Pivotal files for IPO

The software company, of which Dell is the majority shareholder, has yet to become profitable, its filing shows.
Written by Stephanie Condon, Senior Writer

Pivotal Software, of which Dell Technologies is the majority shareholder, has filed to go public.

In its S-1 form filed with the US Securities and Exchange Commission, the company showed that its revenue is growing but it continues to incur losses.

For the fiscal year that ended February 2, the company says it brought in $259 million in subscription revenue, representing 73 percent year-over-year revenue growth.

Total revenue was $280.9 million in 2016, $416.3 million in 2017 and $509.4 million for fiscal 2018, respectively. For the most recent fiscal year, that represents year-over-year growth of 22 percent.

Pivotal's net loss was $282.7 million in 2016, $232.9 million in 2017 and $163.5 million for fiscal 2018.

Pivotal spun out from DellEMC and VMware in 2013 and in November 2013 announced its loud-native software development platform Pivotal Cloud Foundry (PCF). The company also offers complementary strategic services, Pivotal Labs ("Labs"). Since then, its PCF customer count has grown to 319 as of the end of the 2018 fiscal year.

"There is a positive correlation between customers using Labs and the expansion of their PCF subscriptions," Pivotal notes in its filing. Additionally, at the end of fiscal 2018, its trailing four-quarter dollar-based net expansion rate was 158 percent.

While the company continues to grow, it notes under "risks" that, "we have incurred substantial losses and may not be able to generate sufficient revenue to achieve and sustain profitability."

Pivotal did not indicate where it would list shares or what its stock symbol would be. Following the offering, Dell will remain the majority shareholder, Pivotal said.

This article was amended to clarify that Dell is the majority shareholder of Pivotal, but is not the sole owner.

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