Rally Software (RALY) Files $70M IPO - InvestingChannel

Rally Software (RALY) Files $70M IPO

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Rally Software (NYSE: RALY) filed an $70 million IPO on form S-1 with the SEC late Monday. The company plans to list on NYSE under the symbol “RALY.”

Deutsche Bank Securities Inc. and Piper Jaffray & Co. will act as lead book-running managers for the offering. Needham & Company, LLC, JMP Securities LLC and William Blair & Company, L.L.C. will act as co-managers.

Rally Software is a leading global provider of cloud-based solutions for managing Agile software development. The company’s platform transforms the way organizations manage the software development lifecycle by enabling close alignment of software development and strategic business objectives, facilitating collaboration, increasing transparency, and automating manual processes. As of October 31, 2012, Rally Software had 154,982 paid users and more than 1,000 customers, including 36 of the Fortune 100 companies.

From fiscal 2011 to fiscal 2012, Rally Software’s subscription and support revenue grew from $19.9 million to $31.1 million, representing a 56% year-over-year growth rate. For the nine months ended October 31, 2011 and 2012, subscription and support revenue grew from $22.2 million to $31.4 million, representing a 41% period-over-period growth rate. The company primarily sell solutions through one-year subscriptions. For fiscal 2012, the renewal rate among existing customers was 129%, taking into account paid seat nonrenewals, upgrades and downgrades.

From fiscal 2011 to fiscal 2012, total revenue grew from $29.7 million to $41.3 million, representing a 39% year-over-year growth rate. For the nine months ended October 31, 2011 and 2012, total revenue grew from $30.1 million to $41.4 million, representing a 38% period-over-period growth rate. The company recorded net losses of $9.9 million, $11.6 million and $6.7 million in fiscal 2011, 2012 and the nine months ended October 31, 2012, respectively.

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