Lonergan SV150 Insights 2019

The Lon­er­gan SV150 is the defin­i­tive list of the top pub­lic com­pa­nies in tech­nol­o­gy locat­ed in the Sil­i­con Val­ley. It is the suc­ces­sor to the SV150 list pub­lished for over thir­ty years by The Mer­cury News, which as of 2018 has been suspended.

As we do more analy­sis of the trends and sto­ries of the Lon­er­gan SV150, we will post our insights on this page. Check back peri­od­i­cal­ly or fol­low us on Twit­ter and LinkedIn.

SV150 Rev­enues top $1 tril­lion for the first time

The Lon­er­gan SV150 had total 2018 rev­enues of $1.085 tril­lion, which rep­re­sents 15% same com­pa­ny growth year-over-year. This strong rev­enue growth was achieved despite a slight slow­down at #1 ranked Apple (rep­re­sent­ing 24% of Lon­er­gan SV150 rev­enue). Apple grew cal­en­dar year 2018 rev­enues by 9%, ver­sus 10% rev­enue growth for the 2017 cal­en­dar year (Apple fis­cal year adjust­ed per our rank­ing method­ol­o­gy; the Apple fis­cal year end­ed Sep­tem­ber 29, 2018).

Total net income for the Lon­er­gan SV150 was $193 bil­lion, up 62% from the pri­or year. Mar­ket cap was also up from $4.4 tril­lion to $4.9 tril­lion, despite the mar­ket volatil­i­ty over the past 12 months. 

For a ten year ret­ro­spec­tive on the changes in the SV150 2009 – 2018, please read our blog post The Lon­er­gan SV150: Look­ing Back 10 Years.

For an extend­ed com­pa­ny pro­file on each of the Lon­er­gan SV150, includ­ing mar­ket cap, net income and per­for­mance ratios, click below for a down­load­able PDF work­sheet suit­able for printing.

Down­load the SV150 Worksheet

Slowdown in acquisition-based departures

A total of eight Lonergan SV150 ranked pub­lic com­pa­nies have been ful­ly acquired and delist­ed since our ranking last year. These include Verifone, Pandora, Cavium, IDT, Oclaro, Imperva, Abaxis, and Hortonworks.

This level of acquisition activity represents a slowdown from 2016-17,  which were two cat­a­clysmi­cal­ly active acquisition years. The peak year for M&A among large public companies on the list was 2016, when 18 companies on the prior year’s list went away. The current pace of recent acqui­si­tions is approaching 2012-15 average levels of six acquisitions per year.

The largest company on last year’s ranking to be acquired was #50 (2018 list) ranked Verifone, a global payment and commerce solution provider, which was bought by Francisco Partners, a tech-focused private equity firm, in a 2018 deal said to be worth $3.4 billion.

In the first half of 2019, only four companies on last year’s ranking have been acquired. Several additional ranked companies are in the process of being acquired, including #46 Cypress and #52 Shutterfly.

The return of IPOs

Ten recent IPOs are debut­ing on the Lon­er­gan SV150 this year, fol­low­ing an equal­ly impres­sive show­ing from last year’s list, which also boast­ed ten new IPOs.

The high­est rank­ing debut IPO on the Lon­er­gan SV150 is Num­ber 18 ranked Uber, with 2018 rev­enues of over $11 Bil­lion. Recent IPOs have remade the land­scape of the Sil­i­con Val­ley, with 49 of the Lon­er­gan SV150 made up of com­pa­nies with IPOs from 2014 on. 

All ten new IPOs are list­ed below:

Mar­ket cap reflects val­ue on June 7, 2019. Uber prof­itabi­ly shown on the table reflects ​“nor­mal­ized” net income report­ed by Thom­son Reuters; unad­just­ed net income for 2018 includ­ing one-time gains was pushed into the pos­i­tive, most­ly from the sale of its Russ­ian and South­east Asia businesses.

The South Bay con­tin­ues to be the geo­graph­i­cal hub of Sil­i­con Val­ley head­quar­tered pub­lic tech companies

The South Bay is still the cen­ter of grav­i­ty for the pub­lic com­pa­ny tech world. Despite VC and start-up com­pa­ny flight north­wards, the South Bay (from Moun­tain View south to San Jose and includ­ing Fre­mont) rep­re­sents well over half of the Lon­er­gan SV150 com­pa­ny head­quar­ters. By con­trast, San Fran­cis­co rep­re­sents only 20% of Lon­er­gan SV150 head­quar­ters. This met­ric has been increas­ing in recent years how­ev­er, mov­ing San Fran­cis­co coun­ty into sec­ond place among the sev­en coun­ties rep­re­sent­ed in our rank­ing (oth­er coun­ties are San Jose, San Mateo, Alame­da, Con­tra Cos­ta, Marin and San­ta Cruz).

• 83 of the com­pa­nies in the Lon­er­gan SV150 are head­quar­tered in San­ta Clara county.
• Six of ten IPOs debut­ing on the list are head­quar­tered in San Francisco 

Women CEOs still rare (there’s one more than last year)

Despite an unprece­dent­ed lev­el of atten­tion focused on the issue of women in tech, the num­ber of women CEOs rep­re­sent­ed on the list went up only one ver­sus 2018. Nev­er­the­less, we cel­e­brate the arrival of Julia Hartz, CEO-founder of 2018 IPO Eventbrite (LSV #122). 

The cur­rent sev­en women CEOs of the Lon­er­gan SV150 are:

• Safra Catz, Ora­cle (LSV #7)
  
• Lisa Su, AMD (LSV #24)
• Jayshree Ullal, Arista (LSV #49)
• Kat­ri­na Lake, Stitch Fix (LSV #61)
• Lynn Jurich, Sun­run (LSV #85)
• Kim­ber­ly Popovits, Genom­ic Health (LSV #111)
• Julia Hartz, Eventbrite (LSV #122) — IPO 2018
  

Big improve­ment in women on boards 

As of May 2019 proxy sea­son, women direc­tors fill 23% of the board seats on the Lon­er­gan SV150. Com­pared to our study of Sil­i­con Val­ley boards pub­lished in our 2015 Who Runs Sil­i­con Val­ley Board edi­tion, this is an increase of 9 per­cent­age points. A relent­less focus on gen­der diver­si­ty in the Sil­i­con Val­ley has yield­ed a change in recruit­ment at the board level. 

• Board seats filled by women: 157 in mid-2015 ris­ing to 307 today 
• Per­cent women held seats: 14% in mid-2015 ris­ing to 23% today 
• Num­ber of Lon­er­gan SV150 boards with no women direc­tors: 45 in mid-2015 drop­ping to 7 today 

Note: our 2015 board study reflect­ed the pop­u­la­tion of board direc­tors of the Sil­i­con Val­ley 150 in sum­mer 2015. Only 144 com­pa­nies were includ­ed at that time, because six com­pa­nies in The Mer­cury News list­ing had been acquired before sum­mer 2015. Our num­bers in the above com­par­isons have been adjust­ed to include the board pop­u­la­tions of those six com­pa­nies using the board pro­files in their April 2014 proxy filings. 

IPOs with CEO-founders con­tin­ue to debut with dual class stock own­er­ship structures

This year the num­ber of Lon­er­gan SV150 com­pa­nies uti­liz­ing a dual class stock own­er­ship (DCSO) struc­ture climbed from 22 to 27. This growth is a func­tion of its pop­u­lar­i­ty with new IPO CEO-founders. Exact­ly half of the new IPOs that hit the list this year employ a DCSO struc­ture, and all are founder-led. Com­pa­nies with this type of struc­ture have a sep­a­rate ​“super-vote” class of stock typ­i­cal­ly con­trolled by insid­ers only.

IPOs Using DCSO

1. Lyft (LSV #48) IPO 2019 under CEO-founder Logan Green — post IPO vot­ing pow­er NA
2. Pin­ter­est (LSV #86) IPO 2019 under CEO-founder Ben Sil­ber­mann — post IPO vot­ing pow­er NA
3. Zoom Video Com­mu­ni­ca­tions (LSV #116) IPO 2019 under CEO-founder Eric Yuan — vot­ing pow­er 22% pre-IPO
4. Eventbrite (LSV #122) IPO 2018 under CEO-founder Julia Hartz — vot­ing pow­er of Class B stock 17.4% pre-IPO
5. Fast­ly (LSV# 148) IPO 2019 under CEO-founder Artur Bergman — vot­ing pow­er 15.6% pre-IPO 

By con­trast, none of the CEOs at recent IPOs NOT employ­ing a DCSO struc­ture were called founders. 

IPOs Not Using DCSO

1. Uber (LSV #18) IPO 2019 under CEO Dara Khosrowshahi
2. SVMK (LSV #127) IPO 2018 under CEO Zan­der Lurie
   
3. Upwork (LSV #128) IPO 2018 under CEO Stephane Kasriel
4. Ana­plan (LSV #132) IPO 2018 under CEO Frank Calderoni
   
5. Son­im Tech­nolo­gies (LSV#150) IPO 2019 under CEO Robert Plaschke
   

Note: Source for vot­ing pow­er comes from the 2019 proxy; in cas­es where no 2019 proxy is filed, the com­pa­ny stock prospec­tus was used.