There is something iconic about a technology company having an Initial Public Offering (IPO). The symbolism of a group of people creating a new technology, working long hours through the startup phase, winning customers, figuring out how to scale – to then have it all come together in a single day is fascinating. I had always wondered what it was like to build a tech company and take it public. I have studied the companies who have done it for years.
When it was our time to go public, it was an incredible experience. I plan to do a series of blog posts on the IPO process. We learned a great deal through the process, and I want to share what we learned. But what about life as a public company? What about the quarterly earnings process? What is it like behind the scenes?
A few days ago we held our fourth earnings call as a public company so I thought it would be a good time to share what that is like. Here you go:
Every 90 days, public companies report their financial performance. On June 30, we closed our quarter and began the accounting process. We work with our internal teams and our external auditors to prepare the required SEC filings. This takes a few weeks, and by the end of July we are prepared to publish our results. We then prepare a press release highlighting the results and hold an earnings call to discuss the quarter and answer questions.
The first time I did this a year ago it was quite nerve-racking. I listened to other company's earnings recordings, I read their press releases and studied the transcripts of their calls. We prepared for several weeks, did rehearsal sessions and put up big white boards full of data so that if we needed something during the call we had it ready. I could not sleep the night before. The call went great! I received a bunch of congratulatory emails from our board, our associates and from other companies.
We are now developing a rhythm and getting accustomed to the process. In the 2nd quarter of 2014, the company grew by 33% year-over-year. We now have 488 large employer customers, which is up 70 in the quarter alone. We had our biggest and best user conference, One Place, and introduced some incredible new technology, user experience design and an expanding ecosystem of partners.
Having completed a full year cycle now, I have my own system of preparing for the call. We have a fantastic finance team who pulls all the information together. It is still stressful and each quarter has its own personality, but I am learning with each one. I encourage the team to have a detailed checklist of prep, to set the room up the same each time so that it is familiar and we include a handful of associates so they can experience it. We took a few pictures of this call so you can truly see "behind the scenes!"
The process and discipline of reporting financials every quarter is actually healthy for a company. It is expensive and it does require more work. However I believe it is a natural step in the progression of a leading technology company. The market awareness of our company since going public is amazing. It helps as we recruit top software engineers, sales professionals and managers. It helps that our customers and prospective customers have routine access to our performance. It also helps having a regular "call" with the management team. It is not easy, and after four calls I certainly have not learned everything. In my career I have tended toward pursuing the harder things anyway. I like to see what we as a team can accomplish.
When I look back over the past decade or so I see so many things that could have stunted our growth. The statistics of how few companies survive their first five years are bleak. Getting a software company to $10 million in revenue is nearly impossible. Reaching $50 million in revenue, and then passing the incredibly high bar of $100 million and going public – truly a rare accomplishment. That is probably why we all marvel at the "tech-IPO". It represents a team beating all the odds, a new idea being brought to the mass market and the capital to go even farther. Beyond that milestone lies the enormous field of opportunity and the task of operating a larger enterprise. It has been an incredible experience to co-found a company, work with a team to grow it and to take it public. However, as I say to our team, “we are just getting started!"
You can see our most recent press releases and highlights here.