Xactly S-1 Analysis (NYSE: XTLY)

Exchange: NYSE

Proposed Symbol: XTLY

CEO: Christopher W. Cabrera

Offer Amount: $75 mm

No. of Shares to be sold in IPO: 7 mm

No. of Shares Outstanding: 27.7mm

Price Range: $10-12

Mkt Cap at Midpoint of Proposed range: $304.7 mm

Expected IPO Date: 06/26/15

Description from S-1: “Xactly is a leading provider of enterprise-class, cloud-based, incentive compensation solutions for employee and sales performance management. We address a critical business need: to incentivize employees and align their behaviors with company goals. Our solutions allow organizations to make better strategic decisions, optimize behaviors, increase sales and employee performance, improve margins, increase operational efficiencies, mitigate risk, design better incentive compensation plans and reduce error rates in incentive compensation calculations. We were the first 100% cloud-based, multi-tenant provider focusing solely on the incentive compensation and employee and sales performance management market and we achieved our leadership position through domain expertise and innovative technology. We deliver our solutions through a Software-as-a-Service (SaaS) business model. We believe that our solutions are strategic for our customers. We go beyond automation by providing our customers with commercially actionable insights so that they can optimize their employees’ behaviors. We believe that we are the first and only company to make commercially available insights derived from an empirical set of aggregated and anonymized data which helps customers make fact-based decisions to motivate employees and drive business performance. Our solutions help executives design, manage and analyze incentive programs and provide visibility into employee and incentive program performance. At the same time, employees use our solutions to monitor, estimate and track their own and their team’s performance in real-time, and modify their behaviors to maximize their payout consistent with company goals.”

Underwriters:

  • Lead Underwriter: J.P. Morgan, Deutsche Bank Securities, UBS Investment Bank
  • Co Managers: Needham & Company, Oppenheimer & Co.

Competitors: Benefitfocus, Achievers, Globoforce, Badgeville, Betterworks, bSwift, Benelogic, Benaissance, Liazon, Callidus Software, Cognizant, Enterprise Incentive Software, Excentive, Merced Systems, NetCommissions, Oracle, SAP, Successfactors, SunGard, Synygy, Varicent, Versata, Vue Software, ZS Associates, Payscale, Zenefits, Limeade, Keas, Redbrick Health, Trustnode, Castlight Health, BlinkAwards, Welltok, MarketPay, AnyPerk, Guidespark, Benefitter, Evolution1, Benu, Decusoft, Equilar, BenefitExpress, Acclaris, Connecture, Peoplefluent

Revenue (fiscal year ended January 31):

  • 2013 = $36.33 mm
  • 2014 = $47.22
  • 2015 = $61.111 mm

R & D Expenses:

  • 2013 = $6.57 mm
  • 2014 = $9.114 mm
  • 2015 = $11.87 mm

Sales & Marketing Expenses:

  • 2013 = $15.41 mm
  • 2014 = $20.53 mm
  • 2015 = $28.88 mm

Gross Profit:

  • 2013 = $19.1 mm
  • 2014 = $27.67 mm
  • 2015 = $36.07 mm

No. of Subscribers:

  • 2013 = 108K
  • 2014 = 140K
  • 2015 = 194K

Cash: $19.325 mm

Total Assets: $52.7 mm

Major Customers:

  • Angie’s List Inc.
  • LinkedIn Corporation
  • Monster Worldwide, Inc.
  • Tribune Publishing Company
  • Twitter, Inc.
  • DocuSign, Inc.
  • QlikTech International AB
  • salesforce.com, inc.
  • ServiceNow, Inc.
  • Workday, Inc.
  • Akamai Technologies, Inc.
  • Level 3 Communications, Inc.
  • Palo Alto Networks, Inc.
  • Riverbed Technology, Inc.
  • ARRIS Group
  • Stryker Corporation

Other Notes

  • Based in San Jose, CA
  • Founded in 2005
  • Xactly provides a cloud-based platform that ties compensation to employee performance
    • Most similar companies are Achievers (Private), Globoforce (Private), and Benefitfocus (NASDAQ:BNFT)
    • Benefitfocus had a monster IPO on September 18, 2013; $BNFT went up 102% on its first day of trading from $26.50 to $53.50, and climbed at high as $77 in January 2014.
    • Globoforce postponed their IPO on March 20, 2014; they have yet to reschedule their IPO
    • Achievers is in the tech IPO pipeline, and will likely IPO within the next 1-2 yrs.
  • Funding Rounds:
    • Series A — $4 mm
      • Sept 6, 2005
      • Investors: Rembrandt Venture Partners, Bay Partners
    • Series B — $8 mm
      • Mar 4, 2006
    • Series C — $15 mm
      • Apr 23, 2007
      • Investors: Illuminate Ventures, Alloy Ventures
    • Series D — $30 mm
      • Apr 30, 2008
      • Investors: Illuminate Ventures, Rembrandt Venture Partners, Bay Partners, Outlook Ventures, Glynn Capital Management, Alloy Ventures, Cheyenne Capital
    • Series E — $7.5 mm
      • Jul 7, 2010
      • Investors: Salesforce Ventures ,Alloy Ventures, Key Venture Partners, Rembrandt Venture Partners, Bay Partners, Illuminate Ventures
    • Series F — $12 mm
      • Dec 1, 2014
      • Investors: Illuminate Ventures, Rembrandt Venture Partners
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