Analytics and AI pioneer SAS announced on July 29 that it is preparing to be ready for an initial public offering (IPO) by 2024. The news comes just a few weeks after reports about the company at first being in talks and then ending talks with Broadcom about a potential sale to the semiconductor giant.
SAS' CEO and founder Jim Goodnight emphasized the company's strength and stability in a statement issued by the company.
"By moving toward IPO readiness, we can open up new opportunities for SAS employees, customers, partners, and our community to participate in our success, ensuring the brightest possible future for all of us," Goodnight said in the prepared statement. "As an organization, we are on a solid path forward, with sustainable growth that continues to build upon the trusted brand and platform we have created. We have built a strong operational and financial foundation, setting us up for an even better future. Now, it's time to prepare for this next chapter."
The nature of that next chapter, however, is less clear given the long preparation period of 2 to 3 years for the IPO prep.
Omdia chief analyst for AI platforms, analytics, and data management Bradley Shimmin told InformationWeek that it's hard to speculate about what the announcement means and what will happen because the IPO readiness program is targeting a date so far out in the future. He characterized SAS as a company whose leadership, Goodnight and co-founder John Sall, has taken the long view when it comes to navigating a competitive market landscape rather than grabbing at an immediate return.
"It is quite possible of course that this is another signal that portends a willingness to explore a partnership or acquisition opportunity," Shimmin said. "Or it could genuinely reflect an interest in building toward an eventual IPO. I think if this does point to a change of character, then it might signal the company's recognition that longstanding its leadership is considering stepping back or moving into a different role over the long term. Of course, only time will tell."
Of course an IPO can provide an exit strategy for a company's owners, in this case, Goodnight and Sall. Goodnight is currently 78 years old, and the stated timing of this IPO readiness -- 2 to 3 years out -- puts a deadline right between his 80th and 81st birthdays.
The privately held company provided a rare glimpse inside its financials in the IPO prep announcement, saying that in 2020 it generated approximately $3 billion in revenue and achieved its 45th consecutive year of profitability. SAS also said that it achieved an 8.4% revenue growth in the first half of 2021.
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