According to a MarketsandMarkets report, the global cloud-based ITSM industry is expected to grow 15% annually over the next five years to be worth $8.78 billion in 2021. Bellevue, Washington-based Apptio (Nasdaq: APTI), which listed last year is trying to make its mark in this industry.
Apptio’s Financials
Apptio was founded by Sunny Gupta, Kurt Shintaffer, and Paul McLachlan with the intention of offering a service that could help the CIOs of organizations manage the business of technology more efficiently. It soon developed a platform that integrates Cost Transparency, IT Planning, IT Benchmarking, Bill of IT, and Business Insights SaaS applications into a service that helps align technology investments to business priorities, engage business stakeholders to drive accountability and value, and optimize and increase efficiency of hybrid IT resources. Its service is able to automatically aggregate, cleanse, and establish relationships across disparate financial, operational, and vendor invoices and map that data into its standard IT cost model. It claims that the deployment of its platform helps IT organizations channel 3-5% of their spending over five years into innovation that is more strategically aligned with the broader goals of the business.
Apptio recently reported its first quarter results for the year that surpassed market expectations. Revenues for the quarter increased 19% over the year to $36.2 million driven by a 20% growth in subscription revenues. Services revenues grew 18% over the year to $7.7 million. Adjusted net loss of $0.08 per share was better than the Street’s forecast of a loss of $0.12 per share.
Apptio’s continued losses are attributed to its high expenditure on R&D and sales and marketing. During the last quarter, R&D spend increased 15% to $9.7 million and sales and marketing spend grew 17% over the year to $19 million.
For the current quarter, Apptio forecast revenues of $43.5-$44 million and it projected the year’s revenues between $179-$182 million.
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