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<p>R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 SunTrust Robinson Humphrey State of the Software Market February 2017 R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 2 Table of Contents SECTION I. SECTION II. SECTION III. APPENDIX. Macro Economic and Capital Markets Themes Impacting Software Review of the Software Exit Environment Public Software Company Operating and Valuation Metrics A. Application Software B. Infrastructure Software C. Security and Storage Software STRH Public Software Company Universe Page 3 Page 12 Page 27 Page 39 Page 47 Page 53 Page 59 R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 Section I. Macro Economic and Capital Markets Themes Impacting Software R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 4 $14.9 $15.0 $14.9 $14.6 $14.4$14.4 $15.0 $16.8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Indexed GDP Growth1.1% 0.8% (0.3%) (2.8%) (3.5%) (4.1%) (3.3%) (0.2%) 1.6% 2.7% 3.1% 2.7% 1.9% 1.7% 1.2% 1.7% 2.8% 2.5% 2.4% 1.3% 1.3% 1.0% 1.7% 2.7% 1.6% 2.4% 2.9% 2.5% 3.3% 3.0% 2.2% 1.9% 1.6% 1.2% 1.7% 1.9% 2.2% 2.2% 2.2% 2.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Economic outlook remains in-line with 30 year average 30 year average GDP growth = 2.5% 12 quarters to return to pre- recession nominal GDP levels ($ in trillions) Economic Decline 8 Quarters of Recovery 22 Consecutive Quarters of Sustained “Growth” Outlook (1) = Actual GDP in declining quarters = Actual GDP in recovery and growth quarters = Projected GDP (1) = 1% – 5% range of GDP growth from low point = Actual GDP = Projected GDP (1) GDP Growth – Slow and Steady Since the Great Recession …While Growth is Expected to Remain In-Line with Historical Levels for Several Quarters Nominal GDP has Recovered Beyond Pre- Recession Highs… Historical and Projected GDP Year-Over-Year GDP Growth Source: Bureau of Economic Analysis, Bureau of Labor Economics and STRH analysis Note: GDP denominated in 2009 dollars (1) GDP growth based on the Federal Reserve of Philadelphia’s quarterly survey of economist estimates Economic Decline 8 Quarters of Recovery 22 Consecutive Quarters of Sustained “Growth” Outlook (1) 19 – Industry and GDP (Economic Analysis Updated) R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 5 (20%) (10%) 0% 10% 20% 30% 40% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Growth (Decline)Median IT Multiplier Over Time Overall median: 1990 – 2000 median: 2001 – 2010 median: 2010 – Present median: 3.2x 4.5x 2.0x 1.6x = Change in Investment in IT Equipment & Software = GDP Growth (2009 Dollars) = Projected Change in Investment in IT Equipment & Software = Project GDP Growth The IT Spending Multiplier on GDP – SaaS Driving IT Efficiency? Growth of Investment in IT Equipment and Software Consistently Outstrips GDP Growth Source: Bureau of Economic Analysis and STRH analysis Note: GDP growth based on the Federal Reserve of Philadelphia’s quarterly survey of economist estimates. IT Spending growth estimated by applying historical growth multiplier to Federal Reserve GDP growth estimates Shift to SaaS potentially driving lower capex? 19 – Industry and GDP (Economic Analysis Updated) R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 6 0 20 40 60 80 12/07 6/08 12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12 12/12 6/13 12/13 6/14 12/14 6/15 12/15 6/16 12/16 VIX Volatility Index Quarter Average (200) (150) (100) (50) 0 50 100 150 200 12/07 6/08 12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12 12/12 6/13 12/13 6/14 12/14 6/15 12/15 6/16 12/16 Source: Capital IQ, Chicago Board Options Exchange and STRH analysis; includes data through 12/31/16 Denotes percentage of days with a move greater than 50 points New U.S. Administration Heightened Concerns on Terrorist Activity Concerns of Unknown Federal Reserve Actions on Rates Diverging Monetary Policies World Currency Devaluations Weakening Global Growth Inflation Concerns CBOE Volatility Index (“VIX”) Absolute Value of 1 Day Change in NASDAQ 2008 2009 2010 2011 2012 2013 2014 = Up day movement = Up day median: 20.0 points = Down day movement = Down day median: (20.6) points Q4 ‘16 market volatility increased 7% over the preceding quarter 12% 9% 20% 8% 6% Capital Markets Have Become Less Volatile 2015 18% 23% 27% 2016 29% 19 – Industry and GDP (Market Volitility) % of All Days in Range VIX 2008-2010 2011-2013 2014-2016 > 35% 21% 4% 0% 25% - 35% 27% 9% 3% < 25% 52% 87% 96% R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 7 22.3 99.8 7.0 54.0 0 20 40 60 80 100 120 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Basis Points (bps)(20%) 0% 20% 40% 60% 80% 100% 120% Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Interest Rate Trends Debt Markets vs. Nasdaq 5-Year Performance Five Year Performance: Debt Markets vs. NASDAQ Source: Capital IQ, Federal Reserve Bank of St. Louis, ICE Benchmark Association, S&P Dow Jones Indices and STRH analysis; includes data through 12/31/16 (1) Consists of 100 credit facilities drawn from the S&P Leveraged Loan Index to mirror the market-weighted performance of the largest institutional leveraged loans (2) Bank of America Merrill Lunch’s benchmark index for high yield corporate bonds (3) As of 12/31/16 5-Year Min 95% Nasdaq S&P Leveraged Loan 100 (1) BAML HY Master II (2) Today (3) 19 – Industry and GDP (Loan Indices vs Nasdaq) 19 – Industry and GDP (LIBOR data) 3-Month Libor Fed Funds Rate 25% 43% Strong debt market recovery since pull back in late 2015 R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 8 CEO Confidence is Driving Analyst Sentiment and the Market Source: Capital IQ, Thomson Financial, SCD, company filings, company press releases, the 451 Group and STRH analysis (1) FactSet, CEO Confidence Board Index (2) Represents Pre-Election (11/7/2016) to 2/17/2017 Analyst Consensus Rating Change 7 – Companies Taken Private DB pull: Strategic vs Sponsor Deals CEO Confidence is Near All-Time Highs (1)… …Which has Pushed Stocks Higher …Sell-Side Analyst Sentiment is Positive (2) … • The CEO confidence index is a measure of a CEO’s view on the economy as it relates to hiring, industry concerns, economic worries, and short-term/long-term outlook • The index surged post election from 50 to 65, its highest level in nearly six years, citing improvement in the U.S. economy and prospects in emerging markets <50 “Bearish” >50 “Bullish” • Since the election, 67% of all software companies in STRH’s index have either received an increase in rating or no change in rating by sell-side analysts • Increased global economic outlook bodes well for software as increased IT spending and capital spending will help drive spending growth across the sector STRH Public Company Universe: 155 Companies 43.3% 28.8% 22.0% (5.0%) 6.0% 17.0% 28.0% 39.0% 50.0% Feb-16 Jun-16 Oct-16 Feb-17 STRH Software Nasdaq S&P 500 LTM Stock Performance 42% 15% 35% 41% 37% 41% 26% 34% 21% 44% 39% 25% 38 Companies 39 Companies 46 Companies 32 Companies SaaS Apps Perp. Apps Infrastructure Sec. & Storage % Increased Rating % No Rating Change % Decreased Rating • Over the LTM, software companies have outperformed the broader markets by a wide margin • Since the election, STRH’s software index is up 10%, pushing the median EV / 2017E revenue multiple for the index to 3.6x (3.0x on the day before the election, a 19% increase) 65 0 10 20 30 40 50 60 70 80 90 100 12/08 12/09 12/10 12/11 12/12 12/13 12/14 12/15 12/16 Election Day R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 9 Election Effects on the Equity Markets – Charting the Last Six Election Cycles Source: Capital IQ, Wall Street research and STRH analysis Note: Large cap stocks based on the S&P 500 index; small / mid cap stocks based on the S&PMidCap 400 index Pre-election is defined as beginning of given year until day before election; post-election is defined as from the day of the election until the end of the given year Annual Performance During Election Year by Market Cap Major Average Performance Nasdaq S&P 500 Dow Jones Industrial Average Large Small / Mid 1996 Pre- Election Post- Election 14% 4% 11% 5% 2000 Pre- Election Post- Election (2%) (8%) 21% (2%) 2004 Pre- Election Post- Election 2% 7% 5% 10% 2008 Pre- Election Post- Election (33%) (10%) (33%) (7%) 2012 Pre- Election Post- Election 11% (0%) 12% 2% 19 – Industry and GDP (Election Impact on Equity Markets) 2016 Pre- Election Post- Election 6% 5% 10% 12% 0% 100% 200% 300% 400% 500% 600% 700% Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 Dec-14 Dec-16 R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 10 Great Recession Technology Bubble (15%) (10%) (5%) 0% 5% 10% 15% 20% 25% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Median Software License Revenue Growth Software License Revenue Growth Trends (1) Software Players Have Recognized the Importance of Improving Recurring Revenue Mix Source: Capital IQ and STRH Analysis. Comp set performance as of 12/31/16. Comp set includes currently and previous public software companies Denotes percentage of total revenue that is contributable to total recurring revenue, including SaaS subscriptions, subscription, maintenance and other recurring revenue (1) Includes perpetual license, SaaS and Subscription revenue 26% 40% Improving Mix of Recurring Revenue Across the Software Market 19 – Industry and GDP (Brexit) R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 11 2.1x 2.2x 1.2x 2.3x 1.8x 2.5x 1.0x 2.6x 4.2x 7.8x 11.0x 10.3x 5.7x 11.6x 13.1x 15.2x 6.5x 13.9x 21.8x 42.6x 2.1x 2.2x 1.2x 2.3x 1.8x 2.5x 1.0x 2.6x 4.2x 7.8x 11.0x 10.3x 5.7x 11.6x 13.1x 15.2x 6.5x 13.9x 21.8x 42.6x 4,941 1,114 2,812 1,269 5,845 Index Value Chart Legend EV / LTM EBITDA Note: Sphere size corresponds to relative multiple value of performance group EV / LTM Revenue 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x Major Index Valuations – Then and Now Index Value Source: Capital IQ and STRH analysis Note: Bubbles represent aggregate LTM revenue and LTM EBITDA multiples for the respective index (1) Tech Bubble peak as of 3/23/00 and trough as of 10/9/02 (2) Great Recession peak as of 10/10/07 and trough as of 3/9/09 7,286 14,079 6,547 20,822 11,120 Great Recession (2007 – 2009) Tech Bubble (2000 – 2002) Today Peak(1) Trough(1) Peak(2) Trough(2) As of 2/24/17 19 – Market Volatility 5 8 2.3 4. R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 Section II. Review of the Software Exit Environment R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 13 276 M&A Deals $90.0B M&A Volume 4.6x Median LTM Rev. Multiple 548 Software Exits 2015 + 2016 17 IPOs $21.8B (1) Market Cap 5.2x Median NTM Revenue Multiple (2) 255 M&A Deals $172.9B (3) M&A Volume 3.5x Median LTM Rev. Multiple Source: Thomson Financial, Capital IQ, company filings, company press releases, the 451 Group and STRH analysis (1) Represents total market Cap based on 17 IPOs between 1/1/15 and 12/31/16 at time of IPO pricing (2) Based on NTM Revenue and enterprise value at time of IPO pricing (3) Includes Dell take private of $60B+ Perpetual SaaS Equity-Specific R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 14 $47.3 $100.0 $90.0 $108.0 $105.0 $150.0 $110.0 $190.0 2.2x 3.6x 3.8x 3.5x 3.6x 3.6x 4.0x 4.0x 2009 2010 2011 2012 2013 2014 2015 2016 Median Transaction Value ($ in Millions) Median EV / Revenue Multiple Total Deal Volume ($B) Number of Transactions (1) Deal Size & Median Valuation (2) % SaaS 2016 Was a Banner Year for Software – Shift to SaaS Complete Source: SDC, Capital IQ, Company filings, the 451 Group, Thomson Financial and STRH analysis. Includes data through 12/31/16 (1) Represent software M&A deals where the disclosed or estimated transaction value is known; excludes small asset sales and deals less than $5M in value (2) Total, deal volume and size represent transaction enterprise values and are calculated from publicly disclosed information 47% 34% 47% 35% 17% 26% 51% 57% $19.6 $48.5 $51.6 $52.3 $48.1 $69.0 $135.0 $127.9 1 – Consistent M&A Deal Flow DB Pull: X year Deal Query % SaaS: Comes from final column of DB pull Total Deal Volume: On dashboard of excel spreadsheet 48 57 77 94 92 101 110 120 53 65 72 77 75 75 83 87 21 22 26 20 30 38 48 48 10 16 9 15 17 22 18 17 132 160 184 206 215 236 259 272 2009 2010 2011 2012 2013 2014 2015 2016 Applications Infrastructure Security Storage R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 15 $10.8 $30.1 $32.6 $24.7 $31.1 $36.7 Total $98.0 $98.6 $8.9 $18.4 $19.0 $23.4 $21.2 $32.3 $28.8 $29.2 $19.6 $48.5 $51.6 $48.1 $52.3 $69.0 $135.0 $127.9 2009 2010 2011 2012 2013 2014 2015 2016 All Others $35.2 Dell/EMC $62.8 M&A Volume by Transaction Size Valuation by Deal Size (2) Deals over $1 Billion in Transaction Size Represent Over 67% of Total Software M&A Volume Since 2009 ($ in billions) = Total transaction volume of all deals > $1 billion = Total transaction volume of all deals < $1 billion = Median EV / Revenue for all deals > $1 billion = Median EV / Revenue for all deals < $1 billion 2 – Billon Dollar Deal Charts Bain & Vista / Vertafore Vista Equity / Marketo Salesforce / Demandware Thoma Bravo / QlikTech Symantec / Blue Coat Microsoft / LinkedIn FP & Evergreen / Dell Software KKR / Epicor Oracle / NetSuite Micro Focus / HP Software TPG / McAfee Broadcom / Brocade Symantec / LifeLock Roper / Deltek 2016 – The Year of the Billion Dollar Software Deal Source: SDC, Capital IQ, Company filings, the 451 Group, Thomson Financial and STRH analysis; includes data through 12/31/16 (1) Represents Billion dollar deals done by sponsor or sponsor-back companies (2) Represents LTM Revenue multiple where transaction values are known Infor / Lawson Apax / Epicor Providence / Blackboard NCR / Radiant Systems Blackstone / Emdeon Datatel / SunGuard Ed. HP / Autonomy Bain Capital / MYOB Oracle / Endeca Oracle / RightNow SAP / SuccessFactors SSI Investments / SkillSoft ABB / Ventyx SAP / Sybase Symantec / Verisign (IAM) IBM / Sterling Commerce Hexagon / Intergraph HP / 3PAR Intel / McAfee HP / ArcSight IBM / Netezza KKR / Visma EMC / Isilon Systems Attachmate / Novell Oracle / Taleo Dell / SonicWALL Vista Equity / Misys Dell / Wyse Technology SAP/ Ariba Apax & JMI / Paradigm Microsoft / Yammer Dell / Quest Software VMWare / NICRA Roper / Sunquest IBM / Kenexa Thomas Bravo / Deltex Red Prairie / JDA Software Cisco / Meraki Oracle / Sun EMC / Data Domain Adobe Systems / Omniture Emerson / Avocent VMware / Airwatch H&F / Renaissance Learning Charterhouse / Skillsoft SAP / Fieldglass Permira / TeamViewer Priceline / OpenTable SanDisk / Fusion-io Oracle / MICROS Systems Skillsoft / SumTotal Systems Thoma Bravo / Compuware Micro Focus / Attachmate SAP / Concur Vista Equity / TIBCO Vista Equity / ACS Oracle / Datalogix Fiserv / Open Solutions Oracle / Acme Packet Bain / BMC Software Vista Equity / Websense Salesforce / Exact Target SAP / Hybris Thoma Bravo / Intuit FS Schneider / Invensys Cisco / Sourcefire KKR / Mitchell OpenText / GXS Advent / UNIT4 H&F/ Applied Systems NCR / Digital Insight Oracle / Responsys SS&C / Advent Software Bain / Blue Coat Systems Permira / Informatica LinkedIn / lynda.com Raytheon / Websense EMC / Virtustream Cox / DealerTrack Carlyle Group / Veritas TPG Capital / Ellucian Vista Equity / Solera Dell / EMC EQT Partners / IFS 15 Other Billion Dollar Deals % Sponsor (1) 58% 27% 40% 58% 0% 23% 47% 50% 3.5x 3.5x 3.7x 4.5x 3.7x 6.8x 5.1x 4.0x 2.2x 3.7x 4.0x 3.5x 3.6x 3.5x 3.9x 4.0x 2009 2010 2011 2012 2013 2014 2015 2016 R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 16 59 50 44 37 26 17 36 19 4 7 15 17 14 9 12 40 36 38 30 13 24 15 15 15 21 17 12 5 12 9 33 33 35 29 31 21 5 16 26 14 10 6 10 7 6 132 119 117 96 70 62 56 50 45 42 42 35 29 28 27 IBM MSFT Oracle Dell EMC CSCO ADSK HP SAP CRM Vmware CA Symantec Infor BMC ADBE 20 19 23 19 19 19 16 19 13 24 24 20 21 14 17 13 12 11 15 7 4 14 16 14 4 16 12 11 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 2015 2016 Total Consolidator Activity By Quarter (2) Number of Acquisitions by Consolidator (1) Consolidator M&A Activity Returns as the Stalwarts are Refocused Attention on Inorganic Initiatives 2004-2007 2008-2011 2012-2016 2012-2016 = 282 2008-2011 = 302 2004-2007 = 366 Number of Deals Timeframe 5 – Consolidator Activity DB Pull: Consolidator M&A Activity Deals Evolving Consolidator M&A Activity – Pace of Deal Volume Slowing? Source: SDC, Capital IQ, Company filings, the 451 Group, Thomson Financial and STRH analysis; includes data through 12/31/16 (1) Includes all announced software transactions, regardless of size or if valuation was disclosed; does not include non-software transactions (2) The total number of acquisitions per quarter is derived from the number of acquisitions by consolidator chart above Median: 20 Median: 19 Median: 22 Median: 16 Median: 14 Median: 12 Median: 12 R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 17 2 – Billon Dollar Deal Charts Chart Legend EV / LTM EBITDA Note: Sphere size corresponds to relative multiple value of performance group EV / LTM Revenue 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x Software M&A Valuations by Buyer Type & Deal Size Source: Thomson Financial, SCD, company filings, company press releases, the 451 Group and STRH analysis Data represents period 2011-present. Only includes companies with EV / revenue and EV / EBITDA valuation observations Note: Valuation multiples represents LTM Revenue and LTM EBITDA multiples (1) As of 12/31/16 Buyer Profile for All Deals 2011-2016 (1) Sponsor or Sponsor-Backed Acquiror Strategic Acquiror Number of Deals: 45 Number of Deals: 50 Number of Deals: 400 Number of Deals: 875 Transaction SizeGreater than $1 BillionLess than $1 Billion12.0x 13.9x 14.5x 20.4x 3.2x .6x 4.0x 6.2x R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 18 4.6x 5.2x 2.6x 4.7x 2.2x 3.7x 1.3x 3.8x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Strategic Aquiror > $1bn Strategic Aquiror < $1bn Sponsor Aquiror > $1bn Sponsor Aquiror < $1bn 18.6x 20.0x 29.4x 14.3x 9.6x 17.6x 9.8x 13.2x 0.0x 10.0x 20.0x 30.0x 40.0x 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Strategic Aquiror > $1bn Strategic Aquiror < $1bn Sponsor Aquiror > $1bn Sponsor Aquiror < $1bn …with Median EV / EBITDA Multiples Following Similar Trends Median EV / Revenue Multiples are in Line with Levels prior to the Financial Crisis… LTM M&A Valuations by Buyer Type Over Time EV / LTM Revenue EV / LTM EBITDA Source: 451 Group, S&P Capital IQ and STRH Analysis. Excludes asset divestitures Note: Data represents 1/1/04 through 12/31/16. Only includes companies with EV / revenue and EV / EBITDA valuation observations (1) No >$1bn Sponsor acquired transactions took place in 2009; (2) Strategic acquiror; (3) Sponsor or sponsor-backed acquiror (4) Transaction size greater than $1 billion; (5) Transaction size less than $1 billion (2) (4) (2) (5) (3) (4) (3) (5) (2) (4) (2) (5) (3) (4) (3) (5) 2 – Billon Dollar Deal Charts (1) (1) R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 19 2.5x Δ 1.7x Δ Chart Legend EV / Revenue Note: Sphere size corresponds to relative multiple value of performance group 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x Software M&A Valuation by Business Performance Metrics Source: Thomson Financial, SCD, company filings, company press releases, the 451 Group and STRH analysis Data represents period 1/1/07-12/31/16. Only includes companies with EV / revenue and EV / EBITDA valuation observations 11 – M&A Valuations vs Growth & EBITDA DB Pull: Bubbles_M&A_Deals LTM Revenue Growth at Time of Acquisition LTM Rev Growth at Acquisition <10% 10% - 20% 20% - 35% >35% Number of Deals: 83 Number of Deals: 67 Number of Deals: 36 Number of Deals: 43 Median Deal Size: $300 mm Median Deal Size: $225 mm Median Deal Size: $150 mm Median Deal Size: $139 mm Number of Deals: 60 Number of Deals: 35 Number of Deals: 23 Number of Deals: 9 Median Deal Size: $281 mm Median Deal Size: $675 mm Median Deal Size: $283 mm Median Deal Size: $218 mm Number of Deals: 78 Number of Deals: 33 Number of Deals: 22 Number of Deals: 16 Median Deal Size: $104 mm Median Deal Size: $209 mm Median Deal Size: $611 mm Median Deal Size: $626 mm EV / Revenue: 2.3x EV / Revenue: 3.5x EV / Revenue: 4.8x EV / Revenue: 6.5x <15%EBITDA Margin at Time of Acquisition>25%15% - 25%EV / Revenue: 4.1xEV / Revenue: 2.9xEV / Revenue: 2.4x1.6x 2.3x 3.1x 3.3x 3.3x 4.1x 5.3x 4.0x 5.0x 6.9x 3.2x 8.5x R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 20 0.0x 2.5x 5.0x 7.5x 10.0x 12.5x 15.0x 17.5x 20.0x $0 $25 $50 $75 $100 $125 $150 $175 $200 EV / Revenue Acquisition MultipleTarget Revenue Infrastructure, Security and Storage Applications (Perpetual) Applications (SaaS) Dispersion of Revenue Size M&A Deal Distribution by Target LTM Revenue 46% Majority of software companies are acquired early in their revenue lifecycle % of Deals 23% 21% 6% 4% M&A Deal Distribution by Transaction Value M&A Deal Distribution by LTM Revenue Multiple (1) 61% 11% 28% Software M&A Across Target Company Lifecycles Source: Thomson Financial, company filings, company press releases, the 451 Group and STRH analysis Data represents period 2008-through 12/31/16. Only includes companies with EV / revenue valuation observations (1) Transactions up to $200M in LTM Revenue 14% 13% 15% 19% 9% 10% 9% 6% 5% < $25 $25 - $50 $50 - $100 $100 - $200 $200 - $300 $300 - $500 $500 - $1B $1B - $2B > $2B M&A Deal Size 39% 25% 16% 4% 16% 19% 21% 28% 9% 23% 48% 16% 16% 5% 15% $0 - $25 $25 - $50 $50 - $100 $100 - $150 $150 - $200 LTM Revenue Applications (SaaS) Applications (Perp.) Infrastructure, Security & Storage 8% 29% 24% 14% 24% 16% 38% 30% 8% 8% 11% 25% 20% 13% 31% 0.0x - 1.5x 1.5x - 3.0x 3.0x - 4.5x 4.5x - 6.0x 6.0x+ EV / LTM Revenue Acquisition Multiple Applications (SaaS) Applications (Perp.) Infrastructure, Security & Storage 3 – Acquisition Lifecycle & Scatter Plot DB Pull: Scatter Plot Deals R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 21 109 118 120 136 115 115 139 116 23 42 64 70 100 121 120 156 2009 2010 2011 2012 2013 2014 2015 2016 Perpetual SaaS $16,065 $41,980 $39,980 $31,648 $30,491 $3,583 $6,545 $11,583 $16,417 $21,815 $32,658 $36,313 $118,811 $16,174 $54,060 $73,801 While SaaS M&A Multiples Continue to Outpace Perpetual License Models, 2016 Saw a Slight Drop-off in EV / LTM Revenue Multiples as Compared to 2015 Median EV / LTM Revenue Valuation Multiples – SaaS vs. Perpetual License Number of Deals – SaaS vs. Perpetual License Total Volume ($ in millions) Perpetual License SaaS SaaS vs. Perpetual License Software M&A Activity Note: Represent software M&A deals where the disclosed or estimated transaction value is known; excludes small asset sales and deals less than $5M in value SaaS includes on-demand and subscription-based pricing models. Includes data through 12/31/16 Source: Company filings, the 451 Group, Wall Street research and SunTrust Robinson Humphrey analysis 4 – Perpetual vs. SaaS Activity DB Pull: Perpetual vs On-Demand 2.0x 3.9x 3.7x 3.5x 3.3x 3.4x 3.6x 3.4x 4.3x 3.5x 4.5x 3.6x 4.4x 4.0x 4.7x 4.6x 2009 2010 2011 2012 2013 2014 2015 2016 Perpetual SaaS R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 22 Enterprise Value / LTM Revenue (1) Premium Multiples are being Paid for High Growth Companies and Best of Breed Technologies 2 – Billon Dollar Deal Charts Demise of the “Private Company Discount” Theory Source: Company filings, company press releases, SDC, the 451 Group and STRH analysis Note: Annual Public Company EV & EV / LTM revenue data based on 4 quarter trailing average. Excludes public company divestitures Includes data through 12/31/16 Public M&A = acquisitions of public companies; Private M&A = acquisitions of privately held companies; Public Companies = median of all public companies that comprise the STRH Software & Systems comp universe 2016 High Multiple Public Co. M&A Deals: • Netsuite • Demandware • LinkedIn • Marketo • Cvent 10.8x 10.5x 8.2x 7.9x 7.6x 2009 2010 2011 2012 2013 2014 2015 2016 Public Target 25 28 16 26 20 22 19 22 Private Target 107 132 168 180 195 214 240 250 # of Deals1.5x 2.6x 3.5x 2.9x 2.6x 2.9x 2.6x 3.9x 3.3x 4.0x 4.5x 3.8x 4.1x 3.8x 5.0x 4.6x 1.5x 1.9x 2.1x 2.2x 2.9x 3.4x 3.4x 3.6x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x 5.5x Median Enterprise or Transaction Value / LTM RevenuePublic Company M&A Targets Private Company M&A Targets Public Companies R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 23 = EV / LTM Revenue = EV / LTM EBITDA % 52-Week High 1-Day 30-Day Premiums Paid (1) Median Take-Private Valuation Metrics Since 2014 65 Deals 3.1x Median Revenue Multiple 12.5x Median EBITDA Multiple 29.2% Median 1-Day Premium 32.9% Median 30-Day Premium (1.4%) Median % 52-Week Premium Software Take-Private Metrics Source: Capital IQ, the 451 Group and STRH Analysis (1) Represents the median share price premium paid for each respective period 7 – Companies Taken Private DB pull: Strategic vs Sponsor Deals 3.5x 2.9x 2.6x 2.9x 2.6x 3.8x 15.5x 11.9x 14.6x 15.9x 12.0x 10.7x 2011 2012 2013 2014 2015 2016 34.6% 28.9% 27.0% 25.8% 30.0% 30.5% 46.8% 33.4% 37.3% 30.8% 31.0% 37.0% 9.3% 13.8% 12.5% (2.1%) (3.5%) (1.4%) 2011 2012 2013 2014 2015 2016 R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 24 33 IPOs 2014 – 2016 $115M Deal Size (2) 18% of Company Sold in IPO (2) 27% First Day Perform. (2) SaaS (27 Companies) Perpetual (6 Companies) Quarterly Revenue Growth and Margin Profile: Pre / Post-IPO (1) Pre-IPO Post-IPO = Quarterly Revenue Growth = Quarterly Gross Margin = Quarterly EBITDA Margin Pre-IPO Post-IPO Recent Software IPO Metrics Source: Capital IQ and STRH Analysis. Comp set and stock performance as of 2/24/17. Comp set includes software IPOs between 1/1/14 and 12/31/16 (1) Revenue growth is defined as the year-over-year growth based on revenue in the current quarter. Gross and EBITDA margins are presented based on the given quarter. Chart values represent the median values for the respective metrics, normalized for time (2) Represents median value of 33 recent software IPOs (3) 1-day post IPO Performance 47% 39% 32% 27% 21% (9%) (16%) (11%) (8%) (2%) 66% 65% 66% 70% 72% - 2 Yrs - 1 Yr At IPO + 1 Yr + 2 Yr 45% 44% 36% 41% 27% NA 6% 11% 2% (1%) 82% 54% 67% 71% 65% - 2 Yrs - 1 Yr At IPO + 1 Yr + 2 Yr Median Stock Performance (3) 27% 20% LTM Revenue ($ in Millions) $91 $250 LTM Gross Margin 65% 77% Fwd. Revenue Growth 35% 31% LTM EBITDA Margin (15%) 14% EV / NTM Revenue 4.8x (4.8x as of 2/24/17) 7.2x (3.8x as of 2/24/17) Median Metrics at IPO70% Price At-or-Above Filing Range R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 25 Offering Filing Range Offer Price Performance Issuer Model Issue Date Deal Size ($M) % Company Sold % Primary % Secondary Low High Offer Price % Above / Below Midpoint (1) 1-Day Perform. Since IPO BlackLine SaaS 10.27.16 $168 20% 100% 0% $13.00 $15.00 $17.00 21% 39% 76.0% Coupa Software SaaS 10.05.16 $153 18% 100% 0% $14.00 $16.00 $18.00 20% 85% 46.6% Nutanix SaaS 09.29.16 $274 12% 100% 0% $11.00 $13.00 $16.00 33% 131% 86.4% Apptio SaaS 09.22.16 $110 18% 100% 0% $13.00 $15.00 $16.00 14% 41% (15.4%) Everbridge SaaS 09.15.16 $104 32% 83% 17% $11.00 $13.00 $12.00 0% 27% 59.6% Talend SaaS 07.28.16 $109 22% 100% 0% $15.00 $17.00 $18.00 13% 42% 51.1% Twilio SaaS 06.22.16 $173 14% 100% 0% $12.00 $14.00 $15.00 15% 92% 115.1% SecureWorks Corp. SaaS 04.21.16 $112 10% 100% 0% $15.50 $17.50 $14.00 (15%) 0% (26.3%) Xactly Corporation SaaS 06.25.15 $65 29% 97% 3% $10.00 $12.00 $8.00 (27%) 9% 55.0% AppFolio SaaS 06.25.15 $86 22% 100% 0% $12.00 $14.00 $12.00 (8%) 17% 98.3% MINDBODY SaaS 06.18.15 $100 18% 100% 0% $13.00 $15.00 $14.00 0% (17%) 85.4% Box SaaS 01.22.15 $201 12% 100% 0% $11.00 $13.00 $14.00 17% 66% 28.1% Hortonworks SaaS 12.11.14 $115 17% 100% 0% $12.00 $14.00 $16.00 23% 65% (37.9%) New Relic SaaS 12.11.14 $132 12% 100% 0% $18.00 $20.00 $23.00 21% 48% 48.1% Workiva SaaS 12.11.14 $101 18% 100% 0% $13.00 $15.00 $14.00 0% (2%) 3.9% Upland Software SaaS 11.05.14 $46 27% 100% 0% $12.00 $14.00 $12.00 (8%) (19%) 0.4% HubSpot SaaS 10.08.14 $144 19% 100% 0% $19.00 $21.00 $25.00 25% 20% 142.8% MobileIron SaaS 06.11.14 $115 17% 100% 0% $8.00 $10.00 $9.00 0% 22% (48.3%) Kinaxis SaaS 06.03.14 $93 33% 65% 35% $12.82 $14.66 $11.91 (13%) 0% 362.8% TrueCar SaaS 05.15.14 $80 13% 100% 0% $12.00 $14.00 $9.00 (31%) 12% 58.7% Zendesk SaaS 05.14.14 $115 18% 100% 0% $8.00 $10.00 $9.00 0% 49% 210.2% Sabre Corporation SaaS 04.16.14 $721 17% 100% 0% $18.00 $20.00 $16.00 (16%) 3% 36.2% Paycom Software SaaS 04.14.14 $115 15% 69% 31% $18.00 $20.00 $15.00 (21%) 2% 268.7% Five9 SaaS 04.03.14 $81 25% 100% 0% $9.00 $11.00 $7.00 (30%) 9% 133.7% Amber Road SaaS 03.20.14 $111 42% 65% 35% $10.50 $12.50 $13.00 13% 31% (39.6%) Paylocity SaaS 03.18.14 $138 17% 71% 29% $14.00 $16.00 $17.00 13% 41% 116.4% Varonis Systems SaaS 02.27.14 $121 23% 100% 0% $17.00 $19.00 $22.00 22% 100% 25.9% Atlassian Corporation Perpetual 12.09.15 $531 12% 100% 0% $16.50 $18.50 $21.00 20% 32% 39.4% Pure Storage Perpetual 10.06.15 $489 16% 100% 0% $16.00 $18.00 $17.00 0% (6%) (32.0%) Rapid7 Perpetual 07.16.15 $119 20% 100% 0% $13.00 $15.00 $16.00 14% 58% (3.7%) Sophos Group Perpetual 06.26.15 $637 40% 23% 77% $3.30 $4.41 $3.54 (8%) 7% 0.2% MYOB Perpetual 05.01.15 $668 40% 99% 1% $2.35 $3.14 $2.85 4% 7% (7.2%) Cyberark Software Perpetual 09.23.14 $99 21% 100% 0% $13.00 $15.00 $16.00 14% 87% 215.8% SaaS Median $115 18% 100% 0% $12.82 $14.66 $14.00 0% 27% 55% Perpetual Median $510 20% 100% 0% $13.00 $15.00 $16.00 9% 20% (2%) Overall Median $115 18% 100% 0% $13.00 $15.00 $15.00 4% 27% 48% 100% of IPOs in 2016 Were SaaS / Subscription Software IPO Activity – Since 2014 Source: Company Filings, Capital IQ and STRH Analysis. Comp set includes software IPOs between 1/1/14 and 12/31/2016 (1) Represents the % the offer price is above / below the midpoint of the initial offer range R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 26 Software IPO Activity – Since 2014 (Continued) Source: Company Filings, Capital IQ and STRH Analysis. Comp set includes software IPOs between 1/1/14 and 12/31/2016 (1) Includes Stock-based Comp add back (2) Calculated as cash flow from operations less capital expenditures (3) As of 2/24/17 Company Stats At IPO ($ in Millions) Valuation At Offer Price Valuation At First Day Close 1st Day Close vs. Offer Current Valuation (3) Issuer Model LTM Revenue LTM Gross Margin LTM EBITDA (1) LTM EBITDA Margin LTM Free Cash Flow (2) Projected Rev. Growth EV / LTM Rev. EV / NTM Rev. EV / LTM FCF EV / NTM FCF EV / LTM Rev. EV / NTM Rev. EV / LTM FCF EV / NTM FCF EV / LTM Rev. EV / NTM Rev. EV / LTM Rev. EV / NTM Rev. BlackLine SaaS $102 81% ($15) (15%) $123 47% 8.7x 8.6x 7.2x NM 11.9x 11.8x 9.9x NM 3.2x 3.2x 11.6x 8.5x Coupa Software SaaS $109 62% ($34) (31%) $125 50% 8.7x 6.7x 7.6x NM 15.4x 11.8x 13.4x NM 6.7x 5.2x 9.0x 7.0x Nutanix SaaS $445 62% ($119) (27%) $574 75% 5.4x 3.4x 4.2x NM 11.9x 7.5x 9.2x NM 6.5x 4.1x 7.4x 4.9x Apptio SaaS $143 64% ($21) (15%) $155 20% 5.0x 4.0x 4.6x NM 6.7x 5.3x 6.2x NM 1.7x 1.4x 2.7x 2.5x Everbridge SaaS $67 67% ($4) (6%) $75 28% 5.0x 4.0x 4.5x NM 6.3x 5.0x 5.7x NM 1.3x 1.0x 6.0x 4.8x Talend SaaS $89 76% ($21) (24%) $102 35% 5.7x 4.2x 5.0x NM 8.1x 6.0x 7.0x NM 2.4x 1.7x 6.5x 4.8x Twilio SaaS $193 56% ($20) (11%) $243 46% 7.1x 5.2x 5.6x NM 13.0x 9.6x 10.3x NM 5.9x 4.3x 9.1x 6.8x SecureWorks Corp. SaaS $342 52% ($48) (14%) $421 23% 3.3x 2.6x 2.7x NM 3.3x 2.6x 2.7x NM 0.0x 0.0x 1.8x 1.5x Xactly Corporation SaaS $64 60% ($11) (17%) $74 21% 3.7x 3.0x 3.1x NM 4.0x 3.2x 3.4x NM 0.3x 0.2x 3.9x 3.4x AppFolio SaaS $54 54% ($8) (14%) $72 51% 7.2x 4.8x 5.4x NM 8.4x 5.7x 6.3x NM 1.3x 0.8x 7.4x 5.8x MINDBODY SaaS $77 59% ($21) (27%) $95 36% 9.3x 6.9x 7.5x NM 8.1x 6.0x 6.5x NM (1.2x) (0.9x) 7.1x 5.4x Box SaaS $193 79% ($105) (54%) $280 31% 7.8x 5.7x 5.4x NM 13.4x 9.8x 9.2x NM 5.6x 4.1x 5.8x 4.6x Hortonworks SaaS $42 34% ($83) (199%) $49 104% 13.3x 7.5x 11.3x NM 23.7x 13.4x 20.1x NM 10.4x 5.9x 2.8x 2.2x New Relic SaaS $85 82% ($28) (33%) $104 65% 11.4x 7.9x 9.3x NM 17.3x 12.0x 14.1x NM 6.0x 4.1x 6.6x 5.1x Workiva SaaS $106 71% ($24) (23%) $112 32% 5.1x 4.1x 4.8x NM 5.0x 4.0x 4.8x NM (0.1x) (0.1x) 3.1x 2.7x Upland Software SaaS $60 65% $3 5% $65 58% 4.1x 3.1x 3.8x NM 3.6x 2.7x 3.3x NM (0.5x) (0.4x) 3.3x 2.9x HubSpot SaaS $104 68% ($30) (29%) $111 42% 8.3x 6.5x 7.8x NM 9.8x 7.6x 9.2x NM 1.5x 1.2x 7.7x 5.9x MobileIron SaaS $108 83% ($28) (26%) $114 8% 5.7x 4.9x 5.4x NM 7.1x 6.1x 6.7x NM 1.4x 1.2x 2.0x 1.8x Kinaxis SaaS $63 71% $16 26% $70 15% 5.5x 4.5x 4.9x 21.2x 5.5x 4.5x 4.9x 21.2x 0.0x 0.0x 11.5x 9.3x TrueCar SaaS $153 90% ($0) (0%) $194 44% 3.9x 2.9x 3.1x NM 4.4x 3.2x 3.5x NM 0.5x 0.4x 4.1x 3.6x Zendesk SaaS $83 66% ($16) (19%) $112 55% 7.2x 4.8x 5.4x NM 10.9x 7.3x 8.1x NM 3.7x 2.5x 7.8x 5.8x Sabre Corporation SaaS $2,431 32% $718 30% $2,964 (3%) 3.4x 2.7x 2.8x 12.8x 3.4x 2.8x 2.8x 13.0x 0.1x 0.0x 2.7x 2.6x Paycom Software SaaS $117 82% $13 11% $140 30% 7.1x 5.5x 6.0x 41.6x 7.3x 5.7x 6.1x 42.5x 0.2x 0.1x 9.9x 7.7x Five9 SaaS $84 42% ($22) (26%) $102 22% 4.7x 3.9x 3.9x NM 5.1x 4.2x 4.2x NM 0.4x 0.3x 5.3x 4.5x Amber Road SaaS $53 58% ($2) (3%) $62 17% 6.5x 5.5x 5.5x NM 8.0x 6.9x 6.9x NM 1.5x 1.3x 3.0x 2.7x Paylocity SaaS $91 48% $3 3% $178 97% 9.2x 4.7x 4.7x NM 13.0x 6.6x 6.6x NM 3.8x 1.9x 6.9x 5.5x Varonis Systems SaaS $75 91% ($3) (4%) $96 28% 7.5x 5.8x 5.8x NM 14.5x 11.3x 11.3x NM 7.0x 5.5x 3.8x 3.2x Atlassian Corporation Perpetual $353 84% $64 18% $507 33% 11.8x 7.7x 8.2x 30.5x 15.8x 10.3x 11.0x 40.9x 4.0x 2.6x 11.4x 8.2x Pure Storage Perpetual $274 58% ($139) (51%) $398 128% 13.0x 6.9x 8.9x NM 12.3x 6.6x 8.5x NM (0.7x) (0.4x) 2.8x 1.9x Rapid7 Perpetual $92 74% ($22) (24%) $101 31% 9.2x 7.4x 8.4x NM 13.0x 10.5x 11.9x NM 3.8x 3.1x 3.7x 3.0x Sophos Group Perpetual $447 80% $66 15% $472 NA 5.3x 4.9x 5.0x 46.3x 5.6x 5.2x 5.3x 48.5x 0.3x 0.2x 3.6x 3.1x MYOB Perpetual $227 64% $64 28% $246 1% 9.3x 8.4x 8.5x 24.1x 9.8x 8.8x 9.0x 25.5x 0.5x 0.5x 7.1x 4.5x Cyberark Software Perpetual $76 85% $10 13% $85 28% 5.3x 4.2x 4.7x 21.2x 10.7x 8.5x 9.5x 43.2x 5.4x 4.3x 6.6x 5.3x SaaS Median $91 65% ($20) (15%) $112 35% 6.5x 4.8x 5.4x 21.2x 8.1x 6.0x 6.6x 21.2x 1.5x 1.2x 6.0x 4.8x Perpetual Median $250 77% $37 14% $322 31% 9.2x 7.2x 8.3x 27.3x 11.5x 8.7x 9.3x 42.1x 2.2x 1.5x 5.1x 3.8x Overall Median $102 66% ($16) (15%) $112 32% 7.1x 4.9x 5.4x 24.1x 8.4x 6.6x 6.9x 40.9x 1.5x 1.2x 6.0x 4.6x R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 Section III. Public Software Company Operating and Valuation Metrics R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 28 Median 25th Percentile Valuation Metrics EV / 2017E EBITDA Key Metrics (2) 10.1% Revenue Growth 68.1% Gross Margins 15.2% EBITDA Margins 3.7x EV / ‘17E Revenue 15.8x EV / ‘17E EBITDA 25.8x ‘17E P/E 15.2% Cash / Market Cap 2.9% Capex / Revenue 1.0x Net Debt (3) / EBITDA Valuation LTM Operating Metrics LTM Credit Metrics 3-Year Software Universe Performance (1) # of Public Software Companies: 155 Returns Since 2014 Software Median = 24% NASDAQ = 45% T e x t E d i t s f r o m M a s t e r C o m p s Public Software Company Universe Source: Company filings, Thomson Financial, Capital IQ and STRH analysis Note: Valuation charts represent median, 25th percentile and 75th percentile values based on Wall Street consensus (1) Price weighted software index based on SunTrust Robison Humphrey analysis as of 2/24/17 (2) All metrics are based on the most recent data, as of 2/24/17 (3) Includes only companies with net debt 1 7 – C u s t o m C h a r t s ( S e e I n s t . T a b ) Folder 9 EV / 2017E Revenue By Segment Applications by Business Model By Segment Applications by Business Model 75th Percentile Chart Legend 10.5x 14.8x 18.9x 27.2x 16.7x 23.9x Perpetual SaaS 9.8x 13.9x 6.0x 14.3x 14.3x 22.9x 11.1x 24.0x 11.3x 17.9x 7.5x 17.7x Inf. Security Storage Apps 7.5x 1 x 17 x 16.7x 23.9x 17 x 1.8x 2.7x 4.6x 5.8x 4.0x 4.8x Perpetual SaaS 2.6x 2.2x 1.4x 2.5x 4.6x 4.3x 2.2x 5.8x 3.2x 3.0x 1.7x 4.5x Inf. Security Storage Apps 3. 1.7x 4. 4.0x 4.8x 3.2x 22.7% 53.2% 25.2% 19.5% (30.3%) 2014 2015 2016 2017 Applications - SaaS Applications - Perpetual Infrastructure Security Storage R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 29 1.7x 2.8x 4.3x 5.3x 3.9x 4.0x Perpetual SaaS 2.2x 2.2x 1.1x 2.1x 4.3x 4.1x 2.2x 5.3x 3.0x 2.9x 1.5x 3.9x Inf. Security Storage Apps 1.4x 1.2x 3.4x 3.3x 3.0x 2.5x Perpetual SaaS 1.4x 1.5x 0.5x 1.5x 2.7x 3.1x 1.7x 3.7x 1.9x 2.2x 0.8x 2.8x Inf. Security Storage Apps 1.7x 1.9x 3.8x 5.4x 3.6x 3.3x Perpetual SaaS 1.9x 2.1x 1.0x 1.7x 3.6x 4.6x 2.2x 5.2x 2.5x 3.3x 1.2x 3.6x Inf. Security Storage Apps By Segment Applications by Business Model Taking a Look at the Valuation Metrics at Major 2016 Events – EV / 2017E Revenue Overall Median EV / 2017E Revenue 3.2x 2.3x 3.7x Start of 2016 (January 1, 2016) Today (February 24, 2017) Pre-Election (November 7, 2016) Low of 2016 (February 11, 2016) By Segment Applications by Business Model 3.0x Source: Company filings, Thomson Financial, Capital IQ and STRH analysis Note: Valuation charts represent 25th percentile, median and 75th percentile values based on Wall Street consensus; analysis does not include companies that have been acquired and delisted By Segment Applications by Business Model By Segment Applications by Business Model January 1, 2016 November 7, 2016 February 11, 2016 February 24, 2017 2.5x 2.5x 3.3x 1.2x 3.6x 3.6x 3.3x 1.9x 2.2x 0.8x 2. 3.0x 3.0x 2. 1. 3.9x 3.9x 4. 1.8x 2.7x 4.6x 5.8x 4.0x 4.8x Perpetual SaaS 2.6x 2.2x 1.4x 2.5x 4.6x 4.3x 2.2x 5.8x 3.2x 3.0x 1.7x 4.5x Inf. Security Storage Apps 3. 1.7x 4. 4.0x 4.8x 3.2x R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 30 8.7x 12.4x 16.3x 25.7x 13.2x 23.3x Perpetual SaaS 8.1x 10.5x 6.0x 12.0x 15.0x 16.5x 11.6x 21.6x 10.6x 13.7x 7.6x 14.9x Inf. Security Storage Apps 6.0x 7.1x 6.0x 9.3x 12.2x 14.2x 13.1x 15.8x 7.9x 8.5x 8.3x 12.3x Inf. Security Storage Apps 7.5x 11.8x 14.8x 24.0x 14.0x 18.4x Perpetual SaaS 7.1x 9.1x 6.0x 10.2x 12.8x 17.4x 18.3x 19.0x 9.3x 11.6x 8.5x 14.1x Inf. Security Storage Apps 11.6x 7.9x 8.5x 8. 12.3x By Segment Applications by Business Model Taking a Look at the Valuation Metrics at Major 2016 Events – EV / 2017E EBITDA Overall Median EV / 2017E EBITDA January 1, 2016 November 7, 2016 13.1x February 11, 2016 10.0x February 24, 2017 15.8x By Segment Applications by Business Model 11.9x By Segment Applications by Business Model By Segment Applications by Business Model Source: Company filings, Thomson Financial, Capital IQ and STRH analysis Note: Valuation charts represent 25th percentile, median and 75th percentile values based on Wall Street consensus; analysis does not include companies that have been acquired and delisted Start of 2016 (January 1, 2016) End of 2016 (December 31, 2016) Pre-Election (November 7, 2016) Low of 2016 (February 11, 2016) 18.4x 8.5x 14. x 14.0x 23.3x 10.6x 13.7x 7.6x 14.9x 13.2x 9. 10.5x 14.8x 18.9x 27.2x 16.7x 23.9x Perpetual SaaS 9.8x 13.9x 6.0x 14.3x 14.3x 22.9x 11.1x 24.0x 11.3x 17.9x 7.5x 17.7x Inf. Security Storage Apps 7.5x 1 x 17 x 16.7x 23.9x 17 x 6.6x 9.3x 13.2x 18.4x 11.9x 15.7x Perpetual SaaS 15.7x 11.9x R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 31 1.9x Δ 2.1x Δ Chart Legend EV / 2017 EBITDA Note: Sphere size corresponds to relative multiple value of performance group EV / 2017 Revenue 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x 14 – Public Trading Bubble Charts Revenue Growth vs. EBITDA Margin – Growth Generally “Wins” Source: Company filings, SEC Filings, Thomson Financial, Capital IQ and STRH analysis Note: Matrix comprised of STRH equity comp set as of 2/24/17 median values shown in chart; companies without analyst forward projections are excluded; CY2017E Revenue and EBITDA used to calculate all multiples "Hyper Growth" Companies Projected Revenue Growth (CY2016E-CY2017E) Proj. Rev. Growth (CY'16E-CY'17E) <5% 5%-15% 15%-25% 25%+ 2.3x EV / Rev 3.2x EV / Rev 4.2x EV / Rev 5.2x EV / Rev EBITDA Margin (CY2017E)>25%16 Companies 24 Companies 16 Companies 15%-25%9 Companies 10 Companies 4 Companies 4.6x EV / Rev ANSS, AZPN, CA, CDK, CSCO, CTXS, EGOV, INTC, MANH, MCRO, MSTR, ORCL, PRGS, SNPS, SOW, VRSN AVV-LN, BLKB, CDNS, CHKP, CSU, DSG, DSY, FFIV, FICO, GIMO, INTU, MENT, MSFT, NTCT, PDFS, QLYS, RHT, RIB, RP, SABR, SAP, TYL, UPLD, ZIXI ADBE, BSFT, CARB, CYBR, ELLI, FTNT, GWRE, KXS, MDSO, MYO, NEM, SGE, TREND, ULTI, VEEV, ZG NICE, NOW, OTEX, PANW, PAYC, SNCR, SYMC, TEAM, WAGE 9 Companies 6 Companies 2.6x EV / Rev AMSWA, CGM, HPE, IBM, NCR, NTAP, PTC, STX, TDC CSOD, CUDA, CVLT, GTO, MGIC, PEGA, SPSC, TCS, VRNT, XXIA CALD, CRM, NTWK, NXJ PCTY, PFPT, SOPH, SPLK, TWLO, WDAY 2.5x EV / Rev BAS1V, BV, EGAN, ENOC, FEYE, JIVE, LPSN, LRN, MRIN, NQ, QADA, QTM, RDWR, RST, SDL, SREV, TNGO, VDSI ABT, ADSK, AGYS, AMBR, APTI, AVG, BNFT, CYRN, DATA, EXA, FSC1V, FUEL, GUID, HGN, MOBL, PRO, SCWX FIVN, IMPV, NMBL, SY, TRUE, VRNS, WK, XTLY APPF, BL, BOX, COUP, EVBG, HDP, HUBS, MB, MODN, NEWR, NTNX, PSTG, RPD, TLND, TWOU, ZEN <15%18 Companies 17 Companies 8 Companies 16 Companies 4.9x 6.6x 4.3x 1.3x 2.4x 3.2x 1.5x 2.8x 3.3x 4.2x 4.6x 5.7x 20.0x 18.9x 45.2x 8.3x 14.0x 20.9x 11.8x 15.7x 19.5x R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 32 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 SaaS Applicatons Perp Applicatons 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 SaaS Applicatons Perp Applicatons Public Company: SaaS vs. Perpetual Applications Over the Last Twelve Months (1) EV / NTM Revenue EV / LTM Revenue Median: 4.3x Median: 3.9x 5.9x 4.1x 3.9x 4.7x 5.6x 3.5x 3.4x 4.6x Source: Capital IQ and STRH Analysis (1) SaaS Applications include application software with SaaS and subscription / term-based business models 6 – SaaS vs Perp R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 33 19.3% 7.4% 17.9% 17.9% 10.1% Perpetual SaaS Applications Infrastructure Security Storage All Software Median: 15.2% 58.8% 67.9% 71.3% 78.1% 64.7% Perpetual SaaS Applications Infrastructure Security Storage All Software Median: 68.1% 9.2% 25.0% 7.4% 10.8% 16.9% Perpetual SaaS Applications Infrastructure Security Storage All Software Median: 10.1% (1.8%) NA 3.1% 7.5% 2.6% Perpetual SaaS Applications Infrastructure Security Storage All Software Median: 0.9% LTM Revenue Growth LTM Margin and Profitability Total Revenue Growth Gross Margin 8 – Bubble Charts EV & Operating Metrics License Revenue Growth EBITDA Margin Operating Metrics by Segment Note: LTM as of 2/24/17. Operating metrics based on median values of each subsector within the SunTrust Robinson Humphrey software universe Source: Company filings, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis All Software 16.9 7.5% 2.6% 64.7 9.2% . 7.4 10.8% ) . R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 34 7.4% 7.2% 16.8% 19.5% 27.7% <$100M $100-500M $500M-1B $1B-2B >$2B All Software Median: 15.2% 66.4% 67.9% 67.6% 73.5% 67.8% <$100M $100-500M $500M-1B $1B-2B >$2B All Software Median: 68.1% 11.3% 14.8% 17.2% 7.8% 4.0% <$100M $100-500M $500M-1B $1B-2B >$2B All Software Median: 10.1% (15.3%) (1.8%) 7.2% 3.1% 0.7% <$100M $100-500M $500M-1B $1B-2B >$2B All Software Median: 0.9% 8 – Bubble Charts EV & Operating Metrics Operating Metrics by Company Size (1) Note: LTM as of 2/24/17. Operating metrics based on median values of each subsector within the SunTrust Robinson Humphrey software universe Source: Company filings, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis (1) Size buckets based on LTM revenue LTM Revenue Growth LTM Margin and Profitability Total Revenue Growth Gross Margin License Revenue Growth EBITDA Margin All Software . . . ( (1. ) 7.2% 3.1% . . . . R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 35 $8k $19k $20k $26k $16k Perpetual SaaS Applications Infrastructure Security Storage All Software Median: $14K $195k $241k $290k $264k $352k Perpetual SaaS Applications Infrastructure Security Storage All Software Median: $244K $242k $273k $318k $309k $369k Perpetual SaaS Applications Infrastructure Security Storage All Software Median: $289K 3.8% 20.8% 11.2% 6.2% (1.0%) Perpetual SaaS Applications Infrastructure Security Storage All Software Median: 11.0% LTM Revenue / Employee Last Fiscal Year Employee Growth Revenue and Employee Analysis LTM Cost Analysis Total Cost (1) / Employee Stock-Based Compensation / Employee 8 – Bubble Charts EV & Operating Metrics Revenue and Cost Analysis by Segment Note: LTM as of 2/24/16. Operating metrics based on median values of each subsector within the SunTrust Robinson Humphrey software universe Source: Company filings, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis (1) Total cost = cost of goods sold + operating expense – non-cash stock based compensation All Software 11.2 (1.0) $8K K K $K $20K K $ K 88K K $ K 3.8% K K K $3K $ K R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 36 Prioritizing Initiatives 28.5% 28.2% 29.0% 29.4% 30.0% 29.9% 29.3% 30.5% 32.1% 33.0% 33.4% 33.8% 35.4% 35.0% 34.2% 33.7% 33.7% 32.2% 25% 27% 29% 31% 33% 35% 37% 39% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 2013 2014 2015 2016 Median Software S&M as % of Revenue 15.2% 15.9% 12.0% 8.2% 9.0% < $100 mm $100 mm - $500 mm $500 mm - $1 bn $1 bn - $2 bn > $2 bn 16.8% 11.5% 12.0% 11.4% 15.3% SaaS Applications Perpetual License Applications Infrastructure Security Storage 17.2% 17.9% 14.3% 20.1% 14.3% < $100 mm $100 mm - $500 mm $500 mm - $1 bn $1 bn - $2 bn > $2 bn 17.0% 16.1% 19.1% 17.9% 22.5% SaaS Applications Perpetual License Applications Infrastructure Security Storage 20.7% 35.8% 29.9% 32.7% 27.6% < $100 mm $100 mm - $500 mm $500 mm - $1 bn $1 bn - $2 bn > $2 bn 32.5% 22.6% 34.7% 37.6% 48.4% SaaS Applications Perpetual License Applications Infrastructure Security Storage Cost-Cutting Investing in Platforms LTM Cost Structure Historical Cost Detail on LTM Basis Research & Development Sales & Marketing General & Administrative Subsector Size (1) Subsector Size (1) Subsector Size (1) 12 – Historical Cost Data Cost Structure Detail Note: LTM as of 12/31/16 Operating metrics based on median values of each sector within SunTrust Robinson Humphrey’ software universe (detailed in each section) Source: Company filings, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis (1) Size buckets based on LTM revenue All Software 14.7% 14.5% 15.3% 15.3% 15.2% 15.4% 15.0% 15.7% 16.2% 16.4% 16.4% 17.0% 16.9% 17.5% 17.7% 17.9% 17.3% 17.5% 12% 14% 16% 18% 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 2013 2014 2015 2016 Median Software R&D as % of Revenue 12.3% 12.6% 13.1% 12.7% 12.1% 12.6% 12.4% 12.6% 12.7% 13.2% 14.2% 13.7% 13.8% 13.8% 13.6% 13.9% 13.9% 12.9% 10% 11% 12% 13% 14% 15% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 2013 2014 2015 2016 Median Software G&A as % of Revenue R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 37 34.0% 30.5% 6.7% R&D % S&M % G&A % 15.6% 20.2% 11.8% R&D % S&M % G&A % Security Infrastructure Perpetual Apps Storage SaaS Apps < $100M $100M – $500M $500M - $1B $1B - $2B > $2B Cost Structure Matrix (1) 20.7% 17.9% 14.3% 20.1% 14.3% Note: LTM as of 12/31/16 Operating metrics based on median values of each sector within SunTrust Robinson Humphrey’ software universe (detailed in each section) Source: Company filings, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis (1) Size buckets based on LTM revenue 17.0% 16.1% 19.1% 17.9% 22.5% Median: Median: 32.5% 16.8% 17.2% 15.2% 35.8% 15.9% 29.9% 12.0% 32.7% 8.2% 27.6% 9.0% 22.6% 11.5% 34.7% 12.0% 37.6% 11.4% 48.4% 15.3% 12 – Historical Cost Data 16.0% 30.9% 16.0% R&D % S&M % G&A % 15.3% 32.7% 17.1% R&D % S&M % G&A % 16.9% 28.7% 21.7% R&D % S&M % G&A % 42.6% 36.9% 12.8% R&D % S&M % G&A % 24.7% 33.9% 9.1% R&D % S&M % G&A % 22.1% 20.7% 20.3% R&D % S&M % G&A % 10.7% 21.3% 11.1% R&D % S&M % G&A % 16.9% 29.5% 7.5% R&D % S&M % G&A % 17.8% 16.7% 18.5% R&D % S&M % G&A % 22.3% 43.0% 15.5% R&D % S&M % G&A % 19.1% 32.2% 11.6% R&D % S&M % G&A % 18.5% 32.7% 8.7% R&D % S&M % G&A % 14.1% 28.7% 9.1% R&D % S&M % G&A % 17.6% 41.6% 18.8% R&D % S&M % G&A % 19.6% 39.3% 13.5% R&D % S&M % G&A % 39.2% 61.5% 18.9% R&D % S&M % G&A % 12.3% 36.6% 8.2% R&D % S&M % G&A % 12.9% 15.3% 7.5% R&D % S&M % G&A % 17.2% 77.1% 29.7% R&D % S&M % G&A % 29.5% 57.8% 15.2% R&D % S&M % G&A % 10.6% 39.6% 11.4% R&D % S&M % G&A % NA NA NA R&D % S&M % G&A % 13.1% 12.4% 17.3% R&D % S&M % G&A % R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 38 Cash Balances of Software & Systems Companies The Widening Gap Between the Largest Consolidators and the Rest of the Field has Become a Hallmark Trait of Today’s Technology Market Uses of Cash (2) Cash Balances Swell (1) Software & Systems Companies with the Top 10 Cash Balances… All Other Software Co.’s 15% Top 10 Software Co. Cash Balances 85% Aggregate Software Co. Cash $369 billion 10 Largest Software & Systems Co. Cash Balances 1) Microsoft 2) Cisco Systems 3) Oracle 4) Intel 5) Hewlett-Packard 6) IBM 7) VMware 8) Symantec 9) SAP 10) Adobe Distribution of Cash 66% Increase Aggregate Cash Balance of the Public Software & Systems Company Universe 146% Increase 10 – Cash Concentration …Spent 55% of EBITDA on M&A Transactions… (3) …Whereas the Rest Spent 46% of EBITDA on M&A Transactions (3) Concentration of War Chests with Public Company Consolidators Note: “Cash” includes cash equivalents and short term investments Source: Capital IQ, Thomson Financial, company filings and SunTrust Robinson Humphrey analysis (1) Software cash balances 12/31/09 vs. cash balances 12/31/16 (2) Based on LTM financial metrics as of 12/31/16 (3) Excludes equity and debt financing of M&A transactions All Software $118 $40 $64 $31 $131 $19 $11 $9 EBITDA Share Repurchase M&A Dividends Revenue EBITDA Share Repurchase M&A Top 10 All Other ($ in Billions) ($ in Billions) $127 $312 $34 $57 2009 Today 2009 Today Top 10 All Other R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 Section III. A. Application Software R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 40 Application Software Recent Segment M&A Activity Segment M&A Activity Application Software 2016 M&A Activity by Segment 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 13.5x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x 3.4x 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 13.2x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x 3.3x 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 13.4x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2. 3.4 6.3x 3.5x Chart Legend EV / LTM EBITDA Note: Sphere represents median multiple for each respective year EV / LTM Revenue 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x M&A Segment Summary Source: Company filings, Information Week, the 451 Group, TechCrunch, other publicly available news sources, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 13.9x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x 4.0x 10.1x 17.3x 32.2x 8.3x 16.0x 28.3x 8.8x 13.1x 11.0x 14.4x 1.0x 1.9x 5.3x 1.8x 3.6x 5.4x 2.8x 3.4x 6.3x 4.0x Roper acquired Deltek, a provider of enterprise software and information solutions for project-based businesses in the professional services and government contracting markets GE Digital acquired ServiceMax, a leading provider of cloud-based field service management solutions Insight Venture Partners acquired Ministry Brands, a provider of SaaS-based solutions for churches, ministries and other faith-based organizations Hearst Business Media acquired CAMP Systems, a provider of SaaS solutions for managing and tracking the maintenance of planes used in business aviation Vista Equity Partners acquired the SunGard Public Sector and Education assets from FIS, which provide solutions addressing public admin needs of government agencies and K-12 school districts Salesforce acquired Krux, a provider of SaaS-based real-time audience data management and targeting solutions Adobe acquired TubeMogul, a provider of advertising software that allows brands to plan, buy and measure global advertising GI Partners completed a majority investment with Daxko, a leading provider of SaaS solutions to member-based health and wellness organizations 20 26 25 20 24 11 23 34 20 27 27 27 25 30 31 23 29 35 33 23 3.5x 4.0x 2.9x 2.8x 3.2x 4.1x 2.2x 3.9x 3.6x 3.5x 4.4x 2.9x 3.7x 4.1x 4.7x 2.6x 3.0x 5.2x 4.1x 4.0x Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 2015 2016 No. of Transactions Median EV/Rev Multiple 6 14 21 25 54 PLM / EDA HCM SCM CRM ERP R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 41 4.4% 27.0% 11.7% 24.4% 11.7% 9.9% CRM ERP HCM PLM SCM Vertical All Software Median: 15.2% All Applications Median: 13.4% 66.6% 60.0% 66.1% 83.9% 52.1% 56.1% CRM ERP HCM PLM SCM Vertical All Software Median: 68.1% All Applications Median: 64.3% 23.3% 7.2% 25.7% 4.7% 9.0% 14.8% CRM ERP HCM PLM SCM Vertical All Software Median: 10.1% All Applications Median: 10.3% (5.3%) 0.5% NA 3.1% (8.7%) (4.7%) CRM ERP HCM PLM SCM Vertical All Software Median: 0.9% All Applications Median: 0.9% . Application Software 8 – Bubble Charts EV & Operating Metrics Operating Metrics by Subsector LTM Revenue Growth LTM Margin and Profitability Total Revenue Growth Gross Margin License Revenue Growth EBITDA Margin Note: LTM as of 2/24/17. Operating metrics based on median values of the Application Software sector within the SunTrust Robinson Humphrey software universe Source: Company filings, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis 9.0 (5.3%) 3.1 (. (. ) 0.5% . 52.1% 4.4 . . . . R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 42 4.5% 7.4% 23.2% 19.5% 24.7% <$100M $100-500M $500M-1B $1B-2B >$2B All Software Median: 15.2% All Applications Median: 13.4% 62.4% 63.3% 58.7% 71.2% 72.1% <$100M $100-500M $500M-1B $1B-2B >$2B All Software Median: 68.1% All Applications Median: 64.3% 14.1% 13.9% 19.8% 6.7% 5.1% <$100M $100-500M $500M-1B $1B-2B >$2B All Software Median: 10.1% All Applications Median: 10.3% (7.6%) (10.7%) (1.3%) (19.3%) 1.0% <$100M $100-500M $500M-1B $1B-2B >$2B All Software Median: 0.9% All Applications Median: 0.9% 8 – Bubble Charts EV & Operating Metrics Operating Metrics by Company Size (1) LTM Revenue Growth LTM Margin and Profitability Total Revenue Growth Gross Margin License Revenue Growth EBITDA Margin Note: LTM as of 2/24/17. Operating metrics based on median values of the Application Software sector within the SunTrust Robinson Humphrey software universe Source: Company filings, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis (1) Size buckets based on LTM revenue Application Software . ( . ) . . . 24.7% 7. . R0 G70 B127 R245 G128 B37 R255 G164 B0 R0 G117 B201 R164 G169 B173 R 64 G 64 B 64 R 102 G 102 B 102 R246 G198 B91 R0 G161 B223 R173 G201 B232 43 Application Software 12 – Historical Cost Data Cost Structure Detail Note: LTM as of 12/31/16. Operating metrics based on median values of each sector within SunTrust Robinson Humphrey’s software universe (detailed at the end of this section) Source: Company filings, Thomson Financial, Capital IQ and SunTrust Robinson Humphrey analysis (1) Size buckets based on LTM revenue LTM Cost Structure Historical Cost Detail on LTM Basis Research & Development Sales & Marketing General & Administrative Subsector Size (1) Subsector Size (1) Subsector Size (1) 15.6% 15.0% 15.7% 16.0% 16.5% 16.1% 16.0% 15.9% 16.2% 16.0% 16.1% 16.4% 16.4% 16.5% 16.4% 16.3% 16.8% 16.5% 14% 15% 16% 17% 18% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 2013 2014 2015 2016 Median A</p>
