Based in Redwood Shores, California, Imperva (proposed IMPV) scheduled a $75 million IPO with a market capitalization of $332 million at a price range mid-point of $15 for Wednesday, November 9, 2011. The full IPO calendar for the week of November 7 includes five scheduled IPOs.
IMPV is a data security company whose sales increased 45% for the nine months ended September 30, 2011, to $55 million from $38 million. Losses held steady at $9 million. However, revenue for the last two quarters, June and September, were $18.8mm and $19.7mm: the September quarter was essentially flat in top line revenue compared to the June quarter.
Conclusion & Valuation
IMPV has never made money although it has increased top line revenue. IMPV makes a big case about deferred revenue – future monies due on service and maintenance contracts – which increased 51% for the September, 2011 nine months, to $26 million from the year earlier $17 million number. However, top line revenue for the last four quarters is essentially flat, while quarterly losses are consistently in the -$2.6 million to $3.2 million range.
Therefore, we believe the IMPV IPO will happen, but for the time being at least it seems prudent to watch IMPV from the sidelines.