Survey: Tech Sector Expects High Growth, Weighs IPOs

SAN FRANCISCO, Feb. 22, 2011 /PRNewswire/ -- The San Francisco-Bay Area technology sector expects to focus on organic growth, launching new products and market expansion in 2011 as revenues are anticipated to significantly rise. Many of these Bay Area tech companies could be a driving force behind the IPO market as they go public in the coming years.

More than 75 percent of Chief Financial Officers at technology companies expect their companies' revenues to grow by at least 10 percent in 2011, and roughly one-third of CFOs expect revenue growth to exceed 50 percent, according to a new benchmark survey of more than 100 CFOs at technology companies conducted by Armanino McKenna LLP, the largest CPA & Consulting firm headquartered in California.

"The technology sector is clearly focused on top-line growth and expectations are very high," said Andy Armanino, Managing Partner at Armanino McKenna. "And for many of those companies an IPO exit is becoming more of a reality."

Other major findings from the survey include:

• More than half of the technology companies surveyed have increased their cash reserves over the past year and plan to deploy that capital into hiring and sales & marketing.
• Despite a challenging IPO market over the past several years, our findings show 20 percent of technology companies anticipate an IPO exit within the next three years.
• Technology companies that are considering an IPO said the biggest challenges to going public are a lack of resources, technical expertise and the inability to balance day-to-day job requirements with IPO preparations.

The 2011 CFO Evolution Benchmark Survey Report prepared by Armanino McKenna also includes analysis and insight into the survey results:

The IPO market has been challenging, particularly for smaller companies, for the past several years…. Reporting requirements have increased the costs of going public … and major brokerage firms have been focused on large company stocks due to cuts in analyst research. … These forces have combined to make it more difficult for small-cap companies to attract large investors. … But on the other hand, the current slow but steady recovery, combined with decreased volatility in the capital markets and technology IPO successes in the second half of 2010 all indicate a healthier IPO environment in 2011.  

To compile the survey results, Armanino McKenna contacted more than 200 San Francisco Bay Area CFOs and finance executives across industries, including technology, through an online survey instrument in December 2010.  The executives were asked about their roles and responsibilities, the strengths and weaknesses of their finance organizations, and their priorities and initiatives for 2011.

"Armanino McKenna has developed a set of initiatives that transforms the CFO organization into a strategic and forward-thinking business leader for the company," said Tom Mescall, Partner-in-Charge of Armanino Consulting. "The CFO Evolution can be applied to all companies, regardless of size, maturity and complexity and it strikes the right balance between the competing demands of the accounting, business protection, and leadership roles of today's CFO."  

Free Webinar

Armanino McKenna will present the findings of the 2011 CFO Benchmark Survey Report during a free webinar on March 3 from 10 a.m. – 11 a.m. (PST). Attendees will learn the best practices of successful finance organizations, as well as key 2011 initiatives for CFOs.

To learn more visit: http://www.armaninomckenna.com/webinars

To register go to: https://www2.gotomeeting.com/register/204935763

About Armanino McKenna LLP

Armanino McKenna is the largest California-based CPA & Consulting firm with 325 employees and 39 partners. It is a member firm in Moore Stephens International Limited, a global association of accounting and consulting firms in 98 countries. The Armanino McKenna LLP public accounting and consulting firm offers a comprehensive package of services from audits and reviews to tax planning and preparation, SOX compliance, financial/IT staffing, IT software and service, and valuations and consulting. The company has offices in San Ramon, San Francisco, San Jose, Portland and the Seattle area.

SOURCE Armanino McKenna LLP