timing and duration of customer contracts, varying billing cycles and the timing and duration of customerrenewals. We reasonably expect approximately half of our backlog as of January 31, 2018, will be invoiced during the fiscal year ended January 31, 2019,primarily due to the fact that our contracts are typically three years in length.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 areporting period. We generally sign multiple year subscription contracts for our platform and invoice an initial amount at contract signing followed bysubsequent annual invoices. The majority of our deferred revenue balance consists of subscription revenues that are recognized ratably over the contractualperiod. Together, the sum of deferred revenue and backlog represents the total billed and unbilled contract value yet to be recognized in revenues andprovides visibility into future revenue streams.Total CustomersWe define a customer as a separate and distinct buying entity, such as a company, an educational or government institution, or a distinct businessunit of a large corporation that has an active contract with us or our partner to access our services. We believe the number of total customers is a key indicatorof our market penetration, growth and future revenues. Our ability to attract new customers is primarily affected by the effectiveness of our marketingprograms and our direct sales force. Accordingly, we have aggressively invested in and intend to continue to invest in our direct sales force. In addition, weare continuing to pursue additional partnerships with global systems integrators and other strategic partners. Components of Results of OperationsRevenuesWe offer subscriptions to our cloud-based BSM platform, including procurement, invoicing and expense management. We derive our revenuesprimarily from subscription fees and professional services fees. Subscription revenues consist primarily of fees to provide our customers access to our cloud-based platform, which includes routine customer support at no additional cost. Professional services fees include deployment services, optimization services,and training. Subscription revenues are a function of the number of customers, the number of users at each customer, the number of modules subscribed to byeach customer, the price of our modules, and renewal rates.Subscription revenues accounted for approximately 88%, 88% and 90%, respectively, of our revenues for the fiscal years ended January 31, 2018,2017 and 2016. Subscription fees are recognized ratably as revenues over the contract term beginning on the date the application is made available to thecustomer. Our new business subscriptions typically have a term of three years. We generally invoice our customers in annual installments at the beginning ofeach year in the subscription period. Amounts that have been invoiced are initially recorded as deferred revenue and are recognized ratably over thesubscription period. Amounts that have not been invoiced are not reflected in our consolidated financial statements.Professional services revenues consist primarily of fees associated with the implementation and configuration of our subscription service.Professional services are generally sold on a fixed-fee or time-and-materials basis. Revenue for time-and-material arrangements is recognized as the servicesare performed. For fixed‑fee and other types of arrangements entered into prior to the fourth quarter of the fiscal year ended January 31, 2017, professionalservices revenue was generally deferred and recognized upon the completion of the project under the completed performance method of accounting. Duringthe fourth quarter of the fiscal year ended January 31, 2017, we developed the ability to accurately estimate professional services costs on a project basis. Assuch, revenue for fixed-fee and other types of arrangements entered into after the third quarter of the fiscal year ended January 31, 2017 is recognized asservices are performed under the proportional performance method of accounting. At January 31, 2018, we have fully recognized professional servicesrevenue from contracts signed prior to October 31, 2016, for which revenue was recognized under the completed contract method.44The terms of our typical professional services arrangements provide that our customers pay us within 30 days from the invoice date. Fixed-feeservices arrangements are generally invoiced in advance. We have made significant investments in our professional services business that are designed toensure customer success and adoption of our platform. We are continuing to invest in expanding our professional services partner ecosystem to furthersupport our customers. As the professional services practices of our partner firms continue to develop, we expect them to increasingly contract directly withour subscription customers and we incentivize our sales force to further this objective.Cost of RevenuesSubscription ServicesCost of subscription services consists primarily of expenses related to hosting our service and providing customer support. Significant expenses arecomprised 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 developed technology.Professional Services and Other Cost of RevenuesCost of professional services and other cost of revenues consist primarily of personnel and related costs directly associated with our professionalservices and training departments, including salaries, benefits, bonuses and stock-based compensation; the costs of contracted third-party vendors; andallocated overhead. These costs are generally expensed in the period incurred; therefore, the costs associated with our professional services revenues may notalign with the period in which the corresponding professional services revenues are recognized because we use the completed performance method ofaccounting for professional services revenues under fixed-fee arrangements for professional services entered into prior to the fourth quarter of the fiscal yearended January 31, 2017.Professional services associated with the implementation and configuration of our subscription platform are performed directly by our services team,as well as by contracted third-party vendors. In cases in which third party vendors invoice us for services performed for our customers, those fees are accruedover the requisite service period.Operating ExpensesResearch and DevelopmentResearch and development expenses consist primarily of personnel costs of our development team, including salaries, benefits, bonuses, stock-basedcompensation expense and allocated overhead costs. Our cycle of frequent updates has facilitated rapid innovation and the introduction of new modulesthroughout our history. We have aggressively invested, and intend to continue to invest, in developing technology to support our growth. We capitalizecertain software development costs that are attributable to developing new modules and features and adding incremental functionality to our platform, andwe amortize such costs as costs of subscription revenues over the estimated life of the new application or incremental functionality, which is two to threeyears.Sales and MarketingSales and marketing expenses consist primarily of personnel and related costs directly associated with our sales and marketing staff, includingsalaries, benefits, bonuses, commissions and stock-based compensation. Commissions earned by our sales force that can be associated directly with anoncancellable subscription contract are deferred and amortized over the same period that revenues are to be recognized for the related noncancellablecontract. Other sales and marketing costs include promotional events to promote our brand, including our INSPIRE conferences, advertising, allocatedoverhead and amortization of customer relationships and trademark.45General and AdministrativeGeneral and administrative expenses consist of personnel costs and related expenses for executive, finance, legal, human resources, recruiting, andemployee-related information technology and administrative personnel, including salaries, benefits, bonuses and stock-based compensation expense;professional fees for external legal, accounting, recruiting and other consulting services; allocated overhead costs; and legal settlements.Other Income (Expense), NetOther income (expense), net consists primarily of the effects of exchange rates on our foreign currency-denominated asset and liability balances,interest expense associated with the convertible notes, interest income earned on our cash and cash equivalents, and the change in the fair value of ourpreferred stock warrants. All translation adjustments are recorded as foreign currency gains (losses) in the consolidated statements of operations. To date, wehave had minimal interest income.Provision for Income TaxesProvision for income taxes consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business. We maintain afull valuation allowance on our U.S. and the majority of our international deferred tax assets as we have concluded that it is not more likely than not that thedeferred assets will be utilized.On December 22, 2017, the Tax Act was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions thataffect 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.Results of OperationsThe following tables set forth selected consolidated statements of operations data and such data as a percentage of total revenues for each of theperiods indicated: For the year ended January 31, 2018 2017 2016 (in thousands) Revenues: Subscription services $164,865 $117,788 $75,667 Professional services and other 21,915 15,987 8,011 Total revenues 186,780 133,775 83,678 Cost of revenues: Subscription services 36,481 25,055 16,804 Professional services and other 23,425 21,214 15,107 Total cost of revenues 59,906 46,269 31,911 Gross profit 126,874 87,506 51,767 Operating expenses: Research and development 44,536 30,262 22,767 Sales and marketing 88,722 68,562 54,713 General and administrative 38,578 24,106 19,540 Total operating expenses 171,836 122,930 97,020 Loss from operations (44,962) (35,424) (45,253)Other income (expense), net 2,805 (1,335) (568)Loss before provision for income taxes (42,157) (36,759) (45,821)Provision for income taxes 1,648 848 335 Net loss $(43,805) $(37,607) $(46,156)46 For the year ended January 31, 2018 2017 2016 Revenues: Subscription services 88 % 88 % 90 %Professional services and other 12 12 10 Total revenues 100 100 100 Cost of revenues: Subscription services 20 19 20 Professional services and other 13 16 18 Total cost of revenues 33 35 38 Gross profit 67 65 62 Operating expenses: Research and development 24 23 27 Sales and marketing 48 51 65 General and administrative 21 18 24 Total operating expenses 93 92 116 Loss from operations (26) (27) (54) Other income (expense), net 2 (1) (1) Loss before provision for income taxes (24) (28) (55) Provision for income taxes 1 1 — Net loss (25)% (29)% (55)% Fiscal Years Ended January 31, 2018, 2017 and 2016Revenues For the year ended January 31, 2017 to 2018 2016 to 2017 2018 2017 2016 % Change % Change (in thousands) Subscription services $164,865 $117,788 $75,667 40% 56%Professional services and other 21,915 15,987 8,011 37% 100%Total revenues $186,780 $133,775 $83,678 40% 60% Total revenues were $186.8 million for the fiscal year ended January 31, 2018, compared to $133.8 million for the fiscal year ended January 31,2017, an increase of $53.0 million, or 40%. Subscription services revenues were $164.9 million for the fiscal year ended January 31, 2018, compared to$117.8 million, or 88% of total revenues, for the fiscal years ended January 31, 2018 and 2017. This increase in absolute dollars was primarily due to theacquisition of new customers, the sale of additional users or modules to existing customers, and to a lesser extent, new revenues generated by the acquisitionscompleted 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 customersand a favorable impact from the timing of completion of various projects for which revenue was recognized under the completed performance method ofaccounting. At January 31, 2018, we have fully recognized professional services revenue from contracts signed prior to October 31, 2016, for which revenuewas recognized under the completed contract method.Total revenues were $133.8 million for the fiscal year ended January 31, 2017 compared to $83.7 million for the fiscal year ended January 31, 2016,an increase of $50.1 million, or 60%. Subscription services revenues were $117.8 million, or 88% of total revenues, for the fiscal year ended January 31,2017, compared to $75.7 million, or 90% of total revenues, for the fiscal year ended January 31, 2016. This increase was primarily due to the acquisition ofnew customers, an increase in average subscription revenue per customer and add-on subscription revenue from47the sale of additional users or modules to existing customers. Professional services revenues were $16.0 million for the fiscal year ended January 31, 2017compared to $8.0 million for the fiscal year ended January 31, 2016. This increase of $8.0 million, or 100%, was primarily due to an increase in the number ofcompleted new-customer implementation projects. During the fourth quarter of the fiscal year ended January 31, 2017, we developed the ability to accuratelyestimate professional services costs on a project basis. As such, revenue for fixed-fee and other types of arrangements entered into after the third quarter of thefiscal year ended January 31, 2017 is recognized as services are performed under the proportional performance method of accounting. This change did nothave a material impact on the revenues recognized during the fiscal year ended January 31, 2017 since it only has been applied prospectively toarrangements entered into during the fourth quarter of the fiscal year ended January 31, 2017. Cost of Revenues For the year ended January 31, 2017 to 2018 2016 to 2017 2018 2017 2016 % Change % Change (in thousands) Subscription services $36,481 $25,055 $16,804 46% 49%Professional services and other 23,425 21,214 15,107 10% 40%Total cost of revenues $59,906 $46,269 $31,911 29% 45% Cost of subscription services was $36.5 million for the fiscal year ended January 31, 2018, compared to $25.1 million for the fiscal year endedJanuary 31, 2017, an increase of $11.4 million, or 46%. The increase in cost of subscription services was primarily due to an increase of $4.0 million inemployee related expenses largely due to higher stock-based compensation costs, an increase of $2.4 million in hosting fees to accommodate customergrowth, an increase of $2.3 million in amortization of capitalized software development costs and intangible assets due to acquisitions completed during theyear, an increase of $2.7 million related to allocated facilities and other costs driven by our overall growth.Cost of subscription services was $25.1 million for the fiscal year ended January 31, 2017, compared to $16.8 million for the fiscal year endedJanuary 31, 2016, an increase of $8.3 million, or 49%. The increase in cost of subscription services was primarily due to an increase of $3.1 million inemployee compensation costs related to higher headcount, an increase of $2.2 million in hosting fees to accommodate customer growth, an increase of$1.7 million in amortization of capitalized software development costs and intangible assets, and an increase of $1.3 million related to allocated facilitiesand other costs driven by our overall growth.Cost of professional services was $23.4 million for the fiscal year ended January 31, 2018, compared to $21.2 million for the fiscal year endedJanuary 31, 2017, an increase of $2.2 million, or 10%. The increase in cost of professional services was primarily due to an increase of $5.0 million inemployee related expenses largely due to higher stock-based compensation costs, and an increase of $1.1 million related to allocated facilities and travelcosts driven by our overall growth. These increases were offset by a $3.9 million decrease in costs associated with work performed by subcontractors forengagements where we or our partner firms had contracted directly with the customer to perform the professional services. Cost of professional services was $21.2 million for the fiscal year ended January 31, 2017, compared to $15.1 million for the fiscal year endedJanuary 31, 2016, an increase of $6.1 million, or 40%. The increase in cost of professional services was primarily due to an increase of $3.3 million inemployee compensation costs related to higher headcount, an increase of $1.8 million for work performed by subcontractors for engagements where we or ourpartner firms had contracted directly with the customer to perform the professional services, and an increase of $1.0 million related to travel expenses andallocated facilities costs driven by our overall growth. 48Gross Profit For the year ended January 31, 2017 to 2018 2016 to 2017 2018 2017 2016 % Change % Change (in thousands) Gross profit $126,874 $87,506 $51,767 45% 69% Gross profit was $126.8 million for the fiscal year ended January 31, 2018, compared to $87.5 million for the fiscal year ended January 31, 2017, anincrease of $39.3 million, or 45%. The increase in gross profit was primarily due to the acquisition of new customers, and the sale of new additional users ormodules to existing customers, in addition and to a lesser extent, new revenues generated by the acquisitions completed during the fiscal year ended January31, 2018.. In addition, professional services gross profit improved, driven by a favorable impact from the timing of completion of various projects for whichrevenue is recognized under the completed performance method of accounting. Gross margin percentage, defined as gross profit divided by total revenues,was 69% for the fiscal year ended January 31, 2018, compared to 65% for the fiscal year ended January 31, 2017. Gross profit was $87.5 million for the fiscal year ended January 31, 2017, compared to $51.8 million for the fiscal year ended January 31, 2016, anincrease of $35.7 million, or 69%. The increase in gross profit is the result of the increase in our subscription services revenues due primarily to the additionof new customers in the fiscal year. This was offset by negative professional services gross margins primarily because, through October 31, 2016, revenuesfrom fixed-fee professional services agreements were generally deferred and recognized upon completion of the project under the completed performancemethod of accounting, while the related costs were recognized as incurred. Gross margin percentage was 65% for the fiscal year ended January 31, 2017,compared to 62% for the fiscal year ended January 31, 2016. Operating ExpensesResearch and Development For the year ended January 31, 2017 to 2018 2016 to 2017 2018 2017 2016 % Change % Change (in thousands) Research and development $44,536 $30,262 $22,767 47% 33% Research and development expenses were $44.5 million for the fiscal year ended January 31, 2018, compared to $30.3 million for the fiscal yearended January 31, 2017, an increase of $14.2 million, or 47%. The increase was primarily due to an increase of $12.4 million in employee related expenseslargely due to higher headcount and stock-based compensation costs, and an increase of $1.8 million related to allocated facilities, travel and other costsdriven by our overall growth. We expect research and development expenses will continue to increase in absolute dollars in fiscal 2019 as we continue toinvest in research and development activities.Research and development expenses were $30.3 million for the fiscal year ended January 31, 2017, compared to $22.8 million for the fiscal yearended January 31, 2016, an increase of $7.5 million, or 33%. The increase was primarily due to an increase of $7.1 million in compensation costs related tohigher headcount, and an increase of $1.6 million related to allocated facilities, travel and other costs driven by our overall growth. The increase in researchand development costs has been partially offset by an increase in capitalized software development costs of $1.2 million. 49Sales and Marketing For the year ended January 31, 2017 to 2018 2016 to 2017 2018 2017 2016 % Change % Change (in thousands) Sales and marketing $88,722 $68,562 $54,713 29% 25% Sales and marketing expenses were $88.7 million for the fiscal year ended January 31, 2018, compared to $68.6 million for the fiscal year endedJanuary 31, 2017, an increase of $20.1 million, or 29%. The increase was primarily due to an increase of $15.4 million in employee related expenses largelydue 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 millionrelated to allocated facilities costs and other costs driven by our overall growth. We expect sales and marketing expenses will continue to increase in absolutedollars in fiscal 2019 as we continue to expand our operations. Sales and marketing expenses were $68.6 million for the fiscal year ended January 31, 2017, compared to $54.7 million for the fiscal year endedJanuary 31, 2016, an increase of $13.9 million, or 25%. The increase was primarily due to an increase of $10.8 million in compensation costs related tohigher headcount, an increase of $0.7 million in marketing and event costs, an increase of $1.1 million in costs due to additional travel expenses and anincrease of $2.3 million related to allocated facilities costs and other costs driven by our overall growth. This was offset by a decrease of $1.2 million inoutsourced advertising, marketing, consulting and professional services. General and Administrative For the year ended January 31, 2017 to 2018 2016 to 2017 2018 2017 2016 % Change % Change (in thousands) General and administrative $38,578 $24,106 $19,540 60% 23% General and administrative expenses were $38.6 million for the fiscal year ended January 31, 2018, compared to $24.1 million for the fiscal yearended 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 expenseslargely due to higher headcount and stock-based compensation costs, $3.4 million for professional and outside services due to the continued transition tobeing a public company, and an increase of $0.6 million related to allocated facilities costs, travel and other costs driven by our overall growth. We expectgeneral and administrative expenses will continue to increase in absolute dollars in fiscal 2019 due to the growth of our company. General and administrative expenses were $24.1 million for the fiscal year ended January 31, 2017, compared to $19.5 million for the fiscal yearended January 31, 2016, an increase of $4.6 million, or 23%. The increase was primarily due to an increase of $5.1 million in compensation costs related tohigher headcount, $2.7 million for professional and outside services, $0.4 million due to increased bad debt expense and an increase of $2.0 million relatedto allocated facilities costs, travel and other costs driven by our overall growth. These increases were partially offset by $3.9 million of stock-basedcompensation charges mainly resulting from the sale of common stock by certain employees and former employees during the fiscal year ended January 31,2016, which did not recur during the fiscal year ended January 31, 2017. Additionally, there is a decrease of $1.8 million of litigation costs from fiscal 2016that did not recur during the fiscal year ended January 31, 2017, due to the resolution of an ongoing litigation matter. For the year ended January 31, 2017 to 2018 2016 to 2017 2018 2017 2016 % Change % Change (in thousands) Other income (expense), net $2,805 $(1,335) $(568) 310% 135%50 Other income, net, was $2.8 million for the fiscal year ended January 31, 2018, compared to a net expense of $1.3 million for the fiscal year endedJanuary 31, 2017, an increase of $4.1 million, or 310%. The increase in income was due to a $3.1 million in net currency gains, primarily driven by thestrengthened British Pound and Euro during the period, and $1.0 million increase in interest income. Other expense, net, was $1.3 million for the fiscal year ended January 31, 2017, compared to $0.6 million for the fiscal year ended January 31, 2016,an increase of $0.8 million, or 135%. The increase was primarily related to the increase in currency losses of $0.5 million, due to the revaluation of accountsreceivable held in foreign currency at January 31, 2017. In addition, there was an increase in mark-to-market expense related to an outstanding warrant, of$0.4 million during the fiscal year. For the year ended January 31, 2017 to 2018 2016 to 2017 2018 2017 2016 % Change % Change (in thousands) Provision for income taxes $1,648 $848 $335 94% 153%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, or 94%. This increase is driven by our increased tax expense primarily in foreign jurisdictions.Provision for income taxes was $0.8 million for the fiscal year ended January 31, 2017, compared to $0.3 million for the year ended January 31,2016, an increase of $0.5 million, or 153%. This increase is driven by our increased tax expense primarily in foreign jurisdictions. Liquidity and Capital ResourcesAs of January 31, 2018, our principal sources of liquidity were cash and cash equivalents totaling $412.9 million, including net proceeds from ourconvertible debt offering. Our cash equivalents are comprised primarily of bank deposits and money market funds. We believe our existing cash and cashequivalents will be sufficient to meet our projected operating requirements for at least the next 12 months.Our future capital requirements will depend on many factors, including our pace of growth, subscription renewal activity, the timing and extent ofspend to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced services offerings and thecontinuing market acceptance of our services. We may in the future enter into arrangements to acquire or invest in complementary businesses, services andtechnologies and intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing isrequired 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, ourbusiness, operating results and financial condition would be adversely affected.Operating ActivitiesCash provided by operating activities of $19.8 million for the fiscal year ended January 31, 2018, was 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 $21.8 million, offsetby 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 $1.0 million.51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 netchange in operating assets and liabilities was primarily due to an unfavorable change from increases in accounts receivable of $20.0 million, deferredcommissions 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 $25.9million and accrued expenses, accounts payable and other liabilities of $2.0 million.Cash used in operating activities of $22.1 million for the fiscal year ended January 31, 2016, was primarily due to a net loss of $46.2 million,partially offset by stock-based compensation of $10.6 million and depreciation and amortization, including deferred commissions, of $5.6 million. Changesin working capital were favorable to cash flows from operations due to a change in the deferred revenue balance of $24.2 million, partially offset by anincrease in accounts receivable of $8.3 million, an increase of capitalized deferred commissions of $5.4 million and other operating assets and liabilitieschanges.Investing ActivitiesCash used in investing activities for the fiscal year ended January 31, 2018, of $50.5 million was primarily related to the acquisitions of TradeExtensions 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.Cash used in investing activities for the fiscal year ended January 31, 2016, of $5.3 million was primarily related to $3.9 million for purchases ofproperty and equipment, as well as $1.4 million for business acquisitions.Financing ActivitiesCash provided by financing activities for the fiscal year ended January 31, 2018, of $241.9 million, was primarily due to the net proceeds obtainedfrom the issuance of the convertible notes net of issuance costs incurred and costs to purchase the capped call for approximately $200.4 million, cash raisedin our follow-on common stock offering net of underwriting discount, commissions and offering costs for $22.3 million and $19.3 million in proceeds fromthe 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 inour IPO for $137.2 million and $4.3 million in proceeds from the exercise of stock options. Cash provided by financing activities for the fiscal year ended January 31, 2016, of $77.7 million consisted primarily of net proceeds from theissuance of Series G convertible preferred stock of $75.7 million, and $2.1 million in proceeds from the exercise of stock options and preferred stock warrants.Off-Balance Sheet ArrangementsThrough January 31, 2018, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured financeor special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow orlimited purposes.52Commitments and Contractual ObligationsOur principal commitments and contractual obligations consist of our senior notes due in 2023, obligations under operating leases for office facilitiesand contractual purchase obligations for hosting services that support our business operations. The following table summarizes our non-cancelablecontractual obligations as of January 31, 2018. Payments due by period Total Less Than1 Year 1-3 Years 3-5 Years More Than5 Years (in thousands) Convertible Notes $230,000 $— $— $230,000 $— Aggregate interest obligation(1) 4,353 891 1,713 1,749 — Operating lease obligations 37,007 6,175 12,767 11,984 6,081 Purchase obligations 6,000 6,000 — — — Total contractual obligations $277,360 $13,066 $14,480 $243,733 $6,081 (1)Represents estimated aggregate interest obligations for our outstanding Convertible Notes that are payable in cash.Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have beenprepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reportedamounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenuesgenerated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that webelieve are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities thatare not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that theaccounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areasinvolving management’s judgments and estimates.Revenue RecognitionWe derive our revenues primarily from subscription services fees and professional services fees. We offer subscriptions to our cloud modules throughcontracts that are typically three years in length. The arrangements do not contain general rights of return. The subscription contracts do not providecustomers with the right to take possession of the software supporting the modules and, as a result, are accounted for as service contracts.We commence revenue recognition for our subscription services and professional services when all of the following criteria are met: •there is persuasive evidence of an arrangement; •the service has been or is being provided to the customer; •collection of the fees is reasonably assured; and •the amount of fees to be paid by the customer is fixed or determinable.Subscription Services RevenuesSubscription services revenues are recognized ratably over the contractual term of the arrangement beginning on the date that the service is madeavailable to the customer, assuming all other revenue recognition criteria have been met.53Professional Services RevenuesProfessional services are generally sold on a fixed-fee or time-and-materials basis. Revenue for time-and-material arrangements is recognized as theservices are performed. For fixed-fee and other types of arrangements, entered into prior to the fourth quarter of the fiscal year ended January 31, 2017,professional services revenue was generally deferred and recognized upon the completion of the project under the completed performance method ofaccounting. During the fourth quarter of the fiscal year ended January 31, 2017, we developed the ability to accurately estimate professional services costs ona project basis. As such, revenue for fixed-fee and other types of arrangements entered into after the third quarter of the fiscal year ended January 31, 2017 isrecognized as services are performed under the proportional performance method of accounting. At January 31, 2018, we have fully recognized professionalservices revenue from contracts signed prior to October 31, 2016, for which revenue was recognized under the completed contract method.Multiple Deliverable ArrangementsFor arrangements with multiple deliverables, we evaluate whether the individual deliverables qualify as separate units of accounting. In order to treatdeliverables in a multiple deliverable arrangement as separate units of accounting, the deliverables must have standalone value upon delivery. If thedeliverables have standalone value upon delivery, we account for each deliverable separately, recognizing the respective revenues as the services aredelivered. If one or more of the deliverables does not have standalone value upon delivery, the deliverables without standalone value are combined with thefinal deliverable within the arrangement and treated as a single unit of accounting. Revenues for arrangements treated as a single unit of accounting aregenerally recognized over the subscription services period, which is typically the final deliverable.We have determined that our subscription services have standalone value, as we sell our subscriptions separately. The professional services related toour subscription services also have standalone value as numerous partners are trained to perform these professional services and these partners have a historyof successfully completing significant deployments of our software platform.When multiple deliverables included in an arrangement are separable into different units of accounting, the arrangement consideration is allocated tothe identified separate units of accounting based on the relative selling price of each unit of accounting. Multiple deliverable arrangement accountingguidance provides a hierarchy when determining the relative selling price for each unit of accounting. Vendor-specific objective evidence (VSOE) of sellingprice, based on the price at which the item is regularly sold by the vendor on a standalone basis, should be used if it exists. If VSOE of selling price is notavailable, third-party evidence (TPE) of selling price is used to establish the selling price if it exists. VSOE and TPE do not currently exist for any of ourdeliverables. Accordingly, for arrangements with multiple deliverables that can be separated into different units of accounting, the relative selling price ofeach unit of accounting is based on best estimate of selling price (BESP).We determine the BESP for deliverables based on overall pricing objectives, market conditions and entity-specific factors. This includes a review ofhistorical data taking into consideration the size of the arrangements, the cloud applications being sold, customer demographics and the numbers and typesof users within the arrangements.Deferred CommissionsWe capitalize commission costs that are incremental and directly related to the acquisition of customer contracts. Commissions are earned by salespersonnel upon the execution of the sales contracts, and commission payments are generally made shortly after they are earned. Deferred commissions areamortized over the term of the related non-cancelable customer contract. We capitalized commission costs of $5.7 million and amortized $4.0 million duringthe fiscal year ended January 31, 2018. We capitalized commission costs of $4.5 million and amortized $4.0 million to expense during the fiscal year endedJanuary 31, 2017. We capitalized commission costs of $5.4 million and amortized $2.8 million to expense during the fiscal year ended January 31, 2016.54Capitalized Software Development CostsWe capitalize certain development costs incurred in connection with software development for our cloud-based platform. Costs incurred in thepreliminary stages of development are expensed as incurred.Once software has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software issubstantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. These software development costs arerecorded as part of property and equipment. Capitalized software development costs are amortized on a straight-line basis over the technology’s estimateduseful life, which is generally two to three years. During the fiscal year ended January 31, 2018 we capitalized $3.8 million in software development costs.Amortization expense related to software development costs was approximately $3.9 million for the fiscal year ended January 31, 2018. We capitalizedsoftware development costs of $4.3 million and amortized $3.3 million to expense during the fiscal year ended January 31, 2017. We capitalized softwaredevelopment costs of $3.2 million and amortized $2.2 million to expense during the fiscal year ended January 31, 2016.Costs incurred in the maintenance and minor upgrade and enhancement of Company’s software platform without adding additional functionality areexpensed 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. The fairvalue of stock options and shares issued from our employee share purchase plan are estimated on the grant date using the Black-Scholes option-pricingmodel. The fair value of an RSU is measured using the fair value of our common stock on the date of the grant. The fair value of market-based awards isdetermined using a Monte Carlo simulation approach. Stock-based compensation expense is recognized over 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 highly subjective assumptions, including the fair value of our underlyingcommon stock prior to the initial public offering, expected term of the option, expected volatility of the price of our common stock, risk-free interest ratesand the expected dividend yield of our common stock. The assumptions used in our option-pricing model represent management’s best estimates. Theseestimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-basedcompensation expense could be materially different in the future.These assumptions and estimates are as follows: •Fair Value of Common Stock. Prior to our initial public offering in October 2016, our stock was not publicly traded and we estimated the fairvalue of common stock using various methodologies, including valuation analyses performed by third-party valuation firms. After the initialpublic 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 toremain outstanding. To determine the expected term, we generally apply the simplified approach in which the expected term of an award ispresumed to be the mid-point between the vesting date and the expiration date of the award as we do not have sufficient historical exercisedata 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 theterm 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 hasbeen estimated by taking the historic price volatility for industry peers based on daily price observations over a period equivalent to theexpected term of the stock option awards. Industry peers consist of several public 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.55In the first quarter of the year ended January 31, 2018, we changed our accounting policy for share-based compensation to recognize forfeitures asthey occur, as permitted by ASU 2016-09. Refer to Note 2 of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report foradditional information regarding the adoption of this standard.We will continue to use judgment in evaluating the assumptions related to our stock-based compensation on a prospective basis. As we continue toaccumulate additional data related to our common stock, we may have refinements to our estimates, which could materially impact our future stock-basedcompensation 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. Thepurchase price of the acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at theacquisition dates. The excess of the purchase price over those fair values is recorded as goodwill. During the measurement period, which may be up to oneyear from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon theconclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequentadjustments 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, includingestimated 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 wehave made in the past have been reasonable and appropriate, these estimates are based on historical experience and information obtained from themanagement of the acquired companies and are inherently uncertain.We review goodwill for impairment annually during the fourth quarter or more frequently if events or changes in circumstances would more likelythan not reduce the fair value of our single reporting unit below its carrying value. As of January 31, 2018, 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 forpossible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. We have not recorded anysignificant 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 wemodify the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized over the revised estimated useful life.Convertible NotesWe account for the issued Convertible Notes as separate liability and equity components. The carrying amount of the liability component wascalculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equitycomponent representing the conversion option was determined by deducting the fair value of the liability component from the par value of the ConvertibleNotes as a whole. This difference represents a debt discount that is amortized to interest expense over the term of the Convertible Notes using the effectiveinterest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. We allocated issuancecosts incurred to the liability and equity components. Issuance costs attributable to the liability component are being amortized to expense over therespective term of the Convertible Notes, and issuance costs attributable to the equity component were netted with the respective equity component inAdditional paid-in capital.56Income TaxesWe account for income taxes under the asset and liability method. We record deferred tax assets and liabilities for the future tax consequencesattributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as foroperating loss and tax credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in theyears 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 liabilitiesin 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 recognizea 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 thelikelihood 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 ismore likely than not that the position will be sustained upon examination. We recognize potential accrued interest and penalties associated withunrecognized 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% to21%, requiring companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxeson certain foreign sourced earnings.In connection with the initial analysis of the impact of the Tax Act, we remeasured certain deferred tax assets and liabilities based on the rates atwhich they are expected to reverse in the future. The remeasurement of our deferred tax balance was offset by application of our valuation allowance. Wehave calculated our best estimate of the impact of the Tax Act in the year end income tax provision in accordance with its understanding of the Tax Act andguidance available as of the date of this filing. Based on our preliminary calculation, the effects of the transition tax have been offset by our available taxcredits in the United States. As we complete the analysis of the Tax Act, collect and prepare necessary data, and interpret any additional guidance, we maymake adjustments to our initial assessment. Pursuant to Staff Accounting Bulletin No. 118, adjustments to the provisional amounts recorded by us as ofJanuary 31, 2018 that are identified within a subsequent measurement period of up to one year from the enactment date will be included as an adjustment totax expense from continuing operations in the period the amounts are determined.Recent Accounting PronouncementsRefer to Note 2, “Significant Accounting Policies” in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report foranalysis of recent accounting pronouncements that are applicable to our business. Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Foreign Currency Exchange RiskOur results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in theEuro and British Pound Sterling. Due to the relative size of our international operations to date, our foreign currency exposure has been fairly limited andthus we have not instituted a hedging program. We performed a sensitivity analysis as of January 31, 2018 and determined that, without hedging theexposure, a 10% change in the value of the U.S. dollar would result in an approximate $3.1 million impact on our current year net loss. We expect ourinternational operations to continue to grow in the near term and we are continually monitoring the foreign currency exposure to determine when we shouldbegin a hedging program. The substantial majority of our agreements have been and we expect will continue to be denominated in U.S. dollars.57Market Risk and Market Interest RiskIn January 2018, we issued $230 million aggregate principal amount of 0.375% convertible senior notes due 2023. Our Convertible Notes have fixedannual interest rates at 0.375% and, therefore, we do not have economic interest rate exposure on our Convertible Notes. However, the values of theConvertible Notes are exposed to interest rate risk. Generally, the fair market value of our fixed interest rate Convertible Notes will increase as interest ratesfall 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 convertiblesenior 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 notes at face value less unamortized discount on our balance sheet, and we present the fair value for requireddisclosure purposes only.Our exposure to interest rate risk also is related to our interest-bearing assets, primarily our cash and cash equivalent. Fluctuations in interest ratesimpact the yield of the investment. A hypothetical 100 basis points increase in interest rates would have impacted interest income by $2.0 million for theyear ended January 31, 2018 and $0.7 million for the year ended January 31, 2017.Item 8. Financial Statements and Supplementary Data.The financial statements and supplementary financial information required by this Item 8 are included in our consolidated financial statements andnotes and are set forth in the pages indicated in Part IV, Item 15(a) of this Annual Report on Form 10‑K and are incorporated herein by reference.Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and Procedures. a)Evaluation of Disclosure Controls and Procedures.Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosurecontrols and procedures as of January 31, 2018. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rulesand forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of January 31, 2018, our Chief Executive Officer and Chief Financial Officerconcluded 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 ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined inExchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 58Our management, including the CEO and CFO, conducted an evaluation of the effectiveness of our internal control over financial reporting based onthe Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Inaccordance with guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their final assessment ofinternal control over financial reporting for the first fiscal year in which the acquisition occurred. We have excluded from our evaluation of the internalcontrol over financial reporting current year acquisitions, all of which are included in the January 31, 2018 consolidated financial statements and constitutedcollectively less than 5% of total assets and 5% of total revenues for the year ended January 31, 2018. Based on the results of this evaluation, ourmanagement concluded that our internal control over financial reporting was effective at the end of fiscal 2018. The effectiveness of our internal control over financial reporting at the end of fiscal 2018 has been audited by Ernst & Young LLP, an independentregistered public accounting firm, as stated in their report which is included elsewhere herein. c)Changes in Internal Control Over Financial Reporting.There was no change in our internal control over financial reporting that occurred during the quarter ended January 31, 2018 that has materiallyaffected, or is reasonably likely to materially affect, our internal control over financial reporting. d)Inherent Limitations on Effectiveness of Controls.Our management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls or our internalcontrol over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide onlyreasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there areresource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, noevaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitationsinclude the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally,controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. Thedesign of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that anydesign will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes inconditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system,misstatements due to error or fraud may occur and not be detected.Item 9B. Other Information.None. 59PART IIIItem 10. Directors, Executive Officers and Corporate Governance.The information called for by this item will be set forth in our Proxy Statement for the 2018 Annual Meeting of Stockholders to be filed with the SECwithin 120 days of the fiscal year ended January 31, 2018 (Proxy Statement) and is incorporated herein by reference.Item 11. Executive Compensation.The information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.Item 13. Certain Relationships and Related Transactions, and Director Independence.The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.Item 14. Principal Accountant Fees and Services.The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.60PART IVItem 15. Exhibits, Financial Statement Schedules.(a) Documents Filed with Report(1) Financial Statements. Report of Independent Registered Public Accounting FirmF-2 Consolidated Balance Sheets as of January 31, 2018 and 2017F-5 Consolidated Statements of Operations for the Years ended January 31, 2018, 2017 and 2016F-6 Consolidated Statements of Comprehensive Loss for the Years ended January 31, 2018, 2017 and 2016F-7 Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years ended January 31, 2018, 2017 and 2016F-8 Consolidated Statements of Cash Flows for the Years ended January 31, 2018, 2017 and 2016F-9 Notes to Consolidated Financial StatementsF-10 (2) Financial Statement Schedules.Schedule II – Valuation and Qualifying Accounts(in thousands) Balance as ofbeginning of year Additions Deductions Balance as of end ofyear 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 Year ended January 31, 2016 Allowance for doubtful accounts $189 $126 $(200) $115 (3) Exhibits. Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date FiledHerewith 2.1 Share purchase agreement dated April 7,2017. 8-K 001-37901 2.1 4/7/2017 3.1 Amended and Restated Certificate ofIncorporation of Registrant. 10-Q 001-37901 3.1 12/9/2016 3.2 Amended and Restated Bylaws ofRegistrant. 10-Q 001-37901 3.2 12/9/2016 4.1 Amended and Restated Investors’ RightsAgreement, dated May 26, 2015, by andamong the Registrant and the partiesthereto. S-1 333-213546 4.1 9/8/2016 61 Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date FiledHerewith 4.2 Waiver of Notice and Registration Rightsand Amendment to Amended and RestatedInvestors Rights Agreement. S-1/A 333-217105 4.1.2 4/10/2017 4.3 Indenture dated as of January 17, 2018,between the Company and WilmingtonTrust, National Association, as trustee. 8-K 001-37901 4.1 1/18/2018 10.1* Form of Indemnification Agreementbetween the Registrant and each of itsdirectors and executive officers. S-1/A 333-213546 10.1 9/23/2016 10.2* 2006 Stock Plan, as amended, and forms ofagreements thereunder. S-1/A 333-213546 10.2 9/23/2016 10.3* Registrant’s 2016 Equity Incentive Plan andforms of agreements thereunder. S-1/A 333-213546 10.3 9/23/2016 10.4* Registrant’s 2016 Employee Stock PurchasePlan and form of Participation Agreementthereunder. S-1/A 333-213546 10.4 10/4/2016 10.5* Incentive Bonus Plan. S-1 333-213546 10.5 9/8/2016 10.6* Offer Letter, dated May 19, 2016, andSeverance and Change in ControlAgreement, between the Registrant andRobert Bernshteyn. S-1 333-213546 10.6 9/8/2016 10.7* Offer Letter, dated May 19, 2016, andSeverance and Change in ControlAgreement, between the Registrant andTodd Ford. S-1 333-213546 10.8 9/8/2016 10.8* Offer Letter, dated May 19, 2016, andSeverance and Change in ControlAgreement, between the Registrant andRavi Thakur. S-1 333-213546 10.9 9/8/2016 10.9* Offer Letter, dated August 25, 2016,between the Registrant and Steven Winter. S-1 333-231546 10.10 9/8/2016 10.10 Lease Agreement, dated March 20, 2014,among the Registrant and CrossroadsAssociates and Clocktower Associates, asamended. S-1 333-213546 10.11 9/8/2016 62 Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date FiledHerewith 10.10.1 Third Amendment, dated May 1, 2017, tothe Lease Agreement by and between theRegistrant and BCSP Crossroads PropertyLLC. 10-Q 001-37901 10.1 9/8/2017 10.11* Compensation Program for Non-EmployeeDirectors. S-1/A 333-213546 10.12 9/23/2016 10.12 Form of Base Capped Call Confirmation. 8-K 001-37901 99.1 1/18/2018 10.13 Form of Additional Capped CallConfirmation. 8-K 001-37901 99.2 1/18/2018 10.14 Form of Director ConfidentialityAgreement. X 21.1 List of Subsidiaries of Registrant. S-1 333-213546 21.1 9/8/2016 23.1 Consent of Independent Registered PublicAccounting Firm. X 24.1 Power of Attorney (contained in thesignature page to this Annual Report onForm 10-K). 31.1 Certification of Principal ExecutiveOfficer Pursuant to Rules 13a-14(a) and15d-14(a) under the Securities ExchangeAct of 1934, as Adopted Pursuant toSection 302 of the Sarbanes-Oxley Act of2002. X 31.2 Certification of Principal Financial OfficerPursuant to Rules 13a-14(a) and 15d-14(a)under the Securities Exchange Act of1934, as Adopted Pursuant to Section 302of the Sarbanes-Oxley Act of 2002. X 32.1 Certification of Principal ExecutiveOfficer Pursuant to 18 U.S.C. Section1350, as Adopted Pursuant to Section 906of the Sarbanes-Oxley Act of 2002. X 32.2 Certification of Principal Financial OfficerPursuant to 18 U.S.C. Section 1350, asAdopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002. X63 Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date FiledHerewith 101.INS XBRL Instance Document X 101.SCH XBRL Taxonomy Extension SchemaDocument X 101.CAL XBRL Taxonomy Extension CalculationLinkbase Document X 101.DEF XBRL Taxonomy Extension DefinitionLinkbase Document X 101.LAB XBRL Taxonomy Extension LabelLinkbase Document X 101.PRE XBRL Taxonomy Extension PresentationLinkbase Document X*Indicates a management contract or compensatory plan.(b) Exhibits: See Item 15(a)(3), above.(c) Financial Statement Schedules: See Item 15(a)(2), above. Item 16. Form 10-K Summary. None.64SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. Coupa Software Incorporated Date: March 28, 2018 By:/s/ Robert Bernshteyn Robert Bernshteyn Chief Executive OfficerPOWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Robert Bernshteynand Todd Ford, 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 allcapacities, 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 inconnection 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 thingrequisite 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 andconfirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theRegistrant in the capacities and on the dates indicated. Name Title Date /s/ Robert Bernshteyn Chief Executive Officer and Director March 28, 2018Robert Bernshteyn (Principal Executive Officer) /s/ Todd Ford Chief Financial Officer March 28, 2018Todd Ford (Principal Financial Officer) /s/ Anthony Tiscornia VP Finance March 28, 2018Anthony Tiscornia (Principal Accounting Officer) /s/ Leslie Campbell Director March 28, 2018Leslie Campbell /s/ Roger Siboni Director March 28, 2018Roger Siboni /s/ Tayloe Stansbury Director March 28, 2018Tayloe Stansbury /s/ Scott Thompson Director March 28, 2018Scott Thompson /s/ Frank van Veenendaal Director March 28, 2018Frank van Veenendaal 65INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting FirmF-2 Consolidated Balance Sheets as of January 31, 2018 and 2017F-5 Consolidated Statements of Operations for the Years ended January 31, 2018,2017 and 2016F-6 Consolidated Statements of Comprehensive Loss for the Years ended January 31, 2018,2017 and 2016F-7 Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years ended January 31, 2018, 2017 and 2016F-8 Consolidated Statements of Cash Flows for the Years ended January 31, 2018, 2017 and 2016F-9 Notes to Consolidated Financial StatementsF-10 F-1Report of Independent Registered Public Accounting FirmThe Stockholders and Board of Directors of Coupa Software IncorporatedOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Coupa Software Incorporated (the Company) as of January 31, 2018 and 2017, the relatedconsolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the threeyears in the period ended January 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred toas the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial positionof the Company at January 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended January 31,2018, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company'sinternal control over financial reporting as of January 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 28, 2018 expressed an unqualifiedopinion thereon.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financialstatements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Companyin accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing proceduresto assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also includedevaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financialstatements. We believe that our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company’s auditor since 2015.San Jose, CaliforniaMarch 28, 2018 F-2Report of Independent Registered Public Accounting FirmThe Stockholders and Board of Directors and of Coupa Software IncorporatedOpinion on Internal Control over Financial ReportingWe have audited Coupa Software Incorporated’s internal control over financial reporting as of January 31, 2018, based on criteria established in InternalControl—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 ofJanuary 31, 2018, 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 theeffectiveness of internal control over financial reporting did not include the internal controls over current year acquisitions, which are included in the 2018consolidated financial statements of the Company and collectively constituted less than 5% of total assets as of January 31, 2018, and less than 5% ofrevenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internalcontrol over financial reporting over current year acquisitions.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2018 consolidatedfinancial statements of the Company and our report dated March 28, 2018 expressed an unqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Ourresponsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing andevaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.F-3Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ Ernst & Young LLPSan Jose, CaliforniaMarch 28, 2018F-4COUPA SOFTWARE INCORPORATEDCONSOLIDATED BALANCE SHEETS(In thousands, except share and per share amounts) As of January 31, 2018 2017 Assets Current assets: Cash and cash equivalents $412,903 $201,721 Accounts receivable, net of allowances 61,366 47,614 Prepaid expenses and other current assets 10,952 9,150 Deferred commissions, current portion 3,756 3,091 Total current assets 488,977 261,576 Property and equipment, net 5,186 4,642 Deferred commissions, net of current portion 3,896 2,895 Goodwill 44,410 6,306 Intangible assets, net 20,020 5,848 Other assets 9,961 2,597 Total assets $572,450 $283,864 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $1,342 $1,175 Accrued expenses and other current liabilities 26,643 17,490 Deferred revenue, current portion 125,714 89,872 Total current liabilities 153,699 108,537 Convertible senior notes, net (Note 8) 163,010 — Deferred revenue, net of current portion 2,316 968 Other liabilities 12,880 467 Total liabilities 331,905 109,972 Commitments and contingencies (Note 9) Stockholders’ equity: Preferred stock, $0.0001 par value per share; 25,000,000 and zero shares authorized at January 31, 2018 and 2017; zero shares issued and outstanding at January 31, 2018 and 2017 — — Common stock, $0.0001 par value per share; 625,000,000 and 225,000,000 shares authorized at January 31, 2018 and January 31, 2017; 55,712,342 and 50,251,541 shares issued and outstanding as of January 31, 2018 and January 31, 2017, respectively 6 5 Additional paid-in capital 445,318 334,363 Accumulated other comprehensive loss (298) — Accumulated deficit (204,481) (160,476)Total stockholders’ equity 240,545 173,892 Total liabilities and stockholders’ equity $572,450 $283,864 See Notes to Consolidated Financial Statements.F-5COUPA SOFTWARE INCORPORATEDCONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts) For the year ended January 31, 2018 2017 2016 Revenues: Subscription services $164,865 $117,788 $75,667 Professional services and other 21,915 15,987 8,011 Total revenues 186,780 133,775 83,678 Cost of revenues: Subscription services 36,481 25,055 16,804 Professional services and other 23,425 21,214 15,107 Total cost of revenues 59,906 46,269 31,911 Gross profit 126,874 87,506 51,767 Operating expenses: Research and development 44,536 30,262 22,767 Sales and marketing 88,722 68,562 54,713 General and administrative 38,578 24,106 19,540 Total operating expenses 171,836 122,930 97,020 Loss from operations (44,962) (35,424) (45,253)Other income (expense), net 2,805 (1,335) (568)Loss before provision for income taxes (42,157) (36,759) (45,821)Provision for income taxes 1,648 848 335 Net loss $(43,805) $(37,607) $(46,156)Net loss per share attributable to common stockholders, basic and diluted $(0.83) $(1.88) $(9.81)Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted 52,999 19,988 4,704 See Notes to Consolidated Financial Statements. F-6 COUPA SOFTWARE INCORPORATEDCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(In thousands) For the year ended January 31, 2018 2017 2016 Net loss $(43,805) $(37,607) $(46,156)Other comprehensive loss in relation to defined benefit plans, net of tax (298) — — Comprehensive loss $(44,103) $(37,607) $(46,156) See Notes to Consolidated Financial Statements. F-7COUPA SOFTWARE INCORPORATEDCONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)(In thousands, except share amounts) Convertible PreferredStock Common Stock AdditionalPaid-In AccumulatedOtherComprehensive Accumulated TotalStockholdersEquity Shares Amount Shares Amount Capital Loss Deficit (Deficit) Balance at January 31, 2015 28,487,570 $88,444 4,203,646 $1 $4,143 $— $(76,713) $(72,569)Issuance of Series G convertible preferred stock, net of issuance costs of $4,269 4,783,762 75,731 — — — — — — Exercise of Series E preferred stock warrants 160,523 775 — — — — — — Issuance of common stock for acquisitions — — 314,386 — 1,269 — — 1,269 Exercise of stock options — — 1,240,306 — 477 — — 477 Vesting of early exercised stock options — — — — 142 — — 142 Stock-based compensation expense — — — — 10,598 — — 10,598 Net loss — — — — — — (46,156) (46,156)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 purchaseplan — — 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 — — — — — Cumulative effect adjustment for ASU 2016-09adoption (Note 2) — — — — 200 — (200) — Defined benefit plans — — — — — (298) — (298)Net loss — — — — — — (43,805) (43,805)Balance at January 31, 2018 — $— 55,712,342 $6 $445,318 $(298) $(204,481) $240,545 See Notes to Consolidated Financial Statements. F-8 COUPA SOFTWARE INCORPORATEDCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) For the year ended January 31, 2018 2017 2016 Cash flows from operating activities Net loss $(43,805) $(37,607) $(46,156)Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 7,562 4,575 2,758 Amortization of deferred commissions 4,001 4,004 2,834 Amortization of debt discount and issuance costs 459 — — Stock-based compensation 29,694 9,452 10,568 Change in fair value of preferred stock warrant liability — 627 190 Other non-cash items 41 355 — Changes in operating assets and liabilities net of effects from acquisitions: Accounts receivable (10,710) (20,041) (8,314)Prepaid expenses and other current assets (390) (4,600) (1,289)Other assets (602) (1,136) (2,006)Deferred commissions (5,667) (4,468) (5,384)Accounts payable (4,005) 224 (121)Accrued expenses and other liabilities 7,120 1,772 696 Deferred revenue 36,072 25,888 24,155 Net cash provided by (used in) operating activities 19,770 (20,955) (22,069)Cash flows from investing activities Acquisitions, net of cash acquired (46,075) (6,750) (1,426)Purchase of property and equipment (4,488) (4,491) (3,868)Increase in restricted cash 34 — — Net cash used in investing activities (50,529) (11,241) (5,294)Cash flows from financing activities Proceeds from issuance of senior convertible notes, net of issuance costs 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 (64)Proceeds from the exercise of common stock options 12,500 4,252 1,570 Excess tax benefit from stock-based compensation — 51 — Proceeds from issuance of common stock under the employee stock purchase plan 6,824 — — Proceeds from issuance of convertible preferred stock, net of issuance costs — — 75,731 Proceeds from the exercise of preferred stock warrants — 50 500 Net cash provided by financing activities 241,941 141,569 77,737 Net increase in cash and cash equivalents 211,182 109,373 50,374 Cash and cash equivalents at beginning of period 201,721 92,348 41,974 Cash and cash equivalents at end of period $412,903 $201,721 $92,348 Supplemental disclosure of cash flow data Cash paid for income taxes $1,314 $390 $17 Supplemental disclosure of non-cash investing and financing activities Issuance of common stock in connection with acquisitions $— $2,357 $1,269 Vesting of early exercised stock options $2,219 $606 $142 Property and equipment included in accounts payable and accrued expenses and other current liabilities $70 $84 $184 Conversion of convertible preferred stock to common stock $— $164,950 $— Offering costs included in accounts payable and accrued expenses and other current liabilities $— $— $1,254 See Notes to Consolidated Financial Statements. F-9 COUPA SOFTWARE INCORPORATEDNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNote 1. Organization and Description of BusinessThe CompanyCoupa Software Incorporated (the “Company”) was incorporated in the state of Delaware in 2006. The Company provides a comprehensive, cloud-based business spend management (or BSM) platform that provide greater visibility into and control over how companies spend money. The BSM platformenables businesses to achieve savings that drive profitability. The Company is based in San Mateo, California.The Company’s fiscal year ends on January 31.Initial Public OfferingIn October 2016, the Company closed its initial public offering (“IPO”), in which it issued and sold 8,510,000 shares of common stock inclusive ofthe underwriters’ option to purchase additional shares that was exercised in full. The Company received aggregate proceeds of $142.5 million from the IPO,net of underwriters’ discounts and commissions, before deducting offering costs of approximately $5.3 million. Upon the closing of the IPO, all shares of itsoutstanding preferred stock automatically converted into 34,610,979 shares of common stock.Follow-On OfferingIn April 2017, the Company closed a follow-on offering (the “Offering”), in which it issued and sold 959,618 shares of common stock inclusive of theunderwriters’ option to purchase additional shares, which was exercised in full. The price per share to the public was $25.25. The Company receivedaggregate proceeds of $24.0 million from the Offering, net of underwriters’ discounts and commissions, before deducting offering costs of approximately $0.8million and inclusive of approximately $1.0 million received from selling stockholders due to the exercise of 244,387 options at an average per shareexercise price of $3.93.Note 2. Significant Accounting PoliciesBasis of PresentationThe accompanying consolidated financial statements have been prepared using accounting principles generally accepted in the United States ofAmerica (“GAAP”). The consolidated financial statements include the results of the Company and its wholly owned subsidiaries. All significantintercompany transactions and balances have been eliminated during consolidation.Use of EstimatesThe preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and thereported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates its significant estimates including, butnot limited to, the valuation of accounts receivable, the lives of tangible and intangible assets and the recoverability or impairment of tangible andintangible assets, including goodwill, stock-based compensation, revenue recognition, the valuation of acquired assets and liabilities assumed, convertiblesenior notes fair value, and provisions for income taxes. Management bases its estimates on historical experience and on various other market-specific andrelevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates and suchdifferences could be material to the financial position and results of operations. F-10 Foreign Currency TranslationThe functional currency for the Company’s foreign operations is the U.S. dollar. Foreign currency transaction gains and losses are included in theconsolidated statements of operations for the period in other expense, net. 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 endedJanuary 31, 2018, 2017 and 2016, realized foreign currency transaction gains and losses were comprised of a net gain of $292,000, and net losses of$638,000 and $789,000, respectively.Risks and UncertaintiesThe Company’s services are concentrated in an industry which is characterized by significant competition, rapid technological advances andchanges in customer requirements and industry standards. The success of the Company depends on management’s ability to anticipate and respond quicklyand adequately to technological developments in the industry and changes in customer requirements and industry standards. Any significant delays in thedevelopment or introduction of services could have a material adverse effect on the Company’s business and operating results. Furthermore, the effects ofpotential legal activity that could be brought against the Company, including costs incurred to defend legal cases, relationships with customers and marketperception, and the financial impact of any judicial decisions, could have a material adverse effect on the Company’s business and operating results.The Company serves customers and users from data center facilities, generally operated by a single third party, and located across various differentphysical locations, such as the U.S., Europe and Asia-Pacific.. The Company has internal procedures to restore services in the event of disasters at the currentdata center facilities. Even with these procedures for disaster recovery in place, cloud applications could be significantly interrupted during the procedures torestore services.Concentration of Risk and Significant CustomersFinancial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and accountsreceivable. Cash deposits may, at times, exceed amounts insured by the Federal Deposit Insurance Corporation (“FDIC”) and the Securities InvestorProtection Corporation (“SIPC”). The Company has not experienced any losses on its deposits of cash and cash equivalents to date.No customer balance comprised 10% or more of total accounts receivable at January 31, 2018 or 2017.During the years ended January 31, 2018, 2017 and 2016, revenues by geographic area, based on billing addresses of the customers, was as follows: For the year ended January 31, 2018 2017 2016 United States $121,440 $90,449 $60,411 Foreign countries 65,340 43,326 23,267 Total revenues $186,780 $133,775 $83,678 No single foreign country represented more than 10% of the Company’s revenues in any period.Additionally, no single customer represented more than 10% of the Company’s revenues in any period.Fair Value of Financial InstrumentsThe Company’s financial instruments include cash and cash equivalents, trade receivables, accounts payable, accrued liabilities and preferred stockwarrants. Cash and cash equivalents are reported at fair value. The recorded carrying amount of trade receivables, accounts payable, and accrued liabilitiesapproximates their fair value due to their short-term nature.F-11 The Company carries convertible senior notes at face value less unamortized debt discount and issuance costs on its consolidated balance sheet, andit presents the fair value of the convertible senior notes for disclosure purposes only.Cash and Cash EquivalentsThe Company considers all highly liquid investments purchased with original maturities of less than three months from the date of purchase to becash equivalents. The Company’s cash and cash equivalents consist of monies held in bank demand deposits and money market funds and are presented atfair market value based on quoted market prices.Accounts Receivable and Allowance for Doubtful AccountsThe Company extends credit to its customers in the normal course of business, and does not require cash collateral or other security to support thecollection of customer receivables. The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on theaging of the receivable balance, historical experience, and communications with customers, and provides a reserve when needed. Accounts receivable arewritten off when deemed uncollectible. The allowance for doubtful accounts was $9,000 and $672,000 at January 31, 2018 and 2017, respectively.Deferred CommissionsThe Company capitalizes commission costs that can be associated specifically with a non-cancelable subscription contract. Commissions are earnedby sales personnel upon the execution of the sales contract by the customer, and commission payments are made shortly after they are earned. Deferredcommissions are amortized over the term of the related non-cancelable customer contract. The Company capitalized commission costs of $5.7 million, $4.5million and $5.4 million and amortized $4.0 million, $4.0 million and $2.8 million to sales and marketing expense in the accompanying consolidatedstatements of operations during the years ended January 31, 2018, 2017 and 2016, respectively. Research and Development CostsResearch and development costs are expensed as incurred. Research and development costs consist primarily of compensation related costs incurredfor the maintenance and bug fixing of the Company’s software platform, as well as planning, predevelopment and post implementation costs associated withthe development of enhancements to the Company’s software platform.Advertising CostsAdvertising costs are expensed as incurred and are included in sales and marketing expense in the accompanying consolidated statements ofoperations. Advertising expense totaled $1.6 million, $446,000 and $1.7 million for the years ended January 31, 2018, 2017 and 2016, respectively.Capitalized Software Development CostsThe Company capitalizes certain development costs incurred in connection with software development for its cloud-based platform. Costs incurredin the preliminary stages of development are expensed as incurred. Once the software has reached the development stage, internal and external costs, if directand incurred for adding incremental functionality to the Company’s platform, are capitalized until the software is substantially complete and ready for itsintended use. Capitalization ceases upon completion of all substantial testing. These software development costs are recorded as part of property andequipment.F-12 Capitalized software development costs are amortized on a straight-line basis to cost of revenues—subscription services over the technology’sestimated useful life, which is generally two to three years. During the years ended January 31, 2018, 2017 and 2016, the Company capitalized $4.2 million,$4.3 million and $3.2 million, respectively, in software development costs. Costs incurred in the maintenance and minor upgrade and enhancement of the Company’s software platform without adding additional functionalityare expensed as incurred.Property and EquipmentProperty and equipment are stated at cost net of accumulated depreciation and amortization. Depreciation is calculated using the straight-linemethod over the estimated useful lives of the assets. Furniture and equipment is amortized over an estimated useful life of three to five years. Leaseholdimprovements are amortized over the shorter of their useful life, estimated at five years, or the remaining term of the lease. Upon retirement or sale of assets,the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheet and the resulting gain or loss is reflected inthe consolidated statement of operations. Maintenance and repair costs are expensed as incurred.Goodwill and Other Intangible AssetsGoodwill is the excess of costs over fair value of net assets of the business acquired. Goodwill and other intangible assets acquired that aredetermined to have an indefinite useful life are not amortized but are tested for impairment at least annually.Other intangible assets, which includes acquired developed technology, customer relationships, and trademarks are recorded at fair value, net ofaccumulated amortization, and are amortized using the straight-line method. Other intangible assets also includes in-process research and development whichwill begin to be amortized upon project completion. The Company assesses the impairment of long-lived intangible assets whenever events or changes incircumstances indicate that the carrying amount may not be recoverable.The Company has not recorded impairment charges on goodwill and other intangible assets for the periods presented in these consolidated financialstatements.Revenue RecognitionThe Company derives its revenues primarily from subscription services fees and professional services fees. The Company sells subscriptions to itscloud platform through contracts that are typically three years in length. The arrangements do not contain general rights of return. The subscription contractsdo not provide customers with the right to take possession of the software supporting the applications and, as a result, are accounted for as service contracts.The Company commences revenue recognition for its subscription services and professional services when all of the following criteria are met: •There is persuasive evidence of an arrangement; •The service has been or is being provided to the customer; •Collection of the fees is reasonably assured; and •The amount of fees to be paid by the customer is fixed or determinable.Subscription Services RevenuesSubscription services revenues are recognized ratably over the contractual term of the arrangement beginning on the date that the service is madeavailable to the customer, provided revenue recognized does not exceed amounts that are able to be invoiced, assuming all other revenue recognition criteriahave been met.F-13 Professional Services RevenuesProfessional services are generally sold on a fixed-fee or time-and-materials basis. Revenue for time-and-material arrangements is recognized as theservices are performed. For fixed‑fee and other types of arrangements entered into prior to the fourth quarter of the fiscal year ended January 31, 2017,professional services revenue was generally deferred and recognized upon the completion of the project under the completed performance method ofaccounting. During the fourth quarter of the fiscal year ended January 31, 2017, the Company developed the ability to accurately estimate professionalservices costs on a project basis. As such, revenue for fixed‑fee and other types of arrangements entered into after the third quarter of the fiscal year endedJanuary 31, 2017 is recognized as services are performed under the proportional performance method of accounting. At January 31, 2018, we have fullyrecognized professional services revenue from contracts signed prior to October 31, 2016, for which revenue was recognized under the completed contractmethod.Multiple Deliverable ArrangementsFor arrangements with multiple deliverables, the Company evaluates whether the individual deliverables qualify as separate units of accounting. Inorder to treat deliverables in a multiple deliverable arrangement as separate units of accounting, the deliverables must have standalone value upon delivery.If the deliverables have standalone value upon delivery, the Company accounts for each deliverable separately, recognizing the respective revenue as theservices are delivered.The Company has determined that its subscription services have standalone value, as the Company sells its subscriptions separately. Theprofessional services related to the Company’s subscription services also have standalone value as numerous partners are trained to perform theseprofessional services and these partners have a history of contracting directly with customers and successfully completing deployments of the Company’ssoftware platform.When multiple deliverables included in an arrangement are separable into different units of accounting, the arrangement consideration is allocated tothe identified units of accounting based on the relative selling price of each unit of accounting. Such multiple deliverable arrangement accounting guidanceprovides a hierarchy when determining the relative selling price for each unit of accounting. Vendor-specific objective evidence (“VSOE”) of selling price,based on the price at which the item is regularly sold by the vendor on a standalone basis, should be used if it exists. If VSOE of selling price is not available,third-party evidence (“TPE”) of selling price is used to establish the selling price if it exists. VSOE and TPE do not currently exist for any of the Company’sdeliverables. Accordingly, for arrangements with multiple deliverables that can be separated into different units of accounting, the relative selling price ofeach unit of accounting is based on best estimate of selling price (“BESP”).The Company determines the BESP for deliverables based on overall pricing objectives, which take into consideration market conditions and entity-specific factors. This includes a review of historical data related to the size of arrangements, the cloud applications being sold, customer demographics andthe numbers and types of users within the arrangements.Cost of Subscription Services RevenueCost of subscription services revenue consist primarily of expenses related to the hosting of the Company’s subscription service and supporting theCompany’s customers. These expenses are comprised of third-party hosting expenses, amortization of intangible assets and personnel and related costsdirectly associated with the Company’s cloud infrastructure and cloud operations, including salaries, benefits, bonuses and stock-based compensation andallocated overhead.Overhead associated with facilities, information technology and depreciation, excluding depreciation related to the Company’s data centerinfrastructure, is allocated to the cost of revenue and operating expenses based on headcount by cost center.F-14 Cost of Professional Services RevenueCost of professional services revenue consist primarily of personnel costs directly associated with deployment of the Company’s solution, includingsalaries, benefits, bonuses and stock-based compensation, cost of subcontractors, travel costs and allocated overhead.Deferred RevenueDeferred revenue consists of customer billings or payments received in advance of the recognition of revenue and is recognized as revenue as therevenue recognition criteria are met. The Company generally invoices its customers annually for the forthcoming year of service. Accordingly, theCompany’s deferred revenue balance does not include revenue for future years of multiple year non-cancellable contracts that have not yet been billed. Income TaxesThe Company accounts for income taxes under the asset and liability method, which requires that deferred income taxes be provided for temporarydifferences between the financial reporting and tax basis of the Company’s assets and liabilities. In addition, deferred tax assets are recorded for the futurebenefit from the utilization of net operating losses and research and development credit carryforwards. A valuation allowance is provided against deferred taxassets unless it is more likely than not that they will be realized.The Company’s policy for accounting for uncertainty in income taxes requires the evaluation of tax positions taken or expected to be taken in thecourse of the preparation of tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority.Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. The Company recognizesinterest and penalties related to unrecognized tax benefits as income tax expense. Since the date of adoption of accounting for uncertain tax positions, theCompany has accrued immaterial interest and penalties associated with unrecognized tax benefits for all periods presented. Stock-Based CompensationThe Company measures and recognizes stock-based compensation expense for all stock-based awards, including grants of stock, restricted stockunits (“RSU”) and options to purchase stock, made to employees, outside directors and consultants based on estimated fair values.The Company uses the Black-Scholes option pricing model to value its options at the date of grant based on certain assumptions. The Companyrecognizes stock-based compensation expense for grants that vest based on only a service condition using the straight-line single-option approach. TheCompany recognizes stock-based compensation expense related to shares issued pursuant to its 2016 Employee Stock Purchase Plan (“ESPP”) on a straight-line basis over the offering period, which is 24 months.For RSUs granted following its IPO, the Company generally recognizes stock-based compensation using the straight-line method as the awards onlycontain a service condition. The fair value of an RSU is measured using the fair value of the Company’s common stock on the date of the grant.The Company recognizes stock-based compensation expense from market-based awards using the graded-vesting method. The fair value of suchawards is determined using a Monte Carlo simulation approach.The Company records stock-based compensation expense from stock-based awards granted to non-employees at the estimated fair value of theawards upon vesting. The Company values options granted to non-employees using the Black-Scholes option pricing model. These awards are remeasuredover their term until vested, exercised, cancelled or expired.The Company recognizes stock-based compensation expense based on actual forfeitures.F-15 Convertible Senior NotesThe Company accounts for the issued Convertible Senior Notes (“Convertible Notes”) as separate liability and equity components. The carryingamount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. Thecarrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from thepar 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 ConvertibleNotes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equityclassification. The Company has allocated issuance costs incurred to the liability and equity components. Issuance costs attributable to the liabilitycomponent are being amortized to expense over the respective term of the Convertible Notes, and issuance costs attributable to the equity components werenetted with the respective equity component in additional paid in capital.Comprehensive LossComprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstancesfrom non-owner sources. The Company’s comprehensive loss consists of net loss and other comprehensive loss. Other comprehensive loss represents netdeferred gains and losses and prior service costs and credits for defined benefit pension plans.Recent Accounting GuidanceRecently Adopted Accounting PronouncementsIn March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718):Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for share-basedpayments, including allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account forforfeitures as they occur and immediate recognition of excess tax benefits in the income statement. The Company adopted ASU 2016-09 in the first quarter offiscal 2018 and elected to account for forfeitures as they occur in calculating compensation costs. Also as a result of this adoption, the Company recorded a$6.7 million cumulative-effect decrease in accumulated deficit and an offsetting increase in deferred tax assets for previously unrecognized excess taxbenefits that existed as of January 31, 2017. The realization of these deferred tax assets is not more likely than not to be achieved, and therefore, theCompany recorded a $6.7 million valuation allowance against these deferred tax assets with an offsetting increase in accumulated deficit. The Companyrecorded $200,000 of additional paid-in capital for the differential between the amount of compensation cost previously recorded and the amount that wouldhave been recorded without estimating forfeitures.In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”).ASU 2017-01 narrows the definition of a business and requires an entity to evaluate if substantially all of the fair value of the gross assets acquired isconcentrated in either a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. Theguidance also requires a business to include at least one substantive process and narrows the definition of outputs. This guidance will be effective for fiscalyears, and interim periods within those fiscal years, beginning after December 15, 2017. The Company has elected to early adopt this new guidance effectiveFebruary 1, 2017. The adoption of this standard had no impact on the Company’s historical financial statements.New Accounting Pronouncements Not Yet AdoptedIn May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) which provides guidance for revenuerecognition. Since the issuance of ASU 2014-09, the FASB has also issued ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, all of which clarifycertain aspects of ASU 2014-09. The new standard affects any entity that either enters into contracts with customers to transfer goods or services or enters intocontracts for the transfer of non-financial assets. The new standard will supersede the revenue recognition requirements in Topic 605, Revenue Recognition,and most industry-specific guidance. This standard also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The new standard is effective for public entities for annual reporting periods, andF-16 interim periods within those annual reporting periods, beginning after December 15, 2017. The new standard can be applied either retrospectively to eachprior reporting period presented (full retrospective approach) or retrospectively as a cumulative-effect adjustment (modified retrospective approach) as of thedate of adoption. The Company has elected to adopt this standard effective on February 1, 2018 using a modified retrospective approach.The primary impact of the new standard on the Company is from the removal of the current limitation on contingent revenue. In addition,commissions accounting under the new standard is significantly different than the Company’s current capitalization policy. The new standard results inadditional types of costs that will be capitalized and amounts that will be amortized over a period longer than the Company’s current policy of amortizingthe deferred amounts over the specific revenue contract-terms. Specifically, incremental contract costs will be deferred and amortized over an estimatedcustomer 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 transaction price and when the Company expectsto recognize revenue which will begin in the filing of the first quarter Form 10-Q for the year ending January 31, 2019.The Company has implemented control activities related to the adoption of the new standard, particularly related to evaluating the impact of thestandard on the Company’s revenue recognition policies, the determination of average customer life, and the new disclosure requirements, and did notrequire the implementation of new information technology systems.The Company is finalizing its analysis and the adoption of this guidance is expected to result in a reduction of approximately $2 million of deferredrevenue from the consolidated balance sheet upon adoption. The Company also expects to capitalize between $10 million and $12 million of additionalcontract costs (e.g., deferred commissions). The Company does not expect the adoption of ASU No. 2014-09 to have any impact on its operating cash flow.In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requiresa 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 eitherfinance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal yearsbeginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transitionapproach is required for lessees with capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presentedin the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of adopting ASU 2016-02 on itsconsolidated financial statements.In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16"). ASU 2016-16 requiresentities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard iseffective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company will adopt this standard onFebruary 1, 2018. As of January 31, 2018, the Company has an aggregate prepaid tax asset of $5.6 million recorded in prepayments and other current assetsand other long-term assets, which represents tax expense that was deferred in accordance with current GAAP. At adoption, the Company will recognize theunamortized portion of the deferred tax charge 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 2016-18requires 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, andan 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 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company will adoptthis standard on February 1, 2018 and does not expect the adoption of this standard to have a material effect on its consolidated statement of cash flows.F-17 In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment(“ASU 2017-04”), which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if thecarrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the totalamount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies the requirements for excluding and allocating foreign currency translationadjustments to reporting units related to an entity’s testing of reporting units for goodwill impairment, and clarifies that an entity should consider income taxeffects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. Theguidance is effective for annual reporting periods beginning after January 1, 2020 and interim periods within those fiscal years. The Company is currentlyevaluating the impact of adopting ASC 2017-04 on its consolidated financial statements.Note 3. Business CombinationsAcquisitions in Fiscal Year Ended January 31, 2018Simeno Holdings AG On December 1, 2017, the Company acquired all of the issued and outstanding capital stock held by of Simeno Holdings AG (“Simeno”), aSwitzerland 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 thetangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date. The total purchase consideration was $8.7million in cash, of which $1.5 million is being held until the second anniversary after closing of the acquisition. In addition, the Company issued 221,257shares of common stock to the selling shareholder of Simeno and this stock is subject to service vesting conditions including continued employment with theCompany and all of these shares were unvested at January 31, 2018. The value assigned to the common stock issued will be recorded as post-acquisitioncompensation expense and has been excluded from the purchase consideration. The major classes of assets and liabilities to which the Company has allocated the fair value of purchase consideration were as follows: (inthousands): December 1, 2017 Cash and cash equivalents $747 Accounts receivable 1,912 Intangible assets 3,820 Other assets 331 Deferred tax assets, net 285 Goodwill 7,264 Accounts payable and other liabilities (1,405)Pension plan obligation (4,226)Total consideration $8,728 F-18 The Company continues to collect information and reevaluate the estimates and assumptions and records any adjustments to the Company’spreliminary estimates to goodwill provided that the Company is within the measurement period. The goodwill recognized was primarily attributed toincreased synergies that are expected to be achieved from the integration of Simeno and is not expected to be deductible for income tax purposes. TheCompany determined the fair values of intangible assets acquired and liabilities assumed with the assistance of third party valuation consultants. Based onthis valuation, the intangible assets acquired are (in thousands): Fair Value Useful life(in Years)Developed technology$2,300 4Customer relationships 1,520 4Total intangible assets$3,820 Simeno maintained a pension plan covering employees in Switzerland pursuant to the requirements of Swiss pension law, which has been assumedby the Company upon the completion of the acquisition. The pension plan is accounted for as defined benefit pension plan, which requires the Company torecognize the underfunded status of the plan as a liability in the consolidated balance sheets and changes in the funded status of defined benefit pension planthrough other comprehensive income (loss). As of the acquisition date in December 2017, the Company recorded net liabilities of $4.2 million on itsconsolidated balance sheet in connection with this pension plan. The changes in the funded status of the defined benefit plan for the period from acquisitiondate to January 31, 2018 was not material.The Company incurred costs related to this acquisition of approximately $445,000 during the year ended January 31, 2018. All acquisition relatedcosts were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statements of operations.The revenue and earnings of Simeno have been included in the Company’s results since the acquisition date and are not material to the Company’sconsolidated financial results. Pro forma results of operations for this acquisition have not been presented as the financial impact to the Company’sconsolidated financial statements would be immaterial.Trade Extensions TradeExt ABOn May 3, 2017, the Company acquired substantially all of the issued and outstanding capital stock held by shareholders of Trade ExtensionsTradeExt 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 isbeing held in escrow for 18 months after the transaction closing date. In addition, approximately $4.1 million in the form of 148,476 shares of the Company’scommon stock was issued to certain key employees of Trade Extensions, which stock is subject to service vesting conditions including continuedemployment with the Company and were unvested at January 31, 2018. The value assigned to the common stock issued will be recorded as post-acquisitioncompensation expense and has been excluded from the purchase consideration.F-19 The major classes of assets and liabilities to which the Company has allocated the fair value of purchase consideration were as follows: (inthousands): 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 Other assets include indemnification assets totaling $1.4 million due to assumed liability for which the seller is responsible. The goodwillrecognized was primarily attributed to increased synergies that are expected to be achieved from the integration of Trade Extensions and is not expected tobe deductible for income tax purposes. The Company determined the fair values of intangible assets acquired with the assistance of third party valuationconsultants. Based on this valuation, the intangible assets acquired are (in thousands): Fair Value Useful life(in Years)Developed technology$9,700 7Customer relationships 3,100 5Trademarks 160 1Total intangible assets$12,960 The Company incurred costs related to this acquisition of approximately $526,000 during the year ended January 31, 2018. All acquisition relatedcosts were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statements of operations.The revenue and earnings of Trade Extensions have been included in the Company’s results since the acquisition date and are not material to theCompany’s consolidated financial results. Pro forma results of operations for this acquisition have not been presented as the financial impact to theCompany’s consolidated financial statements would be immaterial.Acquisition in Fiscal Year Ended January 31, 2017On December 30, 2016, the Company acquired substantially all the assets of Spend360 International Limited (“Spend360”), a United Kingdom basedcompany which helps transform outdated data classification processes that rely on humans for accuracy with a modern, digitized system that uses innovativetechnologies to classify data more quickly and accurately.The total purchase consideration of $10.1 million was paid in 94,241 shares of the Company’s common stock having a total fair value of $2.3 millionand $7.8 million in cash of which $1.0 million is due twelve months after the acquisition date.The acquisition of Spend360 was accounted for in accordance with the acquisition method of accounting for business combinations with Coupa asthe accounting acquiror. Under the acquisition method of accounting, the total purchase consideration is allocated to the tangible and identifiable intangibleassets acquired and liabilities assumed based on their estimated fair values, using information currently available to us.F-20 The Company expensed the related acquisition costs of $366,000 in general and administrative expenses in the accompanying consolidatedstatement of operations. Allocation of the purchase price of $10.1 million is as follows (in thousands): Amount Intangible assets $5,431 Deferred revenue (26)Goodwill 4,701 Total purchase price allocation $10,106 Intangible assets consist of developed technology. The estimated useful life of the developed technology is five years. The value of developedtechnology was estimated using the replacement cost method. The purchase price exceeded the fair value of identifiable intangible asset acquired, resultingin the recognition of goodwill. Goodwill is primarily attributable to expected synergies in the Company’s subscription offerings and cross-sellingopportunities and is deductible for tax purposes.Additionally, in connection with the acquisition, the Company issued 56,304 shares of the Company’s restricted common stock with a total fairvalue of $1.4 million. The shares have service-based vesting requirements and the value has therefore been excluded from the purchase consideration. Therelated value will be recognized on a straight-line basis as compensation expense over the requisite service period over three years from the acquisition date.In addition, the Company will pay up to $1.0 million dependent on the cumulative revenue earned through December 2018 by the acquired business. TheCompany determined that there is an in-substance service period for an employee related to the potential future payment and therefore will record thisamount as compensation expense if it becomes payable.Pro forma results of operations have not been presented because the acquisition was not material to the Company’s results of operations.Note 4. Goodwill and Other Intangible AssetsGoodwillThe following table represents the changes in goodwill (in thousands): Balance at January 31, 2016 $1,605 Additions from acquisitions 4,701 Balance at January 31, 2017 6,306 Additions from acquisitions 38,104 Balance at January 31, 2018 $44,410 Other Intangible AssetsThe following table summarizes the other intangible asset balances (in thousands): As of January 31, 2018 2017 GrossCarryingAmount AccumulatedAmortization NetCarryingAmount GrossCarryingAmount AccumulatedAmortization NetCarryingAmount Developed technology $19,385 $(4,153) $15,232 $7,210 $(1,393) $5,817 Customer relationships 4,694 (597) 4,097 74 (43) 31 Trademarks 160 (119) 41 — — — In-process research and development 650 — 650 — — — Total other intangible assets $24,889 $(4,869) $20,020 $7,284 $(1,436) $5,848 F-21 Amortization expense related to other intangible assets was approximately $3.4 million, $952,000 and $387,000 for the years ended January 31,2018, 2017 and 2016, respectively. As of January 31, 2018, the future amortization expense of other intangible assets is as follows (in thousands): Year Ending January 31, 2019 $4,177 2020 4,066 2021 4,047 2022 3,791 2023 1,546 Thereafter 1,743 Total $19,370 The Company, which has one reporting unit, performed an annual test for goodwill impairment and determined that goodwill was not impaired. Inaddition, there have been no significant events or circumstances affecting the valuation of goodwill subsequent to the Company’s annual assessment.Furthermore, no events or changes in circumstances have occurred to suggest that the carrying amounts for any of the Company’s long-lived assets oridentifiable intangible assets may be non-recoverable. As such, the Company was not required to reevaluate the recoverability of its long-lived assets.Note 5. Property and Equipment, NetProperty and equipment consisted of the following (in thousands): As of January 31, 2018 2017 Furniture and equipment $1,897 $1,415 Software development costs 16,574 12,376 Leasehold improvements 557 458 Construction in progress 149 — Total property and equipment 19,177 14,249 Less: accumulated depreciation and amortization (13,991) (9,607)Property and equipment, net $5,186 $4,642 Depreciation and amortization expense related to property and equipment, excluding software development costs, was approximately $532,000,$432,000 and $256,000 for the years ended January 31, 2018, 2017 and 2016, respectively. Amortization expense related to software development costs wasapproximately $3.9 million, $3.3 million and $2.2 million for the years ended January 31, 2018, 2017 and 2016, respectively. Note 6. Fair Value MeasurementsFair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageousmarket for the asset or liability in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of thesefinancial assets and liabilities are recognized in earnings or other comprehensive income when they occur. When determining the fair value measurements forassets and liabilities which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which theCompany would transact and the market-based risk measurement or assumptions that market participants would use in pricing the assets or liabilities, such asinherent risk, transfer restrictions and credit risk.F-22 The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases thecategorization 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, orother inputs that are observable or can be corroborated by observable market data for substantially full term of assets or liabilities. •Level 3—Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants woulduse in pricing the assets or liabilities.The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis asof January 31, 2018 and 2017 (in thousands): January 31, 2018 Level 1 Level 2 Level 3 Total Money market funds(1) $389,357 $— $— $389,357 January 31, 2017 Money market funds(1) $178,245 $— $— $178,245 (1)Included in cash and cash equivalents The fair value of the Convertible Notes was $162.6 million on issuance which approximates its value as at January 31, 2018. The fair value wasdetermined based on relevant market information. The Company carries the convertible senior notes at face value less unamortized discount on itsconsolidated balance sheet, and presents the fair value for required disclosure purposes only. For further information on the Convertible Notes see Note 8.Note 7. Accrued Expenses and Other Current LiabilitiesAccrued expenses and other current liabilities consisted of the following (in thousands): As of January 31, 2018 2017 Accrued compensation $11,606 $6,750 Accrued other current liabilities 15,037 10,740 Total accrued expenses and other current Liabilities $26,643 $17,490 Included in the accrued compensation liability caption for the year ended January 31, 2018, the Company had accrued $3.2 million of employeestock purchase plan contributions received. For further information on the Company’s employee stock purchase plan see Note 10.Note 8. Convertible Senior NotesIn January 2018, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with certain counterparties relating to the Company’ssale of $230.0 million aggregate principle amount of its 0.375% Convertible Senior Notes due 2023 (the “Convertible Notes”) to the counterparties in aprivate placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and for initial resale by the Initial Purchasersto qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. The Convertible Notesconsisted of a $200.0 million initial placement and an overallotment option that provided the initial purchasers of the Convertible Notes with the option topurchase an additional $30.0 million of the Convertible Notes, which was exercised in full by the counterparties prior to the Convertible Notes issuance. OnJanuary 17, 2018, for a total of $230.0 million, the Convertible Notes were issued in accordance with an Indenture (the “Indenture”) between the Companyand Wilmington Trust, National Association, as trustee.F-23 The net proceeds from the issuance of the Convertible Notes are $200.4 million, net of debt issuance costs, including the underwriting discount andthe cash used to purchase the capped call, discussed below.The Convertible Notes are senior, unsecured obligations of the Company, and interest is payable semi-annually in cash at a rate of 0.375% per annumon January 15 and July 15 of each year, beginning on July 15, 2018. The Convertible Notes will mature on January 15, 2023 unless redeemed, repurchased orconverted prior to such date. Prior to the close of business on the business day immediately preceding October 15, 2022, the Convertible Notes areconvertible at the option of holders during certain periods, upon satisfaction of certain conditions. On or after October 15, 2022, the Convertible Notes areconvertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Convertible Notes willhave an initial conversion rate of 22.4685 shares of common stock per $1,000 principal (equivalent to an initial conversion price ofapproximately $44.5068 per share of its common stock). The conversion rate is subject to customary adjustments for certain events as described in theIndenture. 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 itscommon stock, at its election. It is the Company’s current intent to settle conversions of the Convertible Notes through combination settlement, whichinvolves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock.Holders may convert their Convertible Notes, at their option, prior to the close of business on the business day immediately preceding October 15,2022, in multiples of $1,000 principal amount, only under the following circumstances: •during any fiscal quarter commencing after the fiscal quarter ending on April 30, 2018 (and only during such fiscal quarter), if the lastreported sale price of its common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive tradingdays ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of theconversion price on each applicable trading day; •during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading priceper $1,000 principal amount of the Convertible Notes for each trading day of the Measurement Period was less than 98% of the product ofthe last reported sales price of the Company’s common stock and the conversion rate on each such trading day; •after the Company’s issuance of a notice of redemption and prior to the close of business on the second scheduled trading day immediatelypreceding the redemption date; or •upon the occurrence of specified corporate events, as defined in the Indenture. If the Company undergoes a fundamental change, as described in the Indenture, subject to certain conditions, holders may require the Company torepurchase for cash all or any portion of their Convertible Notes. The fundamental change repurchase price is equal to 100% of the principal amount ofthe Convertible Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the fundamental change repurchase date. If holders elect toconvert their Convertible Notes in connection with a make-whole fundamental change, as described in the Indenture, the Company will, to the extentprovided in the Indenture, increase the conversion rate applicable to the Convertible Notes.The Convertible Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of its indebtedness that isexpressly subordinated in right of payment to the Convertible Notes, and equal in right of payment to any of its indebtedness that is not so subordinated. TheConvertible 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 securingsuch indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) and any preferred equity of its current or futuresubsidiaries.The Indenture contains customary events of default with respect to the Convertible Notes and provides that upon certain events of default occurringand continuing, the Trustee may, and the Trustee at the request of holders of at least 25% in principal amount of the Convertible Notes shall, declare allprincipal and accrued and unpaid interest, if any, of the Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency orreorganization, involving us or a significant subsidiary, all of the principal of and accrued and unpaid interest on the Convertible Notes will automaticallybecome due and payable.F-24 In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. Thecarrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertiblefeature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liabilitycomponent from the par value of the Convertible Notes as a whole. The difference between the principal amount of the Convertible Notes and the liabilitycomponent, equal to $62.3 million (the “debt discount”), is amortized to interest expense using the effective interest method over the term of the ConvertibleNotes. The equity component of the Convertible Notes will not be remeasured as long as it continues to meet the conditions for equity classification.The Company incurred in $7.0 million of transaction costs related to the issuance of the Convertible Notes. The Company allocated the total amountincurred to the liability and equity components using the same proportions as the proceeds from the Convertible Notes. Issuance costs attributable to theliability component are being amortized to interest expense over the term of the Convertible Notes using the effective interest method, and issuance costsattributable to the equity component are included along with the equity component in stockholders' equity.The Convertible Notes consisted of the following as of January 31, 2018 (in thousands): Amount Liability: Principal $230,000 Less: debt discount, net of amortization (66,990)Net carrying amount $163,010 Equity $60,470 The following table sets forth interest expense recognized related to the Notes for the year ended January 31, 2018 (dollars in thousands): Amount Contractual interest expense $36 Amortization of debt issuance costs 36 Amortization of debt discount 423 Total $495 Effective interest rate of the liability component 7.66% Capped CallIn conjunction with the issuance of the Convertible Notes, the Company purchased the Capped Call options on the Company’s stock with certaincounterparties at a price of $23.3 million.The Capped Call exercise price is equal to the Convertible Note’s initial conversion price and the cap price is $63.821 per share, subject to certainadjustments under the terms of the capped call transactions. The Capped Call options are exercisable on the same date when the conversion option isexercised.By entering into the Capped Call, the Company expects to reduce the potential dilution to its common stock (or, in the event the conversion issettled 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 theConvertible Notes.The cost of the capped call is not expected to be tax deductible as the Company did not elect to integrate the capped call into the Convertible Notesfor tax purposes. The cost of the capped call was recorded as a reduction of the Company’s additional paid-in capital in the accompanying ConsolidatedFinancial Statements. F-25 Note 9. Commitments and ContingenciesCommitmentsThe Company leases office space under non-cancelable operating leases with various expiration dates through April 2024. Rent expense, which isbeing recognized on a straight-line basis over the lease term, was $5.8 million, $3.8 million and $2.4 million during the years ended January 31, 2018, 2017and 2016, respectively. The difference between the lease payments made and the lease expense recognized to date using the straight-line method is recordedas a liability and included within accrued expenses and other current liabilities in the accompanying consolidated balance sheet. Additionally, the Companyhas current contractual purchase obligations for hosting services that support business operations.Future minimum payments by year for our non-cancelable leases and purchase obligations as of January 31, 2018 are as follows (in thousands): Year Ending January 31, 2019 $12,175 2020 6,403 2021 6,364 2022 6,279 2023 5,705 Thereafter 6,081 Total $43,007 ContingenciesThe Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of business. Although the results oflitigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not havea material adverse effect on the Company’s business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have anadverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.Warranties and IndemnificationsThe Company’s cloud-based software platform and applications are typically warranted against material decreases in functionality and to perform ina manner consistent with general industry standards and in accordance with the Company’s on-line documentation under normal use and circumstances.The Company includes service level commitments to its customers, typically regarding certain levels of uptime reliability and performance and if theCompany fails to meet those levels, customers can receive credits and in some cases, terminate their relationship with the Company. To date, the Companyhas not incurred any material costs as a result of such commitments.The Company generally agrees to defend and indemnify its customers against legal claims that the Company’s platform infringes 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 suchinfringement claims and has not recorded any related liabilities.F-26 Note 10. Common Stock and Stockholders’ EquityCommon StockEach share of common stock has the right to one vote. The holders of the common stock are also entitled to receive dividends whenever funds arelegally available and when declared by the Board of Directors, subject to the prior rights of holders of all classes of stock outstanding having priority rightsas to dividends. No dividends have been declared or paid since inception.Preferred Stock As of January 31, 2018, the Company had authorized 25,000,000 shares of preferred stock, par value $0.0001, of which no shares were issued andoutstanding. 2016 Equity Incentive PlanThe 2016 Equity Incentive Plan, or 2016 Plan, was approved by the Company’s stockholders in September 2016. The 2016 Plan provides for thegrant 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, October 5, 2016. The 2016 Plan replaced theCompany’s 2006 Stock Plan, however awards outstanding under the 2006 Stock Plan will continue to be governed by their existing terms.The Company has reserved 5,224,006 shares of its common stock for issuance under the 2016 Plan. The number of shares reserved for issuance underthe 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 itsoutstanding 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 beadjusted in the event of a stock split, stock dividend or other changes in its capitalization.The following table summarizes stock option activity under the Company’s 2006 Stock Plan and the 2016 Plan during the year ended January 31,2018 (aggregate intrinsic value in thousands): Options Outstanding OutstandingStockOptions Weighted-AverageExercisePrice Weighted-AverageRemainingContractual Life(in years) AggregateIntrinsicValue Balance, January 31, 2017 13,016,402 $5.60 7.92 $265,542 Option grants 474,117 $25.07 Options exercised (3,399,499) $3.68 Options forfeited (789,767) $6.91 Balance, January 31, 2018 9,301,253 $7.19 7.30 $288,713 Vested and expected to vest at January 31, 2018 9,301,253 $7.19 7.30 $288,713 Exercisable at January 31, 2018 5,681,555 $5.24 6.78 $187,450 The options exercisable as of January 31, 2018 include options that are exercisable prior to vesting. The aggregate intrinsic value of options vestedand exercisable as of January 31, 2018 is calculated based on the difference between the exercise price and the fair value of the Company’s common stock asof January 31, 2018. The aggregate intrinsic value of exercised options was $89.3 million, $11.0 million and $5.5 million for the years ended January 31,2018, 2017 and 2016, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock asof the exercise date.The weighted-average grant date fair value of options granted for the years ended January 31, 2018, 2017 and 2016 was $11.58, $4.65 and $2.28 pershare, respectively. F-27 The total grant date fair value of options vested during fiscal 2018, 2017 and 2016 was $5.5 million, $5.8 million and $2.4 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 aresubject 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 isexercised. Early exercises of options are not deemed to be substantive exercises for accounting purposes and accordingly, amounts received for earlyexercises are initially recorded in accrued expenses and other current liabilities and reclassified to additional paid-in capital as the underlying shares vest. AtJanuary 31, 2018 and 2017, the Company had $334,000 and $2.6 million, respectively, recorded in accrued expenses and other current liabilities related toearly exercises of stock options, and the related number of unvested shares subject to repurchase was 52,509 and 255,529, respectively.Restricted Stock Units (“RSUs”)The following table summarizes the activity related to the Company’s RSUs: Number ofRSUsOutstanding Weighted-AverageGrant DateFair Value Awarded and unvested at January 31, 2017 77,883 $18.38 Awards granted 2,358,752 $26.71 Awards vested (263,484) $23.54 Awards forfeited (201,373) $23.35 Awarded and unvested at January 31, 2018 1,971,778 $27.14 2016 Employee Stock Purchase PlanThe board of directors adopted the 2016 Employee Stock Purchase Plan (the “ESPP”) in September 2016 and it has been approved by the Company’sstockholders. The ESPP allows eligible employees to purchase shares of common stock through payroll deductions and is intended to qualify underSection 423 of the Internal Revenue Code.As of January 31, 2018, the Company had 880,441 shares of its common stock available for future issuances under the ESPP. The number of sharesreserved 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 tothe 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 sharesdetermined 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 orother changes in its capitalization.Each offering period will last a number of months determined by the administrator, up to a maximum of 27 months. The initial offering period beganon the effective date of the Company’s initial public offering, October 5, 2016, and ends on September 15, 2018, and new 24 month offering periods willbegin on each March 16 and September 16 thereafter. Currently each offering period consists of four consecutive purchase periods, of approximately 6months duration, at the end of which payroll contributions are used to purchase shares of the Company’s common stock. Participants may purchaseCompany’s common stock through payroll deductions, up to a maximum of 15% of their eligible compensation. Participants may withdraw from the ESPPand receive a refund of their accumulated payroll contributions at any time prior to a purchase date. Unless changed by the administrator, the purchase pricefor 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 applicableoffering 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 marketvalue per share on the applicable purchase date.F-28 As of January 31, 2018, 441,124 shares of common stock were purchased under the 2016 ESPP. 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, 2018, total unrecognizedcompensation cost related to 2016 ESPP was $4.9 million which will be amortized over a weighted-average period of approximately one year.Market-based OptionsIn September 2016, the Board of Directors of the Company granted 544,127 stock options to the Chief Executive Officer (the “2016 CEO Grant”)under the 2006 Equity Plan with an exercise price of $13.04 per share. The 2016 CEO Grant is eligible to vest based on the achievement of stock priceappreciation targets after the consummation of the initial public offering, as well as continuous service over a four-year period following the grant date. Thefair value of the 2016 CEO Grant was determined using a Monte Carlo simulation approach. The Company amortizes the fair value of the option award usingthe graded-vesting method. Stock-based compensation expense recognized for market-based awards was approximately $1.6 million and $417,000 for the years ended January31, 2018 and 2017, respectively. As of January 31, 2018, two of three performance-based milestones has been achieved, resulting in 126,962 shares beingvested and exercisable.Stock-based CompensationThe Company’s total stock-based compensation expense was as follows (in thousands): For the year ended January 31, 2018 2017 2016 Cost of revenue: Subscription services $2,105 $715 $235 Professional services and other 2,722 772 1,014 Research and development 6,928 1,766 1,236 Sales and marketing 8,476 3,130 1,347 General and administrative 9,464 3,069 6,736 Total $29,695 $9,452 $10,568 Stock-based compensation capitalized in capitalized software development costs was approximately $332,000 and $224,000 at January 31, 2018and 2017, respectively. Of the total stock-based compensation expenses, costs recognized for options granted to non-employees were immaterial for all periods presented.As of January 31, 2018 there was approximately $19.3 million of total unrecognized compensation cost related to unvested stock options granted toemployees and non-employee service providers under the 2006 Stock Plan and 2016 Equity Incentive Plan. This unrecognized compensation cost isexpected to be recognized over an estimated weighted-average amortization period of approximately two years.As of January 31, 2018 there was approximately $48.4 million of total unrecognized compensation cost related to unvested restricted stock unitsgranted to employees under the 2016 Equity Incentive Plan. This unrecognized compensation cost is expected to be recognized over an estimated weighted-average amortization period of approximately three years. F-29 The fair values of the Company’s stock options granted during the years ended January 31, 2018, 2017 and 2016 were estimated using the followingassumptions: For the year ended January 31, 2018 2017 2016 Employee Stock Options Expected term (years) 6.00 6.00 5.70 - 6.00 Volatility 46% 48% 48% Risk-free interest rate 1.88% - 2.23% 1.27% - 2.08% 1.62% - 1.94% Dividend yield 0% 0% 0% Employee Stock Purchase Plan Expected term (years) 0.5 - 2.0 0.41 - 1.91 — Volatility 37.30% - 42.61% 48% — Risk-free interest rate 0.89% - 1.39% 0.48% - 0.81% — Dividend yield 0% 0% — Market-Based Awards Expected term (years) — 7.36 — Volatility — 48% — Risk-free interest rate — 1.61% — Dividend yield — 0% — These assumptions and estimates are as follows: •Fair Value of Common Stock. Prior to the initial public offering, the fair value of the shares of common stock underlying stock options hasbeen established by the Company’s board of directors, which was responsible for these estimates, and had been based in part upon avaluation provided by a third-party valuation firm. Because there had been no public market for the Company’s common stock, its board ofdirectors considered this independent valuation and other factors, including, but not limited to, revenue growth, the current status of thetechnical and commercial success of its operations, its financial condition, the stage of development and competition to establish the fairvalue of the Company’s common stock at the time of grant of the option. After the initial public offering, the Company used the publiclyquoted price as reported on the Nasdaq Global Select Market as the fair value of its common stock. •Expected Term. The expected term represents the weighted-average period that the stock options are expected to remain outstanding. Todetermine the expected term, the Company generally applies the simplified approach in which the expected term of an award is presumed tobe the mid-point between the vesting date and the expiration date of the award as the Company does not have sufficient historical exercisedata to provide a reasonable basis for an estimate of expected term. •Risk-Free Interest Rate. The Company bases the risk-free interest rate on the yields of U.S. Treasury securities with maturities approximatelyequal to the term of employee stock option awards. •Expected Volatility. As the Company does not have an extensive trading history for its common stock, the expected volatility for its commonstock has been estimated by taking the historic price volatility for industry peers based on daily price observations over a period equivalentto the expected term of the stock option awards. Industry peers consist of several public companies in its industry. F-30 Note 11. Income TaxesThe following table presents the domestic and foreign components of loss before provision for income taxes for the periods presented (in thousands): For the year ended January 31, 2018 2017 2016 United States $(44,977) $(38,926) $(46,850)Foreign 2,820 2,167 1,029 Loss before provision for income taxes $(42,157) $(36,759) $(45,821) The provision for income taxes is composed of the following (in thousands): For the year ended January 31, 2018 2017 2016 Current income taxes: Federal $— $— $— State 116 82 22 Foreign 4,248 976 308 Total current income taxes 4,364 1,058 330 Deferred income taxes: Federal (26) 13 5 State 7 1 — Foreign (2,697) (224) — Total deferred income taxes (2,716) (210) 5 Total provision for income taxes $1,648 $848 $335 The effective tax rate differs from the federal statutory rate as follows: For the year ended January 31, 2018 2017 2016 Federal statutory income tax rate 33.8% 34.0% 34.0%Tax reform rate change impact (80.7) — — State tax, net of federal benefit 2.6 2.6 2.7 Change in valuation allowance (23.6) (36.2) (32.0)Stock-based compensation 63.5 (2.7) (6.3)Other non-deductible items (3.5) (1.8) (0.4)Foreign rate differential (0.5) (1.4) (0.4)Tax credits 4.5 3.2 1.7 Total (3.9)% (2.3)% (0.7)% The difference between the U.S. federal statutory tax rate of 33.8% and the Company’s effective tax rate in all periods presented is primarily due to afull valuation allowance related to the Company’s U.S. and Canada deferred tax assets offset by foreign tax expense on the Company’s profitable foreignoperations.F-31 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets andliabilities for the periods presented (in thousands): As of January 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $61,671 $49,100 Accruals and reserves 3,161 1,164 Stock-based compensation 4,476 3,388 Tax credits 5,636 2,233 Gross deferred tax assets 74,944 55,885 Valuation allowance (58,027) (54,615)Total deferred tax assets, net of valuation allowance 16,917 1,270 Deferred tax liabilities: Fixed assets and intangibles assets (1,495) (1,072)Discount of convertible notes (14,803) — Gross deferred tax liabilities (16,298) (1,072)Net deferred tax assets $619 $198 A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuationallowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferredtax assets. Based on the weight of the available evidence, which includes the Company’s historical operating losses, lack of taxable income, and theaccumulated deficit, the Company provided a full valuation allowance against the U.S. and international deferred tax assets resulting from the tax loss andcredits carried forward. The valuation allowance increased by $3.4 million, $13.1 million and $14.6 million during the years ended January 31, 2018, 2017and 2016, respectively.As of January 31, 2018, the Company had net operating loss carryforwards of approximately $253 million and $140 million available to reducefuture taxable income, if any, for federal and state income tax purposes, respectively. The U.S. federal and California state net operating loss carryforwardswill begin to expire in 2026 and 2029, respectively. As of January 31, 2018, the Company had research and development credit carryforwards of approximately $6.1 million available to reduce its futuretax liability, if any, for each of federal and California state income tax purposes. The federal credit carryforwards begin to expire in 2031. California creditcarryforwards have no expiration date. As of January 31, 2018, the Company has U.S. federal foreign tax credits carryforwards of $1.9 million that will beginto expire in 2025.Federal and state laws impose restrictions on the utilization of net operating loss carryforwards and R&D credit carryforwards in the event of a changein ownership of the Company, which constitutes an ‘ownership change’ as defined by Internal Revenue Code Section 382 and 383. The Companyexperienced an ownership change in the past that does not materially impact the availability of its net operating losses and tax credits. Should there beownership change in the future, the Company’s ability to utilize existing carryforwards could be substantially restricted.The Company accounts for uncertainty in income taxes in accordance with ASC 740. Tax positions are evaluated in a two-step process, whereby theCompany first determines whether it is more likely than not that a tax position will be sustained upon examination by the tax authority, including resolutionsof any related appeals or litigation processes, based on technical merit. If a tax position meets the more-likely-than-not recognition threshold it is thenmeasured to determine the amount of benefit to recognized in the financial statements. The tax position is measured as the largest amount of benefit that isgreater than 50% likely of being realized upon ultimate settlement.F-32 The following table summarizes the activity related to unrecognized tax benefits (in thousands): For the year ended January 31, 2018 2017 2016 Unrecognized tax benefit—beginning of year $5,441 $3,304 $2,846 Gross increases —prior year tax positions 472 6 Gross decreases —prior year tax positions (5) (248) — Gross increases — current year tax positions 7,227 1,913 452 Unrecognized tax benefit—end of year $12,663 $5,441 $3,304 As of January 31, 2018, $8.0 million of the unrecognized tax benefits was accounted for as a reduction in the Company’s deferred tax assets. All but$122,000 of the unrecognized tax benefits as of January 31, 2017 are accounted for as a reduction in the Company’s deferred tax assets. Due to theCompany’s valuation allowance, only $4.6 million of the $12.7 million of unrecognized tax benefits would affect the Company’s effective tax rate, ifrecognized. The Company does not believe it is reasonably possible that its unrecognized tax benefits will significantly change in the next twelve months.The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. There was immaterial accrued interestand penalties related to unrecognized tax benefits as of January 31, 2018 and 2017.The Company’s material income tax jurisdictions are the United States (federal) and California. As a result of net operating loss carryforwards, theCompany is subject to audits for tax years 2006 and forward for federal purposes and 2009 and forward for California purposes. There are tax years whichremain subject to examination in various other jurisdictions that are not material to the Company’s financial statements.On December 22, 2017, the Tax Act was signed into law making significant changes to the Internal Revenue Code. Changes include, but are notlimited to a corporate tax rate decrease from 35% to 21%, effective for tax years beginning after December 31, 2017, the transition of U.S. internationaltaxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreignearnings as of January 31, 2018. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Act, the Company revaluedits ending net deferred tax assets at January 31, 2018, which were fully offset by a valuation allowance.The Tax Act provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits, or E&P,through the year ended December 31, 2018.The Company has calculated its best estimate of the impact of the Tax Act in its year end income tax provision in accordance with its understandingof the Tax Act and guidance available as of the date of this filing. Based on the preliminary calculation, the effects of the transition tax have been offset bythe Company’s available tax credits in the United States. As the Company completes the analysis of the Tax Act, collect and prepare necessary data, andinterpret any additional guidance, the Company may make adjustments to its initial assessment. Pursuant to Staff Accounting Bulletin No. 118, adjustmentsto the provisional amounts recorded by the Company as of January 31, 2018 that are identified within a subsequent measurement period of up to one yearfrom the enactment date will be included as an adjustment to tax expense from continuing operations in the period the amounts are determined.F-33 Note 12. Net Loss per Share Attributable to Common StockholdersBasic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by theweighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities as they do notshare 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 dilutednet loss per share attributable to common stockholders as the effects of potentially dilutive securities are antidilutive given the net loss of the Company.The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders during the years endedJanuary 31, 2018, 2017 and 2016 (in thousands, except per share amounts): January 31, 2018 2017 2016 Numerator: Net loss attributable to common stockholders $(43,805) $(37,607) $(46,156)Denominator: Weighted-average common shares outstanding 52,999 19,988 4,704 Net loss per share attributable to common stockholders, basic and diluted $(0.83) $(1.88) $(9.81) Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as dilutednet loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securitiesthat were not included in the diluted per share calculations because they would be anti-dilutive were as follows: As of January 31, 2018 2017 2016 Convertible preferred stock as converted — — 34,610,979 Options to purchase common stock 9,301,253 13,016,402 9,543,966 RSUs 1,971,778 77,883 62,500 Unvested common shares subject to repurchase 458,214 335,116 283,524 Shares committed under 2016 ESPP 195,497 144,685 — Convertible preferred stock warrants — — 36,971 Total 11,926,742 13,574,086 44,537,940 The Company expects to settle the principal amount of the Convertible Notes in cash, and therefore, the Company uses the treasury stock method forcalculating any potential dilutive effect of the Conversion Option on diluted net income per share, if applicable. The Conversion Option will have a dilutiveimpact on net loss per share of common stock when the average market price of the Company’s common stock for a given period exceeds the conversionprice of the Convertible Notes of $44.51 per share. During the year ended January 31, 2018, the Company's weighted average common stock price was belowthe conversion price of the Convertible Notes. Note 13. Business Segment InformationThe Company’s chief operating decision maker is the Chief Executive Officer (“CEO”). The CEO reviews the financial information presented on aconsolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined thatit operates in a single reporting segment: cloud platform.F-34 Note 14. Employee Benefit PlanThe Company maintained a qualified defined contribution plan under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan,participating employees may elect to contribute up to 90% of their eligible compensation, subject to certain limitations. The Company matches certainpercentages of employee contributions. Both employee and employer contributions vest immediately upon contribution. During the years ended January 31,2018, 2017 and 2016, the Company’s contributions to the 401(k) Plan amounted to approximately $1.5 million, $1.4 million and $1.5 million, respectively.The Company also maintains a limited number of defined benefit plans for certain non-U.S. locations. Total costs under these plans were notsignificant. Note 15. Related PartiesOne of the Company’s customers, T. Rowe Associates, Inc., is an investment adviser of certain of the Company’s stockholders. For the period endedJanuary 31, 2018, 2017 and 2016, the Company recognized subscription revenue of $573,000, $509,000, and $284,000 from this customer, respectively. TheCompany had no outstanding receivable as of January 31, 2018 and January 31, 2017 from this customer.Note 16. 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 2018 and2017 (in thousands except per share data): Three months ended Jan. 31, Oct. 31, Jul. 31, Apr. 30, Jan. 31, Oct. 31, Jul. 31, Apr. 30, 2018 2017 2017 2017 2017 2016 2016 2016 (in thousands) Total revenues $53,752 $47,340 $44,551 $41,137 $38,018 $35,442 $31,132 $29,183 Gross profit 37,286 32,345 29,603 27,640 26,625 24,065 19,651 17,165 Loss from operations 9,057 11,159 14,359 10,387 6,436 5,497 11,427 12,064 Net loss 8,723 11,302 13,742 10,038 6,608 6,694 12,438 11,867 Net loss per share attributable to common stockholders, basic and diluted $0.16 $0.21 $0.26 $0.20 $0.13 $0.36 $2.13 $2.11 F-35Exhibit 10.14 Coupa Software IncorporatedDirector Confidentiality AgreementThis Director Confiden(cid:16)ality Agreement (“Agreement”) is made by and between Coupa So(cid:32)ware Incorporated, aDelaware corpora(cid:16)on (the “Company”), and the undersigned member of the Board of Directors (the “Board”) of the Company(the “Director”), as of the date indicated below.RecitalsWHEREAS, the Company and the Board believe in the importance of protec(cid:16)ng and holding confiden(cid:16)al all non-publicinformation that the members of the Board obtain due to their directorship position; WHEREAS, members of the Board have fiduciary duties under the General Corporation Law of the State of Delaware; WHEREAS, the Corporate Governance Guidelines adopted by the Board state that, consistent with their fiduciary du(cid:16)es,directors are expected to maintain the confiden(cid:16)ality of the informa(cid:16)on they receive as a director and the delibera(cid:16)ons of the Board and itscommittees; and WHEREAS, the Company and the Board desire that each member of the Board enter into this Agreement regardingconfidentiality in connection with their service on the Board.NOW, THEREFORE, in considera(cid:16)on of the premises and the covenants contained herein, the Company and Director dohereby covenant and agree as follows:Section 1.Agreement of Confidentiality. Pursuant to the fiduciary du(cid:16)es of loyalty and care, the Director agreesto take reasonable measures to protect and hold confiden(cid:16)al all non-public informa(cid:16)on obtained due to his or her directorshipposition absent the express permission of the Company to disclose such information. Accordingly:(a)the Director agrees not to use Confiden(cid:16)al Informa(cid:16)on for his or her own personal benefit or tobenefit persons or entities outside the Company; and  (b)the Director agrees not to disclose Confiden(cid:16)al Informa(cid:16)on outside the Company, either during ora(cid:32)er his or her service as a Director of the Company, except with authoriza(cid:16)on of the Company or as may be otherwiserequired by law. For purposes of this Agreement, to the extent applicable, the Company authorizes Director to discloseConfiden(cid:16)al Informa(cid:16)on to the general partners, managing members or other control persons and/or any affiliatedmanagement companies of his or her venture capital fund on a need to know basis (collec(cid:16)vely, the “VC Fund”);provided, however, that the VC Fund shall strictly observe the terms of this Agreement.Section 2.“Confidential Information” includes all non-public informa(cid:16)on entrusted to or obtained by the Directorby reason of his or her position as a member of the Board. It includes, but is not limited to:a)non-public informa(cid:16)on that might be of use to compe(cid:16)tors or harmful to the Company or itscustomers or suppliers if disclosed;b)non-public informa(cid:16)on about the Company’s financial condi(cid:16)on, prospects or plans, its sales andmarke(cid:16)ng programs and research and development informa(cid:16)on, as well as informa(cid:16)on rela(cid:16)ng to mergers andacquisitions, stock splits and other corporate transactions;c)non-public informa(cid:16)on concerning possible transac(cid:16)ons with other companies or informa(cid:16)on aboutthe Company’s customers, suppliers or partners, which the Company is under an obliga(cid:16)on to maintain as confiden(cid:16)al;andd)non-public information about discussions and deliberations relating to business issues and decisions,between and among employees, officers and the Board.Sec(cid:16)on 3.Permi(cid:63)ed Communica(cid:16)ons. Nothing in this Agreement is intended to limit the Director’s ability tomeet or otherwise communicate with various cons(cid:16)tuencies that are involved with the Company under the circumstancesspecified in the Corporate Governance Guidelines or to act as an authorized spokesperson of the Company pursuant to theCompany’s Investor Relations and Communications Policy.Sec(cid:16)on 4.Modifica(cid:16)on and Waiver. No supplement, modifica(cid:16)on or amendment of this Agreement shall bebinding unless executed in wri(cid:16)ng by the par(cid:16)es hereto. No waiver of any of the provisions of this Agreement shall be deemed orshall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.  Sec(cid:16)on 5.Applicable Law. This Agreement shall be governed by, and construed and enforced in accordancewith, the laws of the State of Delaware, without regard to its conflict of laws rules. Section 6.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall forall purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year written below. COUPA SOFTWARE INCORPORATEDDIRECTOR By: Name: Name: Office: DATE: Exhibit 23.1 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 333-21391 and 333-217104) pertaining tothe 2016 Equity Incentive Plan, 2016 Stock Plan, and the 2016 Employee Stock Purchase Plan of Coupa Software Incorporated of ourreports dated March 28, 2018, with respect to the consolidated financial statements and schedule of Coupa Software Incorporated, andthe effectiveness of internal control over financial reporting of Coupa Software Incorporated, included in this Annual Report (Form 10-K) for the year ended January 31, 2018. /s/ Ernst & Young LLP San Jose, CaliforniaMarch 28, 2018 Exhibit 31.1CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICERPURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Robert Bernshteyn, certify that:1.I have reviewed this annual report on Form 10-K of Coupa Software Incorporated;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: (a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: March 28, 2018By:/s/ Robert Bernshteyn Name:Robert Bernshteyn Title:Chief Executive Officer and Chairman of the Board (Principal Executive Officer)  Exhibit 31.2CERTIFICATION OF PRINCIPAL FINANCIAL OFFICERPURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Todd Ford, certify that:1.I have reviewed this annual report on Form 10-K of Coupa Software Incorporated;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: (a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: March 28, 2018By:/s/ Todd Ford Name:Todd Ford Title:Chief Financial Officer (Principal Financial Officer)  Exhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Robert Bernshteyn, Chief Executive Officer of Coupa Software Incorporated (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1)The annual report on Form 10-K for the Company for the year ended January 31, 2018 (the “Report”) fully complies with the requirements ofSection 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. Date: March 28, 2018By:/s/ Robert Bernshteyn Name:Robert Bernshteyn Title:Chief Executive Officer and Chairman of the Board (Principal Executive Officer)  Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Todd Ford, Chief Financial Officer of Coupa Software Incorporated (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1)The annual report on Form 10-K for the Company for the year ended January 31, 2018 (the “Report”) fully complies with the requirements ofSection 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. Date: March 28, 2018By:/s/ Todd Ford Name:Todd Ford Title:Chief Financial Officer (Principal Financial Officer) 

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