software developer Pluralsight (PS) is off to a solid start as its 20.7 mln
share IPO priced at $15, above the upwardly revised $12-$14 price range. In
all, it generated total gross proceeds of $310.5 mln, about $41.5 mln more than
originally anticipated. Those tracking the IPO market are probably well aware
that cloud IPOs have been quite hot of late, as names like Pivotal Sofware
(PVLT), Zuora (ZUO), and ZScaler (ZS) also saw healthy demand for their deals.
With that trend in mind, and considering its solid double-digit growth, it
doesn't come as much of a surprise to see PS' IPO also generate a lot of
interest. Now the stock has opened at $20.
The lead underwriters on its deal were Morgan Stanley, JP Morgan, Barclays, and BofA Merrill Lynch. Shares are set to open for trading later this morning on the Nasdaq.
PS is an enterprise software company committed to closing the global technology skills gap. This skills gap exists because technology is changing faster than the world’s ability to acquire and adapt to new skills. To address this challenge, many companies still use traditional in-person, instructor-led training, which doesn’t move fast enough or scale quickly enough to meet the ever-increasing demand.
PS disrupts the in-person models by offering a cloud-based technology learning platform that is broadly accessible. Learners on its platform can quickly acquire today’s most valuable technology skills through high-quality learning experiences delivered by subject-matter experts, available on any device at any time.
Its cloud-based technology learning platform provides a broad range of tools, including skill assessments, a curated library of courses, learning paths, and business analytics. Our platform is powered by Iris, our proprietary machine-learning driven skill assessment algorithm and recommendation engine, which enables businesses to more effectively quantify and develop skills across technologies. Through our platform we provide both businesses and individuals with the ability to stay smart, stay relevant, and drive results.
Its platform is used by businesses to train their software developers, IT professionals, data scientists, data engineers, technical engineers, business users, and technology executives. The platform is also used by individuals to develop and enhance their technology skills.
Taking a look at the financials, revenue increased 33% for the
three months ended March 31, 2018 to $49.6 mln. The increase was primarily due
to a 44% increase in revenue from business customers, driven by an increase of
2,250 business customers to 14,830 as of March 31, 2018, as well as increased
sales to its existing business customers as evidenced by its 120% dollar-based
net retention rate at March 31, 2018.
Gross margin remained steady at 70% for the three months ended March 31, 2018.
Moving down the income statement, sales and marketing expenses were $29.5 mln compared to $17.8 mln for the three months ended March 31, 2017, an increase of 65%. The increase was primarily due to an increase of $9.0 mln in employee compensation costs, as it added headcount to support its growth.
The end result is that operating loss widened slightly to ($3.7) mln from ($1.5) mln as overall operating expenses spiked higher by 58%.