Some nice numbers from Coupa for its third quarter end, with losses narrower than expected on a 33.6% year-on-year rise in revenues.
Key to the revenue boost was increased adoption of the Coupa solutions by large enterprise customers, with CEO Rob Bernshteyn citing three strong examples in his post-results conference call with analysts:
While we took many customers live this quarter, let me highlight Caterpillar, the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel electric locomotives, who has already gone live with Coupa at their first location just months after kicking off the project with us earlier in the year.
Now, of course, we have plenty of exciting new customer wins in Q3 as well, Toyota financial services, a leading provider of automotive financial services, offering financial products to Toyota customers and dealers selected Coupa source-to-pay and contract lifecycle management to streamline their core source-to-pay process, leveraging the power of Coupa’s unified platform and suite synergy.
Zürich Insurance, a leading multiline insurer that serve these customers in global and local markets selected Coupa source-to-pay and expense management, replacing an incumbent solution, based primarily on usability and employee adoption, as well as of course, product innovation.
Bernsheyn took time out to elaborate on the value proposition that he sees such customers responding to, picking out the P in Coupa as a big driver:
The P in Coupa, which stands for Prescriptive, is the method by which we deliver the Community Intelligence capabilities to our customers. We are able to see across hundreds of billion dollars spending and be Prescriptive to them about information such as supplier risk and the like.
Without question, many of our customers over the course of the year recognize the value of that vision and many of them already taken advantage of that with our latest release around Community Intelligence focused on Perfect Fit Insights which are operational benchmarks running across company, as well as our Risk Aware product which we made generally available at the last Inspire event.
So without a doubt this is an area that continues to be of high interest for our prospective customers and one that continues to build huge barriers essentially for us in the marketplace given the hundreds of billions dollar of data, the spend data we are tracking on one unified cloud platform.
Helping customers to see and understand value of investment is crucial, he added:
One of the things we do I think is quite special in this market is with every one of our customers, the exploration of identifying value for them, then going into delivering that value and optimizing that value [that] we set [in] very clear measurable goals. Very often those goals are round getting certain amount of Spend Under Management and some cases it’s a certain amount of savings targets, whatever [those] may be. They are very unique and specific to every one of our customers and are confidential with that customer.
We like to use Spend Under Management as the key non-financial measure for the organization, because at the end of the day if you are not capturing investments, you don’t have an opportunity to optimize it, look for greater value propositions around it. Our Spend Under Management numbers continue to grow faster and faster and faster. So there’s an acceleration there and it’s clearly correlated with value being delivered.
Last quarter we reached some key milestones suppressing $500 billion in Cumulative Spend Under Management. This figure continues to grow at fast pace, landing at $570 billion at the end of Q3. It’s really an amazing thing.
The other major customer proposition is to strike the balance between being close and consultative without getting in the way. Bernshteyn explained:
The way we think about internally is that we never want to be the bottleneck. We never want to be the obstacle to adoption as fast as the customer is willing to adopt us. Now very often sales run change management programs for transformation initiatives around the Coupa deployment…We provide as much agility as possible to the customer and then we allow them to work in concert with the system integrators to get customers deployed.
How quickly they continue to adopt? They may adopt division by division. They may go product category by product category. They may go geography by geography. They may go business process by business process. We want to have the agility that they desire. But to get value in an Accelerated way which is of course the A in Coupa.
Mention of systems integrators led to a re-affirmation of the desire to have all the major players there working as partners. But the main partner commentary for now is around the relationship between Coupa and Amazon, which appears to be expanding. Bernshteyn said:
In October we announced the general availability of Coupa Open Buy with Amazon Business. This offering expands customer buying options by giving employees access to the Amazon Business marketplace. [And] just last week we announced the addition of Coupa to the AWS Marketplace where customers can now quickly discover and subscribe to Coupa Spend Management solutions. Overall, we are excited that we continue to expand our relationship with Amazon, a valued customer, key supplier and strategic partner to Coupa.
He added that such partnerships are approached on a pragmatic case-by-case basis:
When we see good business opportunities we would like to take advantage of them and we are sure that Amazon thinks very much the same way. We have a great relationship with Amazon as a customer, as a supplier and we found ways to partner on a host of different initiatives like the ones that I described. We see an opportunity for a whole host of customers across just about every company size and every vertical to take advantage of some of the synergies we are bringing in the market together.
Some good use case examples of Coupa’s spend management capabiltiies in action and an encouraging continued focus on delivering ways to make adoption as easy as possible for customers. A good end to 2017 for Coupa.