Riverbed Sets IPO Terms

Five months after it first filed IPO forms with the Securities and Exchange Commission (SEC) , Riverbed Technology Inc. (Nasdaq: RVBD) has revealed the terms of its long-awaited listing on Nasdaq . (See Riverbed Makes It Official, Riverbed Scales Up, and Where Are the IPOs? )

According to a new filing with the SEC, the WAN acceleration vendor will offer almost 8.4 million shares at a range of between $7 and $8.50. In addition, the underwriters, led by Goldman Sachs & Co. , have the option to buy a further 1.26 million shares from Riverbed, putting the maximum possible proceeds from the listing at about $82 million, and the minimum at nearly $59 million.

The company, which has raised $38 million in VC backing since its inception in May 2002, is applying to use the ticker RVBD. (See Riverbed Scores $20M.)

The filing shows that, in the six months to June 30 this year, Riverbed's revenues shot up to $31.8 million, from $5.2 million in the first half of 2005, and its customer base totaled more than 1,000, up from 500 at the beginning of this year. The company reported total revenues for 2005 of $22.9 million. (See Riverbed Acquires 500th Customer.)

Those increased sales have been joined by higher costs, though -- operating costs were $31 million in the first six months, up from $11.8 million a year earlier -- and the company reported a net loss of $10.3 million in the first half of this year. Those increased costs were partly the result of a significant rise in headcount, up to 271 on June 30 from 70 at the end of 2004.And profits aren't expected any time soon. In the "Risk factors" section of its filing, the company notes: "We expect to continue to incur losses, and we may not become profitable for the foreseeable future, if ever."

The company's potential profitability is also affected by its high ratio of indirect sales. Resellers accounted for 73 percent of revenues in the first six months of this year.

Ray Le Maistre, International News Editor, Light Reading