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Important disclosures appear at the back of this report

GP Bullhound LLP is authorized and regulated by the Financial Conduct Authority GP Bullhound Inc is a member of FINRA

Global Software Market PerspectivesQ4 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

7Appendix C: GP Bullhound Software Report

Overview, Software Credentials & Team

3

Large established SaaS companies are focusing on shifting to PaaS for their customers

– Customers want to be able to customize their own applications, add new services and shape their product. They can also integrate new

features and functionalities that are prohibitive to develop on their own, for example AI features

– Salesforce is the best example of a SaaS company shifting to PaaS, with their Force.com platform spawning multiple innovative and

successful companies leveraging their technology

» Financial Force – by being native on Force.com they are able to build cloud ERP apps on the largest customer success platform, making

teams more nimble, the services better, and the cost of synchronizing transactions lower

– Other companies focusing on platform offerings are Google, Microsoft, Oracle, SAP and Workday

Customer acquisition cost for SaaS companies has increased almost 65% over the past 5 years lowering margin

expectations for software companies, and making optimization of sales strategies more difficult

– Competition among SaaS vendors has made the cost of acquiring customers increase quite significantly, particularly larger enterprise

solutions

– While competition is responsible for driving up prices, another factor that inevitably affects SaaS companies of scale is a shrinking number of

sales channels to tap

» As early sales channels become saturated, converting clients from this source becomes increasingly difficult and expensive

» Sales channels further down the continuum usually have a marginally higher cost. Channel sales is the exception, having an existing

customer to sell to or through is much cheaper than a new sale and the upfront friction that comes with it

The newly signed tax bill in the US will lead to repatriation of profits, creating an extremely favorable M&A environment

for large technology & software consolidators

– Apple could bring back cash to the order of $252B, Cisco $65B and Google $55B – the possibilities are numerous, with multiple software

companies at large public valuations, and many more with significant value that could contribute scale to the largest technology acquirers

» E.g. Apple / Tesla, Apple / Netflix, Microsoft / Citrix, Google / Salesforce

Our Views on Current Trends in Software

Source: Redpoint Ventures, Capital IQ

4

In our discussions with software consolidators and other strategic acquirers, we have seen a hyper focus on “growth

acquisitions”

– For instance, large software companies paying a premium for fast growth, private software companies to super charge their own growth

» SaaS companies with as little as $5 million of ARR have attracted such interest when growing north of 100%

» Acquirers are not evaluating build vs. buy as often in these scenarios

» Strategic interest has increased for international expansion through M&A

» Growth stage entities and teams are being left alone and often not fully integrated for a period of time to not disrupt their growing

operations and momentum

Strategic M&A processes have been catalyzed through “market checks” in parallel to a company’s growth equity or

private equity financing processes

– Founders and management teams are weighing the company and personal advantages of exiting prior to their next financing as opposed

to taking further dilution and a longer time horizon to exit

– Investor interest and term sheets can often drive strategics to act in fear they will lose the opportunity or need to pay up in the future after

more capital has been raised

– All opportunities should be considered and we have seen founders benefit from exploring and understanding their options in the broader

market

We have also started to see a number of “soft landing” exits for start-ups

– Software and internet companies exiting to strategics or PE buyers in lieu of raising fresh capital and continued standalone growth

– This is a trend in difficult sub-sectors (consumer, parts of digital marketing) and with non-category leading companies

Software M&A Trends & Dynamics

5

SaaS Company Executive Commentary

Celigo is redefining the future of cloud-based

application integration through an easy-to-use,

next-generation integration Platform-as-a-Service

(iPaaS) that enables companies to integrate almost

anything to anything.

JAN ARENDTSZFounder & CEO

"The phenomenal success of SaaS over the last ten years has

spawned thousands of new cloud applications. The

proliferation of these apps is a direct result of the

consumerization of enterprise software, where clunky

interfaces and complex implementations are a relic of the past.

Today, most mid-market companies use well over 100

specialized cloud-based apps and services that are easy to

purchase by line managers and quick to deploy. That’s the easy

part. They soon find out that to be successful, they need to

integrate the enterprise. These apps need to be connected with a

simplicity that matches the simplicity of the underlying apps

themselves."

6

SaaS Company Executive Commentary (Cont’d)

GERO DECKERCo-Founder & CEO

"Many companies are overwhelmed with the pace, volume and

complexity of change. Faced with disruption in the market,

new technologies and complex regulatory requirements,

organizations are desperate to become more agile. SaaS

offerings like the Signavio suite come at a perfect time to help

these businesses solve their challenges and fundamentally

improve the way they work. With a focus on delivering

customer success, SaaS providers can make a sustainable

difference at scale - and yield fantastic returns for their

investors along the way."

Signavio enables companies to translate between

strategy and execution. Its Business Transformation

Suite helps analyze, improve, reinvent and

automate business processes across the enterprise.

7

SaaS Company Executive Commentary (Cont’d)

JOERG WIEMERCo-Founder & CEO

“As any scrappy entrepreneur will tell you, cash burn rates

provide a very good sense for the steady-state health of the

business. Detailed cash flow metrics are a must have.

However, large organizations rarely use this metrics to run

their business. They still rely on accounting data. This triggers

some problems, because accounting data is an opinion from

yesterday, after the accountant has dome his work. Only cash

tells you the truth in real time. CXO`s have realized that cash

flow is the lifeblood of a business and payment processes are

carrying this lifeblood. We deliver smart payment processes to

help great organizations to make better decisions in real time.”

TIS is a leading global cloud platform for managing

corporate payments and cash flows. The platform

provides bank account management, payments,

business discovery, cash flow, ERP integration, and

certification solutions for treasurers, CFOs, and firms

in the accounting and IT industry.

8




Key SaaS Metrics



1

2

3

4

5

6



9

Announce

DateIssuer Selected Investors Issuer Description

Capital

Raised ($)

Dec 19 Domo

Blackrock, Castor Ventures,

GGV Capital, Glynn Capital,

SharesPost, The Capital

Group, The Yard Ventures

Business management

platform115

Dec 19 Convercent Rho VenturesCorporate compliance

management25

Dec 14 Squarespeace General AtlanticContent management

platform200

Dec 4 Contentful

General Catalyst,

Benchmark, Balderton, Point

Nine

Content management

platform28

Nov 30 UptakeBallie Gifford, Revolution,

GreatPoint VenturesPredictive analytics 117

Nov 1 InVisionApp

Accel. Battery Ventures,

FirstMark Capital, Geodisic,

ICONIQ, Spark Capital, Tiger

Design collaboration

platform100

Oct 31 MetricStream

Clearlake Capital, EDB

Investments, Sageview,

Goldman Sachs

Governance, risk and

compliance63.4

Oct 24 Skybox SecurityCVC Capital, Pantheon

Ventures

Cyber secruity

management150

Oct 16 Duo Security

Geodisic, Index, Lead Edge,

Meritech, Redpoint, True

Venture, Workday

Authentication and mobile

security70

Oct 12 HappyOrNot Northzone VenturesCustomer feedback

monitoring14.5

Oct 11 CartaMenlo Ventures, Social

CapitalCap table management 42

Announce

DateTarget Buyer Target Description Value ($)

Implied

EV/LTM Rev

Dec 28 BravoSolution Accel-KKR/JAGGAER Procurement & sourcing 217.8 2.3x

Dec 18 Aconnex Oracle Document management 1,222.8 9.8x

Dec 12 Black Duck SynopsysOpen source & license

management547 7.3x

Dec 11 Shazam Apple Music recognition 400 7.3x

Dec 5 TSheets.com IntuitTime tracking and

scheduling340 8.5x

Dec 5 Simply Measured Sprout Social Social analytics - -

Nov 27 Skyhigh Networks McAfee Cloud access security - -

Nov 21 Cloudmark Proofpoint Messaging security 110 -

Nov 16 Qvidian Upland Software Sales execution 50 -

Nov 14 IntraLinks Siris Capital Content collaboration 1,000 -

Nov 8 ABC Financial Thoma BravoHealth club software &

billing- -

Nov 1 ZiriMed Navicure/BainFinancial & clinical

performance750 -

Oct 25 SkyGiraffe ServiceNow Enterprise mobility - -

Oct 23 Vista/Bullhorn Insight, GenstarCRM for service-based

industries- -

Oct 23 BroadSoft CiscoEnterprise

communication1,528.9 4.2x

Oct 9 Reapit Accel-KKREstate & lettings agent

CRM66 5.6x

Notable Software M&A Deals & Private Financings(Q4 2017)

Selected M&A Transactions Selected Private Financings

Source(s): Capital IQ, Pitchbook

Note: Only includes private financings deals above $20m

Deals are sorted by date

Median 7.3x

10

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

2017

Q4

U.S. & Canada Europe Asia Other

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

2017

Q4

U.S. & Canada Europe Asia Other

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

$0M

$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

2017

Q4

Value Deals

0

100

200

300

400

500

600

$0M

$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

2017

Q4

M&A Buyout M&A Deals Buyout Deals

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

Source(s): Pitchbook as of 12/29/2017

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

11

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: 162.3%

Revenue (LTM December 31 2016):

$132.9m

EV/Revenue1: 10.9x

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





Revenue (LTM December 31 2016): $85.8m

EV/Revenue1: 10.4x

Selected Metrics:


– 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






$261.0m

EV/Revenue1: 5.4x

Selected Metrics:



– 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






$187.7m

EV/Revenue1: 9.8x

Selected Metrics:



– Average ACV 2016: $169K


– $ Based Net Retention Rate: 117%

Description (NasdaqGS:OKTA): Provider of

identity verification software for the

enterprise





Revenue (LTM January 31 2017): $160.3m

EV/Revenue1: 9.4x

Selected Metrics:




– $ Based Net Retention Rate (2017)2:

123%

Description (NYSE:YEXT): Provider of

platform that lets businesses manage

their digital knowledge in the cloud






EV/Revenue1: 5.8x

Selected Metrics:


– $ Based Net Retention Rate (2017):

119%

– Revenue Growth from Existing

Enterprise and Mid Size Customers

(2016): 63%

1. CY 2017E revenue multiple

Source(s): Company SEC filings from Edgar, Capital IQ as of 12/29/2017

Description (NASDAQ:MDB): The leading

modern general purpose database

platform


Offering Amount: $192m




EV/Revenue1: 8.0x

Selected Metrics:



– ARR expansion rate: 120%


– Average expansion multiple of top 25

end-customers: 12.3x

Description (NASDAQ:FSCT): Provider of

security software to monitor devices

connected to the network






EV/Revenue1: 6.7x

Selected Metrics:


– Average ACV: $200K+

– Average expansion multiple of top 20

end-customers: 4.5x

Listed in 2017

12

Description (NYSE:AYX): Provider of mobile

and cloud-based email service platform

designed to deliver customer

communication that drives engagement

and business growth





Revenue (LTM December 31 2016): $79.9m

EV/Revenue1: 9.7x

Selected Metrics:


– Subscription Net Dollar Retention %:

126%

– Email Volume Growth YoY%: 37%

– Customer Growth YoY%: 36%

Software IPOs in 2017

1. CY 2017E revenue multiple

Source(s): Company SEC filings from Edgar, Capital IQ as of 12/29/2017

Description: Cloud-based storage platform

designed to store documents, files, videos and

photos

Listed in 2017 To come in 2018

Description: Security-as-a-Service internet

security and compliance platform that acts as

a series of checkposts in between the

organization and the public internet, scanning

all incoming and outgoing traffic between

any device

Confidentially Filed Confidentially Filed

2017 saw a strong IPO market for SaaS unicrons, highlighted by the performance of

Appian and Forescout; we expect 2018 to be less robust of an environment driven by

choppy public markets and fewer SaaS companies of scale ready to debut

13




Key SaaS Metrics



1

2

3

4

5

6



14

GP Bullhound Selected SaaS Index Market Valuations

Source(s): Capital IQ as of 12/29/2017

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)

13,5

11,7

10,3

10,1

7,8

6,5

6,0

5,3

4,7

4,0

3,7

3,7

3,7

3,4

3,4

3,3

3,2

Salesforce

ServiceNow

Workday

Square

Splunk

Atlassian

j2 Global

Veeva

Ultimate Software

LogMeIn

athenahealth

Paycom

Proofpoint

RingCentral

Medidata Solutions

RealPage

Zendesk

2U

HubSpot

New Relic

73.8

22.5

21.4

15

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


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

Mean: 8.5x

Mean: 6.7x

As of Dec 29: 7.7x

As of Dec 29: 6.7x

0x

2x

4x

6x

8x

10x

12x

14x

12-29-12 06-29-13 12-29-13 06-29-14 12-29-14 06-29-15 12-29-15 06-29-16 12-29-16 06-29-17 12-29-17

GP Bullhound SaaS Index - TEV/LTM Revenues GP Bullhound SaaS Index - TEV/NTM Revenue

Public market bubble? Current SaaS valuations are

below the mean of the last five year

16

VEEV

BL

PAYC

WDAY

WIX

QTWO

APPF

PFPT

SQ

SPLK

COUP

ZEN

TWLO

HUBS

ULTI

MDSO

MB

CRM

PCTYNEWR

TLND

MIME

QLYS

EVBG

CALD

FIVNCSOD

EGHT

RP

RNG

INST

BOX

SPSC

ATHN

BNFT

BSFT

WKVIT B

AMBR

CSLT

CARB

APTIECOM

LPSN

MOBL

BCOV

BV

SCWX

XRO

AYX

CLDR

YEXT

MULE

OKTA

(30%)

(25%)

(20%)

(15%)

(10%)

(5%)

0%

5%

10%

15%

20%

25%

30%

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

2017E U

nle

ve

red

FC

F M

arg

in

2017E Revenue Growth

Rule of 40% – Public SaaS2017E Growth and Profitability of Public SaaS Companies in GPB Index


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

Rule of 40: SaaS companies

represent 41% of the total

companies and 71% of the

total Enterprise Value in

the GPB Index

17

CRM

WDAY

NOW

SPLK

SHOP

VEEV

SQ

ULTI

ATHN

MDSO

PAYC

PFPT

MULE

RPCLDR

RNG

HUBS

ZEN

BOX

PCTY

NEWR

XRO

OKTA

TWLO

CSOD

TWOU

BL

COUP

QTWO

QLYS

MIMECALD

MB

EGHT

FIVN

BSFT

YEXT

AYX

SPSC

TLND

BNFT

APPF

APPN

SCWX

WK

INST

EVBG

APTILPSN

CARB CSLT

MOBL

UPLD

BVECOM

VIT B

BCOV

AMBR

0x

1x

2x

3x

4x

5x

6x

7x

8x

9x

10x

11x

12x

13x

14x

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

EV

/2017E R

eve

nu

e M

ultip

le

2017E Revenue Growth + 2017E Unlevered FCF Margin

Rule of 40% – Public SaaS (Cont'd)


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

excludes outliers and companies with “N/A”

Sub-Performers Market-Performers Out-Performers

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

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

18

91%

65%

54%50% 49%

37%

29%

41%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Vertically Focused Cloud SoftwareSignificantly 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%



41%

27%24% 24% 24%

20% 21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

10.3x 10.8x 8.2x 12.4x 7.3x 9.8x 7.1x 7.4x 7.1x 10.2x 6.3x 4.6x 6.8x 10.8x 6.2xEV/LTM

Revenue

CY17/16E

Revenue

Growth

57.8% 55.0% 35.7% 38.2% 24.4% 36.0% 19.6% 30.2% 30.8% 34.3% 18.3% 12.0% 17.6% 25.1% 8.1%

19

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


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

Share

Price

Market

Cap EV Cash EV/Revenue EV/EBITDA

CY

Revenue

Growth

Company Name HQ Employee 12-29-17 LTM L6M L1M (m) (m) (m) LTM CY17E CY18E LTM CY17E CY18E 17/16 Gross EBITDA

Share Price Performance

CY17E

Margins

LogMeIn US 2,823 $114.50 17.3% 8.8% (1.6%) $6,027 $5,751 $276 7.2x 5.6x 5.0x 29.2x 15.5x 13.1x 202.9% 82.8% 36.3%

DXC Technology US 60,000 94.90 NA 20.8% (0.6%) 27,072 33,293 2,671 2.1x 1.6x 1.4x 15.2x 8.5x 6.8x 168.2% NA 19.5%

Micro Focus UK 16,100 34.10 19.3% 6.5% 1.6% 14,844 16,319 730 8.5x 6.5x 3.9x 22.6x NA 9.9x 86.4% NA 0.0%

CLX Communications SE 338 8.83 (18.1%) (43.6%) 2.0% 473 512 26 1.5x 1.4x 1.3x 14.2x 13.6x 11.5x 84.7% 26.6% 10.3%

Iron Mountain US 24,000 37.73 16.5% 10.4% (6.9%) 10,619 17,230 338 7.4x 4.5x 4.4x 13.8x 13.7x 12.7x 77.1% 56.1% 33.2%

Gridsum CN 929 9.15 (9.6%) 10.1% 4.0% 281 282 39 3.6x 2.9x 1.8x NM NM 14.2x 70.6% NA (7.7%)

Shopify CA 1,900 101.00 134.3% 16.9% (2.6%) 10,088 9,161 927 15.8x 13.9x 9.6x NM NM NM 69.6% 56.8% 2.8%

Wisetech AU 900 11.05 170.4% 104.4% 15.8% 3,208 3,132 78 26.5x 21.9x 17.0x NM 61.0x 46.1x 58.2% NA 35.8%

Okta US 898 25.61 NA 10.0% (12.9%) 2,610 2,387 224 10.3x 9.4x 7.1x NM NM NM 57.8% 70.9% (25.8%)

MuleSoft US 1,147 23.26 NA (6.9%) 3.0% 3,023 2,841 182 10.8x 9.8x 7.2x NM NM NM 55.0% 74.1% (19.6%)

Trade Desk US 467 45.73 61.1% (10.1%) (5.5%) 1,878 1,773 133 6.4x 5.8x 4.5x 25.8x 19.4x 14.6x 51.4% 78.9% 29.7%

Alteryx US 515 25.27 NA 29.5% 1.9% 1,495 1,339 157 11.3x 10.4x 7.6x NM NM NM 50.2% 84.4% (5.1%)

MongoDB US 930 29.68 NA NA 3.4% 1,501 1,213 289 8.7x 8.0x 5.9x NM NM NM 50.1% 72.5% (47.7%)

Xero NZ 1,853 22.36 83.7% 18.3% 2.5% 3,071 3,014 61 12.3x 11.0x 8.2x NM NM 65.7x 47.4% NA 2.8%

Atlassian UK 2,292 45.52 87.6% 29.4% (2.3%) 10,280 9,666 614 15.3x 13.2x 10.1x NM 49.3x 35.9x 46.4% NA 26.7%

Wix IL 1,266 57.55 28.6% (17.2%) 7.1% 2,616 2,409 209 6.2x 5.7x 4.3x NM 35.4x 22.1x 46.1% 84.1% 16.1%

Extreme Networks US 1,628 12.52 147.9% 31.8% (0.2%) 1,420 1,434 154 2.1x 1.8x 1.3x 26.6x 16.2x 11.0x 45.8% NA 11.3%

Blackline US 726 32.80 22.3% (9.5%) (10.0%) 1,734 1,625 110 10.0x 9.3x 7.2x NM NM NM 41.7% 80.6% 0.6%

Instructure US 1,125 33.10 70.2% 12.4% (3.4%) 1,002 935 67 6.4x 6.0x 4.7x NM NM NM 41.1% 72.3% (18.5%)

Talend FR 816 37.48 64.2% 9.5% (6.7%) 1,092 998 95 7.3x 6.7x 5.2x NM NM NM 40.2% 77.6% (12.4%)

RingCentral US 1,037 48.40 131.0% 33.1% 1.9% 3,744 3,572 172 8.3x 7.2x 5.8x NM NM NM 40.0% 76.5% 6.5%

Twilio US 955 23.60 (19.4%) (18.6%) (10.0%) 2,196 1,912 284 5.2x 4.9x 4.0x NM NM NM 39.7% 55.5% (4.0%)

Pure Storage US 2,000 15.86 40.7% 22.0% (10.2%) 3,438 2,887 551 3.2x 2.8x 2.2x NM NM 32.9x 39.6% 66.4% 2.1%

Hortonworks US 1,150 20.11 146.7% 54.9% 3.4% 1,418 1,355 63 5.7x 5.3x 4.1x NM NM NM 39.4% 71.5% (12.2%)

Mimecast UK 957 28.67 63.9% 7.3% (3.5%) 1,643 1,555 120 7.0x 6.5x 5.3x NM 72.6x 51.0x 39.4% NA 9.0%

Cloudera US 1,470 16.52 NA 5.4% 5.8% 2,333 1,944 390 5.8x 5.4x 4.2x NM NM NM 38.9% 72.6% (27.8%)

2U US 1,164 64.51 116.7% 39.2% 0.8% 3,369 3,184 202 12.4x 11.2x 8.1x NM NM NM 38.5% 81.1% 3.7%

ServiceNow US 5,895 130.39 74.0% 23.2% 8.1% 22,519 22,004 1,672 12.4x 11.5x 8.7x NM 52.2x 34.9x 38.2% 77.6% 21.9%

WageWorks US 1,958 62.00 (14.5%) (7.9%) (5.2%) 2,457 1,810 892 4.1x 3.8x 3.4x 19.7x 12.4x 10.8x 37.9% 64.1% 30.4%

Metaps JP 246 26.68 (20.9%) (5.1%) (6.5%) 358 337 60 2.7x 2.7x 2.6x NM NM NM 37.7% NA 2.8%

Yext US 750 12.03 NA (8.1%) (14.3%) 1,098 984 113 6.2x 5.8x 4.4x NM NM NM 36.9% 74.7% (23.7%)

HubSpot US 1,962 88.40 89.7% 35.4% 9.5% 3,304 3,105 492 9.0x 8.4x 6.6x NM NM NM 36.9% 80.7% 5.9%

Zendesk US 1,970 33.84 59.7% 22.4% (0.8%) 3,435 3,208 227 8.1x 7.5x 5.8x NM NM NM 36.8% 73.5% 3.2%

Workday US 7,900 101.74 51.8% 5.5% (4.5%) 21,365 19,628 3,211 9.8x 9.2x 7.4x NM 56.9x 44.0x 36.0% 74.0% 16.2%

20

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



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Coupa Software US 652 $31.22 22.7% 5.3% (9.8%) $1,719 $1,499 $219 8.8x 8.3x 6.7x NM NM NM 35.8% 70.7% (6.7%)

Proofpoint US 1,573 88.81 25.1% 3.0% 0.1% 3,982 3,903 460 8.2x 7.7x 5.9x NM 59.7x 43.1x 35.7% 77.4% 12.8%

New Relic US 1,230 57.77 104.4% 34.7% 0.6% 3,181 2,953 227 9.6x 9.0x 7.1x NM NM NM 34.9% NA 1.3%

Everbridge US 553 29.72 62.9% 18.8% 9.6% 840 792 48 8.2x 7.6x 6.0x NM NM NM 34.9% 71.8% (0.5%)

AppFolio US 626 41.50 74.0% 27.9% (2.6%) 1,409 1,366 43 10.2x 9.6x 7.5x NM 50.7x 37.7x 34.3% 61.8% 19.0%

NICE Systems IL 4,930 90.64 32.7% 13.0% 4.2% 5,517 5,590 375 4.4x 4.2x 3.9x 21.1x 14.9x 13.5x 32.4% 70.0% 27.9%

Open Text CA 11,600 35.67 15.0% 14.7% 9.3% 9,470 11,864 376 4.9x 4.6x 4.3x 17.9x 13.2x 11.6x 32.0% NA 34.6%

Park City Group US 77 9.55 (27.1%) (22.0%) (15.1%) 186 176 15 9.1x 8.2x 6.3x 42.7x NA 18.7x 31.7% NA 0.0%

Paycom US 2,075 80.33 74.1% 18.9% (0.6%) 4,680 4,648 67 11.4x 10.8x 8.6x 54.0x 35.0x 27.9x 31.3% 83.9% 30.7%

Symantec US 13,000 28.06 15.8% 0.0% (1.8%) 17,397 21,580 2,026 4.7x 4.4x 4.2x 36.2x 9.4x 8.3x 30.9% NA 46.3%

MINDBODY US 1,440 30.45 40.6% 12.8% (6.3%) 1,422 1,212 225 7.1x 6.7x 5.3x NM NM 58.4x 30.8% 72.5% 4.5%

Splunk US 2,700 82.84 59.9% 43.4% 4.2% 11,718 10,738 1,058 9.3x 8.6x 6.9x NM 73.8x 51.5x 30.7% 83.1% 11.7%

Yonyou CN 15,023 3.25 7.0% 29.5% 2.3% 4,759 5,028 439 5.9x 5.4x 4.5x 62.8x 74.8x 40.5x 30.6% 68.7% 7.2%

SimCorp DK 1,551 $56.98 16.8% (5.0%) (4.9%) $2,245 $2,255 $26 6.0x 5.5x 5.1x 26.9x 21.2x 18.5x 30.6% 61.3% 26.0%

ForeScout Technologies US 811 31.89 NA NA 42.3% 1,209 1,445 72 7.1x 6.7x 5.6x NM NM NM 30.2% 72.8% (20.5%)

Amazon US 341,400 1,169.47 52.8% 19.8% 0.7% 563,535 582,411 24,310 3.6x 3.3x 2.6x 45.0x 30.7x 22.7x 30.2% 36.7% 10.7%

Upland Software US 251 21.66 142.0% (1.1%) (10.2%) 450 489 53 5.5x 5.0x 4.0x 40.1x 16.3x 11.4x 30.1% 67.2% 30.8%

Average 7.9x 7.1x 5.6x 30.2x 34.4x 26.7x 48.5% 70.6% 7.0%

Median 7.3x 6.7x 5.3x 26.6x 26.0x 20.4x 38.9% 72.5% 5.9%

21

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



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Q2 Holdings US 742 $36.85 26.6% (0.3%) (11.4%) $1,536 $1,447 $89 7.8x 7.5x 6.0x NM NM 72.1x 29.1% 52.0% 5.0%

Castlight Health US 381 3.75 (25.7%) (9.6%) (3.8%) 502 420 87 3.4x 3.2x 2.6x NM NM NM 28.6% 66.6% (18.1%)

j2 Global US 2,426 75.03 (8.2%) (12.6%) (3.8%) 3,632 4,229 403 4.0x 3.8x 3.6x 10.7x 9.1x 8.3x 28.3% 84.6% 41.6%

Varonis Systems US 1,199 48.55 83.6% 32.7% (2.8%) 1,352 1,223 128 6.2x 5.8x 4.9x NM NM NM 28.0% 90.6% 3.7%

Paylocity US 2,115 47.16 54.6% 5.5% 4.2% 2,477 2,379 98 7.6x 7.1x 5.8x NM 36.0x 28.5x 27.5% NA 19.9%

Box US 1,726 21.12 52.1% 16.9% (3.7%) 2,875 2,787 173 5.8x 5.5x 4.5x NM NM NM 27.0% 75.1% (3.8%)

Model N US 864 15.75 79.0% 19.3% (3.1%) 462 462 58 3.5x 3.3x 3.0x NM NM 72.4x 26.9% NA (2.9%)

Appian US 1,000 31.48 NA 71.6% 46.6% 1,904 1,831 72 11.5x 10.9x 9.4x NM NM NM 26.3% 64.8% (13.4%)

Guidewire Software US 1,945 74.26 48.5% 8.1% (3.5%) 5,704 5,143 561 9.7x 9.1x 7.6x NM 43.4x 39.0x 26.1% NA 20.9%

Palo Alto Networks US 4,707 144.94 15.8% 7.6% 0.0% 13,318 12,346 1,503 6.6x 6.3x 5.2x NM 26.2x 20.1x 25.8% NA 23.9%

Rapid7 US 1,000 18.66 51.8% 11.7% 1.1% 819 735 84 3.9x 3.7x 3.1x NM NM NM 25.7% 73.7% (10.5%)

Square US 1,853 34.67 152.5% 48.2% (11.4%) 13,472 12,958 868 6.3x 6.1x 4.8x NM NM 52.6x 25.2% 86.2% 6.4%

Veeva US 1,794 55.28 34.6% (9.9%) (6.1%) 7,813 7,055 758 10.8x 10.4x 8.7x 43.4x 31.0x 27.0x 25.1% 71.0% 33.4%

Vitec Software Group SE 600 10.63 29.3% 26.2% 0.0% 317 361 5 3.4x 3.5x 3.1x 16.4x 12.7x 11.4x 25.0% 95.0% 27.6%

Salesforce US 25,000 102.23 47.8% 17.8% (1.3%) 73,841 72,800 3,629 7.3x 7.0x 5.8x NM 32.7x 26.6x 24.4% 75.9% 21.3%

PROS ES 158,612 7.87 27.3% 22.1% (4.5%) 4,707 4,936 1,456 1.0x 1.0x 0.9x 8.2x 7.9x 7.3x 24.3% 88.3% 12.2%

Asseco Poland PL 22,364 12.64 (5.9%) (5.3%) 2.0% 1,049 1,149 134 0.5x 0.5x 0.4x 4.6x 4.1x 3.4x 23.9% NA 12.0%

Adobe US 15,706 175.24 69.0% 24.1% (0.9%) 86,383 82,445 5,820 11.3x 11.4x 9.4x 33.1x 27.1x 21.1x 23.8% 87.3% 42.0%

F-Secure FI 1,060 4.67 27.6% 0.2% (0.1%) 732 635 96 3.2x 3.1x 2.8x 30.0x 28.6x 18.7x 23.0% NA 10.8%

MYOB AU 1,400 2.83 6.7% 9.6% 5.1% 1,712 2,021 30 6.6x 6.1x 5.5x 19.7x 13.6x 12.2x 22.7% 91.5% 45.3%

Imperva US 1,022 39.70 6.4% (17.5%) (2.3%) 1,350 1,007 343 3.3x 3.1x 2.7x NM 23.2x 18.1x 21.7% 91.0% 13.5%

Five9 US 840 24.88 75.0% 17.7% 2.3% 1,385 1,367 63 7.2x 6.9x 5.9x NM NM 63.6x 21.6% 60.2% 8.2%

SAP DE 87,874 112.32 29.8% 8.9% (0.8%) 134,660 135,356 6,185 4.9x 4.8x 4.5x 19.5x 13.8x 13.4x 21.3% 72.5% 34.6%

Alphabet US 78,101 1,053.40 31.2% 12.3% 1.5% 729,458 633,279 100,143 6.1x 5.8x 4.9x 18.4x 14.4x 12.1x 21.3% 62.1% 40.2%

Callidus Software US 1,200 28.65 71.6% 19.9% 0.5% 1,951 1,775 176 7.4x 7.1x 5.9x NM 56.2x 38.2x 20.5% 65.0% 12.7%

Average 6.0x 5.7x 4.8x 20.4x 23.8x 28.3x 24.9% 76.5% 15.5%

Median 6.2x 5.8x 4.9x 18.9x 24.7x 20.6x 25.1% 75.1% 12.7%

22

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



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Verisign US 990 $114.44 50.6% 22.4% (0.3%) $11,280 $11,321 $2,366 9.8x 9.7x 9.4x 15.1x 14.1x 13.1x 2.0% 83.5% 69.0%

Check Point Software IL 4,281 103.62 21.8% (5.4%) 1.5% 16,936 15,426 1,510 8.4x 8.3x 7.8x 16.9x 14.8x 14.0x 6.7% 88.7% 56.0%

MSCI US 3,047 126.54 61.1% 21.6% (0.9%) 11,397 12,676 799 10.3x 10.0x 9.0x 20.0x 19.2x 16.9x 10.5% 78.3% 51.9%

ANSYS US 2,900 147.59 59.3% 22.6% 0.7% 12,525 11,598 927 10.9x 10.7x 9.9x 24.8x 21.8x 20.5x 9.7% 89.4% 49.0%

Black Knight US 4,250 44.15 NA NA (1.6%) 6,776 8,175 146 7.8x 7.7x 7.1x 22.4x 16.1x 14.4x 3.1% NA 47.9%

Aspen Technology US 1,419 66.20 20.9% 21.6% (0.6%) 4,802 4,883 59 10.1x 10.0x 9.7x 22.4x 21.0x 20.0x 3.1% NA 47.7%


Progress Software US 2,000 42.57 31.9% 38.9% 3.1% 2,035 1,967 184 4.9x 5.0x 4.9x 14.1x 10.8x 10.7x (2.2%) 87.6% 46.1%

MYOB AU 1,400 2.83 6.7% 9.6% 5.1% 1,712 2,021 30 6.6x 6.1x 5.5x 19.7x 13.6x 12.2x 22.7% 91.5% 45.3%

Adobe US 15,706 175.24 69.0% 24.1% (0.9%) 86,383 82,445 5,820 11.3x 11.4x 9.4x 33.1x 27.1x 21.1x 23.8% 87.3% 42.0%


Intel US 106,000 46.16 25.9% 37.6% 5.0% 216,029 230,165 17,504 3.7x 3.7x 3.6x 9.2x 9.0x 8.5x 4.5% 63.3% 41.4%

SS&C Technologies US 8,001 40.48 39.8% 6.6% (1.2%) 8,333 10,447 103 6.4x 6.2x 5.9x 17.1x 15.1x 13.6x 13.1% 56.8% 41.3%

Oracle Financial IN 9,124 63.96 40.0% 15.9% 10.2% 5,458 5,076 374 7.2x 6.9x 6.1x 17.3x 16.8x 14.9x 13.5% NA 41.1%

Alphabet US 78,101 1,053.40 31.2% 12.3% 1.5% 729,458 633,279 100,143 6.1x 5.8x 4.9x 18.4x 14.4x 12.1x 21.3% 62.1% 40.2%

Microsoft US 124,000 85.54 36.0% 24.9% 2.6% 659,906 615,246 133,611 6.6x 6.1x 5.6x 19.2x 15.4x 13.9x 16.1% NA 39.4%

F5 Networks US 4,366 131.22 (9.5%) 3.1% 1.0% 8,214 7,197 1,017 3.4x 3.4x 3.3x 11.4x 8.7x 8.3x 3.6% NA 39.3%

Akamai Technologies US 7,439 65.04 (3.0%) 29.5% 17.5% 11,002 10,907 752 4.4x 4.4x 4.1x 16.5x 11.9x 11.3x 6.3% 65.0% 37.0%

Intuit US 8,200 157.78 37.3% 18.5% 2.3% 40,336 40,434 777 7.7x 7.4x 6.8x 24.7x 20.1x 18.5x 12.0% NA 36.9%

VMware US 18,905 125.32 58.4% 44.0% 4.9% 50,521 43,141 7,985 6.1x 5.5x 5.0x 23.3x 14.9x 13.7x 11.1% 87.6% 36.9%

Qualys US 832 59.35 86.3% 46.2% 1.0% 2,251 1,948 303 8.8x 8.5x 7.3x 34.3x 23.0x 20.1x 16.1% 78.8% 36.8%

LogMeIn US 2,823 114.50 17.3% 8.8% (1.6%) 6,027 5,751 276 7.2x 5.6x 5.0x 29.2x 15.5x 13.1x 202.9% 82.8% 36.3%

Verizon US 160,100 52.93 (1.5%) 19.2% 6.1% 215,925 330,721 4,487 2.7x 2.6x 2.6x 7.5x 7.3x 7.2x (0.6%) 59.4% 36.2%


Fiserv US 23,000 131.13 22.2% 7.8% 1.9% 27,327 32,113 325 5.7x 5.7x 5.4x 18.2x 15.8x 14.8x 2.9% 46.3% 35.8%

CenturyLink US 39,500 16.68 (30.6%) (31.0%) 14.7% 17,831 42,649 160 2.6x 2.4x 1.8x 7.2x 6.7x 4.8x 2.4% 54.5% 35.5%

Cisco US 72,900 38.30 25.7% 21.9% 2.2% 189,341 153,678 71,588 3.2x 3.2x 3.1x 10.6x 9.0x 9.2x (1.1%) NA 35.5%

Jack Henry & Associates US 5,972 116.96 31.2% 12.8% 2.7% 9,033 8,929 104 6.2x 6.1x 5.8x 19.9x 17.3x 16.6x 5.2% NA 35.1%

Average 7.3x 6.9x 6.2x 19.2x 16.4x 14.5x 18.8% 74.9% 42.3%

Median 6.5x 6.1x 5.5x 18.4x 15.0x 13.7x 10.1% 80.8% 40.6%

23

GP Bullhound SaaS Index Performance

L1M L3M

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2017-09-29 2017-10-29 2017-11-29 2017-12-29

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GPB SaaS Index S&P 500 NASDAQ Composite

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24




Key SaaS Metrics



1

2

3

4

5

6



25

Key SaaS MetricsDefinitions & Calculations

Metric Definition Calculation

Normalized measurement of recurring revenue, most frequently

measured with a constant value in each month of the

subscription periodMRR

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

management S&M costsCAC =

𝑆&𝑀

# 𝑜𝑓 𝑛𝑒𝑤 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠

Customer Acquisition Cost (CAC)

Amount of profit a customer is calculated to deliver to the

company over the lifetime of the customerCLV =

𝐴𝑅𝑃𝑈 ∗ 𝐺𝑀

𝐶ℎ𝑢𝑟𝑛 𝑟𝑎𝑡𝑒

Customer Lifetime Value (CLV)

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

customer acquisitionPayback Period =

𝐶𝐴𝐶

𝐴𝑅𝑃𝐴 ∗ 𝐺𝑀Payback Period

Churn (Gross & Net)

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

or cohort regardless of account expansion or growth

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

period or cohort after taking into consideration new, reactivated,

or expanded accounts Net Churn =

(𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑙𝑜𝑠𝑡𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑 − 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑔𝑎𝑖𝑛𝑒𝑑

𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑)𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑎𝑡

𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑

Gross Churn = 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑙𝑜𝑠𝑡 𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑

𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑎𝑡 𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑝𝑒𝑖𝑟𝑜𝑑

MRR= # 𝑜𝑓 𝑝𝑎𝑦𝑖𝑛𝑔 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 ∗ 𝐴𝑅𝑃𝐴/𝑚𝑜𝑛𝑡ℎ

26

Key SaaS Metrics (Cont’d)

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

metrics that investors will focus on

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

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

services

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

MRR / ARR / ARRR

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

back sales and marketing investments

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

payback periods:

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

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

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

• Customer Lifetime Value = NPV of recurring gross profit of a customer less the initial cost of customer acquisition

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

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

CAC vs. CLV

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

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

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

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

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

• Net Revenue Retention:

– Key metric for performance of SaaS business

– >100% upsells more than make up for churn

– ARR as a Percentage of Upsells: 15%+

Churn & Renewal Rates

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

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

Free Cash Flow / Burn Rate

Source(s): GP Bullhound analysis

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

27




Key SaaS Metrics



1

2

3

4

5

6



28

Public Comps – GP Bullhound SaaS Index



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Salesforce US 25,000 $102.23 47.8% 17.8% (1.3%) $73,841 $72,800 $3,629 7.3x 7.0x 5.8x NM 32.7x 26.6x 24.4% 75.9% 21.3%



Square US 1,853 34.67 152.5% 48.2% (11.4%) 13,472 12,958 868 6.3x 6.1x 4.8x NM NM 52.6x 25.2% 86.2% 6.4%



j2 Global CA 1,900 101.00 134.3% 16.9% (2.6%) 10,088 9,161 927 15.8x 13.9x 9.6x NM NM NM 69.6% 56.8% 2.8%

Veeva US 1,794 55.28 34.6% (9.9%) (6.1%) 7,813 7,055 758 10.8x 10.4x 8.7x 43.4x 31.0x 27.0x 25.1% 71.0% 33.4%

Ultimate Software US 3,747 218.23 20.0% 3.9% 8.6% 6,520 6,391 138 7.1x 6.8x 5.7x NM 29.8x 23.3x 19.6% 64.6% 23.0%


athenahealth US 5,305 133.04 26.4% (6.1%) 2.6% 5,324 5,478 123 4.6x 4.5x 4.1x 42.1x 20.6x 16.1x 12.0% 56.2% 21.9%

Paycom US 2,075 80.33 74.1% 18.9% (0.6%) 4,680 4,648 67 11.4x 10.8x 8.6x 54.0x 35.0x 27.9x 31.3% 83.9% 30.7%



Medidata Solutions US 1,424 63.37 26.4% (19.0%) (2.5%) 3,707 3,583 398 6.8x 6.6x 5.6x 43.6x 26.8x 22.2x 17.6% 78.4% 24.5%

RealPage US 5,200 44.30 47.9% 22.9% (1.9%) 3,672 3,960 109 6.3x 5.9x 4.8x 44.8x 24.4x 18.3x 18.3% 62.5% 24.1%


2U US 1,164 64.51 116.7% 39.2% 0.8% 3,369 3,184 202 12.4x 11.2x 8.1x NM NM NM 38.5% 81.2% 3.7%

HubSpot US 1,962 88.40 89.7% 35.4% 9.5% 3,304 3,105 492 9.0x 8.4x 6.6x NM NM NM 36.9% 80.7% 5.9%




Box US 1,726 21.12 52.1% 16.9% (3.7%) 2,875 2,787 173 5.8x 5.5x 4.5x NM NM NM 27.0% 75.1% (3.8%)

Wix IL 1,266 57.55 28.6% (17.2%) 7.1% 2,616 2,409 209 6.2x 5.7x 4.3x NM 35.4x 22.1x 46.1% 84.1% 16.1%




Qualys US 832 59.35 86.3% 46.2% 1.0% 2,251 1,948 303 8.8x 8.5x 7.3x 34.3x 23.0x 20.1x 16.1% 78.8% 36.8%


Cornerstone OnDemand US 1,960 35.33 (17.1%) (1.8%) (3.5%) 2,046 1,983 309 4.3x 4.1x 3.9x NM 30.3x 21.6x 14.2% 73.1% 13.5%



BroadSoft US 1,733 54.90 30.9% 27.5% 0.1% 1,745 1,585 371 4.4x 4.1x 3.7x 66.7x 16.8x 15.6x 12.8% 76.9% 24.5%

Blackline US 726 32.80 22.3% (9.5%) (10.0%) 1,734 1,625 110 10.0x 9.3x 7.2x NM NM NM 41.7% 80.6% 0.6%

Coupa Software US 652 31.22 22.7% 5.3% (9.8%) 1,719 1,499 219 8.8x 8.3x 6.7x NM NM NM 35.8% 70.7% (6.7%)


Q2 Holdings US 742 36.85 26.6% (0.3%) (11.4%) 1,536 1,447 89 7.8x 7.5x 6.0x NM NM 72.1x 29.1% 52.0% 5.0%

MongoDB US 930 29.68 NA NA 3.4% 1,501 1,213 289 8.7x 8.0x 5.9x NM NM NM 50.1% 72.5% (47.7%)

29

Public Comps – GP Bullhound SaaS Index (Cont'd)



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Alteryx US 515 $25.27 NA 29.5% 1.9% $1,495 $1,339 $157 11.3x 10.4x 7.6x NM NM NM 50.2% 84.4% (5.1%)

MINDBODY US 1,440 30.45 40.6% 12.8% (6.3%) 1,422 1,212 225 7.1x 6.7x 5.3x NM NM 58.4x 30.8% 72.5% 4.5%

AppFolio US 626 41.50 74.0% 27.9% (2.6%) 1,409 1,366 43 10.2x 9.6x 7.5x NM 50.7x 37.7x 34.3% 61.8% 19.0%

Five9 US 840 24.88 75.0% 17.7% 2.3% 1,385 1,367 63 7.2x 6.9x 5.9x NM NM 63.6x 21.6% 60.2% 8.2%

8x8 US 1,019 14.10 (2.8%) (2.4%) 0.4% 1,297 1,129 167 4.2x 4.0x 3.4x NM 53.6x 51.4x 15.4% NA 7.5%

ForeScout Technologies US 811 31.89 NA NA 42.3% 1,209 1,445 72 7.1x 6.7x 5.6x NM NM NM 30.2% 72.8% (20.5%)




Apptio US 745 23.52 22.4% 33.1% 6.1% 950 814 136 4.5x 4.4x 3.8x NM NM NM 15.8% 69.5% (2.7%)

Workiva US 1,284 21.40 57.4% 12.6% (3.2%) 897 839 78 4.2x 4.1x 3.6x NM NM NM 15.7% 71.7% (10.5%)

Benefitfocus US 1,430 27.00 (9.5%) (24.4%) 1.3% 844 910 55 3.6x 3.5x 3.2x NM 48.0x 32.7x 9.9% 52.5% 7.4%


SPS Commerce US 1,217 48.59 (31.0%) (24.2%) (3.8%) 837 673 164 3.2x 3.1x 2.8x 29.0x 21.1x 17.5x 13.7% 67.4% 14.5%

SecureWorks US 2,306 8.87 (16.1%) (4.3%) (9.7%) 719 619 100 1.3x 1.3x 1.2x NM NM NM 8.4% 55.3% (4.5%)

Carbonite US 830 25.10 48.1% 14.4% 4.6% 701 692 119 3.0x 2.8x 2.6x NM 14.6x 11.7x 18.7% 75.2% 19.2%

LivePerson US 954 11.50 49.4% 4.1% 3.1% 685 630 54 2.9x 2.9x 2.7x 55.1x 34.7x 28.7x (2.1%) 73.5% 8.3%

Castlight Health US 381 3.75 (25.7%) (9.6%) (3.8%) 502 420 87 3.4x 3.2x 2.6x NM NM NM 28.6% 66.6% (18.1%)


Bazaarvoice US 776 5.45 12.4% 11.2% (0.5%) 469 404 65 2.0x 1.9x 1.9x NM 15.9x 13.0x 3.2% NA 12.2%


MobileIron US 854 3.90 2.6% (35.0%) 0.0% 375 292 82 1.7x 1.7x 1.6x NM NM NM 6.3% 84.9% (10.2%)

Vitec Software Group SE 600 10.63 29.3% 26.2% 0.0% 317 361 5 3.4x 3.5x 3.1x 16.4x 12.7x 11.4x 25.0% 95.0% 27.6%

Brightcove US 506 7.10 (13.9%) 14.5% (4.7%) 246 224 22 1.5x 1.4x 1.4x NM NM 41.5x 3.4% 60.6% (4.2%)

ChannelAdvisor US 697 9.00 (38.6%) (21.7%) 3.4% 239 186 54 1.5x 1.5x 1.4x NM 39.8x 24.2x 8.5% 78.3% 3.8%

Amber Road US 677 7.34 (21.1%) (14.8%) 3.8% 200 214 8 2.8x 2.7x 2.5x NM NM 63.8x 7.8% 53.2% (0.8%)

Marin Software US 437 10.95 (33.4%) 20.3% 17.1% 62 35 29 0.4x NA NA NM NA NA NA NA NA

Average 6.9x 6.5x 5.3x 39.5x 35.5x 32.9x 32.2% 71.1% 5.8%

Median 7.1x 6.7x 5.4x 42.1x 32.7x 28.2x 30.2% 72.8% 6.4%

30




Key SaaS Metrics



1

2

3

4

5

6



31

Public Comps – Large-Cap Consolidator



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Microsoft US 124,000 $85.54 36.0% 24.9% 2.6% $659,906 $615,246 $133,611 6.6x 6.1x 5.6x 19.2x 15.4x 13.9x 16.1% NA 39.4%

Intel US 106,000 46.16 25.9% 37.6% 5.0% 216,029 230,165 17,504 3.7x 3.7x 3.6x 9.2x 9.0x 8.5x 4.5% 63.3% 41.4%

Oracle US 138,000 47.28 22.2% (5.8%) (2.6%) 195,720 185,248 71,580 4.8x 4.8x 4.6x 12.2x 10.3x 9.8x 4.7% NA 46.0%


IBM US 380,300 153.42 (7.9%) (0.5%) (0.1%) 142,035 176,292 11,515 2.3x 2.2x 2.2x 10.5x 9.2x 8.9x 0.5% 47.5% 24.5%

SAP DE 87,874 112.32 29.8% 8.9% (0.8%) 134,660 135,356 6,185 4.9x 4.8x 4.5x 19.5x 13.8x 13.4x 21.3% 72.5% 34.6%

Hewlett Packard US 66,000 14.36 (38.5%) (13.8%) 2.8% 22,888 27,380 9,579 1.0x 0.8x 0.9x 6.2x 4.8x 5.0x (32.7%) NA 17.3%

Average 3.8x 3.7x 3.5x 12.5x 10.2x 9.8x 1.9% 61.1% 34.1%

Median 3.7x 3.7x 3.6x 10.6x 9.2x 9.2x 4.5% 63.3% 35.5%

32

Public Comps – Advertising Technology



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Alphabet US 78,101 $1,053.40 31.2% 12.3% 1.5% $729,458 $633,279 $100,143 6.1x 5.8x 4.9x 18.4x 14.4x 12.1x 21.3% 62.1% 40.2%

Adobe US 15,706 175.24 69.0% 24.1% (0.9%) 86,383 82,445 5,820 11.3x 11.4x 9.4x 33.1x 27.1x 21.1x 23.8% 87.3% 42.0%


Teradata US 10,093 38.46 41.1% 28.8% 2.1% 4,654 4,355 1,025 2.0x 2.0x 2.0x 25.6x 11.8x 11.4x (7.8%) 52.3% 17.2%

Hubspot US 1,962 88.40 89.7% 35.4% 9.5% 3,304 3,105 492 9.0x 8.4x 6.6x NM NM NM 36.9% 80.7% 5.9%


Trade Desk US 467 45.73 61.1% (10.1%) (5.5%) 1,878 1,773 133 6.4x 5.8x 4.5x 25.8x 19.4x 14.6x 51.4% 78.9% 29.7%

Criteo FR 2,712 26.03 (36.6%) (45.4%) (18.2%) 1,718 1,387 358 0.6x 1.5x 1.4x 6.8x 4.7x 5.1x (48.5%) 88.3% 31.7%


TechTarget US 659 13.92 64.7% 32.8% (0.4%) 384 391 28 3.7x 3.6x 3.2x 34.1x 18.1x 13.4x 1.6% 73.7% 20.0%


Average 5.2x 5.1x 4.3x 24.0x 24.0x 18.0x 12.3% 74.2% 21.5%

Median 6.1x 5.8x 4.5x 25.7x 18.8x 14.0x 20.5% 77.1% 20.0%

33

Public Comps – Business Intelligence/Analytics



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins


IBM US 380,300 153.42 (7.9%) (0.5%) (0.1%) 142,035 176,292 11,515 2.3x 2.2x 2.2x 10.5x 9.2x 8.9x 0.5% 47.5% 24.5%

SAP DE 87,874 112.32 29.8% 8.9% (0.8%) 134,660 135,356 6,185 4.9x 4.8x 4.5x 19.5x 13.8x 13.4x 21.4% 72.5% 34.6%

Adobe US 15,706 175.24 69.0% 24.1% (0.9%) 86,383 82,445 5,820 11.3x 11.4x 9.4x 33.1x 27.1x 21.1x 23.8% 87.3% 42.0%

NetApp US 10,100 55.32 55.0% 38.0% (1.6%) 14,759 11,925 5,972 2.1x 2.1x 2.0x 11.7x 9.2x 8.7x 5.6% NA 22.6%


Tableau Software US 3,223 69.20 66.0% 12.0% 0.3% 5,518 4,575 943 5.2x 5.3x 4.8x NM NM 61.6x 5.1% 87.8% 6.6%

Teradata US 10,093 38.46 41.1% 28.8% 2.1% 4,654 4,355 1,025 2.0x 2.0x 2.0x 25.6x 11.8x 11.4x (7.8%) 52.3% 17.2%

Fair Isaac US 2,734 153.20 27.1% 10.8% (1.4%) 4,595 5,094 106 5.5x 5.4x 5.0x 24.1x 22.3x 19.1x 5.2% NA 24.1%

Blackbaud US 3,156 94.49 47.2% 10.4% (3.8%) 4,440 4,761 17 6.2x 6.0x 5.4x 34.4x 24.4x 22.3x 8.1% 58.3% 24.7%


Verint US 5,000 41.85 18.4% 4.4% (4.0%) 2,669 3,133 319 2.8x 2.7x 2.6x 32.2x 12.3x 10.1x 7.5% 64.9% 22.3%


Inovalon US 2,181 15.00 47.8% 13.6% (5.1%) 2,188 1,906 526 4.4x 4.2x 3.9x 26.0x 17.1x 15.4x 5.8% 66.1% 24.6%

MicroStrategy US 2,178 131.30 (33.9%) (30.6%) (3.9%) 1,503 857 646 1.7x 1.7x 1.7x 8.8x 8.3x 12.5x (2.4%) 80.6% 20.5%

Alteryx US 515 25.27 NA 29.5% 1.9% 1,495 1,339 157 11.3x 10.4x 7.6x NM NM NM 50.2% 84.4% (5.1%)

Hortonworks US 1,150 20.11 146.7% 54.9% 3.4% 1,418 1,355 63 5.7x 5.3x 4.1x NM NM 52.8x 39.4% 71.5% (8.9%)



SAS AB SE 10,324 2.60 69.5% 20.1% (16.1%) 996 964 1,054 0.2x 0.2x 0.2x 2.0x 2.1x 2.2x 14.0% NA 8.7%




SDL UK 3,310 5.93 12.6% (25.7%) (8.0%) 488 453 34 1.2x 1.2x 1.1x 11.1x 12.9x 10.3x 17.8% NA 9.1%


Gridsum CN 929 9.15 (9.6%) 10.1% 4.0% 281 282 39 3.6x 2.9x 1.8x NM NM 14.2x 70.6% NA (7.7%)

iSentia AU 1,300 1.08 (46.9%) (33.8%) 19.0% 216 256 10 2.1x 2.3x 2.4x 11.4x 9.6x 9.8x (2.4%) NA 23.7%

Attunity IL 253 6.98 24.0% (3.1%) (8.2%) 140 133 7 2.2x 2.1x 1.8x NM 34.4x 26.6x 13.7% 84.3% 6.2%

Datawatch US 144 9.50 72.7% 8.6% (1.0%) 116 86 30 2.4x 2.3x 2.0x NM NM NA 17.9% NA (1.0%)

Hottolink JP 88 7.24 76.8% 35.5% 15.7% 93 99 8 4.7x NA NA 11.3x NA NA NA NA NA

Mattersight US 265 2.55 (28.2%) 0.0% (3.8%) 83 106 8 2.5x 2.3x 2.0x NM NM NM 18.6% 70.2% (7.4%)


Expert System IT 238 1.72 (13.6%) (13.6%) 5.9% 61 73 13 2.2x 2.5x 2.3x NM NM 19.5x (5.2%) NA (7.5%)

Average 4.4x 4.3x 3.7x 21.0x 19.6x 20.2x 17.5% 72.0% 8.7%

Median 4.2x 4.1x 3.6x 18.9x 14.1x 13.8x 15.7% 72.5% 8.7%

34

Public Comps – Communication



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Microsoft US 124,000 $85.54 36.0% 24.9% 2.6% $659,906 $615,246 $133,611 6.6x 6.1x 5.6x 19.2x 15.4x 13.9x 16.1% NA 39.4%


Citrix US 9,600 88.00 (2.2%) 10.7% 1.1% 13,259 13,172 1,504 3.8x 4.7x 4.6x 13.3x 13.4x 14.2x (17.4%) 86.6% 34.7%


NICE Systems IL 4,930 90.64 32.7% 13.0% 4.2% 5,517 5,590 375 4.4x 4.2x 3.9x 21.1x 14.9x 13.5x 32.4% 70.0% 27.9%

Nuance US 11,600 16.35 10.0% (6.9%) (0.1%) 4,746 6,519 844 3.4x 3.3x 3.2x 18.9x 11.8x 10.5x 1.2% NA 28.0%




Broadsoft US 1,733 54.90 30.9% 27.5% 0.1% 1,745 1,585 371 4.4x 4.1x 3.7x 66.7x 16.8x 15.6x 12.8% 76.9% 24.5%

8x8 US 1,019 14.10 (2.8%) (2.4%) 0.4% 1,297 1,129 167 4.2x 4.0x 3.4x NM 53.6x 51.4x 15.4% NA 7.5%




Synchronoss US 1,765 8.94 (76.8%) (45.4%) (22.4%) 425 549 194 1.2x 1.2x 1.3x 10.1x 4.7x 6.7x (0.6%) 63.8% 24.5%

Cybozu JP 516 4.91 28.0% 6.9% 8.9% 225 210 16 2.6x NA NA 18.3x NA NA NA NA NA

V-cube JP 500 4.86 (12.3%) (8.6%) (3.7%) 116 142 30 2.4x NA NA 24.2x NA NA NA NA NA

Average 4.8x 4.8x 4.1x 23.5x 20.5x 18.3x 22.1% 68.6% 20.7%

Median 4.0x 4.1x 3.7x 18.6x 14.2x 13.7x 16.1% 72.6% 24.5%

35

Public Comps – ERP & Enterprise Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Oracle US 138,000 $47.28 22.2% (5.8%) (2.6%) $195,720 $185,248 $71,580 4.8x 4.8x 4.6x 12.2x 10.3x 9.8x 4.7% NA 46.0%

SAP DE 87,874 112.32 29.8% 8.9% (0.8%) 134,660 135,356 6,185 4.9x 4.8x 4.5x 19.5x 13.8x 13.4x 21.4% 72.5% 34.6%



Constellation Software CA 12,124 607.63 32.5% 15.5% 3.4% 12,877 12,776 415 5.4x 5.2x 4.6x 36.1x 20.0x 17.2x 15.6% 66.5% 26.0%

Sage Group UK 13,292 10.79 33.8% 21.7% 3.0% 11,653 12,651 310 5.5x 5.5x 4.9x 20.4x 18.2x 16.8x 13.4% NA 30.1%

Shopify CA 1,900 101.00 134.3% 16.9% (2.6%) 10,088 9,161 927 15.8x 13.9x 9.6x NM NM NM 69.6% 56.8% 2.8%

Tyler Technologies US 4,039 177.05 23.5% 0.1% (1.6%) 6,651 6,487 165 7.9x 7.7x 7.0x 35.4x 25.7x 22.6x 11.6% 51.3% 29.9%

Guidewire Software US 1,945 74.26 48.5% 8.1% (3.5%) 5,704 5,143 561 9.7x 9.1x 7.6x NM 43.4x 39.0x 26.1% NA 20.9%

Yonyou Networks CN 15,023 3.25 7.0% 29.5% 2.3% 4,759 5,028 439 5.9x 5.4x 4.5x 62.8x 74.8x 40.5x 30.6% 68.7% 7.2%

Prosegur ES 158,612 7.87 27.3% 22.1% (4.5%) 4,707 4,936 1,456 1.0x 1.0x 0.9x 8.2x 7.9x 7.3x 24.3% 88.3% 12.2%

Blackbaud US 3,156 94.49 47.2% 10.4% (3.8%) 4,440 4,761 17 6.2x 6.0x 5.4x 34.4x 24.4x 22.3x 8.1% 58.3% 24.7%

Medidata Solutions US 1,424 63.37 26.4% (19.0%) (2.5%) 3,707 3,583 398 6.8x 6.6x 5.6x 43.6x 26.8x 22.2x 17.6% 78.4% 24.5%

RealPage US 5,200 44.30 47.9% 22.9% (1.9%) 3,672 3,960 109 6.3x 5.9x 4.8x 44.8x 24.4x 18.3x 18.3% 62.5% 24.1%





Aveva Group UK 1,707 37.37 63.0% 49.5% 5.7% 2,391 2,211 178 7.3x 7.4x 7.1x 45.4x 29.5x 25.9x 15.9% NA 25.0%



Five9 US 840 24.88 75.0% 17.7% 2.3% 1,385 1,367 63 7.2x 6.9x 5.9x NM NM 63.6x 21.6% 60.2% 8.2%

Enghouse CA 1,504 49.03 20.2% 21.8% 15.9% 1,324 1,222 101 4.8x 4.6x 4.4x 21.5x 16.8x 15.6x 10.1% NA 27.6%

Technology One AU 994 3.87 (5.2%) (13.3%) 0.8% 1,223 1,150 73 5.4x 5.2x 4.6x 23.5x 21.0x 19.4x 19.1% NA 24.9%



SPS Commerce US 1,217 48.59 (31.0%) (24.2%) (3.8%) 837 673 164 3.2x 3.1x 2.8x 29.0x 21.1x 17.5x 13.7% 67.4% 14.5%

BasWare FI 1,840 57.04 49.8% 31.3% 4.9% 819 848 30 4.8x 4.7x 4.4x NM NM 64.6x 14.6% 89.7% 1.0%

QAD US 1,850 38.85 28.6% 19.9% 3.9% 722 596 140 2.0x 2.0x 1.9x 68.0x 39.6x 30.9x 8.2% 51.4% 5.0%

Model N US 864 15.75 79.0% 19.3% (3.1%) 462 462 58 3.5x 3.3x 3.0x NM NM 72.4x 26.9% NA (2.9%)

Synchronoss US 1,765 8.94 (76.8%) (45.4%) (22.4%) 425 549 194 1.2x 1.2x 1.3x 10.1x 4.7x 6.7x (0.6%) 63.8% 24.5%

American Software US 390 11.63 11.5% 13.9% (10.1%) 351 270 80 2.6x 2.5x 2.3x 18.4x 13.8x 13.1x (2.1%) NA 18.3%

ServiceSource US 3,145 3.09 (44.7%) (20.8%) 5.5% 279 241 180 1.0x 1.0x 1.0x NM 15.4x 11.1x (6.8%) 36.5% 6.6%


Amber Road US 677 7.34 (21.1%) (14.8%) 3.8% 200 214 8 2.8x 2.7x 2.5x NM NM 63.8x 7.8% 53.2% (0.8%)

Freelancer AU 390 0.38 (47.8%) (36.8%) (2.9%) 173 146 27 3.6x 3.6x 3.3x NM NM 75.0x 7.2% 85.0% 0.2%

Average 6.4x 6.0x 5.1x 30.2x 28.3x 31.0x 0.2x 0.7x 0.2x

Median 5.5x 5.3x 4.6x 26.3x 24.4x 22.6x 18.0% 68.0% 15.3%

36

Public Comps – Financial Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Intuit US 8,200 $157.78 37.3% 18.5% 2.3% $40,336 $40,434 $777 7.7x 7.4x 6.8x 24.7x 20.1x 18.5x 12.0% NA 36.9%

Fidelity National US 53,000 94.09 22.2% 10.9% 1.5% 31,414 39,907 720 4.3x 4.4x 4.3x 15.8x 13.2x 12.5x (0.8%) 37.0% 33.0%

Fiserv US 23,000 131.13 22.2% 7.8% 1.9% 27,327 32,113 325 5.7x 5.7x 5.4x 18.2x 15.8x 14.8x 2.9% 46.3% 35.8%

MSCI US 3,047 126.54 61.1% 21.6% (0.9%) 11,397 12,676 799 10.3x 10.0x 9.0x 20.0x 19.2x 16.9x 10.5% 78.3% 51.9%

Jack Henry & Associates US 5,972 116.96 31.2% 12.8% 2.7% 9,033 8,929 104 6.2x 6.1x 5.8x 19.9x 17.3x 16.6x 5.2% NA 35.1%

Temenos CH 4,356 128.26 83.7% 46.5% 3.8% 9,016 9,292 161 13.4x 12.8x 11.4x 48.5x 36.6x 31.0x 14.9% 81.4% 34.9%

SS&C US 8,001 40.48 39.8% 6.6% (1.2%) 8,333 10,447 103 6.4x 6.2x 5.9x 17.1x 15.1x 13.6x 13.1% 56.8% 41.3%

Black Knight US 4,250 44.15 NA NA (1.6%) 6,776 8,175 146 7.8x 7.7x 7.1x 22.4x 16.1x 14.4x 3.1% NA 47.9%

Oracle Financial IN 9,124 63.96 40.0% 15.9% 10.2% 5,458 5,076 374 7.2x 6.9x 6.1x 17.3x 16.8x 14.9x 13.5% NA 41.1%

Fair Isaac US 2,734 153.20 27.1% 10.8% (1.4%) 4,595 5,094 106 5.5x 5.4x 5.0x 24.1x 22.3x 19.1x 5.2% NA 24.1%

Ellie Mae US 1,280 89.40 5.0% (17.6%) 2.6% 3,088 2,721 366 6.8x 6.6x 5.5x 33.2x 22.8x 20.4x 14.5% 62.2% 28.9%

Ebix US 2,988 79.25 34.0% 46.9% 2.1% 2,493 2,775 102 8.2x 7.8x 6.5x 23.3x 22.7x 18.3x 19.1% 65.0% 34.4%

SimCorp DK 1,551 56.98 16.8% (5.0%) (4.9%) 2,245 2,255 26 6.0x 5.5x 5.1x 26.9x 21.2x 18.5x 30.6% 61.3% 26.0%

Envestnet US 3,197 49.85 40.4% 27.5% 3.0% 2,209 2,419 49 3.7x 3.6x 3.1x 41.4x 20.1x 15.7x 17.6% 62.6% 17.7%

MYOB AU 1,400 2.83 6.7% 9.6% 5.1% 1,712 2,021 30 6.6x 6.1x 5.5x 19.7x 13.6x 12.2x 22.7% 91.5% 45.3%

Q2 Holdings US 742 36.85 26.6% (0.3%) (11.4%) 1,536 1,447 89 7.8x 7.5x 6.0x NM NM 72.1x 29.1% 52.0% 5.0%

IRESS AU 1,790 9.05 5.4% (8.4%) 5.2% 1,532 1,668 16 5.3x 5.0x 4.6x 22.5x 18.8x 16.3x 18.0% 26.2% 26.7%

Bottomline Technologies US 1,600 34.68 38.3% 36.5% 5.0% 1,404 1,463 128 4.1x 4.0x 3.7x 40.5x 17.6x 16.3x 7.6% NA 22.9%

Fidessa UK 1,727 34.21 21.0% 12.0% 3.8% 1,318 1,222 92 2.7x 2.6x 2.5x 14.7x 11.9x 11.5x 15.9% NA 21.6%

Asseco PL 22,364 12.64 (5.9%) (5.3%) 2.0% 1,049 1,149 134 0.5x 0.5x 0.4x 4.6x 4.1x 3.4x 23.9% NA 12.0%


Average 6.2x 6.0x 5.4x 23.9x 18.2x 18.9x 14.0% 60.8% 29.5%

Median 6.2x 6.1x 5.5x 22.4x 17.6x 16.3x 14.5% 62.2% 33.0%

37

Public Comps – Human Capital Management



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

ADP US 58,000 $117.19 13.3% 15.5% 3.4% $51,973 $51,627 $2,477 4.3x 4.1x 3.8x 19.0x 19.8x 17.8x 9.2% NA 20.4%



Ultimate Software US 3,747 218.23 20.0% 3.9% 8.6% 6,520 6,391 138 7.1x 6.8x 5.7x NM 29.8x 23.3x 19.6% 64.6% 23.0%

Paycom US 2,075 80.33 74.1% 18.9% (0.6%) 4,680 4,648 67 11.4x 10.8x 8.6x 54.0x 35.0x 27.9x 31.3% 83.9% 30.7%

TriNet US 2,700 44.34 71.5% 35.6% 0.2% 3,081 3,249 264 1.0x 4.0x 4.0x 13.6x 11.7x 11.6x (73.7%) 74.1% 34.6%


WageWorks US 1,958 62.00 (14.5%) (7.9%) (5.2%) 2,457 1,810 892 4.1x 3.8x 3.4x 19.7x 12.4x 10.8x 37.9% 64.1% 30.4%

Cornerstone OnDemand US 1,960 35.33 (17.1%) (1.8%) (3.5%) 2,046 1,983 309 4.3x 4.1x 3.9x NM 30.3x 21.6x 14.2% 73.1% 13.5%



Benefitfocus US 1,430 27.00 (9.5%) (24.4%) 1.3% 844 910 55 3.6x 3.5x 3.2x NM 48.0x 32.7x 9.9% 52.5% 7.4%

Solium CA 611 8.70 42.5% 13.3% 4.3% 486 416 70 5.0x 4.8x 4.1x 34.5x 39.0x 30.9x 12.5% NA 12.3%


Freelancer AU 390 0.38 (47.8%) (36.8%) (2.9%) 173 146 27 3.6x 3.6x 3.3x NM NM 75.0x 7.2% 85.0% 0.2%

Average 6.2x 6.1x 5.1x 30.2x 34.1x 29.2x 17.4% 71.1% 17.0%

Median 5.5x 5.0x 4.1x 27.1x 35.0x 28.2x 20.5% 72.7% 19.9%

38

Public Comps – Infrastructure



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

VMware US 18,905 $125.32 58.4% 44.0% 4.9% $50,521 $43,141 $7,985 6.1x 5.5x 5.0x 23.3x 14.9x 13.7x 11.1% 87.6% 36.9%


Red Hat US 10,500 120.10 72.4% 25.7% (3.5%) 21,251 20,298 1,716 7.3x 7.3x 6.3x 38.2x 27.1x 22.7x 18.8% NA 27.1%


Micro Focus UK 16,100 34.10 19.3% 6.5% 1.6% 14,844 16,319 730 8.5x 6.5x 3.9x 22.6x NA 9.9x 86.4% NA 0.0%

Citrix US 9,600 88.00 (2.2%) 10.7% 1.1% 13,259 13,172 1,504 3.8x 4.7x 4.6x 13.3x 13.4x 14.2x (17.4%) 86.6% 34.7%


Akamai Technologies US 7,439 65.04 (3.0%) 29.5% 17.5% 11,002 10,907 752 4.4x 4.4x 4.1x 16.5x 11.9x 11.3x 6.3% 65.0% 37.0%

Juniper Networks US 9,832 28.50 0.5% 2.4% (3.7%) 10,685 9,535 3,286 1.8x 1.9x 1.9x 8.0x 7.0x 7.0x 0.6% 62.1% 27.2%


F5 Networks US 4,366 131.22 (9.5%) 3.1% 1.0% 8,214 7,197 1,017 3.4x 3.4x 3.3x 11.4x 8.7x 8.3x 3.6% NA 39.3%

Trend Micro JP 5,627 56.73 59.9% 8.4% 0.5% 7,800 6,543 1,257 5.0x 5.0x 4.6x 14.0x 14.9x 13.4x 15.9% 81.5% 33.5%


Nutanix US 3,009 35.28 34.8% 77.0% 8.5% 5,660 5,294 366 6.2x 5.4x 4.4x NM NM NM 56.2% NA (11.8%)

Software AG DE 4,600 56.27 NA NA 3.9% 4,299 4,246 413 4.1x 4.0x 3.9x 14.2x 12.4x 12.2x 16.0% 76.4% 32.1%


Sophos UK 3,293 7.70 140.3% 33.3% (5.0%) 3,593 3,817 81 6.7x 6.7x 5.5x NM NM 59.2x 10.5% NA 8.5%

Pure Storage US 2,000 15.86 40.7% 22.0% (10.2%) 3,438 2,887 551 3.2x 2.8x 2.2x NM NM 32.9x 39.6% 66.4% 2.1%



NetScout Systems US 3,113 30.45 (4.7%) (13.0%) (3.8%) 2,653 2,646 307 2.4x 2.3x 2.1x 13.5x 9.9x 8.1x 0.1% NA 23.7%

FireEye US 2,900 14.20 20.1% (8.3%) 2.7% 2,621 2,512 879 3.4x 3.4x 3.1x NM 28.7x 24.7x 4.0% 73.4% 11.8%

Commvault US 2,656 52.50 0.5% (7.3%) (2.7%) 2,425 1,930 495 2.9x 2.8x 2.5x NM 22.2x 17.4x 8.2% NA 12.6%

Qualys US 832 59.35 86.3% 46.2% 1.0% 2,251 1,948 303 8.8x 8.5x 7.3x 34.3x 23.0x 20.1x 16.1% 78.8% 36.8%

Progress Software US 2,000 42.57 31.9% 38.9% 3.1% 2,035 1,967 184 4.9x 5.0x 4.9x 14.1x 10.8x 10.7x (2.2%) 87.6% 46.1%

Alarm.com US 785 37.75 35.4% 0.3% (8.2%) 1,780 1,767 85 5.5x 5.3x 4.6x 32.3x 25.6x 21.1x 27.8% 65.9% 20.6%


Extreme Networks US 1,628 12.52 147.9% 31.8% (0.2%) 1,420 1,434 154 2.1x 1.8x 1.3x 26.6x 16.2x 11.0x 45.8% NA 11.3%

Hortonworks US 1,150 20.11 146.7% 54.9% 3.4% 1,418 1,355 63 5.7x 5.3x 4.1x NM NM 52.8x 39.4% 71.5% (8.9%)



SecureWorks US 2,306 8.87 (16.1%) (4.3%) (9.7%) 719 619 100 1.3x 1.3x 1.2x NM NM NM 8.4% 55.3% (4.5%)

A10 Networks US 837 7.72 (8.1%) (8.7%) (5.0%) 546 422 124 1.8x 1.8x 1.6x NM 35.0x 27.7x 4.5% 77.3% 5.0%

Metaps JP 246 26.68 (20.9%) (5.1%) (6.5%) 358 337 65 2.2x 2.7x 2.6x NM NM NM 37.7% NA 2.8%


Average 5.7x 5.3x 4.4x 21.7x 26.7x 24.2x 29.2% 74.7% 15.5%

Median 5.0x 5.0x 4.4x 19.6x 16.2x 18.7x 25.7% 76.9% 12.6%

39

Public Comps – IT Security



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

Cisco US 72,900 $38.30 25.7% 21.9% 2.2% $189,341 $153,678 $71,588 3.2x 3.2x 3.1x 10.6x 9.0x 9.2x (1.1%) NA 35.5%


Check Point Software IL 4,281 103.62 21.8% (5.4%) 1.5% 16,936 15,426 1,510 8.4x 8.3x 7.8x 16.9x 14.8x 14.0x 6.7% 88.7% 56.0%

Palo Alto Networks US 4,707 144.94 15.8% 7.6% 0.0% 13,318 12,346 1,503 6.6x 6.3x 5.2x NM 26.2x 20.1x 25.8% NA 23.9%


Verisign US 990 114.44 50.6% 22.4% (0.3%) 11,280 11,321 2,366 9.8x 9.7x 9.4x 15.1x 14.1x 13.1x 2.0% 83.5% 69.0%

Trend Micro JP 5,627 56.73 59.9% 8.4% 0.5% 7,800 6,543 1,257 5.0x 5.0x 4.6x 14.0x 14.9x 13.4x 15.9% 81.5% 33.5%

Fortinet US 4,903 43.69 44.2% 15.8% 5.4% 7,598 6,322 1,276 4.4x 4.3x 3.7x 37.3x 20.5x 17.0x 16.6% 75.2% 20.7%

Gemalto NL 15,000 59.44 3.1% (1.0%) 58.2% 5,343 6,352 272 1.8x 1.8x 1.7x 12.0x 11.9x 10.8x 8.8% 36.7% 14.9%


Verint US 5,000 41.85 18.4% 4.4% (4.0%) 2,669 3,133 319 2.8x 2.7x 2.6x 32.2x 12.3x 10.1x 7.5% 64.9% 22.3%

FireEye US 2,900 14.20 20.1% (8.3%) 2.7% 2,621 2,512 879 3.4x 3.4x 3.1x NM 28.7x 24.7x 4.0% 73.4% 11.8%


Qualys US 832 59.35 86.3% 46.2% 1.0% 2,251 1,948 303 8.8x 8.5x 7.3x 34.3x 23.0x 20.1x 16.1% 78.8% 36.8%

Cheetah Mobile CN 2,831 12.08 26.6% 10.7% (3.4%) 1,672 1,478 343 2.0x 2.0x 1.7x 21.2x 17.8x 12.4x 13.8% 64.5% 11.1%


Barracuda Networks US 1,490 27.50 28.4% 21.4% (0.3%) 1,474 1,268 178 3.4x 3.4x 3.2x 39.4x 19.4x 16.0x 7.0% NA 17.5%

CyberArk IL 823 41.39 (8.9%) (16.9%) (11.3%) 1,438 1,164 274 4.7x 4.5x 3.8x 39.6x 20.6x 16.4x 18.6% 86.1% 21.9%

Varonis Systems US 1,199 48.55 83.6% 32.7% (2.8%) 1,352 1,223 128 6.2x 5.8x 4.9x NM NM NM 28.0% 90.6% 3.7%

Imperva US 1,022 39.70 6.4% (17.5%) (2.3%) 1,350 1,007 343 3.3x 3.1x 2.7x NM 23.2x 18.1x 21.7% 80.9% 13.5%


F-Secure FI 1,060 4.67 27.6% 0.2% (0.1%) 732 635 96 3.2x 3.1x 2.8x 30.0x 28.6x 18.7x 23.0% NA 10.8%

Secureworks US 2,306 8.87 (16.1%) (4.3%) (9.7%) 719 619 100 1.3x 1.3x 1.2x NM NM NM 8.4% 55.3% (4.5%)

VASCO Data US 615 13.90 1.8% (0.4%) 4.5% 554 396 159 2.1x 2.1x 1.9x 38.0x 20.7x 18.5x (1.7%) 70.9% 10.1%

MobileIron US 854 3.90 2.6% (35.0%) 0.0% 375 292 82 1.7x 1.7x 1.6x NM NM NM 6.3% 84.9% (10.2%)

Zix US 201 4.38 (11.9%) (23.6%) (3.1%) 241 208 33 3.2x 3.2x 2.9x 14.4x 11.4x 9.5x 9.1% 81.2% 27.9%

Absolute Software CA 505 5.49 16.9% (9.5%) 2.3% 216 184 33 2.0x 2.0x 1.9x 15.5x 23.9x 17.4x 4.5% NA 8.3%

iPass US 163 0.52 (68.1%) (60.6%) (18.8%) 35 28 7 0.5x 0.5x 0.4x NM NM NM (13.9%) 17.5% (31.6%)

Average 4.7x 4.5x 3.9x 25.4x 25.3x 19.7x 16.0% 72.4% 15.9%

Median 3.7x 3.6x 3.2x 25.6x 20.6x 16.7x 14.8% 77.4% 13.2%

40

Public Comps – Marketing Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

SAP DE 87,874 $112.32 29.8% 8.9% (0.8%) $134,660 $135,356 $6,185 4.9x 4.8x 4.5x 19.5x 13.8x 13.4x 21.3% 72.5% 34.6%

Acxiom US 3,260 27.56 2.4% 6.0% 1.4% 2,185 2,246 170 2.5x 2.5x 2.3x 28.2x 13.1x 10.4x 2.3% NA 19.1%

Five9 US 840 24.88 75.0% 17.7% 2.3% 1,385 1,367 63 7.2x 6.9x 5.9x NM NM 63.6x 21.6% 60.2% 8.2%


SDL UK 3,310 5.93 12.6% (25.7%) (8.0%) 488 453 34 1.2x 1.2x 1.1x 11.1x 12.9x 10.3x 17.8% NA 9.1%




Average 2.8x 3.1x 2.8x 28.5x 21.7x 23.4x 10.4% 71.1% 13.6%

Median 2.2x 2.5x 2.3x 23.8x 14.9x 13.4x 8.5% 73.0% 9.1%

41

Public Comps – Storage



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins


Microsoft US 124,000 85.54 36.0% 24.9% 2.6% 659,906 615,246 133,611 6.6x 6.1x 5.6x 19.2x 15.4x 13.9x 16.1% NA 39.4%

Amazon US 341,400 1,169.47 52.8% 19.8% 0.7% 563,535 582,411 24,310 3.6x 3.3x 2.6x 45.0x 30.7x 22.7x 30.2% 36.7% 10.7%

Verizon US 160,100 52.93 (1.5%) 19.2% 6.1% 215,925 330,721 4,487 2.7x 2.6x 2.6x 7.5x 7.3x 7.2x (0.6%) 59.4% 36.2%

Oracle US 138,000 47.28 22.2% (5.8%) (2.6%) 195,720 185,248 71,580 4.8x 4.8x 4.6x 12.2x 10.3x 9.8x 4.7% NA 46.0%

IBM US 380,300 153.42 (7.9%) (0.5%) (0.1%) 142,035 176,292 11,515 2.3x 2.2x 2.2x 10.5x 9.2x 8.9x 0.5% 47.5% 24.5%


CenturyLink US 39,500 16.68 (30.6%) (31.0%) 14.7% 17,831 42,649 160 2.6x 2.4x 1.8x 7.2x 6.7x 4.8x 2.4% 54.5% 35.5%

NetApp US 10,100 55.32 55.0% 38.0% (1.6%) 14,759 11,925 5,972 2.1x 2.1x 2.0x 11.7x 9.2x 8.7x 5.6% NA 22.6%

Iron Mountain US 24,000 37.73 16.5% 10.4% (6.9%) 10,619 17,230 338 7.4x 4.5x 4.4x 13.8x 13.7x 12.7x 77.1% 56.1% 33.2%

Nutanix US 3,009 35.28 34.8% 77.0% 8.5% 5,660 5,294 366 6.2x 5.4x 4.4x NM NM NM 56.2% NA (11.8%)

Box US 1,726 21.12 52.1% 16.9% (3.7%) 2,875 2,787 173 5.8x 5.5x 4.5x NM NM NM 27.0% 75.1% (3.8%)

CommVault US 2,656 52.50 0.5% (7.3%) (2.7%) 2,425 1,930 495 2.9x 2.8x 2.5x NM 22.2x 17.4x 8.2% NA 12.6%

Barracuda Networks US 1,490 27.50 28.4% 21.4% (0.3%) 1,474 1,268 178 3.4x 3.4x 3.2x 39.4x 19.4x 16.0x 7.0% NA 17.5%

Carbonite US 830 25.10 48.1% 14.4% 4.6% 701 692 119 3.0x 2.8x 2.6x NM 14.6x 11.7x 18.7% 75.2% 19.2%


Average 4.3x 3.9x 3.4x 18.5x 15.8x 15.3x 18.9% 60.3% 21.2%

Median 3.5x 3.4x 2.9x 13.0x 14.4x 12.4x 12.2% 60.0% 21.9%

42




Key SaaS Metrics



1

2

3

4

5

6



43

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Software Market Report Overview

GP Bullhound has established a quarterly market

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

to provide quantitative insights into public and

private market valuations across the transaction

spectrum and qualitative insights into company

business models, technology and customer trends

The report examines the SaaS public company

landscape, M&A, private placement and IPO

trends

The software sector has disrupted technology and

many other industries over the last several

decades; first providing a global wave of on-

premise software to all industries in the 1980s and

1990s; then modernizing traditional businesses

through cloud-based platforms and enabling

growth in business-to-consumer technologies, from

mobile, to banking, to real estate, to consumer

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The shift of business applications to the cloud, de-

centralized IT operations and infrastructure

software have percolated through organizations

large and small creating a Software Eating the

World paradigm

JONATHAN CANTWELL

Director

45

GP Bullhound’s Selected Software Transactions

Sold to Sold to Private placement Sold to

Sold to

Sold toSold to

Private placement Private placement Sold toSold to

Sold toSold to Sold to

Sold to

Private placementPrivate placement

ECI Partners

Sold toSold toPrivate placement

46

Authors

PIERCE LEWIS-OAKES

[email protected]

ALEC DAFFERNER

[email protected]

OKAN INALTAY

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PER ROMAN

Managing [email protected]

MATT FINEGOLD

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JONATHAN CANTWELL

[email protected]

mailto:[email protected]






47

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London, SW1Y 6LX

United Kingdom

SAN FRANCISCOtel. +1 415 986 0191

One Maritime Plaza Suite 1620

San Francisco, CA 94111

USA

STOCKHOLMtel. +46 8 545 074 14

Grev Turegatan 30

Stockholm, 114 38

Sweden

BERLINtel. +49 30 610 80 600

Kleine Jaegerstr. 8

Berlin, 101 17

Germany

PARIStel. +33 1 82 88 43 40

45 rue de Lisbonne

75 008 Paris

France

MANCHESTERtel. +44 161 413 5030

1 New York Street

Manchester, M1 4HD

United Kingdom

HONG KONGtel. +852 5806 1310

Level 6, Champion Tower

3 Garden Road, Central

Hong Kong

MADRIDtel. +34 951 12 72 32

Paseo de Recoletos 6

28001 Madrid

Spain

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