In PC era, antivirus software played an important role with computer, while people have already forgotten it at present. The popular antivirus software has gradually gone out of our sight. And in the era without antivirus software, a software security company choose to go public in NASDAQ for the second time.

In the evening of 22nd, October, McAfee, the antivirus software company officially went listed in NASDAQ. On its first day of trading, its stock price dropped by 6.50% to $18.70, with a market value of $8.076 billion. Under the trend that software companies go listed, McAfee’s stock price doesn’t raise as it expected to. As of press time, its stock price was $18.79, increased by 0.48%, with a market value of $8.115 billion.

When we look back to the past, the company had its ups and downs: it went listed in 1999, and it was delisted in 2011 after being taken over by Intel. McAfee once changed its name to “Intel Security”, but Intel sold half of its stocks in 2017. Experiencing ups and downs for decades, McAfee has already missed the golden age of antivirus software. And what will be the reason for its second listing?

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The Second IPO Launch, What Will Be Its Reason?

After the first IPO launch, McAfee’s poor performance may be the reason for its delisting. And its improved performance may be their confidence to go public again.

The performance of McAfee is improving in the last three years, and it achieved a considerable growth for its revenue. The prospectus revealed, that the company has achieved a $2.4 billion revenue in 2018, increased by 16% compared with 2017 (revenue $2.08 billion). And in 2019, total revenue reached $2.6 billion, with 9.4% increase.

At present, the company’s growth mainly comes from individual and cooperate subscription. For revenue of individual users, recurring revenue accounted more than 85% of total revenue in the past three financial years. In 2020, in the 26 weeks up to 26th, July, recurring revenue accounts for 88%, wherein 85% of its yearly subscription comes from core users.

McAfee’s marketing strategy helps it to acquire a large number of users. Judging from its recurring revenue ratio, we can see the loyalty of its user, which will become a long-term stable income for the company.

In the recent years, although McAfee is operating at a loss, the scale is becoming smaller. From 2017 to 2019, the company’s losses are $686 million, $512 million and $236 million respectively. And in the first half this year, McAfee has achieved a net profit of $31 million. McAfee’s profitability has strengthened its confidence, motivating it to go public for the second time, so as to enlarge its scale.

Apart from its profitability, the increase of the demand for cloud office is another reason.

Affected by the lockdown policy, more and more people have to work at home, which increases the demand for cloud software. Following the increasing usage of network comes the problem of online security.

According to SecWiki, from January to April this year, the number of network threat has increased by 630%, which undoubtedly is a positive signal for McAfee.

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In addition, the company is in debt of $4.8 billion at the moment, which is an urgent problem and going public naturally becomes its first choice. After going listed, the company is going to lighten its burden with the $525 million acquired from stocks.

It seems that McAfee is going on a right track as its business is profitable at the moment. However, the money from its stock can barely fill its debt, and its profits can not fill its debt in time as well. What McAfee should do right now, is to use the money acquired from stock market to enlarge its business scale, and to boost its profit growth.

Cloud Service Subscription, Key of Long-term Growth

At present, McAfee’s antivirus service is not limited to individuals, it also offers network security products to governments and cooperates all over the world, which means that McAfee not only offers service to individuals and families, but also prevent business clients and government clients from threats in local environment and internet.

Up till June 27th, 2020, McAfee’s clients widely spread all around the world. As data shows, 25% of the top 250 global companies are clients of McAfee. And for VIP clients, McAfee will send service team to clients’ office for on-site service.

In the past three financial years, recurring revenues are more than 75% of total revenue. In the 26 weeks up till June 27th, 2020, recurring revenue accounts 77% of total revenue. What’s more, 81% of its revenue comes from clients whose contract values are more than $100 thousand. And the recurring revenue mainly comes from software subscription, which means that companies have stronger recurring paying abilities, and McAfee has made certain achievement in its subscription mode.

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Last year, McAfee has purchased Uplevel Security and Nanosec, and in the first half this year, it purchased Light Point Security, so as to strengthen its competitiveness in security software.

Ups and downs of McAfee epitomize the histories of antivirus market. What is the reason for the disappearing of the once-popular antivirus market?

In the past, people installed antivirus software in no matter PC devices or mobile devices. When people buy a new computer or mobile phone, it would be unavoidable that they install antivirus software. And McAfee was also experiencing its ups at that time.

McAfee tried to enter Chinese market once in the past, but only won a small market share, because of its poor localization strategy. Unable to fit in the local market, and hard to survive among the local competitors, McAfee failed to enter the Chinese market.