Today: Silicon Valley's stalled IPO market looks to heat back up with Good Technology filing, impending Zendesk offering. Also: Cisco and Agilent report earnings.
The Lead: Good Technology plans IPO ahead of Zendesk offering
Another Silicon Valley company joined the pipeline of initial public offerings Wednesday, just as Zendesk prepares to break an IPO drought for Bay Area tech companies.
Sunnyvale mobile-management company Good Technology filed for a $100 million IPO on Wednesday afternoon, though that figure is likely a placeholder while the 18-year-old firm settles on a price range. Good Technology, which was valued at $800 million in its most recent funding round, helps enterprise customers secure and manage their employees' use of mobile electronic devices, similar to AirWatch, which was acquired for more than $1.5 billion by Palo Alto's VMware earlier this year.
CEO Christy Wyatt, a former Apple and Palm executive, noted in a February interview with Recode that Good is larger than AirWatch, adding, "It says a lot about the opportunity in this space."
Good's financial disclosures in Wednesday's filing weren't that great, however: While sales growth has been strong, with revenues gaining more than 25 percent in each of the past two calendar years to a total of $160.4 million in 2013, net losses have been growing at similar or higher rates. Fortune's Dan Primack noted Wednesday that the company had only $42 million in cash on hand at the end of 2013, worrisome considering a net loss of $118.4 million last year would suggest the company may run out of money without the financial help an IPO could bring.
An IPO windfall isn't guaranteed in the current environment, either. While biotechnology companies enjoyed a run of success in the first quarter of 2014, few pure-tech companies from Silicon Valley have made debuts this year. Coupons.com, A10 Networks and Aerohive Networks managed to complete their offerings in March, but a strong tech downturn on Wall Street that has most strongly affected companies that went public in the past year has put a chill on many companies' IPO plans, including high-profile filers such as Box. Good Technology rival MobileIron, based in Mountain View, also reportedly delayed its planned IPO.
"Whenever it looks like it's possible to lose money is when it becomes very easy for sentiment to swing," Santa Clara University professor Robert Hendershott noted of the IPO market recently.
That slowdown is one reason all eyes have turned to Zendesk, the San Francisco cloud software company that is expected to go public this week. Zendesk is expected to price its IPO Wednesday or Thursday evening, with its price range currently sitting at $8 to $10, and the price the company commands and its performance on Wall Street will be watched closely amid tech's stock market maelstrom.
SV150 market report: Cisco and Agilent release earnings after stocks fall
Tech stocks returned to declines Wednesday, but Cisco Systems received a big boost in late trading thanks to a an earnings report that beat expectations.
Cisco reported a slight decline in net income and sales from the same quarter a year ago, but profits of $2.2 billion, or 42 cents a share, on revenues of $11.5 billion easily beat analysts' expectations. The San Jose networking giant, the fifth largest Silicon Valley tech company in terms of revenues, has been suffering from a slowdown in emerging markets, but found growth in United States demand for mobile networking gear. "We saw strength across a number of areas of our business," CEO John Chambers said in Wednesday's conference call. Cisco shares dropped 0.2 percent to $22.81 in Wednesday's regular trading session, then jumped to more than $24.30 in after-hours action following the report's release.
Agilent joined Cisco in releasing earnings Wednesday, announcing a net income of $150 million, or 45 cents a share, on sales of $1.73 billion; shares dipped slightly in late trading after falling 1.7 percent to $55.85 in the regular session. Google dropped 1.3 percent to $534.41 as a variety of protesters gathered outside the Mountain View company's annual shareholders meeting while Google Glass reached the open market in the United States. Apple added 11 cents to $593.87 as analysts examined the possible breakdown of iPhone sales while Norway cast a stern eye at iCloud. Tesla Motors gained 0.2 percent to $190.62 after CEO Elon Musk divulged more information about its planned "gigafactory" in a talk at the company's Fremont factory, and Netflix added 1.4 percent to $351.88 after a report showed it was responsible for an increasing amount of Internet traffic. Redwood City-based Shutterfly fell 2 percent to $38.22 after an embarrassing email snafu, and Yahoo dropped 0.7 percent to $34.17 after acquiring Snapchat rival Blink.
Up: Netflix, Gilead, Symantec, Tesla, eBay, Adobe, Apple
Down: Zynga, EA, SunPower, Yelp, Twitter, Workday, LinkedIn, SanDisk, Google, AMD, Juniper, Facebook, Nvidia, Hewlett-Packard, Intuit
The SV150 index of Silicon Valley's largest tech companies: Down 5.48, or 0.39 percent, to 1,391.57
The tech-heavy Nasdaq composite index: Down 29.54, or 0.72 percent, to 4,100.63
The blue chip Dow Jones industrial average: Down 101.47, or 0.61 percent, to 16,613.97
And the widely watched Standard & Poor's 500 index: Down 8.92, or 0.47 percent, to 1,888.53