The long-awaited initial public offering of Arm and smaller Instacart could reignite the lackluster IPO market in September. Both companies have filed to list on the Nasdaq.
These big events could happen as early as in the upcoming holiday-shortened Labor Day week. The Arm IPO is expected to surpass 2023's biggest IPO, Johnson & Johnson spinoff Kenvue, which raised $3.8 billion.
Arm IPO Is Around The Corner
This will be Arm' s second IPO; the first time was in 1998. It went private after Japan's SoftBank Group purchased it for $32 billion in 2016.
Arm filed for its upcoming IPO with the SEC for American depositary shares (ADS) on Aug. 21. Arm IPO shares will trade under the aptly selected ticker ARM.
Barclays will be the lead underwriter in the estimated $6 billion deal, according to Renaissance Capital. The share price and number of shares have not been determined.
Arm develops low-cost, energy-efficient microprocessors used in smartphones, personal computers, data centers, networking equipment, vehicles and robotics. The company is a key supplier to Apple.
Arm uses AI and machine learning (ML) in its Endpoint AI for its Internet of Things (IoT) technology, high performance computing for 5G and IoT technology, and for cloud computing.
The company clearly dominates the space, and estimates that 70% of the world uses Arm products in over 250 billion devices. Arm shipped more than 30 billion chips in fiscal 2023.
Arm reported $524 million in profit on $2.68 billion in revenue in fiscal 2023, which ended in March, according to its SEC F-1 filing. Arm's 2023 revenue was down slightly from 2022 sales of $2.7 billion.
Arm's second-quarter net sales dropped 10.8% in U.S. dollars over last year's quarter, as reported in SoftBank Group's second quarter report Aug. 8. Its royalty revenue decreased by 19.3% from slowing smartphone revenues, partially offset by a 3.6% increase in licensing revenue from cloud servers chips and automotive applications.
Its quarterly profit fell due to lower revenue and higher expenses from stock compensation and increased research & development head count.
Instacart Readies For Debut
San Francisco-based Maplebear, doing business as Instacart, filed for Instacart's IPO on the Nasdaq on Aug. 25. The company will trade under the symbol CART. Goldman Sachs will lead the underwriting. Renaissance Capital estimates the deal to be around $1 billion. The share price and number of shares have not been determined.
Instacart delivers groceries from over 40,000 stores in the U.S. and Canada to over 7.7 million monthly active customers.
Retailers reach customers through both Instacart Marketplace, where customers can shop from retailers through the app or website, or the online storefronts on the Instacart Enterprise Platform.
About 12% of groceries sales are purchased online, Instacart CEO Fidji Simo said in the company's F-1 SEC filing. She sees the online grocery business doubling or more over time.
Instacart's second quarter revenue grew 15% to $716 million over last year, as reported in the SEC filing. In addition, its $114 net income showed a vast improvement over last year's quarterly $8 million.
Instacart reported $2.551 billion full-year revenue with $48 net income in 2022. Full-year 2022 gross margin grew to 72% from 67% in 2021 and 60% in 2020.
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