Analysis Of Coupa’s LLamasoft Acquisition

The pandemic conditions have forced all organizations – big and small – to look at their expenses more closely. Organizations are reaching out to business spend management services providers to create efficient financial models. San Mateo-based Coupa (Nasdaq: COUP) is benefiting from its cloud-based model that helps these organizations manage spend. It is also adding AI capabilities to its portfolio to stay ahead of the curve.

Coupa’s Financials

Revenues for the first quarter of the year grew 31% to $133.0 million, ahead of the market’s estimates by 7%. GAAP net loss of $60.8 million was significantly higher than the previous year’s net loss of $26.3 million. On an adjusted basis, net income was $0.18 per share, compared to a net income of $0.20 per share a year ago and analyst estimates of $0.04 per share.

By segment, subscription services revenues increased 31% to $118.1 million and professional services revenues grew 28.2% to $14.9 million.

For the second quarter, the company expects revenues of $145-$146 million with non-GAAP net loss of $0.11-$0.13 per share. It expects to end the year with revenues of $523-$524 million with net income of $0.47-$0.49 per share. The market was looking for Q2 revenues of $129.31 million with an EPS of $0.02 and revenues of $498.31 million for the year with an EPS of $0.46.

Coupa’s Product Upgrades

During the quarter, Coupa strengthened its relationship with American Express to bring virtual card payments to the US. The expanded relationship will allow US-based customers to now use American Express virtual Cards as a payment option with Coupa Pay, its business-to-business (B2B) payments solution. American Express already had a Virtual Cards payment solution available in the UK and Australia. The new service simplifies complex and inefficient payment processes for businesses around the world. The expansion will help meet the demand of customers who need a virtual way to pay suppliers and ensure their business continues to be operational. The solution comes with additional benefits such as extended pre-approvals for card spend, enhanced security when paying suppliers, increased visibility into the full payment process, streamlined payments, and the ability to use the card’s payment cycle to better manage working capital for buyers.

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