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Based in Seattle, WA, Tableau Software (NYSE:DATA) scheduled a $176 million IPO with a market capitalization of $1.4 billion at a price range mid-point of $24.50, for Friday, May 17, 2013.

Four other new IPOs are scheduled for this week. The full IPO calendar is here.

  • S-1 filed May 6, 2013
  • Manager,Joint Managers:Goldman, Sachs; Morgan Stanley
  • Co Managers:Credit Suisse;J.P. Morgan; UBS; BMO Capital; JMP Securities

SUMMARY

Data believes it is "democratizing" the use of business analytics software.

On a year-over-year basis DATA's sales increased 82% in 2011, 106% in 2012 and 60% in the March '13 quarter. DATA had been making marginal profits which turned in to loss for the March '13 quarter, because sales & marketing jumped to $24 million from $11 million.

VALUATION

DATA is priced at a price-to-sales premium to QLIK (a direct competitor mentioned in the S-1 filing), but DATA's March qtr sales were up 60% from the March '12 quarter. QLIK's sales were up only 23% on a similar comparative basis. The price-to-book values are essentially the same.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing March qtr

Cap (NYSE:MM)

Sales

Earnings

BkValue

TangibleBV

in IPO

Tableau Software (DATA)

$1,409

8.8

-88.0

10.0

10.1

13%

       

Qlik Technologies (NASDAQ:QLIK)

$2,500

6.5

-47.3

11.1

11.1

 

Qlik Technologies

   

March qtr '11

March qtr '12

 
    

$79

$97

 

QLIK % increase from prior period

    

23%

 

RECOMMENDATION
Buy DATA on the IPO.

Glossary

BUSINESS
DATA believes it is democratizing the use of business analytics software by allowing people to access information, perform analysis and share results without assistance from technical specialists.

By putting powerful, self-service analytical technology directly into the hands of people who make decisions with data, DATA seeks to accelerate the pace of informed and intelligent decision making. This enables customers to create better workplaces, with happier employees who are empowered to more fully express their ingenuity and creativity.

CUSTOMERS
DATA products are used by people of diverse skill levels across all kinds of organizations, including Fortune 500 corporations, small and medium-sized businesses, government agencies, universities, research institutions and non-profits.

As of March 31, 2013, DATA had over 12,000 customer accounts located in over 100 different countries. As of March 31, 2013, DATA had more than 10,900 customers. When DATA calculates the number of customers, DATA consolidates customer accounts that are affiliated with the same parent organization.

DISTRIBUTION & SALES
DATA's distribution strategy is based on a "land and expand" business model and is designed to capitalize on the ease of use, low up-front cost and collaborative capabilities of software.

To facilitate rapid adoption of products, DATA provides fully-functional free trial versions of products on the website and created a simple pricing model.

DATA's direct sales approach includes inside sales teams and field sales teams. DATA also sell products through indirect sales channels including technology vendors, resellers, original equipment manufacturers, or OEMs, and independent software vendors, or ISVs.

As of March 31, 2013, less than 10% of the sales team focused on indirect sales channels. Sales through indirect channels have historically varied from quarter to quarter, and comprised less than 25% of total revenues for the years ended December 31, 2010, 2011 and 2012 and for the three months ended March 31, 2012 and 2013.

INTERNATIONAL
With 17% of total revenues from customers located outside the United States and Canada in 2012, DATA believes there is significant opportunity to expand the international business.

DATA products currently support eight languages and DATA is aggressively expanding its direct sales force and indirect sales channels outside the United States. In addition to a presence in Australia, Canada, England and France, in 2012, DATA opened sales offices in Germany, Japan and Singapore.

SEASONALITY
Historically, there is a pattern of increased license sales in the fourth fiscal quarter as a result of industry buying patterns has positively impacted total revenues in that period, which has resulted in low or negative sequential revenue growth in the first quarter as compared to the prior quarter.

INTELLECTUAL PROPERTY
As of March 31, 2013, DATA had ten issued U.S. patents covering our technology and 11 patent applications pending for examination in the United States.

COMPETITION
Current primary competitors generally fall into three categories:

  • Large software companies, including suppliers of traditional business intelligence products that provide one or more capabilities that are competitive with DATA's products, such as International Business Machines Corporation, or IBM, Microsoft Corporation, Oracle Corporation and SAP AG;
  • Spreadsheet software providers, such as Microsoft Corporation; and
  • New and emerging business analytics software companies, such as Qlik Technologies Inc. and TIBCO Spotfire (a subsidiary of TIBCO Software Inc.).

5% STOCKHOLDERS POST-IPO
New Enterprise Associates, 36.4%
Meritech Capital Partners, 6.5%

USE OF PROCEEDS
Class A common stock offered by Tableau, 5,000,000 shares
Class A common stock offered by the selling stockholders, 2,200,000 shares

DATA expects to net $111 million from its IPO. Proceeds are allocated to general corporate purposes and working capital.

Disclaimer: This DATA IPO report is based on a reading and analysis of DATA's S-1A filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Tableau Software