initial public offerings (IPOs) trading on American exchanges

Friday, February 16, 2018

MuleSoft (MULE) reported earnings on Thur 15 Feb 2018 (a/h)

a.  Feb 9: #14, 37   vol. 3.0  -->  +29%

** charts after earnings **


MuleSoft breaks out of post-IPO high as investors digest solid FY18 guidance (MULE)
Shares of software firm MuleSoft (MULE 29.66, 3.53 +13.5%) have grabbed fresh all-time highs in reaction to the company’s solid FY18 guidance as Q4 results and the Q1 guide were frankly nothing to write home about. With that being said, the relatively recent IPO (March 2017) reported in-line earnings for the current quarter while revenues lifted better than 60% while beating market expectations.

Given the relative newness of the company on the public markets, it may be prudent to give a refresher on what exactly MULE does. Founded in 2006, MULE is a Software-as-a-Service (SaaS) company which allows customers to connect their devices and apps to the cloud. MULE’s Anypoint Platform is built to design, build and manage integration and APIs.

Now back to the print; as mentioned, MuleSoft reported a mostly in-line loss of ($0.12) per share in Q4 while revenues were up more than the market expected -- 60% -- to $88.7 million. Results were driven by 57% growth in Subscription and support revenues to $70.6 million. Professional services and other revenues were up 75% to $18.1 million in the quarter.

Non-GAAP gross margins were 72.9% in Q4 compared to 73.2% in the year-ago period. On a non-GAAP basis, gross margin for subscription and support and professional services revenue each increased year-over-year; however, total gross margin decreased due to the higher mix of services revenue, which has a lower gross margin than subscription and support.

Further, MuleSoft earned the business of more large customers in the quarter; namely, MuleSoft ended 2017 with 45 customers with over $1.0 million in annual contract value, up from 30 at year-end 2016.

The outlook for Q1 was a bit more muted; MuleSoft sees in-line Q1 EPS and revenues at a loss between ($0.07)-($0.09) per share and $87-90 million in revenues.

For FY18, the company sees EPS at a loss which is slated to come in better than the market expects between ($0.26)-($0.30). Revenues are also expected to come in ahead of the Street views at $405-415 million.

Management provided some visibility for revenues going forward; the company set a target of $1 billion in revenues by 2021, which suggests about a 35% CAGR for the next few years.

A vote of confidence, MuleSoft broke out of the post-IPO high at $29 (from late May, 2017) following the strong guidance. The stock had been riding a lower channel between about $20-26 since last August, a level which was broken through this morning as investors give the proverbial nod of approval after earnings.

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