Livongo Health IPO: What You Need To Know

A health care company that has shown strong top-line growth, benefiting from the escalating incidences of chronic illnesses is testing the IPO waters this week.

The IPO Terms

Mountain View, California-based Livongo Health, Inc. has filed a preliminary prospectus with the SEC to offer 10.70 million shares at an estimated price of $24-$26.

At the midpoint of the estimated price range, the size of the offering is $267.5 million.

The company's shares have been approved for listing on the Nasdaq under the ticker symbol LVGO.

Kinnevik Online AB, which holds more than 5% of Livongo's outstanding capital stock, has expressed willingness to buy up to $20 million worth of shares or about 800,000 shares, the company said in the filing.

Morgan Stanley, Goldman Sachs and JPMorgan are the lead underwriters for the offering.

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The Company

Livongo's platform named AI+AI, leverages data science and technology, creating a new kind of personalized experience for people with chronic conditions. While also assisting with tracking and gathering data on their condition, the platform also provides actionable feedback.

The feedback helps the members to make sustainable behavior changes that lead to better outcomes and lower costs.

Its clients are employers, health plans, government entities and labor unions etc, with its business based on a recurring revenue model.

As of June 30, 2019, the company had 720 clients and over 192,000 Livongo for Diabetes members.

Livongo's business capitalizes on the widespread prevalence of chronic conditions. As of 2014, about 60% of the U.S. adults lived with one or more chronic conditions, and over 40% had two or more chronic conditions, the company said, citing estimates.

The Finances

For the fiscal year ended Dec. 31, 2018, the company reported revenues of $68.43 million, more than doubling from the $30.85 million reported for fiscal year 2017. The net loss for the year, however, widened from $17 million to $33.54 million.

For the three months ended March 31, the company reported revenues of $21.92 million compared to $9.36 million for the year-ago quarter. It reported a loss of $15 million compared to the year-ago loss of $4.25 million.