According to a Zion Market Research report published last year, the global Applications Programming Interface (API) management market is estimated to grow from $609.32 million in 2016 to $ 3.44 billion by 2022. That translates to a healthy annual growth rate of more than 33% during the five year projection period. Billion Dollar Unicorn MuleSoft (NYSE: MULE) is a leading player in the market that is hopeful of delivering $1 billion in revenues in the sector by 2021.
San Francisco-based MuleSoft was founded by Ross Mason and Dave Rosenburg to build a platform that could simplify and accelerate the way businesses connect by leveraging an event-driven architecture to build high-scale web services. Its proprietary Anypoint platform helps transform business by gathering data from disparate applications, databases, and other sources into APIs.
MuleSoft recently reported its fiscal 2017 results. Revenues for the fourth quarter grew 60% to $88.7 million, ahead of the market’s forecast of $83.6 million. Adjusted loss per share of $0.12 was in line with the Street’s expectations for the quarter. It ended the year with revenues growing 57% to $296.5 million. It reported a loss of $0.75 per share for 2017 compared with a loss of $2.73 per share reported a year ago.
By segment, subscription and support services grew 57% over the year to $70.6 million for the quarter. Professional services revenues grew 75% over the quarter to $18.1 million.
For the current quarter, MuleSoft forecast revenues of $87-$90 million with an adjusted loss of $0.09-$0.07 per share. It expects to end the year with revenues of $405-$415 million with a loss of $0.30-$0.26 per share. The market had forecast revenues of $88.7 million for the quarter with a loss of $0.08 per share. The Street was estimating revenues of $396.9 million for the year with a loss of $0.41 per share.
MuleSoft recently announced its target of delivering $1 billion in revenues by the year 2021. It is focusing on getting to that target through continued product innovation and market tie-ups. On the product side, it recently launched a new version of Anypoint Platform that comes with several enhancements that will simplify the creation, discovery, and the ability to reuse IT assets such as APIs and best practice templates. As part of the upgrade, it has simplified the process of allowing teams to take direct ownership of the application and creation process, while ensuring that the IT teams of the organizations can maintain governance and control.
To continue to build the ecosystem around its services, it more than doubled certification among its partners through various focused initiatives and joint events. It is seeing significant traction from these initiatives as partner source bookings grew to 30% of total new and add-on bookings, compared with 26% a year ago.
The market has been pleased with MuleSoft. It is offering products that deliver cloud-based integration, out of the box SaaS connectivity, and an easy-to-use interface that could quickly ramp the developer team. It is clearly counting on the unprecedented opportunity in SaaS that is available in the market today. It has set for itself a rather impressive target of a billion dollars in revenues in the next 3 years.
It is this impressive goal that has attracted Salesforce to MuleSoft. Yesterday, Salesforce confirmed plans to buy MuleSoft in a deal that values Mulesoft at $6.5 billion. Analysts estimate that MuleSoft could help Salesforce integrate data across its various applications and acquisitions. Additionally, with the trove of data that MuleSoft has access to, it can help build out Salesforce’s Einstein as well.
Meanwhile, MuleSoft’s stock is trading at $42 with a market capitalization of $5.5 billion. It has recovered from the 52-week low of $19.40 it was trading at in October last year.
We’ve been covering MuleSoft for many years. You can read Ross Mason’s Entrepreneur Journeys story here. Ross also was a guest at our roundtable and podcast. We’re thrilled by MuleSoft’s success. The company bootstrapped to validation, raised funding, executed relentlessly, went public, and has now found an incredible exit.