Workday's (WDAY) strong debut on Friday marked the 16th on-demand enterprise software IPO this year. The group has performed exceptionally well, posting an average first day gain of 34% (vs. 14% average for all IPOs YTD) and an average total return of 47% (vs. 20%), a reflection of investors' ongoing interest in growth and high revenue visibility.
E2open (EOPN), the only on-demand enterprise software IPO that has traded down on its first day, saw redemption this week after reporting slightly better-than-expected results on Monday after the close. Since its earnings announcement, E2open has jumped 29%, bringing it back above its offer price and at a post-IPO high.
Workday lived up to its hype on Friday and closed its first day of trading up 75%, solidifying its spot as the fifth largest first day gain this year, behind big data software provider Splunk (SPLK; +109% first day pop), mobile ad platform Millennial Media (MM; +92%), organic food maker Annie's (BNNY; +89%) and quick-turn protoype manufacturer Proto Labs (PRLB; +81%).
Workday now commands the highest valuation of this year's on-demand IPOs with a fully diluted market value of $9.4 billion (44x trailing 12 month sales). IT automation software provider ServiceNow (NOW) follows with a market value of $5.4 billion (29x trailnig sales). Guidewire (GWRE), ExactTarget, (ET)Demandware (DWRE) and Bazaarvoice (BV) each have market values in excess of $1 billion.
| Company (Ticker) | IPO Date | Market Value | EV/LTM Sales | First Day Pop | Return from IPO |
|---|---|---|---|---|---|
| Workday (WDAY) | 10/11/12 | $9.4 billion | 44x | 75% | 75% |
| ServiceNow (NOW) | 6/28/12 | $5.4 billion | 29x | 37% | 85% |
| Guidewire (GWRE) | 1/24/12 | $1.8 billion | 7x | 32% | 132% |
| ExactTarget (ET) | 3/21/12 | $1.7 billion | 6x | 32% | 21% |
| Demandware (DWRE) | 3/14/12 | $1.2 billion | 16x | 47% | 109% |
| Bazaarvoice (BV) | 2/23/12 | $1.0 billion | 8x | 38% | 25% |
