Investor presentation

May 2016

2

Safe harbor statement

This presentation contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this presentation, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words ‘‘anticipate,’’ ‘‘believe,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘may,’’ ‘‘plan,’’ ‘‘predict,’’ ‘‘project,’’ ‘‘target,’’ ‘‘potential,’’ ‘‘would,’’ ‘‘could,’’ ‘‘should,’’ ‘‘continue,’’ and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make.

3

Historical Revenue

$54

$71

$97

$119

$26 $32

2012 2013 2014 2015 1Q15 1Q16

• Security and identity platform for

authentication, access management

and secure communications for

healthcare providers and patients

• 1,500+ global healthcare customers

• 200+ new healthcare customers

annually over the last four years

• 97%+ healthcare customer renewal

Imprivata snapshot

$ in mm

4

Investment highlights

1. Cybersecurity and clinician productivity are a priority in healthcare

2. Consistently adding new healthcare customers globally

3. Significant up-sell and cross-sell opportunities within our base

4. Large and expanding TAM of over $5B

5. Targeting EBITDA profitability by year end 2016

5

Security in healthcare is front page news

“How Identify Theft Sticks you with Medical Bills”

“Is Anyone Really 'HIPAA Compliant’

In Healthcare?”

“Why Hackers Want your

Healthcare Data”

“90% of hospitals and

clinics

lose their patients' data”

“Stolen health credentials can go

for … about 10 or 20 times the value

of a U.S. credit card number”

“Medical identity theft: How the

healthcare Industry is failing

us”

“The Need to Secure E-Prescriptions”

6

November 2015 J.P. Morgan report on hospital spending identifies access and security as spending priorities.

Hospital spending priorities

7

Why is patient information so difficult to secure?

CIO says: Protection and security of patient information is non-negotiable

– Patient information is more valuable, vulnerable and under attack

– HIPAA penalties have averaged $1.1M per organization since the 2009 Enforcement Rule was passed

– Potential criminal penalty: 10 years in prison in addition to a $250,000 fine

Doctors say: My job is to save lives… I am not responsible for security

– Security policies are viewed as slowing down access to systems

– Willingness to help equates to willingness to give out password

– Differentiating malware from legit dialogs takes time and technical skills

Lack of delineation between public and private space

– No personal ownership for shared workstations

– Open workstations left unattended

8

Username and

passwords are used

for everything: logging

into an application,

CPOE, witness signing

Care providers enter

usernames and

passwords up to 70x a

day

PROBLEM IMPRIVATA ONESIGN

Replaces usernames

and passwords with

strong authentication –

finger biometric,

proximity badge, etc.

Streamlines workflows

to save up to 45

minutes per shift

Fast, secure access to patient information from wherever and whenever it’s needed

Imprivata OneSign

Authentication Management

Single Sign-on

Virtual DesktopAccess

9

IMPRIVATA21%

CARADIGM9%

IBM3%

MICROSOFT3%

CITRIX2%NOVELL

2%

SYMANTEC2%

HEALTHCAST1%

OTHER7%

NO SOLUTION

50%

• “Best in KLAS” in SSO

• Large greenfield opportunity

• High barriers to entry

– $50mm+ of R&D investment

– Covered by 15 patents

• Record number of displacements in 2015

• Business model

– Per user perpetual license

– Annual recurring maintenance

– Services for workflow optimization

– Devices for authentication at access points

• Global TAM of $3B

Imprivata OneSign

U.S. Acute Care Facility SSO Penetration

HIMSS Analytics data as of March 2016

10

Passwords alone provide

just the bare minimum of

security

81% of surveyed hospitals

reported being hacked in

last 2 years

Traditional enterprise

authentication not suitable

for hospital workflows

PROBLEM IMPRIVATA CONFIRM ID

Centralizes identity and two-

factor authentication across all

workflows inside and outside

the hospital

Makes security invisible by

replacing passwords with

innovative and convenient

authentication methods

Increases e-prescribing rates

by 85%; Decreases risk of

hacking by up to 65%

Comprehensive identity and multi-factor authentication platform for healthcare

Imprivata Confirm ID

Strong Authentication Management

Fingerprint Biometrics

Hands-Free Authentication

Soft Tokens

11

• Launched February 2015 with EPCS

• 60 customers in first year, 38 OneSign customers

• Business model

– Subscription or perpetual with maintenance

– Specialized biometric device and token for strong authentication

– Services for supervised enrollment and prescriber workflow

• Expanding product offering in 2016, to deliver a single, robust solution for secure, multi-factor authentication across healthcare workflows

Imprivata Confirm ID

12

Care providers use

insecure texting as a

fast, easy form of

communication in

delivery of care

Many hospitals still

rely on outdated pager

technology

PROBLEM IMPRIVATA CORTEXT

Enterprise security for

communicating:

- Provider to Provider

- Provider to Patient

Integration with EMR and

Critical Alerts

88% decrease in response

time from 2 hours to 15

minutes

Secure communication and messaging platform

Imprivata Cortext

13

• “Best in KLAS” in Secure Messaging

• 247 customers as of 12/31/15, up from 90 in 2014

– 90 customers had both OneSign and Cortext

• Business model

– Subscription, cloud offering

– Priced per user per month

• Imprivata OneSign integration

Imprivata Cortext

Multi device support

14

Positive patient identification using palm vein biometric technology

Imprivata PatientSecure

7-10% of patients are

misidentified when

their medical record is

being accessed

Fraud / identity theft

growing

at 22%

Joint Commission #1

National Patient Safety

Goal: Identity Patients

Correctly

PROBLEM IMPRIVATA PATIENTSECURE

Creates a 1:1 link between

a patient and multiple EMR

records

Helps improve patient

safety, reduce insurance

fraud, and decrease

operational costs

Reduce duplicate medical

records to 0.11%; 80x

better than national

average

15

• Acquired HT Systems in April 2015

– 60 customers, 25 common customers

– 22 employees, 3 in sales

– Generated over $6 million in revenue in 2014

• Business Model

– Per patient ID perpetual license

– Palm vein biometric devices for enrollment and authentication

– Services for implementation

– Annual recurring maintenance

• Estimated TAM $2 billion

Imprivata PatientSecure

# of patients in database

# of times 2+ patients share the same

last and first names

# of times when 2+ patients share the

same last and first names, and DOB

# of Maria Garcia’s with

the same DOB

Case study:

16

Platform cross-selling opportunity

4Q14 1Q15 2Q15 3Q15 4Q15 1Q16

North American Healthcare Customers

Multi-Product Customers Single Product Customers

17

Partner ecosystem around authentication and access management platform

EMR & strategic

resellers

Integrated

clinical workflow

authentication

Virtual desktop

infrastructure

Clinical access

endpoint

partnerships

18

1,500+ healthcare customers globally

IDN

Academic

Community

Clinics / Specialties

International

Financial overview

20

$0

$20

$40

$60

$80

$100

$120

$140

2012 2013 2014 2015 1Q15 1Q16

Delivering strong revenue growth

Revenue

$54

$71

$97

$ in mm

$25.6 $31.544%

45%

55%

46%

54%

50%

50%

49%

51%56%

$119

45%

55%

PRODUCT

Perpetual Licenses

Subscriptions

Devices

MAINTENANCE AND SERVICES

Software Maintenance

Technical Support

Professional Services

Deployment and Training

21

• Stable recurring maintenance revenue with 97% healthcare retention rates

• 200+ new healthcare customers

annually over the last four years

• Expanding within existing customer footprint

• No single end user customer >4% in last 3 years

• 21% of revenue from outside US

High quality of revenues

Sales to

new

customers

Sales to

existing

customers

Software

maintenance

renewals and

Professional

Services

$ in mm

32% 32%36%

35%33%

38%

38%

43%

35%

30%

26%

22%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2012 2013 2014 2015

22

Selected customers follow-on purchases

1,300 Bed

Hospital System 2012 2013 2014 2015 2016

Spend (inthousands)

$226 $566 $90 $100 $375

Cumulative Total $226 $793 $883 $984 $1,359

OneSign

purchase✓ ✓

Maintenance ✓ ✓ ✓ ✓ ✓

New Product ✓

325 Bed Hospital 2013 2014 2015 2016

Spend (in

thousands)$256 $321 $387 $452

Cumulative Total $256 $321 $488 $864

OneSign

purchase✓ ✓ ✓ ✓

Maintenance ✓ ✓ ✓ ✓

New Product ✓

100 Bed Hospital 2012 2013 2014 2015 2016

Spend (inthousands) $39 $23 $24 $45 $21

Cumulative Total $39 $63 $88 $133 $155

OneSign

purchase✓ ✓ ✓ ✓ ✓

Maintenance ✓ ✓ ✓ ✓ ✓

New Product ✓✓ ✓

23

• Backlog includes deferred revenue and committed customer purchases

• 1Q16 backlog grew 28% over 1Q15

• 88% of 4Q15 backlog will be recognized as revenue in 2016

Improving visibility through growing backlog

0

10

20

30

40

50

60Backlog

24

Attractive Long-Term Operating Model

FY

2012

FY

2013

FY

2014

FY

2015

Q1

2015

Q1

2016

FY 2016

Guidance

Target

Model

Gross Margin75.2% 73.5% 69.1% 68.1% 67.4% 68.4% Up 70%+

S&M as % of

Revenue1 41.6% 42.9% 46.4% 44.0% 46.9% 45.1% 30%

R&D as % of

Revenue1 22.8% 27.6% 26.6% 26.5% 26.8% 27.6%15-

18%

G&A as % of

Revenue1 8.4% 10.7% 12.4% 15.7% 17.9% 17.2% 10%

Adjusted

EBTIDA

Margin

4.3% (4.7%) (11.9%) (10.4%) (17.6%) (14.2%) (8%)-(6%) 20%+

1Includes Depreciation and Amortization and Stock Based Compensation.

Appendix

26

GAAP Net Loss to Adjusted EBITDA

($’000) 2012 2013 2014 2015 Q1 2015 Q1 2016

GAAP net loss $1,048 $(5,523) $(16,736) $(23,067) $(6,699) $(6,674)

Income tax expense 109 108 169 838 37 140

Depreciation and

amortization1,082 2,397 3,075 3,761 780 981

Other (expense)

income, net90 (109) 722 567 478 (242)

Stock-based

compensation450 640 1,612 4,155 701 1357

Change in fair value of

contingent liability(431) (877) (376) 197 21 (101)

Shareholder litigation

costs- - - - - 33

Acquisition costs - - - 709 163 -

Shelf registration and

offering costs- - - 490 - -

Adjusted EBITDA $2,348 $(3,364) $(11,534) $(12,350) $(4,519) $(4,506)