Over the past 12 months, Coupa Software Inc (NASDAQ: COUP) has grown by more than 100%. What are the factors that are required to support the company’s growth in the next quarter?

Coupa Software offers financial performance management software that helps companies manage their finances. Demand for software of this kind remains strong as more companies seek ways to cut costs. Coupa Software offers its clients programs that make the process of making payments and restocking a lot simpler.

Sales of software-by-subscription (SaaS) are what have set Coupa Software Inc (COUP) apart from its competitors. Subscription fees create a constant source of income. Moreover, Coupa Software can grow rapidly as its customer base expands with the SaaS business, incurring a small cost to support each additional customer, thanks to its cost-effective and scalable model.

During the past three years, Coupa Software’s customer base grew by about 37% per year. According to the company’s third-quarter report, over 1,000 customers had annual accounts valued at over $100,000, up 33 % year-on-year. Likewise, Coupa Software reports the cost of acquiring a new customer is six times the total revenue generated over time. This means that each new customer represents a 500% return on investment.

Furthermore, Coupa Software Inc (COUP) creates a network effect that allows it to be competitive with technology giants. Increased customer participation attracts new vendors, which in turn increases Coupa Software’s customer base. Over the past three years, Coupa Software has seen a nearly 190 % increase in revenue. Despite not yet being profitable, the company can generate free cash flow.

As a result, the business can grow without incurring further debt or issuing more shares. Therefore, the main factors driving Coupa Software Inc (COUP) long-term growth will be its successful business model, demand for its services, and network effect.