Coupa turns in strong Q1 numbers as product offerings align with COVID-19 procurement and spend needs
- A good first quarter for spend management firm Coupa as organizations adjust to the realities of operating in a COVID-19 economy.
Back in March, as the COVID-19 pandemic began to hit home in the US, Coupa CEO Rob Bernshteyn made the case that business spend agility is all the more essential in times of economic volatility. Fast forward three months and business resiliency is still the narrative as he says:
I personally called upon the procurement function at all companies to step-up and lead in this time of uncertainty and many have. Business Spend Management and the role of procurement is perhaps more important now in this unprecedented time than it has ever been.
It’s an idea that’s being taken on board by Chief Procurement Officers around the world, he says, citing as one example Alejandro Basterrechea, Head of Procurement Operations at European online fashion retailer Zalando, who was able to re-configure the firm's approval chains in less than one hour to help immediately contain and control costs.
Yesterday Coupa released its Q1 2021 quarterly numbers which indicate a fair degree of resilience in their own right. Revenue was up 47% year-on-year to $119.2 million, with subscription revenues accounting for $105.7 million of that, up 45% year-on-year, while net losses fell $20.5 million a year ago to $14.8 million.
Customer go-lives during Q1 include:
- Oil and gas provider Fieldwood Energy, which went live with Coupa BSM in less than six months, with the capability for virtual training and the simplicity of the user centric platform cited as necessities.
- Filipino geothermal energy producer Energy Development Corporation rolled out a fast track two week implementation of Coupa Sourcing, completing its first two sourcing events within five days of being live.
- European insurance giant Ergo brought forward its launch date by three months to run an urgent sourcing event with more than 100 suppliers, before going live with the Coupa Business Spend Management.
- Konica Minolta Business Systems Asia went with Coupa Business Spend Management to replace manual paper and spreadsheet based purchasing processes which had made controlling spend difficult.
- NEC Corporation of America went live on Coupa Contingent Workforce to create a single system of record for contract labor management, now used by all hiring managers companywide, with an integrated end-to-end process from requisition to release.
The current economic circumstances due to the pandemic have inevitably influenced some end user decisions, notes Bernshteyn:
What was interesting during the quarter is we had an increase in inbound demand for some of those applications that offered the fastest return given the current situation. So things like the ability to quickly assess supplier risk through our Risk Assess application; the ability to dynamically run a sourcing event, whether it be their Source Together, or on their own; the ability to very quickly get their arms around the contingent workforces that they're using and on-board folks on a temporary basis rather than full-time.
So, for example, in terms of supplier risk mitigation, the Bank of Montreal is a good example, he says::
Bank of Montreal was already using Coupa Risk Assess...Results from Coronavirus risk assessments of their suppliers and third-parties through the community have enabled them to easily respond to the increase on pandemic preparedness risk.
Elsewhere the threat of supply chain disruption has put sourcing front of mind, he adds:
We worked with a major airline that needed to secure Personal Protective Equipment for their employees and was unable to do so through their traditional supplier network. By tapping into the Coupa community, they were able to identify and vet alternative sources. As one outcome, more than 1 million masks were delivered to the airline along with hundreds of thousands to two other companies that joined the Source Together event.
And as noted last week, the public health scare is making many wary of hard cash and traditional forms of payment, a shift that Coupa appears to be benefiting from:
We continue to gain traction globally with accelerate virtual cards and invoice payments….We now support approximately 100 customers using Coupa Pay, with about one half of them being new customers and one half coming from our installed base. In fact, we have a number of customers who urgently needed Coupa Pay recently. Paper checks are still highly prevalent…Coupa enabled customers in our community to rapidly implement digital check programs. This eliminated the need for many of them to go into their offices and handle paper checks.
A strong quarter, inevitably tempered by the by-now-familiar cautious forward looking guidance that’s characterized the latest round of quarterly numbers across all sectors. But Coupa’s core product offerings have held up and mapped onto urgent business needs at a time of crisis.
Only one Coupa play - Coupa Travel Sabre, the result of the acquisition of Yapta to expand Coupa’s Travel and Expenses offering - looks to have been negatively impacted by COVID-19. That had been expected to contribute as much as $2 million in revenue, but the assumption now is that it will provide “virtually no revenue contribution” for the rest of the year with corporate travel on hold for now.
Looking forward, as lockdowns lift and economies start to re-open, Bernshteyn argues that the focus on community intelligence and shared learnings that Coupa has built out over the years will come into its own:
Many companies are going to start to re-enter or are beginning to re-enter and virtually all of them need certain indirect supplies to make that happen. So we're actually negotiating product bundles by industry, using our Source Together capabilities, so that customers of all sizes within our community can leverage centralized contracts for everything they need to re-enter. You can imagine non-healthcare organizations needing surgical masks and hand sanitizers and disinfectant wipes, gloves, KN95 masks, sublimated masks, all these things...creating packages for healthcare organizations that will include things like IR thermometers, and isolation gowns and things of that nature. So we're taking the power of this community, and driving incredible volumes to suppliers that are able to deliver for that community, at fair pricing that's delivered rapidly.
That’s a powerful message in its own right and could become a major positive differentiator for Coupa in the uncertain post-pandemic months ahead.