According to a recent report, the global SaaS Spend Management Software market is expected to grow at 22% CAGR from $611 million in 2021 to reach $2.46 billion by 2028. San Mateo-based Coupa (Nasdaq: COUP) recently announced its fourth-quarter results that failed to impress the market. The company’s weaker outlook sent the stock plummeting in the after-hours trading session.

Coupa’s Financials

Revenues for the fourth quarter grew 18% to $193.3 million, ahead of the market’s estimates of $186.19 million. GAAP net loss of $96 million was significantly higher than the previous year’s net loss of $61.4 million. On an adjusted basis, net income was $0.19 per share, compared to a net income of $0.17 per share a year ago and analyst estimates of an EPS of $0.14 per share.

By segment, subscription services revenues increased 28% to $173 million and professional services revenues fell 29% to $20.3 million.

For the fiscal year, Coupa’s revenues grew 34% to $725.3 million, EPS was $0.83.

For the first quarter, the company expects revenues of $189-$191 million and a non-GAAP net income of $0.03-$0.06 per share. It expects to end the year with revenues of $836-$840 million and a net income of $0.15-$0.19 per share. The market was looking for revenues of $193.29 million and an EPS of $0.03 for the first quarter and revenues of $870.96 million and an EPS of $0.73 for the year.

Coupa’s Product Upgrades

Coupa continues to expand its presence across a wide range of organizations. It believes it has a huge market opportunity given that its enterprise penetration is still below 20% in the Global 2000, and it has a modest 2,000 mid-market customers. The company was recently awarded the FedRAMP authorization to allow it to conduct business with federal organizations.

According to Coupa, its current customers are subscribing to less than a fifth of its total platform and new customers are landing with increasingly more modules. To drive growth within the customer base, it is driving growth across three key offerings – Coupa Pay, Coupa Sourcing Optimization, and Community.ai.

Coupa Pay is helping deliver a fully unified solution that leverages the Coupa Business Spend Management platform to centralize and streamline payments for organizations. It is seeing strong growth momentum with the product with the attach rate of over 30% on new customer deals. The mid-market consumers are specifically attracted to Coupa Pay and delivered an attach rate of over 50%. The growth in Coupa Pay can be seen through the noticeable increases in the total payment volume (TPV) being processed through its payments hub. It expects the cumulative TPV to grow beyond $10 billion in the first quarter this year. TPV grew by more than four times in the last reported quarter.

Coupa is also attracting customers through its Sourcing Optimization solution. By using its supply chain and sourcing solutions in tandem, customers are able to get an optimized supply chain-related quality and spend. Finally, Coupa is leveraging the community on its platform. Community.ai integrates AI with human connections, to unlock business value. Its AI has access to over $3.3 trillion of cumulative real-time spend data for analysis. Its AI is able to provide actionable insights to its customers using this fast-growing trove of information.

The market was not pleased with Coupa’s results. While revenue and billings both beat by less than usual, the company is seeing its organic growth decelerate for the second consecutive quarter. Its guidance was also below consensus, suggesting that the deceleration will continue.

Coupa’s stock is trading at $86.37 with a market capitalization of $6.42 billion. The stock hit a 52-week high of $283.38 in April last year and a 52-week low of $64.79 earlier this month.