Q4 2021 Coupa Software Inc Earnings Call

March 16, 2021

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Good day, ladies and gentlemen, and welcome to the Cooper software fourth quarter fiscal year 2021 earnings release Conference call. At this time all participants are in a listen only mode at the conclusion of our prepared remarks, we will conduct a question and answer session.

And you would like to ask a question you May press star one on your Touchtone drab at any time.

And one should require assistance during the conference. Please press star zero on your Touchtone pad and anytime you are now.

And this call is being recorded.

And if you introduce your host for today's conference call Mr. Steve <unk> VP of Investor Relations. Mr. Roberts, you May begin your conference. Thank.

Thank you good afternoon, and welcome to the Software's fourth quarter Conference call. Joining me today are Robert and Steve Cooper, CEO and Todd Ford Kuipers CFO. Our remarks today include forward looking statements about guidance and future results of operations strategies market size products competitive position and potential growth opportunities. Our actual results may be materially different and forward looking.

Involve risks and uncertainties and assumptions that are described in our most recently filed 10-Q. These forward looking statements are based on our beliefs and assumptions today and we disclaim any obligation to update any forward looking statements. If this call is replayed. After today. The information presented may not contain current or accurate information. We also present, both GAAP and non-GAAP financial measures a reconciliation of certain.

Certain of these measures is included in today's earnings release, which you can find on our Investor Relations website. A replay of this call will also be available unless otherwise stated growth comparisons are against the same period of the prior year. One final note before we get started is that we will be conducting and analyst day on July 15th and we'll be doing so in a virtual setting.

With that I will now turn the call over to Rob Rob Alright.

Alright, Thanks, Stephen and Hello, everyone and thank you for joining us.

It's amazing to think about where the world was a year ago last year on this exact date, we held our year end earnings call for fiscal 2020 that same morning, our home state of California was announcing emergency shelter and place orders and response to the Covid pandemic.

It's likely that none of us realize at that moment, how much our world was about to change with employee safety as a top priority companies would be shuttering their offices and bracing for impact.

And then from certain time, calling on all of us to do things differently with many of our customers needing to take swift actions to survive.

Through it all I'm proud to say that my Cooper colleagues and I stood side by side with our customers. We sought ways to help them in any way possible and thankfully our expertise and business from management proved useful.

And an adverse uncertain situation companies can also make the most important impact by controlling their spend that we help them. Many do so.

As the leader and business management solutions, we were there to ensure our customers have the resiliency and the agility to endure the difficult times and to prevail despite them.

We ourselves also took to heart and state of mind and wisdom, we impacted to our customers as we planned our own growth strategy and the face of this wide scale global pandemic.

Looking back and on the past year, we carefully and thoughtfully scaled the organization by efficiently Onboarding more than 1300 employees across all areas.

Including sales marketing product development and services.

Simultaneously, we expanded the world's most comprehensive BSM platform by adding.

Supply chain design, and planning treasury and by enhancing our supplier diversity and travel and expense offerings and.

We added many new customers to our growing Cooper community from mid market to large enterprise, including dozens of fortune 500 companies and we successfully shifted our software implementations to FERC fully virtual while reducing deployment times by about a month.

Once live these customers contributed to our cumulative spend under management, which now exceeds $2 three trillion.

Inspired by the Big lights of DSM, there's nothing we can do when we rally together around our core value is leveraging the breadth and depth of our core competencies and domain expertise and our focus on execution as a result of this work and despite the tremendously difficult market environment and delighted to share that we delivered on our model of 30.

Percent annual revenue growth continued thoughtful sales and marketing efficiency and cash flow leverage.

And I'm proud to share some of the successes we have achieved both in terms of business accomplishments and financial results.

Moving forward, we remain maniacally focused on delivering the worlds preeminent value as a service platform for all of our customers.

And as you know a key component of value as a service is helping customers accrue more value more quickly and coupal, we call. It accelerated time to value, which is what the <unk> and Cooper stands for and.

Accelerated vision and area was keenly on display and many of our go lives this quarter <unk>.

Here are several examples from around the world.

BMW recently went live on Cooper BSM.

They needed to migrate nearly 1 million items and more than 5000 contracts to our platform.

And I'm happy to report that 100% of their content was available on day, one of their Cooper launch, which enabled them to maximize savings opportunities right away.

Spotless the largest integrated facilities services provider throughout New New Zealand and Australia. Also recently went live with Cooper working closely with our partners and customer success teams spotless implemented the Cooper platform and just 13 weeks and was able to issue 2005 hundred purchase orders on the first day they were low.

Hi.

We also support Westpac Australia's oldest bank there.

And Theyre CPO posted on Linkedin amazing.

Amazing that someone can use and procurement business application and purchased the product. They are looking for within 15 seconds.

I love that quote.

And because it gives you a sense of the user centricity or the <unk> and Cooper that no one expects and the world of procurement at least before meeting us.

The accelerated value that these customers have achieved is indicative of what our new customers are also striving to accomplish as they begin their implementations.

To that and I am pleased to share that our broader sales environment continues to improve we have seen increased activity and closure rates with some of our larger sales opportunities.

Let me take a moment to welcome some of the many organizations, who joined our vast global ever growing Cooper community last quarter. They.

They include Aspen Pharma care Ball Corporation Bank of New Zealand, Carvana Checkout Cloud era Heathrow Airport high spot Honda Research Institute Synchrony financial types.

Tyson foods waste star and dozens of others.

And these new customers joined the Cooper community to leverage our and comparable business spend management platform. Knowing there is no alternative of this kind of offering.

As we extend our leadership position, we believe it's incumbent upon us to protect our flank.

To that and we have built clear barriers to entry and BSM, including a robust portfolio of patents to protect our innovations.

Our truly innovative pallet patent filings and had a success rate of over 95%.

And we now have 100 patents issued or pending and we expect to file over a dozen more this year.

Now one of the many areas, where we have deep patent coverage is and strategic sourcing optimization.

And there is no better example of the value that can be extracted from our platform than the following.

One of the world's largest medical device pharmaceutical and consumer packaged goods companies using Cooper BSM.

Recently saved over $300 million and a single sourcing event.

<unk> platform process over 2 million data points derived from more than 400 rules set by the customer for 6000 items and over 300 suppliers to elegantly produce the award scenario that generated these massive savings.

It truly is no market equivalent for our sourcing solution, which amplifies the open platform the <unk> and Cooper to maximize the number of suppliers bidding on our sourcing and that.

Now in other way that our customers tap into community sourcing is true Cooper advantage, where they instantly gain access to pre negotiated contracts with trusted suppliers.

And that portion of the offering is now called instant and vantage and has grown to incorporate more than 70 suppliers, providing tens of millions of dollars and savings to hundreds of customers. We have also expanded the Cooper a coup advantage to incorporate sourcing events dove sourcing advantage. The Cooper community can collaborate via group saw.

<unk> events to maximize savings by rationalizing surface levels and items purchased across all participants.

There are already over 40 events planned for 2021 with an expected average savings of approximately 20% per customer.

And this new functionality to build on the already comprehensive approach, we have to accelerating ROI for our customers.

Likewise, the industry has no equivalent and the comprehensive platform, the <unk> and coupon because of the breadth of our offering we added a major customer and the federal sector for the second quarter and a row.

While we are restricted from publicly sharing the name of this new federal customer I can say that it is a very prominent and well known centralized federal agency that is also contractually committed to be our fed ramp agency sponsor.

We're making good progress in this sector and are encouraged by the robust federal pipeline that we have developed.

Let me now discuss the continuously growing power of community intelligence.

Grupo <unk> and Mexican food company with over 10000 employees across 14 plants and 25 distribution centers utilized community intelligence to dramatically reduce approval cycle times. The average approval cycle time for purchase orders was previously over 30 days and approximately 19 days for invoice approval.

Community intelligence showed that best in class consumer packaged goods companies, how they were improving Pos and invoices and significantly less time.

<unk> heard US then followed real time transaction contextual prescriptions.

Known as the Pea and Cooper that will automatically shared with them on ways. They can improve.

And doing so they're able to drive Po approval cycle times down to less than three days and despite a 600% increase and volume. They are also able to reduce invoice approval cycle times to less than four days. Despite the number of invoices growing by 20 times.

This is an example of a key value proposition that no other company and our industry can provide to.

And the use of a platform with real time prescriptions based on Anonymised transaction level data, which makes our customers smarter together.

And other industry unique capability, we delivered for our customers is Cooper pay we are truly the only game in town when it comes to sitting at the intersection of buyer suppliers and banks and now have nearly 200 pay customers.

This quarter I want to share with your story about and enterprise company that has achieved early success with Cooper pay.

I honest pharmaceuticals is the leader in RNA targeted therapy pioneering new markets and changing standards of care with their novel technology.

Six months ago, I honest digitized, it's payments processes with copay.

Already over 90% of invoices and hundreds of millions of spend have been processed through Cooper pay at eye on us.

Before implementing Cooper pay I honest manually processed a significant portion of its 15th annual payments through its ERP, including about 50% of its U S vendors by paper check.

In addition to the complexity of Onboarding up to 1500, new suppliers annually the payment processes across the company were disjointed and inefficient there would be set with manual data entry manual reconciliation and missed payment instructions and remittance information.

I honestly now pays and suppliers leveraging several payment methods or rails available through Cooper pay including ACTH wire and check.

We also use cross border to process payments and four currencies across 10 entities in Europe and North America.

After implementing coupe of PE I honest has all but eliminated manual payment processes, including operational efficiency improvements and significantly reduced errors.

And as credits Coupe is ease of use holistic approach and mindset of striving for continuous improvement to the success that has been realized.

And this is just an example of the type of early success, we're seeing with Cooper pay.

With the objective of continually increasing the functionality and value we provide to our customers, let's now discuss acquisitions.

And we recently completed a small acquisition of Panna and leading corporate travel booking company.

And as booking engine will allow us to build upon our success and expense management and further unlock our potential with our travel saver offering we already have the most comprehensive business spend management solution and our market has ever seen this.

And this acquisition is all about deepening that value for our customers, while broadening our set of capabilities.

This deal is consistent with our M&A strategy of adding technology components that maximize and enhance the value of our organic transactional core engine and augmenting. This engine with key advanced power applications that optimize the value of these transactions and.

And making the decision to acquire Panna, we considered culture first.

We considered buy versus build and we considered whether it would quickly could quickly be integrated into our platform, while maintaining a seamless experience for users.

We're more than confident that this acquisition checks all of these boxes and.

I am happy to welcome dependent team to coupon.

Now, let's move on to the Cooper business spend index before getting into the Q1 outlook I'd like to once again reiterate that the BSI is not necessarily indicative of the trends we're seeing in the Cooper business itself.

These are trends, we're seeing across industries.

The Q1, BSI revealed that business sentiment is gradually improving for the third consecutive quarter. Following the steep decline at the onset of the pandemic businesses remain cautious about the global economic outlook and all industries.

With the exception of Hi, Tec, which remains below trend year over year. Nevertheless.

For a closer look at the Q1 BSI I invite you to visit spend index Dot com.

Now I'd like to highlight a.

Few of my colleagues, who have made outstanding contributions and alignment to our core values and let.

Let me start with <unk> <unk>, who was recently recognized by his peers for exemplifying our number one core value ensuring customer success.

Gil and delivers value for colleagues and customers alike, you always find the best solution when designing integration interfaces by following best practices.

Our second core value of focusing our results Julian Phillips was recognized Julian leads by example is ability to address difficult situations with diplomacy, yet assertiveness deserves acknowledgement.

And not least gautam fancy was recognized for embodying our core value of striving for excellence.

John I'm always takes quick actions defined resolutions for our customers. He is passionate when it comes from serving the customer and supporting our team and constantly inspires with colleagues to strive for excellence as well.

These three colleagues embody our core values and reflect our culture of authenticity community and excellence that we are maniacally developing at Cooper.

The job is about a lot more of their paycheck, it's about a sense of dignity and a sense of purpose, we seek to provide a platform for professional and personal self expression to every employee we hire here at Cooper.

So before finishing up I want to highlight that IDC recently published six reports.

<unk> areas of business spend management and Cooper was once again, the leader and every one of them.

There are currently 28 analysts reports across virtually every aspect of business spend management and we are a leader and all of these reports.

Proudly no other provider can come anywhere close to matching the capabilities of our platform, nor the value and ROI, we deliver for our customers.

Now we do not take these accolades for granted.

They serve as just another source of inspiration as we work to lead our market for the benefit of our growing customer community.

So let me close where I began.

This year presented more challenges for all of us and we could have possibly imagined, but theres nothing more human and resiliency and the face of adversity and.

And I am convinced that we will emerge from this crisis stronger and smarter than before.

As we are well into our 49th quarter of execution, our confidence has never been higher and our ability to navigate difficult conditions for our customer community to grow at a market setting pace and to extend our position as the clear leader and business spend management.

With that let me now hand, it over to our Chief Financial Officer, Todd Ford, who will review, our Q4 financial results and provide our outlook for the first quarter and fiscal 2022, Todd. Thanks.

Thanks, Rob and good afternoon, everyone as Rob noted a year ago today, we held our fiscal 2020 Q4 earnings call at that time, we were entering a period of significant uncertainty as the Covid pandemic was just beginning to impact businesses across the globe and.

In spite of this uncertainty we approach the situation with resiliency in mind, we Werent just focused on getting through the pandemic, but on continuing to build our business to be best positioning upon exiting COVID-19.

During the year, we continued to invest across our organization and ensure the success of our customers.

And we made strategic investments with the acquisitions of connectors Berlin, Loopnet and Lama soft during fiscal 'twenty, one and our most recent acquisition upon us and early February.

While making these investments we delivered 39% year over year revenue growth, while continuing to show leverage and our operating margins and adjusted free cash flows and fact, even with the economic headwinds and the impact from our acquisitions, we executed well and still generated and adjusted free cash flow margin of 21%.

And from 14% last year, and we exited the year from a rule of 40 perspective at 60% and redefine the rule of 40 as revenue growth rate plus adjusted free cash flow margin I am proud of our fiscal 'twenty, one results and that we delivered on our commitments to our stakeholders. Most importantly.

With the assertive posture taken last year, we are well positioned for FY 'twenty two and beyond.

Now, let's get into the details of Q4, we had a very strong Q4 across the board with significant contributions from Cooper pay including Cooper Treasury and Cooper supply chain management, formerly <unk>.

Total revenue for Q4 was $164 million up 47% year over year with subscription revenue of $135 million up 37% compared to last year.

Total revenue for fiscal 'twenty, one with $542 million.

Up 39% year over year with subscription revenue of $470 million up 36% compared to last year.

The revenue contribution from <unk> for Q4, and the full year was approximately $22 million.

As a reminder, the opening deferred revenue for <unk> was subject to a one time purchase accounting haircut of nearly 50% and it will take at least one full annual cycle before the impact of this haircut. This worked its way through our financials.

Calculated billings for Q4 were $270 million up 49% year over year and $642 million for the full year up 37% compared to last year.

Calculated billings included approximately $15 million of Lama from opening deferred revenue post haircut.

As a reminder, the comparative period of Q4 fiscal 'twenty last year with our last pandemic quarter and we delivered record results across the board during that quarter, given the difficult compare and the volatility of the pandemic influenced business environment throughout fiscal 'twenty. One we were pleased with our execution for Q4 and Ford.

Full fiscal year.

Turning to gross margin, our fourth quarter non-GAAP gross margin was 71% well above our guidance of 67% to 68%, but approximately two five points lower than Q3 due to the <unk> acquisition.

Given the size of Amazon and we expect to experience meaningful gross margin compression from most of fiscal 'twenty. Two this is already reflected in our guidance, which I will share with you and a few minutes.

Non-GAAP gross margin for fiscal 'twenty, one was 71, 9% compared to our guidance of 71%.

Let's now take a look.

And Q4 results of operations, despite the impact of Onboarding and the full Lama staff expenses, while taking a revenue reduction from the opening deferred haircut the scale and leverage of our financial model was once again demonstrated through our strong operating income and cash flow results. Specifically, we delivered Q4 non-GAAP operating income.

Some of $11 million or 7% of total revenue as well as non-GAAP net income of $13 million.

Or <unk> 17 per share on approximately 77 million diluted shares.

For fiscal 'twenty, one we delivered non-GAAP operating income of $53 million or 10% of total revenue as well as non-GAAP net income of $56 million or <unk> 77 per share on approximately 73 million diluted shares.

We also delivered very strong cash flow results. This is a testament to the Cooper platform being mission critical for our customers and vital to achieving their business objective.

Q4, and full year operating cash flows were $20 4 million and $78 2 million respectively.

Adjusted free cash flow for the fourth quarter was $38 1 million or 23% of total revenues.

For fiscal 'twenty, one adjusted free cash flows were $113 5 million or 21% of total revenues.

Our results, which truly demonstrates our ability to grow the business and to do so profitably.

Please note that our Q4 operating cash flows were negatively impacted by a onetime $19 4 million payout of legacy equity awards from <unk> acquisition.

These are awards that while granted by the legacy company.

And pay for out of acquisition consideration flow through the P&L of the acquired entity and this case Cooper and stock based compensation costs.

For the full year operating cash flows were also negatively impacted by $27 $4 million related to early redemptions on our 2023 convertible notes.

With most of this impact coming in Q2, and Q3 and non in Q4 and.

In total the full year impact of these items was $46 8 million, meaning that our operating cash flows would have been $125 million. If we adjusted for these two items.

Cash at quarter end was $606 million.

The decrease and our cash balance was driven by cash paid for <unk> acquisition of approximately $792 million as you already know we also issued stock with a fair value of approximately $635 million to complete the transaction.

Now, let's turn to guidance.

There are several inputs this quarter, so I'll start by laying out the framework.

First the vaccines are now being distributed and it appears we are continuing to trend and the right direction. It will still take some time for things to return to normal at least some version of the new normal.

Many customers and prospects continue to operate with caution and making it difficult to predict the timing of when deals will close.

So we continue to see incremental strength with each successive quarter. Both in terms of feedback from our go to market teams and customer and prospect conversations.

Suitable uncertainty still exists and that.

Thus, we will continue to proceed and a measured fashion net.

Our guidance once again assumes no billings or revenue contribution in Q1 or fiscal 'twenty two from Cooper travel favor.

It is possible, we could see travel pick up and the second half of the year. However, it is currently too difficult to predict what that recovery may look like with respect to both timing and volume we will update you in future quarters. If we begin to incorporate contributions from travel favor into our guidance.

Finally, let's talk about Cooper supply chain design and planning, formerly llama llama soft as.

As we stated in the past our strategy is to align their business model with Coopers optimizing for long term success with Cooper core and supply chain management, working together and one cloud BSM platform. We are committed to this approach, which is clearly the right term right long term strategy for our business and the near term. However this.

Cost of revenue contribution from <unk> to be significantly lower than their legacy pre acquisition annual revenue of approximately $105 million.

For at least all of fiscal 'twenty, two and most if not all of fiscal 'twenty three.

And we explain why.

First our objective is to convert legacy on Prem license arrangement arrangements to the cloud.

This process, which we anticipate will be spread out over the next two plus years and will primarily happen in conjunction with customer renewals.

And it's already underway.

Under ASC 606 license revenue is recognized upfront, whereas cloud revenue is recognized ratably over time, and therefore cloud conversions will create a decrease and revenue on the front and Conversely revenue on the back and will be greater and a SaaS arrangement and it would have been with a non from license, but it will take time to reach that inflection.

And point.

As a reminder, we reported on Prem license revenue and our professional services and other revenue line.

And <unk> Lama software is doing substantially all their own implementation work prior to the acquisition, which resulted in meaningful professional services revenue as you know GSI and regional partners lead 80% plus of our Cooper implementations. This partner led model is key to our strategy and we are training our partners to take them on a soft professional services work.

This will drive a much cleaner more model and better margins and the long term.

Finally, the opening deferred revenue haircut for Lomonosov to a significant nearly 50% as I noted earlier. This haircut will have a meaningful impact on fiscal 'twenty to subscription revenues.

With these considerations as a backdrop, we expect total revenue for the first quarter to be 151, five to $152 5 million.

With subscription revenue of $133 five to $134 5 million and professional services and other revenues of approximately $18 million.

As a reminder, we recognize revenue based on the number of days and a quarter and since there are fewer days in Q1 due to February steady state subscription revenues are seasonally lower by several million dollars and Q1 compared to Q4.

For calculated billings on a trailing 12 month basis, we expect to exit Q1 at a year over year growth rate of approximately 33%.

Moving down the income statement, we expect Q1, non-GAAP gross margin of $65 to 66%.

Factors contributing to the lower Q1 gross margin guidance include lower Lama soft revenues due to the deferred revenue haircut shift to subscription revenue and shifting services revenue to partners and the reduced number of days in Q1 because of February.

We expect a non-GAAP operating loss of $10 million to $12 million and a non-GAAP net loss of $13 million to $15 million, resulting in a non-GAAP net loss per share of <unk> 18 to 21.

On approximately 73 million weighted average basic and diluted shares for the quarter.

After finishing the year strong with $38 $1 million of positive adjusted free cash flows and Q4 on strong collections performance. We expect Q1, adjusted free cash flows of $3 million to $5 million.

For the fiscal year and January 31, 2022, we expect total revenues of $675 million to $678 million.

This includes subscription revenue of 586 million to $589 million and professional services and other revenue of approximately $89 million.

And this guidance, we are assuming a legacy subscription revenue contribution from <unk> of $30 to $35 million the.

And the interesting dynamic here.

Is that to the extent, we're not successful in converting former <unk> customers to the cloud and the timeframe. We are planning our revenues will be higher.

And the near term.

Turning to gross margin for fiscal 'twenty, two we expect a non-GAAP gross margin of 66% to 67% a non-GAAP operating loss of $7 million to $10 million and a non-GAAP net loss of $17 million to $20 million, resulting in a non-GAAP loss per share of <unk> 23 to 27.

And on approximately $73 5 million weighted average basic and diluted shares for the year.

As we work our way through the timing of revenues recognized from Lam and soft as well as taking advantage of synergies on the cost side of the equation, we expect our P&L to improve over the next several quarters.

With respect to adjusted free cash flows we expect to be up on an absolute dollar basis for fiscal 'twenty two.

That concludes our prepared remarks, we'd now be happy to take your questions operator.

Sure.

Thank you Mr forward, ladies and gentlemen, if you have a question. Please press star one on your Touchtone telephone.

And in order to allow everyone to ask questions. We ask that you. Please limit yourself to one question each.

Your first question comes from Milan Shah from Barclays.

Yes.

Hey, congratulations and a great finish to the year to a very strong year.

My question was around the Copa <unk> and Darren.

And the invoice function.

And our up can you talk a little bit about what you're seeing and in terms of the debate we have with clients around doing this and Cooper average during this and ERP.

ERP you gave a very good example.

I would assume that to change and that message missed that you have with the ERP system is pretty much everywhere, but where our customers on their journey to kind of actually acknowledged that and finally move on and then and embrace you. Thank you.

Got it. Thanks, so much for the question and look they continue to acknowledge it without a doubt the challenges that they're having they're not difficult to see the very real challenges.

And because of that our customer acquisition rate is accelerating and our deployments and transactional spend running through the system is accelerating.

A lot of it has to do with the fact that we're in a very unique situation. We faced a scenario where you have very.

And this jointed processes for pay you have a lot of manual effort being deployed you have a lot of different perhaps ERP modules being used and you have this value proposition of a centralized hub, where you have visibility to everything from the point of thought around making a request to buy something all the way through to <unk>.

And.

And the ability to use any rail seamlessly to make those payments across the geographies.

Geographies of hundreds and some cases thousands of suppliers. So we're continuing to make really really good headway, there and it's a process, but one that we're obviously committed to because the value proposition is just so so strong.

Your next question comes from Bob Napoli from William Blair.

Thank you and I appreciate it and I was wondering if you could give any color on the success and.

Cross selling some of the new acquisitions, and Lam and soft and the treasury business in particular that it seemed to have so much.

Are they filling in the GAAP you expected and.

Sure.

Alex offerings.

Sure. So let me just say that what's really working for US is our set strategy of delivering and integrated business spend management platform. What we're seeing from customers of any size that we interact with as they do not have visibility to their spend whether it pertains to <unk>.

Correct or indirect whether it pertains to the cash that day utilizing properly to manage the expenditures.

That theyre, making whether it has to do with their expense processes their invoice processes their contracts management their sourcing theyre looking for across the board visibility control and optimization of business spend management and because of that they realize the synergy of partnering with a value as a service.

Like ourselves who offers a business spend management platform for that so of course their uptake in supply chain design and planning treasury and many of the modules and capabilities that I just listed but the secret sauce to it is the alignment between ourselves and our customers around the vision of business spend management and how to get.

Two and optimize success with it.

Our next question comes from Daniel Jester from Citi.

Great. Thanks for taking my question I just wanted to go back to your comments about the source together event and the Coupe advantage. If I heard correctly, you had sort of 70 suppliers kind of offering there.

And how much did that grow in the past year and maybe.

Can you inform us on anything youre doing to sort of boost the number of suppliers that are making use of that.

While our focus is on boosting the value that we deliver to our customers that may be and by increasing more suppliers that may be through negotiating stronger contracts with our preferred suppliers that may be by facilitating these incredible.

Events, the where were driving where we're bringing together multiple customers too.

To facilitate a sourcing event, where everyone gets the same based on aggregating buying power and so our orientation is not so much on number of suppliers, it's always oriented toward the value, we're delivering for our customers and.

We're very proud of our continued growth and the value of driving force them, what you could see.

And numerically the areas that were over $2 three trillion dollars and spend is now running through the platform, where you can see numerically is that our average subscription per year from our customers has grown and virtually every quarter now for 48 quarters.

So that's our orientation and all of that is moving and the right direction and we're very.

Please go ahead.

Your next question comes from standard Blonsky from Morgan Stanley.

Perfect. Thank you so much guys.

And congratulations on a very strong and for the fiscal year.

When you look at your.

Fiscal 'twenty guidance.

What are some of the from the macro data points that youre looking at as far as informing how youre thinking about growth revenue growth for the full year and where to put your your investment dollars. Thank you.

Maybe you can address that both from external and then I'll ask Todd to talk about it from an internal but from an external perspective as you can imagine as executives and the company will look at every element of data we have in front of US we're looking at how our pipeline is.

And <unk>.

And is growing and I'm proud to say, it's the largest pipeline we've ever had as a company at this moment, we're looking at the talent that we have.

All over the world that can work that pipeline to bring deals to closure and we're looking at our ability to implement those customers successfully and quickly and the systems integrator network that we're developing and certifying around the world. We're looking at just about every piece of data we can get to continue this.

This move this quarter over quarter move to build out the company. So not one specific measure, but every measure that we have and our purview from from an external perspective.

Yes, Dan and from a financial perspective, obviously, we look at trends that we've seen in the past three quarters. We look at the strength of the pipeline you are picking up multiple data points from customers and prospects alike and.

And looking at a range of outcomes and trying to take a very measured approach with respect to that range and and.

Similar to how we've done things in the past we assume.

<unk> will start out kind of a lower range and as we execute we will update it accordingly and.

Our guidance and philosophy too.

Our guidance philosophy Hasnt changed.

Our next question comes from Michael <unk> from Wells Fargo.

Hey, great. Thanks, good afternoon, and thanks for taking the question.

On Lama soft I, just was hoping we could get more detail on what that helps unlock from the direct expense side and how that value.

And potentially contribute to the community on the on the Cooper platform. I'm also wondering just initial observations you might be able to share on any difference between the two buyers and.

How much cross sell could prove part of the equation for success, there as well appreciating Todd's commentary just around the push pull dynamics of and migrating to the cloud versus the traditional license model there.

While at the broadest sense I can tell you theres not one executives that I've spoken to over the last four to five months that is not thinking about how that gets worked through optimization of their supply chain and some way right, especially if they're dealing with any kinds of products whatsoever. So that is an area of very real focus not only.

Partially but also and the public sector. Obviously, so we think we've got just an incredible platform here and to help companies not only design their supply chain for the longer term and short term, but actually plan out what goods and services. They are going to need to source immediately and then take action on those sourcing events through operational and true.

<unk> purchasing and receiving and of course, invoice reconciliation and payments and and backgrounds and designing and planning. So the synergy is very clear and the alignment is very clear.

And we're really excited about the culture of the people that we brought on and as well thats starting to really become one Cooper diligence, we'd like to call. It here and and that Hasnt taken a lot of time for us to really see things at <unk>.

A set of colleagues grounded and a common set of values. The value proposition is crystal clear there was a second portion and to your question around the value of community data very simply put when you complete a design and incentive plan for supply chain that feeds directly into our sourcing optimization Cape.

<unk>. So once you know what it is that you need we can help you get it very very quickly and we can get it from the right folks with the lowest risk and at the right price.

And with the highest likelihood of on time delivery.

That's an obvious and synergy point, but the beauty of that is after we see that transactional spend happening as you stop buying these.

These products were picking up a whole host of community data.

That is highly relevant everything from time to deliver to ordering trends to order cycle time restocking patterns consumption data and much more and we are looking to use some of that information to inform how to more optimally design and plan next time around and in fact, we've created a center of excellence and data side.

And tier that is tasked with optimizing optimizing leveraging that optimize data for.

The design and planning use case, so it's really really exciting time for us here because this just has never before been done and our industry.

And our next question comes from Steve <unk> from <unk> Nikko.

Yes.

Hey, guys. Thanks for taking my question.

And I was curious to get some color on.

Competition and two aspects one is <unk>.

Maybe a little bit on your competition with.

SaaS providers, and HR, and ERP and procure to pay that.

Meda and necessary to try to get into that space and a bigger way and secondly on pay itself, which could ultimately disrupt a huge tam and BTB payments.

Understood that.

99% Greenfield, probably but how do you think about your competition and that pay spaces as well. Thank you very much and congrats on the Q4.

Sure. Thank you very much.

You may be new to some other comments, we've shared and the path to our competition, but we all hear firmly believe that the primary competitor. We have is an incredible one and that is purely ourselves.

No. One else has has a broad vision around business spend management that we can see and the market and so our pursuit of that and our ability to execute for our customers is our fundamental competition of course, we're not naive there are some point solution providers and certain distinct use cases that may be competitive for those use cases, but if we align around the common.

And vision with our customers we tend to be victorious every time, so that's our orientation and that's our orientation around.

Becoming the leader in this marketplace by redefining it and delivering value as a service that's measurable for every one of our customers.

And any point solution providers over time.

To sort themselves out.

Your next question comes from Brad sales from Bofa Securities.

Oh, Great Hey, guys. Thanks for taking my question I wanted to ask.

About Cooper PE and.

Another question and Cuba pay please and the past you've provided the ASP uplift.

And I think that for greater than 20% could you comment on how thats trending and any commentary on core invoicing solution versus some of these other add ons like V card early payment are those starting to contribute to that metric as well because it sounds like youre seeing broader adoption of Cooper pay elements. Thank you. So much sure sure happy to answer that so.

The attach rate for could prepay this quarter similar to I think last quarter with Chevron and 30% is healthy and it's still there.

Certainly the fastest growing new module that we have ever done now after nearly 200 customers I think I share then and the prepared remarks, the customer acquisition rate itself.

It's accelerating and and what I think you should know is that customers are thoughtfully, taking a methodical approach to ramping their transactional spend and indeed more and more of that is happening in the last capability of Cooper pay debt. We took <unk> and that is invoice payments of course, we see virtual credit card adoption, we see dynamic discount.

Adoption, but orca.

And what we call COVID-19 accelerate but at the core of course, the real play here is around invoice payments and <unk>.

<unk> healthy adoption and customer add ons quarter in quarter out.

The next question comes from Joseph <unk> from Canaccord.

Hey, guys. Thanks for taking the question great execution, and I know, Rob you were talking about one big customer and the big savings and they had there I was wondering if you could kind of.

Kind of expand out to a higher level and maybe provide a little color on.

And where you see ROI savings or discount savings now for your broader customer base vs.

Perhaps where you were a year or 18 months ago.

Sure. Thank you for that and again as you know as we've discussed in the past savings as one value proposition and there's so many more around our overall suite, but we measure all of all savings.

And the tens of billions of dollars for our customers in aggregate and that continues to grow and that that is delivered through.

The fundamental value proposition of business by management and greater visibility to opportunities for savings greater control around your expenditures actually preventing spend from happening where you otherwise wouldn't have been able to and then continuing to optimize that spend so that route and its routed to the right suppliers with the lowest risk at the right price points and with the right quality.

So we continue to.

To grow that and and again quantitatively I think you see the outcome of that which is just incredible renewal range and continued adoption of other modules of our product with a lot lower cost of customer acquisition and currently for US which is why we continue to primarily hunt rather than gather and the marketplace.

Yes.

Your next question comes from Ryan Macdonald from Needham.

Okay.

Hi, Thanks for taking my questions and congrats on a great quarter.

My question is really for Rob here can you talk about Berlin, and Lama and how that started to contribute into fourth quarter and what you see heading into first quarter, particularly on the billing side.

Sure.

Well like I had mentioned earlier.

So the answer is significant contributions in both areas.

But the most interesting I think and relevant for you as you think about our business and coming quarters and years is that is coming through and realization by the prospect that and integrated platform that supports all the use cases that we have now.

Integrated together and put onto one technology platform, one usability layer.

More and more one business logic layer is what they are actually looking for so continued continued.

Growth, having said that I think it's also important to note that the core areas of Cooper, what you might call organic.

And if youre thinking about it from a product perspective and <unk>.

New to grow rapidly as well and we see strong growth there.

Your next question comes from Chris moving from Goldman Sachs.

Okay. Thanks, very much for taking my question.

And the platform continues to grow here through M&A can you give us a sense some of the increases and deal sizes that youre seeing and then still.

Early with low.

And one of the soft and keep the supply chain planning, but just trying to get a sense for.

Any increase you've seen there and particular with deal sizes for customers, taking that and in addition to your broader platform just given how big a category supply chain management is thank you.

Sure sure they are quite meaningful and I think the two measures to look at as Ive said in the past virtually every quarter for eight quarters average annual recurring revenue for the platform for new customers has grown.

Incrementally grown but when you started.

Very small numbers and you start again, you get into the one hundreds of thousands and you start doing and multimillion dollar annual deals Youre, making and same thing and progress certainly the addition of supply chain.

Design and planning is.

And continued contributor to that and the willingness for just about any executive and the world that runs a meaningful organization to spend money on best in class and a modern.

AI supported and.

Information technology solutions for sorting out how to optimize their supply chain is very very strong and so we will continue to charge fairly for the value as a service, we deliver and continue to grow that value as a service on bolt ons and as we continue to work into this from our way into this market.

Your next question comes from Brent <unk>.

And from Piper Sandler.

Thank you and good afternoon, I was hoping you could double click on the P&I acquisition and logic here Youre acquired GAAP to about a year ago imagine you learned a lot and the last year just around the travel space. My question here is what did you learn and the last year that incur.

Increasing your confidence and decision to double down on travel and expense management and and what was unique about panna debt that attracted you to that business. It looks like its slightly larger than the App also looks like it's got an integrated payment.

Rails for travel and expense management, So walk me through the logic, there and what you've learned about that travel and expense management space from last year.

Sure. Thank you for the question I think one other things thats distinctly unique about that company is the culture and the people and their passion and they have for this category is a category that we've watched and then at some way part of free.

And for a quite some time now.

And that's number one number two they took a very innovative approach of very smart patent pending approach too.

Two.

Sorting out the very generic travel bookings process, that's prevalent and our industry and we love the innovation that they brought to that approach and the thoughtfulness and they brought to that approach and so making that transactional construct part of our overall expense management offering and thus part of our overall business spend management offering just seem low.

And a complete no brainer to us and we're well underway to integrating that offering already and we look forward to have being and market with that as one integrated suite here very very shortly.

We look forward to going live on and ourselves here and our own Mike Cooper and environment shortly as well it just really really exciting for us.

Our next question comes from Brian Peterson from Raymond James.

Hi, gentlemen, and thanks for taking the question and congrats on the strong quarter. So you had a pretty successful M&A engine over the last few years I'm curious on the path to value creation for customers and ultimately revenue for you how would you rank lama soft versus some of the acquisitions you've made in the past and you also mentioned migrating services to the channel versus internal.

Any impact on active deployments are ramping and the size that are impacting the 'twenty two guidance. Thank you.

Well so your first question and how we drank it that's a tough one because we appreciate all of the people that joined US from all the different companies that we've acquired and now made part of a couple of core I mean, Theyre, all Mike Cooper colleagues and Todd Cooper colleagues and everyone. That's listening here that works at Cooper. So we don't really think of it that way, but what I can tell you is that over the course and <unk>.

Last 12 or so years.

We've progressed in.

And in terms of the size of some of the acquisitions, we've taken on but we did that very thoughtfully very very carefully making sure that we do everything possible to increase the likelihood of those acquisitions being highly successful from a people process people perspective from a process perspective, certainly for technology perspective as long as all of it is.

And with our common vision around business spend management and allow myself was certainly no exception.

Some incredible folks that we're pursuing an area that we will continue to pursue now part of a much stronger overall core.

So that's what I'd say is most important maybe Todd could add to some of your secondary crushing and Arizona.

From a guidance perspective, Brian.

And we made and a certain assumption that we're going to convert all the license to the cloud and the vast majority of the professional services work to GSI, which will bring down billings and revenues. If we're successful and restructured in a manner such that if we don't succeed to the level, we expect our actual revenues and billings would be higher so we do expect to have some professional services.

But and our guidance, we assumed very little and part of that is also just to get the goals and objectives and alignment and I don't want to guide too.

Higher numbers with professional services and licenses and then if it doesn't happen and then we're having a discussion so we basically taken that off the table and to the extent and we don't execute it's upside to our guidance.

Your next question comes from Peter Levine from Evercore.

Alright, thanks, guys.

And as a piggy back off of prior comment you made on pipeline strength can you dissect how much of that might be net new versus upsell. So curious to know if that mix shift.

And basically out of that mix it trended throughout the year and your expectations into fiscal 'twenty. Two and then second is have you guys seen some of the most impacted industries return to market curious to see curious to know if we see a rebound here in calendar 'twenty one from some of these industries.

Sure well we don't.

Don't breakout pipeline in terms of add on or net new but I can tell you, it's certainly healthy and in vault and where our primary focus is certainly on net new net new customers because the add on business tends to come.

Con Ed.

And I had mentioned earlier and much lower cost of customer acquisition happens much more organically.

In terms of industry is look we've seen acceleration and pipeline and some of the <unk>.

Some of the largest and most prominent and industries and as you would see with Covid now starting to kind of.

The situation and start to look healthy and healthier each day, we see some of the larger projects and manufacturing telecom and high Tech retail certainly.

Move move a bit quicker, but those are just some other verticals and the very situational data and sharing with you it's not.

Scientific tool.

Your next question comes from that Anthony from BTG.

Hey, guys. Thanks for taking my question nice job and the quarter.

And maybe digging in and just a little bit further on underpin acquisition and really the overall travel space.

Todd you mentioned that Youre, not really assuming much.

Revenue contribution this year and the guide.

So I guess, maybe a couple of parts how much more if anything do you feel like you need to sort of build out that whole product too.

To be competitive when you see corporate travel coming back.

And sort of cross selling their existing customers and then secondarily what level of travel or entertainment are you currently budgeting and for the guidance on the margin side for for Cooper spending.

And on the first part around product, we feel like we're in a really good spot on our expense management module and offering on its own is used by hundreds of customers around the world and is very robust.

And it has been replacing a number of income and providers for some time with the travel booking component with travel saver as well.

Encouraged by our ability to not only be competitive but to really reframe the whole market I mean, the challenges of that market is a frustration with these ability.

People booking outside known channel is not getting the savings that they would like.

Frustration or a lot of money left on the table with pre negotiated discounts not being take advantage of and much much more.

Also of course, using AI to track fraud, we support each and every one of those challenges that customers are facing with and integrated offerings. So we won't rest on our laurels will continue to build out the <unk>.

And on offering it's a core platform that we're going to continue to invest and what we think we're really well positioned as travel begins to take.

Take hold more and more and in coming quarters and emerge as a leader and a and a very interesting category.

But one that we still believe it's just a subcategory of broader business from management, which is what we're planning for.

And from a guidance perspective, really what we're doing with Panna is coming from.

Prospective our resiliency and skating to the puck right. We know the world is going to come back and some sort of sense of normalcy with a six months 12 months or 18 months and by getting ahead of this on the travel expense side, and we're going to be really well positioned when travel does come back so from a guidance perspective for literally no revenue was contemplated and the guy.

Items and then obviously the expenses are still flowing through the P&L and there is some incremental from partner that's in the guidance but.

I would say, it's pretty small and the Grand scheme of things.

Your next question comes from Josh Beck from Keybanc.

Thanks for taking the question I just wanted to ask a little bit about the budget process that youre seeing from your customers. It seems like a year ago today. The back office really got day prioritized in light of other front office areas collaboration et cetera, do you think.

Now that we're a year removed certainly things are starting to look a lot brighter on the vaccine front.

That is.

Being considered the BSM and back office area, more and maybe where it was pre pandemic and that's a bit of a.

From a tricky one to answer but just curious maybe you can share along those line.

I would say what we're seeing is probably maybe most valuable to the audience here is that there is a broader arc, perhaps than just the one year. If we look at a five to 10 year arc and that arc Theres. No question whatsoever that this area of business from management is making its way higher and higher on the priority list of digital transformation and moving to the cloud.

And we've largely.

Started around the customer revenue side or CRM spend a great deal of time, moving human capital and those core constructions and the cloud and that will really make them away and too.

One of the last areas to wrap around core ERP, which is business by management and so it's still episodic and some cases, obviously there are certain industries and certain companies that see this at the very top of the list where others.

And not as keen on it but the broader are strongly suggests that a greater prioritization and this area is upon us.

Your next question comes from Brian <unk> from Mizuho.

Thanks for taking my question I wanted to ask you about bill and it's been now more than a couple of quarters. Since you acquired and Berlin. So how's the integration going and I understand billings is more synergistic to Cooper.

And so thats more of Central Bank connectivity and also its and the euro. So how what are you seeing the opportunity to put balance tragedy and to.

The U S market.

That's correct about the greatest area of synergy with Covid pay and that is exactly how that's been playing out we've been having really exceptional success with bell and not only from the people perspective, but from the go to market perspective from the customers. We're closing the deployments were doing we just finished the annual <unk> conference, which had I think over.

750 active participants in the Treasury community.

Which is part of our broader Cooper community and now so really pleased with what's happening with debt that area of our business.

And our last question comes from Mark Murphy from Jpmorgan.

Hi, Good afternoon. This is Matt Coss on behalf of Mark Murphy. Thank you for taking my question Rob.

Rob you mentioned earlier that you've been able to reduce deployment times by about a month.

Is there anything in there thats.

Indicates that debt.

Reduction and deployment times will continue how we're able to accomplish that.

And any impact on gross margin from that.

Well, it's hard to predict but I do think if I were to predict I would say some of that is certainly sustainable for the longer term I mean, if you think about a typical deployments in a physical world. There are days that is spent flying into the client account or a day spent flying out there dinners, there's a whole bunch of Av.

Work, that's done and there might be.

Following are interesting for folks, but it is and focus on the result of getting the customer lives and now when we're on a zoom session, where you have the systems integrator you have the one of my <unk> colleagues you have the right folks from the from the customer account and they are sharing their screen and configuring and real time and stepping through the Gantt chart of execution to go live.

And obviously, that's much more efficient as long as folks are willing and tech savvy enough to to go about it that way. So my instinct is 100% of that operational efficiency improvement will likely not take as people move back toward travel I do think it's significant portion of it will because we now know that it's doable and of course, we'll see how that plays out.

And I just wanted to get some additional comments on the record because we've got some messages offline with respect to Q4 billings and revenue contribution inorganic and organic.

Would be worthwhile to highlight in this setting while we don't really think about it that way internally I know that a lot of if you want the some of the detailed here. So when we guided for Q4 for <unk>, we guided to $22 million to $24 million billings contribution and we noted on the call that from the opening deferred for Lama soft was approximately 15 million.

And for revenue, we guided to 13 million from Lama soft.

And came in at $22 million related to <unk>. Some of that revenue came from the bleed off of the opening deferred which was the $15 million and addition, Lama swap had a strong Q4 from net new business, which positively impact Q4 billings and revenues.

Since we had little operating history with Amazon from when we guided Q4, we took a cautious approach and our assumption for new business contribution and as you can imagine we're pleased by other stronger than expected performance in Q4.

Also it is difficult to bifurcate organic and inorganic contribution when it comes to new business and professional services, what is organic and inorganic is subject to interpretation and hence difficult to provide an exact number and general I personally think about organic billings and revenue growth rate for Q4 to be and the low thirties and.

And as a reminder, that's against a tough compare from Q4, but year ago.

At this time and there are no further questions. This concludes the conference for today.

Thank you all for joining us and you may now disconnect.

Okay.

[music].

Yeah.

[music].

Good day, ladies and gentlemen, and welcome to recoup and software fourth quarter fiscal year 2021 earnings release Conference call. At this time, all participants are in listen only mode.

And of our prepared remarks, we will conduct a question and answer session.

He would like to ask a question you May press star one on your touchdown pass and anytime.

And lunch and require assistance during the conference. Please press Star Zero and you touched on path and any time as a reminder, this call is being recorded.

Mark and introduce your host for today's conference call Mr. Steven Horwitz VP of Investor Relations. Mr. Roberts, you may begin your conference.

Thank you good afternoon, and welcome to Cooper Software's fourth quarter Conference call. Joining me today are Robert and Steve Cooper, CEO and Todd Ford CFO. Our remarks today include forward looking statements about guidance and future results of operations strategies market size products competitive position and potential growth opportunities. Our actual results may be materially different and forward looking <unk>.

And these involve risks and uncertainties and assumptions that are described in our most recently filed 10-Q. These forward looking statements are based on the beliefs and assumptions today and we disclaim any obligation to update any forward looking statements. If this call is replayed. After today. The information presented may not contain current or accurate information. We also present, both GAAP and non-GAAP financial measures a reconciliation of certain.

And certain of these measures is included in today's earnings release, which you can find on our Investor Relations website. A replay of this call will also be available unless otherwise stated growth comparisons are against the same period of the prior year. One final note before we get started and is that we will be conducting and analyst day on July 15, and will be doing so in a virtual setting.

With that I will now turn the call over to Rob Rob.

Alright, Thanks, Stephen and Hello, everyone and thank you for joining us.

And it's amazing to think about where the world was a year ago last year and this exact date, we held our year end earnings call for fiscal 2020 that same morning, our home state of California was announcing emergency shelter and place orders and response to the Covid pandemic.

Likely that none of us realize at that moment, how much our world was about to change with employee safety as a top priority companies would be shuttering their offices and bracing for impact.

And it's at a certain time, calling on all of us to do things differently, but many of our customers need to take swift actions to survive.

Through it all and I'm proud to say that my Cooper colleagues and I stood side by side with our customers. We saw ways to help them in any way possible and thankfully our expertise and business spend management proved useful.

And an adverse uncertain situation companies can also make the most important impact by controlling their spend that we help them. Many do so.

As the leader in business and management solutions, we were there to ensure our customers have the resiliency and the agility to endure the difficult times and to prevail despite them.

We ourselves also took to heart and state of mind and wisdom, we impacted to our customers as we planned our own growth strategy and the face of this wide scale global pandemic low.

Looking back and on the past year, we carefully and thoughtfully scaled the organization by efficiently Onboarding more than 1300 employees across all areas.

Including sales marketing product development and services.

Simultaneously, we expanded the world's most comprehensive BSM platform by adding <unk>.

Supply chain design, and planning treasury and by enhancing our supplier diversity and travel and expense offerings and.

We added many new customers to our growing community from mid market to large enterprise, including dozens of fortune 500 companies and we successfully shifted our software implementations to FERC fully virtual while reducing deployment times by about a month.

Once live these customers contributed to our cumulative spend under management, which now exceeds $2 three trillion.

Inspired by the Big lights, and BSM Theres nothing we can do when we rally together around our core value is leveraging the breadth and depth of our core competencies and domain expertise and our focus on execution.

As a result of this work and despite the tremendously difficult market environment and delighted to share that we delivered on our model of 30 plus percent annual revenue growth continued thoughtful sales and marketing efficiency and cash flow leverage.

I am proud to share some of the successes we have achieved both in terms of business accomplishments and financial results.

Moving forward, we remain maniacally focused on delivering the world's preeminent value as a service platform for all of our customers.

And as you know a key component of value as a service is helping customers accrue more value more quickly at Cooper, we call. It accelerated time to value, which is what the a and Cooper stands for and.

And accelerated vision and area was keenly on display and many of our go lives this quarter here.

Here are several examples from around the world.

P. M. W. Recently went live on Cooper BSM.

They needed to migrate nearly 1 million items and more than 5000 contracts to our platform.

I'm happy to report that 100% of their content was available on day, one of their Cooper launch, which enabled them to maximize savings opportunities right away.

Spotless the largest integrated facility services provider throughout and New New Zealand and Australia. Also recently went live with Cooper working closely with our partners and customer success teams spotless implemented the Cooper platform and just 13 weeks and was able to issue 2005 hundred purchase orders on the first day they were low.

Hi.

We also support Westpac Australia's oldest bank theyre CPO posted on Linkedin.

Amazing that someone can use and procurement business application and purchased the product. They are looking for within 15 seconds.

I love that quote.

Because it gives you a sense of the user centricity or the you and Cooper that no one expects and the world of procurement at least before meeting us.

The accelerated value that these customers have achieved is indicative of what our new customers and also striving to accomplish as they begin their implementations to that and I am pleased to share that our broader sales environment continues to improve we have seen increased activity and closure rates with some of our larger sales opportunities.

Let me take a moment to welcome some of the many organizations, who joined our vast global ever growing Cooper community last quarter. They.

They include Aspen Pharma care Ball Corporation Bank of New Zealand Carvana Checkout Cloud era, Heathrow Airport hotspot Honda Research Institute Synchrony financial types.

Tyson foods waste star and dozens of others.

And these new customers joined the cubic immunity to leverage our and comparable business spend management platform. Knowing there is no alternative of this kind of offering.

As we extend our leadership position, we believe it is incumbent upon us to protect our flank.

To that and we have built clear barriers to entry and BSM, including a robust portfolio of patents to protect our innovations.

Our truly innovative talent patent filings and had a success rate of over 95%.

And we now have 100 patents issued or pending and we expect to file over a dozen more this year.

Now one of the many areas, where we have deep patent coverage is and strategic sourcing optimization.

This offering which provides and E sourcing platform for companies to run online negotiations and optimized results has been frequently added this year by customers seeking quick ROI opportunities Theres No. Better example of the value that can be extracted from our platform than the following.

One of the world's largest medical device pharmaceutical and consumer packaged goods companies using Cooper BSM.

Recently saved over $300 million and a single sourcing event.

<unk> platform process over 2 million data points derived from more than 400 rules set by the customer for 6000 items and over 300 suppliers to elegantly produced the award scenario that generated these massive savings there.

It truly is no market equivalent for our sourcing solution, which amplifies the open platform the <unk> and Cooper to maximize the number of suppliers bidding on our sourcing and that.

Now in other ways that our customers tap into community sourcing is to keep advantage, where they instantly gain access to pre negotiated contracts with trusted suppliers.

That portion of the offering is now called instant and vantage and has grown to incorporate more than 70 suppliers, providing tens of millions of dollars and savings to hundreds of customers. We have also expanded the Cooper <unk> advantage to incorporate sourcing events dove sourcing advantage. The Cooper community can collaborate via groups.

<unk> events to maximize savings by rationalizing surface levels and items purchased across all participants.

There are already over 40 events planned for 2021 with an expected average savings of approximately 20% per customer.

And this new functionality to build on the already comprehensive approach, we have to accelerating ROI for our customers.

Likewise, the industry has no equivalent Lee comprehensive platform and see and coupon because of the breadth of our offering we added a major customer and the federal sector for the second quarter and a row.

While we are restricted from publicly sharing the name of this new federal customer I can say that and as a very prominent and well known and centralized Federal agency that is also contractually committed to be our fed ramp agency sponsor.

And we're making good progress and the sector and are encouraged by the robust federal pipeline that we have developed.

Let me now discuss the continuously growing power of community intelligence.

Grupo hurt as a Mexican food company with over 10000 employees across 14 plants and 25 distribution centers utilized community intelligence to dramatically reduce approval cycle times. The average approval cycle time for purchase orders was previously over 30 days and approximately 19 days for invoice.

<unk> <unk>.

Community intelligence showed that best in class consumer packaged goods companies, how they were approving and invoices and significantly less time.

<unk> heard US then followed real time transaction contextual prescriptions also known as the Pea and Cooper that will automatically shared with them on ways. They can improve.

This is an example of a key value proposition that no other company and our industry can provide.

The use of a platform with real time prescriptions based on Anonymised transaction level data, which makes our customers smarter together.

And other industry unique capability, we delivered for our customers is Cooper pay we are truly the only game in town when it comes to sitting at the intersection of buyers and suppliers and banks and now have nearly 200 pay customers.

This quarter I want to share with you a story about and enterprise company that has achieved early success with Cooper pay.

Our Onyx Pharmaceuticals is the leader in RNA targeted therapy pioneering new markets and changing standards of care with their novel technology.

Six months ago, I honest digitized, it's payments processes with copay.

Already over 90% of invoices and hundreds of millions of spend have been processed through Cooper pay at ion us.

Before implementing Cooper pay I honest manually processed a significant portion of its 15000 annual payments through its ERP, including about 50% of its U S vendors by paper check.

In addition to the complexity of Onboarding up to 1500, new suppliers annually the payment processes across the company were disjointed and inefficient.

Be set with manual data entry manual reconciliation and missed payment instructions and remittance information.

I honestly now pays and suppliers leveraging several payment methods or rails available through Cooper pay including ACTH wire and check.

And they also use cross border to process payments and four currencies across 10 entities in Europe and North America.

After implementing Cooper PE I honest has all but eliminated manual payment processes, including operational efficiency improvements and significantly reduced errors.

And as credits Cooper's ease of use holistic approach and mindset of striving for continuous improvement to the success that has been realized.

This is just an example of the type of early success, we're seeing with Cooper pay.

With the objective of continually increasing the functionality and value we provide to our customers, let's now discuss acquisitions.

And we recently completed a small acquisition of Panama, and leading corporate travel booking company.

This acquisition is all about deepening that value for our customers, while broadening our set of capabilities.

This deal is consistent with our M&A strategy of adding technology components to maximize and enhance the value of our organic transactional core engine and augmenting. This engine with key advanced power applications that optimize the value of these transactions and.

And making the decision to acquire Panna, we considered culture first.

We considered buy versus build and we considered whether it would quickly could quickly be integrated into our platform, while maintaining a seamless experience for users.

We are more than confident that this acquisition checks all of these boxes and.

And happy to welcome to panic team to coupon.

These are trends, we're seeing across industries.

The Q1, DSI revealed that business sentiment is gradually improving for the third consecutive quarter. Following the steep decline at the onset of the pandemic businesses remain cautious about the global economic outlook and all industries.

With the exception of Hi, Tec, which remains below trend year over year. Nevertheless.

For a closer look at the Q1 BSI I invite you to visit spend index Dot com.

Now I'd like to highlight a.

A few of my colleagues, who have made outstanding contributions and alignment to our core values and let.

Let me start with Guillain Cassa <unk>, who was recently recognized by his peers for exemplifying our number one core value ensuring customer success and.

<unk> and delivers value for colleagues and customers alike, you always find the best solution when designing integration interfaces by following best practices for.

And for a second core value of focusing our results Julian Phillips was recognized.

Julian leads by example visibility to address difficult situations with diplomacy, yet assertiveness deserved acknowledgement less.

And last but not least gautam fancy was recognized for embodying our core value of striving for excellence.

And I'm always take quick actions defined resolutions for our customers. He is passionate when it comes from serving the customer and supporting our team and.

And constantly inspires from colleagues to strive for excellence as well.

These three colleagues and body, our core values and reflect our culture of authenticity community and excellence that we are maniacally developing at Cooper.

The job, it's about a lot more of their paycheck, it's about a sense of dignity and a sense of purpose, we seek to provide a platform for professional and personal self expression to every employee we hire here at Cooper.

So before finishing up I want to highlight that IDC recently published six reports.

Covering areas of business spend management and Cooper was once again, the leader and every one of them.

There are currently 28 analyst reports across virtually every aspect of business spend management and we're a leader and all of these reports.

No other provider can come anywhere close to matching the capabilities of our platform, nor the value and ROI, we deliver for our customers.

Now we do not take these accolades for granted.

They serve as just another source of inspiration as we work to lead our market for the benefit of our growing customer community.

So let me close where I began.

This year presented more challenges for all of us and we could have possibly imagined, but theres nothing more human and resiliency and the face of adversity.

I am convinced that we will emerge from this crisis stronger and smarter than before.

With that let me now hand, it over to our Chief Financial Officer, Todd Ford, who will review, our Q4 financial results and provide our outlook for the first quarter and fiscal 2020 to Todd.

Thanks, Rob and good afternoon, everyone.

As Rob noted a year ago today, we held our fiscal 2020 and Q4 earnings call at that time, we were entering a period of significant uncertainty as the Covid pandemic was just beginning to impact businesses across the globe and.

In spite of this uncertainty we approach the situation with resiliency in mind, we weren't just focused on getting through the pandemic, but on continuing to build our business to be best positioning upon exiting COVID-19.

During the year, we continued to invest across our organization and and to the success of our customers.

And we made strategic investments with the acquisitions of connectors Mellon Loopnet and Lama soft during fiscal 'twenty, one and our most recent acquisition upon us and early February.

And from 14% last year, and we exited the year from a rule of 40 perspective at 60% and we defined the rule of 40 as revenue growth rate plus adjusted free cash flow margin I am proud of our fiscal 'twenty, one results and that we delivered on our commitments to our stakeholders. Most importantly.

With the assertive posture taken last year, we are well positioned for FY 'twenty two and beyond.

Total revenue for Q4 was $164 million up 47% year over year with subscription revenue of $135 million up 37% compared to last year.

Total revenue for fiscal 'twenty, one with $542 million up 39% year over year with subscription revenue of $470 million up 36% compared to last year.

The revenue contribution from <unk> for Q4, and the full year was approximately $22 million.

As a reminder, the opening deferred revenue from <unk> was subject to a one time purchase accounting haircut of nearly 50% and it will take at least one full annual cycle before the impact of this haircut that's worked its way through our financials.

Calculated billings for Q4 were $270 million up 49% year over year at $642 million for the full year up 37% compared to last year.

Calculated billings included approximately $15 million of Wamus up opening deferred revenue post haircut.

As a reminder, the comparative period of Q4 fiscal 'twenty last year with our last pandemic quarter and we delivered record results across the board during that quarter, given a difficult compare and the volatility of the pandemic influenced business environment throughout fiscal 'twenty. One we were pleased with our execution for Q4 and Ford.

The full fiscal year.

Turning to gross margin.

Our fourth quarter and non-GAAP gross margin was 71% well above our guidance of 67%, 68%, but approximately two five points lower than Q3 due to the <unk> acquisition.

Given the size of <unk>, we expect to experience meaningful gross margin compression from most of fiscal 'twenty. Two this is already reflected in our guidance, which I will share with you and a few minutes.

Non-GAAP gross margin for fiscal 'twenty one.

71, 9% compared to our guidance of 71%.

Let's now take a look.

And Q4 results of operations.

Despite the impact of Onboarding and the full Lama staff expenses, while taking a revenue reduction from the opening deferred haircut the scale and leverage of our financial model was once again demonstrated through our strong operating income and cash flow results. Specifically, we delivered Q4, non-GAAP operating income of $11 million or 7% of <unk>.

Total revenue as well as non-GAAP net income of $13 million or <unk> 17 per share on approximately 77 million diluted shares.

We also delivered very strong cash flow results. This is a testament to the Cooper platform being mission critical for our customers and vital to achieving their business objectives.

Q4, and full year operating cash flows were $20 4 million and $78 2 million respectively.

Adjusted free cash flow for the fourth quarter was $38 1 million or 23% of total revenues.

For fiscal 'twenty, one adjusted free cash flows were $113 5 million or 21% of total revenues.

Our results, which truly demonstrates our ability to grow the business and to do so profitably.

Please note that our Q4 operating cash flows were negatively impacted by a onetime $19 $4 million payout of legacy equity award for the <unk> acquisition.

These are awards that while granted by the legacy company and paid for out of acquisition consideration flow through the P&L of the acquired entity and this case Cooper and stock based compensation cost for.

For the full year operating cash flows were also negatively impacted by $27 $4 million related to early redemptions on our 2023 convertible notes.

With most of this impact coming in Q2, and Q3 and non in Q4 and.

In total the full year impact of these items was $46 8 million, meaning that our operating cash flows would have been $125 million if we.

And for these two items.

Cash at quarter end was $606 million the decrease and our cash balance was driven by cash paid for the <unk> acquisition of approximately $792 million as you already know we also issued stock with a fair value of approximately $635 million to complete the transaction.

Now, let's turn to guidance.

There are several inputs this quarter, so I'll start by laying out the framework.

Many customers and prospects continue to operate with caution and making it difficult to predict the timing of when deals will close.

So we continue to see incremental strength with each successive quarter. Both in terms of feedback from our go to market teams and customer and prospect conversations considerable uncertainty still exists and.

Thus, we will continue to proceed and a measured fashion net.

Our guidance once again assumes no billings or revenue contribution in Q1 or fiscal 'twenty two from Cooper travel favor.

Finally, let's talk about Cooper supply chain design and planning, formerly llama llama soft as.

As we stated in the past our strategy is to align their business model with Coopers optimizing for long term success with Cooper core and supply chain management, working together and one cloud BSM platform. We are committed to this approach, which is clearly the right long term strategy for our business and the near term. However this.

Cost of revenue contribution from non us off to be significantly lower than their legacy pre acquisition annual revenue of approximately $105 million.

For at least all of fiscal 'twenty, two and most if not all of fiscal 'twenty three.

And explain why.

First our objective is to convert legacy on Prem license arrangement arrangements to the cloud.

This process, which we anticipate will be spread out over the next two plus years and will primarily happen in conjunction with customer renewals.

And it is already underway and.

Under ASC 606 license revenue is recognized upfront, whereas cloud revenue is recognized ratably over time.

Therefore, our cloud conversions will create a decrease and revenue on the front and Conversely revenue on the back and will be greater and a SaaS arrangement and then it would have been with an on Prem license, but it will take time to reach that inflection point.

As a reminder, we reported on Prem license revenue and our professional services and other revenue line.

Next while I'm a software is doing substantially all their own implementation work prior to the acquisition, which resulted in meaningful professional services revenue as you know GSI and regional partners lead 80% plus of our Cooper implementations. This partner led model is key to our strategy and we are training our partners to take a lot of soft professional services work.

This will drive a much cleaner more model and better margins and the long term.

And finally, the opening deferred revenue haircut for Lama software significant nearly 50% as I noted earlier. This haircut will have a meaningful impact on our fiscal 'twenty to subscription revenues.

With these considerations as a backdrop, we expect total revenue for the first quarter to be 151, five to $152 $5 million.

With subscription revenue of $133 five to $134 $5 million and professional services and other revenues of approximately $18 million.

As a reminder, we recognize revenue based on the number of days and the quarter and since there are fewer days in Q1 due to February steady state subscription revenues are seasonally lower by several million dollars.

And Q1 compared to Q4.

For calculated billings on a trailing 12 month basis, we expect to exit Q1 at a year over year growth rate of approximately 33%.

Moving down the income statement, we expect Q1, non-GAAP gross margin of $65 to 66%.

We expect a non-GAAP operating loss of $10 million to $12 million and a non-GAAP net loss of $13 million to $15 million, resulting in a non-GAAP net loss per share of 18% to 21.

On approximately $73 million weighted average basic and diluted shares for the quarter.

After finishing the year strong with $38 $1 million of positive adjusted free cash flows and Q4 on strong collections performance. We expect Q1 adjusted free cash flows of $3 million to $5 million for the fiscal year and January 31, 2022, we expect total revenues of $675.

$678 million. This includes subscription revenue of $586 million to $589 million and professional services and other revenue of approximately $89 million.

And this guidance, we are assuming a legacy subscription revenue contribution from <unk> of 30% to $35 million the.

The interesting dynamic here is.

Is that to the extent, we're not successful in converting former line of SAP customers to the cloud and the timeframe. We are planning our revenues will be higher.

And the near term.

<unk> and a non-GAAP loss per share of 23 to 27.

And on approximately $73 5 million weighted average basic and diluted shares for the year.

As we work our way through the timing of revenues recognized from <unk> as well as taking advantage of synergies on the cost side of the equation, we expect our P&L to improve over the next several quarters.

With respect to adjusted free cash flows we expect to be up on an absolute dollar basis for fiscal 'twenty two.

That concludes our prepared remarks, we'd now be happy to take your questions operator.

Yes.

Thank you Mr forward, ladies and gentlemen, if you have a question. Please press star one on your Touchtone telephone.

And in order to allow everyone time for questions. We ask that you. Please limit yourself to one question each.

Your first question comes from Merrill Lynch all from Barclays.

Hey, congratulations and a great finish to a very strong year.

My question was around the Copa <unk> and Derek invoice function.

Rob can you talk a little bit about what you're seeing and in terms of the debate you have the clients around doing this and Cooper average during this and ERP you gave a very good example.

I would assume that to change and that message that you have with the ERP system is pretty much everywhere, but where our customers on their journey to kind of actually acknowledged that and finally move on and embrace you. Thank you.

Sure. Thanks, so much for the question look they continue to acknowledge it without a doubt the challenges that they are having they are not difficult to see the very real challenges.

And because of that.

Customer acquisition rate is accelerating and our deployments and transactional spend running through the system is accelerating.

A lot of it has to do with the fact that we're in a very unique situation. We face a scenario, where you have very disjointed processes for pay you have a lot of manual effort being deployed you have a lot of different perhaps ERP modules being used and you have this value proposition of a centralized hub.

Where you have visibility to everything from the point of thought around making a request to buy something all the way through to payment.

And the ability to use any rail seamlessly to make those payments across the geographies of hundreds and in some cases thousands of suppliers.

So we're continuing to make really really good headway, there and it's a process, but one that we're obviously committed to.

The value proposition is just so strong.

Your next question comes from Bob Napoli from William Blair.

Thank you and I appreciate it and I was wondering if you could give any color on the success and.

Cross selling some of the new acquisitions and Lama soft and the treasury business in particular that it seemed to have so much and what are they filling in the GAAP you expected and.

Your your product offerings.

And our indirect whether it pertains to the cash that day utilizing properly to manage the expenditures.

And that Theyre, making whether it has to do with their expense processes their invoice processes their contracts management their sourcing theyre looking for across the board visibility control and optimization of business spend management and because of that day realize the synergy of partnering with a value as a service player like <unk>.

Ourselves who offers a business spend management platform for that so of course their uptake Inc. Supply chain design and planning Treasury and many of the modules and capabilities I just listed but the secret sauce to it is the alignment between ourselves and our customers around the vision of business spend management and how to get to and <unk>.

Optimize success with it.

Our next question comes from Daniel Jester from Citi.

Great. Thanks for taking my question I just wanted to go back to your comments about the source together events and the Coupe advantage. If I heard correctly, you had 70 suppliers kind of offering there.

And how much of that did that grow in the past year and.

Can you inform us on anything youre doing to sort of boost the number of suppliers that are making use of that.

While our focus is on boosting the value that we deliver to our customers that may be and by increasing more suppliers that may be through the negotiating stronger.

Tracks with our preferred suppliers that may be by facilitating these incredible.

The where we're driving where we're bringing together multiple customers too.

To facilitate our sourcing and that where everyone gets the same based on aggregating.

Buying power so our orientation is not so much on number of suppliers, it's always oriented toward the value and delivering for customers and.

We're very proud of our continued growth and the value we're driving force them, what you could see.

And numerically there is that were over $2 three trillion dollars and spend is now running through the platform, where you can see numerically is that our average subscription per year from our customers is drawn and virtually every quarter now for 48 quarters. So that's our orientation and all of that is moving and the right direction and we're very pleased with it.

Your next question comes from standard Blonsky from Morgan Stanley.

Perfect. Thank you so much guys.

And congratulations on a very strong and to the fiscal year.

And when you look at your.

Fiscal 'twenty two guidance.

And what are some of the from the macro data points that youre looking at as far as informing how youre thinking about growth revenue growth for the full year and where to put your your investment dollars. Thank you.

Maybe you can address that both from external and then I'll ask Todd to talk about it a bit from internal but from an external perspective as you'd imagine as executives and the company will look at every element of data we have in front of US we're looking at how our pipeline is.

<unk>.

Is growing and I'm proud to say, it's the largest pipeline we've ever had as a company at this moment, we're looking at the talent that we have.

This move is quarter over quarter move to build out the company. So not one specific measure, but every measure that we have and our purview from from an external perspective.

And looking at a range of outcomes and trying to take a very measured approach with respect to that range and similar to how we've done things in the past we assume.

That will start out kind of a lower range and as we execute we will update it accordingly, and our guidance and philosophy too.

Our guidance philosophy Hasnt changed.

Our next question comes from Nicole <unk> from Wells Fargo.

Hey, great. Thanks, good afternoon, and thanks for taking the question.

Llama soft I just was hoping we could get more detail on what that helps unlock from the direct spend side and now that value.

Can potentially contribute to the community on the on the Cooper platform.

And so I'm wondering just initial observations you might be able to share on any difference between the two buyers and.

How much cross sell could prove part of the equation for success, there as well appreciating Todd's commentary just around the push pull dynamics of migrating to the cloud versus the traditional license model there.

Well I'll, let the broadest sense I can tell you theres not one executives that I've spoken to over the last four to five months that is not thinking about how that gets worked through optimization of their supply chain and some way right, especially if they're dealing with any kinds of products whatsoever. So that is an area of very real focus not only.

Commercially, but also and the public sector. Obviously, so we think we've got just an incredible platform here and to help companies not only design their supply chain for the longer term and short term, but actually plan out what goods and services theyre going to need to source immediately and then take action on those sourcing events through operational and <unk>.

Transactional purchasing and receiving and of course, invoice reconciliation and payments and backgrounds and designing and planning. So the synergy is very clear and the alignment is very clear and we're really excited about the culture of the people that we brought on as well that's starting to really become one Cooper.

Diligence, we'd like to call it here and and that Hasnt taken a lot of time for us to really see things out is a set of colleagues grounded and a common set of value the value proposition and.

And as Crystal clear there was a second portion and to your question around the value of community data very simply put when you complete a design and incentive plan for supply chain that feeds directly into our sourcing optimization capabilities. So once you know what it is that you need we can help you get it very very quickly and we get it.

And from the right folks with the lowest risk and at the right price and with the highest likelihood of on time delivery. So that's an obvious and <unk>.

Energy point, but the beauty of that is after we see that transactional spend happening as you stop buying these.

These products were picking up a whole host of community data.

That's highly relevant everything from time to deliver to ordering trends to order cycle time restocking patterns consumption data and much more and we're looking to use some of that information to inform how to more optimally designed and plan next time around and in fact, we've created a center of excellence and data Center.

And here that is tasked with optimizing optimizing leveraging that optimized data for the design and planning use cases, so it's really really exciting time for us here because this just has never.

Before been done and our industry.

And our next question comes from Steve Connie from <unk> Nikko.

Hey, guys. Thanks for taking my question.

Was curious to get some color on.

Competition and two aspects one is maybe a little bit on your competition with.

SaaS providers, and HR, and ERP and procure to pay debt.

Meda and necessary to try to get into that space and a bigger way and secondly on pay itself, which could ultimately disrupt a huge tam and BTB payments.

Understood that.

99% Greenfield, probably but how do you think about your competition and that pace space as well. Thank you very much and congrats on the Q4.

Sure. Thank you very much.

And maybe new to some other comments, we've shared in the past or our competition, but we all hear firmly believe that the primary competitor. We have is an incredible one and that is purely ourselves.

No. One else is has a broad vision around business spend management that we can see and the market and so our pursuit of that and our ability to execute for our customers is our fundamental competition now of course, we're not naive theres some point solution providers and certain distinct use cases that may be competitive for those use cases, but if we align around the <unk>.

Common vision with our customers we tend to be victorious every time, so that's our orientation and that's our orientation around.

Becoming the leader in this marketplace by redefining it and delivering value as a service that's measurable for every one of our customers any point solution providers over time will have to sort themselves out.

Your next question comes from Brad sales from Bofa Securities.

Oh, Great Hey, guys. Thanks for taking my question I wanted to ask.

About Cooper PE and.

Another question and Cuba pay please and the past you've provided the ASP uplift.

And I think that growth greater than 20% could you comment on how thats trending and any commentary on the core invoicing solution versus some of these other add ons like V card early payment are those starting to contribute to that metric as well because it sounds like youre seeing broader adoption of Cooper pay elements. Thank you. So much sure sure happy to answer that so.

The attach rate for <unk> prepay this quarter similar to I think last quarter was chevron only 30% that is healthy and it's still certainly the fastest growing new module that we have ever done now after nearly 200 customers I think I share then and the prepared remarks, the customer acquisition rate itself.

And is accelerating and and what I think you should know is that customers are thoughtfully, taking a methodical approach to ramping their transactional spend and indeed more and more of that is happening in the last capability of Cooper pay that we took and that is invoice payments of course, we see virtual credit card adoption, we see dynamic discounting.

The option, but architected and what we call COVID-19 accelerate but at the core of course, the real play here is around invoice payments and <unk>.

<unk> healthy adoption and customer add ons quarter and quarter out.

Our next question comes from Joseph <unk> from Canaccord.

Hey, guys. Thanks for taking the question great execution, and I know, Rob you were talking about one big customer and the big savings. They had there I was wondering if you could kind of cash.

Kind of expand out to a higher level and maybe provide a little color on.

And where you see ROI savings or discount savings now for your broader customer base versus new.

Perhaps where you were a year or 18 months ago. Thanks.

Sure. Thank you for that and again as you know as we've discussed in past savings as one and value proposition and there's so many more around our overall suite, but we measure of all savings.

And the tens of billions of dollars for our customers in aggregate and that continues to grow and that that is delivered through the fundamental value proposition of business by management and greater visibility to opportunities for savings greater control around your expenditures actually preventing spend from happening where you otherwise wouldn't have been able to.

And then continuing to optimize that spend so that route and its routed to the right suppliers with the lowest risk at the right price points with the rate and quality level. So we continue to.

To grow that and and again quantitatively I think you see the outcome of that which is just incredible renewal rates and continued adoption of other modules of our product with a lot lower cost of customer acquisition and currently for US which is why we continue to primarily hunt rather than gather and the market.

Thanks.

Your next question comes from Ryan Macdonald from Needham.

Okay.

Hi, Thanks for taking my questions and congrats on a great quarter.

My question is really for Rob here can you talk about Berlin, and Lama and how that started to contribute into fourth quarter and what you see heading into the first quarter, particularly on the billing side.

True.

Like I had mentioned earlier.

So the answer is significant contributions in both areas.

But the most interesting I think and relevant free as you think about our business and coming quarters and years is that is coming from realisation by the prospect that and integrated platform that supports all the use cases that we have now.

Integrated together and put onto one technology platform, one usability layer.

More and more one business logic layer is what they are actually looking for cell continued continued.

Growth, having said that I think it's also important to note that the core areas of Cooper.

And I call organic.

If you were thinking about it from a from a products perspective.

And you need to grow rapidly as well and we see strong growth there.

Your next question comes from Chris Merwin from Goldman Sachs.

Okay. Thanks, very much for taking my question.

And the platform continues to grow here and through M&A can you give us a sense some of the increases and deal sizes that youre seeing and I know it's still.

Early with low.

And can you supply chain planning, but just trying to get a sense for.

Any increase you've seen there and particular with deal sizes for customers, taking that and addition to your broader platform just given how big a category supply chain management is thank you.

Sure sure Theyre quite meaningfully and I think the two measures to look at it as I've said in the past virtually every quarter and 48 quarters average annual recurring revenue for the platform for new.

New customers has grown and incrementally grown but when you started.

Very small numbers and you start again, you get into the hundreds of thousands and you start doing multimillion dollar annual deals Youre, making significant progress certainly the addition of supply chain.

Design and planning.

And continued contributor to that and the willingness for just about any executive and the world that runs a meaningful organizations to spend money on best in class and a modern.

AI supported information technology solutions for sorting out how to optimize their supply chain is very very strong and so we will continue to charge fairly for the values and service, we deliver and continue to grow that value as a service on bolt ons and as we continue to work into this from <unk>.

Right.

Your next question comes from Brent <unk>.

And from Piper Sandler.

Thank you and good afternoon, I was hoping you could double click on the P&I acquisition and logic here Youre acquired GAAP to about a year ago I imagine you learned a lot and the last year just around the travel space. My question here is what did you learn and the last year that incur.

Increasing your confidence and decision to double down on travel and expense management and and what was unique about panna debt that attracted you to that business. It looks like its slightly larger than Yapta also looks like it's got an integrated payment.

Rails for travel and expense management, So walk me through the logic, there and what you've learned about that travel and expense management space from last year. Thanks.

Sure. Thank you for the question I think one other things thats distinctly unique about that company is the culture and the people and their passion and they have for this category. It's a category that we've watched and then it's some way part of free.

And for quite some time now.

And Thats number one number two they took a very innovative approach.

<unk> patent pending approach too.

Sorting out the very generic travel bookings process, that's prevalent and our industry and we love the innovation that they brought to that approach and the thoughtfulness that brought to that approach and so making that transactional construct part of our overall expense management offering and thus part of our overall business spend management offering just seem like.

And a complete no brainer to us and we're well underway to integrating that offering already and we look forward to have being and market with that as one integrated suite here very very shortly.

We look forward to going live on and ourselves here and our own Mike Cooper and environment shortly as well just really really exciting for us.

Your next question comes from Brian Peterson from Raymond James.

Hi, Joe and thanks for taking my question and congrats on the strong quarter. So you had a pretty successful M&A and just over the last few years I am curious on the path to value creation for customers and ultimately revenue for you how would you rank lama soft versus some of the acquisitions you've made in the past and you also mentioned migrating services to the channel versus internal.

And any impact on active deployments are ramping and the size that are impacting the 'twenty two guidance. Thank you.

Well to your first question and then how we would rank at that's a tough one because we appreciate all of the people that joined US from all the different companies that we've acquired and now made part of a couple of core I mean, they are all Mike Cooper colleagues and Todd Cooper colleagues and everyone. That's listening here that works at Cooper. So we don't really think of it that way, but what I can tell you is that over the course and <unk>.

Last 12 or so years.

<unk> progressed.

And in terms of the sizes of some of the acquisitions, we've taken on but we did that very thoughtfully very very carefully making sure that we do everything possible to increase the likelihood of those acquisitions being highly successful from a people process and people perspective from a process perspective, certainly for technology perspective, as long as all of it is and.

Aligned with our common vision around business spend management and allow myself was certainly no exception.

Just some incredible folks.

We're pursuing an area that we will continue to pursue now part of a much stronger overall core.

So that's what I'd say is most important maybe Todd could add to some of your secondary question there as well.

So from a guidance perspective, Brian.

We made and a certain assumption that we're going to convert all the license to the cloud and the vast majority of the professional services work to GSI, and which will bring down billings and revenues. If we're successful and restructured in a manner such that if we don't succeed to the level, we expect our actual revenues and billings would be higher. So we do expect to have some professional service.

But and our guidance, we assumed very little and.

And part of that is also just to get the goals and objectives and alignment and I don't want to guide too higher numbers with professional services and licenses and then if it doesn't happen and then we're having a discussion and so we've basically taken that off the table and to the extent, we don't execute it's upside to our guidance.

Your next question comes from Peter Levine from Evercore.

Alright, thanks, guys.

And as a piggyback off of prior comment you made on pipeline strength can you dissect how much of that might be net new versus upsell. So curious to know if that mix shift.

And basically all of that makes it trended throughout the year and your expectations into fiscal 'twenty two and.

And then secondly have you guys seen some of the most impacted industries return to market curious to see curious to know if we see a rebound here in calendar 'twenty one from some new chemistries.

Sure well, we don't we don't breakout pipeline in terms of add on or net new but I can tell you is certainly healthy and involved and where our primary focus is certainly on net new net new customers because the add on business tends to corn.

As I mentioned earlier much lower cost of customer acquisition happens much more organically and.

In terms of industry is look we've seen acceleration of pipeline and some of the.

Some of the largest and most prominent and industries and as you'd see with Covid now starting to kind of.

The situation and start to look healthy and healthier each day, we see some of the larger projects and manufacturing telecom, even high tech retail certainly.

<unk> move a bit quicker, but those are just some other verticals and the very situational data and sharing with you it's not scientific.

And all.

Your next question comes from Matt Vanvliet from BTG.

Hey, guys. Thanks for taking my question and nice job and the quarter, maybe digging in and just a little bit further on underpin acquisition and and really the overall travel space Todd.

Todd you mentioned that Youre, not really assuming much.

Revenue contribution this year and the guide.

So I guess, maybe a couple of parts how much more if anything do you feel like you need to sort of build out that whole product too.

To be competitive when you see corporate travel coming back.

And sort of cross selling there to existing customers and then secondarily what level of travel or entertainment are you currently budgeting and for the guidance on the margin side for for Cooper spending.

Well on the first part around product, we feel like we're in a really good spot on expense management module and offering on its own is used by hundreds of customers around the world and is very robust.

And it has been replacing a number of income and providers for some time with the travel booking component with travel saver as well.

Encouraged by our ability to not only be competitive but to really reframe the whole market I mean, the challenges of that market is a frustration with these ability.

People booking outside known channel is not getting the savings that they would like.

And the frustration as are a lot of money left on the table with pre negotiated discounts and that being take advantage of and much much more.

And then on offering it as a core platform that we're going to continue investing where we think we're really well positioned as travel begins to take.

Take hold more and.

More and in coming quarters, and emerge as a leader and a and a very interesting category.

But one that we still believe it's just a subcategory of broader business spend management, which is what we're playing for.

And from a guidance perspective, really what we're doing with Panna.

Coming from a P.

Perspective, our resiliency and skating to the puck right. We know the world is going to come back and some sort of sense of normalcy with our six months 12 months or 18 months and by getting ahead of this on the travel expense side, we're going to be really well positioned when travel does come back so from a guidance perspective.

Literally no revenue was contemplated in the guidance and then obviously the expenses are still flowing through the P&L and there is some incremental from partner, that's and the guidance but.

I would say, it's pretty small and the Grand scheme of things.

Your next question comes from Josh Beck from Keybanc.

Thanks for taking the question I just wanted to ask a little bit about the budget process that youre seeing from your customers. It seems like a year ago today. The back office really got deep prioritized in light of other front office areas collaboration et cetera, do you think.

Now that we're a year removed certainly things are starting to look a lot brighter on the vaccine front.

It's.

B and considered the BSM and back office area, more and maybe where it was pre pandemic and other that's a bit of a.

From a tricky one to answer but just curious maybe you can share along those line.

And I would say what we're seeing is probably maybe most valuable to the audience. Here is that there is a broader arc, perhaps than just a one year. If we look at a five to 10 year arc and that arc Theres. No question whatsoever that this area of business from management is making its way higher and higher on the priority list of digital transformation and moving to the cloud.

And we.

And largely.

Started around the customer revenue side or CRM spend a great deal of time, moving human capital and those core constructions and the cloud and now we're really making our way into.

And not as keen on it but the broader are strongly suggests that a greater prioritization and this area is upon us.

Your next question comes from Brian <unk> from Mizuho.

Thanks for taking my question I wanted to ask you about bill and it's been now more than a couple of quarters since you acquired and Belgian so how's the integration going and I understand and billings is more synergistic to Cooper.

That's more options to bank connectivity and also its and euro. So how what are you seeing the opportunity to put balance tragedy and to the U S market.

That's correct about the greatest area of synergy with Google pay and that is exactly how that's been playing out we have been having really exceptional success with bell and not only from the people perspective, but from the go to market perspective from the customers. We're closing the deployments were doing we just finished the annual <unk> conference, which had I think over.

750 active participants in the Treasury community.

Which is part of our broader Cooper community and now so really pleased with what's happening with that that area of our business.

And our last question comes from Mark Murphy from Jpmorgan.

Hi, Good afternoon. This is Matt Coss on behalf of Mark Murphy. Thank you for taking my question Rob.

Rob you mentioned earlier that you've been able to reduce deployment times by about a month.

Is there anything in there and thats.

Indicates that debt.

Reduction and deployment times will continue how we're able to accomplish that.

And any impact on gross margin from that.

Well, it's hard to predict but I do think if I were to predict I would say some of that is certainly sustainable for the longer term I mean, if you think about a typical deployment in a physical world. There are days that are spent flying into the client account or a day spent flying out there dinners, there's a whole bunch of Av.

Work, that's done and that might be.

Following are interesting for folks, but it isn't focused on the result of getting the customer lives and now when we're on a zoom session, where you have the systems integrator you have the one of my Super colleagues you have the right folks from the from the customer account and they are sharing their screen and configuring and real time and stepping through the Gantt chart of execution to go live.

And obviously, that's much more efficient as long as folks are willing and tech savvy enough to to go about it that way. So my instinct is 100% of that operational efficiency improvement will likely not stake as people move back towards travel I do think a significant portion of it will because we now know that it's doable and of course, we'll see how that plays out.

And I just wanted to get some additional comments on the record because we've got some messages offline with respect to Q4 billings and revenue contribution inorganic and organic.

Worthwhile to highlight in this setting while we don't really think about it that way internally I know that a lot of you want the some of the detailed here. So when we guided for Q4 for <unk>, we guided to 22% to $24 million billings contribution and we noted on the call that from the opening deferred for Lama shocked with approximately 15 million.

And for revenue, we guided to 13 million from <unk>.

And came in at $22 million related to allow massage and some of that revenue came from the bleed off of the opening deferred which was the 15 million and addition Lama soft had a strong Q4 from net new business, which positively impact Q4 billings and revenues.

Since we had little operating history with Amazon and we guided Q4, we took a cautious approach and our assumption for new business contribution and as you can imagine we were pleased by other stronger than expected performance. In Q4 also it's difficult to bifurcate organic and inorganic contribution when it comes to new business and professional services, what is organic and inorganic as subs.

<unk> interpretation and hence difficult to provide an exact number and general I personally think about organic billings and revenue growth rate for Q4 to be and the low thirties and.

As a reminder, that's against the tough compare from Q4 be ergo.

At this time and there are no further questions. This concludes the conference for today and we do thank you all for joining US and you may now disconnect.

Q4 2021 Coupa Software Inc Earnings Call

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