A welcome feature of Coupa’s quarterly earnings calls has been the firm’s practice of citing tangible examples of its offerings in use by its customers. Yesterday’s Q3 numbers were no exception with CEO Rob Bernshteyn this time picking out a number of individuals he dubs “Spend Setters”:
These are people like Al Williams, Chief Procurement Officer at Barclays, who helped Barclays achieve 92% on-contract spend. Rick Quaintance, Senior Director of Procurements and Contract Management at the USO (United Service Organizations), who helped to reduce invoice cycle times to 2.7 days using community benchmarking while helping US troops get the goods and services they need at all times. And Thomas Sebastian, Global Head of Sourcing and Procurement at Zurich Insurance, who led the $27 billion insurance company to achieve a 99% electronic PO environment.
It’s a nice touch that brings to the fore the customers, something of which diginomica thoroughly approves at all times from all vendors. Once again, as is now familiar practice, Bernshteyn was able to point to a stream of customer success stories, stating with Brazil’s Diagnosticos da America (DASA), the largest diagnostic medicine company in Latin America:
DASA implemented Coupa to digitize their business spend management (BSM). Coupa has made it faster and easier for end users to procure supplies for more than 700 healthcare facilities across Brazil. In only five months on Coupa, DASA has already reached 95% spend under management, issuing 84% of goods PO from catalogs.
Randstad US, part of a global family of companies specializing and flexible workforce in HR services, went live with Coupa at their rapid BSM implementation by replacing what they described as extremely manual processes with streamlined workflows, Randstad is increasing PO back spend by 70% in the first year and reducing invoice cycle times to less than five days. In addition to these efficiency gains, Randstad is expected to achieve enough savings from Coupa Advantage alone to realize 100% ROI on their subscription costs.
Toyota Motor Corporation Australia, the country's leading automotive company, recently implemented Coupa as part of its strategic transformation initiative for spend visibility, compliance and risk reduction. In addition to achieving greater spend under management, Toyota is targeting 100% electronic purchase orders and a reduction of PO cycle times down to two days within the first six months of being live.
From Europe, Bernshteyn picked out Finnish airline Finnair’s 8 months rapid deployment to digitiize purchasing processes for employees and Danish pharma giant Novo Nordisk, which went live with sourcing, contract management and purchasing in the first phase of a global deployment.
Meanwhile down under, New Zealand’s largest energy provider Next Genesis Energy has consolidated its several systems down to one BSM platform, while Multibank, a Panamanian banking and financial services provider, is using Coupa to increase on-contract spend and cut its budget requests cycle times in half. Bernshteyn said of the latter:
With Coupa, Multibank has not only increased catalog usage and streamlined workflows to allow for fully control, traceable and auditable budget pre-approval., but they have also lowered the use of paper and ink helping reduce our carbon footprint and preserve our planet.
In previous quarters, Coupa has highlighted its Community Intelligence initiative, a ‘wisdom of the crowds’ pooling of shared customer experiences. Bernshteyn pointed to the UK’s Provident Financial Group as an example of how this works for mutual benefit in practice:
Provident is one of the UK's leading suppliers of personal credit, helping over 2.4 million customers who do not have access to mainstream lending products get on a path to stronger and more secure financial future. James Wagstaff, Chief Procurement Officer of Provident, knows that every penny Provident spends may ultimately lead to increased costs for Provident customers. James takes this very seriously and to that end, he's leveraged Coupa Community Intelligence to pinpoint specific opportunities this manage spend more effectively.
For example, Community Intelligence helped James identify opportunities to increase the percentage of invoices processing electronically. Prior to using Community Intelligence, James did not realize that Provident's electronic invoicing percentage was slightly significantly lower than best-in-class companies within his peer group. CI not only identified the problem, but also prescribed ways to increase electronic invoicing, including showing James which of his suppliers were already transacting electronically with others in the Coupa Community, making it easy for him to target the right suppliers for electronic invoicing enablement.
Increased electronic invoicing has freed up Provident resources from processing manual invoices. James and his team are targeting process efficiency savings of £3 for every invoice moved from manual to electronic. These efficiency savings will ultimately benefit Provident customers who rely on Provident credit products to build their credit and pay for important life events.
The focus on community has recently stepped up with the formation of Coupa Source Together, a program that connects Coupa customers to collaborate on group sourcing events to tap into the purchasing clout that such scale brings. Bernshteyn explained:
These companies are leveraging their group buying power to attract more suppliers, negotiate better pricing and realize greater savings than they would be able to do on their own. Since launching Source Together mid-year, we've seen tremendous traction, with group sourcing events globally which have generated millions of dollars in negotiated savings. Hundreds of companies have indicated interest in participating in upcoming events. Source Together participants are capturing over 50% negotiated savings across diverse categories.
Recently in just a single event five companies came together to source IT hardware and peripherals negotiating over $1 million in savings in three weeks. These companies have never worked with each other before. But through Source Together, they are able to collaborate and capture value in an accelerated fashion.
He cited the example of ZocDoc, provider of a medical care appointment booking platform that helps patients reduce the waiting time for doctors' appointments and incentivizes value-based care:
Philip Thomas, a business spend leader at ZocDoc was charged with building a new business spend management function including the implementation of Coupa to help fuel ZocDoc growth. Philip wanted to deliver a quick win to establish credibility. Through Source Together, Philip achieved a 9.1% negotiated savings on laptops, desktops, keyboards, monitors and headsets that could not have been achieved with just its own companies spend volume. Best of all, ZocDoc captured these savings before even going live with the full Coupa implementation. This has empowered Philip and his team to demonstrate immediate value.
As ever, the roll call of customer successes is impressive. Wall Street was a tad cool on the quarterly numbers despite them beating analyst expectations.
Revenue was $101.8 million, up 51% year-on-year from $67.46 million last year. The firm turned in a net GAAP loss of $26.34 million, compared to a loss of $9.65 million for the comparable period last year. On a non-GAAP basis, the firm recorded a profit for the sixth consecutive quarter, $14.2 million compared to $5.5 million a year ago. For the full year, Coupa now expects revenues of between $379.8 million and $380.8 million.
Having shaped the BSM space in its own image, Coupa has an interesting new rival on the horizon following Workday’s acquisition last month of San Francisco start-up Scout RFP. At the time that deal was announced, Phil Wainewright observed:
I get the feeling though that Coupa's CEO relishes the challenge from Workday. It spurs Coupa to continue to differentiate itself with a far more comprehensive offering for enterprises that see spend management not just as an automation opportunity but also as a strategic play.
That certainly remained the party line yesterday, as Bernshteyn stated:
We're excited for the additional validation of the category that we've been creating and cultivating now for over a decade in business spends management. And we have a lot of confidence in our buyer. Remember, our buyer is the key spender within an organization. They know how to identify value and we're more than excited to continue delivering exceptional value to them for many quarters and years to come.
Bring on 2020.