SuccessFactors is set to become a publicly traded company shortly. In fact, the stock is expected to price the day before Thanksgiving (Nov. 19) with the ticker symbol being SFX. The investor roadshow can also be viewed on the retailroadshow.com.
A couple quick takeaways from Lars presentation on the roadshow…
1. SuccessFactors is a strong growth story, growing over 100% annually. Although they are doing very well in SMB, they also have a nice book of business in the enterprise. The average total users is what I would deem small, but they have a large opportunity to grow existing and new install base from a usage perspective.
2. The 4th quarter is very important to the company, and this quarter right now is no different. They have traditionally had very strong 4th quarters (for many reasons including performance review season) and it will be interesting as to any visibility or guidance they give to the street as they move forward.
3. Their story is very well-known as to their “market share at all costs” play right now, but CFO Felt did articulate a goal to become cash-flow positive by Q3 2009. If you are counting that is almost 2 years. In addition, target operating margins are 25%. In comparison, Kenexa is currently operating at about 16% while Taleo is about 5%.
Although current market conditions are not ideal and pricing the day before on the the biggest holidays is not opportunistic, I think the investor response will say a lot about how SuccessFactors is building their business and the confidence behind the model itself.
UPDATE: SuccessFactors ticker symbol has changed to SFSF and will be listed solely on NASDAQ. Another interested note in one of the S-1 amendments as pointed out by a friend:
Page 42 of the S1 filed Oct 31st – “As of December 31, 2006, we had 850 customers, as compared to 341 at December 31, 2005.”
Page 42 of the S1 filed Oct 19th – As of December 31, 2006, we had 1,118 customers, as compared to 348 at December 31, 2005.
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