Is third time a charm for IntraLinks?

Contact: Brenon Daly

Maybe the third time will be the charm for IntraLinks. The company, which is perhaps best known for its ‘virtual deal rooms,’ filed to go public late last week, the third time it has put in an S-1. It plans to raise $150m in the offering, which is being led by Morgan Stanley, Deutsche Bank Securities and Credit Suisse. IntraLinks had also been on file back in the Bubble Era, filing its IPO paperwork in mid-1999 only to pull it a year later, and again for a few months in late 2005.

To get a sense of just how much the company – and, by extension, Wall Street – has changed since the frothy time of the late 1990s, we went back and pulled IntraLinks’ original prospectus to compare it to the most-recent paperwork. It hardly seems like the same company.

In 1999, IntraLinks lost five times more money than it even brought in as revenue (a $21.3m net loss on just $4.1 in revenue for the year). The company even managed the highly impressive trick of running its business at a negative gross margin. The kicker on that upside-down business model is that it was actually pretty common back in the late 1990s. Plenty of companies running at even larger losses than IntraLinks made it public during that era.

Like a lot of us, IntraLinks seems positively grown up now compared to the time when companies were throwing equity around like it was funny money and stock prices only went up. It finished 2009 with $141m in revenue, meaning that it now generates more sales every two weeks than it did during the entire year that it first filed to go public. And while the vendor still hasn’t managed to hit profitability, it has narrowed its operating loss to just $3.4m last year. For the record, IntraLinks’ gross margin hit a respectable 65% in 2009, a sharp reversal from the Bubble Era, when it actually sank deeper into the red with every sale that it made.