If there is one that is clear about the tech industry it is that it’s the future. Technology is enabling change in pretty much every facet of life and in terms of the business world, the use of technology is critically important to stay ahead of your competitors. That being said, some people inside (and outside) the industry fear we are in a bubble that is reminiscent of the late-90s. While I don’t necessarily agree with that idea, I was intrigued by this visualization (seen below) put together by the folks over at FindTheCompany.
The team over at FindTheCompany decided to take a look at the current tech landscape to see how the hottest public tech companies are performing as of late. According to FindTheCompany, they wanted to find examples of hot, growing organizations that remain extraordinarily unprofitable. The criteria they put in place to find such companies was as follows:
- 50 percent revenue growth year over year (2014 vs. 2013)
- 20 percent headcount growth year over year (2014 vs. 2013)
With list in hand, they sorted the list by 2014 profit, from lowest (i.e. most negative) to highest. The data comes from Zacks Investment Research.
The following 15 companies emerged as both the hottest (e.g. fastest growth) and most unprofitable (tens, if not hundreds of millions, in losses):
At the top of the list with almost $600 million in losses is everyone’s favorite blue bird, Twitter. The company has been facing a lot pressure lately to really figure out what Twitter is and what its core offering(s) will be. Just the other day, it was announced that Twitter co-founder, Jack Dorsey, is back in the role of CEO at the company. Keep in mind he is also the founder and CEO at Square, his payments company which is poised for an IPO soon.
The recent release of Twitter Moments is a good sign that the company is focusing on improving the product. Of course, Dorsey will also have to focus on creating new and improving existing revenue streams as well.
Coming in at number 15 on the list is Pandora with just over $30 million in losses. Despite Pandora facing stiff competition from big-names like Spotify and Apple Music, the company remains on top of the industry, with better brand recognition, more users, and more revenue than its rivals. That being said, Pandora along with its competitors are currently doing an interesting juggling act as consumers look to pay less for music, and labels try to get every last penny they can from streaming services. Time will tell whether music streaming companies such as Pandora or Spotify can emerge as sustainable, profitable businesses.