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Cloud Stocks: Coupa Aims for $1B Revenue

Posted on Monday, Sep 30th 2019

San Mateo-based business spend management firm Coupa (Nasdaq: COUP) recently reported a strong second quarter that surpassed estimates. Its stock has more than doubled in value this year.

Coupa’s Financials

In the recent second quarter, Coupa reported revenue of $95 million, up 54% and calculated billings of $108 million, up 57%. GAAP net loss was $20 million or $0.32 per share compared to a loss of $13.9 million or $0.24 per share last year. Non-GAAP net income was $5.3 million or $0.07 per share compared to net income of $3.3 million or $0.05 per share last year. Analysts estimated a loss of $0.10 per share on revenue of $85.4 million.

By segment, subscription services revenue increased 51% to $83.5 million and professional services revenue increased 84% to $11.6 million.

Cash and cash equivalents were $613.9 million as of July 31, 2019.

For the third quarter of fiscal 2020, the company expects non-GAAP income per share between $0.05 and $0.08. Revenue is expected to be between $95.5 and $96.5 million, with approximately $9.5 million from professional services and $86-$87 million from subscriptions. Analysts expect EPS of $0.06 on revenue of $96.23 million.

For the full year fiscal 2020, Coupa expects revenue between $369 and $372 million and non-GAAP income per share between $0.11 and $0.16, compared with analyst estimates of EPS of $0.16 on revenue of $372.12 million. For the full year 2019, the company reported revenue of $260.4 million, up 39% and GAAP loss of $55 million or $0.96 per share.

During the quarter, several new customers across numerous geographies and industries signed up for its BSM platform. New customers included Affirmed Networks, Auckland Savings Bank, Carousell, Commonwealth Bank of Australia, Comfortdelgro Corporation, Las Vegas Valley Water District, Lucid Software, Lucozade Ribena Suntory, Messer-US, Pochteca Materias Primas, PSSI Group, Suntory, Rakuten, Redfin, Sainsbury’s Supermarkets, Tullow Oil, University of St. Augustine, Venafi, Volkswagen Group Australia, Waste Management Incorporated, and Wawa.

Coupa’s Expansion

At its recent Business Spend Management event called Inspire ’19, it unveiled new Community Intelligence innovations as well as Coupa Pay partnerships with Citi Commercial Cards, PayPal, Stripe, and Transfermate.

Coupa is also expanding its presence internationally. It now has over a dozen offices in Europe, including London, Frankfurt, Dublin and Basel, five offices in the Asia Pacific region, including Tokyo, Pune, Hyderabad and Singapore, and several offices in Latin America, including in Mexico and Brazil. 

Coupa also announced that it has earned three more patents. Its 16th US patent enables customers to propose more accurate translations of terms used in localized versions of its solution. Its 17th new patent involves the use of machine learning to automatically say the contents of invoices and other transactional documents. Its 18th new patent is focused on automatically recognizing the geographic locale of the document based on language cues within the document itself. It has 75 more additional pending patents in the pipeline. 

In May this year, Coupa completed the acquisition of Exari, a leading provider of contract lifecycle management (CLM). The acquisition helps Coupa extend its Coupa Contract Management solution with advanced CLM capabilities including functionality for contract creation, collaboration, and discovery. Customers will be able to manage their business spend comprehensively on the Coupa BSM Platform.

Melbourne-based Exari was founded in 1999. It was bootstrapped initially and raised funding of about $34 million later from Wellington Financial and Beacon Equity Partners. Exari had estimated annual revenue of $13.1 million and competed with Determine, Qcentive, and Icertis.

Coupa was named as a leader in the Gartner 2019 Magic Quadrant for Procure-to-Pay Suites for the fourth consecutive time, and for the first time, ranked highest on both axes – Completeness of Vision and Ability to Execute. Other leaders include SAP, Ivalua, GEP, Basware, and JAGGAER.

Based on the continued momentum in its performance and by extending its leadership standing in Business Spend Management (BSM), the company says it is well-positioned on its path to $1 billion in revenue.

Its stock is trading at $127.89 with a market capitalization of $8.04 billion. Earlier this month, it had climbed to a life-high of $156.16. It hit a 52-week low of $125.37 in November last year.

This segment is a part in the series : Cloud Stocks

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