How well did Klaviyo, Arm and Instacart actually do in their first test on the public markets?

Speak to any CEO on the day their company goes public, and they will tell you that the IPO is just another step on their journey, that the company is not done yet, that they’re just getting started.

This is true. It is also true that going public is a major milestone for any company.


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CEOs like to downplay the moment as more incremental than transformational. You, on the other end of the phone or video call, nod, knowing that you are being told a bit of spin and knowing that the CEO also knows that you know. It’s a dance.

Still, that CEO is right that going public is not the end of their journey. Now they’re the CEO of a listed company and have to sit down with analysts and investors regularly to answer for their company’s performance. That’s a change.

To that end, three recent tech IPOs just reported their financial performance for the first time as public companies, and I want to talk about their results. Not only because I am far too curious how these former startups did, but also because going public often entails certain costs that can make newly public companies appear massively unprofitable right out the gate. Also, some headlines that I have seen this morning have me scratching my head.

So, let’s do a quick summary of results from Arm (chip design), Klaviyo (business software), and Instacart (grocery delivery and ads) and ask how they perform once we allow for IPO-related costs. After all, the better (or worse) these companies fare, the more (less) likely we are to see other private tech shops try to follow suit.

 Earnings roll call

Arm reported revenue of $806 million in its second quarter ended September 30, up 28% from the $630 million it reported a year earlier. The company’s strong gross margins of more than 90% were not enough to generate enough gross profit, however, to cover its whole-cloth operating expenses of $916 million, leading to a $156 million operating loss and a $110 million net loss. The company was profitable in the same quarter a year earlier.

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