Genesys has slammed the brakes on plans to become an initial public offering (IPO).
The Information broke the story, with its sources suggesting that the company chose to do so because of increased “stock market volatility”.
Genesys had slated its IPO for April or May 2025, as per Bloomberg sources.
Now, the CCaaS Magic Quadrant leader seems set to delay the move to “later in 2025” instead.
If it goes ahead, Genesys could issue shares and raise greater capital to fund innovation and possibly acquisitions.
Some reports even suggested it could raise as much as $2BN, with Goldman Sachs, Citigroup, and JPMorgan Chase & Co. supposedly supporting the endeavor.
With so much on the line, it’s understandable that Genesys is cautious of current volatility within the stock market.
Prominent industry analyst Zeus Kerravala, Principal Analyst at ZK Research, recognizes this. Yet, he suggests that broader uncertainty in the market may also be a key reason to pause the IPO.
Kerravala explained: “With AI becoming a big part of CX deployments, as an industry, there are still a lot of questions, such as: will we see seat compression? Can virtual agent spending offset the loss of physical sets? What is the pricing model going to be? Things like that.”
This creates uncertainty in the business and – with the market being volatile right now – any uncertainty will lead to an unsuccessful IPO.
While Genesys is actively considering some of those questions, as evident in its new tokenization strategy, there are no easy answers as AI stands to disrupt the contact center industry.
Indeed, Gartner recently predicted that AI agents will resolve 80 percent of common customer service issues without human intervention by 2029. That’s quite the jump from today.
Alongside the impact of AI, there’s also the risk of its regulation. As Rebecca Wetteman, CEO & Principal Analyst at Valoir, stated:
It’s not surprising that Genesys is delaying its IPO, given the uncertainty in the economy and the market volatility. That alone would be enough to give anyone pause, but increased scrutiny of tech and AI tech in particular doesn’t help either.
Additionally, consider the health of the broader enterprise communications market. That may also drive investor doubt, which could impact the success of an IPO.
After all, longtime Genesys rival Avaya has started the year with widespread layoffs while purposefully trimming its customer base. Meanwhile, Mitel appears to be on the edge of bankruptcy.
However, alongside stock market instability and broader uncertainties, there is a more cynical view here. Perhaps Genesys floated the idea of an IPO to court suitors and private equity interest? Maybe the proposed IPO will come to a grinding halt?
That has happened before. In January 2022, Reuters reported that Genesys had picked banks for an IPO, only for that move to fade into the memory bank.
Nonetheless, that’s purely speculation, and there are several other possible reasons for the delay.
For instance, there is a time commitment to become an IPO alongside costs for issuing shares. Genesys could just be giving itself more time to gather those resources.
There is also a mentality switch to consider. Private companies have the luxury of planning for long-term objectives, while IPOs must manage their businesses for short-term quarterly results. That’s a significant shift in running a business.
However, whatever the reason for the delay, Genesys has some high-profile backers that may – later in 2025 – help it drum up funds.
BlackRock, Salesforce, and Zoom are just some of those backers. Although, the latter is fast becoming one of the company’s chief CCaaS competitors.
CX Today contacted Genesys to comment on the news but didn’t receive an immediate response.
