It has been a year since Billion Dollar Unicorn Coupa (Nasdaq: COUP) listed successfully on the stock exchange. However, its stock soon tumbled on concerns of continuing losses. It has since recovered. 

Coupa’s Background

San Mateo-based Coupa was founded in 2006 by former Oracle executives Noah Eisner and Dave Stephens. While setting Oracle’s iProcure product line, they wondered why the way corporates buy should be any different from the way people buy at home. This led them to set up Coupa Procurement and create a service that simplifies the purchase process as if corporates were shopping at Amazon.

Coupa went on to build a user-centric, unified spend management platform that gives organizations a 360-degree view on all company spending. Its unified solutions span multiple functions including procurement, invoicing, expense management, sourcing, inventory, contract management, budgeting, and analytics.

Coupa’s biggest advantage lies in its ability to successfully integrate with multiple ERP suites including SAP, Oracle, NetSuite, and GreatPlains. Its applications are able to provide spend management functions within the ERP itself. It can integrate to one or many ERPs through its open API and connectors within a short time and allows enterprise users to feed data directly into the system from their mobile phones. But Coupa will have to look out for increasing competition from SAP and even Workday (WDAY).

Coupa’s Financials

In the recent second quarter, Coupa reported revenue of $44.6 million, up 43%. GAAP net loss was $13.7 million or $0.26 per share compared to a loss of $12.4 million or $2.13 per share last year. Non GAAP net loss was $5.4 million or $0.10 per share, beating analyst estimates of a loss of $0.19 per share on revenue of $41.64 million.

By segment, subscription services revenue increased 43% to $39.8 million and professional services revenue increased 43% to$4.8 million.

Cash and cash equivalents were $208.3 million as of July 31, 2017. Total deferred revenue was $95.8 million as of July 31, 2017.

For the third-quarter, it expects non GAAP loss per share between $0.10 and $0.12, in line with analyst estimates of $0.12-per-share loss. Revenue is expected to be between $44.8 and $45.3 million, with approximately $4 million from professional services. Analysts were expecting revenue of $44.1 million.

For the full year 2018, Coupa expects revenue between $177 and $179 million and non GAAP loss per share between $0.48 and $0.50. For the full year 2017, the company reported revenue of $133.8 million, up 60% and GAAP loss of $37.6 million or $1.88 per share, down 19% from $46.2 million or $9.81 per share in 2016.

Coupa’s Acquisitions

In May 2017, Coupa acquired San Francisco-based Riskopy for its advanced data aggregation engine, which combines conventional and alternative data sources in a proprietary algorithm. It uses a combination of financial data and event data to create a view into supplier risk. Terms of the deal were not disclosed.

It also acquired strategic sourcing and advanced optimization platform Trade Extensions in May 2017 to make it easier for organizations to reduce supply chain risk, increase profit margins, and achieve operational compliance. Based in Uppsala, Sweden, Trade Extensions’ platform is used by large brands to run complex sourcing projects for transportation and logistics, production planning, and supply chain design. Terms of the deal were not disclosed.

Earlier in January 2017, it had acquired London-based Spend360 International Ltd. to help transform outdated data classification processes. Spend360 uses deep machine learning and artificial intelligence to structure and cleanse data in a format that finance and procurement can actually use. Together, Coupa and Spend360 will account for processing over $1.3 trillion in spend. Terms of the deal were not disclosed.

From unifying spend management processes across multiple functions, Coupa’s strategy now seems to be focused on working with large and complex data sets.

During the quarter, Coupa’s major customer wins included Unilever, Glencore Canada, FlexTrade Systems, and Mineral Resources Limited among others. Ross MacMillan, RBC analyst, says that such customer wins would be good for future enterprise sales traction.

Its stock is trading at $34.2 with a market capitalization of $1.8 billion. Last year, it had listed on the Nasdaq at $18 a share and had soon peaked to $41.61 during its first day of trading. Since then, the stock had tumbled and hit a 52-week low of $22.5 in March. It hit a 52-week high of $37.72 in May following its acquisitions.

Photo Credit: Caryl Lyons/Flickr.com