PowerPoint Presentation - GP Bullhound · PDF fileConfidential 3 Executive Summary GP...

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Global Software Market Perspectives1H 2017

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Executive Summary

Key Sector Takeaways and Commentary

Recent Software Transaction Trends

Public Market SaaS Analyses

Key SaaS Metrics

Appendix A: GP Bullhound SaaS Index

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7 Appendix B: Software Public Comps by Category

8 Appendix C: GP Bullhound Software Credentials

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Executive Summary

▪ GP Bullhound has established a quarterly market

report on the Software as a Service (“SaaS”) space

to provide quantitative insights into public and

private market valuations across the transaction

spectrum and qualitative insights into company

business models, technology and customer trends

▪ The report examines the SaaS public company

landscape, M&A, private placement and IPO

trends

▪ The software sector has disrupted technology and

many other industries over the last several

decades; first providing a global wave of on-

premise software to all industries in the 1980s and

1990s; then modernizing traditional businesses

through cloud-based platforms and enabling

growth in business-to-consumer technologies, from

mobile, to banking, to real estate, to consumer

products

▪ The shift of business applications to the cloud, de-

centralized IT operations and infrastructure

software have percolated through organizations

large and small creating a Software Eating the

World paradigm

JONATHAN CANTWELL

Director

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Executive Summary




Key SaaS Metrics


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▪ SaaS is the predominant method to deliver software for many business and financial reasons

– Ease-of-use across the enterprise

– Centralized platform and real-time updates

– Highly recurring revenue model

– Scalable with profitable unit economics

▪ In order to build a large SaaS business, a company needs a visionary management team, to develop differentiated

products with a strong market fit and a profitable, scalable model measured by Key Performance Indicators and SaaS

metrics

– Outstanding SaaS companies have shown they can grow to $50m+ in ARR in 6-7 years (e.g. Dropbox, Twilio, Veeva and Workday)

– Material changes in private company valuations occur as ARR grows to $10m, $25m, $40m, and $60m

– SaaS metrics such as LTV/CAC of 5x+, Net Revenue Retention of 105%+ are also relevant benchmarks, among others

▪ Focus on user experience has become a critical factor for SaaS vendors and is demanded by their customers

– User experience and interface in B2B software is important in many verticals

– Salesforce initially set the tone for beautiful SaaS products that people within the enterprise/business/organization want to use

– Additional leading SaaS vendors on the UX/UI front include: 8x8, Box, Slack, and Zoom

Key Sector Takeaways: Building a SaaS Business

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▪ We predict software M&A will continue to be robust over the coming years, driven by the strategic expansion of

traditional and non-traditional technology consolidators, as well as the attractiveness of the sector to Private Equity

investors

– With strategic convergence still under way and strict IPO criteria, software consolidators are seeking growth-focused M&A deals to expand

product lines, customer bases and geographical reach

» E.g. Oracle/Moat, Intel/Mobileye, Cisco/AppDynamics, Oracle/Textura

– Tech giants will continue to acquire SaaS companies to improve cross-selling opportunities and strengthen their position in the fastest-growing

SaaS sectors

» E.g. Salesforce/Krux, Oracle/Netsuite, Microsoft/LinkedIn

– Non-traditional technology consolidators are now also active in the market, acquiring complementary technologies to drive growth,

scalability and margins and to support customers better

» E.g. Roper Technologies/Deltek, GE/ServiceMax, John Wiley & Sons/Atypon, Verizon/Fleetmatics

– Private equity firms will continue to be aggressive in acquiring highly recurring, sustainable SaaS businesses through platform and add-on

acquisitions; some PE firms are building cross-portfolio, large, horizontal SaaS entities

» # of PE SaaS M&A deals: 240 (‘13), 303 (‘14), 336 (‘15), 296 (‘16), 199 (1H’17)

» Median revenue multiples for SaaS PE M&A: 2.5x (‘13), 2.9x (‘14), 3.3x (‘15), 3.8x (‘16), 3.1x (1H’17)

– Private valuations in 2017 have bucked the trend of mapping to public valuations and now map to separate private valuation thresholds

and comparables. We have also seen PE and PE-backed strategics out-pay strategics on a number of acquisitions in the last few years

» PE: Thoma Bravo; Silver Lake/SolarWinds (9.2x), Vista Equity/Marketo (7.5x), Insight Venture Partners/Diligent (5.9x), Thoma Bravo/Qlik

Technologies (4.2x)

» PE-backed: Energy Services Group (Accel-KKR)/Utiligroup (7.1x), Lanyon (Vista Equity)/CVENT (7.4x), Flexera Software (Thoma

Bravo)/Secunia (4.5x), Misys (Vista Equity)/DH Corp (2.8x)

Key Sector Takeaways: M&A, Investment and Valuations

Source(s): Pitchbook, Capital IQ

Note: Multiples shown are EV/LTM Revenue & exclude any outlying data

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SaaS Company Executive Commentary

ULRIK BO LARSEN Co-Founder & CEO

“As the SaaS playbook is being constantly re-iterated and re-

publicized many Go-to-market tactics are becoming table stakes

in a market place with an increasingly low barrier to entry in

many categories. The future winners will be orchestrating a

symphony of good current product-market fit, seeing around

corners to build what customers aren't asking for just yet, and

constantly challenge their own modus operandi on the go-to-

market to get a leg up against their competition. While data

and patent moats sounds great in theory, many categories are

seen execution excellence being the name of the game.”

A customer experience management SaaS suite

built on social media management tools to deliver

personalized brand experiences and optimize

customer engagement.

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SaaS Company Executive Commentary (Cont’d)

MATT STUART Co-Founder & Co-CEO

“At Main Street Hub we take a customer-centric approach to

every aspect of our business. From scaling sales operations to

building SaaS products, it's not about making our lives easier,

it's about making our customers' lives easier. As a result, we've

seen our sales and retention metrics improve as we scale.

Today, our customers are more satisfied than they've ever

been.”

Main Street Hub is the marketing platform for local

businesses. The company offers an integrated

social, web, and email marketing solution designed

to help small business owners get more customers

and keep them coming back. Main Street Hub is

headquartered in Austin, TX and has 10,000 customers in all 50 states.

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SaaS Company Executive Commentary (Cont’d)

“I have been a part of organizations in the past that focused

on raising capital and building products based on big ideas, to

big markets, without any idea how to sell. Profitability took a

back seat to buzz words and product (not customer) focused

companies. I believe you will see the next generation of SaaS

companies not only have product market fit prior to raising

post-seed capital, but they will also be more focused on sales

execution with focus on land and expand models. TextRecruit

was customer founded, and continues to be customer driven,

with revenue production at it's core. With this, and a defensible

product and patent strategy, we have continued to see 40%-

60% Q/Q growth since 2015.”

TextRecruit is a candidate and employee

engagement platform that leverages text, chat and

AI to optimize the hiring funnel.

ERIK KOSTELNIK Co-Founder & CEO

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Executive Summary




Key SaaS Metrics


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▪ Description (NASDAQ:APPN): Provider of low-code

software development platform that enables organizations

to develop various applications

▪ Listing Date: 05/25/17

▪ Offering Amount: $75.0m

▪ Offering Price/Share: $12

▪ % Change/IPO Price: 53%

▪ Revenue (LTM to December 31 2016): $132.9m

▪ EV/Revenue1: 7.2x

▪ Selected Metrics:

– Revenue Growth 16/15: 20%

– Subscription Revenue %: 45%

– Average ACV: $475K

– Subscription Revenue Retention Rate: 112%

▪ Description (NYSE:AYX): Provider of self-service data

analytics software that enables organizations to improve

productivity and business outcomes









– Subscription Revenue %: >95%

– YoY Customer Growth (16/15): 66%

– $ Based Net Retention Rate: >120%

Software IPOs in 2017

▪ Description (NYSE:CLDR): Developer of a hybrid open

source software (HOSS) platform for data management,

machine learning and advanced analytics










– Net Expansion Rate for Subscription Revenue: 142%

– Revenue from Cloudera Global 8000: 73%

▪ Description (NYSE:MULE): Developer of an integration

solution for connecting applications, data, to devices






▪ EV/Revenue: 10.2x




– Average ACV 2016: $169K

– YoY Customer Growth (16/15): 27%

– $ Based Net Retention Rate: 117%

▪ Description (NasdaqGS:OKTA): Provider of identity

verification software for the enterprise





▪ Revenue (LTM to January 31 2017): $160.3m





– YoY Customer Growth (17/16)2: 40%

– $ Based Net Retention Rate (2017)2: 123%

▪ Description (NYSE:YEXT): Provider of platform that lets

businesses manage their digital knowledge in the cloud





▪ Revenue (LTM to January 31 2017): $124.3m




– $ Based Net Retention Rate (2017)2: 119%

– Revenue Growth from Existing Enterprise and Mid Size

Customers (2016): 63%

1. CY 2017E revenue multiple

2. Year Ended January 31

Source(s): Company SEC filings from Edgar, Capital IQ as of 06/15/2017

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Announce

DateIssuer Selected Investors Issuer Description Series

Value

($)

Jun 9 BigCommerce General Catalyst, GGV Ecommerce software E 39

Jun 14 Element AI

Data Collective, Intel

Capital, Microsoft

Accelerator, Tencent

AI & Machine Learning A 102

May 25 DemandbaseSageview Capital, Silver

Lake Management, others

Account-Based Marketing

platformH 65

May 9 Gainsight Cisco InvestmentsCustomer success

managementE 52

May 7 Fuze

Wellington Management,

Greenspring Associates,

Summit Partners, Bessemer

Venture Partners, G20

Ventures

Enterprise communications

softwareF 134

May 4 SignifydMenlo Ventures, American

ExpressFraud-prevention platform C 56

Apr 28 Snow SoftwareSumeru Equity Partners,

Ontario Pension Board

Software asset

managementA 120

Apr 26 EverFi

Rise Fund, TPG Growth, Main

Street Advisors, Advance

Publications

EdTech company D 190

Apr 12 QualtricsInsight Venture Partners,

Accel, Sequoia CapitalExperience management C 180

Apr 5Snowflake

Computing

Iconiq Capital, Madrona

Venture Group, Altimeter

Capital, Redpoint Ventures,

Sutter Hill Ventures

Data warehouse D 100

Feb 27Cherwell

SoftwareKKR ITSM B 50

Feb 21 ConfluentSequoia Capital,

Benchmark, Index VenturesReal-time data platform C 50

Jan 26Zoom Video

Communications

Sequoia, AME Cloud

Ventures, Emergence

Capital, Qualcomm

Ventuers

Enterprise video

conferencingD 115

Jan 23 Tricentis Insight Venture Partners Automated software testing B 165

Announce

DateTarget Buyer Target Description Value ($)

Implied

EV/LTM Rev

Jun 5 Covisint OpenTextCloud based IoT

application design 103 1.0x

May 31 Idera HGGCDatabase lifecycle

management1,125 -

May 30Lithium

TechnologiesVista Equity Social media management - -

May 30 Xactly Vista EquityEmployee performance

management577 5.6x

May 15 Statistica TIBCO Software Data science platform - -

May 3 Kofax Thoma BravoBusiness process

management software1350 -

May 1 Viptela CiscoCloud-based networking

technology610 -

May 1 Jive Software Wave SystemsCommunication and

collaboration solutions450 1.7x

Apr 18 Moat OracleDigital advertising

measurement- -

Mar 13 Mobileye IntelAdvanced driver assistance

systems15,300 41.9x

Mar 7 Nimble Storage HP Enterprise Hybrid storage solutions 1,200 2.6x

Mar 7 Tagetik Wolters KluwerPerformance and disclosure

management317 5.3x

Mar 6 Veracode CA TechnologiesApplication risk

management platform614 -

Feb 23Halogen

SoftwareSaba Software

Employee and talent

management212 2.4x

Feb 10Aon Hewitt

(assets)Blackstone

HR and employee benefits

platform4,800 2.1x

Feb 2 MSC Software HexagonSimulation software for

engineers834 -

Jan 24 Appdynamics CiscoApplication intelligence

software3,700 18.9x

Jan 23 LANDesk Clearlake CapitalIT task integration and

automation1,100 -

Notable Software M&A Deals & Private Financings(1H 2017)

M&A Private Financings

Source(s): Capital IQ, Pitchbook

Note: Only includes M&A deals above $40m and private financings deals above $20m

Deals are sorted by date

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0

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$0M

$5B

$10B

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Value Deals

Global Software Transaction TrendsM&A and Private Placement Activity by Quarter

Source(s): Pitchbook as of 06/30/2017

Note: Data includes all “SaaS” M&A and private placement deals as defined by Pitchbook regardless of geography or transaction size

M&A Deal Volume Has Stayed Consistent Fewer, Larger Private Placements are Occurring

The US and Europe Continue to Dominate M&A Deal Volume Private Placement Deal Volume by Region has Stayed Consistent

0

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$0M

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Value Deals

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2015

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U.S. & Canada Europe Asia Other

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U.S. & Canada Europe Asia Other

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Executive Summary




Key SaaS Metrics


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18.0

8.8

8.6

8.5

7.9

7.9

6.2

5.6

5.5

4.6

4.1

3.8

3.2

3.2

3.0

2.7

2.7

2.6

Salesforce

Workday

ServiceNow

Square

Veeva

j2 Global

Atlassian

Splunk

Ultimate Software

athenahealth

LogMeIn

Medidata Solutions

Paycom

Proofpoint

MuleSoft

Wix

RealPage

Zendesk

RingCentral

Twilio

GP Bullhound Selected SaaS Index Market Valuations

Source(s): Capital IQ as of 06/30/2017

Note: Includes the 20 largest companies by market cap from the GP Bullhound SaaS index, constituents can be found in Appendix A

(Market Cap Values in $ in billions)

61.6

20.1

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As of June 30:

6.2x

As of June 30:

7.5x

Analysis of GP Bullhound SaaS Index ValuationsRevenue Multiple Trends – Last 5 Years


Note: GP Bullhound SaaS Index constituents can be found in Appendix A

GP Bullhound SaaS Index – TEV/LTM Revenue GP Bullhound SaaS Index – TEV/NTM Revenue

3x

4x

5x

6x

7x

8x

9x

10x

11x

12x

13x

14x

6/30/2012 12/31/2012 6/30/2013 12/31/2013 6/30/2014 12/31/2014 6/30/2015 12/31/2015 6/30/2016 12/31/2016 6/30/2017

Mean: 8.4x

Mean: 6.6x

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VEEV

SHOP

BL

TEAM

PAYC NOW

WDAY

WIX

QTWO

APPF

PFPT

SQ

SPLK

TWOU

ZEN

TWLO

HUBS

ULTIMDSO

MB

CRM

PCTY

NEWR

TLNDMIME

QLYS

CALD

FIVN

CSODEGHT

RP

RNG

INST

BOX

SPSC

ATHN

BNFT

XTLY

BSFT

WK

VIT BAMBR

CSLT

CARB

APTI

ECOM

MOBL

BCOV

BV

SCWX

UPLD

XRO

AYX

YEXT

(30%)

(25%)

(20%)

(15%)

(10%)

(5%)

0%

5%

10%

15%

20%

25%

30%

(5%) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65%

2017E U

nle

ve

red

FC

F M

arg

in

2017E Revenue Growth

Rule of 40% - Public SaaS2017E Growth and Profitability of Public SaaS Companies


Note: Data based on GP Bullhound SaaS Index, constituents can be found in Appendix A,

excludes outliers and companies with “N/A”

The Rule of

40% Line

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CRM

WDAY

NOW

SPLK

SHOP

VEEV

SQ

TEAM

ULTI

ATHN

MDSO

PAYC

PFPT

WIX

RP

RNG

HUBS

ZEN

BOX

PCTY

NEWR

XRO

TWLO

CSOD

TWOU

BL

QTWO

QLYS

MIME

CALD

MB

EGHT

FIVN

BSFT

YEXT

AYX

SPSC

TLND

BNFT

APPF

SCWX

WK

INST

APTI

CARBCSLT

MOBL

XTLY

UPLD

BVECOM

VIT B

BCOV

AMBR

0x

1x

2x

3x

4x

5x

6x

7x

8x

9x

10x

11x

12x

13x

14x

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70%

EV

/2017E R

eve

nu

e M

ultip

le

2017E Revenue Growth + 2017E Unlevered FCF Margin

Rule of 40% - Public SaaS (Cont'd)


Note: Data based on GP Bullhound SaaS Index, constituents can be found in Appendix A,

excludes outliers and companies with “N/A”

Sub-Performers Market-Performers Out-Performers

Companies whose summed revenue growth rate and FCF margin is greater than 40%, are valued higher

by investors than those below this 'rule of 40' line

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91%

65%

54%50% 49%

37%

29%

41%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Benefits of Vertically Focused Cloud SoftwareSignificantly Lower Sales & Marketing Spend as a Percentage of Revenue

Horizontal Software Vertically-Specific Software

Median: 24%Median: 50%

Source(s): Capital IQ as of FY 2016


41%

27%24% 24% 24%

20% 21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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SaaS Public Company ValuationsHigh Growth (2017 Revenue Growth Rate >30%)


Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and not taken into average calculation consideration

Share

Price

Market

Cap EV Cash EV/Revenue EV/EBITDA

CY

Revenue

Growth

Company Name HQ Employee 06-30-17 LTM L6M L1M (m) (m) (m) LTM CY17E CY18E LTM CY17E CY18E 17/16 Gross EBITDA

Share Price Performance

CY17E

Margins

LogMeIn US 2,746 $104.50 64.7% 8.2% (5.4%) $5,499 $5,233 $296 11.8x 5.2x 4.5x 73.5x 15.0x 11.9x 200.6% 82.7% 34.6%

DXC Technology US 59,000 76.72 NA NA (2.1%) 21,838 23,817 1,263 3.1x 1.2x 1.0x 37.2x 6.3x 4.6x 164.5% NA 19.0%

CLX Communications SE 317 15.96 123.6% 49.4% 10.2% 856 917 12 3.8x 2.5x 2.2x 37.2x 20.5x 16.8x 82.3% 29.2% 12.3%

Iron Mountain US 24,000 34.36 (13.7%) 5.8% (1.9%) 9,075 15,191 296 6.7x 4.0x 3.9x 13.1x 12.1x 11.4x 77.6% 55.9% 33.0%

Shopify CA 1,900 86.90 182.5% 102.7% (4.1%) 8,492 8,097 396 18.2x 12.9x 9.2x NM NM NM 61.5% 54.1% 0.7%

Gridsum CN 929 8.56 NA (16.0%) (29.3%) 255 242 37 3.8x 2.6x 1.6x NM NM 7.3x 60.7% 89.0% (2.2%)

Synchronoss US 1,765 16.45 (48.4%) (57.0%) 25.8% 763 887 194 1.9x 1.2x 1.1x 16.3x 4.5x 3.7x 53.9% 66.3% 26.9%

Xero NZ 1,721 18.45 42.2% 51.4% 6.4% 2,522 2,439 80 12.0x 8.6x 6.4x NM NM 54.5x 51.8% NA 1.5%

Okta US 898 22.80 NA NA (12.3%) 2,173 1,948 224 10.7x 8.3x 6.1x NM NM NM 46.9% 68.2% (34.7%)

Wix IL 1,266 69.60 129.3% 56.2% (6.9%) 3,164 3,001 164 9.3x 7.1x 5.4x NM 37.4x 24.2x 45.9% 85.5% 19.0%

MuleSoft US 897 24.94 NA NA (6.5%) 3,212 2,872 340 13.7x 10.5x 7.8x NM NM NM 45.3% 73.7% (18.4%)

Trade Desk US 467 50.11 NA 81.1% (6.3%) 2,121 2,040 107 9.0x 6.9x 5.5x 34.7x 25.6x 18.6x 45.0% 79.6% 27.1%

Wisetech AU 525 5.31 60.9% 30.0% (1.4%) 1,544 1,464 83 16.2x 11.2x 9.1x 57.4x 30.9x 23.0x 44.7% NA 36.2%

Alteryx US 469 19.52 NA NA 4.8% 1,139 974 164 10.2x 7.9x 5.8x NM NM NM 43.6% 83.6% (14.5%)

Atlassian UK 2,078 35.18 35.8% 46.1% (1.2%) 7,932 7,429 504 13.8x 10.5x 8.1x NM 43.9x 33.9x 41.7% NA 23.9%

Blackline US 640 35.74 NA 29.4% 5.1% 1,836 1,735 101 12.8x 10.1x 7.8x NM NM NM 39.6% 80.3% (4.4%)

WageWorks US 1,958 67.20 12.4% (7.3%) (4.1%) 2,657 2,294 609 5.9x 4.8x 4.3x 31.2x 15.9x 13.8x 38.6% 64.1% 29.9%

RingCentral US 1,037 36.55 85.3% 77.4% 6.9% 2,747 2,598 150 6.8x 5.3x 4.3x NM NM 57.4x 37.7% 75.8% 6.2%

Talend FR 722 34.78 NA 56.7% 5.3% 1,003 908 95 7.8x 6.2x 4.8x NM NM NM 37.3% 76.6% (17.3%)

Pure Storage US 1,800 12.81 17.5% 13.3% (1.9%) 2,674 2,138 536 2.8x 2.1x 1.6x NM NM 28.9x 37.0% 65.5% 0.6%

Instructure US 1,006 29.50 55.3% 50.9% 11.1% 853 815 38 6.7x 5.4x 4.1x NM NM NM 36.8% 72.3% (21.2%)

Yext US 630 13.33 NA NA (5.3%) 1,200 1,067 134 7.9x 6.3x 4.7x NM NM NM 36.4% 74.8% (25.2%)

ServiceNow US 5,223 106.00 59.6% 42.6% 0.6% 18,007 17,548 975 11.7x 9.3x 7.2x NM 42.9x 29.3x 35.0% 76.8% 21.8%

Zendesk US 1,750 27.78 5.3% 31.0% 5.3% 2,749 2,501 248 7.4x 5.9x 4.6x NM NM NM 34.8% 73.6% 3.0%

Mimecast UK 957 26.78 167.5% 49.6% 0.2% 1,509 1,400 112 7.5x 6.1x 4.9x NM NM 50.4x 33.8% NA 7.7%

Cloudera US 1,470 16.02 NA NA (25.5%) 2,101 2,537 222 8.9x 7.3x 5.8x NM NM NM 33.3% 71.1% (36.2%)

New Relic US 1,088 43.01 46.4% 52.2% (3.6%) 2,301 2,095 206 8.0x 6.5x 5.1x NM NM 62.3x 33.2% NA 0.1%

Proofpoint US 1,573 86.83 37.6% 22.9% 0.2% 3,796 3,755 413 9.2x 7.5x 5.9x NM 64.0x 42.0x 33.1% 76.4% 11.7%

NICE Systems IL 4,930 80.18 28.8% 17.5% 3.2% 4,856 4,994 309 4.6x 3.7x 3.5x 21.5x 13.2x 12.0x 32.5% 68.7% 28.2%

HubSpot US 1,663 65.75 51.4% 39.9% (7.5%) 2,404 2,282 123 7.8x 6.4x 5.1x NM NM NM 32.2% 79.6% 3.2%

Everbridge US 530 24.36 NA 32.0% (6.9%) 679 639 40 7.7x 6.3x 5.0x NM NM NM 32.2% 71.1% (1.7%)

Symantec US 13,000 28.25 37.5% 18.3% (6.0%) 17,183 21,113 4,256 5.3x 4.2x 3.9x 29.0x 9.7x 8.1x 31.6% NA 43.6%

j2 Global US 2,426 85.09 34.7% 4.0% 1.5% 4,101 4,742 187 5.1x 4.1x 3.8x 12.6x 9.9x 8.8x 31.6% 84.2% 41.5%

2U US 1,164 46.92 59.5% 55.6% 10.5% 2,231 2,102 143 9.4x 7.8x 6.0x NM NM NM 31.4% 81.4% 3.8%

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SaaS Public Company Valuations (Cont'd)High Growth (2017 Revenue Growth Rate >30%)



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Castlight Health US 381 $4.15 4.8% (16.2%) 15.3% $542 $438 $103 4.1x 3.3x 2.6x NM NM NM 31.3% 68.2% (22.5%)

AppFolio US 626 32.60 125.4% 36.7% 14.4% 1,104 1,076 27 9.4x 7.8x 6.2x NM 62.1x 43.0x 31.0% 59.6% 12.5%

Workday US 6,900 97.00 29.9% 46.8% (2.3%) 20,079 18,505 2,116 10.9x 9.0x 7.2x NM 62.2x 44.4x 30.8% 73.9% 14.5%

Coupa Software US 652 28.98 NA 15.9% (16.7%) 1,536 1,297 238 8.9x 7.5x 6.0x NM NM NM 30.2% 69.5% (10.7%)

Paycom US 2,075 68.41 58.3% 50.4% 3.5% 4,065 4,004 93 11.2x 9.4x 7.5x 50.5x 33.7x 26.0x 30.1% 83.5% 27.7%

Average 8.5x 6.5x 5.1x 34.5x 28.3x 26.5x 48.1% 72.3% 7.2%

Median 8.0x 6.4x 5.1x 33.0x 23.0x 23.6x 37.0% 73.8% 6.2%

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Confidential

SaaS Public Company Valuations (Cont'd)Strong Growth (2017 Revenue Growth Rate Between 20% and 30%)



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

MINDBODY US 1,444 $27.20 68.5% 27.7% (2.5%) $1,189 $1,116 $88 7.5x 6.2x 4.9x NM NM 61.8x 30.0% 71.4% 2.2%

Twilio US 829 29.11 (20.2%) 0.9% 18.8% 2,634 2,345 289 7.7x 6.5x 5.1x NM NM NM 29.7% 56.6% (5.7%)

Open Text CA 11,200 31.54 6.6% 2.1% (2.3%) 8,324 10,495 452 5.0x 4.1x 4.0x 17.7x 11.8x 10.8x 29.7% NA 35.1%

Hortonworks US 1,110 12.88 20.5% 55.0% (0.1%) 824 741 83 3.7x 3.1x 2.4x NM NM 11.3x 29.6% 70.0% (6.3%)

Q2 Holdings US 742 36.95 31.9% 28.1% (6.9%) 1,513 1,431 82 8.9x 7.4x 5.8x NM NM 69.4x 29.2% 52.8% 3.8%

Metaps JP 233 28.13 177.5% (18.9%) (0.4%) 364 337 70 3.1x 2.8x 2.8x 50.8x NM NM 29.1% NA 3.3%

Box US 1,495 18.24 76.4% 31.6% (1.8%) 2,465 2,362 184 5.5x 4.7x 3.8x NM NM NM 26.8% 74.2% (4.2%)

Paylocity US 1,800 45.18 4.6% 50.5% (3.4%) 2,327 2,226 101 7.9x 6.7x 5.4x NM 39.1x 30.0x 26.4% NA 17.3%

Splunk US 2,700 56.89 5.0% 11.2% (7.6%) 7,872 6,869 1,087 6.8x 5.7x 4.6x NM 50.6x 33.6x 26.3% 83.4% 11.3%

Square US 1,853 23.46 159.2% 72.1% 3.2% 8,776 8,231 891 4.6x 3.8x 3.0x NM 66.4x 37.4x 25.2% 85.7% 5.8%

SimCorp DK 1,401 60.52 23.8% 23.8% (1.2%) 2,386 2,332 58 7.1x 6.0x 5.5x 29.7x 21.6x 19.3x 25.2% 63.3% 27.6%

CyberArk IL 823 49.95 2.8% 9.8% 2.0% 1,735 1,448 287 6.3x 5.4x 4.4x 34.2x 23.0x 18.0x 24.6% 86.4% 23.3%

Freelancer AU 390 0.60 (49.5%) (16.7%) (10.3%) 276 250 25 6.5x 5.3x 4.1x NM NM 41.6x 24.6% 86.0% 6.2%

Rapid7 US 662 16.83 33.8% 38.3% (6.6%) 731 651 79 3.9x 3.3x 2.7x NM NM NM 24.5% 74.5% (11.1%)

Model N US 814 13.30 (0.4%) 50.3% 3.1% 383 386 54 3.3x 2.8x 2.5x NM NM 47.6x 24.3% NA (4.2%)

Extreme Networks US 1,378 9.22 172.0% 83.3% (3.5%) 1,016 993 117 1.8x 1.5x 1.1x 29.2x 12.8x NA 23.9% NA 11.7%

Ultimate Software US 3,747 210.06 (0.1%) 15.2% (5.0%) 6,243 6,168 84 7.5x 6.4x 5.2x NM 26.1x 21.1x 23.9% 64.5% 24.4%

Varonis Systems US 1,148 37.20 54.9% 38.8% 1.9% 1,012 891 121 5.1x 4.4x 3.7x NM NM NM 23.4% 90.4% 2.0%

Adobe US 15,706 141.44 47.7% 37.4% (0.7%) 69,787 66,744 4,932 10.2x 9.3x 7.7x 31.2x 22.5x 18.3x 23.2% 87.8% 41.1%

Veeva US 1,794 61.31 79.7% 50.6% (5.5%) 8,568 7,904 664 13.6x 11.8x 9.9x 55.9x 37.2x 30.7x 23.0% 70.3% 31.8%

Palo Alto Networks US 4,340 133.81 9.1% 7.0% 14.4% 12,287 11,433 1,372 6.9x 5.9x 4.9x NM 25.3x 19.7x 22.7% NA 23.5%

Salesforce US 25,000 86.60 9.1% 26.5% (4.7%) 61,602 60,918 3,220 6.9x 5.9x 5.0x NM 27.7x 22.4x 22.6% 76.1% 21.3%

Amazon US 341,400 968.00 35.3% 29.1% (2.9%) 462,680 462,748 21,531 3.2x 2.8x 2.3x 37.9x 24.1x 18.4x 22.1% 36.6% 11.6%

Mattersight US 265 2.55 (34.1%) (31.1%) (5.6%) 83 98 23 2.5x 2.1x 1.8x NM NM 33.5x 22.0% 69.8% (4.9%)

Ellie Mae US 1,123 109.91 19.9% 31.3% 0.5% 3,745 3,351 394 8.8x 7.6x 6.2x 43.4x 23.1x 17.4x 21.8% 65.6% 33.0%

Imperva US 936 47.85 11.3% 24.6% (3.3%) 1,601 1,288 313 4.7x 4.0x 3.4x NM 39.6x 28.1x 21.5% 80.4% 10.1%

Guidewire Software US 1,863 68.71 11.3% 39.3% 3.3% 5,111 4,633 477 9.8x 8.5x 7.2x NM 40.9x 28.5x 21.4% NA 20.7%

Asseco Poland PL 22,364 13.16 (0.2%) 1.8% (1.7%) 1,092 1,963 319 1.0x 0.9x 0.8x 7.5x 6.8x 6.2x 21.4% 23.4% 12.5%

Yonyou CN 13,889 2.53 (14.3%) (15.8%) 13.4% 3,697 3,758 629 5.0x 4.3x 4.0x NM 32.1x 36.6x 20.5% 68.7% 13.6%

IRESS AU 1,790 9.74 20.0% 13.5% 9.7% 1,649 1,768 17 6.3x 5.2x 4.8x 23.7x 17.5x 15.7x 20.1% 30.5% 29.8%

Average 6.0x 5.1x 4.3x 32.8x 28.8x 28.2x 24.6% 68.2% 12.9%

Median 6.3x 5.2x 4.3x 31.2x 25.3x 25.2x 24.1% 70.3% 11.7%

23

Confidential

SaaS Public Company Valuations (Cont'd)High Profitability (2017 EBITDA Margin >35%)



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Verisign US 990 $92.96 7.5% 22.2% 2.6% $9,433 $9,510 $1,786 8.3x 8.2x 8.0x 12.7x 11.7x 11.2x 1.3% 83.2% 70.2%

Check Point Software IL 4,281 109.08 36.9% 29.1% (2.1%) 17,828 16,360 1,468 9.2x 8.7x 8.2x 18.7x 16.2x 15.1x 7.7% 88.8% 53.9%

MSCI US 2,897 102.99 33.5% 30.7% 2.9% 9,316 10,695 697 9.1x 8.6x 8.0x 18.2x 16.9x 15.2x 8.2% 78.2% 51.0%

Aspen Technology US 1,396 55.26 37.3% 1.1% (9.6%) 4,117 4,155 102 8.8x 8.6x 8.1x 19.0x 17.7x 16.3x 2.5% NA 48.4%

ANSYS US 2,800 121.68 34.1% 31.6% (4.0%) 10,404 9,537 867 9.4x 9.1x 8.5x 21.0x 18.9x 17.5x 6.4% 88.7% 48.1%

Micro Focus UK 4,490 29.49 37.5% 9.6% (5.0%) 6,774 8,490 123 6.4x 6.1x 6.0x 17.0x 12.7x 12.4x NA NA 48.0%

Black Knight US 4,250 40.95 8.9% 8.3% 3.5% 2,848 5,361 108 5.1x 4.9x 4.5x 15.3x 10.4x 9.3x 5.6% NA 47.4%

MYOB AU 1,400 2.62 2.1% (0.8%) 0.2% 1,592 1,878 44 7.0x 5.9x 5.4x 20.7x 12.6x 11.5x 19.7% 91.9% 46.5%



SS&C Technologies US 8,001 38.41 36.8% 34.3% 2.9% 7,836 10,172 109 6.5x 6.1x 5.8x 18.3x 14.7x 13.4x 13.2% 58.4% 41.1%

Adobe US 15,706 141.44 47.7% 37.4% (0.7%) 69,787 66,744 4,932 10.2x 9.3x 7.7x 31.2x 22.5x 18.3x 23.2% 87.8% 41.1%

Intel US 106,000 33.74 2.9% (7.0%) (6.7%) 158,882 167,338 17,295 2.8x 2.8x 2.7x 7.1x 6.8x 6.4x 1.4% 63.0% 40.9%

Alphabet US 73,992 929.68 32.1% 17.3% (6.7%) 635,840 547,338 92,439 5.8x 5.1x 4.4x 17.5x 12.5x 10.7x 19.0% 61.3% 40.7%

Microsoft US 114,000 68.93 34.7% 10.9% (2.1%) 532,175 496,594 121,576 5.7x 5.0x 4.7x 17.2x 12.5x 11.4x 16.7% NA 39.6%

F5 Networks US 4,419 127.06 11.6% (12.2%) (0.7%) 8,221 7,206 1,015 3.5x 3.4x 3.2x 11.5x 8.6x 8.0x 5.8% NA 39.3%

Oracle Financial IN 8,818 55.68 9.1% 21.2% 1.3% 4,749 4,204 544 6.2x 5.7x 5.1x 15.7x 14.8x 12.8x 13.4% NA 38.5%

Intuit US 7,900 132.81 19.0% 15.9% (5.2%) 34,028 32,935 1,593 6.5x 6.2x 5.7x 20.8x 16.1x 14.4x 9.7% NA 38.5%

Progress Software US 1,912 30.89 12.5% (3.3%) 5.1% 1,491 1,373 245 3.4x 3.5x 3.5x 10.7x 9.2x 9.6x (2.8%) 85.2% 37.7%

Akamai Technologies US 6,672 49.81 (10.9%) (25.3%) 5.0% 8,611 8,411 845 3.5x 3.4x 3.1x 11.9x 9.0x 8.1x 6.4% 65.1% 37.5%

VMware US 18,905 87.43 52.8% 11.1% (9.6%) 35,707 28,595 7,985 4.0x 3.8x 3.5x 15.5x 10.0x 9.8x 7.4% 86.9% 37.4%

Verizon US 161,000 44.66 (20.0%) (16.3%) (3.3%) 182,185 296,264 4,307 2.4x 2.4x 2.4x 6.9x 6.7x 6.6x (2.6%) 59.2% 36.2%


CenturyLink US 40,000 23.88 (17.7%) 0.4% (4.4%) 13,106 32,571 214 1.9x 2.0x 1.9x 5.1x 5.5x 5.4x (5.5%) 54.7% 36.0%

Cisco US 73,390 31.30 9.1% 3.6% (1.2%) 156,502 120,998 67,974 2.5x 2.5x 2.5x 8.0x 7.0x 6.9x (1.6%) NA 36.0%

Fiserv US 23,000 122.34 12.5% 15.1% (1.8%) 25,982 30,312 308 5.4x 5.3x 5.0x 17.4x 14.8x 13.8x 4.7% 47.0% 35.6%

Jack Henry & Associates US 5,861 103.87 19.0% 17.0% (1.2%) 8,066 8,073 43 5.7x 5.5x 5.2x 16.0x 15.6x 14.5x 4.9% NA 35.4%

Temenos CH 4,356 89.35 79.7% 28.0% (3.5%) 6,229 6,406 210 9.9x 9.1x 8.2x 37.0x 25.9x 22.6x 10.7% 81.2% 35.3%

Open Text CA 11,200 31.54 6.6% 2.1% (2.3%) 8,324 10,495 452 5.0x 4.1x 4.0x 17.7x 11.8x 10.8x 29.7% NA 35.1%

Average 6.2x 5.7x 5.2x 18.2x 13.5x 12.1x 11.2% 74.4% 42.0%

Median 5.7x 5.3x 5.0x 17.2x 12.5x 11.4x 7.6% 81.2% 39.6%

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24

GP Bullhound SaaS Index Performance

L1M L3M

L6M L12M



80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

110.0%

115.0%

120.0%

3/30/2017 4/30/2017 5/31/2017 6/30/2017

Ind

ex V

alu

e

GPB SaaS Index S&P 500 NASDAQ Composite

95.0%

100.0%

105.0%

110.0%

115.0%

120.0%

125.0%

130.0%

135.0%

140.0%

145.0%

12/30/2016 1/30/2017 2/28/2017 3/31/2017 4/30/2017 5/31/2017 6/30/2017

Ind

ex

Va

lue


90.0%

95.0%

100.0%

105.0%

110.0%

115.0%

120.0%

125.0%

130.0%

135.0%

140.0%

6/30/2016 8/31/2016 10/31/2016 12/31/2016 2/28/2017 4/30/2017 6/30/2017

Ind

ex

Va

lue


90.0%

95.0%

100.0%

105.0%

110.0%

5/31/2017 6/10/2017 6/20/2017 6/30/2017

Ind

ex V

alu

e


Confidential

25

Executive Summary




Key SaaS Metrics


1

2

3

4

5

6



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26

Key SaaS MetricsDefinitions & Calculations

Metric Definition Calculation

Normalized measurement of recurring revenue, most frequently

measured with a constant value in each month of the

subscription periodMRR

All S&M expenses for new customers. Sometimes excludes people

management S&M costsCAC =

𝑆&𝑀

# 𝑜𝑓 𝑛𝑒𝑤 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠

Customer Acquisition Cost (CAC)

Amount of profit a customer is calculated to deliver to the

company over the lifetime of the customerCLV =

𝐴𝑅𝑃𝑈 ∗ 𝐺𝑀

𝐶ℎ𝑢𝑟𝑛 𝑟𝑎𝑡𝑒

Customer Lifetime Value (CLV)

The # of months a company requires to payback its cost of

customer acquisitionPayback Period =

𝐶𝐴𝐶

𝐴𝑅𝑃𝐴 ∗ 𝐺𝑀Payback Period

Churn (Gross & Net)

Gross Churn is the # of customers you lose in a given period or

cohort regardless of account expansion or growth

Net Churn is the # of customers gained or lost in a given period or

cohort after taking into consideration new, reactivated, or

expanded accounts Net Churn =

(𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑙𝑜𝑠𝑡𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑 − 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑔𝑎𝑖𝑛𝑒𝑑

𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑)𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑎𝑡

𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑

Gross Churn = 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑙𝑜𝑠𝑡 𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑

𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑎𝑡 𝑏𝑒𝑔𝑔𝑖𝑛𝑖𝑛𝑔 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑝𝑒𝑖𝑟𝑜𝑑

MRR= # 𝑜𝑓 𝑝𝑎𝑦𝑖𝑛𝑔 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 ∗ 𝐴𝑅𝑃𝐴/𝑚𝑜𝑛𝑡ℎ

Confidential

27

Key SaaS Metrics (Cont’d)

• Monthly Recurring Revenues (MRR), Annual Recurring Revenue (ARR), Annual Run Rate Revenue (ARRR) are the key

metrics that investors will focus on

– Note: ARRR = ARR + Non-recurring revenue items

– Also important to understand, the % on-demand SaaS vs. traditional license, and the mix between software and

services

• Important to show continued growth in top line revenue (both reported and for the above metrics)

MRR / ARR / ARRR

• Customer Acquisition Cost (CAC) payback period is typically stated in months. Represents the time taken to fully pay

back sales and marketing investments

• Growth is the key target for SaaS companies, but sales and marketing investments should ultimately be profitable. CAC

payback periods:

– For SMEs, CAC payback period should be 6-12 months

– For Enterprise Customers, CAC payback period should be 9-15 months

– A CAC payback period of >24months should be a cause for concern

• Customer Lifetime Value = NPV of recurring profits of a customer less after CAC has been repaid

– For SMEs, CLV should be between 3 & 4 years

– For Enterprise Customers, CLV should be between 5 & 7 years

CAC vs. CLV

• Logo Churn: Churn of absolute number of customers. Top companies have a Logo Churn of <7%

• MRR Churn: Churn of customer MRR that has been lost over given period of time. Top companies have a MRR Churn of

<5%, including upgrades/customer expansion, churn is ideally negative

• MRR Renewal: Total MRR of renewed customers/Total MRR of existing customers at year beginning. Top companies

have a MRR Renewal percentage of 105-110% due to upsells to its installed base

• Net Revenue Retention:

– Key metric for performance of SaaS business

– >100% upsells more than make up for churn

– ARR as a Percentage of Upsells: 15%+

Churn & Renewal Rates

• Growth is of paramount importance, with excess cash being used to fuel growth

• Important, therefore, to understand the cash burn in the business and planning for capital efficient hyper-growth

Free Cash Flow / Burn Rate

Source(s): GP Bullhound analysis

Investors focus on key SaaS metrics, long-term business model viability and valuations

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28

Executive Summary




Key SaaS Metrics


1

2

3

4

5

6



29

Confidential

Public Comps – GP Bullhound SaaS Index



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Salesforce US 25,000 $86.60 9.1% 26.5% (4.7%) $61,602 $60,918 $3,220 6.9x 5.9x 5.0x NM 27.7x 22.4x 22.6% 76.1% 21.3%



Square US 1,853 23.46 159.2% 72.1% 3.2% 8,776 8,231 891 4.6x 3.8x 3.0x NM 66.4x 37.4x 25.2% 85.7% 5.8%

Veeva US 1,794 61.31 79.7% 50.6% (5.5%) 8,568 7,904 664 13.6x 11.8x 9.9x 55.9x 37.2x 30.7x 23.0% 70.3% 31.8%

j2 Global CA 1,900 86.90 182.5% 102.7% (4.1%) 8,492 8,097 396 18.2x 12.9x 9.2x NM NM NM 61.5% 54.1% 0.7%




athenahealth US 5,305 140.55 1.8% 33.6% 3.8% 5,599 5,784 98 5.2x 4.7x 4.1x 51.5x 22.0x 18.2x 12.9% 56.2% 21.5%

LogMeIn US 2,746 104.50 64.7% 8.2% (5.4%) 5,499 5,233 296 11.8x 5.2x 4.5x 73.5x 15.0x 11.9x 200.6% 82.7% 34.6%

Medidata Solutions US 1,424 78.20 66.8% 57.4% 10.0% 4,555 4,457 365 9.2x 8.1x 6.8x 61.6x 32.9x 26.5x 19.3% 78.6% 24.5%

Paycom US 2,075 68.41 58.3% 50.4% 3.5% 4,065 4,004 93 11.2x 9.4x 7.5x 50.5x 33.7x 26.0x 30.1% 83.5% 27.7%



Wix IL 1,266 69.60 129.3% 56.2% (6.9%) 3,164 3,001 164 9.3x 7.1x 5.4x NM 37.4x 24.2x 45.9% 85.5% 19.0%

RealPage US 4,800 35.95 61.0% 19.8% 2.3% 2,972 3,034 60 5.1x 4.6x 4.1x 34.2x 18.9x 15.3x 15.4% 61.5% 24.5%





Box US 1,495 18.24 76.4% 31.6% (1.8%) 2,465 2,362 184 5.5x 4.7x 3.8x NM NM NM 26.8% 74.2% (4.2%)

HubSpot US 1,663 65.75 51.4% 39.9% (7.5%) 2,404 2,282 123 7.8x 6.4x 5.1x NM NM NM 32.2% 79.6% 3.2%



2U US 1,164 46.92 59.5% 55.6% 10.5% 2,231 2,102 143 9.4x 7.8x 6.0x NM NM NM 31.4% 81.4% 3.8%



Cornerstone OnDemand US 1,859 35.75 (6.1%) (15.5%) (2.3%) 2,031 1,982 290 4.6x 4.1x 3.6x NM 35.5x 23.8x 13.8% 72.3% 11.6%

Blackline US 640 35.74 NA 29.4% 5.1% 1,836 1,735 101 12.8x 10.1x 7.8x NM NM NM 39.6% 80.3% (4.4%)

Callidus Software US 1,128 24.20 21.1% 44.0% 5.0% 1,570 1,387 183 6.4x 5.7x 4.8x NM 45.9x 34.7x 18.4% 64.0% 12.4%

Coupa Software US 652 28.98 NA 15.9% (16.7%) 1,536 1,297 238 8.9x 7.5x 6.0x NM NM NM 30.2% 69.5% (10.7%)


Qualys US 721 40.80 36.9% 28.9% (2.6%) 1,511 1,266 245 6.2x 5.6x 4.8x 25.9x 17.6x 14.5x 14.5% 78.2% 31.7%


8x8 US 1,019 14.55 (0.4%) 1.7% 7.0% 1,333 1,158 175 4.6x 4.1x 3.5x NM 40.3x 30.8x 16.2% NA 10.1%

BroadSoft US 1,646 43.05 4.9% 4.4% 9.1% 1,322 1,227 300 3.5x 3.2x 2.8x 47.0x 13.7x 11.8x 12.9% 76.8% 23.3%


MINDBODY US 1,444 27.20 68.5% 27.7% (2.5%) 1,189 1,116 88 7.5x 6.2x 4.9x NM NM 61.8x 30.0% 71.4% 2.2%

Five9 US 807 21.52 80.8% 51.7% (3.2%) 1,172 1,161 56 6.8x 6.0x 5.1x NM NM 60.5x 19.1% 59.2% 5.9%

30

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Public Comps – GP Bullhound SaaS Index



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Alteryx US 469 $19.52 NA NA 4.8% $1,139 $974 $164 10.2x 7.9x 5.8x NM NM NM 43.6% 83.6% (14.5%)

Benefitfocus US 1,430 36.35 (4.6%) 22.4% 13.6% 1,128 1,179 58 4.9x 4.4x 3.7x NM 74.5x 39.5x 13.8% 51.9% 6.0%

AppFolio US 626 32.60 125.4% 36.7% 14.4% 1,104 1,076 27 9.4x 7.8x 6.2x NM 62.1x 43.0x 31.0% 59.6% 12.5%

SPS Commerce US 1,217 63.76 5.2% (8.8%) 9.1% 1,096 942 154 4.7x 4.3x 3.7x 44.8x 29.2x 24.0x 14.4% 67.5% 14.6%

Appian US 753 18.15 NA NA 1.4% 1,082 1,124 35 8.3x 7.2x 6.1x NM NM NM 17.3% 63.3% (18.5%)




Workiva US 1,180 19.05 39.5% 39.6% 5.0% 788 744 65 4.0x 3.6x 3.2x NM NM NM 14.5% 72.5% (11.1%)

SecureWorks US 2,306 9.29 (34.1%) (12.3%) (18.0%) 753 662 92 1.5x 1.4x 1.3x NM NM NM 7.9% 54.9% (5.5%)

Apptio US 748 17.35 NA (6.4%) 5.7% 689 578 111 3.4x 3.2x 2.8x NM NM NM 12.8% 68.8% (5.1%)


LivePerson US 974 11.00 73.5% 45.7% 15.2% 643 595 48 2.7x 2.9x 2.7x NM 32.1x 25.0x (6.9%) 73.3% 8.9%

Carbonite US 830 21.80 124.0% 32.9% 15.3% 599 597 42 2.8x 2.5x 2.2x 51.9x 11.0x 9.1x 17.2% 75.2% 22.4%

MobileIron US 854 6.05 98.4% 61.3% 15.2% 558 467 91 2.8x 2.6x 2.3x NM NM NM 11.6% 84.1% (5.6%)

Castlight Health US 381 4.15 4.8% (16.2%) 15.3% 542 438 103 4.1x 3.3x 2.6x NM NM NM 31.3% 68.2% (22.5%)

Xactly US 450 15.65 22.2% 42.3% 0.6% 503 472 44 4.9x 4.2x 3.5x NM NM NM 17.6% 62.8% (3.7%)

Upland Software US 251 21.99 188.6% 145.7% (1.4%) 446 484 19 6.2x 5.4x 5.0x 56.5x 18.0x 15.6x 19.2% 66.9% 30.2%

Bazaarvoice US 763 4.95 23.4% 2.1% 11.2% 417 358 91 1.8x 1.8x 1.7x NM 19.9x 13.8x 0.4% NA 8.9%

ChannelAdvisor US 697 11.55 (20.3%) (19.5%) 0.9% 304 242 63 2.1x 2.0x 1.8x NM 35.2x 22.3x 9.5% 76.9% 5.6%

Vitec Software Group SE 500 8.53 13.0% 2.6% 4.9% 251 277 15 3.2x 3.0x 2.9x 15.6x 10.5x 9.7x 11.9% NA 28.7%

Amber Road US 677 8.57 11.2% (5.6%) 16.1% 232 240 15 3.2x 2.9x 2.6x NM NM NM 12.0% 50.9% (3.3%)

Brightcove US 506 6.20 (29.5%) (23.0%) 3.3% 212 183 29 1.2x 1.2x 1.1x NM NM 21.5x 1.0% 62.2% (2.7%)

Marin Software US 437 1.30 (44.7%) (44.7%) 0.0% 51 21 33 0.2x NA NA NM NA NA NA NA NA

Average 7.1x 5.9x 4.7x 46.6x 35.0x 31.3x 29.2% 70.1% 5.4%

Median 7.2x 5.9x 4.8x 50.5x 33.7x 26.5x 26.8% 72.3% 5.9%

Confidential

31

Executive Summary




Key SaaS Metrics


1

2

3

4

5

6



32

Confidential

Public Comps – Large-Cap Consolidator



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Microsoft US 114,000 $68.93 34.7% 10.9% (2.1%) $532,175 $496,594 $121,576 5.7x 5.0x 4.7x 17.2x 12.5x 11.4x 16.7% NA 39.6%

Oracle US 138,000 50.14 22.5% 30.4% 10.4% 207,413 199,630 66,078 5.3x 5.2x 5.0x 13.6x 11.2x 10.5x 4.0% NA 46.0%

Intel US 106,000 33.74 2.9% (7.0%) (6.7%) 158,882 167,338 17,295 2.8x 2.8x 2.7x 7.1x 6.8x 6.4x 1.4% 63.0% 40.9%


IBM US 380,300 153.83 1.4% (7.3%) 1.4% 144,523 176,735 10,695 2.3x 2.3x 2.3x 9.8x 9.5x 9.4x 0.1% 47.7% 23.7%

SAP DE 85,751 104.78 39.4% 20.1% (1.7%) 125,588 126,476 8,000 5.2x 4.6x 4.3x 20.1x 13.4x 12.4x 17.2% 72.8% 34.5%

Hewlett Packard US 195,000 16.59 (9.2%) (28.3%) (12.0%) 27,251 33,100 8,101 0.7x 1.0x 1.1x 4.5x 5.6x 6.9x (32.6%) NA 17.9%

Average 3.5x 3.3x 3.2x 11.5x 9.4x 9.1x 0.7% 61.2% 34.1%

Median 2.8x 2.8x 2.7x 9.8x 9.5x 9.4x 1.4% 63.0% 36.0%

33

Confidential

Public Comps – Advertising Technology



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Alphabet US 73,992 $929.68 32.1% 17.3% (6.7%) $635,840 $547,338 $92,439 5.8x 5.1x 4.4x 17.5x 12.5x 10.7x 19.0% 61.3% 40.7%

Adobe US 15,706 141.44 47.7% 37.4% (0.7%) 69,787 66,744 4,932 10.2x 9.3x 7.7x 31.2x 22.5x 18.3x 23.2% 87.8% 41.1%


Teradata US 10,093 29.49 17.6% 8.5% 4.8% 3,860 3,257 1,164 1.4x 1.6x 1.6x 9.7x 8.8x 8.7x (9.7%) 51.2% 17.6%

Criteo FR 2,582 49.05 6.8% 19.4% (10.7%) 3,176 2,972 304 1.6x 3.2x 2.6x 16.6x 10.2x 8.0x (47.9%) 87.7% 31.0%

Hubspot US 1,663 65.75 51.4% 39.9% (7.5%) 2,404 2,282 123 7.8x 6.4x 5.1x NM NM NM 32.2% 79.6% 3.2%

Trade Desk US 467 50.11 NA 81.1% (6.3%) 2,121 2,040 107 9.0x 6.9x 5.5x 34.7x 25.6x 18.6x 45.0% 79.6% 27.1%




TechTarget US 659 10.37 28.0% 21.6% 14.3% 285 295 27 2.8x 2.7x 2.4x 26.7x 13.4x 10.6x 4.0% 72.9% 19.9%

Average 5.1x 4.6x 3.9x 22.7x 22.2x 16.8x 10.6% 73.7% 20.8%

Median 5.8x 5.1x 4.4x 22.1x 21.2x 16.1x 18.4% 76.5% 19.9%

34

Confidential

Public Comps – Business Intelligence/Analytics



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins


IBM US 380,300 153.83 1.4% (7.3%) 1.4% 144,523 176,735 10,695 2.3x 2.3x 2.3x 9.8x 9.5x 9.4x 0.1% 47.7% 23.7%

SAP DE 85,751 104.78 39.4% 20.1% (1.7%) 125,588 126,476 8,000 5.2x 4.6x 4.3x 20.1x 13.4x 12.4x 17.2% 72.8% 34.5%

Adobe US 15,706 141.44 47.7% 37.4% (0.7%) 69,787 66,744 4,932 10.2x 9.3x 7.7x 31.2x 22.5x 18.3x 23.2% 87.8% 41.1%

NetApp US 10,100 40.05 62.9% 13.6% (1.0%) 10,883 8,078 4,928 1.5x 1.4x 1.4x 8.9x 6.5x 6.0x 3.5% NA 22.2%


Tableau Software US 3,223 61.27 25.2% 45.4% (2.0%) 4,778 3,824 955 4.5x 4.4x 4.0x NM 73.3x 52.6x 6.1% 87.6% 5.9%

Fair Isaac US 3,306 139.41 23.4% 16.9% 5.0% 4,317 4,827 116 5.2x 5.1x 4.8x 23.0x 19.6x 17.6x 4.6% NA 26.1%

Blackbaud US 3,156 85.75 26.3% 34.0% 3.0% 4,025 4,368 14 5.9x 5.5x 5.1x 34.5x 23.1x 20.7x 7.7% 58.0% 24.0%

Teradata US 10,093 29.49 17.6% 8.5% 4.8% 3,860 3,257 1,164 1.4x 1.6x 1.6x 9.7x 8.8x 8.7x (9.7%) 51.2% 17.6%

Verint US 5,100 40.70 22.8% 15.5% (1.1%) 2,551 2,969 345 2.8x 2.6x 2.5x 28.8x 11.5x 10.4x 7.3% 65.1% 22.6%


MicroStrategy US 2,162 191.67 9.5% (2.9%) 4.8% 2,194 1,575 618 3.1x 3.0x 2.9x 13.7x 11.5x 10.2x 1.7% 82.2% 26.2%


Inovalon US 2,181 13.15 (27.0%) 27.7% (3.0%) 1,920 1,645 533 3.8x 3.7x 3.4x 20.2x 15.3x 13.8x 4.9% 65.0% 23.9%


Alteryx US 469 19.52 NA NA 4.8% 1,139 974 164 10.2x 7.9x 5.8x NM NM NM 43.6% 83.6% (14.5%)




SAS AB SE 10,155 2.18 15.5% 41.8% 17.5% 720 761 1,025 0.2x 0.2x 0.1x 2.2x 2.3x 2.2x 8.2% NA 6.7%


SDL UK 3,310 8.09 57.7% 48.0% (0.8%) 663 635 26 1.9x 1.7x 1.7x 16.6x 13.9x 12.4x 11.6% 54.8% 12.6%



iSentia AU 1,300 1.65 (36.2%) (20.5%) 30.1% 330 373 6 3.2x 2.9x 2.7x 12.7x 10.4x 9.4x 11.0% NA 28.0%

Gridsum CN 929 8.56 NA (16.0%) (29.3%) 255 242 37 3.8x 2.6x 1.6x NM NM 7.3x 60.7% 89.0% (2.2%)

Attunity IL 235 7.19 (22.8%) 19.8% 8.1% 121 110 12 1.9x 1.7x 1.5x NM 20.3x 17.0x 15.1% 85.3% 8.6%

Datawatch US 146 9.30 67.9% 69.1% 13.4% 112 84 28 2.5x 2.3x NA NM NM NA 15.2% NA (1.6%)

Mattersight US 265 2.55 (34.1%) (31.1%) (5.6%) 83 98 23 2.5x 2.1x 1.8x NM NM 33.5x 22.0% 69.8% (4.9%)

Hottolink JP 88 5.42 11.6% 31.9% 11.0% 66 75 7 3.8x NA NA 24.6x NA NA NA NA NA

Expert System IT 233 1.99 (9.3%) (0.5%) (0.3%) 54 62 15 2.0x 1.8x 1.5x NM 17.0x 8.3x 10.4% NA 10.8%


Average 4.2x 3.8x 3.3x 18.2x 19.7x 17.8x 16.1% 71.8% 9.0%

Median 3.7x 3.1x 2.9x 17.5x 14.6x 12.4x 12.8% 72.5% 8.9%

35

Confidential

Public Comps – Communication



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Microsoft US 114,000 $68.93 34.7% 10.9% (2.1%) $532,175 $496,594 $121,576 5.7x 5.0x 4.7x 17.2x 12.5x 11.4x 16.7% NA 39.6%


Citrix US 9,600 79.58 (0.6%) (10.9%) (3.1%) 12,028 12,072 1,414 3.5x 4.3x 4.1x 11.9x 12.3x 11.5x (17.3%) 86.8% 34.7%


Nuance US 13,200 17.41 11.4% 16.8% (7.4%) 5,008 6,806 786 3.5x 3.3x 3.1x 16.4x 10.4x 10.0x 6.2% NA 31.7%

NICE Systems IL 4,930 80.18 28.8% 17.5% 3.2% 4,856 4,994 309 4.6x 3.7x 3.5x 21.5x 13.2x 12.0x 32.5% 68.7% 28.2%




8x8 US 1,019 14.55 (0.4%) 1.7% 7.0% 1,333 1,158 175 4.6x 4.1x 3.5x NM 40.3x 30.8x 16.2% NA 10.1%

Broadsoft US 1,646 43.05 4.9% 4.4% 9.1% 1,322 1,227 300 3.5x 3.2x 2.8x 47.0x 13.7x 11.8x 12.9% 76.8% 23.3%





Cybozu JP 516 4.50 22.1% 17.9% 5.9% 207 195 15 2.6x NA NA 18.5x NA NA NA NA NA

V-cube JP 500 5.23 (45.7%) (6.0%) 2.1% 101 134 18 2.1x 2.0x 2.0x 14.7x 13.4x 11.1x 6.4% 48.0% 15.2%

Average 4.8x 4.2x 3.7x 20.1x 18.0x 17.9x 23.4% 67.0% 20.7%

Median 3.8x 3.9x 3.5x 16.4x 13.2x 11.6x 23.2% 71.1% 23.6%

36

Confidential

Public Comps – ERP & Enterprise Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Oracle US 138,000 $50.14 22.5% 30.4% 10.4% $207,413 $199,630 $66,078 5.3x 5.2x 5.0x 13.6x 11.2x 10.5x 4.0% NA 46.0%

SAP DE 85,751 104.78 39.4% 20.1% (1.7%) 125,588 126,476 8,000 5.2x 4.6x 4.3x 20.1x 13.4x 12.4x 17.2% 72.8% 34.5%



Constellation Software CA 12,124 521.99 35.5% 14.9% 1.6% 11,062 10,934 475 5.0x 4.6x 4.0x 25.4x 17.7x 15.4x 12.6% 66.1% 25.9%

Sage Group UK 13,761 8.94 4.1% 10.5% (3.2%) 9,654 10,093 387 4.7x 4.5x 4.4x 16.3x 15.7x 14.2x 10.4% NA 28.6%

Shopify CA 1,900 86.90 182.5% 102.7% (4.1%) 8,492 8,097 396 18.2x 12.9x 9.2x NM NM NM 61.5% 54.1% 0.7%

Tyler Technologies US 3,860 175.67 5.4% 23.0% 2.9% 6,514 6,431 84 8.3x 7.6x 6.8x 38.2x 25.5x 22.2x 12.3% 52.1% 29.8%

Guidewire Software US 1,863 68.71 11.3% 39.3% 3.3% 5,111 4,633 477 9.8x 8.5x 7.2x NM 40.9x 28.5x 21.4% NA 20.7%

Medidata Solutions US 1,424 78.20 66.8% 57.4% 10.0% 4,555 4,457 365 9.2x 8.1x 6.8x 61.6x 32.9x 26.5x 19.3% 78.6% 24.5%


Blackbaud US 3,156 85.75 26.3% 34.0% 3.0% 4,025 4,368 14 5.9x 5.5x 5.1x 34.5x 23.1x 20.7x 7.7% 58.0% 24.0%

Prosegur ES 158,612 6.49 8.2% 3.5% (3.1%) 3,885 4,047 1,376 0.9x 0.8x 0.8x 8.0x 7.0x 6.6x 17.0% 96.1% 12.1%

Yonyou Networks CN 13,889 2.53 (14.3%) (15.8%) 13.4% 3,697 3,758 629 5.0x 4.3x 4.0x NM 32.1x 36.6x 20.5% 68.7% 13.6%

RealPage US 4,800 35.95 61.0% 19.8% 2.3% 2,972 3,034 60 5.1x 4.6x 4.1x 34.2x 18.9x 15.3x 15.4% 61.5% 24.5%



Aveva Group UK 1,707 25.20 11.9% 8.6% 0.2% 1,611 1,441 164 5.3x 5.0x 4.9x 22.1x 18.7x 17.3x 10.8% NA 26.9%



Technology One AU 846 4.42 14.8% 8.2% 5.2% 1,387 1,343 44 6.7x 6.0x 5.3x 30.4x 25.8x 22.1x 20.8% NA 23.3%

Five9 US 807 21.52 80.8% 51.7% (3.2%) 1,172 1,161 56 6.8x 6.0x 5.1x NM NM 60.5x 19.1% 59.2% 5.9%

SPS Commerce US 1,217 63.76 5.2% (8.8%) 9.1% 1,096 942 154 4.7x 4.3x 3.7x 44.8x 29.2x 24.0x 14.4% 67.5% 14.6%

Enghouse CA 1,528 40.43 (4.2%) (2.9%) (8.0%) 1,090 1,024 64 4.5x 3.9x 3.5x 17.6x 14.1x 12.7x 9.9% NA 27.5%

Appian US 753 18.15 NA NA 1.4% 1,082 1,124 35 8.3x 7.2x 6.1x NM NM NM 17.3% 63.3% (18.5%)




BasWare FI 1,856 45.01 17.2% 17.5% 15.6% 646 655 35 4.1x 3.7x 3.5x NM NM 47.0x 11.5% 89.6% 0.3%

QAD US 1,775 32.05 66.3% 5.4% (0.8%) 593 454 153 1.6x 1.6x 1.5x 45.0x 30.4x 26.3x 4.7% 52.0% 5.1%


Model N US 814 13.30 (0.4%) 50.3% 3.1% 383 386 54 3.3x 2.8x 2.5x NM NM 47.6x 24.3% NA (4.2%)

ServiceSource US 3,145 3.88 (3.7%) (31.7%) 12.1% 344 292 189 1.2x 1.2x 1.1x NM 18.8x 12.1x (5.1%) 36.9% 6.5%


American Software US 386 10.29 (1.8%) (0.4%) (3.8%) 303 218 85 2.1x 2.0x 1.9x 15.1x 11.1x 10.4x (0.6%) NA 18.1%


Amber Road US 677 8.57 11.2% (5.6%) 16.1% 232 240 15 3.2x 2.9x 2.6x NM NM NM 12.0% 50.9% (3.3%)

Average 6.1x 5.2x 4.4x 28.5x 24.1x 24.8x 20.1% 68.0% 14.6%

Median 5.2x 4.6x 4.3x 23.7x 23.1x 22.3x 17.3% 67.5% 14.5%

37

Confidential

Public Comps – Financial Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Intuit US 7,900 $132.81 19.0% 15.9% (5.2%) $34,028 $32,935 $1,593 6.5x 6.2x 5.7x 20.8x 16.1x 14.4x 9.7% NA 38.5%

Fidelity National US 57,000 85.40 15.9% 12.9% 0.1% 28,232 37,144 705 4.0x 4.0x 3.9x 15.6x 12.1x 11.4x 1.1% 38.3% 33.0%

Fiserv US 23,000 122.34 12.5% 15.1% (1.8%) 25,982 30,312 308 5.4x 5.3x 5.0x 17.4x 14.8x 13.8x 4.7% 47.0% 35.6%

MSCI US 2,897 102.99 33.5% 30.7% 2.9% 9,316 10,695 697 9.1x 8.6x 8.0x 18.2x 16.9x 15.2x 8.2% 78.2% 51.0%

Jack Henry & Associates US 5,861 103.87 19.0% 17.0% (1.2%) 8,066 8,073 43 5.7x 5.5x 5.2x 16.0x 15.6x 14.5x 4.9% NA 35.4%

SS&C US 8,001 38.41 36.8% 34.3% 2.9% 7,836 10,172 109 6.5x 6.1x 5.8x 18.3x 14.7x 13.4x 13.2% 58.4% 41.1%

Temenos CH 4,356 89.35 79.7% 28.0% (3.5%) 6,229 6,406 210 9.9x 9.1x 8.2x 37.0x 25.9x 22.6x 10.7% 81.2% 35.3%

Oracle Financial IN 8,818 55.68 9.1% 21.2% 1.3% 4,749 4,204 544 6.2x 5.7x 5.1x 15.7x 14.8x 12.8x 13.4% NA 38.5%

Fair Isaac US 3,306 139.41 23.4% 16.9% 5.0% 4,317 4,827 116 5.2x 5.1x 4.8x 23.0x 19.6x 17.6x 4.6% NA 26.1%

Ellie Mae US 1,123 109.91 19.9% 31.3% 0.5% 3,745 3,351 394 8.8x 7.6x 6.2x 43.4x 23.1x 17.4x 21.8% 65.6% 33.0%

Black Knight US 4,250 40.95 8.9% 8.3% 3.5% 2,848 5,361 108 5.1x 4.9x 4.5x 15.3x 10.4x 9.3x 5.6% NA 47.4%

SimCorp DK 1,401 60.52 23.8% 23.8% (1.2%) 2,386 2,332 58 7.1x 6.0x 5.5x 29.7x 21.6x 19.3x 25.2% 63.3% 27.6%

Envestnet US 3,197 39.60 18.9% 12.3% 12.0% 1,736 1,981 39 3.3x 3.0x 2.6x 38.7x 15.8x 12.7x 14.6% 68.7% 19.0%

Ebix US 2,988 53.90 12.5% (5.5%) (1.3%) 1,700 1,898 123 6.2x 5.4x 4.8x 17.1x 16.2x 14.3x 17.0% 67.7% 33.7%

IRESS AU 1,790 9.74 20.0% 13.5% 9.7% 1,649 1,768 17 6.3x 5.2x 4.8x 23.7x 17.5x 15.7x 20.1% 30.5% 29.8%

MYOB AU 1,400 2.62 2.1% (0.8%) 0.2% 1,592 1,878 44 7.0x 5.9x 5.4x 20.7x 12.6x 11.5x 19.7% 91.9% 46.5%


Fidessa UK 1,736 30.09 15.2% 6.5% (6.2%) 1,157 1,034 117 2.5x 2.2x 2.2x 13.9x 10.1x 9.4x 12.5% NA 22.3%

Asseco PL 22,364 13.16 (0.2%) 1.8% (1.7%) 1,092 1,963 319 1.0x 0.9x 0.8x 7.5x 6.8x 6.2x 21.4% 23.4% 12.5%

Bottomline Technologies US 1,600 25.69 19.3% 2.7% 3.4% 1,040 1,080 141 3.2x 3.0x 2.8x 36.9x 13.6x 12.3x 6.4% NA 22.2%


Average 5.8x 5.3x 4.8x 22.6x 15.7x 16.7x 13.2% 59.7% 29.9%

Median 6.2x 5.4x 5.0x 18.3x 15.6x 14.0x 12.8% 64.5% 33.0%

38

Confidential

Public Comps – Human Capital Management



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

ADP US 57,000 $102.46 11.5% (0.3%) 0.9% $45,842 $44,845 $2,999 3.8x 3.5x 3.3x 16.2x 16.6x 14.9x 8.3% NA 21.4%




Paycom US 2,075 68.41 58.3% 50.4% 3.5% 4,065 4,004 93 11.2x 9.4x 7.5x 50.5x 33.7x 26.0x 30.1% 83.5% 27.7%

WageWorks US 1,958 67.20 12.4% (7.3%) (4.1%) 2,657 2,294 609 5.9x 4.8x 4.3x 31.2x 15.9x 13.8x 38.6% 64.1% 29.9%


TriNet US 2,600 32.74 57.5% 27.8% 6.2% 2,245 2,479 216 0.8x 0.7x 0.7x 14.1x 12.0x 10.5x 9.3% 71.8% 6.2%

Cornerstone OnDemand US 1,859 35.75 (6.1%) (15.5%) (2.3%) 2,031 1,982 290 4.6x 4.1x 3.6x NM 35.5x 23.8x 13.8% 72.3% 11.6%


Benefitfocus US 1,430 36.35 (4.6%) 22.4% 13.6% 1,128 1,179 58 4.9x 4.4x 3.7x NM 74.5x 39.5x 13.8% 51.9% 6.0%



Upland Software US 251 21.99 188.6% 145.7% (1.4%) 446 484 19 6.2x 5.4x 5.0x 56.5x 18.0x 15.6x 19.2% 66.9% 30.2%

Solium CA 553 7.55 64.9% 20.1% (7.7%) 381 315 65 3.9x 3.5x 2.9x 27.1x 28.8x 19.8x 16.6% NA 12.1%


Average 6.5x 5.5x 4.5x 32.6x 34.7x 26.1x 22.7% 70.1% 13.5%

Median 6.3x 5.3x 4.2x 29.1x 33.7x 24.9x 21.5% 71.8% 13.4%

39

Confidential

Public Comps – Infrastructure



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

VMware US 18,905 $87.43 52.8% 11.1% (9.6%) $35,707 $28,595 $7,985 4.0x 3.8x 3.5x 15.5x 10.0x 9.8x 7.4% 86.9% 37.4%



Red Hat US 10,500 95.75 31.9% 37.4% 7.1% 16,998 16,110 1,638 6.4x 5.9x 5.2x 37.2x 22.2x 18.8x 16.7% NA 26.7%

Citrix US 9,600 79.58 (0.6%) (10.9%) (3.1%) 12,028 12,072 1,414 3.5x 4.3x 4.1x 11.9x 12.3x 11.5x (17.3%) 86.8% 34.7%

Juniper Networks US 9,832 27.88 24.0% (1.3%) (4.8%) 10,653 9,803 2,984 1.9x 1.9x 1.8x 8.6x 6.7x 6.2x 4.9% 62.6% 27.8%

Akamai Technologies US 6,672 49.81 (10.9%) (25.3%) 5.0% 8,611 8,411 845 3.5x 3.4x 3.1x 11.9x 9.0x 8.1x 6.4% 65.1% 37.5%

F5 Networks US 4,419 127.06 11.6% (12.2%) (0.7%) 8,221 7,206 1,015 3.5x 3.4x 3.2x 11.5x 8.6x 8.0x 5.8% NA 39.3%



Trend Micro JP 5,627 51.54 45.2% 44.8% 3.6% 7,077 5,972 1,113 4.8x 4.6x 4.3x 14.2x 13.4x 12.5x 16.0% 79.2% 33.9%

Micro Focus UK 4,490 29.49 37.5% 9.6% (5.0%) 6,774 8,490 123 6.4x 6.1x 6.0x 17.0x 12.7x 12.4x NA NA 48.0%

LogMeIn US 2,746 104.50 64.7% 8.2% (5.4%) 5,499 5,233 296 11.8x 5.2x 4.5x 73.5x 15.0x 11.9x 200.6% 82.7% 34.6%

Brocade US 5,960 12.61 37.4% 1.0% (0.2%) 5,171 5,423 1,300 2.3x 2.2x 2.2x 15.0x 10.4x NA 2.9% NA 21.6%


Software AG DE 4,486 43.75 29.0% 20.2% (8.6%) 3,343 3,236 408 3.5x 3.1x 3.1x 11.9x 9.7x 9.7x 12.0% 76.8% 32.2%


NetScout Systems US 3,113 34.40 54.6% 9.2% (6.3%) 3,155 3,012 443 2.6x 2.6x 2.4x 13.2x 10.4x 8.3x 2.2% NA 25.1%

Nutanix US 2,672 20.15 NA (24.1%) 11.1% 3,053 2,703 350 4.0x 3.0x 2.3x NM NM NM 47.8% NA (20.2%)

FireEye US 2,900 15.21 (7.7%) 27.8% 1.7% 2,713 2,589 875 3.6x 3.5x 3.2x NM 41.6x 29.8x 2.3% 72.7% 8.5%

Pure Storage US 1,800 12.81 17.5% 13.3% (1.9%) 2,674 2,138 536 2.8x 2.1x 1.6x NM NM 28.9x 37.0% 65.5% 0.6%

Sophos UK 3,293 5.76 106.4% 78.3% (1.4%) 2,654 2,942 68 5.6x 5.2x 4.4x NM 50.9x 15.0x 10.2% NA 10.2%

Commvault US 2,656 56.45 30.7% 9.8% 0.4% 2,537 2,087 450 3.2x 3.1x 2.8x NM 22.2x 17.2x 7.0% NA 13.8%


Alarm.com US 764 37.63 46.8% 35.2% 15.5% 1,743 1,754 63 6.3x 5.4x 4.7x 37.3x 26.6x 21.6x 24.7% 66.0% 20.3%

Qualys US 721 40.80 36.9% 28.9% (2.6%) 1,511 1,266 245 6.2x 5.6x 4.8x 25.9x 17.6x 14.5x 14.5% 78.2% 31.7%


Progress Software US 1,912 30.89 12.5% (3.3%) 5.1% 1,491 1,373 245 3.4x 3.5x 3.5x 10.7x 9.2x 9.6x (2.8%) 85.2% 37.7%

Extreme Networks US 1,378 9.22 172.0% 83.3% (3.5%) 1,016 993 117 1.8x 1.5x 1.1x 29.2x 12.8x NA 23.9% NA 11.7%



SecureWorks US 2,306 9.29 (34.1%) (12.3%) (18.0%) 753 662 92 1.5x 1.4x 1.3x NM NM NM 7.9% 54.9% (5.5%)


A10 Networks US 837 8.44 30.4% 1.6% 1.0% 585 469 116 2.0x 1.8x 1.6x NM 26.1x 16.6x 12.6% 76.8% 6.9%

Metaps JP 233 28.13 177.5% (18.9%) (0.4%) 364 337 70 3.1x 2.8x 2.8x 50.8x NM NM 29.1% NA 3.3%


Average 5.3x 4.4x 3.8x 23.6x 22.3x 20.1x 24.1% 74.2% 16.2%

Median 3.9x 3.6x 3.5x 15.2x 13.4x 14.7x 16.7% 76.5% 17.0%

40

Confidential

Public Comps – IT Security



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Cisco US 73,390 $31.30 9.1% 3.6% (1.2%) $156,502 $120,998 $67,974 2.5x 2.5x 2.5x 8.0x 7.0x 6.9x (1.6%) NA 36.0%

Check Point Software IL 4,281 109.08 36.9% 29.1% (2.1%) 17,828 16,360 1,468 9.2x 8.7x 8.2x 18.7x 16.2x 15.1x 7.7% 88.8% 53.9%


Palo Alto Networks US 4,340 133.81 9.1% 7.0% 14.4% 12,287 11,433 1,372 6.9x 5.9x 4.9x NM 25.3x 19.7x 22.7% NA 23.5%

Verisign US 990 92.96 7.5% 22.2% 2.6% 9,433 9,510 1,786 8.3x 8.2x 8.0x 12.7x 11.7x 11.2x 1.3% 83.2% 70.2%


Trend Micro JP 5,627 51.54 45.2% 44.8% 3.6% 7,077 5,972 1,113 4.8x 4.6x 4.3x 14.2x 13.4x 12.5x 16.0% 79.2% 33.9%

Fortinet US 4,711 37.44 18.5% 24.3% (4.4%) 6,580 5,382 1,199 4.0x 3.6x 3.1x 50.0x 17.8x 14.3x 16.9% 74.7% 20.3%

Gemalto NL 15,000 59.95 (1.5%) 3.4% 0.9% 5,367 5,449 700 1.7x 1.5x 1.4x 9.5x 8.7x 7.5x 8.4% 39.4% 17.5%


FireEye US 2,900 15.21 (7.7%) 27.8% 1.7% 2,713 2,589 875 3.6x 3.5x 3.2x NM 41.6x 29.8x 2.3% 72.7% 8.5%

Verint US 5,100 40.70 22.8% 15.5% (1.1%) 2,551 2,969 345 2.8x 2.6x 2.5x 28.8x 11.5x 10.4x 7.3% 65.1% 22.6%


CyberArk IL 823 49.95 2.8% 9.8% 2.0% 1,735 1,448 287 6.3x 5.4x 4.4x 34.2x 23.0x 18.0x 24.6% 86.4% 23.3%

Imperva US 936 47.85 11.3% 24.6% (3.3%) 1,601 1,288 313 4.7x 4.0x 3.4x NM 39.6x 28.1x 21.5% 80.4% 10.1%

Qualys US 721 40.80 36.9% 28.9% (2.6%) 1,511 1,266 245 6.2x 5.6x 4.8x 25.9x 17.6x 14.5x 14.5% 78.2% 31.7%


Cheetah Mobile CN 2,831 10.78 13.5% 12.8% (10.1%) 1,492 1,324 268 2.0x 1.8x 1.5x 57.1x 23.3x 13.9x 14.7% 62.8% 7.5%

AVG Technologies NL 1,486 25.70 35.3% 1.5% 0.0% 1,304 1,426 97 3.4x NA NA 11.4x NA NA NA NA NA

Barracuda Networks US 1,490 23.06 52.3% 7.6% 4.2% 1,221 1,025 200 2.9x 2.8x 2.5x 27.0x 14.9x 12.2x 6.2% NA 18.7%

Varonis Systems US 1,148 37.20 54.9% 38.8% 1.9% 1,012 891 121 5.1x 4.4x 3.7x NM NM NM 23.4% 90.4% 2.0%

Secureworks US 2,306 9.29 (34.1%) (12.3%) (18.0%) 753 662 92 1.5x 1.4x 1.3x NM NM NM 7.9% 54.9% (5.5%)

F-Secure FI 1,055 4.76 60.4% 29.5% 3.7% 743 633 103 3.7x 3.2x 2.9x 28.2x 33.0x 19.7x 17.1% NA 9.8%


VASCO Data US 621 14.35 (12.4%) 5.1% 2.5% 573 427 146 2.3x 2.3x 2.1x 34.8x 26.9x 18.5x (3.6%) 70.4% 8.5%

MobileIron US 854 6.05 98.4% 61.3% 15.2% 558 467 91 2.8x 2.6x 2.3x NM NM NM 11.6% 84.1% (5.6%)

Zix US 201 5.69 51.7% 15.2% (2.4%) 310 286 23 4.6x 4.3x 3.9x 23.6x 16.0x 13.6x 10.4% 81.7% 26.9%

Absolute Software CA 486 5.91 11.0% 24.4% 0.9% 233 198 35 2.2x 2.0x 1.9x 17.1x 24.0x 16.3x 8.8% NA 8.5%

Guidance Software US 350 6.61 6.8% (6.6%) 3.0% 216 199 18 1.8x 1.7x 1.6x NM 16.2x 12.9x 4.3% 72.7% 10.7%

iPass US 163 1.32 6.5% (20.0%) (8.3%) 87 74 13 1.2x 1.1x 0.9x NM NM 14.7x 9.8% 32.8% (4.4%)

Average 4.6x 4.1x 3.6x 25.3x 23.3x 18.5x 15.5% 72.7% 15.8%

Median 4.0x 3.6x 3.2x 25.9x 17.7x 14.6x 14.5% 75.5% 11.3%

41

Confidential

Public Comps – Marketing Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

SAP DE 85,751 $104.78 39.4% 20.1% (1.7%) $125,588 $126,476 $8,000 5.2x 4.6x 4.3x 20.1x 13.4x 12.4x 17.2% 72.8% 34.5%

Acxiom US 3,260 25.98 18.1% (3.1%) 1.0% 2,055 2,113 170 2.4x 2.3x 2.1x 24.9x 12.0x 10.3x 4.0% NA 19.2%

Five9 US 807 21.52 80.8% 51.7% (3.2%) 1,172 1,161 56 6.8x 6.0x 5.1x NM NM 60.5x 19.1% 59.2% 5.9%

SDL UK 3,310 8.09 57.7% 48.0% (0.8%) 663 635 26 1.9x 1.7x 1.7x 16.6x 13.9x 12.4x 11.6% 54.8% 12.6%





Average 2.9x 3.0x 2.8x 20.5x 21.1x 22.4x 7.8% 67.4% 13.7%

Median 2.3x 2.3x 2.1x 20.1x 16.9x 13.8x 9.5% 72.8% 8.9%

42

Confidential

Public Comps – Storage



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins


Microsoft US 114,000 68.93 34.7% 10.9% (2.1%) 532,175 496,594 121,576 5.7x 5.0x 4.7x 17.2x 12.5x 11.4x 16.7% NA 39.6%

Amazon US 341,400 968.00 35.3% 29.1% (2.9%) 462,680 462,748 21,531 3.2x 2.8x 2.3x 37.9x 24.1x 18.4x 22.1% 36.6% 11.6%

Oracle US 138,000 50.14 22.5% 30.4% 10.4% 207,413 199,630 66,078 5.3x 5.2x 5.0x 13.6x 11.2x 10.5x 4.0% NA 46.0%

Verizon US 161,000 44.66 (20.0%) (16.3%) (3.3%) 182,185 296,264 4,307 2.4x 2.4x 2.4x 6.9x 6.7x 6.6x (2.6%) 59.2% 36.2%

IBM US 380,300 153.83 1.4% (7.3%) 1.4% 144,523 176,735 10,695 2.3x 2.3x 2.3x 9.8x 9.5x 9.4x 0.1% 47.7% 23.7%


CenturyLink US 40,000 23.88 (17.7%) 0.4% (4.4%) 13,106 32,571 214 1.9x 2.0x 1.9x 5.1x 5.5x 5.4x (5.5%) 54.7% 36.0%

NetApp US 10,100 40.05 62.9% 13.6% (1.0%) 10,883 8,078 4,928 1.5x 1.4x 1.4x 8.9x 6.5x 6.0x 3.5% NA 22.2%

Iron Mountain US 24,000 34.36 (13.7%) 5.8% (1.9%) 9,075 15,191 296 6.7x 4.0x 3.9x 13.1x 12.1x 11.4x 77.6% 55.9% 33.0%

Brocade US 5,960 12.61 37.4% 1.0% (0.2%) 5,171 5,423 1,300 2.3x 2.2x 2.2x 15.0x 10.4x NA 2.9% NA 21.6%

Nutanix US 2,672 20.15 NA (24.1%) 11.1% 3,053 2,703 350 4.0x 3.0x 2.3x NM NM NM 47.8% NA (20.2%)

CommVault US 2,656 56.45 30.7% 9.8% 0.4% 2,537 2,087 450 3.2x 3.1x 2.8x NM 22.2x 17.2x 7.0% NA 13.8%

Box US 1,495 18.24 76.4% 31.6% (1.8%) 2,465 2,362 184 5.5x 4.7x 3.8x NM NM NM 26.8% 74.2% (4.2%)

Barracuda Networks US 1,490 23.06 52.3% 7.6% 4.2% 1,221 1,025 200 2.9x 2.8x 2.5x 27.0x 14.9x 12.2x 6.2% NA 18.7%

Carbonite US 830 21.80 124.0% 32.9% 15.3% 599 597 42 2.8x 2.5x 2.2x 51.9x 11.0x 9.1x 17.2% 75.2% 22.4%


Average 3.7x 3.3x 2.9x 18.7x 13.3x 12.3x 15.7% 60.3% 21.2%

Median 3.2x 2.8x 2.4x 14.3x 11.6x 11.0x 7.0% 60.3% 22.2%

Confidential

43

Executive Summary




Key SaaS Metrics


1

2

3

4

5

6



44

OUR MISSIONTo advise the most passionate

technology entrepreneurs

▪ GP Bullhound is a leading technology merchant

bank, providing transaction advice and capital to

the best entrepreneurs and founders in Europe and

beyond

▪ With offices in London, San Francisco, Stockholm,

Berlin, Manchester, Paris and Hong Kong,

GP Bullhound provides advice and deep sector

knowledge to the most disruptive and market-

changing software companies

▪ In the last three years, we have completed 28

software M&A transactions and private

placements

▪ GP Bullhound has advised on M&A transactions

with leading software consolidators, including

Cisco, Google, Oracle, SAP, and Salesforce, and

raised capital from prolific software investors

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▪ Please subscribe here to receive GP Bullhound's

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About GP Bullhound

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45

Confidential

GP Bullhound’s Selected Software Transactions

Private placement Private placement Sold to Sold toSold to Sold to

Sold toSold toSold to Sold to Sold to Private placement

Private placementSold toSold to Sold toSold to Sold to

46

Confidential

Authors

PIERCE LEWIS-OAKES

[email protected]

ALEC DAFFERNER

[email protected]

OKAN INALTAY

[email protected]

PER ROMAN

Managing [email protected]

CHRIS PARK

[email protected]

JONATHAN CANTWELL

[email protected]

mailto:[email protected]






47

Our Team

ANDRE SHORTELLPartner

ALESSANDRO CASARTELLIDirector

ALEC DAFFERNERPartner

ROBERT AHLDINPartner

JOAKIM DAL

Vice President

SIR MARTIN SMITHChairman

SIMON NICHOLLSPartner

Director

SEBASTIAN MARKOWSKY

JULIAN RIEDLBAUERPartner

CLAUDIO ALVAREZDirector

ALEXIS SCORERDirector

PER LINDTORPDirector

CHRIS PARKAssociate

RAVI GHEDIA

Vice President

MIKE KIMAssociate

CARL WESSBERGDirector

SVEN RAEYMAEKERSPartner

CHRIS GRAVESDirector

OSKAR HERDLANDDirector, Equity Capital Markets

LORD CLIVE HOLLICK

Senior Advisor

HARRI NEEDHAM

Group Finance Manager

DAVE NISH

Technology Manager

LINDA NORDMARK

Finance Manager

PER ROMANManaging Partner

MANISH MADHVANIManaging Partner

HUGH CAMPBELLManaging Partner

STAFFAN INGEBORNNon-Executive Director

MARK SEBBANon-Executive Director

ANN GREVELIUS

Senior Advisor

MARVIN MAERZ

Associate

GRAEME BAYLEYPartner & Group CFO

CECILIA ROMAN

Senior AdvisorAnalyst

ED PRIOR

JAVED HUQ

Vice PresidentJOY SIOUFI

Vice President

Director

NICK HORROCKS

OLOF RUSTNER

Vice President

JOHANNES ÅKERMARK

Vice President

KARL BLOMSTERWALL

Analyst

OKAN INALTAY

Analyst

ELENA BOCHAROVA

Analyst Analyst

KYLE BOOYSENS

Analyst

JOFFREY EZERZER

Analyst

FELIX BRATELL Analyst

MATTHEW FINEGOLD PAUL GAILLARDAnalyst

JONATHAN CANTWELL Director

CHRISTIAN LAGERLING

Co-founder & Senior Advisor

GUILLAUME BONNETONPartner

PIERCE LEWIS-OAKES

Analyst

JACOB LOVENSKIOLDAnalyst

Vice President

LENKA KOLAROVA

IMAN CRISBY

Vice President, Marketing

BEN PRADE

Senior Advisor

ADAM PAGE

Analyst

NIKOLAS WESTPHALDirector

ALON KUPERMAN

Principal

CHRISTOPH GRUNWALDAnalyst

HAMPUS HELLERMARK

Analyst

JAIME SENDAGORTA

Associate

MAX BERNARD

Vice President

Associate

SIMON MIREMADI

48

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