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Sumo Logic IPO: What Investors Need To Know

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Sumo Logic IPO: What Investors Need To Know

In a busy week of IPOS, Sumo Logic (NASDAQ: SUMO) is set to debut on Thursday.

The Filing: Sumo Logic sold 14.8 million shares at $22 each. This was above the company’s pricing range of $17 to $21. Editor's note: The stock opened at $26.64.

About Sumo Logic: “Sumo Logic is the pioneer of Continuous Intelligence, a new category of software, which enables organization of all sizes to address the challenges and opportunities presented by digital transformation, modern application, and cloud computing,” according to the IPO filing.

Sumo Logic is the pioneer of Continuous Intelligence, a new category of software, which enables organizations of all sizes to address the challenges and opportunities presented by digital transformation, modern applications and cloud computing.

The company believes businesses need five things to compete in the intelligence economy: Modern application architectures, multi-cloud adoption, continuous security, continuous collaboration, and data-driven intelligence.

Sumo Logic had 2,131 customers as of April 30. The company ended the last fiscal year with 1,900 customers. The company had 27 customers at the end of April that provided over $1 million in annual revenue.

Sumo Logic counts companies like 23andMe, JetBlue, Major League Baseball, Netflix, Salesforce.com and Twilio as customers.

From IDC data, Sumo Logic believes it competes in a market worth $55.1 billion due to it covering multiple industries. IDC forecasts 140 ZB of data generated, with 25% of that coming in real time. The transition to cloud was listed as a major benefactor for Sumo Logic.

“Continuous intelligence will become even more of a strategic imperative. We believe this growing adoption of cloud infrastructure across all organizations will continue to drive demand for our platform,” according to the filing.

Growth: Sumo Logic has listed the following as its key growth strategies going forward:

  • Grow our customer base.
  • Expand within our customer base.
  • Continue to enhance and innovate our offerings.
  • Deepen our sales channels and technology partnerships.

Within the grow our customer base section was a focus on international expansion. The company counts only 16% of its yearly total in international revenue. The last quarter saw this percentage rise slightly to 17%. The company has sales offices in Japan and the United Kingdom and wants to see its international revenue grow.

Financials: Sumo Logic reported revenue of $155.1 million for its last full fiscal year. This represented year-over-year growth of 53%. For the most recent quarter, revenue grew 45% year over year to $47.2 million.

Sumo Logic reported a net loss of $92.1 million in the last full fiscal year. The most recent quarter had a reported net loss of $23.6 million.

 

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