Avalara Rings NYSE Opening Bell: Stock Nearly Doubles on Opening Day

Avalara, a maker of automated cloud-based sales and use tax systems for businesses, made its debut on the New York Stock Exchange on Friday, June 15, 2018. The company is traded under the ticker symbol AVLR. The stock had a first day opening price of $24 per share. As of the writing of this article, the stock was trading at $44.94, an increase of $20.94, or 87%. In after hours trading, the stock climbed as high as $45.80 per share.

The Seattle, Washington-based company has seen rapid but steady growth since its founding in 2004. Avalara’s technologies work behind-the-scenes to automatically calculate sales taxes on purchases, and this is increasingly tied into ecommerce transactions. As such, the technology may be transparent to general consumers, but the brand should be well-known to business management. In addition to ensuring that accurate sales tax rates are applied, the company offers solutions that can automate the sales tax reporting processes for businesses.

As ecommerce has made it easier for even small businesses to makes sales to customers across the U.S. and around the world, Avalara’s technologies have been unheralded in their role: The company’s sales tax engine integrates with more than 600 ecommerce, shopping cart, point-of-sale, accounting, and invoicing systems. Without sales tax automation and compliance reporting, most small businesses simply wouldn’t be able to keep up with the more than 10,000 different sales taxes in the U.S., which are usually based on the geographic location of the purchaser. However, there are so many additional rules and special jurisdictions, that this already impossible task would be even more challenging to most businesses.

With increasing taxation on internet sales and heightened scrutiny by the states, more businesses will likely be attracted to automated sales tax systems such as those provided by Avalara.

“Listing on the New York Stock Exchange is an honor and a humbling experience,” Avalara CEO Scott McFarlane told company employees and media shortly after executives participated in ringing the opening bell on the NYSE on Friday morning. “I am proud of Avalarians past and present who made this possible, and we do not pretend that we could have done this without the trust and commitment of our customers and partners.”

In 2017, the company processed 6.7 billion sales transactions for retailers and manufacturers, including sales tax, excise taxes, utilities and communications, among others. Avalara prepared $28.9 billion in taxes for its business customers, and produced more than 18 million tax documents, including quarterly, annual, and periodic returns, and exemption certificates, in 2017. That same year, Avalara was listed at number 21 on the Forbes list of the top 100 private companies. It has more than 1,400 employees in eight U.S. offices, and four international locations. Avalara has more than 20,000 business customers in North and South America, Europe and Asia.

“The nexus of tax and technology is certainly in the limelight right now, though for Avalara it has always been exciting,” McFarlane added. “For us, tax technology is thrilling and fun, but we understand this perspective may not be shared by everyone who has tried to manage taxes. Avalara offers businesses of all sizes the solutions that can alleviate the burden of tax compliance, a weight that becomes heavier each week as compliance complexity increases around the world. Both as a company and as part of our partner network, we remain committed to helping companies overcome any challenge that may stand in the way of tax compliance done right.”

Avalara is the latest in nearly a dozen cloud-based service provider (software-as-a-service) companies to go through an IPO and become publicly-traded in 2018.