LSV 150 Company Insights - 2023

The Lon­er­gan SV150 is the defin­i­tive rank­ing of the top pub­lic com­pa­nies in tech­nol­o­gy locat­ed in the Sil­i­con Valley.

Only in Sil­i­con Val­ley could a sec­tor with record high rev­enues, sales growth high­er than infla­tion, and close to $250 bil­lion in net income be judged a ​“trou­bled industry.”

With Spring com­ing and the Sil­i­con Val­ley Bank deposit cri­sis behind us, many in Sil­i­con Val­ley are hop­ing the tech sec­tor is liv­ing through the ​“pain” before the ​“gain.” Lay­offs have been announced at over 50 of the com­pa­nies in the rank­ings, and com­pa­nies are prun­ing less promis­ing invest­ments and lin­ing up behind the ban­ner of ​“effi­cien­cy.” 

Adap­ta­tion is the theme for 2023 in the Sil­i­con Val­ley, and the com­pa­nies behind the tech tools need­ed to com­pete glob­al­ly are work­ing to get their own hous­es in order.

Read on for Lon­er­gan Part­ners insights and analy­sis of the com­pa­ny per­for­mance changes (below) and peo­ple lead­er­ship trends impact­ing the top 150 pub­lic com­pa­nies in tech­nol­o­gy in the Sil­i­con Valley.

The ​“Big Sto­ry” — Sil­i­con Val­ley pub­lic tech com­pa­nies adapt to the post pan­dem­ic economy

2022 results in the Lon­er­gan Sil­i­con Val­ley 150 offered up mod­est growth along­side low­er prof­its in a shift­ing world economy:

Rev­enues: up 8.5% from last year’s rank­ing, to $1.67 Tril­lion - a new record high — with 2022 infla­tion run­ning 6.5% accord­ing to the Depart­ment of Labor. Most of the LSV150 ranked coun­tries (116 out of 150, or 77%) grew sales faster than the rate of infla­tion.
Net income: the rank­ings saw net income drop 28% from last year’s rank­ings, to $246 Bil­lion - well off the record high of $342 Bil­lion set in 2021, but still show­ing a sub­stan­tial increase from 2020 (his­tor­i­cal met­rics not adjust­ed for infla­tion). Pos­i­tive 2022 net income was report­ed at 69 com­pa­nies, about the same num­ber as were prof­itable in 2021.
Mar­ket cap: down 11.9% from March 31 of last year, to $9.3 Tril­lion, after six con­sec­u­tive years of the rank­ings show­ing mar­ket cap gains. 

Apple cre­ates a drag on growth

#1 ranked Apple (rep­re­sent­ing 23% of Lon­er­gan SV150 total rev­enue) grew cal­en­dar year 2022 rev­enues by only 2% (after report­ing 29% growth for the 2021 cal­en­dar year). With­out Apple’s drag on growth, the Lon­er­gan SV150 increased rev­enues by 10.4%.

Note: the Apple fis­cal year end­ed Sep­tem­ber 30, 2022; Apple fis­cal year results adjust­ed to cal­en­dar year per our rank­ing method­ol­o­gy. 

Sur­prise! 1 in 4 Lon­er­gan SV150 com­pa­nies show high­er mar­ket caps year-over-year

Tech sec­tor sup­port has improved since the last half of 2022, with almost 1 in 4 com­pa­nies now in pos­i­tive year-over-year mar­ket cap ter­ri­to­ry, as opposed to only 1 in 10 back in Sep­tem­ber, 2022. 

Aggre­gate mar­ket cap for the Lon­er­gan SV150 as of March 31, 2023 was down 11.9% year-over-year, com­pared to the tech heavy NAS­DAQ com­pos­ite which was down 15.4%. 

Let’s look at the changes in mar­ket cap by category:

Note: Table reflects all 150 ranked com­pa­nies year-over-year mar­ket cap changes. 138 com­pa­nies from the 2022 rank­ings remain, and 12 are new­ly added to the list.

No slow­down in acqui­si­tion-based departures

As of this post­ing, ten Lon­er­gan SV150 ranked pub­lic com­pa­nies have been ful­ly acquired and delist­ed since our rank­ing last year. These include: 

• (2022 LSV#36) Twit­ter tak­en pri­vate by Elon Musk
• (2022 LSV#52) Zyn­ga acquired by Two Interactive
• (2022 LSV#67) Poly acquired by HP Inc.
• (2022 LSV#72) Coher­ent  merged with II-VI and moved to Pennsylvania
• (2022 LSV#79) Zen­desk acquired by pri­vate equi­ty consortium
• (2022 LSV#102) Coupa Soft­ware acquired by Thoma Bravo
• (2022 LSV#109) Ana­plan acquired by Thoma Bravo
• (2022 LSV#116) Natus Med­ical acquired by Archimed
• (2022 LSV#139) Posh­mark tak­en private 
• (2022 LSV#142) NeoPho­ton­ics acquired by Lumen­tum

As of the time of this analy­sis in April 2023, there are two addi­tion­al LSV150 ranked com­pa­nies in the process of being acquired/​going pri­vate, includ­ing Broad­com​’s inten­tion to acquire LSV#23 VMware,  and Fran­cis­co Part­ner’s bid to acquire LSV #141 Sumo Log­ic.

Note: the cur­rent pace of acqui­si­tions is only slight­ly off from the pre­vi­ous twelve months. when there were twelve com­pa­nies com­ing off the pri­or year’s rank­ing after being ful­ly acquired.

2022: the year of no new tech IPOs

With the tech IPO mar­ket large­ly dor­mant in 2022, most of our new­ly ranked com­pa­nies were drawn from pub­lic debuts which took place in 2021.

All 9 recent­ly pub­lic com­pa­nies added to this year’s rank­ings for the first time are shown below:

Rate of HQ departures slows way down

After 15 companies of the Lonergan SV150 moved headquarters out of Silicon Valley in 2020-2021, only one company from last year's rankings moved away in the past 12 months: LSV #45 Trimble, which moved to Westminster, Colorado. 

Even as Silicon Valley sees a new trend in headquarters being moved out of the area, the actual concept of corporate headquarters may be changing. Joint Venture Silicon Valley notes in its 2023 Index that the Silicon Valley has embraced remote work at a higher rate than any other region of the US, with 35% of Silicon Valley workers operating from home (up from 9% in 2019). In a graphic illustration of this, LSV#20 Block even notes its location on its press releases as "Distributed Workforce Model/San Francisco." 

Regardless of trends in the adoption of remote work, LSV150 companies still opt to identify their principal executive offices, and the Silicon Valley remains popular as the place to locate public tech company headquarters.  In fact, 35 of the companies currently in the Lonergan SV150 are also constituent stocks of the S&P 500, which is a measure of the size and stability of the tech companies in Silicon Valley.

Lonergan SV150 headquarters still mostly in Santa Clara county

Santa Clara county is host to 63 of the LSV 150 headquarters, more than any other Bay Area county.  Even without behemoth Apple (LSV#1) with its "spaceship" headquarters in Cupertino, the companies headquartered in Santa Clara represent 49% of our rankings' revenues and 47% of market cap.

Farther north, San Fran­cis­co is now home to 45 (30%) of Lonergan SV150 headquarters, which is a doubling since 2018. The companies headquartered in San Francisco represent 10% of revenues and 12% of market cap.

Alameda and Contra Costa counties have grown from hosting 15 HQs two years ago to 19 HQs today.  San Mateo County also continues to grow, now with 23 HQs overall.

Geographic changes of note:

LSV #42 Autodesk, which last year was our lone company with a Marin county HQ, has moved its HQ to San Francisco.
Likewise, we lost our lone Santa Cruz county headquartered company, Poly (ranked #67 last year), to a 2022 acquisition.

See our map of Lonergan SV150 headquarters by county below:

Read the LSV 150 Peo­ple Insights for updates on tech lay­offs, board and CEO gen­der diver­si­ty, and CEO tenure trends…