UPDATED 21:01 EDT / SEPTEMBER 04 2018

CLOUD

Coupa’s stock soars as it acquires DCR Workforce and beats earnings forecast

Updated:

Business spending management company Coupa Software Inc. made a useful acquisition today in the shape of DCR Workforce Inc., a move that was announced during its second-quarter earnings call.

DCR Workforce is a nice fit for Coupa because it operates within the same realm, providing contingent workforce management and services procurement software for larger enterprises that require that kind of thing.

Coupa sees itself as a kind of savings-as-a-service company, helping its customers to spend less money on enterprise software and services through collective bargaining power. By acquiring DCR, Coupa can offer its customers cheaper access to software that can be used to source, procure and manage spend on temporary labor.

A quick look at DCR’s website reveals that the acquisition was probably in the works for some time, as its technology has already been integrated into Coupa’s core platform. It’s now being sold as Coupa Contingent Workforce, and enables admins to approve new projects, release work orders, track time and expenses, complete invoices and manage spend for temporary projects and employees.

In a statement, Coupa Chief Executive Officer Rob Bernshteyn said these kinds of capabilities were a “growing priority” for enterprises. “When effectively managed, it delivers a material impact to the bottom line,” Bernshteyn said.

This isn’t the first time Coupa has used acquisition as a way of expanding its product range. The company last year splashed out on an artificial intelligence software firm called Deep Relevance Inc. in order to add financial fraud detection capabilities to its platform. Coupa now uses Deep Relevances’ AI models to analyze expense, purchase order and invoice data from its customer community in order to try and spot fraudulent transactions.

The DCR acquisition was made public following a strong second quarter from Coupa, which saw it post earnings before certain costs such as stock compensation of 5 cents per share on revenue of $61.7 million. Wall Street had forecast a loss of 9 cents per share on revenue of just $56.6 million.

Coupa’s shareholders reacted positively to the earnings and acquisition news, bidding up the company’s share price by 17 percent in after-hours trading. The latest spike builds on a strong showing by Coupa in the two years since it launched its initial public offering, with its stock almost tripling in value.

Update: Shares were falling a more modest 6 percent in Wednesday morning trading.

Image: Coupa/Facebook

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