Workday's (WDAY) strong debut on Friday marked the 16th on-demand enterprise software IPO this year. The group has performed exceptionally well, posting an average first day gain of 34% (vs. 14% average for all IPOs YTD) and an average total return of 47% (vs. 20%), a reflection of investors' ongoing interest in growth and high revenue visibility.
E2open (EOPN), the only on-demand enterprise software IPO that has traded down on its first day, saw redemption this week after reporting slightly better-than-expected results on Monday after the close. Since its earnings announcement, E2open has jumped 29%, bringing it back above its offer price and at a post-IPO high.
Workday lived up to its hype on Friday and closed its first day of trading up 75%, solidifying its spot as the fifth largest first day gain this year, behind big data software provider Splunk (SPLK), mobile ad platform Millennial Media (MM), organic food maker Annie's (BNNY) and quick-turn protoype manufacturer Proto Labs (PRLB).
Workday now commands the highest valuation of this year's on-demand IPOs with a fully diluted market value of $9.4 billion (44x trailing 12 month sales). IT automation software provider ServiceNow (NOW) follows with a market value of $5.4 billion (29x trailnig sales). Guidewire (GWRE), ExactTarget, (ET) Demandware (DWRE) and Bazaarvoice (BV) each have market values in excess of $1 billion.
|Company (Ticker)||IPO Date||Market Value||EV/LTM Sales||First Day Pop||Return from IPO|
|Workday (WDAY)||10/11/12||$9.4 billion||44x||75%||75%|
|ServiceNow (NOW)||6/28/12||$5.4 billion||29x||37%||85%|
|Guidewire (GWRE)||1/24/12||$1.8 billion||7x||32%||132%|
|ExactTarget (ET)||3/21/12||$1.7 billion||6x||32%||21%|
|Demandware (DWRE)||3/14/12||$1.2 billion||16x||47%||109%|
|Bazaarvoice (BV)||2/23/12||$1.0 billion||8x||38%||25%|