RightNow joins IPO conga line | CNET News.com: “Subscription software company RightNow Technologies has started the ball rolling on an initial public offering of its stock, joining a number of Internet companies queuing up to sell shares to the public. ”
So, this seems to be more welcome news both for Wall Street because it is (marginally) profitable and for Silicon Valley as a sign of recovery in the software as a service market. By the numbers, RightNow reported 1,000 customers, some of which include domain name registrars Go Daddy Software and Dotster as well as software seller Corel. It had a narrow quarterly profit of $162,000 on revenue of $12.9 million, for the period ended March 31st. Its fiscal 2003 revenues were $35.9 million and it had a net loss of $4.1 million, with nearly $45 million in accumulated debt since it was founded seven years ago.
It joins a resurgent tech IPO market, where Shopping.com, Salesforce.com, gay Web portal operator PlanetOut, book e-tailer Alibris, Lindows, Brightmail, online jewelry store Blue Nile, Advertising.com, and Google have all filed shelf registration statements with the U.S. Securities and Exchange Commission for initial public offerings (IPOs) of common stock.
Further, RightNow said it intends to trade on the Nasdaq under the symbol “RNOW,” with Morgan Stanley as sole book runner and lead banker for the offering.
As far as my thoughts on the matter go, I prefer to see only profitable companies with increasing revenues and low to no debt go public, as a way of ensuring investor confidence and avoiding the dismal dot-com crash in early 2001. While $162,000 is a low profit, it has showed it can constrain costs and manage its finances by eeking out a profit. As well, from what I can tell and judging by the revenue numbers, RightNow is on track to grow its 2004 revenues by 50% to about $48 million. It should also manage a 2004 full year profit of between $800,000 and $1 million. Pretty impressive. Examples of companies that are not yet profitable, but still want to capitalize on the IPO market picking up steam, are PlanetOut, Lindows, and Alibris. I wouldn’t recommend investing in either of those three.