Coupa stacks up new customers as subscription revenue growth hits 42%
- Summary:
- Lots of new users and strong revenue growth as Coupa prepares to make more customer-helpful data transparent.
A strong year-end for Coupa yesterday with 39% total revenue growth year-on-year to hit $260.4 million and subscription revenue growth up 42% to $233.4 million. Net GAAP loss for the full year was $55.5 million.
Coupa founder and CEO Rob Bernshteyn called the fourth quarter the firm’s strongest yet, with subscription revenues up 45% year-on-year. Across the year, more than 100 customers went live, he said, including:
National Grid, a FTSE100 energy and utilities company, recently went live with Coupa BSM in a UK-wide rollout. Their defined key success metrics with Coupa included improved requisition to order time, significant increases in electronic invoicing, spend under contract and increased self-service procurement for field personnel. We look forward to continuing to partner with National Grid as we progress their implementation, innovating it with SAP S/4HANA globally.
DXP Enterprises, a distribution management company, recently went live with Coupa BSM. Since go-live, DXP has enabled more than 18,000 suppliers and processed over 85,000 invoices helping them towards their goal of increasing electronic invoicing, reducing invoice approval cycle times and optimizing for early payment discounts.
Farfetch, a global technology platform for luxury fashion, recently went live in two countries with Coupa BSM as part of an expansive systemwide technology transformation that has increased AP efficiency with over 90% supplier invoices being processed through Coupa. Global rollout is planned to the end of 2019 to deliver increased visibility and control over spend.
KPMG UK went live in the first phase of their deployment enabling their internal procurement operations and focusing primarily on their essential function spend. The next phase will be KPMG UK rolling up Coupa BSM across their entire organization for the very first time.
Monash University, the largest university in Australia, went live with Coupa BSM in less than six months with integration to SAP. This is the first of two phases in a university-wide rollout across 9,000 faculty, students and staff. In a typical implementation ranging from three to eight months in length, the speed of Coupa deployments is helping accelerate time to value for our customers.
There was also a big public sector flagged up by Bernshteyn:
The United States Postal Service, one of the largest organizations in the world with procurement spend exceeding $12.9 billion annually, has selected Coupa for its eBuy+ program. Coupa is providing our core BSM solution to help the United States Postal Service achieve stronger financial controls, better spend management and visibility, improved pricing, higher contract compliance rates and lower overall lifecycle costs.
It's one of the largest organizations in the world, over half a million people, over $7 billion in revenue. Their annual spend is obviously managed in billions of dollars. We are looking at 65,000-plus initial users, five-year kind of transaction and they are using this for…streamlining and improving their user experience and improving their item categorization and searchability, reducing overall invoice errors, improving pricing, driving higher contract compliance rates.
And they are going to be doing this across a whole host of spend categories from maintenance and repair to signage displays, marketing, you name it. The ROI on a project like this is really, really strong, measured in millions of millions of dollars annually. So it's these types of large-scale projects that we are really well suited to deliver for the federal government where our greatest core competencies are around usability, high-volume transactional capabilities on a 24/7 basis with a very, very strong customer support and customer success team.
More data
As noted previously by Phil Wainewright, back in 2009, Coupa began signing up customers to its benchmarking program:
In exchange for making their anonymized data available to be pooled with that of other customers, they would benefit from insights into how their performance measured up against the community. For example, a company might see that it was taking much longer than average to complete a certain type of purchase, which would show a need to streamline some of its processes.
The firm is now surfacing more of the data that it has access to, said Bernshteyn, including the Coupa 2019 Benchmark Report released this week, which identifies key performance indicators for driving profitability and growth through business spend management. Soon to come is a new Coupa Business Spend Index (BSI):
The Coupa BSI will include spend metrics for approval cycle times, approval rates and average spend per employee across all key industries. By way of preview, our January data suggests that in aggregate the spend sentiment going into this calendar year was positive across all major industries, of course, at varying degrees.
These build on Coupa’s long-standing focus on community intelligence. Bernshteyn explained:
Community intelligence is really incorporated throughout the platform and the purpose of it is to leverage data from the community, for the community to equip customers to get powerful information they could use to fuel a whole host of applications. Risk Aware and Spend Guard are just two of those applications. Now of course, you know the data is obviously aggregated, anonymized, normalized when it's presented to customers.
The data derived from community intelligence gathering helps to shape product priorities and direction, he added. Coupa Pay is a case in point:
We had customers come to us and say, look, if we are buying through Coupa, why can't we also be paying through Coupa? And when we went in to look at the ways that these customers are doing payments, we did really see a great deal of problems. And problems in terms of being able to handle complex batch runs, a lot of complex integrations, a lot of different rails and forms of payment, a whole host of complexity around reconciliation.
My take
Wall Street was a bit cool on the fiscal 2020 outlook provided by Coupa - as we noted with Salesforce’s numbers last week, the ‘need for speed’ does take over - but it’s undoubtedly a strong set of full year numbers with some impressive logos added to the customer roster.
The broadening out of the Coupa portfolio is proceeding well and indicative of ongoing customer demand. As Bernshteyn noted:
If you look at where we began, 100% of our revenue was coming from our core procurement product and by the time of our IPO, something like 50% and now it's roughly a third…we are seeing a desire by this customer to have a comprehensive business spend management solution and all of these components, all of these information technology modules, if you will, are part of that overall solution.