Here are the 4 Best Performing Tech IPOs in 2021

The tech industry has achieved massive growth since the onset of the COVID-19 pandemic on the growing demand for digitization and automation and cloud-based services. The rapid adoption of modern innovations across…

sectors over a short and compressed timeline has created growth opportunities for the tech industry.

Analysts are optimistic about the software industry, predicting18% annual earnings growth over the next five years. In addition, 97% of global companies have increased their technology adoption to navigate the pandemic. A survey by the World Economic Forum has found that the pandemic has accelerated the adoption and integration of digital technology among medium and small businesses.

This solid backdrop has helped the shares of tech IPOs DigitalOcean Holdings, Inc. (DOCN – Get Rating), Matterport, Inc. (MTTR – Get Rating), SEMrush Holdings, Inc. (SEMR – Get Rating), and Arqit Quantum Inc. (ARQQ – Get Rating) gain significantly in price since they went public last year. So, let’s look at these best performing IPOs of 2021.

DigitalOcean Holdings, Inc. (DOCN – Get Rating)

New York City-based DOCN is an international cloud computing platform operator. The company provides infrastructure solutions across compute, storage, networking and enable developers to expand the innate capabilities of the cloud. The company went public following a traditional IPO process on March 24, 2021, at $47 per share.

On Nov. 16, DOCN announced the pricing of an offering of $1.3 billion of 0% convertible Senior Notes, due 2026. From the $1.27 billion in expected net proceeds, the company intends to use approximately $350 million to repurchase shares of its common stock and the remaining for general corporate purposes.

In September, DOCN acquired server-less platform provider Nimbella. The acquisition should expand the company’s operational capabilities into the function-as-a-service (FaaS) market.

For its fiscal third quarter, ended Sept. 30, DOCN’s revenue increased 37.3% year-over-year to $111.43 million. Its adjusted gross profit improved 42.7% from the prior-year quarter to $88.96 million. Its non-GAAP net income and non-GAAP net income per share rose 439.4% and 300%, respectively, from the same period last year to $14.16 million and $0.12.

An $0.11 consensus EPS estimate for the quarter ending March 2022 indicates a 266.7% year-over-year increase. And the $125.87 million consensus revenue estimate for the quarter reflects a 34.4% improvement from the prior-year quarter. Furthermore, DOCN has an impressive surprise earnings history; it has topped consensus EPS estimates in three  of the trailing four quarters.

The stock has gained 71.3% in price since it went public on March 24 and 29.8% over the past six months to close yesterday’s trading session at $72.78.

Click here to check out our Cloud Computing Industry Report Matterport, Inc. (MTTR – Get Rating)

MTTR operates as a spatial data company focused on digitizing and indexing the built world. The Sunnyvale, Calif., company’s offerings include Matterport digital twins, Matterport Capture, Matterport Workshop application, Matterport Showcase application, and Matterport VR. MTTR went public after a business combination with special purpose acquisition company (SPAC) Gores Holdings VI on July 23, 2021.

On Dec. 15, MTTR announced that it would redeem all its outstanding warrants for purchasing shares of the Company’s Class A common stock. Regarding the redemption, J.D. Fay, Chief Financial Officer of MTTR, said, “If all of the Public Warrants are exercised on or prior to the redemption date, we will add approximately $79 million to the balance sheet, which is additive to the $640 million of gross proceeds raised in the closing of the merger in July 2021.”

On Dec. 9, the company announced that…

 

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