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Summary

  • Invented a purpose-built mobile IT platform for enterprises to secure and manage mobile applications, content and devices while providing its employees with device choice, privacy and a native user experience.
  • Sales increased 158% to $106 million in 2013 vs 2012, with a 31% loss rate in 2013. However, sales increased only 9% to $28 million for Q1 '14.
  • MOBL does have very high market penetration by sector, see 'customers' below.

Based in Mountain View, CA, MobileIron (NASDAQ:MOBL) scheduled a $100 million IPO on the Nasdaq with a market capitalization of $672 million at a price range midpoint of $9 for Friday, June 13, 2014.

The full IPO calendar is available at IPOpremium.

SEC Documents
Manager, Joint managers: Morgan Stanley, Goldman Sachs, Deutsche Bank, Barclays

Co-Managers: Raymond James, Stifel, Nomura

End of lockup (180 days): Wednesday, December 10, 2014

End of 25-day quiet period: Tuesday, July 8, 2014

Summary

MOBL invented a purpose-built mobile IT platform for enterprises to secure and manage mobile applications, content and devices while providing its employees with device choice, privacy and a native user experience.

Sales increased 158% to $106 million in 2013 vs 2012, with a 31% loss rate in 2013.

However, sales increased only 9% to $28 million for Q1 '14 vs Q1 '13, with a loss rate of 49%.

MOBL does have very high market penetration, see 'customers' below.

Valuation

Glossary

Valuation Ratios

Mrkt Cap (MM)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Q1 '14

MobileIron

$675

6.0

-12.1

5.2

5.2

15%

Conclusion
MOBL's growth revenue rate slowed from 158% for 2013 vs. 2012 to only 9% for Q1 '14 vs Q1 '13.

And the last four quarters have been essentially flat. See page 70.

The rating on MOBL is positive plus primarily because of its outstanding customer base and because of the discussion below, from the S-1.

page 61, S-1

"Perpetual license revenue decreased $4.5 million in the three months ended March 31, 2014 compared to the same period of the prior year, due to a $5.9 million decrease in revenue recognized from licenses that were delivered prior to 2013, but for which the revenue was being recognized ratably over the contractual terms of the related software support agreements due to lack of VSOE for software support and services prior to January 1, 2013.

After adjusting for the decrease in perpetual license revenue recognized from licenses delivered prior to 2013, perpetual license revenue increased $1.4 million, or 12%, as a result of an increase in market adoption of our solutions by both new and existing customers.

Subscription revenue increased $3.2 million, or 118%, in the three months ended March 31, 2014 compared to the same period of the prior year, primarily due to increased sales of solutions sold under either a cloud-based delivery model or a subscription term license for our on-premise software products. The increase in subscription revenue also reflected an increase in MRC from $968,000 in the three months ended March 31, 2013, to $2.5 million in the three months ended March 31, 2014."

--------

also see page 54, S-1

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

Business

MOBL invented a purpose-built mobile IT platform for enterprises to secure and manage mobile applications, content and devices while providing its employees with device choice, privacy and a native user experience.

Customers use MOBL's platform as the technology foundation on their journey to become "Mobile First" organizations, embracing mobility as a primary computing platform for their employees.

Market Opportunity

MOBL estimates that the size of the global mobile IT market will be $27 billion for 2014 and will grow to approximately $49 billion in 2017, based on the projected number of smartphones and tablets to be used in enterprises, multiplied by the estimated amount that enterprises will spend annually to secure and manage corporate email, data and applications on those devices.

According to IDC, 280 million business-use smartphones and commercial-use tablets will be shipped in 2014 with 480 million of such devices expected to be shipped in 2017.

Based on a two-year device replacement cycle, we estimate a global installed base of 498 million smartphones and tablets in 2014 growing to 887 million by 2017, representing a compounded annual growth rate of 21%.

Gartner estimated in 2012 that the total cost of mobile IT management software is approximately $55 per device annually.

Customers

As of April 10, 2014, MOBL's customers in the Forbes Global 2000 for 2013 included:

five of the top six aerospace and defense firms,

four of the top five pharmaceuticals companies,

four of the top six railroad, air courier and other transportation firms,

five of the top six electric utilities and

all of the top five auto and truck manufacturers.

As of April 10, 2014, international customers in the Forbes Global 2000 for 2013 included the top five German firms and three of the top five Italian, Spanish, Swiss and U.K. firms.

No customer accounted for more than 5% of our total revenue in 2013, or the three months ended March 31, 2014.

International

MOBL believes that its market opportunity is large and global and sales to customers outside of the United States will remain a significant opportunity for future growth.

In 2011, 2012 and 2013 and the three months ended March 31, 2014, 29%, 40%, 44% and 42% of total revenue, respectively, was generated from customers located outside of the United States.

Channel Partners

MOBL sells its products almost entirely through channel partners, including resellers, service providers and system integrators.

MOBL's sales force develops sales opportunities and works closely with channel partners to sell solutions.

MOBL has a high touch sales force focused on Global 2000 organizations, inside sales teams focused on mid-sized enterprises and sales teams that work in conjunction with service providers that focus on smaller businesses.

MOBL prioritized internal sales and marketing efforts on potential customers that are members of the Global 2000 because MOBL believes that they represent the largest potential opportunity.

As of December 31, 2013, channel partners included over 300 resellers, 35 service providers and a small number of systems integrators.

Platform

MOBL's platform is extensible and fosters a growing ecosystem of application developers and technology partners that augment the functionality and add value to its platform, creating positive network effects for its customers, its ecosystem and its company.

The adoption of mobile technology is a disruption of historic proportions and has outpaced earlier transitions such as mainframe to PCs and client/server to the Internet. IT departments are often challenged to provide users the benefits of mobility, while simultaneously satisfying enterprise requirements.

Users want to access business applications, or apps, and corporate content on their favorite smartphone and tablet with the same ease of use they experience on those devices in their personal lives.

Users also expect their privacy to be preserved when using their personal devices at work.

IT must satisfy new requirements

As a result, IT must satisfy new requirements, including enforcing mobile security, defining mobile management and compliance policies, supporting multiple, rapidly evolving mobile operating systems, enabling both corporate-owned and user-owned devices and mobilizing enterprise applications and content, all while ensuring compatibility with existing IT infrastructure.

MOBL's mobile IT platform addresses the requirements of the mobile era by allowing enterprises to protect corporate data, deliver apps and content, and give users choice of popular mobile devices.

MOBL's architecture promotes employee productivity, separates personal data from corporate data, provides a native user experience and gives IT the ability to define security and management policies independent of the device. MOBL enables corporate-owned, bring your own device (BYOD) and mixed device ownership environments.

Dividend Policy

No dividends are planned.

Intellectual Property

MOBL owns seven issued patents worldwide and, as of April 8, 2014, had 50 patent applications pending worldwide. MOBL has trademark applications and registrations in 20 countries and the European Union.

Competition

MOBL's competitors fall into four primary categories:

Diversified technology companies such as IBM;

Large security and enterprise-software companies such as McAfee (owned by Intel), Symantec and SAP;

Providers of enterprise mobility management solutions such as VMware, Citrix and Good Technology; and

Small and large companies that offer point solutions that compete with some of the features present in MOBL's mobile IT platform.

5% stockholders

Robert Tinker 5.0%

Tae Hea Nahm 20.0%

Entities affiliated with Storm Ventures 20%

Norwest Venture Partners X, LP 19.4%

Entities affiliated with Sequoia Capital 16.8%

Entities affiliated with Foundation Capital 8.5%

Use of proceeds

MOBL expects to net $89 million from its IPO. Proceeds are allocated as follows:

General corporate purposes, including working capital and capital expenditures.

MOBL may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement its business, although MOBL has no present commitments or agreements to enter into any acquisitions or investments.

Pending these uses, MOBL plans to invest these net proceeds in short-term, interest bearing obligations, investment grade instruments, certificates of deposit or direct or guaranteed obligations of the United States.

Disclaimer: This MOBL IPO report is based on a reading and analysis of MOBL'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.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

Source: IPO Preview: MobileIron