powerpoint presentation · very sticky with long project terms and a low appetite to change...

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Global Software Market PerspectivesQ3 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

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 GOMEZCo-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 SaaS Metrics



1

2

3

4

5

6



10

Announce

DateIssuer Selected Investors Issuer Description

Capital

Raised ($)

Sep 13 Bizagi InvusProcess automation

software48

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

management40

Sep 5Gather

Technologies

Ludlow Ventures, Storm

Ventures, Vista Equity

Event management

software55

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

governance80

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

platform50

Aug 3 Databricks

A Capital Partners,

Andreessen Horowitz, Battery

Ventures, Geodisic Capital,

NEA, Green Bay Ventures

Cloud based big data

processing140

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

DateTarget Buyer Target Description Value ($)

Implied

EV/LTM Rev

Sep 28 Exa Corporation Dassault Systemes Simulation software 382 5.3x

Sep 24 Gigya SAPCustomer identity

management software350 -

Sep 19 CarteGraph PamlicoManagement software for

government agencies- -

Sep 7HPE (software

division)

Micro Focus

International

Horizontal software business

across several categories8,315 2.6x

Sep 6 Newgistics Pitney Bowes E-commerce and logistics 475 1.0x

Aug 30HighJump

SoftwareKorber

Supply chain execution

software750 3.8x

Aug 15 MacroPoint Descartes SystemsGlobal freight visibility

software107 8.6x

Aug 14 Huddle Turn/River CapitalCloud based collaboration

software88 -

Aug 14 ZoomInfo Great Hill Partners B2B subscription data 240 6.0x

Aug 8 proAlpha GroupIntermediate

Capital Group

ERP software tailored to

manufacturing companies354 4.5x

Aug 8 EtQ TCVCompliance management

software130 -

Aug 3 Active Network Global PaymentsCloud based community

sports management1,200 -

Aug 1 Nanorep LogMeInCustomer service

management platform50 -

Jul 26Guidance

Software

Open Text

Corporation

Endpoint cybersecurity

solutions245 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 services1,375 -

Jul 10 Innoetics Samsung Cloud based text to speech 50 -

Jul 6 SyncsortCenterbridge

PartnersBig 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 TrendsM&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 SaaS Metrics



1

2

3

4

5

6



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 ValuationsRevenue Multiple Trends – Last Five Years


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 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

VEEV

BL

TEAM

PAYC

NOW

WDAYWIX

QTWO

APPF

PFPT

SQ

SPLK

ZEN

TWLO

HUBSULTI

MDSO

MB

CRM

PCTYNEWR

TLND

MIME

QLYS EVBGCALD

FIVN

CSOD

EGHT

RP

RNG

INST

BOX

SPSC

ATHNBNFT

BSFT

WK

VIT B

AMBRCSLT

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 U

nle

ve

red

FC

F M

arg

in

16

CRM

WDAY

NOW

SPLK

VEEV

SQULTI

ATHN

MDSO

PAYC

PFPTWIX

RP

RNG

HUBS

ZEN

BOX

PCTY NEWR

XRO

TWLO

CSOD

BL

QTWO

QLYS

MIME

CALDMB

EGHT

FIVN

BSFT

YEXT

AYX

SPSC

TLND

BNFT

APPF

SCWX

WK

INST

EVBG

APTI

LPSN

CARB

CSLT

MOBL

UPLD

BV

ECOMVIT 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

17

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%

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 5.9xEV/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





Revenue (LTM December 31 2016): $85.8m

EV/Revenue1: 7.6x

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: 7.3x

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/Revenue: 10.2x

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/Revenue: 9.4x

Selected Metrics:



– 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






EV/Revenue: 6.1x

Selected Metrics:


– $ 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


Offering:

– 8,000,000 Shares

– Price per share: $24

– Market Cap: $1.2bn

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

File date: 10/02/17


$166.8m

Offering:

– 4,800,000 Shares

– Price per share: $20-$22

– Market Cap: $733m-$806m

Selected Metrics:


– Average ACV: $200K+

– Average expansion multiple of top 20

end-customers: 4.5x

Coming SoonListed 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 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 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%)



Share

Price

Market


CY

Revenue

Growth



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%)



Share

Price

Market


CY

Revenue

Growth



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%


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%


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%


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%


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%)



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

23

GP Bullhound SaaS Index Performance

L1M L3M

L6M L12M



80,0%

85,0%

90,0%

95,0%

100,0%

105,0%

110,0%

115,0%

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

Ind

ex

Va

lue

GPB 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

Ind

ex

Va

lue


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

Ind

ex

Va

lue


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

Ind

ex

Va

lue


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

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%



j2 Global 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%

Square US 1,853 28.81 147.5% 67.3% 15.1% 11,054 10,484 920 5.5x 4.9x 3.9x NM NM 44.5x 25.2% 86.2% 6.2%



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%


Ultimate Software US 3,747 189.60 (7.7%) (2.8%) (4.3%) 5,655 5,554 111 6.5x 5.9x 4.9x NM 26.3x 20.8x 19.8% 64.4% 22.6%

athenahealth US 5,305 124.36 0.2% 11.8% (9.9%) 4,966 5,174 71 4.5x 4.2x 3.7x 40.5x 19.3x 16.7x 13.2% 55.9% 21.9%

Medidata Solutions US 1,424 78.06 42.4% 36.7% 7.0% 4,567 4,470 367 8.8x 8.1x 6.8x 58.2x 32.8x 26.5x 19.5% 78.7% 24.6%

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%


RealPage US 5,000 39.90 56.0% 15.3% (2.9%) 3,298 3,369 325 5.5x 5.0x 4.2x 36.9x NA NA 18.2% 63.6% 0.0%

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%


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% 80.5% 4.9%



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% 80.8% 3.7%





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%)


Cornerstone OnDemand US 1,933 40.61 (12.4%) 3.1% 15.5% 2,338 2,272 310 5.1x 4.7x 4.1x NM 35.3x 25.0x 13.7% 72.6% 13.4%


Qualys US 772 51.80 38.1% 40.2% 12.1% 1,944 1,665 279 7.9x 7.3x 6.3x 31.8x 22.1x 18.9x 15.0% 78.5% 33.1%

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%)



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%)

Callidus Software US 1,180 24.65 37.2% 20.2% 1.4% 1,667 1,495 172 6.6x 6.1x 5.1x NM 48.0x 33.6x 19.4% 65.1% 12.6%

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%


BroadSoft US 1,720 50.30 7.9% 23.9% 16.8% 1,560 1,400 368 3.9x 3.7x 3.2x 57.7x 16.1x 13.5x 12.0% 77.1% 22.8%

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%

Public Comps – GP Bullhound SaaS Index



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

29

8x8 US 1,019 $13.50 (11.2%) (11.8%) 2.3% $1,240 $1,062 $178 4.0x 3.8x 3.2x NM 52.3x 42.9x 15.9% NA 7.2%


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%



Benefitfocus US 1,430 33.65 (15.1%) 21.7% 13.1% 1,049 1,102 59 4.4x 4.3x 3.8x NM 68.5x 40.4x 10.0% 53.0% 6.3%

SecureWorks US 2,306 12.35 (1.7%) 19.6% 19.3% 1,001 903 98 2.0x 1.9x 1.8x NM NM NM 8.2% 54.9% (4.9%)

SPS Commerce US 1,217 56.71 (23.0%) (1.0%) (7.4%) 977 818 159 4.0x 3.7x 3.2x 35.7x 25.5x 20.8x 14.3% 67.4% 14.5%


Workiva US 1,195 20.85 15.0% 32.0% 4.8% 872 820 73 4.3x 4.0x 3.5x NM NM NM 15.0% 72.3% (10.5%)

LivePerson US 951 13.55 60.9% 95.0% 2.3% 798 744 54 3.4x 3.5x 3.2x NM 36.6x 29.9x (3.4%) 73.0% 9.4%



Apptio US 756 18.47 (14.5%) 57.3% 4.6% 738 614 124 3.5x 3.4x 2.9x NM NM NM 13.6% 68.6% (4.6%)

Carbonite US 830 22.00 48.8% 12.8% 13.1% 612 595 125 2.7x 2.4x 2.2x NM 12.5x 9.8x 17.8% 74.7% 19.5%

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% 68.0% (19.7%)


Bazaarvoice US 763 4.95 (14.4%) 13.8% 6.5% 417 360 85 1.8x 1.8x 1.7x NM 17.9x 13.7x 1.7% NA 9.8%

MobileIron US 854 3.70 36.0% (16.9%) (3.9%) 348 259 89 1.5x 1.4x 1.3x NM NM NM 9.8% 84.1% (7.4%)

ChannelAdvisor US 697 11.50 (6.5%) 4.5% 9.0% 304 247 58 2.1x 2.0x 1.8x NM 38.8x 25.9x 9.5% 77.8% 5.1%

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%

Brightcove US 513 7.20 (44.1%) (16.3%) 1.4% 247 220 28 1.4x 1.4x 1.3x NM NM 35.4x 1.9% 61.0% (5.2%)

Amber Road US 677 7.68 (19.1%) (0.1%) (1.0%) 209 221 11 2.9x 2.8x 2.5x NM NM NM 9.5% 51.7% (2.3%)

Marin Software US 437 12.25 (27.7%) (5.4%) 59.1% 69 40 33 0.5x NA NA NM NA NA NA NA NA

Average 7.2x 6.4x 5.1x 41.8x 36.9x 31.7x 31.0% 71.0% 5.8%

Median 7.3x 6.3x 5.1x 41.9x 35.5x 28.7x 28.8% 72.6% 6.2%

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



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

30




Key SaaS Metrics



1

2

3

4

5

6



31

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%

Oracle US 138,000 48.35 23.6% 8.6% (2.2%) 201,788 188,589 66,897 4.9x 4.8x 4.7x 12.7x 10.5x 9.8x 4.7% NA 46.1%

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%


IBM US 380,300 145.08 (8.2%) (16.6%) 1.4% 135,206 168,710 12,297 2.2x 2.2x 2.2x 9.8x 9.2x 9.0x (0.4%) 47.7% 23.6%

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%

Hewlett Packard US 195,000 14.71 (35.8%) (37.9%) (17.9%) 23,822 32,699 7,757 0.7x 1.0x 1.1x 4.7x 5.6x 8.1x (32.3%) NA 17.6%

Average 3.5x 3.4x 3.3x 11.6x 9.6x 9.6x 1.7% 61.0% 33.9%

Median 3.0x 3.0x 2.9x 9.8x 9.2x 9.0x 3.3% 63.0% 36.1%

Public Comps – Large-Cap Consolidator



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

32

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%

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%


Teradata US 10,093 33.79 12.2% 8.9% 9.1% 4,423 3,891 1,085 1.8x 1.8x 1.9x 15.6x 10.8x 10.7x (9.3%) 51.4% 17.1%

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%

Criteo FR 2,690 41.50 18.5% (16.6%) (10.6%) 2,710 2,424 308 1.2x 2.6x 2.1x 13.0x 8.2x 6.5x (47.2%) 87.2% 31.2%

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%



TechTarget US 659 11.94 49.3% 31.2% 23.2% 327 331 33 3.2x 3.0x 2.6x 36.2x 14.7x 11.7x 4.4% 73.3% 20.2%


Average 5.3x 4.9x 4.1x 25.1x 23.1x 17.6x 12.0% 73.8% 21.3%

Median 5.8x 5.3x 4.5x 24.1x 20.5x 16.4x 19.4% 77.0% 20.2%

Public Comps – Advertising Technology



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

33


IBM US 380,300 145.08 (8.2%) (16.6%) 1.4% 135,206 168,710 12,297 2.2x 2.2x 2.2x 9.8x 9.2x 9.0x (0.4%) 47.7% 23.6%

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%

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%

NetApp US 10,100 43.76 26.0% 5.2% 15.1% 11,805 8,996 5,327 1.6x 1.6x 1.6x 9.5x 7.2x 6.6x 3.8% NA 22.3%


Tableau Software US 3,223 74.89 36.8% 53.4% 4.7% 5,923 4,931 993 5.7x 5.6x 5.1x NM 71.9x 57.6x 6.7% 88.3% 7.8%

Teradata US 10,093 33.79 12.2% 8.9% 9.1% 4,423 3,891 1,085 1.8x 1.8x 1.9x 15.6x 10.8x 10.7x (9.3%) 51.4% 17.1%

Fair Isaac US 3,257 140.50 12.2% 9.6% 1.4% 4,304 4,785 131 5.2x 5.1x 4.7x 23.7x 19.8x 17.5x 4.7% NA 25.6%

Blackbaud US 3,156 87.80 33.1% 15.4% 6.0% 4,123 4,493 18 5.9x 5.7x 5.2x 34.1x 23.4x 21.4x 7.6% 58.0% 24.4%


Verint US 5,000 41.85 11.5% (3.8%) 7.3% 2,667 3,074 374 2.8x 2.7x 2.5x 31.5x 11.9x 10.6x 7.4% 65.2% 22.6%

Inovalon US 2,181 17.05 18.2% 36.4% 28.2% 2,486 2,206 532 5.3x 4.9x 4.5x 32.8x 20.1x 17.6x 5.5% 65.9% 24.3%


MicroStrategy US 2,184 127.71 (22.9%) (32.0%) 0.8% 1,462 830 632 1.6x 1.6x 1.6x 7.6x 9.6x 12.8x (1.7%) 80.9% 17.2%





SAS AB SE 10,404 3.20 63.0% 99.5% 37.0% 1,056 1,081 1,065 0.2x 0.2x 0.2x 2.2x 2.5x 2.5x 15.3% NA 8.2%




SDL UK 3,310 6.44 6.0% (4.1%) 10.5% 529 494 34 1.3x 1.3x 1.2x 12.1x 13.6x 10.5x 17.5% 52.1% 9.5%


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%

iSentia AU 1,300 1.40 (53.0%) 21.5% 4.9% 279 320 10 2.7x 2.6x 2.5x 14.2x 10.1x 8.7x 6.9% NA 25.6%

Datawatch US 146 11.55 56.1% 40.0% 19.1% 141 111 29 3.2x 3.0x NA NM NM NA 15.7% NA (0.9%)

Attunity IL 247 6.71 (2.9%) (15.2%) 5.0% 114 104 10 1.9x 1.7x 1.4x NM 19.2x 16.4x 13.0% 84.6% 8.8%

Mattersight US 265 2.80 (30.5%) (20.0%) 24.4% 92 114 7 2.8x 2.5x 2.2x NM NM NM 17.6% 69.6% (9.4%)


Hottolink JP 88 5.20 7.4% 15.9% (9.5%) 66 72 10 3.6x NA NA 8.6x NA NA NA NA NA

Expert System IT 233 1.79 (14.6%) (7.9%) (11.4%) 50 58 15 1.8x 1.7x 1.4x NM 15.2x 7.5x 14.4% NA 10.8%

Average 4.3x 4.1x 3.5x 18.0x 20.4x 18.8x 17.2% 70.9% 9.1%

Median 3.6x 3.5x 3.3x 15.6x 14.4x 12.9x 15.0% 72.2% 9.5%

Public Comps – Business Intelligence/Analytics



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

34

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%


Citrix US 9,600 76.82 (9.6%) (8.1%) 0.5% 11,639 11,680 1,356 3.4x 4.1x 4.0x 11.8x 12.4x 11.7x (17.5%) 86.7% 33.4%


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%

Nuance US 13,200 15.72 9.3% (7.6%) 0.3% 4,537 6,268 869 3.2x 3.2x 3.1x 15.4x 11.4x 10.1x (0.1%) NA 28.2%




Broadsoft US 1,720 50.30 7.9% 23.9% 16.8% 1,560 1,400 368 3.9x 3.7x 3.2x 57.7x 16.1x 13.5x 12.0% 77.1% 22.8%

8x8 US 1,019 13.50 (11.2%) (11.8%) 2.3% 1,240 1,062 178 4.0x 3.8x 3.2x NM 52.3x 42.9x 15.9% NA 7.2%





Cybozu JP 516 4.52 (10.5%) 8.8% (1.8%) 207 195 15 2.5x NA NA 16.9x NA NA NA NA NA

V-cube JP 500 5.66 (33.8%) 0.1% 5.2% 119 154 16 2.5x NA NA 23.1x NA NA NA NA NA

Average 4.7x 4.4x 3.8x 19.9x 19.7x 20.1x 25.2% 68.8% 20.4%

Median 3.9x 3.8x 3.4x 16.9x 13.6x 12.7x 30.6% 72.3% 24.7%

Public Comps – Communication



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

35

Oracle US 138,000 $48.35 23.6% 8.6% (2.2%) $201,788 $188,589 $66,897 4.9x 4.8x 4.7x 12.7x 10.5x 9.8x 4.7% NA 46.1%

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%



Constellation Software CA 12,124 544.64 20.3% 11.3% (0.2%) 11,542 11,469 430 5.1x 4.7x 4.2x 25.2x 18.0x 15.8x 13.9% 66.3% 26.2%

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%

Sage Group UK 13,761 9.37 (1.8%) 19.3% 5.3% 10,110 10,563 387 4.9x 4.6x 4.2x 17.1x 15.9x 14.1x 12.5% NA 29.0%

Tyler Technologies US 3,972 174.32 2.7% 12.5% 3.1% 6,503 6,423 80 8.1x 7.6x 6.9x 36.6x 25.6x 22.3x 11.8% 50.8% 29.7%

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%

Yonyou Networks 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%

Medidata Solutions US 1,424 78.06 42.4% 36.7% 7.0% 4,567 4,470 367 8.8x 8.1x 6.8x 58.2x 32.8x 26.5x 19.5% 78.7% 24.6%

Prosegur 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%

Blackbaud US 3,156 87.80 33.1% 15.4% 6.0% 4,123 4,493 18 5.9x 5.7x 5.2x 34.1x 23.4x 21.4x 7.6% 58.0% 24.4%


RealPage US 5,000 39.90 56.0% 15.3% (2.9%) 3,298 3,369 325 5.5x 5.0x 4.2x 36.9x NA NA 18.2% 63.1% NA



Aveva Group UK 1,707 32.65 24.5% 34.0% 34.3% 2,088 1,913 164 7.1x 6.4x 6.2x 29.3x 23.8x 22.0x 14.6% NA 27.0%




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%

Technology One AU 846 3.94 (13.6%) 1.0% 0.9% 1,242 1,197 44 6.0x 5.2x 4.6x 27.1x 22.4x 19.3x 23.8% NA 23.3%

Enghouse CA 1,528 41.37 2.6% (3.1%) 4.3% 1,115 1,035 83 4.0x 3.9x 3.6x 15.5x 14.4x 12.9x 10.5% NA 27.1%

SPS Commerce US 1,217 56.71 (23.0%) (1.0%) (7.4%) 977 818 159 4.0x 3.7x 3.2x 35.7x 25.5x 20.8x 14.3% 67.4% 14.5%



BasWare FI 1,838 47.28 5.7% 28.8% (4.1%) 679 698 27 4.1x 3.9x 3.6x NM NM 48.7x 14.7% 89.7% 0.5%

QAD US 1,830 34.35 54.2% 24.9% 4.9% 640 505 149 1.7x 1.7x 1.6x 47.2x 32.9x 26.7x 6.2% 51.3% 5.2%

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%)


American Software US 378 11.36 5.0% 11.6% 4.3% 338 254 84 2.4x 2.4x 2.2x 20.5x 12.3x 11.6x (1.1%) NA 19.2%

ServiceSource US 3,145 3.46 (28.1%) (8.2%) (6.5%) 309 269 179 1.1x 1.1x 1.1x NM 16.6x 9.9x (5.2%) 37.1% 6.8%


Amber Road US 677 7.68 (19.1%) (0.1%) (1.0%) 209 221 11 2.9x 2.8x 2.5x NM NM NM 9.5% 51.7% (2.3%)

Freelancer AU 390 0.36 (69.1%) (46.5%) 0.6% 166 138 27 3.4x 3.2x 2.8x NM NM 56.9x 12.9% 86.0% 1.2%

Average 6.4x 5.6x 4.7x 27.6x 25.7x 27.2x 0.2x 0.7x 0.1x

Median 5.3x 4.9x 4.5x 26.2x 23.6x 22.3x 19.4% 68.1% 14.5%

Public Comps – ERP & Enterprise Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

36

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%

Fidelity National US 53,000 93.39 21.5% 16.7% 1.6% 31,044 40,084 786 4.3x 4.4x 4.3x 16.0x 13.0x 12.5x (0.9%) 38.3% 33.6%

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%

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%

SS&C 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%

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%

Temenos CH 4,600 101.96 60.6% 27.8% 6.2% 7,156 7,452 253 11.2x 10.5x 9.4x 41.6x 30.2x 25.7x 12.4% 81.2% 34.6%

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%

Fair Isaac US 3,257 140.50 12.2% 9.6% 1.4% 4,304 4,785 131 5.2x 5.1x 4.7x 23.7x 19.8x 17.5x 4.7% NA 25.6%

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%

Ellie Mae US 1,195 82.13 (20.6%) (17.4%) (0.1%) 2,824 2,490 334 6.3x 6.2x 5.1x 30.5x 21.1x 16.4x 12.2% 62.3% 29.2%

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%

Envestnet US 3,197 51.00 40.8% 60.9% 19.6% 2,245 2,477 28 3.9x 3.7x 3.2x 43.7x 19.4x 15.7x 16.4% 68.2% 18.9%

Ebix US 2,988 65.25 16.7% 7.2% 14.7% 2,052 2,338 81 7.3x 6.7x 5.9x 20.4x 19.4x 16.6x 16.9% 66.7% 34.6%


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%

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% 27.8% 28.2%

Bottomline Technologies US 1,600 31.83 36.7% 34.8% 7.3% 1,286 1,343 127 3.9x 3.7x 3.5x 44.6x 16.6x 15.0x 7.2% NA 22.4%

Fidessa UK 1,727 30.13 (2.9%) (4.9%) 14.1% 1,160 1,064 92 2.3x 2.3x 2.2x 12.8x 8.9x 9.2x 15.1% NA 25.5%

Asseco PL 22,364 12.70 (11.7%) (5.5%) 1.1% 1,054 2,000 307 0.9x 1.1x 2.0x 7.3x 8.4x 11.9x (2.9%) NA 13.0%


Average 5.9x 5.5x 5.1x 23.5x 16.7x 15.0x 12.2% 61.7% 29.8%

Median 6.0x 5.5x 5.1x 20.0x 16.6x 14.9x 12.2% 62.3% 33.6%

Public Comps – Financial Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

37

ADP US 58,000 $109.32 25.4% 7.0% 4.0% $48,584 $47,803 $2,784 4.0x 3.8x 3.6x 17.6x 18.4x 16.5x 8.6% NA 20.5%



Ultimate Software US 3,747 189.60 (7.7%) (2.8%) (4.3%) 5,655 5,554 111 6.5x 5.9x 4.9x NM 26.3x 20.8x 19.8% 64.3% 22.6%

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%


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%

Cornerstone OnDemand US 1,933 40.61 (12.4%) 3.1% 15.5% 2,338 2,272 310 5.1x 4.7x 4.1x NM 35.3x 25.0x 13.7% 72.6% 13.4%

TriNet US 2,700 33.62 60.0% 18.6% (5.5%) 2,333 2,540 234 0.8x 0.8x 0.7x 12.4x 11.6x 11.0x 7.8% 72.4% 6.6%


Benefitfocus US 1,430 33.65 (15.1%) 21.7% 13.1% 1,049 1,102 59 4.4x 4.3x 3.8x NM 68.5x 40.4x 10.0% 53.0% 6.3%



Solium CA 594 8.24 46.2% 46.6% 0.7% 419 349 67 4.3x 4.0x 3.4x 27.6x 32.3x 23.1x 13.9% NA 12.3%

Freelancer AU 390 0.36 (69.1%) (46.5%) 0.6% 166 138 27 3.4x 3.2x 2.8x NM NM 56.9x 12.9% 86.0% 1.2%

Average 6.3x 5.7x 4.7x 31.6x 34.8x 27.6x 22.7% 70.9% 14.8%

Median 5.5x 4.8x 4.3x 25.3x 35.3x 26.6x 19.8% 72.3% 15.2%

Public Comps – Human Capital Management



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

38

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%



Red Hat US 10,500 110.86 38.3% 27.8% 5.1% 19,673 18,771 1,659 7.1x 6.8x 5.9x 38.3x 25.1x 21.3x 18.8% NA 27.1%


Citrix US 9,600 76.82 (9.6%) (8.1%) 0.5% 11,639 11,680 1,356 3.4x 4.1x 4.0x 11.8x 12.4x 11.7x (17.5%) 86.7% 33.4%

Juniper Networks US 9,832 27.83 17.4% 0.7% 1.5% 10,584 9,574 3,145 1.8x 1.8x 1.8x 7.9x 6.5x 6.2x 5.1% 62.2% 28.0%


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%


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%

Trend Micro JP 5,627 49.20 40.9% 11.4% 6.7% 6,764 5,577 1,190 4.4x 4.3x 4.0x 12.8x 12.8x 11.5x 15.2% 80.9% 33.4%


Brocade US 5,960 11.95 30.6% (3.9%) (3.2%) 4,945 5,302 1,179 2.3x 2.3x 2.1x 15.0x 9.7x NA (0.3%) NA 23.2%


Software AG DE 4,570 48.82 16.0% 24.2% 13.7% 3,611 3,593 370 3.6x 3.4x 3.3x 12.2x 11.0x 10.5x 15.1% 76.5% 31.0%

Nutanix US 2,813 22.39 NA 19.3% 0.9% 3,469 3,120 349 4.1x 3.2x 2.3x NM NM NM 60.1% NA (14.6%)

Sophos UK 3,293 7.37 111.1% 114.6% 14.0% 3,418 3,716 68 7.0x 6.6x 5.5x NM 65.7x 50.2x 9.6% NA 10.0%

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%

FireEye US 2,900 16.77 15.7% 31.4% 15.5% 3,055 2,945 871 4.0x 4.0x 3.7x NM 37.0x 33.7x 3.9% 73.5% 10.7%

NetScout Systems US 3,129 32.35 11.6% (14.8%) (0.8%) 2,897 2,796 400 2.5x 2.4x 2.3x 13.9x 10.2x 8.1x 1.5% NA 24.0%

Commvault US 2,656 60.80 15.8% 22.3% 1.7% 2,767 2,286 481 3.4x 3.3x 3.0x NM 24.2x 18.5x 8.8% NA 13.6%



Alarm.com US 788 45.18 59.8% 48.9% (0.2%) 2,110 2,114 69 7.1x 6.4x 5.6x 44.8x 31.6x 24.9x 25.8% 66.8% 20.4%

Qualys US 772 51.80 38.1% 40.2% 12.1% 1,944 1,665 279 7.9x 7.3x 6.3x 31.8x 22.1x 18.9x 15.0% 78.5% 33.1%

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%


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%



SecureWorks US 2,306 12.35 (1.7%) 19.6% 19.3% 1,001 903 98 2.0x 1.9x 1.8x NM NM NM 8.2% 54.9% (4.9%)


A10 Networks US 837 7.56 (28.0%) (15.6%) 17.9% 535 403 132 1.7x 1.7x 1.6x NM NM 38.3x 2.7% 76.8% 1.7%

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%


Average 5.5x 4.8x 4.0x 23.0x 27.5x 23.7x 27.6% 74.5% 16.3%

Median 4.4x 4.3x 3.8x 17.5x 15.2x 18.7x 21.9% 76.6% 17.0%

Public Comps – Infrastructure



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

39

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%


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%

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%

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%


Trend Micro JP 5,627 49.20 40.9% 11.4% 6.7% 6,764 5,577 1,190 4.4x 4.3x 4.0x 12.8x 12.8x 11.5x 15.2% 80.9% 33.4%

Fortinet US 4,792 35.84 (0.3%) (6.4%) (4.1%) 6,302 5,095 1,207 3.7x 3.4x 3.0x 35.8x 16.9x 13.7x 16.9% 74.7% 20.3%

Gemalto NL 15,000 44.67 (30.1%) (18.2%) (17.2%) 4,017 5,011 272 1.5x 1.4x 1.4x 9.4x 9.8x 8.3x 7.8% 36.7% 14.4%


FireEye US 2,900 16.77 15.7% 31.4% 15.5% 3,055 2,945 871 4.0x 4.0x 3.7x NM 37.0x 33.7x 3.9% 73.5% 10.7%


Verint US 5,000 41.85 11.5% (3.8%) 7.3% 2,667 3,074 374 2.8x 2.7x 2.5x 31.5x 11.9x 10.6x 7.4% 65.2% 22.6%

Qualys US 772 51.80 38.1% 40.2% 12.1% 1,944 1,665 279 7.9x 7.3x 6.3x 31.8x 22.1x 18.9x 15.0% 78.5% 33.1%


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%

CyberArk IL 823 41.00 (17.4%) (18.2%) 2.0% 1,424 1,164 261 4.9x 4.6x 3.8x 33.1x 21.5x 16.8x 17.5% 85.9% 21.2%

Barracuda Networks US 1,490 24.23 (2.5%) 2.7% 4.8% 1,283 1,080 207 2.9x 2.9x 2.7x 34.1x 16.2x 13.0x 7.0% NA 17.9%

Cheetah Mobile CN 2,831 8.41 (32.4%) (20.0%) (13.3%) 1,164 972 338 1.4x 1.3x 1.1x 22.5x 13.7x 8.6x 14.8% 61.8% 9.4%

Varonis Systems US 1,171 41.90 41.6% 37.2% 9.5% 1,152 1,031 122 5.5x 5.0x 4.3x NM NM NM 25.3% 90.7% 2.9%

Secureworks US 2,306 12.35 (1.7%) 19.6% 19.3% 1,001 903 98 2.0x 1.9x 1.8x NM NM NM 8.2% 54.9% (4.9%)

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%


VASCO Data US 620 12.05 (31.8%) (8.0%) (0.8%) 481 324 156 1.8x 1.7x 1.6x 44.2x 22.5x 16.1x (2.5%) 70.5% 7.7%

MobileIron US 854 3.70 36.0% (16.9%) (3.9%) 348 259 89 1.5x 1.4x 1.3x NM NM NM 9.8% 84.1% (7.4%)

Zix US 201 4.89 21.6% 4.5% (3.7%) 270 241 30 3.8x 3.6x 3.3x 17.2x 13.0x 11.3x 10.4% 81.4% 27.9%

Absolute Software CA 517 6.20 12.5% 9.9% 8.2% 245 210 33 2.3x 2.2x 2.1x 17.2x 24.6x 17.4x 6.0% NA 9.1%

iPass US 163 0.66 (59.3%) (45.5%) 10.0% 44 34 10 0.6x 0.6x 0.5x NM NM NM (13.8%) 27.6% (21.8%)

Average 4.7x 4.4x 3.8x 24.9x 25.3x 19.0x 15.5% 72.5% 15.8%

Median 3.9x 3.6x 3.2x 27.0x 19.2x 15.7x 14.9% 76.9% 12.3%

Public Comps – IT Security



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

40

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%

Acxiom US 3,260 24.64 (7.4%) (11.6%) 7.6% 1,967 2,034 163 2.3x 2.3x 2.0x 26.1x 12.1x 9.9x 2.2% NA 18.7%

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%


SDL UK 3,310 6.44 6.0% (4.1%) 10.5% 529 494 34 1.3x 1.3x 1.2x 12.1x 13.6x 10.5x 17.5% 52.1% 9.5%




Average 3.0x 3.2x 2.9x 19.5x 22.1x 24.4x 9.8% 67.1% 13.4%

Median 2.2x 2.3x 2.0x 20.2x 15.7x 13.7x 9.5% 72.4% 9.5%

Public Comps – Marketing Application



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

41


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%

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%

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%

Oracle US 138,000 48.35 23.6% 8.6% (2.2%) 201,788 188,589 66,897 4.9x 4.8x 4.7x 12.7x 10.5x 9.8x 4.7% NA 46.1%

IBM US 380,300 145.08 (8.2%) (16.6%) 1.4% 135,206 168,710 12,297 2.2x 2.2x 2.2x 9.8x 9.2x 9.0x (0.4%) 47.7% 23.6%


NetApp US 10,100 43.76 26.0% 5.2% 15.1% 11,805 8,996 5,327 1.6x 1.6x 1.6x 9.5x 7.2x 6.6x 3.8% NA 22.3%

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%

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%

Brocade US 5,960 11.95 30.6% (3.9%) (3.2%) 4,945 5,302 1,179 2.3x 2.3x 2.1x 15.0x 9.7x NA (0.3%) NA 23.2%

Nutanix US 2,813 22.39 NA 19.3% 0.9% 3,469 3,120 349 4.1x 3.2x 2.3x NM NM NM 60.1% NA (14.6%)

CommVault US 2,656 60.80 15.8% 22.3% 1.7% 2,767 2,286 481 3.4x 3.3x 3.0x NM 24.2x 18.5x 8.8% NA 13.6%

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%)

Barracuda Networks US 1,490 24.23 (2.5%) 2.7% 4.8% 1,283 1,080 207 2.9x 2.9x 2.7x 34.1x 16.2x 13.0x 7.0% NA 17.9%

Carbonite US 830 22.00 48.8% 12.8% 13.1% 612 595 125 2.7x 2.4x 2.2x NM 12.5x 9.8x 17.8% 74.7% 19.5%


Average 3.8x 3.4x 3.1x 16.4x 14.1x 13.8x 17.0% 60.1% 21.1%

Median 3.1x 2.9x 2.5x 13.7x 12.8x 11.8x 8.8% 59.8% 22.3%

Public Comps – Storage



Share

Price

Market


CY

Revenue

Growth



CY17E

Margins

42




Key SaaS Metrics



1

2

3

4

5

6



43

OUR MISSIONTo advise the most passionate

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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

products

The shift of business applications to the cloud, de-

centralized IT operations and infrastructure

software have percolated through organizations

large and small creating a Software Eating the

World paradigm

JONATHAN CANTWELL

Director

45

GP Bullhound’s Selected Software Transactions

Private placement Private placement

Sold toSold to Sold to

Sold to Private placement

Private placement

Sold toSold to

Sold to

Sold to

Sold to

Sold to Sold to Sold to

Sold to Sold to

Private placementPrivate placement

ECI Partners

46

Authors

PIERCE LEWIS-OAKES

[email protected]

ALEC DAFFERNER

[email protected]

OKAN INALTAY

[email protected]

PER ROMAN

Managing [email protected]

MATT FINEGOLD

[email protected]

JONATHAN CANTWELL

[email protected]

mailto:[email protected]






47

Our Team

ANDRE SHORTELLPartner

ALESSANDRO CASARTELLIDirector

ALEC DAFFERNERPartner

ROBERT AHLDINPartner

JOAKIM DAL

Vice President

SIR MARTIN SMITHChairman

SIMON NICHOLLSPartner

Director

SEBASTIAN MARKOWSKY

JULIAN RIEDLBAUERPartner

CLAUDIO ALVAREZDirector

ALEXIS SCORERDirector

PER LINDTORPDirector

CHRIS PARKAssociate

RAVI GHEDIA

Vice President

CARL WESSBERGDirector

SVEN RAEYMAEKERSPartner

CHRIS GRAVESDirector

OSKAR HERDLANDDirector, Equity Capital Markets

LORD CLIVE HOLLICK

Senior Advisor

HARRI NEEDHAM

Group Finance Manager

DAVE NISH

Technology Manager

LINDA NORDMARK

Finance Manager

PER ROMANManaging Partner

MANISH MADHVANIManaging Partner

HUGH CAMPBELLManaging Partner

STAFFAN INGEBORNNon-Executive Director

MARK SEBBANon-Executive Director

ANN GREVELIUS

Senior Advisor

MARVIN MAERZ

Associate

GRAEME BAYLEYPartner & Group CFO

CECILIA ROMAN

Senior AdvisorAnalyst

ED PRIOR

JAVED HUQ

Vice PresidentJOY SIOUFI

Vice President

DirectorNICK HORROCKS

OLOF RUSTNER

Vice President

JOHANNES ÅKERMARK

Vice President

KARL BLOMSTERWALL

Analyst

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Analyst

ELENA BOCHAROVA

Analyst

Analyst

KYLE BOOYSENS

Analyst

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Analyst

FELIX BRATELL Analyst

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JONATHAN CANTWELL Director

CHRISTIAN LAGERLING

Co-founder & Senior Advisor

GUILLAUME BONNETONPartner

PIERCE LEWIS-OAKES

Analyst

JACOB LOVENSKIOLDAnalyst

IMAN CRISBY

Vice President, Marketing

BEN PRADE

Senior Advisor

ADAM PAGE

Analyst

NIKOLAS WESTPHALDirector

ALON KUPERMAN

Principal

CHRISTOPH GRUNWALDAnalyst

HAMPUS HELLERMARK

Analyst

MAX BERNARD

Vice President

Associate

SIMON MIREMADI

CARL ELFVING

Analyst

JAIME SENDAGORTA

Associate

48

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In addition, GP Bullhound LLP, the members, directors, officers and/or employees thereof and/or any connected

persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of

any of the companies referred to in this research report and may from time-to-time add or dispose of such interests.

GP Bullhound LLP is a limited liability partner- ship registered in England and Wales, registered number

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For US Persons: This research report is distributed to U.S. persons by GP Bullhound Inc. a broker- dealer registered

with the SEC and a member of the FINRA. GP Bullhound Inc. is an affiliate of GP Bullhound LLP. This research

report does not provide personalized advice or recommendations of any kind. All investments bear certain material

risks that should be considered in consultation with an investors financial, legal and tax advisors. GP Bullhound Inc.

engages in private placement and mergers and acquisitions advisory activities with clients and counterparties in the

Technology and CleanTech sectors.

In the last twelve months, GP Bullhound LLP has not been engaged as an advisor to and received compensation

from the companies mentioned in this report, except for Bizagi, Sequence, Sinch, Ecovadis, Rightware, and Media IQ

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