But go ahead and compare them to a company that IPO’d 78 days ago who lets small customers use their company’s office space as their own… how can all of you have so much confidence when they have had literally one public quarterly report ever? …I’m just a little surprised at the confidence level in such a recent IPO.
I couldn’t believe this when I read it. Referring to Pivotal as if it is a little IPO that someone started in their garage six months ago. As far as “78 days ago” and “such a recent IPO”, Pivotal has been around since 1989. That’s almost 30 years. Its founder is still the CEO. Its original business model was as a private consulting group, most recently using the open source software they had developed as the base for a services business, helping enterprises transition to the cloud. They developed open source Cloud Foundry as I understand it. They helped develop Hadoop. (To quote Steppenwulf: “Pivotal was instrumental in developing Hadoop and tools to manage Hadoop… Hortonworks is a Pivotal partner, and Cloudera and MapR the other competitors in the Hadoop as a service (HAAS) space. This isn’t an area that Pivotal currently serves, although it was instrumental in actually creating Apache Hadoop.”)
As far as a shortage of customers: as Tinker pointed out: Ford, GE, Microsoft, Google, and EMC/VMWare liked the product so much that they BOUGHT THE COMPANY with quite substantial investments. Ford has based its entire software development under the Pivotal Lab umbrella (hardly the only one).
And Treepak listed a few more happy customers: Allstate, Bluecross, Humana, Boeing, US Airforce, IRS…
And there’s the British Government too, etc etc
Does this really, REALLY, sound like a new IPO with just a 78 day history that we should be afraid of???
And criticizing them because they start counting companies at $50,000, because “$50,000 won’t budge the needle”:
Most companies count every customer, even the $50 ones. Pivotal says it’s not worth the trouble to count ones less than $50,000. And you are criticizing that practice of just counting the ones who actually count to them? What nonsense!
“How can all of you have so much confidence when they have had literally one public quarterly report ever?” — Well, they do have their SEC filing which gives results for three years back. Lets see:
Their current business model is subscription. Their subscription revenue was up 73% last year, and 174% in two years. (Wow, they must really be having trouble!!!). It was up 69% for their April quarter and up 20% sequentially!!!
Their subscription revenue gross margin was 88% last year! And 92% in their most recent quarter. (Gross margin only 92%…Wow, that’s worrisome.)
Their dollar-based net-retention rate was 156%!!! And over 150% for the last seven consecutive quarters. Did you get that? Over 150% for the last 7 quarters.
How can I have confidence in this company??? I just don’t know.
And a few more facts from the Apr 2018 quarter
GAAP operating loss was $33 million, improved from a loss of $48 million. It was 22% of revenue, improved from 44%.
Adj operating loss was $21 million improved from a loss of $40 million. It was 14% of total revenue, improved from 33%.
GAAP net loss was $32.5 million, improved from $51.5 million.
Adj net loss was $23 million, improved from $43 million yoy
Adj net loss per share was 10 cents, improved from 20 cents loss a year ago
Operating cash flow was $4.5 million improved from negative $4.4 million a year ago.
Okay, ask me again why I have confidence in them! Look, they may crash and burn. Other companies have. But it won’t be because there was no reason to have confidence in them.