Liquidity Public

Adaptive Insights Files To Go Public

Morning Report: Business planning software shop Adaptive Insights is going public. Here’s our first look.

Palo Alto-based Adaptive Insights filed to go public this week. Its SEC filing lists a placeholder, $100 million potential raise for the late-stage startup. The $100 million number will change when the company sets an initial range for its IPO in the coming weeks.

The company sells what it calls a “Business Planning Cloud,” that so far as we can tell, involves stock people drinking water near a window helps large companies plan better and report on their own operations. The firm lists finance and sales as use cases on its website.

Regardless, Adaptive Insights raised just over $175 million during its life as a private company, including funds from Bessemer, Norwest, and Founders Circle.

What do we need to know from its IPO filing? We’ll do a deeper dive later today if we can fit it in, but here are the highlights and lowlights:

  • Steady revenue growth. In its most recent fiscal year ending January 31, 2018, Adaptive Insights had revenue of $106.5 million, $93.9 million of which was subscription top line. The company’s revenue aggregate grew 30 percent from $81.8 million in the preceding fiscal year.
  • Improving revenue mix. Adaptive Insights has had more than $12 million, but less than $13 million in services revenue in each of its last three fiscal years, even as its total revenue grew from $61.7 million to $106.5 million. That means that all the firm’s recent growth has come from higher margin, subscription revenue.
  • Slowing, but persistent losses. Adaptive Insights lost $59.1 million on a GAAP basis two fiscal year’s ago. That fell to $44.7 million in its fiscal period that followed. And in the fiscal year ending January 31, 2018, the company’s net loss descended to $42.7 million. That against rising revenue denotes improving, but still negative margins.
  • Falling, but persistent negative free cash flow. Adaptive Insights consumed $20 million last year due to negative free cash flow. But that was down from $38.6 million the year before.

Adaptive Insights is not growing too quickly for a subscription software company at its current scale, but falling net losses and slowing cash burn mean that it doesn’t cost as much to run as some potential comps.

We don’t know what Adaptive Insights was worth at the time of its last round, a Series G. But we’ll have notes on what the firm thinks that it is worth now. More when we have time!

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iStockPhoto / liuzishan

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