Coupa Investors Want To See Profits

Coupa Investors Want To See Profits


Startup / Leaders 1348 Views 0

Posted on Friday, Mar 17th 2017


Final yr, San Mateo-based Coupa (Nasdaq: COUP), a supplier of cloud-based spend administration agency, listed on the inventory trade. The market was pleased with the listing and it despatched the inventory hovering. However issues haven’t appeared so rosy since as buyers start to lose endurance with its continued losses.

Coupa’s Financials

Final week, Coupa introduced its fourth quarter outcomes. Revenues improved 44% to $38 million. It ended the quarter with a internet lack of $6.6 million or $zero.13 per share, considerably higher than earlier yr’s internet lack of $11.5 million or $2.18 per share. However the market wasn’t impressed.

By phase, revenues from subscriptions providers grew 45% to $33.eight million and professional providers revenues grew 36% to $four.18 million.

Revenues for the yr grew 60% to $133.eight million and losses decreased from $46.2 million or $9.81 per share a yr in the past to $37.6 million or $1.88 per share.

For the present quarter, Coupa forecast revenues of at the very least $38 million. It forecast revenues between $167-$170 million for the complete yr. The projections have been forward of the Road’s forecast. Coupa expects a lack of $zero.12-$zero.17 per share for the quarter and a lack of $zero.53-$zero.58 per share for the yr. The Road had forecast a lack of $zero.25 for the quarter and a lack of $zero.81 for the yr.

Coupa’s Market Enlargement

Spend administration options is a phase of the worldwide procurement software program market which is estimated to develop 2% yearly to $5.four billion in 2020. SAP, with its Ariba providing, was the chief within the phase with 22% market share  in 2015. Coupa came a distant 7th with nearly 1% share. Clearly, Coupa has a great distance forward.

In the course of the quarter, Coupa completed the acquisition of UK-based Spend360 Worldwide for an undisclosed quantity. Spend360 is one other famend participant within the spend analytics area. It arrange present in 2011 and since then has processed spend knowledge value greater than $1 trillion. It's recognized for its machine learning-based answer to categorise and normalize knowledge in a format that can be utilized by finance and procurement departments of organizations. By eradicating human dependency, Spend360’s providing helps scale back prices and improves operational effectivity. In addition to its spectacular know-how, Coupa plans to leverage the acquisition for market enlargement. By integrating Spend360’s analytics answer into its platform, will probably be capable of supply an enhanced spend administration platform.

In addition to acquisitions, Coupa can also be taking a look at partnerships. Final quarter, it entered into an settlement with the Netherlands-based Solmate to make inroads into the Benelux area. The Solmate partnership will assist it supply its value-as-a-service providing to mid-market clients within the area.

Previous to itemizing, Coupa had raised $169 million from buyers together with T. Rowe Worth, Meritech Capital Ventures, Crosslink Capital, Mohr Davidow Ventures, El Dorado Ventures, Battery Ventures, Iconiq Capital, Northgate Capital, PremjiInvest, and BlueRun Ventures. Its final funding spherical was held in June 2015 when it raised $80 million in a spherical led by T.Rowe Worth that valued it at over $1 billion.

Its inventory is buying and selling at $23.7 with a market capitalization of $1.19 billion. Final yr, it had listed on the Nasdaq at $18 a share and had quickly peaked to $41.61 throughout its first day of buying and selling. Since then, the inventory has tumbled. Earlier this week, it was buying and selling at its lowest degree of $23.20. It's nonetheless barely preserving its Unicorn valuation alive because the market struggles to cope with its losses.

My learn is that the present market dynamics are extra in favor of income, much less on progress in any respect prices. Too many corporations have delivered unprofitable progress for too lengthy, and buyers don’t essentially like that dynamic anymore.

Photograph Credit score: Caryl Lyons/