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Mobileye Global (NASDAQ: MBLY)

Mobileye Global LogoMobileye Global (NASDAQ: MBLY), a provider of advanced driver assistance systems (ADAS) and autonomous driving technologies, is a recent addition to our Battle Road IPO Review. Founded in 1999 by Amnon Shashua, a Hebrew University professor and researcher, the company first deployed its solutions on vehicles in 2007.  Today, Mobileye is headquartered in Jerusalem, Israel, where it is still led by Shashua, who acts as the company’s CEO, President, and Director.

Mobileye first debuted on the New York Stock Exchange on August 1st, 2014.  The company continued trading on the exchange until March 2017, when it was purchased by Intel for $15.3 billion.  At the time, Mobileye’s market cap was roughly $10.5 billion. Intel’s thinking at the time, was that Mobileye’s ADAS offerings, essentially software embedded on a computer chip, would complement Intel’s core chip offerings. Perhaps realizing the lack of synergy with its core business, Intel elected to carve out the business, while retaining voting rights. Thus, Mobileye returned to trading desks on October 26th, 2022 as a spinoff of Intel.  This late-October IPO entailed the sale of 47.2 million Class A common stock shares, inclusive of the underwriters’ 30-day option to purchase up to an additional 6.2 million shares, with all shares coming from the company.  Mobileye also sold 4.8 million Class A common stock shares to General Atlantic in a private placement for gross proceeds of $100 million.  In total, with a 2022 IPO share price of $21, Mobileye generated net cash of roughly $1 billion from the IPO and private placement.  When added to the company’s pre-IPO cash balance of $774 million, Mobileye possessed $1.8 billion in cash with no debt immediately after the offering.

Mobileye is a pioneer in the production of advanced driver assistance systems (ADAS) and autonomous driving technologies and solutions.  Mobileye’s offerings are based on its expansive purpose-built software and hardware technologies that are made to supply the necessary functions to enhance ADAS and autonomous driving.  Further, these technologies can already be leveraged in vehicles to provide mission-critical activities that make roads and vehicles safer, and can be delivered at the edge or in the cloud.

Mobileye projects that the current total addressable market for its ADAS solutions is $16 billion, and the company predicts that its total addressable market will rise to $480 billion by the end of 2030, inclusive of the ADAS segment as well as the autonomous vehicle market.  Mobileye has carved out a solid share of this current market, as the company generated 2020 revenue of $967 million with a net loss of $196 million.  In 2021, Mobileye’s revenue jumped 43 percent to $1.4 billion, and the company’s net loss shrunk to $75 million.  Mobileye notes that essentially all of its revenue currently comes from its commercially deployed ADAS products.

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Momentive Global (NASDAQ: MNTV)

Momentive Global LogoMomentive Global (NASDAQ: MNTV), formerly SurveyMonkey, is a leading provider of cloud-based survey software products that enable companies to better engage with customers and employees. Founded as SurveyMonkey in 1999, and based in San Mateo, California, the company is best known for its flagship SurveyMonkey customer feed-back software. An out-of-favor stock, Momentive Global has had a storied history since its IPO five years ago.

The company, then known as SurveyMonkey, priced its 15 million share IPO at $12 per share on the NASDAQ on September 25th 2018. The underwriters subsequently exercised their option to purchase an additional 2.25 million shares. The IPO was led by J.P. Morgan Securities, Allen & Company and BofA Merrill Lynch. Credit Suisse, UBS, Wells Fargo, SunTrust Robinson Humphrey, Code Advisors, Foros, JMP Securities and LionTree Advisors.

Momentive Global is best known for its namesake SurveyMonkey cloud-based questionnaire software that is primarily used for customer feed-back, TechValidate, a marketing content automation software solution, and SurveyMonkey Engage, which is focused on internal employee surveys and feed-back.

In June of 2021, the company changed its name to Momentive Global, reflecting its wider range of customer and employee experience management offerings, which include the addition of market research services. In October of 2021, the company announced that it would be acquired by Zendesk in an all-stock transaction for roughly $4.1 billion. With the intent to expand from customer service to a broader market of global customer intelligence, Zendesk, at the time, appeared to be particularly interested in the SurveyMonkey portion of the business. However, the deal was ultimately rejected by Zendesk shareholders, and Zendesk was forced to terminate the transaction. Zendesk was ultimately taken private in June of last year in a $10 billion acquisition by an investor group led by Permira and Hellman and Friedman.

Today, more than 345,000 organizations around the world use one or more of MNTV’s products, and the company notes that it has over 17 million active users that draw on market insights, brand insights, as well as employee, customer, and product experiences. Over 95 percent of the Fortune 500 use a Momentive product.

In a measure to return cash to shareholders, the company initiated a share repurchase plan in February of 2022 with the intent to repurchase up to $200 million of its common stock. Through the first three quarters of last year, Momentive had repurchased $84 million. At the end of Q3, MNTV held $193 million in cash along with $183 million in debt, for a net cash position of $183 million. The company’s DSOs are 23 days, a reasonable level, attesting to the short-term nature of most of its customer contracts, which are said to be of a duration of one year or less. The company announced an 11 percent workforce reduction, coinciding with its Q3 2022 earnings results. Last month, the company appointed a new CFO, Rich Sullivan, whose experience includes stints at Dreamworks, Twitter, and AT&T.