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<p>Strictly private and confidential Global Software Market Perspectives Q3 2017 2 Key Sector Takeaways and Commentary Recent Software Transaction Trends Public Market SaaS Analyses Key SaaS Metrics Appendix A: GP Bullhound SaaS Index Appendix B: Software Public Comps by Category 1 2 3 4 5 6 7 Appendix C: GP Bullhound Software Report Overview, Software Credentials & Team 3 Software consolidators are actively pursuing M&A to build out their software platforms, acquiring new products and point solutions in order to deliver market-differentiating, comprehensive product suites to their customers Sizeable software players are driven to capture a larger percentage of their enterprise customers’ wallet share by adding and offering a comprehensive set of products – The platform strategy is particularly evident in the human capital management, enterprise resource planning and marketing software spaces » HCM – Asure Software/iSystems, Bullhorn/Connexys, Workday/Pattern Technologies » ERP – Aptean/Apprise, Sage/Intacct » Marketing – SAP/Gigya, Sizmek/Rocket Fuel Many of the software consolidators have built vertical businesses on their platform: most notably, Salesforce in the financial services industry – Others include: Oracle in construction and in utilities; Verizon in telematics Vertical SaaS companies, in particular focused on construction, education, government, healthcare, and real estate sectors, continue to see strong demand from their customers/users, and interest from investors and strategic partners Our Views on Current Trends in Software Source: Capital IQ ”PF” = Pro Forma 0 10 20 30 40 50 2013 2014 2015 2016 2017 # of Verical SaaS M&A Deals YTD PF – The nature of vertical SaaS customers tends to be very sticky with long project terms and a low appetite to change software providers (e.g. government organizations change software providers very infrequently due to their budgets and installed software integrations) » Results in impressive unit economics, high retention rates, customer lifetime value, low CAC, etc. – Specialized vertical SaaS solutions result in a greater ability to cross-sell related solutions that are added inorganically or through internal R&D for the vertical market » Several vertical SaaS roll-ups are being built by private equity: Applied Systems (Hellman & Friedman), Blue Star Sports (Genstar Capital), Ministry Brands (Genstar Capital), Navicure (Bain Capital), PeopleAdmin (Vista Equity), Personify (Rubicon Technology Partners) 4 Consumer software companies are using hardware devices as a means to an end to prove use cases with consumers, enable a ubiquitous software experience across several devices, and hook consumers – Software subscription business model, whether through licensing or direct to consumer, is much more efficient and valuable than traditional consumer hardware businesses » For example, Apple, while enjoying unrivaled market share and margins in hardware, their largest source of growth is now coming from software and services » Acquisitions of Nest and Dropcam by Google has created a market leading brand in the smart home space with a combination of hardware, software and subscription revenue streams – Currently, the private company winners in the consumer market are the ones that have the best software available across many devices – Having hardware agnostic software gives the provider the ability to generate multi-channel revenue streams by getting into the hands of more consumers worldwide » Amazon and Google initially produced hardware products that carried Alexa and Google Assistant software, now these virtual assistants can be found on Lenovo, Belkin, LG and numerous other hardware devices Tech giants will continue to acquire SaaS companies to improve cross-selling opportunities across enterprise customers’ departments and strengthen their position in the fastest-growing SaaS sectors; recent examples include: » Sage acquisition of Intacct – Key rationale: Strengthens positioning in the cloud and provides access to North American customers where there is faster cloud adoption; several cross-selling opportunities exist particularly with Sage People in HCM » Global Payments acquisition of Active Network – Key rationale: Entering two new markets in health and fitness verticals with attractive growth prospects; integration of Global Payments’ technology will enhance payment offering to Active Network’s customers Our Views on Current Trends in Software (Cont’d) 5 Interest in the software sector continues to be bullish, in terms of strategic transactions and private investments. Across a number of sectors, SaaS businesses are being acquired as major consolidators recognize the significant value opportunity presented by SaaS companies – We continue to see private equity firms acquiring SaaS businesses at a faster clip than ever seen before, with 78 PE acquisit ions in Q3 continuing the positive trend - we expect Q4 will be another busy period for funds investing and buying in SaaS M&A, Investment and Valuation Takeaways Source(s): Pitchbook, Capital IQ Note: Multiples shown are EV/LTM Revenue & exclude any outlying data “PF” = Pro Forma – Increasingly we are seeing PE firms make platform acquisitions in a particular vertical and then complete add-on acquisitions of smaller companies that provide niche products or fill gaps in the platforms service offerings. We have seen PE backed software companies go on an acquisition spree in an attempt by their backers to provide scale and improve offerings 0 100 200 300 400 2013 2014 2015 2016 2017 # of PE Platform Acquisitions # of PE SaaS M&A Deals » E.g. Accruent (Genstar Capital)/Verisae, Accruent/Lucernex, Sizmek/Rocket Fuel, Saba Software (Vector Capital, HarbourVest Partners)/Halogen Software, Energy Services Group (Accel-KKR)/Utiligroup, Forcepoint (Vista Equity)/Imperva Skyfence – There has been a distinct slowdown in the IPO market in Q3 with no large cap software IPOs in the last three months. Instead we have seen multiple late stage software companies raising capital in anticipation of going public at some point over the next 24 months. With Softbank’s Vision Fund and others flooding the market with late stage venture capital, private companies that are valuation sensitive, and/or do not want to face public scrutiny in the market are able to delay their expected IPOs » E.g. Slack/Softbank/Thrive, etc., Qualtrics/Accel/Insight, etc., Domo/Blackrock/TPG/IVP, etc. YTD PF 6 SaaS Company Executive Commentary GUSTAVO GOMEZ Co-Founder & CEO “Large organizations have seen their business models turned upside-down by new digital disruptors. Their first reaction was to create a shiny new mobile app, but this has only scratched the surface. Companies have now recognized that they need to provide a contextualized customer experience, not just redesign the user interface. That means completely changing the way they operate and deal with data, and both were previously cast in stone by rigid legacy systems. But business processes can no longer live within such monolithic systems. Organizations must now use agile processes to orchestrate information, devices, applications and people on a global scale.” Bizagi helps organizations to transform into digital businesses. Its process automation software platform connects people, applications, devices and information to deliver the engaging experience that today’s customers demand 7 SaaS Company Executive Commentary (Cont’d) DUSAN OMERCEVIC Founder & CEO “In 2017 a 200-person company will use 120-135 cloud apps and services - there is literally a deployable subscription software for every activity. While we see no sign of SaaS vendor list consolidation - our customers are growing their subscription list by 10-15% a year - we see clear platform winners emerging. Salesforce, and Atlassian are prime examples of SaaS platforms that have become indispensable as customers build their entire tech stacks on top of them.” Cleanshelf is a fully automated solution to manage cloud software subscriptions. Drawbridge, Revinate, and other top Silicon Valley companies use Cleanshelf to lower their SaaS spend by up to 30% 8 SaaS Company Executive Commentary (Cont’d) MALCOLM COWLEY Co-Founder & CEO “There’s never been a better time for entrepreneurs to build a large SaaS company than right now! The world is connected, cross border business has become the norm, and multiple sources of capital exist to fund and grow your business. SaaS companies achieve greatness because of three things: customer- centricity, meaningful and defensible benefits, and a laser focus on creating great organizations that deliver for their customers. In my experience as CEO of Performance Horizon, I’ve found that when you do those three things well, growth is inevitable. Great businesses crush it on all three. Failing businesses get at least one of those pillars wrong.” Performance Horizon is a global SaaS business that helps companies create partnerships that drive measurable business growth 9 Key Sector Takeaways and Commentary Recent Software Transaction Trends Public Market SaaS Analyses Key SaaS Metrics Appendix A: GP Bullhound SaaS Index Appendix B: Software Public Comps by Category 1 2 3 4 5 6 7 Appendix C: GP Bullhound Software Report Overview, Software Credentials & Team 10 Announce Date Issuer Selected Investors Issuer Description Capital Raised ($) Sep 13 Bizagi Invus Process automation software 48 Sep 12 SendinBlue Caloga, Partech Ventures Marketing suite 36 Sep 6 Aras Bantam Group, Bay Capital, Blue Cloud Ventures, GE, Greylock, Silver Lake Product lifecycle management 40 Sep 5 Gather Technologies Ludlow Ventures, Storm Ventures, Vista Equity Event management software 55 Aug 22 Tulip Retail Align Ventures, Commerce Ventures, Kima Ventures, KPCB, Lerer Hippeau Ventures, Math Venture Partners, OneEleven, Promus Ventures, SoftTech VC Mobile retail software 40 Aug 22 Druva Riverwood Capital, Nexus Venture Partners, Sequoia Capital, Tenaya Capital Data management and governance 80 Aug 15 Grupa Pracuj TCV HR software 95 Aug 9 Appboy Accelerator Ventures, Battery Ventures, Blumberg Capital, Bullpen Capital, Citi Ventures, Shasta Ventures, ICONIQ Capital Lifecycle engagement platform 50 Aug 3 Databricks A Capital Partners, Andreessen Horowitz, Battery Ventures, Geodisic Capital, NEA, Green Bay Ventures Cloud based big data processing 140 Jul 23 Toast Bessemer Venture Partners, Generation Investment Management, Lead Edge Capital Point of sale software 101 Jul 18 Freshbooks Accomplice VC, Agman Partners, Atlas Venture, eBay, Oak Investment Partners SMB accounting software 43 Announce Date Target Buyer Target Description Value ($) Implied EV/LTM Rev Sep 28 Exa Corporation Dassault Systemes Simulation software 382 5.3x Sep 24 Gigya SAP Customer identity management software 350 - Sep 19 CarteGraph Pamlico Management software for government agencies - - Sep 7 HPE (software division) Micro Focus International Horizontal software business across several categories 8,315 2.6x Sep 6 Newgistics Pitney Bowes E-commerce and logistics 475 1.0x Aug 30 HighJump Software Korber Supply chain execution software 750 3.8x Aug 15 MacroPoint Descartes Systems Global freight visibility software 107 8.6x Aug 14 Huddle Turn/River Capital Cloud based collaboration software 88 - Aug 14 ZoomInfo Great Hill Partners B2B subscription data 240 6.0x Aug 8 proAlpha Group Intermediate Capital Group ERP software tailored to manufacturing companies 354 4.5x Aug 8 EtQ TCV Compliance management software 130 - Aug 3 Active Network Global Payments Cloud based community sports management 1,200 - Aug 1 Nanorep LogMeIn Customer service management platform 50 - Jul 26 Guidance Software Open Text Corporation Endpoint cybersecurity solutions 245 2.3x Jul 25 Intacct The Sage Group Cloud accounting software 850 12.7x Jul 24 Civica Group OMERS Private Equity Specialized software and business process services 1,375 - Jul 10 Innoetics Samsung Cloud based text to speech 50 - Jul 6 Syncsort Centerbridge Partners Big data software 1,260 - Notable Software M&A Deals & Private Financings (Q3 2017) Selected M&A Transactions Selected 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 Median 4.5x 11 0 100 200 300 400 500 600 $0B $20B $40B $60B $80B $100B $120B 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 M&A Buyout M&A Deals Buyout Deals Global Software Transaction Trends M&A and Private Placement Activity by Quarter Source(s): Pitchbook as of 09/29/2017 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 is Picking Up, Driven by PE Fewer, Larger Private Placements are Still Occurring The US and Europe Continue to Dominate M&A Deal Volume Private Placement Deal Volume by Region has Stayed Consistent 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 U.S. & Canada Europe Asia Other 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 $0B $5B $10B $15B $20B $25B $30B $35B 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 Value Deals 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 U.S. & Canada Europe Asia Other 12 Key Sector Takeaways and Commentary Recent Software Transaction Trends Public Market SaaS Analyses Key SaaS Metrics Appendix A: GP Bullhound SaaS Index Appendix B: Software Public Comps by Category 1 2 3 4 5 6 7 Appendix C: GP Bullhound Software Report Overview, Software Credentials & Team 13 11,5 11,1 9,3 8,0 7,9 5,8 5,7 5,0 4,6 4,5 3,9 3,3 3,3 3,2 3,1 3,1 2,9 Salesforce Workday ServiceNow j2 Global Square Splunk Atlassian Veeva LogMeIn Ultimate Software athenahealth Medidata Solutions Paycom Proofpoint RealPage Wix RingCentral HubSpot Xero Zendesk GP Bullhound Selected SaaS Index Market Valuations Source(s): Capital IQ as of 09/29/2017 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) 67.1 21.9 20.1 14 0x 2x 4x 6x 8x 10x 12x 14x 09-29-2012 03-29-2013 09-29-2013 03-29-2014 09-29-2014 03-29-2015 09-29-2015 03-29-2016 09-29-2016 03-29-2017 09-29-2017 GP Bullhound SaaS Index – TEV/LTM Revenue GP Bullhound SaaS Index – TEV/NTM Revenue Analysis of GP Bullhound SaaS Index Valuations Revenue Multiple Trends – Last Five Years Source(s): Capital IQ as of 09/29/2017 Note: GP Bullhound SaaS Index constituents can be found in Appendix A Mean: 8.4x Mean: 6.7x As of Sep 29: 7.4x As of Sep 29: 6.1x Bubble? Current SaaS multiples are below five year historical averages 15 Rule of 40% – Public SaaS 2017E Growth and Profitability of Public SaaS Companies in GPB Index Source(s): Capital IQ as of 09/29/2017 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 VEEV BL TEAM PAYC NOW WDAY WIX QTWO APPF PFPT SQ SPLK ZEN TWLO HUBS ULTI MDSO MB CRM PCTY NEWR TLND MIME QLYS EVBG CALD FIVN CSOD EGHT RP RNG INST BOX SPSC ATHN BNFT BSFT WK VIT B AMBR CSLT CARB APTI ECOM LPSN MOBL BCOV BV SCWX UPLD XRO AYX YEXT (40%) (35%) (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 Revenue Growth Rule of 40: SaaS companies represent 38% of the total companies and 73% of the total Enterprise Value in the GPB Index 2017E Unlevered FCF Margin 16 CRM WDAY NOW SPLK VEEV SQ ULTI ATHN MDSO PAYC PFPT WIX RP RNG HUBS ZEN BOX PCTY NEWR XRO TWLO CSOD BL QTWO QLYS MIME CALD MB EGHT FIVN BSFT YEXT AYX SPSC TLND BNFT APPF SCWX WK INST EVBG APTI LPSN CARB CSLT MOBL UPLD BV ECOM 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 Revenue Multiple2017E Revenue Growth + 2017E Unlevered FCF Margin Rule of 40% – Public SaaS (Cont'd) Source(s): Capital IQ as of 09/29/2017 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 17 91% 65% 54% 50% 49% 37% 29% 41% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Vertically Focused Cloud Software Significantly Lower Sales & Marketing Spend as a Percentage of Revenue However, generally lower growth and valuation multiples Horizontal Software Vertically-Specific Software Median: 24% Median: 50% Source(s): Capital IQ as of 09/29/2017 Note: GP Bullhound SaaS Index constituents can be found in Appendix A 41% 27% 24% 24% 24% 20% 21% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 12.1x 10.0x 8.6x 12.0x 7.1x 11.0x 6.5x 7.4x 6.2x 12.8x 5.5x 4.5x 8.8x 11.7x 5.9x EV/LTM Revenue CY17/16E Revenue Growth 52.7% 49.3% 34.4% 37.2% 23.9% 34.0% 19.8% 31.0% 29.8% 32.1% 18.2% 13.2% 19.5% 23.8% 7.6% 18 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: 137% Revenue (LTM 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 Listing Date: 03/24/17 Offering Amount: $126.0m Offering Price/Share: $14 % Change/IPO Price: 46% Revenue (LTM December 31 2016): $85.8m EV/Revenue1: 7.6x Selected Metrics: – Revenue Growth 16/15: 59% – 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 Listing Date: 05/28/2017 Offering Amount: $225.0m Offering Price/Share: $15 % Change/IPO Price: 11% Revenue (LTM December 31 2016): $261.0m EV/Revenue1: 7.3x Selected Metrics: – Revenue Growth 16/15: 57% – Subscription Revenue %: 77% – 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 Listing Date: 03/17/17 Offering Amount: $221.0m Offering Price/Share: $17 % Change/IPO Price: 19% Revenue (LTM December 31 2016): $187.7m EV/Revenue: 10.2x Selected Metrics: – Revenue Growth 16/15: 70% – Subscription Revenue %: 81% – 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 Listing Date: 04/07/2017 Offering Amount: $187.0m Offering Price/Share: $17 % Change/IPO Price: 66% Revenue (LTM January 31 2017): $160.3m EV/Revenue: 9.4x Selected Metrics: – Revenue Growth 17/16: 87% – Subscription Revenue %: 89% – 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 Listing Date: 04/13/2017 Offering Amount: $115.5m Offering Price/Share: $11 % Change/IPO Price: 21% Revenue (LTM January 31 2017): $124.3m EV/Revenue: 6.1x Selected Metrics: – Revenue Growth 17/16: 39% – $ 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 09/29/2017 Description (NASDAQ:MDB): The leading modern general purpose database platform File date: 09/21/17 Revenue (LTM January 31 2017): $101.4m Offering: – 8,000,000 Shares – Price per share: $24 – Market Cap: $1.2bn Selected Metrics: – Revenue Growth 17/16: 55% – Subscription Revenue %: 90% – ARR expansion rate: 120% – YoY Customer Growth (17/16): 88% – Average expansion multiple of top 25 end-customers: 12.3x Description (NASDAQ:FSCT): Provider of security software to monitor devices connected to the network File date: 10/02/17 Revenue (LTM December 31 2016): $166.8m Offering: – 4,800,000 Shares – Price per share: $20-$22 – Market Cap: $733m-$806m Selected Metrics: – Revenue Growth 16/15: 32% – Average ACV: $200K+ – Average expansion multiple of top 20 end-customers: 4.5x Coming Soon Listed in 2017 19 LogMeIn US 2,778 $110.05 21.9% 11.7% (2.0%) $5,803 $5,517 $285 8.9x 5.5x 4.7x 43.2x 15.3x 12.4x 201.0% 82.7% 35.6% DXC Technology US 60,000 85.88 NA NA 1.4% 24,449 29,725 2,517 2.6x 1.5x 1.2x 24.4x 8.5x 6.4x 165.3% NA 17.5% CLX Communications SE 333 14.23 71.4% 15.9% 9.3% 763 793 82 2.6x 2.1x 1.9x 25.7x 20.2x 15.2x 89.0% 27.2% 10.5% Micro Focus UK 4,287 32.00 4.7% 6.6% 0.5% 13,924 15,386 151 11.1x 6.1x 3.7x 28.2x 15.1x 9.3x 85.5% NA 40.5% Iron Mountain US 24,000 38.90 3.0% 9.9% (0.9%) 10,370 16,601 291 7.2x 4.4x 4.2x 13.7x 13.1x 12.3x 76.6% 56.1% 33.5% Shopify CA 1,900 116.49 171.2% 60.2% 11.6% 11,537 10,605 932 20.8x 16.3x 11.4x NM NM NM 67.1% 56.1% 1.8% Gridsum CN 929 10.30 (38.5%) (18.3%) 11.8% 316 300 44 4.3x 3.2x 2.0x NM NM 7.8x 60.9% NA 2.7% Wisetech AU 900 6.83 57.7% 57.9% 7.7% 1,979 1,903 78 16.1x 13.5x 10.5x 50.0x 37.9x 28.2x 56.0% NA 35.5% Okta US 898 28.21 NA NA 15.2% 2,696 2,483 213 12.1x 10.1x 7.5x NM NM NM 52.7% 69.5% (28.3%) Synchronoss US 1,765 9.33 (77.4%) (62.3%) (44.1%) 433 556 194 1.2x 0.8x 0.7x 10.2x 3.1x 2.6x 52.5% 65.7% 24.7% Xero NZ 1,721 22.33 55.5% 69.7% 16.6% 3,064 2,982 80 14.7x 10.7x 7.9x NM NM 63.6x 50.1% NA 1.6% Trade Desk US 467 61.51 112.2% 62.0% 18.9% 2,508 2,420 116 9.6x 8.0x 6.3x 37.7x 26.7x 19.9x 50.0% 79.1% 29.7% MuleSoft US 1,049 20.14 NA (15.4%) (6.5%) 2,597 2,341 256 10.0x 8.4x 6.2x NM NM NM 49.3% 74.0% (18.8%) Alteryx US 491 20.37 NA 35.7% (10.9%) 1,196 1,043 153 9.8x 8.3x 6.1x NM NM NM 46.3% 83.7% (12.5%) Wix IL 1,266 71.85 63.4% 7.6% 17.8% 3,266 3,082 185 8.7x 7.3x 5.5x NM 40.5x 22.9x 45.8% 84.4% 18.0% Atlassian UK 2,193 35.15 15.9% 17.8% 1.6% 7,988 7,438 550 12.8x 10.3x 7.9x NM 40.8x 29.3x 43.9% NA 25.3% Extreme Networks US 1,628 11.89 163.1% 84.1% 5.6% 1,345 1,307 130 2.2x 1.7x 1.4x 29.5x 15.0x 11.3x 41.2% NA 11.6% Metaps JP 239 31.88 116.0% 20.4% 9.1% 413 369 85 3.1x 2.8x 2.7x 34.7x 64.9x NM 40.9% NA 4.4% Blackline US 704 34.12 NA 16.3% 14.5% 1,790 1,683 107 11.3x 9.8x 7.6x NM NM NM 39.8% 80.2% (1.4%) Talend FR 765 40.94 63.0% 41.3% 5.9% 1,185 1,090 95 8.6x 7.4x 5.7x NM NM NM 38.8% 77.1% (13.6%) Instructure US 1,099 33.15 30.7% 40.5% 8.7% 974 948 26 7.1x 6.2x 4.7x NM NM NM 38.6% 72.2% (19.8%) Pure Storage US 1,900 15.99 17.2% 64.7% 8.9% 3,382 2,859 523 3.4x 2.8x 2.2x NM NM 32.8x 38.5% 65.9% 1.6% WageWorks US 1,958 60.70 0.9% (14.9%) 3.4% 2,410 1,880 775 4.5x 3.9x 3.6x 23.0x 13.0x 11.3x 38.4% 64.0% 30.0% RingCentral US 1,037 41.75 77.2% 51.0% 5.2% 3,199 3,032 167 7.5x 6.2x 5.0x NM NM 65.8x 38.4% 75.9% 6.3% 2U US 1,164 56.04 46.4% 46.1% 13.9% 2,913 2,891 37 12.1x 10.2x 7.4x NM NM NM 38.1% 81.2% 3.7% Cloudera US 1,470 16.62 NA NA (10.3%) 2,235 1,840 395 5.9x 5.1x 4.1x NM NM NM 37.4% 72.1% (31.9%) ServiceNow US 5,571 117.53 49.8% 34.2% 5.2% 20,064 19,512 1,692 12.0x 10.2x 7.8x NM 46.6x 31.8x 37.2% 77.0% 21.9% Yext US 700 13.28 NA NA 0.5% 1,198 1,071 127 7.4x 6.3x 4.8x NM NM NM 36.8% 74.9% (23.8%) Mimecast UK 957 28.42 48.8% 30.4% 7.0% 1,616 1,518 112 7.5x 6.5x 5.2x NM 74.3x 48.9x 36.8% NA 8.7% HubSpot US 1,777 84.05 49.1% 44.5% 22.8% 3,112 2,909 492 9.1x 7.9x 6.3x NM NM NM 35.6% 80.6% 4.9% Zendesk US 1,880 29.11 (4.1%) 4.4% 6.7% 2,926 2,685 240 7.4x 6.3x 4.9x NM NM NM 35.5% 73.5% 3.1% Twilio US 887 29.85 (56.6%) 3.7% 3.0% 2,744 2,455 289 7.3x 6.6x 5.3x NM NM NM 35.0% 57.0% (4.2%) Proofpoint US 1,573 87.22 15.9% 16.9% (3.5%) 3,875 3,823 429 8.6x 7.6x 5.9x NM 63.6x 42.0x 34.4% 76.9% 11.9% Hortonworks US 1,120 16.95 98.5% 74.0% 3.8% 1,137 1,066 72 4.9x 4.3x 3.4x NM NM 68.0x 34.2% 70.4% (9.9%) Workday US 7,400 105.39 16.6% 24.6% 0.9% 21,921 20,372 2,098 11.0x 9.7x 7.7x NM 63.8x 45.3x 34.0% 73.8% 15.2% New Relic US 1,164 49.80 32.1% 35.6% 4.5% 2,715 2,488 227 8.7x 7.7x 6.0x NM NM NM 33.9% NA 0.8% Park City Group US 77 12.15 7.4% 1.7% (0.4%) 236 227 14 12.0x 10.4x 7.9x 52.3x NA 22.3x 33.7% NA NA Everbridge US 548 26.42 61.9% 28.0% 17.2% 742 697 45 7.8x 6.8x 5.4x NM NM NM 33.5% 71.6% (1.5%) Software Public Company Valuations High Growth (2017 Revenue Growth Rate >30%) Source(s): Capital IQ as of 09/29/2017 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 09-29-17 LTM L6M L1M (m) (m) (m) LTM CY17E CY18E LTM CY17E CY18E 17/16 Gross EBITDA Share Price Performance CY17E Margins 20 Coupa Software US 652 $31.15 NA 26.8% 3.7% $1,670 $1,461 $208 9.2x 8.2x 6.6x NM NM NM 33.4% 69.7% (9.9%) Symantec US 13,000 32.81 31.2% 6.4% 10.5% 20,163 24,051 2,314 5.6x 4.8x 4.5x 33.7x 10.8x 9.4x 32.6% NA 44.6% NICE Systems IL 4,930 79.75 19.2% 19.1% 3.4% 4,813 4,895 360 4.2x 3.6x 3.4x 19.5x 13.4x 12.2x 32.6% 69.3% 27.1% AppFolio US 626 47.95 150.9% 83.4% 15.8% 1,626 1,594 32 12.8x 11.4x 9.0x NM 67.3x 51.2x 32.1% 60.6% 17.0% Yonyou CN 13,889 3.56 5.3% 34.1% 12.2% 5,207 5,269 629 7.1x 5.6x 4.9x NM 43.0x 48.0x 31.6% 68.9% 13.0% Open Text CA 10,900 32.29 (0.5%) (5.0%) 2.1% 8,532 10,660 443 4.7x 4.1x 3.8x 16.9x 12.0x 10.3x 31.3% NA 34.6% Paycom US 2,075 74.96 49.9% 31.6% 4.2% 4,466 4,432 68 11.6x 10.3x 8.2x 60.0x 35.7x 28.1x 31.1% 83.4% 28.7% Castlight Health US 381 4.30 4.4% 16.2% 17.8% 566 476 96 4.1x 3.6x 2.8x NM NM NM 30.7% 67.9% (19.7%) j2 Global US 2,426 73.88 11.9% (13.2%) 0.2% 3,571 4,483 331 4.5x 3.9x 3.6x 11.7x 9.4x 8.4x 30.6% 84.4% 41.9% Average 8.2x 6.8x 5.3x 30.2x 31.4x 26.8x 48.7% 71.4% 9.0% Median 7.8x 6.5x 5.2x 28.2x 23.5x 22.3x 38.4% 72.8% 7.5% Software Public Company Valuations (Cont'd) High Growth (2017 Revenue Growth Rate >30%) Source(s): Capital IQ as of 09/29/2017 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 09-29-17 LTM L6M L1M (m) (m) (m) LTM CY17E CY18E LTM CY17E CY18E 17/16 Gross EBITDA Share Price Performance CY17E Margins 21 MINDBODY US 1,454 $25.85 29.8% (7.2%) 13.4% $1,198 $990 $224 6.2x 5.5x 4.4x NM NM 52.9x 29.8% 72.1% 3.0% Q2 Holdings US 742 41.65 46.1% 17.8% 1.3% 1,720 1,641 79 9.5x 8.4x 6.7x NM NM NM 29.7% 52.5% 4.5% SimCorp DK 1,418 61.07 5.1% 1.4% 1.6% 2,413 2,410 9 6.8x 6.0x 5.5x 29.4x 22.7x 19.7x 29.1% 61.9% 26.3% Amazon US 341,400 961.35 16.0% 10.0% 0.8% 461,813 463,981 21,451 3.1x 2.7x 2.1x 37.7x 25.4x 18.9x 28.1% 36.3% 10.5% Splunk US 2,700 66.43 15.1% 5.9% 3.2% 9,300 8,297 1,084 7.7x 6.8x 5.4x NM 59.5x 41.0x 28.0% 83.3% 11.5% Upland Software US 251 21.16 138.0% 38.9% (6.9%) 440 455 57 5.5x 4.8x 4.3x 49.3x 15.4x 12.6x 27.2% 67.5% 30.9% Paylocity US 2,115 48.82 11.4% 23.6% 4.1% 2,526 2,423 103 8.2x 7.3x 6.0x NM 37.7x 30.3x 27.2% NA 19.4% Box US 1,668 19.32 27.0% 17.2% 0.2% 2,584 2,502 165 5.5x 4.9x 4.0x NM NM NM 26.8% 75.0% (4.1%) Vitec Software Group SE 500 10.15 25.3% 35.5% 0.4% 300 331 6 3.4x 3.2x 2.9x 16.4x 11.3x 10.4x 26.3% 99.0% 28.3% Rapid7 US 887 17.60 2.3% 18.5% 8.8% 766 682 84 3.8x 3.5x 2.9x NM NM NM 25.1% 74.0% (10.7%) Model N US 814 14.95 37.8% 48.0% 12.4% 435 440 52 3.5x 3.2x 2.8x NM NM 46.7x 24.6% NA (3.6%) Palo Alto Networks US 4,562 144.10 (7.7%) 27.0% 10.8% 13,234 12,384 1,375 7.0x 6.4x 5.3x NM 26.6x 20.4x 24.4% NA 23.9% Salesforce US 25,000 93.42 31.2% 13.4% (0.4%) 67,141 66,222 3,501 7.1x 6.4x 5.3x NM 29.5x 23.8x 23.9% 76.2% 21.6% Veeva US 1,794 56.41 36.2% 10.7% (1.3%) 7,932 7,208 725 11.7x 10.7x 9.0x 46.6x 32.9x 27.2x 23.8% 71.3% 32.6% Adobe US 15,706 149.18 38.4% 15.1% (1.9%) 73,537 70,058 5,368 10.1x 9.7x 8.1x 30.2x 23.0x 19.0x 23.8% 87.4% 42.0% MYOB AU 1,400 2.70 (6.5%) (1.9%) (4.6%) 1,637 1,947 30 6.4x 5.9x 5.4x 19.0x 12.9x 11.8x 23.4% 91.5% 45.8% Appian US 1,000 28.46 NA NA 26.8% 1,711 1,633 78 11.2x 10.0x 8.6x NM NM NM 22.7% 64.7% (16.6%) PROS ES 166,165 7.48 7.8% 28.1% 10.9% 4,478 4,631 1,433 1.0x 0.9x 0.9x 8.3x 7.6x 7.1x 22.0% 88.1% 12.1% Guidewire Software US 1,893 77.86 29.7% 37.1% 5.1% 5,840 5,267 573 10.2x 9.6x 8.0x NM 48.3x 35.5x 21.9% NA 19.9% F-Secure FI 1,091 5.05 31.6% 39.2% 0.6% 791 695 92 3.7x 3.4x 3.1x 32.3x 34.3x 20.4x 21.8% NA 10.0% IRESS AU 1,790 8.94 (1.5%) (1.4%) (4.8%) 1,512 1,648 16 5.3x 4.8x 4.4x 22.2x 17.0x 14.9x 21.7% 91.0% 28.2% Imperva US 980 43.40 (17.7%) 4.7% (0.2%) 1,468 1,148 320 3.9x 3.6x 3.0x NM 28.1x 20.4x 21.5% 80.5% 12.7% SAP DE 87,114 109.44 22.1% 11.5% 4.2% 131,212 133,185 5,823 5.0x 4.7x 4.4x 20.2x 13.5x 13.0x 21.0% 72.4% 35.0% Five9 US 825 23.90 54.8% 36.5% 13.9% 1,317 1,306 57 7.3x 6.7x 5.7x NM NM 67.6x 20.2% 60.3% 6.5% Alphabet US 75,606 973.72 21.3% 14.6% 4.1% 669,590 578,832 94,713 5.8x 5.3x 4.5x 17.9x 13.3x 11.2x 20.2% 60.2% 40.0% Average 6.4x 5.8x 4.9x 27.5x 25.5x 25.0x 24.6% 73.3% 17.2% Median 6.2x 5.5x 4.5x 25.8x 24.2x 20.4x 23.9% 73.2% 19.4% Software Public Company Valuations (Cont'd) Strong Growth (2017 Revenue Growth Rate Between 20% and 30%) Source(s): Capital IQ as of 09/29/2017 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 09-29-17 LTM L6M L1M (m) (m) (m) LTM CY17E CY18E LTM CY17E CY18E 17/16 Gross EBITDA Share Price Performance CY17E Margins 22 Verisign US 990 106.39 36.0% 22.0% 4.7% 10,631 10,689 1,808 9.3x 9.2x 8.9x 14.3x 13.2x 12.6x 1.7% 83.4% 69.8% Check Point Software IL 4,281 114.02 48.6% 10.2% 4.6% 18,636 17,037 1,599 9.4x 9.1x 8.5x 19.1x 16.4x 15.3x 7.5% 88.6% 55.6% MSCI US 2,970 116.90 40.0% 21.3% 3.4% 10,528 11,854 751 9.9x 9.4x 8.6x 19.5x 18.0x 16.1x 10.1% 78.3% 52.0% ANSYS US 2,800 122.73 34.9% 15.2% (3.0%) 10,403 9,539 863 9.2x 8.9x 8.4x 20.7x 17.6x 16.8x 8.0% 89.4% 50.7% Aspen Technology US 1,419 62.81 33.6% 7.8% 2.5% 4,591 4,629 102 9.6x 9.5x 9.2x 21.1x 19.7x 18.9x 3.0% NA 48.3% Black Knight US 4,250 43.05 5.3% 11.4% 3.4% 2,964 5,495 99 NA 5.1x 4.7x NA 10.7x 9.6x 4.9% NA 47.9% MYOB AU 1,400 2.70 (6.5%) (1.9%) (4.6%) 1,637 1,947 30 6.4x 5.9x 5.4x 19.0x 12.9x 11.8x 23.4% 91.5% 45.8% Symantec US 13,000 32.81 31.2% 6.4% 10.5% 20,163 24,051 2,314 5.6x 4.8x 4.5x 33.7x 10.8x 9.4x 32.6% NA 44.6% Progress Software US 1,912 38.17 40.3% 33.1% 15.6% 1,843 1,775 191 4.4x 4.5x 4.4x 13.3x 10.6x 10.5x (2.2%) 87.6% 42.3% Adobe US 15,706 149.18 38.4% 15.1% (1.9%) 73,537 70,058 5,368 10.1x 9.7x 8.1x 30.2x 23.0x 19.0x 23.8% 87.4% 42.0% j2 Global US 2,426 73.88 11.9% (13.2%) 0.2% 3,571 4,483 331 4.5x 3.9x 3.6x 11.7x 9.4x 8.4x 30.6% 84.4% 41.9% SS&C Technologies US 8,001 40.15 24.8% 12.8% 5.4% 8,248 10,457 90 6.5x 6.2x 5.9x 18.0x 15.2x 13.8x 13.5% 57.5% 40.8% Micro Focus UK 4,287 32.00 4.7% 6.6% 0.5% 13,924 15,386 151 11.1x 6.1x 3.7x 28.2x 15.1x 9.3x 85.5% NA 40.5% Intel US 106,000 38.08 2.0% 7.1% 9.6% 178,938 184,994 25,929 3.0x 3.0x 2.9x 7.5x 7.5x 7.0x 3.3% 63.0% 40.5% Alphabet US 75,606 973.72 21.3% 14.6% 4.1% 669,590 578,832 94,713 5.8x 5.3x 4.5x 17.9x 13.3x 11.2x 20.2% 60.2% 40.0% F5 Networks US 4,420 120.56 (2.3%) (15.2%) 2.4% 7,661 6,647 1,014 3.2x 3.2x 3.0x 10.6x 8.0x 7.4x 4.1% NA 39.5% Oracle Financial IN 8,705 55.58 16.0% (4.5%) 3.0% 4,742 4,360 386 6.3x 6.1x 5.5x 15.8x 15.6x 13.7x 10.2% NA 39.2% Microsoft US 124,000 74.49 29.8% 13.8% 2.0% 573,740 533,337 129,207 5.9x 5.3x 4.9x 17.5x 13.7x 12.7x 16.8% NA 38.9% VMware US 18,905 109.19 49.4% 18.9% 4.1% 44,636 37,234 7,985 5.2x 4.8x 4.4x 20.1x 12.4x 12.2x 10.4% 87.3% 38.2% Intuit US 8,200 142.14 30.0% 20.6% 3.0% 36,242 35,953 777 6.9x 6.7x 6.1x 22.1x 18.0x 16.3x 10.5% NA 37.2% Akamai Technologies US 7,084 48.72 (7.0%) (23.2%) 6.6% 8,352 8,320 683 3.4x 3.4x 3.1x 12.2x 9.2x 8.5x 5.5% 65.8% 36.8% Verizon US 163,400 49.49 (5.0%) 0.7% 2.0% 201,890 316,603 4,583 2.6x 2.5x 2.5x 7.2x 7.0x 6.9x (0.7%) 59.3% 36.1% Cisco US 72,900 33.63 7.1% (0.3%) 6.8% 166,534 129,759 70,492 2.7x 2.7x 2.7x 8.8x 7.5x 7.4x (1.4%) NA 36.1% CenturyLink US 39,800 18.90 (31.3%) (18.1%) (8.4%) 10,388 35,123 342 2.1x 2.1x 2.2x 5.8x 6.0x 5.8x (6.0%) 54.4% 35.8% Fiserv US 23,000 128.96 29.3% 11.3% 4.8% 27,142 31,584 299 5.6x 5.5x 5.2x 18.1x 15.4x 14.5x 4.0% 46.8% 35.8% LogMeIn US 2,778 110.05 21.9% 11.7% (2.0%) 5,803 5,517 285 8.9x 5.5x 4.7x 43.2x 15.3x 12.4x 201.0% 82.7% 35.6% Wisetech AU 900 6.83 57.7% 57.9% 7.7% 1,979 1,903 78 16.1x 13.5x 10.5x 50.0x 37.9x 28.2x 56.0% NA 35.5% Jack Henry & Associates US 5,972 102.79 20.0% 9.3% 1.7% 7,960 7,895 115 5.5x 5.4x 5.1x 17.7x 15.3x 14.5x 5.2% NA 35.2% Average 6.7x 6.0x 5.4x 19.4x 14.1x 12.5x 20.8% 74.6% 42.2% Median 5.9x 5.4x 4.8x 18.0x 13.5x 12.3x 9.0% 82.7% 40.2% Software Public Company Valuations (Cont'd) High Profitability (2017 EBITDA Margin >35%) Source(s): Capital IQ as of 09/29/2017 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 09-29-17 LTM L6M L1M (m) (m) (m) LTM CY17E CY18E LTM CY17E CY18E 17/16 Gross EBITDA Share Price Performance CY17E Margins 23 GP Bullhound SaaS Index Performance L1M L3M L6M L12M Source(s): Capital IQ as of 09/29/2017 Note: GP Bullhound SaaS Index constituents can be found in Appendix A 80,0% 85,0% 90,0% 95,0% 100,0% 105,0% 110,0% 115,0% 2017-07-03 2017-07-14 2017-07-25 2017-08-05 2017-08-16 2017-08-27 2017-09-07 2017-09-18 2017-09-29 Index ValueGPB SaaS Index S&P 500 NASDAQ Composite 95,0% 100,0% 105,0% 110,0% 115,0% 120,0% 125,0% 2017-04-03 2017-06-01 2017-07-30 2017-09-27 Index ValueGPB SaaS Index S&P 500 NASDAQ Composite 90,0% 95,0% 100,0% 105,0% 110,0% 115,0% 120,0% 125,0% 130,0% 135,0% 2016-10-03 2016-12-02 2017-01-31 2017-04-01 2017-05-31 2017-07-30 2017-09-28 Index ValueGPB SaaS Index S&P 500 NASDAQ Composite 90,0% 95,0% 100,0% 105,0% 110,0% 2017-09-01 2017-09-08 2017-09-15 2017-09-22 2017-09-29 Index ValueGPB SaaS Index S&P 500 NASDAQ Composite 24 Key Sector Takeaways and Commentary Recent Software Transaction Trends Public Market SaaS Analyses Key SaaS Metrics Appendix A: GP Bullhound SaaS Index Appendix B: Software Public Comps by Category 1 2 3 4 5 6 7 Appendix C: GP Bullhound Software Report Overview, Software Credentials & Team 25 Key SaaS Metrics Definitions & Calculations Metric Definition Calculation Normalized measurement of recurring revenue, most frequently measured with a constant value in each month of the subscription period MRR All S&M expenses for new customers. Sometimes excludes people management S&M costs CAC =
