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Based in McLean, VA, Cvent (NYSE:CVT) scheduled an $101 million IPO with a market capitalization of $697 million at a price range mid-point of $18, for Friday, August 9, 2013.

Nine other IPOs were scheduled for the week of August 5. The full IPO calendar can be found at IPOpremium.

  • S-1 filed June 29, 2013
  • Manager; Joint Managers: Morgan; Goldman
  • Co-Managers: Stifel; Pacific Crest; Needham

Summary

CVT is a leading cloud-based enterprise event management platform, providing solutions for both sides of the events and meetings value chain. Revenue Is mostly recurring, subscription-based.

Year-over-year top line revenue increases have been in the range of 37%. CVT, however, lost money on Q1 '13 and estimates a bigger loss in Q2 '13, using the 'going IPO' excuse.

Valuation

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Q2 '13 est

Cap (mm)

Sls

Erngs

BkVlue

TanBV

in IPO

Cvent (CVT)

$697

6.5

-75.7

6.2

7.3

14%

       

Glossary

Conclusion

Even though recent financials are not that promising, investors want to buy subscription-based cloud companies on their IPO: buy CVT on the IPO.

To put the conclusions and observations in context, the following is reorganized, edited, and summarized from the full S-1 referenced above:

Q2 '13 loss

The net income decrease reflects an increase in general and administrative costs that were primarily related to increases in headcount for administrative operations necessary to prepare for an initial public offering and operate as a public company, depreciation and amortization, stock-based compensation, foreign currency losses and acquisition costs.

CVT expects general and administrative costs to increase in absolute dollars and as a percentage of revenue as CVT continue to expand operations, hire additional personnel and transition from being a private company to a public company.

Business

CVT is a leading cloud-based enterprise event management platform, providing solutions for both sides of the events and meetings value chain: (i) event and meeting planners, and (ii) hotels and venues.

Event and meeting planner customers include enterprises such as corporations, associations, not-for-profits, government agencies and universities.

These customers enter into annual and multi-year subscription contracts to utilize part or all of CVT's cloud-based software solutions to plan, manage and execute enterprise events and meetings including external events, such as conferences, tradeshows, and customer events, as well as internal events, such as sales meetings, training seminars and team-building events.

As of December 31, 2012, CVT had more than 6,200 event and meeting planner customers. CVT's event and meeting planner customers used event management solutions to execute more than 139,000 events and meetings and managed 7.3 million registrations during the year ended December 31, 2012. CVT's generally recognize revenue from these contracts ratably over the term of the contract.

Hotels and venues

On the other side of the event value chain, hotels and venues utilize CVT's online marketing solutions to generate more visibility with ready-to-transact event and meeting planners.

CVT's online marketplace, the Cvent Supplier Network, or CSN, connects tens of thousands of event and meeting planners seeking the best venue for their event with more than 200,000 venues in CVT's proprietary database.

CVT believes that its CSN contains the world's largest, most accurate and searchable database of detailed meeting venue information with listings of hotels, conference centers, convention centers, resorts, restaurants, museums, country clubs, wineries, castles and other special event venues in more than 175 countries.

Hotels and venues enter into annual and multi-year advertising contracts with CVT for marketing solutions that increase the prominence of their properties in CVT's CSN; CVT recognizes the revenue from these marketing solutions over the term of the agreement based on the estimated selling prices of each solution.

As of December 31, 2012, CVT had more than 30,000 active CSN event and meeting planner users. The CSN is available with the same functionality to users of the paid subscription event and meeting platform solutions as well as to event and meeting planners that simply visit the CSN site and establish a free user account.

Competition

• existing manual, paper and spreadsheet-based systems that corporate personnel employ to organize events by themselves in a fragmented manner. For example, a significant number of planners process registrations by asking attendees to fill out PDF forms and aggregate that information manually using various office tools. They also frequently lack the ability to process registration payments online. Venue searches and bookings are often processed either by phone or email, while tracking of budget and expense is done on an ad-hoc basis through spreadsheets;

• event and meeting management firms such as The Active Network, primarily through its StarCite business that it acquired in 2012;

• online event registration vendors focused primarily on consumer ticketing such as Eventbrite; and

• small and large companies that offer point solutions that compete with some of the features present in our platform, such as registration management, travel management, venue bookings, web survey providers, email marketers and mobile app developer

5% stockholders pre-IPO, non-management

Entities affiliated with Insight Venture Management, LLC, 26%
Entities affiliated with New Enterprise Associates, Inc, 22%

Employees

As of May 31, 2013, CVT had 1,300 employees between its operations in the United States and India.

Use of proceeds

CVT expects to net $91 million from its IPO.

Proceeds area allocated to working capital and general corporate purposes.

Disclaimer: This CVT IPO report is based on a reading and analysis of CVT's S-1 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: Cvent