Sweet Sixteen for Mimecast in Sunday Times Tech Track Rankings
For many of the fastest growing UK technology companies, there is a balancing act to be managed between rapid top line revenue growth and profit/loss. Ever since the original dotcom boom, huge amounts of money have been sunk into technology businesses, and a relatively small percentage have ever really paid their shareholders back. In cloud computing, or Software as a Service, there is a significant front-loading of investment in infrastructure, after which it’s a case of growing as fast as possible, with every customer added to the system costing slightly less to acquire and serve than the last one.
It’s always nice to come in on a Monday morning and find we’re one of the Top 20 fastest growing technology companies in the UK – or better yet read it in on the Sunday Times over the weekend. Our 16th placement in this year's Tech Track 100 shows us having grown an average of 97% over the past three years. It was also a pleasant surprise to see Mimecast featured in an article about Microsoft and its commitment to cloud computing including a photo of my co-founder, Neil Murray and me.
Last year, Mimecast placed 2nd in the Tech Track 100 with an average annual growth rate over three years of 173%. Going back give years, Deloitte calculated that we’d grown 7,500% and ranked us the third fastest growing tech company in EMEA. This year, although 97% sounds relatively modest, we can point to some very sound and very significant fundamentals behind the revenue numbers. Specifically, the growth that we have experienced to date has reached a stage whereby the revenue from our customer base will support the expenditure needed to fund our current growth plans. This means that in the current fiscal year we are budgeted to be cash flow positive in the third quarter and breakeven in the fourth quarter. This trajectory is further supported by the fact that for the first five months of this year we have been EBITDA positive.
What that means is that unless we see an irresistible growth opportunity that needs up-front investment in order to execute, we should become profitable and be cash flow positive this fiscal year.
At times, over the last year or two, we’ve had to put up with competitors highlighting our losses and trying to convince anyone who would listen that we were in danger of imploding. And we’ve had to hold our nerve, because the key to building a successful SaaS business is to get to that magic break-even point without sacrificing that rapid top line growth. We could have throttled back on investments and been profitable some time ago, but we’d have taken our eye off the real opportunity, and the real opportunity is huge.