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upstart writes:

New CFO sees interesting in-tray at 20 percent year-on-year growth database company:

Database vendor MariaDB has cut a number of jobs and reiterated a "going concern" warning over its medium-term financial viability.

In a statement to the stock market [PDF] late last month, the company, which floated on the New York Stock Exchange at the end of 2022, said it was reducing its headcount by 26 "to achieve cost reduction goals and to focus the Company on key initiatives and priorities."

In December, CEO Michael Howard told The Register the company was looking to hire more people following $104 million in funding and $18 million through private investment in public equity through the special purpose acquisition company that enabled the flotation.

Although the job losses may be a fraction of the reported 340 people the company employs, other details in the filing may highlight further cause for concern over its financial viability.

It includes a mention of MariaDB's February 10Q warning that the company's current cash and cash equivalents "would not be sufficient to fund our operations, including capital expenditure requirements for at least 12 months from... February 13, 2023, raising substantial doubt about our ability to continue as a going concern."

The March 24 statement said it anticipated that the money raised by database subscriptions and services would not be enough to meet its projected working capital and operating needs. "We are currently seeking additional capital to meet our projected working capital, operating, and debt repayment needs for periods after September 30, 2023 ... Going forward, we cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business," it says.

The timing of MariaDB's flotation may have been unfortunate. While it was already in train, the SPAC model was going out of favor. Research from early December 2022 by investment research firm Bedrock AI found 49 per cent of the quarterly financial filings by companies floating via a SPAC since the beginning of the year contained an admission of ineffective internal controls. Earlier this month Europe's biggest SPAC, Pegasus Europe, announced it would cease operations and return capital to its investors at the beginning of May. In May last year, Goldman Sachs took a break from handling SPAC-based IPOs.

Speaking to The Register, MariaDB CMO Franz Aman said the company was still hiring, but a number of job losses had also been necessary. "It's absolutely no secret that, like companies in tech, we need to be super prudent, and we need to be fiscal responsive. We also had a look at our headcount plan, and we had to make sure that we were doing the right things. We had a reduction in workforce... so have most other tech companies: everyone's concerned about profitability, cash position."

Aman argued that a "going concern" notice in regulatory filings was far from unusual.

Original Submission