Notes from the Eloqua S1 IPO Filing

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Eloqua, one of our main competitors, filed their S1 today to go public and raise a proposed $100 million. Being in the industry, I’m very interested to dive in and learn everything I can. Here are some quick notes from the document:

Revenues (pg 8 )
2008 – $32.9 million
2009 – $41.0 million
2010 – $50.8 million ($3.6 million from services)
2011 – $60 million+ run rate currently
Accumulated deficit of $148.6 million (pg 11)
Sales seasonality with Q4 being the best (pg 14)
Single data center in Toronto serving all customers (pg 18)
Pardot LLC is mentioned as a competitive lead management software vendor (pg 21)
Two patents pending (pg 25)
Customer count (pg 67)
712 on December 31, 2009
896 on December 31, 2010
Annual user conference cost $600,000 (pg 72)
Substantial portion of cash provided by operating activities is deferred revenue (pg 74)
IDC predicts that the marketing automation market will grow from $3.2 billion in 2010 to $4.8 billion in 2015 (pg 81)
Each client gets their own database with a common schema (pg 96)
Executive salaries are between $215,000 and $310,000 (pg 112)
Executive target bonuses were focused around net monthly recurring revenue, cash balance, customer satisfaction, sales qualified opportunities, and product development (pg 113)
Equity ownership percentage for the remaining co-founder is 5.5% and investors is ~81% (pg 132)

Overall, there’s nothing too surprising in the filing other than one item: I’m surprised salesforce.com entering the marketing automation market wasn’t listed as a threat.

Reading S1 filings is always interesting, and this one doesn’t disappoint.

What else? What do you think of the above information?

Comments

17 responses to “Notes from the Eloqua S1 IPO Filing”

August 24, 2011

Mike Keen (@mikekeen)

I’m curious how easy (or not) it is for you to remain pragmatic and objective regarding (perceived or actual) big wins from your competition. Any tips for keeping your eye on the ball and not worrying about hitting back?

Reply
1. August 25, 2011
  
  David Cummings
  
  Great question. We work hard to not focus on competitors and stay as close to our customers as possible.
  
  Reply
August 24, 2011

Jesse TL

Love the analysis here. I’ve read Rosetta Stone’s 10K and quarterly reports for a while now, and its always a treasure trove of information. Facts are stubborn things, and thanks to SEC regulations these filings have plenty of facts that you’d never find otherwise. Its your job to see through the veneer, but if you’re passionate about what you do (as you are), its not a chore at all.

I think too few people do serious competitor research, but in my opinion reading these kind of reports is essential.

Great post!

Reply
August 24, 2011

Amir Dekel (@abba_dad)

Very interesting. It’s been a while since my financial analysis days so I’m not sure if the S1 actually gives the total valuation. Would be an interesting figure to see. Another interesting one: based on 2010 customers and revenue, they make an average of about $56,700 per customer. That is sky high for an MA solution, wouldn’t you agree?

How is SFDC entering the arena? I haven’t heard anything about that yet. Did they buy someone or are they just developing something internally?

Great blog David. I really enjoy it.

Reply
1. August 25, 2011
  
  David Cummings
  
  Thanks Amir. Great point that $56,700 per customer really high. We now of customers of theirs that pay north of $500k/year, so I’m guessing that average is skewed by outliers.
  
  SFDC isn’t entering the arena as far as we know but we’ve heard rumors over the years of them getting into the market.
  
  Reply
  1. August 26, 2011
    
    Amir Dekel (@abba_dad)
    
    The only reason I mentioned SFDC is the investment they recently made in HubSpot as part of the $30M+ round they did. I’ve read some others discussing SFDC getting into this space, my guess would be through an acquisition, but now it looks like Eloqua might be off the table. I think this all plays out a little longer before anything dramatic happens.
  2. August 26, 2011
    
    Mark Travis
    
    Except for the statement “Our ten largest customers accounted in the aggregate for less than 12% of our total revenue in each of 2010 and the six months ended June 30, 2011, and no single customer accounted for more than 3% of our total revenue during either of those periods.” So, take 12% of 60M and get 7.2M, which would be about 720K average for each of those customers. However, they further state that no single customer accounts for more than 3%, which would be 1.8M for some lucky customer.
    
    If you take the remaining $52.8M and divide it by the remaining 886 customers, you’re at $59,593 average.
    
    I’d say they are a bit more than outliers and propose that they have a pretty bulky set of large paying customers.
    
    If course, if they have some funky way of recognizing revenue, then all bets are off.
August 25, 2011

Dave

What is the valuation and associated net income by year? Plus, an interesting fact I found out this past month is that all UK companies must file public financials. So, if you have a competitor in the UK, their financials can be obtained for $1!!! I could not believe it. Also, it looks like you have a new Pardot customer at BLiNQ! Onward and upward, cheers!

Reply
1. August 25, 2011
  
  David Cummings
  
  Thanks Dave. Great question about valuation and net income per year. Valuation wasn’t in there due to an absence of potential stock price but they’ve lost money every year.
  
  Wow, I didn’t know that about UK companies having to file public financials. I’ll look into that.
  
  Thanks for signing on as a Pardot customer! We’re excited to have you all on board.
  
  Reply
August 25, 2011

Steven

How are they defining the cost of goods sold? Each SaaS company calculates it differently. I like to know where the costs and investments are headed.

Reply
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