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INVESTMENT BANKING
Software Insights
IN THIS ISSUEAbout UsRecent Transactions & Case StudiesSoftware Valuation EnvironmentRecent Transaction ActivityAppendix: Public Company Trading Detail
25131829
FEBRUARY 2020
Raymond James880 Carillon ParkwaySt. Petersburg, FL 33716(727) 567-6353
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 2
Christian Clifford
Vice PresidentTechnology & Services
Boston Office
Premier Software Investment Banking Team
Zach Sayers
Vice PresidentTechnology & Services
Atlanta Office
U.S.
Henry Izbicki
Vice PresidentTechnology & Services
Munich Office
Bob Flanagan
Managing DirectorTechnology & Services
San Francisco Office
Zishaan Arshad
DirectorTechnology & Services
London Office
Florian Helmreich
Vice PresidentTechnology & Services
Munich Office
Europe
Philip Stein
Managing DirectorTechnology & Services
Munich Office
Sebastian Wintgens
Managing DirectorTechnology & Services
Munich Office
Dominic Emery
Managing DirectorTechnology & Services
London Office
Harald Maehrle
Managing DirectorTechnology & Services
Munich Office
Emanuel Bischofberger
DirectorTechnology & Services
Munich Office
Joel Greenwood
Managing DirectorTechnology & Services
London Office
Jon SteeleManaging DirectorTechnology & ServicesGroup Co-HeadBoston Office
Brendan Ryan
Managing DirectorTechnology & ServicesGroup Co-HeadBoston Office
Chip Kelso
Managing DirectorTechnology & Services
Atlanta Office
Garrett DeNinnoManaging DirectorTechnology & Services
Boston Office
Tamir Bergman
Vice PresidentTechnology & Services
St. Petersburg Office
Bobby Wolfe
DirectorTechnology & Services
St. Petersburg Office
Geoff Tobin
Managing DirectorTechnology & Services
San Francisco Office
Amar Krishnamurti
Managing DirectorTechnology & Services
New York Office
Chris Appaneal
Vice PresidentTechnology & Services
Boston Office
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 3
Broad and Deep Software Practice
Deep & Experienced RJ Team
+21
Blue-Chip Clients
Advisory Venture Capital Private Equity Equities
+4
+4
Extensive Transaction Experience
Transactions Since 2010~170M&A / Private Placement Transactions with $12+ Billion in Total Deal Value Since 2010~120Public Offering Transactions Raising $8+ Billion Since 2010+30
Senior Bankers
Equity Research Analysts
Dedicated Equity CapitalMarkets Professionals
Financial Services
Vertical
Automotive
Education
Energy
Government
Transportation & Logistics
Legal / Professional Services
Real Estate
Retail
Travel & Hospitality
Infrastructure
Cybersecurity
Data Management & Analytics
IT Ops Management & Monitoring
Workflow Automation
Development Platforms / DevOpsCloud-Based Infrastructure
Horizontal
Commerce
Enterprise Resource Planning Marketing
Supply ChainFinancial Management
Human Capital Management
Governance, Risk Management & Compliance
CRM / Customer Interaction Management
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 4
Software Coverage OverviewIn
fras
truc
ture
Softw
are
Vert
ical
So
ftwar
eH
oriz
onta
l So
ftwar
e
GRCCOMMERCE
MARKETINGERP
AUTO LEGAL / PROF. SERVICES
EDUCATION REAL ESTATE
DATA MGMT / ANALYTICS
WORKFLOW AUTOMATION
DEVPLAT / DEVOPS
IT OPS MGMT
CLOUD-BASED
CYBERSECURITY
RETAILENERGY
GOVERNMENT TRAVEL &HOSPITALITY
FINANCIAL MGMT. SUPPLY CHAIN
TRANSPORT & LOGISTICS
FINANCIAL SERVICES
HCMCRM
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 5
RECENT RAYMOND JAMES TRANSACTIONS & CASE STUDIES
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 6
M&A Activity
Unrivalled Momentum in SoftwareStrong Momentum in Software
E-Commerce & cloud solution focusing on customer loyalty
July 2019
Sale to
Software application for marketing automation
July 2019
Investment by
Universal measurement and scales for K-12 market
July 2019
Sale to
Predictive analytics and inventory optimization software
August 2019
Sale to
Cloud-based management software for law firms
September 2019
Investment in
Risk, insurance and claims optimization software
September 2019
Sale to
Cloud-based SaaS software for real estate solutions
Sale to
June 2019 April 2019
Sale to
Financial planningapplication
April 2019
Investment by
Safety software for critical communication & data
April 2019
Investment by
Learning validation software for academia and employers
May 2019
Investment by
Threat intelligence solutions
March 2019
Investment by
Partnership automationsoftware
Workplace management software
October 2019
Sale to
Workplace Business
e-Commerce software platform
October 2019
Investment by
Procurement software
November 2019
Acquisition of
Accreditation and CE software for financial advisors
October 2019
Sale to
Integrated, compliance & vendor risk management software
January 2020
Acquisition of
Cloud-based student information system, CRM, and ERP products
January 2020
Sale to
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 7
M&A Activity
Strong Momentum in Software
June 2018
E-Commerce platform & flexible cloud solutions
Sale to
July 2018
Compliance/risk management solutions
Sale toSale to
August 2018
Integrated ERP software,system & solutions
September 2018
Accounting software for oil and gas sector
Sale to
Real-time scheduling &route optimization software
September 2018
Sale to
Retail software platform
October 2018
Led merger of
School safety software
November 2018
Investment by
Compliance softwaresolutions
November 2018
Acquisition of
Authentication and fraud software
November 2018
Sale to
Collaboration software formedia & entertainment firms
November 2018
Sale to
December 2018
Compliance software &solutions for financial industry
Sale to
Caller authentication software solution
December 2018
Sale to
Pre-construction management platform
January 2019
Sale to
Data managementsoftware solutions
February 2019
Sale to
Unified and integratedcommunication platform
February 2019
Sale to
February 2019
Investment by
Business solutionssoftwareRecruiting Software
February 2019
Sale to
March 2019
Sale to
Robotic process automation software
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 8
IPO & Follow-on Offerings
Strong Momentum in Software
August 2018
$230,000,000Convertible senior notes
Analytics solutions for security & IT operations
January 2018
$114,000,000 Follow-on Offering
Analytics solutions for security & IT operations
April 2018
$184,000,000Follow-on Offering
Telecommunication equipment & solutions provider
Enterprise technology skill platform
May 2018
$310,500,000Initial Public Offering
Cloud-based security platform
May 2018
$152,000,000Initial Public Offering
May 2019
$207,000,000Initial Public Offering
Cloud computing services Enterprise technology skill platform
March 2019
$396,600,000Follow-on Offering
May 2019
$159,400,000Follow-on Offering
Cloud-based enterprise work management software
March 2019
$316,500,000Follow-on Offering
Benefits management platform
January 2019
$127,000,000Follow-on Offering
SaaS-based unified critical communications solutions
September 2018
$2,397,700,000Convertible senior notes
Operational intelligence software
June 2019
$249,500,000Follow-on Offering
Cloud-based taxcompliance solutions
Cloud-based digitalbanking solutions
June 2019
$183,000,000Follow-on Offering
June 2019
$243,500,000Initial Public Offering
Online based fashion retailer
September 2019
$187,500,000Initial Public Offering
Intelligent identity platform
August 2019
$648,000,000Initial Public Offering
Monitoring & analytics platform
September 2019
$1,160,000,000Initial Public Offering
Interactive fitness platform
December 2019
$787,000,000Follow-On Offering
Software intelligence platform for the enterprise cloud
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 9
Raymond James Advisory Case Study
Summary• On January 23, 2020, Ncontracts, LLC entered into a definitive agreement to be acquired
by Gryphon Investors
Company Background• Ncontracts is a leading provider of risk and vendor management software and services to
financial institutions and other organizations• Ncontracts’ offers a comprehensive product suite that enables clients to effectively mitigate and
manage risk efficiently through a variety of tools including vendor and enterprise risk management as well as business continuing planning and cybersecurity solutions
• Founded in 2009, Ncontracts is headquartered in Brentwood, TN
Investment Banking Role• Raymond James served as the exclusive financial advisor to Gryphon Investors in this transaction• Raymond James provided an overall view and perspective on the Ncontracts business, valuation analysis
and M&A targets
Successful Outcome• Gryphon’s extensive experience in integrated risk management software, and the Governance, Risk
Management & Compliance space more broadly, will allow Ncontracts to continue to achieve strong organic and inorganic growth as well as improve customer experience through their innovative and comprehensive platform
January 2020
Raymond James served as the
exclusive financial advisor to Gryphon
Investors in this transaction
Has acquired
Gryphon Investors acquisition of Ncontracts
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 10
Raymond James Advisory Case Study
Summary• On January 16, 2020, Campus Management and Edcentric announced a definitive
agreement to be acquired by Veritas Capital
Company Background• Campus Management is a market leading provider of cloud-based SIS, CRM and ERP solutions
to higher education institutions across the world• Edcentric is a leading SaaS provider of compliance, assessment, engagement, and fundraising
solutions across the student to alumni higher education lifecycle• Founded in 1988, Campus Management is headquartered in Boca Raton, FL
Investment Banking Role• Raymond James served as the exclusive financial advisor to Campus Management and Edcentric in this
transaction• Campus Management and Edcentric, two portfolio companies of Leeds Equity Partners, were sold in a
combination sale
Successful Outcome• The combination creates a comprehensive higher education software platform that allow institutions to create
deep connections across campus through shared data sources, modern software applications, and broad functionality and workflows, driving significant value to each stakeholder
January 2020
Raymond James served as the
exclusive financial advisor to Campus
Management & Edcentric in this
transaction
Sale to
Campus Management and Edcentric sale to Veritas Capital
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 11
Raymond James Advisory Case Study
Summary• On November 20, 2019, Wax Digital entered into a definitive agreement to be acquired by
Marlin Equity Partners
Company Background• Wax Digital is a high growth, cloud based spend management SaaS software provider offering
its clients an integrated source-to-pay software platform• The Company’s solutions are deployed in over 100 countries with 250,000+ users worldwide• Wax Digital has been recognized by Gartner as a Magic Quadrant “visionary” vendor• Founded in 2001, Wax Digitial is headquartered in Sweden
Investment Banking Role• Raymond James served as the exclusive financial advisor to Marlin Equity Partners in this transaction • Worked closely with Marlin’s portfolio company management team to design a customized process
aligned with key objectives
Successful Outcome• Marlin’s acquisition of Wax Digital will be merged with Medius, a Marlin portfolio company, transforming Medius
from a market-leading accounts payable-focused solution into a comprehensive product suite with full source-to-pay capabilities and expanding their European footprint
November 2019
Raymond James served as the
exclusive financial advisor to Marlin
Equity Partners in this transaction
Have Acquired
Marlin Equity Partners acquisition of Wax Digital
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 12
Raymond James Advisory Case Study
Summary• On October 7, 2019, Asure Workspace Management entered into a definitive agreement
to be acquired by fm:systems
Company Background• Asure Software (NASDAQ: ASUR) offers a suite of solutions to help clients optimize and
manage their mobile workforces and their global workspaces• Asure’s SaaS based offerings include asset management, mobile room scheduling, mobile time
tracking, time and labor management software, traditional time clocks, touch panels for room scheduling, and workplace business intelligence analytics
• Asure focuses on offering solutions to organizations in the financial services, manufacturing, non profit, healthcare, government organizations and retail services industries. Asure derives revenue through the source of cloud, maintenance and support, software license, and professional services
Investment Banking Role• Raymond James served as the exclusive financial advisor to Asure Software in this transaction• Worked closely with Asure’s management team and shareholders to design a customized process aligned
with key objectives
Successful Outcome• Fm:systems acquisition of Asure’s Workspace solutions combines two best in class complementary offerings with
technology solutions that enable clients to provide the ideal workplace for every employee • The transaction delivered a premium outcome for Asure’s shareholders
October 2019
Raymond James served as the
exclusive financial advisor to Asure Software in this
transaction
Asure Workspace Management sale to fm:systems
Sale toWorkspace Business
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 13
SOFTWARE VALUATION ENVIRONMENT
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 14
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019E Rule of
402Growth Category/Sector1 Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
High Growth Median $7,238.0 $7,154.6 9.1% 34.4% 169.9% 264.5% 11.4x 9.4x 19.8x 25.1x 69.8x 65.3x 31.7% 24.8% 15.8% 14.8% 22.5% 47.5%
Medium/Low Growth Median $5,388.1 $6,195.3 2.3% 17.4% 56.7% 79.2% 5.1x 4.6x 18.0x 17.4x 33.3x 32.9x 7.6% 7.5% 25.3% 26.7% 13.8% 32.9%
Horizontal Software Median $11,052.8 $11,593.0 6.9% 28.1% 120.4% 148.0% 8.4x 7.3x 23.4x 20.1x 39.9x 40.9x 15.5% 15.7% 24.6% 25.0% 16.5% 40.1%
Vertical Software Median $3,570.2 $4,019.3 3.1% 19.7% 77.3% 104.0% 6.0x 5.3x 19.1x 17.2x 50.2x 40.7x 12.1% 11.8% 25.3% 26.8% 16.3% 37.4%
Infrastructure Software Median $5,695.3 $6,523.8 2.8% 10.5% 56.2% 80.5% 6.2x 5.5x 15.5x 15.6x 26.3x 21.2x 13.5% 12.6% 17.4% 18.2% 17.0% 30.9%
Trading Analysis - Summary
Revenue Multiples EBITDA Multiples
Source: Capital IQ as of market close on January 31st, 2020.Note: Sectors sorted by Enterprise Value; see pages 29 - 45 for public company trading analysis detail.1. Each company is grouped into both a growth category and sector category.2. Rule of 40% calculated as revenue growth + EBITDA margin.
High Growth Software Medium / Low Growth Software Horizontal Software Vertical Software Infrastructure Software
19.8x
25.1x
18.0x17.4x
23.4x
20.1x19.1x
17.2x15.5x 15.6x
0x
5x
10x
15x
20x
25x
30x
2019E 2020E
Enterprise Value / EBITDA
11.4x
9.4x
5.1x4.6x
8.4x
7.3x
6.0x
5.3x
6.2x5.5x
0x
2x
4x
6x
8x
10x
12x
2019E 2020E
Enterprise Value / Revenue
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 15
Trading Analysis
Relative Stock Price Performance Valuation Multiple Analysis
Price / Earnings Ratio Growth and Margin Analysis
Detail by Growth Category: High Growth and Medium/Low Growth Software
High Growth Software Medium/Low Growth Software
69.8x65.3x
33.3x 32.9x
0x
10x
20x
30x
40x
50x
60x
70x
80x
2019E 2020E
P / E Ratio
Source: Capital IQ as of market close on January 31st, 2020.Data represents median performance for each sector.
8.8%33.7%
168.2%
260.8%
2.3%
18.0%
58.1%79.7%
0%
50%
100%
150%
200%
250%
300%
YTD 1 Year 3 Year 5 Year
31.7%
24.8%
15.8% 14.8%
7.6% 7.5%
25.3%26.7%
0%
5%
10%
15%
20%
25%
30%
35%
2019E 2020E 2019E 2020E
Revenue Growth EBITDA Margin
11.4x9.4x
19.8x
25.1x
5.1x 4.6x
18.0x 17.4x
0x
5x
10x
15x
20x
25x
30x
2019E 2020E 2019E 2020E
Enterprise Value / Revenue Enterprise Value / EBITDA
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 16
Trading Analysis
Source: Capital IQ as of market close on January 31st, 2020.Data represents median performance for each sector.
Relative Stock Price Performance Valuation Multiple Analysis
Price / Earnings Ratio Growth and Margin Analysis
Detail by Sector: Horizontal / Vertical / Infrastructure Software
Vertical Software Infrastructure SoftwareHorizontal Software
39.9x 40.9x
50.2x
40.7x
26.3x21.2x
0x
10x
20x
30x
40x
50x
60x
2019E 2020E
P / E Ratio
15.5% 15.7%
24.6% 25.0%
12.4%11.2%
25.0%26.5%
13.5% 12.6%
17.4% 18.2%
0%
5%
10%
15%
20%
25%
30%
2019E 2020E 2019E 2020E
Revenue Growth EBITDA Margin
6.9%
28.1%
120.4%
148.0%
2.9%
20.0%
79.1%
104.0%
2.8%10.5%
56.2%
80.5%
0%
20%
40%
60%
80%
100%
120%
140%
160%
YTD 1 Year 3 Year 5 Year
8.4x7.3x
23.4x
20.1x
6.1x 5.3x
19.1x17.2x
6.2x 5.5x
15.5x 15.6x
0x
5x
10x
15x
20x
25x
2019E 2020E 2019E 2020E
Enterprise Value / Revenue Enterprise Value / EBITDA
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 17
Sustaining growth & profitability is rewarded with a meaningful premium
Software Valuation Framework: The Rule of 40%(1)(2)(3)
Source: Capital IQ as of 01/31/2020.(1) Rule of 40% calculated as 2019E revenue growth + EBITDA margin.(2) Dark blue dots represent high growth companies; Light blue dots represent medium/low growth companies.(3) Software landscape consists of all companies referenced in Appendix
High Growth Software Medium/Low Growth Software
3.7xAverage EV /
Revenue
11.0%Average Rule
of 40%
7.2xAverage EV /
Revenue
32.0%Average Rule
of 40%
11.3xAverage EV /
Revenue
55.6%Average Rule
of 40%
5.0x
10.0x
15.0x
20.0x
25.0x
30.0x
10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%
2019
EV
/ Rev
enue
2019 Rule of 40%
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 18
RECENT TRANSACTIONACTIVITY
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 19
Selected Recent Strategic Buyer M&A ActivityAnnounced Date Buyer Target Sub-Sector Sector Deal
Size ($M) Comments
Jan-20 Retail Vertical Software ND
• SwiftIQ provides cloud analytics and vendor collaboration software to retailers• This acquisition will support PDI's efforts to scale its network for retail customers and CPG
partners in order to improve effectiveness of their loyalty programs and promotions
Jan-20 Transportation & Logistics
Vertical Software ND
• Trux Route Management Systems helps in the development of software for the waste management industry in North America
• This acquisition will add 1,000 customers, across North America, to AMCS’ platform
Jan-20 Transportation& Logistics
Vertical Software ND
• Soft-Pak software enables business-critical back-office operations, such billing for collection and disposal, performing customer service and support, managing for waste hauling fleets
• This acquisition enables Dover to expand its digital portfolio and acts as a building block to its capital deployment strategy
Jan-20 Other Vertical Software ND
• PlayerSpace provides sports program management software to YMCAs and similar organizations nationwide
• This acquisition will enhance Daxco's offerings of membership management platforms powering more than 10,000 health and wellness facilities worldwide
Jan-20 Other Horizontal Software ND
• ServiceBridge offers platform functionally to SMBs and franchise field service companies with that need to scale networks and execute at every level to empower field service
• The acquistion will support GPS businesses through the entire workflow, including resource availability, daily planning, trips, jobs and review
Jan-20Governance, Risk
Management & Compliance
Horizontal Software ND
• Enviance provides cloud-based Environmental, Health and Safety (EH&S) software, leveraging cloud computing technology to deliver its platform online in real-time
• This acquisition gives Cority access to 400 additional clients and augments its capabilities in IH/OH and worker safety
Jan-20 Real Estate Vertical Software ND
• Modern Message is the leading resident engagement, loyalty and rewards platform for the residential real estate industry
• The acquisition will enable RealPage clients to give residents a rich rewards experience, boost ancillary revenue, resident loyalty and reputation scores
Jan-20 Travel & Hospitality Vertical Software ND
• GrowTix is a fully integrated suite of ticketing and registration solutions designed for comic conventions, home shows and a wide variety of business conventions
• This acquisition will enable Patron Technology to strengthen their client relationships by providing an even more diverse set of tools
Jan-20 Real Estate Vertical Software ND
• Alan King & Co is a software company in the mortgage industry, specializing in master servicing and loan accounting software solutions
• The acquisition will help Situs to expand its technology offering to the real estate industry
Jan-20 Government Vertical Software ND
• Vermont Systems is the provider of recreation management software and services for municipal, county, state and federal military governmental entities
• This acquisition will add 1,200 additional clients in the membership and club management SaaS markets to Clubessential’s existing customer base
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 20
Selected Recent Strategic Buyer M&A ActivityAnnounced Date Buyer Target Sub-Sector Sector Deal
Size ($M) Comments
Jan-20 Government Vertical Software ND
• BIAS Software develops financial accounting software for local government entities which offers financial, payroll, cash receipting, utility billing and asset tracking solutions
• The acquisition will deepen Springbrook's market leadership in the Pacific Northwest
Jan-20 Human Capital Management
Horizontal Software $19
• Clustree SA designs and develops an artificial intelligence (AI) solution for career management, which detects employees' skills and appetencies
• Cornerstone plans to integrate the Clustree skills engine and skills ontology into its portfolio of products
Jan-20 Human Capital Management
Horizontal Software ND
• WiserTogether provides shared decision-making tools to consumers, employers, health plansand payers
• The acquisition will help Evive in enhancing its treatment-guidance capabilities and EviveOperating System platform
Jan-20 Automotive Vertical Software ND
• Autolist is an app-based platform that provides an automotive marketplace for dealers and customers
• The acquisition expands CarGurus’ category-leading consumer audience and will help enable the company to further enhance its unique value proposition to dealers
Jan-20 Transportation & Logistics
Vertical Software ND
• Cerasis, a third-party logistics company providing transportation management technology and services for shippers
• Cerasis will help expand GlobalTranz’s growing managed transportation capabilities
Jan-20 Financial Services Vertical Software ND
• International Management Technologies develops customized engineering, loss control and inspection software solutions for insurance companies and other large organizations
• Utilant will expand is market share through further penetration into loss control providers
Jan-20 Real Estate Vertical Software ND
• ClientLook develops client relationship management software for commercial real estate brokers• The acquisition of ClientLook will help LightBox in its continuing effort to unify fragmented
workflows and siloed information
Jan-20 Real Estate Vertical Software ND
• Razz Interactive develops a marketing platform for real estate and property management professionals
• With this acquisition, ResMan can enable customers to build and deliver high-end websites at the cost and convenience of a traditional template solution
Jan-20 Transportation& Logistics
VerticalSoftware ND
• Lanehub Incorporated develops a networking platform for transportation professionals which serves shippers and carriers
• The strategic acquisition of Lanehub reinforces Transplace’s mission to offer our customers the most advanced technologies, giving them a competitive advantage in the marketplace
Jan-20 Automotive Vertical Software ND
• Digital Business Controls develops and provides business services software that offers ticketing, invoicing, accounting and inventory functions for the auto and flat glass industries
• The acquisition would help Mainstreet in building a diversified software and payments business
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 21
Selected Recent Strategic Buyer M&A ActivityAnnounced Date Buyer Target Sub-Sector Sector Deal
Size ($M) Comments
Jan-20 Supply Chain Horizontal Software ND
• Riskpulse is a developer of a platform designed to provide actionable predictive intelligence for the whole supply chain
• The company plans to use the proceeds to further advance predictive and actionable insights
Jan-20 Cloud-Based Infrastructure Infrastructure ND
• Silvertrac Software offers a cloud-based, security guard management and security incident reporting software
• The acquisition of Silvertrac follows Trackforce Valiant's strategy of providing guard firms of all sizes with a purpose-built solution to run their business
Jan-20 Human Capital Management
Horizontal Software ND
• Innovise Limited provides workforce and compliance management software for the facilities management industry
• The acquisition brings TEAM and Innovise customers in five continents, more than 750,000 end users and enhanced technology for clients
Jan-20 Human Capital Management
Horizontal Software ND
• Herefish develops and provides a business process automation platform for staffing and recruiting firms
• The acquisition of Herefish will enable companies to automate time-consuming and manual spreadsheet-based processes to improve bottom-line and top-line growth
Jan-20 Real Estate Vertical Software ND
• Lindsey Software is a provider of a cloud-based property management software and services used by more than 700 public and affordable housing authorities nationwide
• The acquisition extends MRI's reach in US public housing sector to cover a broader spectrum of applications and adds accounting services
Jan-20 Legal / Professional Services
Vertical Software ND
• Superior Document Services provides document management, e-Discovery and data processing services to law firms, corporations and government agencies
• The acquisition will help the target company's customers to benefit from KLDiscovery’s platform
Jan-20 Other Vertical Software ND
• Yaro operates as a mobile-first digital navigation and health literacy platform to help consumers understand, find and pay for healthcare services according to their specific needs
• The acquisition further strengthens Virgin Pulse’s position and adds new benefits navigation capabilities to the company’s existing end-to-end health and wellbeing platform
Jan-20 Travel & Hospitality Horizontal Software ND
• Yapta also known as Your Amazing Personal Travel Assistant, provides airfare and hotel price tracking and assurance services for corporate and personal travelers
• The acquisition extends the acquirer's leadership in business spend management, providing real-time travel savings to businesses
Jan-20 Real Estate Horizontal Software ND
• RightSource Compliance provides software, consulting, training and technology-enabled compliance services to assist clients with federal and state affordable housing regulations
• The acquisition will assist Yardi in enhancing affordable housing product and service offerings
Jan-20 Automotive Vertical Software ND
• DealerNet develops automotive dealer management software solutions to car dealers and original equipment manufacturers in Brazil
• The acquisition would help the target company to explore more opportunities and increase customer base
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 22
Selected Recent Strategic Buyer M&A ActivityAnnounced Date Buyer Target Sub-Sector Sector Deal
Size ($M) Comments
Jan-20 Legal / Professional Services
Vertical Software ND
• Inventus provides litigation support services focused on streamlining data processing and review via a suite of bundled technologies
• The combined company will provide a broader range of technology-enabled legal services for the global legal operations market
Jan-20 CRM / Customer Interaction Management
Horizontal Software ND
• Lifecycle Software Ltd offers billing solutions and customer relationship management (CRM) software solutions
• The acquisition will help the acquirer in complementing its portfolio and provide further mission-critical software capabilities
Jan-20 Automotive Vertical Software ND
• Auto/Mate provides dealership management system (DMS) software to retail automotive dealerships
• After the acquisition, the combined company will support more than 9,000 dealerships and well over 300,000 active users
Jan-20Governance, Risk
Management & Compliance
Horizontal Software ND
• Sys-Tech Solutions, doing business as Systech International, provides anti-counterfeiting, product safety and consumer and brand protection solutions
• The acquisition will enhance Markem-Imaje's portfolio of product identification and traceability solutions with complementary and highly-demanded software and service offerings
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 23
Selected Recent Financial Sponsor ActivityAnnounced Date Buyer Target Sub-Sector Sector Deal
Size ($M) Comments
Jan-20 Human Capital Management
Horizontal Software $22
• Codility provides a platform that enables tech recruiters and hiring managers to assess candidates’ skills by testing their code online
• The capital will be used to fuel Codility's growing footprint in helping expand engineering teams at high-growth companies
Jan-20 Other Horizontal Software 5
• Passageways provides a board management software and employee intranet portal software for banks, credit unions, healthcare etc.
• The company plans to use the proceeds to expand into new market segments, especially as its board management platform, OnBoard, has gained global traction
Jan-20 Human Capital Management
HorizontalSoftware ND
• LaborChart provides integrated workforce management cloud platforms for the global construction industry
• The investment will help LaborChart to expand the company's market position, and accelerate domestic and international growth
Jan-20 Transportation& Logistics
Vertical Software 6
• Cloudtruck provides solution for owner-operators and small trucking carriers at a lower cost using software engineering, data science and operations processes
• The company plans to use the funds to improve the three-core metrics of a truck driver which are revenue, cash-flow and costs
Jan-20 Transportation & Logistics
Vertical Software ND
• Track What Matters provides intuitive fleet tracking service to all sizes of commercial business throughout the United States and abroad
• This investment will help Track What Matters with the resources and expertise required to provide the best technology solutions and customer experience to fleet customers
Jan-20 Marketing Horizontal Software 100
• ActiveCampaign provides email-marketing, marketing automation, sale, CRM, messaging and machine learning solutions to various industries
• The company plans to use the funds to scale its customer experience automation solution
Jan-20 Education Vertical Software 8
• AdmitHub provides expert admissions guidance on its Website and via SMS to help students communicate with college admissions offices directly
• The company plans to use the funds to expand its product development and research efforts and its voice technology
Jan-20 Transportation & Logistics
Vertical Software 7
• Shipamax provides logistics companies such as freight forwarders with a tool kit to automate back-office processes
• The company plans to use the funds to digitize and automate global logistics back-office functions
Jan-20 Human Capital Management
Horizontal Software 50
• Justworks provides access to big-company benefits, automated payroll, compliance support and HR tools to entreprenuers and their teams
• The company plans to use the funds to create fundamentally better PEO product for the modern workforce
Jan-20 CRM / Customer Interaction Management Horizontal ND
• RevenueWell enables dental practices to manage patient engagement, patient relationships, online practice reputation and appointment reminders
• The company intends to use the funds to accelerate to expand and enhance their current product portfolio and tightly integrate healthcare practice success and patient care
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 24
Selected Recent Financial Sponsor ActivityAnnounced Date Buyer Target Sub-Sector Sector Deal
Size ($M) Comments
Jan-20 Transportation & Logistics
Vertical Software $39
• Loginext is a platform that leverages machine learning and cloud technology to provides solutions to manage and optimize logistics and field service operations
• The company plans to use the funds for expansion into London, Sydney and New York as well as for research and development
Jan-20 Development Platforms / DevOps Infrastructure 20
• Beacon is a provider of secure sandbox infrastructure, full suite of developer tools and transparent source code to enable enterprise-scale analytics, trading, risk management etc.
• The company intends to use the funds to expand its existing operations and develop its platform designed for capital markets
Jan-20 Human Capital Management
Horizontal Software 35
• Catalant Platform enables business leaders to organize mission-critical work, access and deploy internal and external resources dynamically and track the speed, quality and impact of work
• The company plans to use the funds to scale its product offering and expand into new global markets
Jan-20 Human Capital Management
Horizontal Software 75
• Personio GmbH develops and delivers HR management and recruiting software • The company intends to use the proceeds to grow its human resource software for small
business, expansion into the United Kingdom and Ireland and establish a new office in London
Jan-20 Legal / Professional Services
Vertical Software 40
• FloQast provides FloQast, a dashboard reporting tool to track and document journal entries, as well as account reconciliations for clients
• The company intends to use the funds to further accelerate customer expansion and drive continued technology innovation for corporate accounting teams
Jan-20 Human Capital Management
Horizontal Software ND
• TalentSmart provides emotional intelligence training for clients ranging from the military to Fortune 500 companies
• The company intends to use funds in to furthur expand its business and enhance it’s emotional intelligence products and services
Jan-20 Development Platforms / DevOps Infrastructure ND
• XebiaLabs platform enables enterprises to orchestrate, automate and analyze their entire software release pipeline at enterprise scale
• This acquisition will help TPG to combine XebiaLabs with CollabNet to create an agile, end-to-end DevOps platform for enterprises
Jan-20 Human Capital Management
Horizontal Software 30
• Phenom People provides cloud-based talent relationship marketing platform (TRM) to companies for recruiting candidates
• The company will use the proceeds to proving the HR Shift towards AI-Powered talent experiences and for continued company growth and scale
Jan-20 Real Estate Vertical Software 35
• Homebound is a construction management software firm which helps its clients in building process from financing to move in stage
• The company will use its proceeds for software and customer service development
Jan-20 Financial Management Horizontal Software ND
• Emburse operates an expense management platform that gives businesses an insight and control over corporate expenses
• Abacus, Captio, Certify, Chrome River, Nexonia and Tallie - have come together under a single company, Emburse, to challenge SAP Concur
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 25
Selected Recent Financial Sponsor ActivityAnnounced Date Buyer Target Sub-Sector Sector Deal
Size ($M) Comments
Jan-20 Education Vertical Software ND
• Campus Management is a provider of cloud-based student information systems (“SIS”), customer relationship management (“CRM”) and enterprise resource planning (“ERP”) solutions
• Veritas Capital would help the target company pursue their expansion plan and increase operational efficiency & effectiveness
Jan-20 Education Vertical Software ND
• Edcentric develops and offers engagement, planning, assessment and compliance SaaS solutions to higher education institutions
• Veritas Capital would help the target company to pursue their expansion plan and increase operational efficiency & effectiveness
Jan-20 Travel & Hospitality Vertical Software $70
• Online Ventures trading as SiteMinder, is an online hotel distribution company which develops cloud-based products for the hospitality industry
• The company will use the proceeds to fuel its growth and innovation, through accelerated go-to-market strategies and increased investments in R&D towards its geographic expansion
Jan-20 Human Capital Management
Horizontal Software 30
• Workboard provides execution intelligence applications for enterprise managers which unifies goal clarity, execution efficiency and employee engagement
• The company intends to use the funds to increase its investment in marketing, go-to-market partnerships and in core technology areas like data visualizations and machine learning
Jan-20 Marketing Horizontal Software 40
• 6Sense Insights provides a predictive intelligence platform which helps B2B marketing and sales leaders to identify new prospects based on data science and time-sensitive intent interactions
• The company intends to use the capital to scale operations and accelerate expansion of its platform
Jan-20 Cloud-Based Infrastructure Infrastructure 90
• Zinier develops a cloud-based platform and mobile application for companies to track and manage sales and service operations in the field
• The company intends to use the funds to enter new markets, conduct R&D to expand its AI-driven platform capabilities and configurability
Jan-20 Automotive Vertical Software 60
• FlashParking designs and develops cloud-based parking and mobility solutions that provides real time data and pricing options for parking space providers
• The company intends to use the funds to scale its cloud-based parking system
Jan-20 Real Estate Vertical Software ND
• MRI Software LLC provides real estate software applications and hosted solutions which include financials suite, commercial suite, residential suite, investment suite etc.
• The company intends to use the funds to bolster innovation across its end-to-end offering, accelerate growth and extend its global presence
Jan-20 Supply Chain Horizontal Software 23
• DHL Resilience360 GmbH operates a supply chain risk management software solution that helps businesses to predict, assess and mitigate the risk of supply chain disruptions
• DHL Resilience360 GmbH will use the proceeds to further advance predictive and actionable insights
Jan-20Governance, Risk
Management & Compliance
Horizontal Software ND
• Foundation Source Philanthropic Services provides outsourced support services for private foundations which includes administration, compliance monitoring, federal and state filings and grants management services
• The acquisition will allow the Company expand market share and enter into new markets
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 26
Selected Recent Financial Sponsor ActivityAnnounced Date Buyer Target Sub-Sector Sector Deal
Size ($M) Comments
Jan-20 Legal / Professional Services
Vertical Software $10
• Legalpad Inc develops a platform that bridges the gap between law and technology by focusing on repeatable legal tasks and workflows that are ripe for automation
• The company intends to use the funds to accelerate growth and continue to connect global talent with opportunity
Jan-20 Human Capital Management
Horizontal Software 3
• MyWorkChoice is a provider of contingent workforce software• MyWorkChoice will use the proceeds to continue its expansion into key geographic markets
enabling its customers to engage the diverse and dependable workforce community
Jan-20 Legal / Professional Services
Vertical Software 5
• Juro develops and operates a SaaS based contract management software/automation solution that enables businesses to generate, negotiate, sign and manage contracts
• The company intends to use the funds to double-down on its data proposition, triple the size of its product team and continue to expand its customer base in the EU and US
Jan-20 Government Vertical Software ND
• Springbrook Software provides cloud-based fund accounting, payroll/human resources, utility billing and community development enterprise software solutions
• This acquisition will continue to deepen Springbrook's focus on providing industry-leading solutions to more than 800 local governments and municipalities across North America
Jan-20 Energy Vertical Software 2
• M1NERAL LLC provides a mineral intelligence platform that provides data, AI insights and transaction automation to buyers, operators and sellers
• The company intends to use the funds to continue to expand its development efforts
Jan-20Governance, Risk
Management & Compliance
Horizontal Software 50
• BigID develops security software products for personal data protection and privacy• The company intends to use the capital to deliver new products in privacy and protection of
personal data along with expansion of go-to-market strategies across the globe
Jan-20 Automotive Vertical Software ND
• Open Lending, LLC delivers software that measures risk for auto loans and offers web-based pricing and underwriting technology that helps lenders approve auto loans for borrowers
• The acquisition will help the company get listed on public market due to the SPAC and the newly merged company will have an implied estimated enterprise value of $1.3 billion
Jan-20 Legal / Professional Services
Vertical Software ND
• Ontellus provides technology-enabled online record retrieval platform to legal and insurance firms
• Aquiline's investment in the company provides resources and capital to support the continued expansion of the company's records retrieval capabilities
Jan-20 Financial Management HorizontalSoftware 73
• Receipt Bank Limited develops an automated bookkeeping software platform that offers Receipt Bank, a receipt and invoice software that is used by businesses, accountants and bookkeepers
• The company plans to use the funds to extend product suite and continue rapid expansion in Europe, Australia and North America
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 27
Offer Price to:
Pricing Date Company Sector Sub-Sector Offer
TypeOffering Size
($M)Offer Price
($) One-Day One-Week Dec 31, 2019
Dec-19 Horizontal Human Capital Management IPO $69 1.27 0.3% 0.3% 2.1%
Dec-19 Horizontal Human Capital Management IPO 150 17.00 (2.4%) (5.8%) (5.6%)
Dec-19 Horizontal Financial Management IPO 216 22.00 61.4% 72.9% 73.0%
Dec-19 Horizontal Enterprise Resource Planning IPO 76 1.18 (5.3%) (7.1%) (3.0%)
Dec-19 Infrastructure IT Management, Security Follow-on 681 24.75 (1.4%) (3.8%) 2.2%
Dec-19 Infrastructure Security Follow-on 193 55.12 4.5% 4.5% 7.1%
Nov-19 Horizontal Human Capital Management Follow-on 296 169.00 (0.6%) 2.3% (0.2%)
Oct-19 Infrastructure Security IPO 699 18.13 2.7% 0.5% 40.9%
Oct-19 Infrastructure Big Data Follow-on 726 42.00 (1.2%) (2.1%) 10.4%
Oct-19 Horizontal Human Capital Management IPO 56 12.00 1.0% (10.3%) 9.1%
Sep-19 Infrastructure Security IPO 648 27.00 39.1% 30.6% 39.9%
Sep-19 Infrastructure Security IPO 188 15.00 34.1% 20.0% 62.0%
Sep-19 Infrastructure IT Management, Security IPO 525 15.00 20.0% 32.5% 13.7%
Sep-19 Horizontal Human Capital Management Follow-on 507 56.30 (2.0%) (8.0%) 20.6%
Aug-19 Vertical Financial Services IPO 143 1.69 8.1% (0.1%) 9.9%
Aug-19 Horizontal Marketing IPO 67 10.81 9.9% 7.9% 105.6%
Aug-19 Infrastructure IT Management, Security IPO 570 16.00 62.9% 62.5% 58.1%
Jul-19 Horizontal Enterprise Resource Planning IPO 326 21.00 76.4% 104.8% 48.1%
Jul-19 Infrastructure DevOps IPO 193 4.20 126.9% 103.9% 61.6%
Selected Recent Public Equity Activity
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 28
Selected Recent Debt Financings
Ratings
Announcement Date Company Sector Sub-Sector Moody’s S&P Size ($M) Coupon (%)
Jan-20 Horizontal Enterprise Resource Planning Ba3 BB- $500 3.63
Jan-20 Horizontal Enterprise Resource Planning Ba3 BB- 500 4.00
Jan-20 Infrastructure Cloud A2 A 499 1.70
Jan-20 Infrastructure Cloud A2 A 1,296 2.30
Jan-20 Infrastructure Cloud A2 A 499 1.90
Jan-20 Infrastructure Cloud A2 A 849 2.15
Jan-20 Infrastructure Cloud NA NA 557 1.45
Jan-20 Infrastructure Cloud NA NA 400 4.88
Jan-20 Infrastructure Cloud NA NA 400 8.25
Jan-20 Infrastructure Big Data NA NA 1,000 0.25
Jan-20 Vertical Professional Services Baa2 BBB 499 2.85
A credit rating of a security is not a recommendation to buy, sell or hold securities and may be subject to review, revisions, suspension, reduction or withdrawal at any time by the assigning rating agency.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 29
APPENDIX
Public Company Trading Detail
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 30
Trading Analysis
High Growth Software
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA3 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
2U, Inc. $1,257.5 $1,415.6 (17.4%) (65.2%) (41.8%) 11.4% 2.5x 1.9x NM NM NM NM 39.1% 27.2% (4.4%) (1.3%) NA 34.7%
8x8, Inc. $1,866.2 $1,977.6 1.7% 5.7% 17.5% 141.5% 4.8x 3.9x NM NM NM NM 22.4% 22.8% (11.1%) (3.7%) 16.0% 11.3%
Adobe Inc. $169,295.5 $169,257.0 6.5% 41.7% 209.7% 400.7% 15.2x 12.8x 33.6x 27.6x 51.9x 44.8x 23.5% 18.1% 45.2% 46.5% 16.5% 68.7%
Alteryx, Inc. $9,076.2 $8,928.7 39.4% 96.0% NA NA 22.8x 17.1x NM NM NM NM 54.6% 32.8% 14.4% 16.2% NA 69.0%
Anaplan, Inc. $7,694.7 $7,438.4 9.9% 83.5% NA NA 21.4x 16.2x NM NM NM NM 44.2% 32.7% (12.6%) (8.4%) NA 31.6%
Atlassian Corporation Plc $36,077.8 $35,297.6 22.2% 49.4% 432.0% NA 25.3x 19.7x NM NM NM NM 45.1% 28.4% 26.1% 24.0% 26.7% 71.2%
Autodesk, Inc. $43,313.5 $44,332.5 7.3% 33.7% 142.0% 264.5% 13.6x 11.1x NM 33.9x NM 70.9x 34.0% 21.8% 26.8% 32.9% 51.9% 60.9%
Avalara, Inc. $6,550.8 $6,103.9 16.2% 113.5% NA NA 16.3x 13.0x NM NM NM NM 37.8% 25.2% 0.6% 1.1% NA 38.3%
BlackLine, Inc. $3,403.5 $3,206.7 18.6% 28.6% 125.1% NA 11.2x 9.3x NM NM NM NM 25.8% 21.0% 9.3% 10.6% 50.0% 35.1%
CDK Global, Inc. $6,516.7 $9,206.1 (1.8%) 9.8% (14.2%) 18.9% 4.8x 4.5x 11.6x 11.4x NM NM 12.2% 7.9% 41.5% 39.3% 10.0% 53.7%
Chegg, Inc. $4,988.1 $5,099.7 8.8% 17.1% 473.4% 521.9% 12.5x 9.8x NM 31.2x 82.3x 48.5x 27.2% 27.4% 30.0% 31.4% NA 57.2%
Coupa Software Incorporated $10,281.1 $10,209.4 10.2% 85.3% 520.0% NA 26.8x 20.9x NM NM NM NM 46.3% 28.1% 12.9% 15.3% 32.5% 59.2%
CyberArk Software Ltd. $5,236.0 $4,729.4 18.6% 57.5% 160.5% 308.1% 11.0x 9.3x NM 32.6x NM NM 25.5% 18.6% 30.1% 28.4% 17.0% 55.5%
DocuSign, Inc. $14,089.0 $14,062.9 5.9% 58.8% NA NA 14.6x 11.6x NM NM NM NM 37.7% 25.9% 8.3% 10.0% 58.7% 46.0%
Everbridge, Inc. $3,062.8 $2,982.0 16.1% 46.5% 390.7% NA 14.9x 11.6x NM NM NM NM 36.0% 28.8% 2.8% 5.4% NA 38.7%Fidelity National Information Services, Inc. $88,293.5 $107,752.5 3.3% 37.4% 80.9% 130.1% 10.4x 7.9x 25.6x 17.7x NM NM 22.6% 31.3% 40.8% 44.8% 7.3% 63.4%
Fiserv, Inc. $80,642.3 $104,011.3 2.6% 43.0% 120.8% 227.1% 10.2x 6.4x 19.8x 17.1x NM NM 74.9% 59.6% 51.5% 37.4% 16.0% 126.5%
Five9, Inc. $4,381.2 $4,282.0 9.4% 40.3% 364.0% 1725.2% 13.3x 11.5x NM NM NM 92.6x 25.2% 15.5% 17.9% 18.1% 16.9% NMGTY Technology Holdings Inc. $326.8 $317.9 6.3% (38.8%) (36.1%) NA 7.8x 5.3x NA NA NM NM NA 49.2% 0.0% 0.0% NA NA
HubSpot, Inc. $7,748.1 $7,375.9 14.2% 14.3% 252.7% 437.7% 11.0x 8.9x NM NM NM NM 30.5% 23.8% 12.6% 12.4% 37.5% 43.1%
Inovalon Holdings, Inc. $3,139.9 $4,067.6 7.7% 41.8% 75.4% NA 6.3x 5.8x 19.1x 17.2x NM NM 21.5% 10.2% 33.2% 33.4% 14.0% 54.7%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin2. High growth software defined as any company with greater than 20% revenue growth.3. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 31
Trading Analysis
High Growth Software (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA3 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019E Rule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
Kinaxis Inc. $2,193.7 $2,001.7 9.9% 40.6% 67.3% 478.3% 10.5x 9.5x NM NM NM NM 26.0% 11.0% 28.7% 25.9% 18.5% 54.7%
LiveRamp Holdings, Inc. $2,724.1 $1,969.3 (16.3%) (7.4%) 54.2% 121.1% 5.6x 4.3x NM NM NM NM 32.0% 30.3% (17.0%) (0.3%) 25.0% 15.0%
Mimecast Limited $3,163.4 $3,207.5 17.6% 35.8% 140.0% NA 8.0x 6.6x NM 34.8x NM NM 25.3% 21.0% 16.8% 18.9% 20.0% 42.1%
New Relic, Inc. $3,880.6 $3,597.5 0.5% (35.1%) 82.3% 112.5% 6.3x 5.4x NM NM NM NM 27.5% 17.0% 16.8% 14.6% 20.7% 44.4%
Okta, Inc. $15,520.2 $15,250.1 11.0% 55.3% NA NA 26.5x 20.1x NM NM NM NM 43.9% 31.7% (7.1%) (4.5%) NA 36.8%
Palo Alto Networks, Inc. $22,998.4 $22,016.1 1.5% 9.3% 59.1% 85.8% 7.0x 5.8x 29.7x 25.2x NM NM 21.3% 20.4% 23.5% 23.1% 22.4% 44.9%
Paycom Software, Inc. $18,344.3 $18,296.0 20.2% 114.6% 588.1% 1115.7% 24.9x 20.2x NM NM NM NM 29.7% 23.5% 42.4% 42.5% 30.6% 72.1%
Paylocity Holding Corp. $7,592.9 $7,547.4 17.4% 99.8% 359.8% 502.2% 14.6x 12.2x NM NM NM 89.0x 27.9% 19.5% 28.3% 28.8% 20.0% 56.2%
Pluralsight, Inc. $1,973.7 $2,094.8 12.7% (35.3%) NA NA 6.6x 5.3x NM NM NM NM 35.9% 25.4% (15.2%) (15.0%) NA 20.7%
Proofpoint, Inc. $6,973.6 $6,888.7 7.0% 20.6% 53.2% 145.6% 7.8x 6.5x NM NM NM NM 23.3% 20.5% 17.4% 13.4% 22.5% 40.6%
PROS Holdings, Inc. $2,660.3 $2,523.1 0.1% 73.4% 168.1% 147.0% 10.2x 8.6x NM NM NM NM 26.1% 17.8% (4.3%) (1.3%) NA 21.8%
Q2 Holdings, Inc. $4,198.7 $4,019.3 7.5% 46.7% 174.6% 387.6% 12.7x 9.7x NM NM NM NM 31.7% 30.3% 5.6% 4.8% 20.0% 37.3%
Rapid7, Inc. $2,932.5 $2,947.9 6.0% 47.8% 376.2% NA 9.1x 7.4x NM NM NM NM 32.5% 22.9% 3.5% 6.4% NA 36.0%
RingCentral, Inc. $17,700.9 $17,544.6 21.9% 122.4% 780.4% 1422.8% 19.7x 16.0x NM NM NM NM 45.1% 23.3% 13.1% 12.6% 18.5% 58.2%
salesforce.com, inc. $161,709.0 $161,673.0 12.1% 20.0% 130.5% 223.0% 9.5x 7.7x 33.0x 27.2x 69.8x 62.9x 28.0% 23.1% 28.8% 28.4% 25.6% 56.9%
ServiceNow, Inc. $63,776.4 $63,216.2 19.8% 53.7% 273.2% 364.0% 18.3x 14.2x 65.0x 49.5x NM NM 32.2% 29.1% 28.2% 28.7% 33.5% 60.4%
Shopify Inc. $54,366.2 $51,810.0 17.1% 176.4% 816.3% NA 33.3x 24.3x NM NM NM NM 45.0% 36.9% 4.3% 4.9% 40.4% 49.3%
Smartsheet Inc. $5,695.3 $5,196.9 7.9% 54.5% NA NA 19.2x 13.8x NM NM NM NM 52.0% 39.3% (15.9%) (11.8%) NA 36.1%
Splunk Inc. $24,215.8 $24,385.9 3.7% 24.4% 168.3% 200.6% 10.4x 8.5x NM NM NM 83.3x 30.4% 22.6% 16.6% 18.6% 37.3% 47.0%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin2. High growth software defined as any company with greater than 20% revenue growth.3. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 32
Trading Analysis
High Growth Software (cont.)
(USD in millions)` Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA3 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
SS&C Technologies Holdings $15,923.3 $23,801.6 2.6% 22.4% 96.1% 127.8% 5.1x 5.0x 13.2x 12.5x NM NM 35.1% 3.3% 38.9% 39.9% 17.1% 74.0%
StoneCo Ltd. $12,048.8 $12,578.3 8.9% 96.4% NA NA 21.2x 14.9x NM 25.0x NM 63.1x 214.9% 42.4% 59.9% 59.6% 53.0% 274.9%
Talend S.A. $1,136.5 $1,119.0 (5.7%) (0.8%) 63.9% NA 4.5x 3.8x NM NM NM NM 21.1% 20.0% (6.5%) (1.7%) NA 14.6%
Tenable Holdings, Inc. $2,675.6 $2,420.7 13.7% (1.6%) NA NA 6.9x 5.6x NM NM NM NM 31.6% 23.8% (10.8%) (8.2%) NA 20.8%
The Trade Desk, Inc. $12,149.3 $12,036.3 3.6% 88.7% 807.6% NA 18.3x 14.0x NM NM NM NM 38.0% 30.6% 31.8% 31.2% 32.7% 69.8%
Twilio Inc. $17,053.6 $15,795.6 26.5% 11.7% 331.3% NA 14.2x 10.8x NM NM NM NM 71.7% 31.2% 9.3% 8.2% 16.9% 81.0%
Upland Software, Inc. $986.2 $1,220.7 9.3% 25.0% 222.9% 392.9% 5.6x 4.7x 14.9x 12.2x 24.4x 16.0x 46.3% 19.2% 37.2% 38.4% 22.5% 83.6%
Veeva Systems Inc. $21,784.3 $20,316.6 4.2% 34.4% 246.4% 409.8% 18.6x 14.6x NM NM 92.8x 67.4x 26.5% 27.3% 39.4% 36.8% 20.9% 65.9%
WiseTech Global Limited $5,336.6 $5,162.4 7.1% 23.1% 421.5% NA 17.9x 14.7x NM NM NM NM 43.9% 21.4% 32.1% 33.6% 36.8% 76.0%
Wix.com Ltd. $7,298.9 $6,933.2 16.6% 30.5% 171.5% 621.4% 9.1x 7.3x NM NM NM NM 26.2% 25.2% 15.0% 16.9% 20.2% 41.2%
Workday, Inc. $42,464.9 $41,912.7 12.3% 1.7% 122.2% 132.4% 11.6x 9.6x NM NM NM NM 28.1% 20.4% 20.7% 21.4% 31.4% 48.9%
Workiva Inc. $2,113.5 $1,946.8 8.2% 8.6% 261.0% 270.4% 6.6x 5.7x NM NM NM NM 20.0% 16.5% (3.3%) (3.3%) NA 16.8%
Yext, Inc. $1,715.3 $1,589.0 3.6% (4.2%) NA NA 5.3x 4.2x NM NM NM NM 30.4% 27.9% (16.6%) (9.7%) NA 13.9%
Zendesk, Inc. $9,691.9 $9,843.5 12.7% 27.9% 261.1% 257.2% 12.1x 9.3x NM NM NM NM 36.0% 30.1% 7.6% 9.9% 44.0% 43.6%
Zoom Video Communications $21,089.5 $20,333.9 12.1% NA NA NA 33.3x 23.4x NM NM NM NM 84.9% 42.1% 18.7% 14.2% 73.5% 103.6%
Zscaler, Inc. $7,177.1 $6,833.7 20.6% 16.0% NA NA 19.1x 14.6x NM NM NM NM 47.3% 31.0% 9.5% 9.5% 36.5% 56.9%
High Growth Median $7,238.0 $7,154.6 9.1% 34.4% 169.9% 264.5% 11.4x 9.4x 19.8x 25.1x 69.8x 65.3x 31.7% 24.8% 15.8% 14.8% 22.5% 47.5%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin2. High growth software defined as any company with greater than 20% revenue growth.3. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 33
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA3 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
Agilysys, Inc. $755.3 $727.5 27.9% 83.6% 234.0% 213.1% 4.7x 4.1x NM NM NM NM 14.7% 13.1% 7.5% 8.1% NA 22.2%
Akamai Technologies, Inc. $15,085.5 $15,722.4 8.1% 43.4% 36.1% 60.5% 5.5x 5.1x 13.0x 12.0x 26.3x 21.2x 6.1% 6.8% 41.9% 42.7% 13.0% 48.0%
Alarm.com Holdings, Inc. $2,133.8 $2,075.4 2.2% (30.2%) 62.2% NA 4.4x 3.8x 20.3x 19.1x NM NM 13.1% 14.4% 21.5% 20.0% 15.0% 34.6%Allscripts Healthcare Solutions, Inc. $1,393.1 $2,302.1 (12.6%) (27.2%) (26.7%) (28.0%) 1.3x 1.2x 7.7x 7.0x NM NM 1.7% 4.2% 16.8% 17.7% 12.4% 18.5%
Amazon.com, Inc. $1,000,342.6 $1,022,856.6 8.7% 16.9% 143.9% 466.6% 3.7x 3.1x 24.5x 20.1x NM NM 19.9% 19.6% 14.9% 15.3% 33.5% 34.8%
American Software, Inc. $477.1 $385.4 0.3% 35.0% 42.3% 80.1% 3.5x 3.3x 27.7x 25.1x NM NM (1.8%) 5.1% 12.7% 13.3% NA 10.9%
ANSYS, Inc. $23,477.5 $22,852.4 6.6% 66.9% 194.2% 240.1% 15.2x 13.7x 34.0x 30.3x NM NM 16.4% 11.1% 44.6% 45.1% 15.0% 61.0%
Arista Networks, Inc. $17,063.0 $14,718.6 9.8% 4.0% 137.6% 253.8% 6.1x 6.2x 15.5x 16.4x NM NM 12.0% (0.7%) 39.3% 37.5% 10.8% 51.3%
Aspen Technology, Inc. $8,080.2 $8,380.4 (1.6%) 23.1% 124.0% 236.6% 13.7x 13.3x 25.9x 25.9x NM NM 13.3% 2.5% 52.8% 51.4% NA 66.0%
Automatic Data Processing $73,998.4 $74,855.6 0.5% 22.6% 69.7% 107.7% 5.2x 4.9x 20.6x 17.9x NM NM 9.1% 6.1% 25.0% 27.2% 12.9% 34.0%
Benefitfocus, Inc. $605.7 $756.5 (15.7%) (66.9%) (38.8%) (23.5%) 2.6x 2.3x NM 29.3x NM NM 14.4% 12.5% 5.2% 7.8% NA 19.6%
Blackbaud, Inc. $3,753.8 $4,349.6 (1.6%) 9.4% 19.4% 79.2% 4.9x 4.6x 24.0x 24.6x 31.4x 35.0x 5.6% 4.6% 20.3% 18.9% NA 25.9%Bottomline Technologies (de) $2,356.6 $2,386.6 0.0% 3.8% 108.4% 116.4% 5.5x 5.0x 24.4x 22.3x NM NM 5.8% 9.6% 22.6% 22.7% 20.0% 28.4%
Box, Inc. $2,248.9 $2,473.6 (10.4%) (28.2%) (12.0%) (20.1%) 3.6x 3.2x NM 24.9x NM NM 14.1% 11.4% 8.3% 12.9% NA 22.4%
Brightcove Inc. $336.0 $329.8 (0.3%) 8.0% 20.3% 20.9% 1.8x 1.6x NM 21.2x NM NM 12.0% 9.5% 4.8% 7.7% NA 16.9%Broadridge Financial Solutions, Inc. $13,660.1 $15,314.5 (3.6%) 18.2% 79.1% 148.3% 3.5x 3.3x 16.5x 14.6x 27.3x 25.3x 1.5% 5.7% 21.2% 22.7% NA 22.7%
Cadence Design Systems $20,233.6 $20,042.4 4.0% 50.1% 177.0% 300.8% 8.6x 8.0x 23.9x 23.0x NM NM 9.1% 7.1% 35.9% 34.9% 10.5% 45.0%
Castlight Health, Inc. $181.3 $145.4 (6.8%) (58.2%) (60.0%) (86.0%) 1.0x 1.1x NM NM NM NM (8.5%) (4.9%) (7.7%) (5.9%) NA (16.2%)
Cerner Corporation $22,561.6 $23,100.8 (2.1%) 30.8% 33.7% 8.3% 4.1x 3.9x 14.0x 12.3x NM NM 6.0% 4.0% 29.0% 31.7% 14.7% 35.0%
ChannelAdvisor Corporation $262.6 $230.9 3.5% (12.9%) (32.4%) (1.3%) 1.8x 1.7x 12.7x 10.8x NM 22.9x (1.3%) 5.0% 14.1% 15.8% 8.0% 12.8%Check Point Software Technologies Ltd. $17,402.5 $15,718.0 3.0% 2.1% 15.7% 48.1% 7.9x 7.7x 15.4x 15.1x NM NM 4.0% 2.8% 51.0% 50.9% 7.9% 55.1%
Cheetah Mobile Inc. $482.0 $161.7 (4.7%) (48.9%) (65.0%) (82.3%) 0.3x 0.3x NA NA NM NM (27.3%) (10.7%) 0.0% 0.0% NA (27.3%)
Trading Analysis
Medium / Low Growth Software
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin2. Medium / Low growth software defined as any company with less than 20% revenue growth.3. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 34
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA3 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
Cisco Systems, Inc. $195,016.8 $186,624.8 (4.1%) (2.8%) 49.6% 74.4% 3.6x 3.6x 9.9x 9.9x NM NM 1.4% (0.3%) 36.4% 36.8% 6.1% 37.8%
Citrix Systems, Inc. $15,785.2 $16,148.7 9.3% 18.2% 32.9% 104.6% 5.4x 5.2x 15.1x 15.4x NM NM 1.0% 3.8% 35.5% 33.6% 7.8% 36.5%
Commvault Systems, Inc. $2,098.0 $1,777.9 0.9% (31.9%) (8.3%) 3.3% 2.6x 2.5x 16.5x 16.7x NM NM (4.3%) 2.5% 15.8% 15.2% 10.0% 11.5%
Constellation Software Inc. $22,290.3 $22,737.8 10.3% 41.9% 136.7% 295.1% 6.5x 5.6x 24.4x 20.8x 39.0x 36.7x 13.8% 16.8% 26.8% 26.9% 15.0% 40.6%
Cornerstone OnDemand, Inc. $3,570.2 $3,568.7 0.4% 2.5% 44.5% 78.5% 6.2x 5.5x 28.0x 21.5x 81.1x 54.1x 6.6% 14.1% 22.2% 25.4% 48.2% 28.8%
CoStar Group, Inc. $23,922.3 $22,670.3 9.1% 67.1% 223.1% 253.9% 16.3x 13.7x NM NM NM NM 16.6% 19.1% 35.9% 32.2% 19.2% 52.5%
Criteo S.A. $986.2 $797.3 (11.2%) (38.2%) (65.9%) (60.5%) 0.8x 0.8x 2.8x 2.8x NM NM (59.1%) 0.6% 30.8% 30.5% NA (28.3%)
Dassault Systèmes SE $45,164.2 $42,771.5 6.9% 43.0% 118.6% 185.3% 9.4x 7.8x 26.9x 22.8x NM NM 14.5% 20.7% 34.9% 34.0% 14.3% 49.5%
Digimarc Corporation $373.8 $335.8 (6.7%) 60.6% 18.6% 15.9% 14.5x 12.3x NA NA NM NM 8.9% 17.8% 0.0% 0.0% NA 8.9%
Dropbox, Inc. $7,068.8 $6,939.0 (5.0%) (31.1%) NA NA 4.2x 3.6x 18.6x 14.9x NM NM 19.1% 14.7% 22.5% 24.5% 22.2% 41.6%
eBay Inc. $27,301.9 $32,728.9 (7.1%) (0.3%) 5.4% (36.7%) 3.0x 3.0x 8.9x 8.7x 14.6x 12.1x 0.4% (0.3%) 34.2% 35.0% 10.0% 34.6%
Ebix, Inc. $1,050.0 $1,741.8 3.1% (39.7%) (38.0%) 50.7% 3.0x 2.4x 9.6x 9.1x 9.5x 10.2x 18.2% 21.1% 30.7% 26.9% 10.0% 48.9%
Envestnet, Inc. $4,138.6 $4,735.6 13.3% 45.4% 108.7% 53.2% 5.2x 4.6x 24.7x 20.1x NM NM 11.2% 14.5% 21.3% 22.8% NA 32.5%
F5 Networks, Inc. $7,425.3 $6,605.3 (12.6%) (24.1%) (8.9%) 9.4% 2.9x 2.7x 8.0x 7.9x NM NM 3.8% 7.5% 36.3% 34.2% 9.6% 40.1%
FireEye, Inc. $3,410.3 $3,503.4 (3.3%) (9.6%) 17.9% (52.7%) 4.0x 3.7x 32.4x 30.6x NM NM 6.0% 7.5% 12.3% 12.1% 22.1% 18.3%
Forescout Technologies, Inc. $1,344.9 $1,299.9 (13.1%) (6.5%) NA NA 3.8x 3.4x NM NM NM NM 14.4% 13.5% (7.8%) (3.3%) NA 6.6%
Fortinet, Inc. $19,730.5 $17,831.8 8.1% 50.7% 246.8% 285.9% 8.3x 7.2x 30.6x 25.5x NM NM 19.0% 15.4% 27.2% 28.3% 17.0% 46.3%
GoDaddy Inc. $11,475.8 $13,181.0 (1.0%) (2.1%) 88.1% NA 4.4x 4.0x 18.9x 15.9x NM NM 12.2% 10.9% 23.4% 25.1% 16.2% 35.6%
Guidewire Software, Inc. $9,290.2 $8,701.6 2.5% 29.8% 115.0% 124.6% 12.6x 10.6x NM NM 79.7x NM (5.6%) 18.6% 20.0% 17.9% 14.0% 14.4%
HMS Holdings Corp. $2,406.8 $2,390.1 (7.7%) (8.9%) 50.4% 38.1% 3.8x 3.3x 13.2x 12.0x NM NM 5.8% 13.7% 28.6% 27.6% 16.3% 34.4%International Business Machines Corporation $127,292.7 $186,726.7 7.2% 6.9% (17.6%) (6.2%) 2.4x 2.4x 10.3x 9.9x NM NM (1.2%) 2.4% 23.6% 23.9% 6.8% 22.4%
Intuit Inc. $72,984.8 $71,504.8 7.0% 29.9% 136.4% 222.9% 10.1x 9.1x 28.4x 25.3x NM NM 14.1% 10.1% 35.4% 36.1% 13.8% 49.4%
IRESS Limited $1,619.9 $1,790.5 7.4% 19.1% 23.9% 35.5% 5.0x 4.8x 19.5x 18.4x 30.8x 34.0x 8.5% 4.2% 25.8% 26.3% NA 34.3%
Iron Mountain Incorporated $9,076.6 $19,417.2 (0.8%) (15.0%) (11.7%) (20.7%) 4.6x 4.5x 13.6x 12.7x NM NM 0.7% 2.3% 33.7% 35.2% 5.4% 34.4%
j2 Global, Inc. $4,671.3 $5,824.6 2.3% 27.5% 14.4% 66.9% 4.3x 4.0x 10.6x 9.9x 15.2x 13.6x 12.7% 6.9% 40.3% 40.6% 13.5% 53.0%
Jack Henry & Associates, Inc. $11,505.1 $11,482.7 2.7% 12.0% 66.6% 143.7% 7.1x 6.7x 21.7x 20.9x NM NM 5.9% 6.2% 32.6% 31.8% 11.5% 38.5%
Trading Analysis
Medium / Low Growth Software (cont.)
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin2. Medium / Low growth software defined as any company with less than 20% revenue growth.3. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 35
Medium / Low Growth Software (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA3 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
K12 Inc. $633.0 $470.2 (20.7%) (48.8%) (19.0%) 13.5% 0.5x 0.4x 3.8x 3.4x NM NM 4.7% 5.9% 12.2% 12.6% 14.0% 16.9%
Limelight Networks, Inc. $591.9 $589.1 22.3% 59.9% 127.9% 87.6% 2.9x 2.6x 33.8x 19.4x 46.8x NM 2.3% 14.3% 8.7% 13.3% 15.0% 11.0%
LivePerson, Inc. $2,603.9 $2,593.4 10.8% 74.7% 461.8% 283.3% 8.9x 7.4x NM NM NM NM 16.6% 20.8% (4.7%) 2.3% 25.0% 11.9%
LogMeIn, Inc. $4,176.4 $4,366.5 0.3% (7.6%) (20.5%) 80.8% 3.5x 3.3x 10.6x 11.0x 16.1x 16.8x 4.6% 4.7% 32.7% 30.2% 5.0% 37.3%
Manhattan Associates, Inc. $5,461.0 $5,387.8 7.2% 75.2% 66.7% 91.4% 8.8x 8.3x NM NM 50.2x 52.0x 9.6% 6.0% 24.3% 22.0% NA 33.8%
Micro Focus International plc $4,489.8 $6,523.8 (3.6%) (41.4%) (63.3%) (25.1%) 1.9x 2.0x 4.9x 5.0x NM NM 8.6% (5.4%) 39.7% 41.0% NA 48.3%
MiX Telematics Limited $301.3 $293.2 13.9% (8.9%) 115.8% 192.9% 2.0x 2.0x 6.2x 7.0x 26.5x 18.7x 12.1% (4.0%) 31.4% 29.1% 25.0% 43.5%
MobileIron, Inc. $534.4 $453.6 (1.9%) (1.6%) 9.7% (45.6%) 2.2x 2.1x NM NM NM NM 6.7% 5.0% (0.9%) 3.6% NA 5.8%
Model N, Inc. $1,039.6 $1,023.1 (11.1%) 115.0% 254.4% 191.5% 7.1x 6.5x NM NM NM NM (4.8%) 9.4% 9.4% 9.5% 13.0% 4.6%
MSCI Inc. $24,209.3 $26,090.7 10.7% 67.9% 245.4% 431.0% 16.8x 15.1x 31.0x 26.9x NM NM 8.3% 11.5% 54.2% 55.9% 10.0% 62.5%
NetApp, Inc. $12,187.3 $10,985.3 (14.2%) (16.3%) 39.4% 41.3% 1.9x 1.9x 8.0x 7.7x NM NM (8.5%) 3.1% 24.2% 24.5% 11.3% 15.7%
NetScout Systems, Inc. $1,924.1 $2,109.1 6.8% (0.8%) (22.8%) (28.4%) 2.4x 2.3x NA 11.5x NM NM (2.5%) 4.0% 0.0% 19.8% NA (2.5%)
NextGen Healthcare, Inc. $910.6 $970.4 (13.8%) (21.6%) (7.7%) (14.9%) 1.8x 1.7x 10.7x 10.0x NM NM 1.2% 5.1% 16.8% 17.2% NA 18.0%
NIC Inc. $1,321.3 $1,118.0 (11.7%) 20.3% (18.1%) 20.2% 3.2x 2.9x 13.5x 12.3x NM NM 2.2% 9.7% 23.6% 23.5% NA 25.7%
Nuance Communications $5,376.6 $6,583.6 6.1% 19.2% 19.3% 37.7% 3.8x 4.3x 13.0x 17.9x NM NM (17.0%) (12.8%) 29.0% 24.3% 5.0% 12.0%
Open Text Corporation $12,143.9 $15,269.1 2.1% 26.2% 31.3% 58.8% 5.2x 4.5x 13.8x 12.3x 17.5x 16.1x 2.6% 15.6% 37.9% 36.8% 9.7% 40.6%
Oracle Corporation $168,241.2 $195,341.2 (1.0%) 4.4% 30.8% 25.2% 4.9x 4.8x 10.5x 10.4x NM NM 0.5% 2.1% 47.0% 46.4% 8.8% 47.4%
Pason Systems Inc. $843.8 $719.5 0.7% (36.1%) (30.7%) (26.3%) 3.2x 3.4x 7.1x 7.8x NM NM 1.3% (6.0%) 44.5% 43.3% NA 45.8%
Paychex, Inc. $30,738.8 $31,089.9 0.8% 21.1% 42.3% 89.5% 7.7x 7.3x 18.9x 17.7x NM NM 17.4% 5.7% 40.7% 41.3% 7.8% 58.2%
PayPal Holdings, Inc. $133,593.0 $127,841.0 5.3% 28.3% 186.3% NA 7.2x 6.1x 26.5x 22.7x 47.5x 37.0x 14.9% 17.9% 27.2% 26.8% 19.5% 42.1%
Pegasystems Inc. $6,839.3 $6,799.3 8.2% 53.2% 122.2% 340.5% 7.4x 6.5x NM NM NM NM 3.8% 12.4% 3.0% 3.9% 20.0% 6.7%
Progress Software Corp. $2,035.4 $2,158.5 8.6% 24.6% 61.1% 80.2% 5.1x 4.8x 12.8x 11.9x NM NM 12.6% 5.9% 39.4% 40.2% 10.5% 52.0%
PTC Inc. $9,599.9 $10,683.2 11.0% (2.0%) 58.1% 148.8% 8.1x 7.0x 27.0x 21.8x NM NM 3.6% 15.8% 30.1% 32.2% 27.9% 33.7%
Qualys, Inc. $3,323.5 $3,063.7 2.8% (0.9%) 138.8% 125.5% 9.5x 8.4x 22.1x 19.7x NM NM 15.3% 14.1% 43.1% 42.5% NA 58.4%
Radware Ltd. $1,194.9 $992.6 (1.2%) 5.2% 73.5% 32.4% 3.9x 3.6x 22.6x 20.7x NM NM 7.6% 9.2% 17.4% 17.4% 17.0% 25.1%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin2. Medium / Low growth software defined as any company with less than 20% revenue growth.3. EV/EBITDA Multiple >35x is denoted as “NM”.
Trading Analysis
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 36
Medium / Low Growth Software (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA3 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
RealPage, Inc. $5,399.7 $5,866.9 8.6% 4.6% 90.7% 224.0% 6.0x 5.1x 20.8x 18.7x 39.2x 33.4x 13.3% 16.8% 28.6% 27.2% NA 41.9%
RELX PLC $51,187.3 $60,136.5 5.0% 19.7% 45.7% 52.7% 5.7x 5.5x 15.8x 15.2x NM NM 10.1% 3.2% 36.1% 36.5% NA 46.2%
Roper Technologies, Inc. $39,714.8 $44,280.4 7.7% 34.7% 98.9% 147.3% 8.2x 7.7x 23.2x 21.7x 32.6x 29.4x 3.5% 7.3% 35.6% 35.5% 12.3% 39.1%
SAP SE $155,915.6 $167,736.0 (2.1%) 30.5% 39.2% 103.6% 5.4x 5.1x 15.1x 13.7x NM NM 9.6% 6.2% 35.9% 37.1% 13.3% 45.5%
ShotSpotter, Inc. $313.8 $288.4 7.6% (43.0%) NA NA 7.1x 5.9x 33.2x 23.8x NM NM 16.1% 20.7% 21.5% 24.9% NA 37.6%
SolarWinds Corporation $5,809.0 $7,503.9 2.0% 7.8% NA NA 8.0x 7.1x 16.6x 15.6x 33.3x 22.8x 13.0% 11.6% 48.0% 45.8% 20.1% 60.9%
Sophos Group plc $3,624.9 $3,773.1 (0.1%) 65.3% 103.3% NA 5.5x 4.6x NM 26.3x 64.5x 54.5x (1.4%) 18.2% 14.7% 17.5% 99.7% 13.4%
SPS Commerce, Inc. $1,979.9 $1,798.2 2.5% 28.2% 64.7% 91.7% 6.4x 5.9x 26.0x 21.9x 61.2x 46.4x 12.4% 10.0% 24.8% 26.8% 20.0% 37.2%
Square, Inc. $32,092.9 $31,987.9 19.4% 4.7% 410.9% NA 14.4x 11.3x NM NM NM 95.6x (32.5%) 27.6% 18.7% 18.7% 43.6% (13.8%)Symphony Communication Public Company Limited $36.9 $66.0 (11.3%) (46.6%) (69.6%) (80.7%) NA NA NA NA NM NM NA NA NA NA NA NA
Synchronoss Technologies $227.3 $483.3 15.1% (23.8%) (85.8%) (87.1%) 1.6x 1.4x 18.6x 16.7x NM NM (4.9%) 10.6% 8.4% 8.4% NA 3.4%
Synopsys, Inc. $22,205.4 $21,620.4 6.0% 58.0% 134.6% 243.1% 6.4x 5.8x 23.7x 19.0x NM NM 6.0% 11.6% 27.2% 30.3% 14.3% 33.2%
GlobalData Plc $2,023.3 $2,146.9 0.8% 120.3% 145.3% 542.0% 9.2x 8.7x NM 34.3x 66.0x 55.5x 16.7% 4.9% 24.0% 25.5% NA 40.7%The Descartes Systems Group Inc $3,775.4 $3,769.5 6.9% 45.3% 108.8% 205.7% 11.6x 10.5x 30.8x 27.3x 39.9x 33.1x 18.4% 10.5% 37.6% 38.3% 18.0% 56.0%
The Sage Group plc $10,629.9 $11,149.7 (1.4%) 18.0% 20.5% 53.8% 4.3x 4.3x 17.3x 16.8x NM NM 8.1% 0.5% 24.9% 25.6% 3.7% 33.0%
Thomson Reuters Corp. $40,019.3 $42,395.7 12.2% 53.5% 62.7% 89.9% 7.2x 6.8x 28.3x 21.8x NM NM 7.6% 5.0% 25.3% 31.3% 28.0% 32.8%
Tyler Technologies, Inc. $12,619.1 $12,449.3 7.9% 71.1% 121.7% 205.1% 11.4x 10.3x NM NM 67.4x 61.0x 16.8% 10.8% 27.7% 28.6% 16.3% 44.4%
Varonis Systems, Inc. $2,550.3 $2,484.9 7.7% 41.6% 179.8% 153.7% 9.8x 8.7x NM NM NM NM (6.1%) 12.9% (8.7%) (2.9%) NA (14.8%)
Verint Systems Inc. $3,875.8 $4,388.3 4.8% 19.9% 55.3% 8.7% 3.2x 3.0x 13.3x 11.9x 18.3x 15.9x 10.8% 7.2% 24.1% 25.3% 14.0% 35.0%
VeriSign, Inc. $24,437.5 $25,004.8 8.0% 23.0% 159.5% 282.0% 20.3x 19.4x 28.0x 26.6x NM NM 1.5% 4.8% 72.4% 72.7% NA 73.9%
Verisk Analytics, Inc. $26,623.9 $29,253.7 8.8% 38.4% 96.6% 152.5% 11.3x 10.3x 24.2x 21.9x NM NM 8.6% 9.3% 46.6% 47.0% 12.3% 55.2%
VMware, Inc. $60,691.3 $64,307.3 (2.5%) (2.0%) 69.1% 92.0% 6.4x 5.7x 16.4x 15.6x NM NM 12.7% 12.3% 38.7% 36.4% 13.8% 51.5%
Walmart Inc. $324,828.2 $399,487.2 (3.7%) 19.5% 71.5% 34.7% 0.8x 0.7x 12.2x 11.8x NM NM 1.4% 3.3% 6.3% 6.3% 5.1% 7.7%Medium/Low Growth Median $5,388.1 $6,195.3 2.3% 17.4% 56.7% 79.2% 5.1x 4.6x 18.0x 17.4x 33.3x 32.9x 7.6% 7.5% 25.3% 26.7% 13.8% 32.9%
Trading Analysis
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin2. Medium / Low growth software defined as any company with less than 20% revenue growth.3. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 37
Trading Analysis
Horizontal Software
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
Adobe Inc. $169,295.5 $169,257.0 6.5% 41.7% 209.7% 400.7% 15.2x 12.8x 33.6x 27.6x 51.9x 44.8x 23.5% 18.1% 45.2% 46.5% 16.5% 68.7%
American Software, Inc. $477.1 $385.4 0.3% 35.0% 42.3% 80.1% 3.5x 3.3x 27.7x 25.1x NM NM (1.8%) 5.1% 12.7% 13.3% NA 10.9%
ANSYS, Inc. $23,477.5 $22,852.4 6.6% 66.9% 194.2% 240.1% 15.2x 13.7x 34.0x 30.3x NM NM 16.4% 11.1% 44.6% 45.1% 15.0% 61.0%
Aspen Technology, Inc. $8,080.2 $8,380.4 (1.6%) 23.1% 124.0% 236.6% 13.7x 13.3x 25.9x 25.9x NM NM 13.3% 2.5% 52.8% 51.4% NA 66.0%
Atlassian Corporation Plc $36,077.8 $35,297.6 22.2% 49.4% 432.0% NA 25.3x 19.7x NM NM NM NM 45.1% 28.4% 26.1% 24.0% 26.7% 71.2%
Automatic Data Processing $73,998.4 $74,855.6 0.5% 22.6% 69.7% 107.7% 5.2x 4.9x 20.6x 17.9x NM NM 9.1% 6.1% 25.0% 27.2% 12.9% 34.0%
Avalara, Inc. $6,550.8 $6,103.9 16.2% 113.5% NA NA 16.3x 13.0x NM NM NM NM 37.8% 25.2% 0.6% 1.1% NA 38.3%
Benefitfocus, Inc. $605.7 $756.5 (15.7%) (66.9%) (38.8%) (23.5%) 2.6x 2.3x NM 29.3x NM NM 14.4% 12.5% 5.2% 7.8% NA 19.6%
Cadence Design Systems $20,233.6 $20,042.4 4.0% 50.1% 177.0% 300.8% 8.6x 8.0x 23.9x 23.0x NM NM 9.1% 7.1% 35.9% 34.9% 10.5% 45.0%
ChannelAdvisor Corporation $262.6 $230.9 3.5% (12.9%) (32.4%) (1.3%) 1.8x 1.7x 12.7x 10.8x NM 22.9x (1.3%) 5.0% 14.1% 15.8% 8.0% 12.8%
Constellation Software Inc. $22,290.3 $22,737.8 10.3% 41.9% 136.7% 295.1% 6.5x 5.6x 24.4x 20.8x 39.0x 36.7x 13.8% 16.8% 26.8% 26.9% 15.0% 40.6%
Coupa Software Incorporated $10,281.1 $10,209.4 10.2% 85.3% 520.0% NA 26.8x 20.9x NM NM NM NM 46.3% 28.1% 12.9% 15.3% 32.5% 59.2%
Criteo S.A. $986.2 $797.3 (11.2%) (38.2%) (65.9%) (60.5%) 0.8x 0.8x 2.8x 2.8x NM NM (59.1%) 0.6% 30.8% 30.5% NA (28.3%)
Dassault Systèmes SE $45,164.2 $42,771.5 6.9% 43.0% 118.6% 185.3% 9.4x 7.8x 26.9x 22.8x NM NM 14.5% 20.7% 34.9% 34.0% 14.3% 49.5%
DocuSign, Inc. $14,089.0 $14,062.9 5.9% 58.8% NA NA 14.6x 11.6x NM NM NM NM 37.7% 25.9% 8.3% 10.0% 58.7% 46.0%
eBay Inc. $27,301.9 $32,728.9 (7.1%) (0.3%) 5.4% (36.7%) 3.0x 3.0x 8.9x 8.7x 14.6x 12.1x 0.4% (0.3%) 34.2% 35.0% 10.0% 34.6%
Five9, Inc. $4,381.2 $4,282.0 9.4% 40.3% 364.0% 1725.2% 13.3x 11.5x NM NM NM 92.6x 25.2% 15.5% 17.9% 18.1% 16.9% 43.0%
GoDaddy Inc. $11,475.8 $13,181.0 (1.0%) (2.1%) 88.1% NA 4.4x 4.0x 18.9x 15.9x NM NM 12.2% 10.9% 23.4% 25.1% 16.2% 35.6%
HubSpot, Inc. $7,748.1 $7,375.9 14.2% 14.3% 252.7% 437.7% 11.0x 8.9x NM NM NM NM 30.5% 23.8% 12.6% 12.4% 37.5% 43.1%International Business Machines Corporation $127,292.7 $186,726.7 7.2% 6.9% (17.6%) (6.2%) 2.4x 2.4x 10.3x 9.9x NM NM (1.2%) 2.4% 23.6% 23.9% 6.8% 22.4%
Intuit Inc. $72,984.8 $71,504.8 7.0% 29.9% 136.4% 222.9% 10.1x 9.1x 28.4x 25.3x NM NM 14.1% 10.1% 35.4% 36.1% 13.8% 49.4%
Kinaxis Inc. $2,193.7 $2,001.7 9.9% 40.6% 67.3% 478.3% 10.5x 9.5x NM NM NM NM 26.0% 11.0% 28.7% 25.9% 18.5% 54.7%
Limelight Networks, Inc. $591.9 $589.1 22.3% 59.9% 127.9% 87.6% 2.9x 2.6x 33.8x 19.4x 46.8x NM 2.3% 14.3% 8.7% 13.3% 15.0% 11.0%
LivePerson, Inc. $2,603.9 $2,593.4 10.8% 74.7% 461.8% 283.3% 8.9x 7.4x NM NM NM NM 16.6% 20.8% (4.7%) 2.3% 25.0% 11.9%
LiveRamp Holdings, Inc. $2,724.1 $1,969.3 (16.3%) (7.4%) 54.2% 121.1% 5.6x 4.3x NM NM NM NM 32.0% 30.3% (17.0%) (0.3%) 25.0% 15.0%
Manhattan Associates, Inc. $5,461.0 $5,387.8 7.2% 75.2% 66.7% 91.4% 8.8x 8.3x NM NM 50.2x 52.0x 9.6% 6.0% 24.3% 22.0% NA 33.8%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 38
Trading Analysis
Horizontal Software (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
Nuance Communications $5,376.6 $6,583.6 6.1% 19.2% 19.3% 37.7% 3.8x 4.3x 13.0x 17.9x NM NM (17.0%) (12.8%) 29.0% 24.3% 5.0% 12.0%
Open Text Corporation $12,143.9 $15,269.1 2.1% 26.2% 31.3% 58.8% 5.2x 4.5x 13.8x 12.3x 17.5x 16.1x 2.6% 15.6% 37.9% 36.8% 9.7% 40.6%
Oracle Corporation $168,241.2 $195,341.2 (1.0%) 4.4% 30.8% 25.2% 4.9x 4.8x 10.5x 10.4x NM NM 0.5% 2.1% 47.0% 46.4% 8.8% 47.4%
Paychex, Inc. $30,738.8 $31,089.9 0.8% 21.1% 42.3% 89.5% 7.7x 7.3x 18.9x 17.7x NM NM 17.4% 5.7% 40.7% 41.3% 7.8% 58.2%
Paycom Software, Inc. $18,344.3 $18,296.0 20.2% 114.6% 588.1% 1115.7% 24.9x 20.2x NM NM NM NM 29.7% 23.5% 42.4% 42.5% 30.6% 72.1%
Paylocity Holding Corporation $7,592.9 $7,547.4 17.4% 99.8% 359.8% 502.2% 14.6x 12.2x NM NM NM 89.0x 27.9% 19.5% 28.3% 28.8% 20.0% 56.2%
PayPal Holdings, Inc. $133,593.0 $127,841.0 5.3% 28.3% 186.3% NA 7.2x 6.1x 26.5x 22.7x 47.5x 37.0x 14.9% 17.9% 27.2% 26.8% 19.5% 42.1%
PROS Holdings, Inc. $2,660.3 $2,523.1 0.1% 73.4% 168.1% 147.0% 10.2x 8.6x NM NM NM NM 26.1% 17.8% (4.3%) (1.3%) NA 21.8%
PTC Inc. $9,599.9 $10,683.2 11.0% (2.0%) 58.1% 148.8% 8.1x 7.0x 27.0x 21.8x NM NM 3.6% 15.8% 30.1% 32.2% 27.9% 33.7%
Roper Technologies, Inc. $39,714.8 $44,280.4 7.7% 34.7% 98.9% 147.3% 8.2x 7.7x 23.2x 21.7x 32.6x 29.4x 3.5% 7.3% 35.6% 35.5% 12.3% 39.1%
salesforce.com, Inc. $161,709.0 $161,673.0 12.1% 20.0% 130.5% 223.0% 9.5x 7.7x 33.0x 27.2x 69.8x 62.9x 28.0% 23.1% 28.8% 28.4% 25.6% 56.9%
SAP SE $155,915.6 $167,736.0 (2.1%) 30.5% 39.2% 103.6% 5.4x 5.1x 15.1x 13.7x NM NM 9.6% 6.2% 35.9% 37.1% 13.3% 45.5%
Shopify Inc. $54,366.2 $51,810.0 17.1% 176.4% 816.3% NA 33.3x 24.3x NM NM NM NM 45.0% 36.9% 4.3% 4.9% 40.4% 49.3%
ShotSpotter, Inc. $313.8 $288.4 7.6% (43.0%) NA NA 7.1x 5.9x 33.2x 23.8x NM NM 16.1% 20.7% 21.5% 24.9% NA 37.6%
Splunk Inc. $24,215.8 $24,385.9 3.7% 24.4% 168.3% 200.6% 10.4x 8.5x NM NM NM 83.3x 30.4% 22.6% 16.6% 18.6% 37.3% 47.0%
Square, Inc. $32,092.9 $31,987.9 19.4% 4.7% 410.9% NA 14.4x 11.3x NM NM NM 95.6x (32.5%) 27.6% 18.7% 18.7% 43.6% (13.8%)
StoneCo Ltd. $12,048.8 $12,578.3 8.9% 96.4% NA NA 20.0x 15.2x NM 25.1x NM 63.4x 234.2% 31.5% 56.5% 60.6% 53.0% 290.7%
Synchronoss Technologies $227.3 $483.3 15.1% (23.8%) (85.8%) (87.1%) 1.6x 1.4x 18.6x 16.7x NM NM (4.9%) 10.6% 8.4% 8.4% NA 3.4%
Synopsys, Inc. $22,205.4 $21,620.4 6.0% 58.0% 134.6% 243.1% 6.4x 5.8x 23.7x 19.0x NM NM 6.0% 11.6% 27.2% 30.3% 14.3% 33.2%
Talend S.A. $1,136.5 $1,119.0 (5.7%) (0.8%) 63.9% NA 4.5x 3.8x NM NM NM NM 21.1% 20.0% (6.5%) (1.7%) NA 14.6%
Tenable Holdings, Inc. $2,675.6 $2,420.7 13.7% (1.6%) NA NA 6.9x 5.6x NM NM NM NM 31.6% 23.8% (10.8%) (8.2%) NA 20.8%The Descartes Systems Group Inc $3,775.4 $3,769.5 6.9% 45.3% 108.8% 205.7% 11.6x 10.5x 30.8x 27.3x 39.9x 33.1x 18.4% 10.5% 37.6% 38.3% 18.0% 56.0%
The Sage Group plc $10,629.9 $11,149.7 (1.4%) 18.0% 20.5% 53.8% 4.3x 4.3x 17.3x 16.8x NM NM 8.1% 0.5% 24.9% 25.6% 3.7% 33.0%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 39
Trading Analysis
Horizontal Software (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
The Trade Desk, Inc. $12,149.3 $12,036.3 3.6% 88.7% 807.6% NA 18.3x 14.0x NM NM NM NM 38.0% 30.6% 31.8% 31.2% 32.7% 69.8%
Verint Systems Inc. $3,875.8 $4,388.3 4.8% 19.9% 55.3% 8.7% 3.2x 3.0x 13.3x 11.9x 18.3x 15.9x 10.8% 7.2% 24.1% 25.3% 14.0% 35.0%
Verisk Analytics, Inc. $26,623.9 $29,253.7 8.8% 38.4% 96.6% 152.5% 11.3x 10.3x 24.2x 21.9x NM NM 8.6% 9.3% 46.6% 47.0% 12.3% 55.2%
Walmart Inc. $324,828.2 $399,487.2 (3.7%) 19.5% 71.5% 34.7% 0.8x 0.7x 12.2x 11.8x NM NM 1.4% 3.3% 6.3% 6.3% 5.1% 7.7%
Wix.com Ltd. $7,298.9 $6,933.2 16.6% 30.5% 171.5% 621.4% 9.1x 7.3x NM NM NM NM 26.2% 25.2% 15.0% 16.9% 20.2% 41.2%
Workday, Inc. $42,464.9 $41,912.7 12.3% 1.7% 122.2% 132.4% 11.6x 9.6x NM NM NM NM 28.1% 20.4% 20.7% 21.4% 31.4% 48.9%
Workiva Inc. $2,113.5 $1,946.8 8.2% 8.6% 261.0% 270.4% 6.6x 5.7x NM NM NM NM 20.0% 16.5% (3.3%) (3.3%) NA 16.8%
Yext, Inc. $1,715.3 $1,589.0 3.6% (4.2%) NA NA 5.3x 4.2x NM NM NM NM 30.4% 27.9% (16.6%) (9.7%) NA 13.9%
Zendesk, Inc. $9,691.9 $9,843.5 12.7% 27.9% 261.1% 257.2% 12.1x 9.3x NM NM NM NM 36.0% 30.1% 7.6% 9.9% 44.0% 43.6%
Horizontal Software Median $11,052.8 $11,593.0 6.9% 28.1% 120.4% 148.0% 8.4x 7.3x 23.4x 20.1x 39.9x 40.9x 15.5% 15.7% 24.6% 25.0% 16.5% 40.1%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 40
Trading Analysis
Vertical Software
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
2U, Inc. $1,257.5 $1,415.6 (17.4%) (65.2%) (41.8%) 11.4% 2.5x 1.9x NM NM NM NM 39.1% 27.2% (4.4%) (1.3%) NA 34.7%
Agilysys, Inc. $755.3 $727.5 27.9% 83.6% 234.0% 213.1% 4.7x 4.1x NM NM NM NM 14.7% 13.1% 7.5% 8.1% NA 22.2%
Alarm.com Holdings, Inc. $2,133.8 $2,075.4 2.2% (30.2%) 62.2% NA 4.4x 3.8x 20.3x 19.1x NM NM 13.1% 14.4% 21.5% 20.0% 15.0% 34.6%Allscripts Healthcare Solutions, Inc. $1,393.1 $2,302.1 (12.6%) (27.2%) (26.7%) (28.0%) 1.3x 1.2x 7.7x 7.0x NM NM 1.7% 4.2% 16.8% 17.7% 12.4% 18.5%
Autodesk, Inc. $43,313.5 $44,332.5 7.3% 33.7% 142.0% 264.5% 13.6x 11.1x NM 33.9x NM 70.9x 34.0% 21.8% 26.8% 32.9% 51.9% 60.9%
Blackbaud, Inc. $3,753.8 $4,349.6 (1.6%) 9.4% 19.4% 79.2% 4.9x 4.6x 24.0x 24.6x 31.4x 35.0x 5.6% 4.6% 20.3% 18.9% NA 25.9%
BlackLine, Inc. $3,403.5 $3,206.7 18.6% 28.6% 125.1% NA 11.2x 9.3x NM NM NM NM 25.8% 21.0% 9.3% 10.6% 50.0% 35.1%
Bottomline Technologies $2,356.6 $2,386.6 0.0% 3.8% 108.4% 116.4% 5.5x 5.0x 24.4x 22.3x NM NM 5.8% 9.6% 22.6% 22.7% 20.0% 28.4%Broadridge Financial Solutions, Inc. $13,660.1 $15,314.5 (3.6%) 18.2% 79.1% 148.3% 3.5x 3.3x 16.5x 14.6x 27.3x 25.3x 1.5% 5.7% 21.2% 22.7% NA 22.7%
Castlight Health, Inc. $181.3 $145.4 (6.8%) (58.2%) (60.0%) (86.0%) 1.0x 1.1x NM NM NM NM (8.5%) (4.9%) (7.7%) (5.9%) NA (16.2%)
CDK Global, Inc. $6,516.7 $9,206.1 (1.8%) 9.8% (14.2%) 18.9% 4.4x 4.5x 11.6x 11.2x NM NM 21.7% (0.8%) 38.2% 39.8% 10.0% 60.0%
Cerner Corporation $22,561.6 $23,100.8 (2.1%) 30.8% 33.7% 8.3% 4.1x 3.9x 14.0x 12.3x NM NM 6.0% 4.0% 29.0% 31.7% 14.7% 35.0%
Chegg, Inc. $4,988.1 $5,099.7 8.8% 17.1% 473.4% 521.9% 12.5x 9.8x NM 31.2x 82.3x 48.5x 27.2% 27.4% 30.0% 31.4% NA 57.2%
Cornerstone OnDemand, Inc. $3,570.2 $3,568.7 0.4% 2.5% 44.5% 78.5% 6.2x 5.5x 28.0x 21.5x 81.1x 54.1x 6.6% 14.1% 22.2% 25.4% 48.2% 28.8%
CoStar Group, Inc. $23,922.3 $22,670.3 9.1% 67.1% 223.1% 253.9% 16.3x 13.7x NM NM NM NM 16.6% 19.1% 35.9% 32.2% 19.2% 52.5%
Ebix, Inc. $1,050.0 $1,741.8 3.1% (39.7%) (38.0%) 50.7% 3.0x 2.4x 9.6x 9.1x 9.5x 10.2x 18.2% 21.1% 30.7% 26.9% 10.0% NM
Envestnet, Inc. $4,138.6 $4,735.6 13.3% 45.4% 108.7% 53.2% 5.2x 4.6x 24.7x 20.1x NM NM 11.2% 14.5% 21.3% 22.8% NA 32.5%
Everbridge, Inc. $3,062.8 $2,982.0 16.1% 46.5% 390.7% NA 14.9x 11.6x NM NM NM NM 36.0% 28.8% 2.8% 5.4% NA 38.7%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 41
Trading Analysis
Vertical Software (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
Fidelity National Information Services, Inc. $88,293.5 $107,752.5 3.3% 37.4% 80.9% 130.1% 10.4x 7.9x 25.6x 17.7x NM NM 22.6% 31.3% 40.8% 44.8% 7.3% 63.4%
Fiserv, Inc. $80,642.3 $104,011.3 2.6% 43.0% 120.8% 227.1% 6.7x 6.3x 19.8x 16.9x NM NM 167.0% 6.3% 33.8% 37.2% 15.5% 200.8%
Guidewire Software, Inc. $9,290.2 $8,701.6 2.5% 29.8% 115.0% 124.6% 12.6x 10.6x NM NM 79.7x NM (5.6%) 18.6% 20.0% 17.9% 14.0% 14.4%
GTY Technology Holdings $326.8 $317.9 6.3% (38.8%) (36.1%) NA 7.8x 5.3x NA NA NM NM NA 49.2% 0.0% 0.0% NA NA
HMS Holdings Corp. $2,406.8 $2,390.1 (7.7%) (8.9%) 50.4% 38.1% 3.8x 3.3x 13.2x 12.0x NM NM 5.8% 13.7% 28.6% 27.6% 16.3% 34.4%
Inovalon Holdings, Inc. $3,139.9 $4,067.6 7.7% 41.8% 75.4% NA 6.3x 5.8x 19.1x 17.2x NM NM 21.5% 10.2% 33.2% 33.4% 14.0% 54.6%
IRESS Limited $1,619.9 $1,790.5 7.4% 19.1% 23.9% 35.5% 5.0x 4.8x 19.5x 18.4x 30.8x 34.0x 8.5% 4.2% 25.8% 26.3% NA 34.3%
Jack Henry & Associates, Inc. $11,505.1 $11,482.7 2.7% 12.0% 66.6% 143.7% 7.1x 6.7x 21.7x 20.9x NM NM 5.9% 6.2% 32.6% 31.8% 11.5% 38.5%
K12 Inc. $633.0 $470.2 (20.7%) (48.8%) (19.0%) 13.5% 0.5x 0.4x 3.8x 3.4x NM NM 4.7% 5.9% 12.2% 12.6% 14.0% 16.9%
MiX Telematics Limited $301.3 $293.2 13.9% (8.9%) 115.8% 192.9% 2.0x 2.0x 6.2x 7.0x 26.5x 18.7x 12.1% (4.0%) 31.4% 29.1% 25.0% 43.5%
Model N, Inc. $1,039.6 $1,023.1 (11.1%) 115.0% 254.4% 191.5% 7.1x 6.5x NM NM NM NM (4.8%) 9.4% 9.4% 9.5% 13.0% 4.6%
MSCI Inc. $24,209.3 $26,090.7 10.7% 67.9% 245.4% 431.0% 16.8x 15.1x 31.0x 26.9x NM NM 8.3% 11.5% 54.2% 55.9% 10.0% 62.5%
NextGen Healthcare, Inc. $910.6 $970.4 (13.8%) (21.6%) (7.7%) (14.9%) 1.8x 1.7x 10.7x 10.0x NM NM 1.2% 5.1% 16.8% 17.2% NA 18.0%
NIC Inc. $1,321.3 $1,118.0 (11.7%) 20.3% (18.1%) 20.2% 3.2x 2.9x 13.5x 12.3x NM NM 2.2% 9.7% 23.6% 23.5% NA 25.7%
Pason Systems Inc. $843.8 $719.5 0.7% (36.1%) (30.7%) (26.3%) 3.2x 3.4x 7.1x 7.8x NM NM 1.3% (6.0%) 44.5% 43.3% NA 45.8%
Pluralsight, Inc. $1,973.7 $2,094.8 12.7% (35.3%) NA NA 6.6x 5.3x NM NM NM NM 35.9% 25.4% (15.2%) (15.0%) NA 20.7%
Q2 Holdings, Inc. $4,198.7 $4,019.3 7.5% 46.7% 174.6% 387.6% 12.7x 9.7x NM NM NM NM 31.7% 30.3% 5.6% 4.8% 20.0% 37.3%
RealPage, Inc. $5,399.7 $5,866.9 8.6% 4.6% 90.7% 224.0% 6.0x 5.1x 20.8x 18.7x 39.2x 33.4x 13.3% 16.8% 28.6% 27.2% NA 41.9%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 42
Trading Analysis
Vertical Software (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
RELX PLC $51,187.3 $60,136.5 5.0% 19.7% 45.7% 52.7% 5.7x 5.5x 15.8x 15.2x NM NM 10.1% 3.2% 36.1% 36.5% NA 46.2%
SPS Commerce, Inc. $1,979.9 $1,798.2 2.5% 28.2% 64.7% 91.7% 6.4x 5.9x 26.0x 21.9x 61.2x 46.4x 12.4% 10.0% 24.8% 26.8% 20.0% 37.2%SS&C Technologies Holdings, Inc. $15,923.3 $23,801.6 2.6% 22.4% 96.1% 127.8% 5.1x 5.0x 13.2x 12.5x NM NM 35.1% 3.3% 38.9% 39.9% 17.1% 74.0%
Thomson Reuters Corporation $40,019.3 $42,395.7 12.2% 53.5% 62.7% 89.9% 7.2x 6.8x 28.3x 21.8x NM NM 7.6% 5.0% 25.3% 31.3% 28.0% 32.8%
Tyler Technologies, Inc. $12,619.1 $12,449.3 7.9% 71.1% 121.7% 205.1% 11.4x 10.3x NM NM 67.4x 61.0x 16.8% 10.8% 27.7% 28.6% 16.3% 44.4%
Veeva Systems Inc. $21,784.3 $20,316.6 4.2% 34.4% 246.4% 409.8% 18.6x 14.6x NM NM 92.8x 67.4x 26.5% 27.3% 39.4% 36.8% 20.9% 65.9%
WiseTech Global Limited $5,336.6 $5,162.4 7.1% 23.1% 421.5% NA 17.9x 14.7x NM NM NM NM 43.9% 21.4% 32.1% 33.6% 36.8% 76.0%
Vertical Software Median $3,570.2 $4,019.3 3.1% 19.7% 77.3% 104.0% 6.0x 5.3x 19.1x 17.2x 50.2x 40.7x 12.1% 11.8% 25.3% 26.8% 16.3% 37.4%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 43
Trading Analysis
Infrastructure
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
8x8, Inc. $1,866.2 $1,977.6 1.7% 5.7% 17.5% 141.5% 4.8x 3.9x NM NM NM NM 22.4% 22.8% (11.1%) (3.7%) 16.0% 11.3%
Akamai Technologies, Inc. $15,085.5 $15,722.4 8.1% 43.4% 36.1% 60.5% 5.5x 5.1x 13.0x 12.0x 26.3x 21.2x 6.1% 6.8% 41.9% 42.7% 13.0% 48.0%
Alteryx, Inc. $9,076.2 $8,928.7 39.4% 96.0% NA NA 22.8x 17.1x NM NM NM NM 54.6% 32.8% 14.4% 16.2% NA 68.9%
Amazon.com, Inc. $1,000,342.6 $1,022,856.6 8.7% 16.9% 143.9% 466.6% 3.7x 3.1x 24.5x 20.1x NM NM 19.9% 19.6% 14.9% 15.3% 33.5% 34.8%
Anaplan, Inc. $7,694.7 $7,438.4 9.9% 83.5% NA NA 21.4x 16.2x NM NM NM NM 44.2% 32.7% (12.6%) (8.4%) NA 31.6%
Arista Networks, Inc. $17,063.0 $14,718.6 9.8% 4.0% 137.6% 253.8% 6.1x 6.2x 15.5x 16.4x NM NM 12.0% (0.7%) 39.3% 37.5% 10.8% 51.3%
Box, Inc. $2,248.9 $2,473.6 (10.4%) (28.2%) (12.0%) (20.1%) 3.6x 3.2x NM 24.9x NM NM 14.1% 11.4% 8.3% 12.9% NA 22.4%
Brightcove Inc. $336.0 $329.8 (0.3%) 8.0% 20.3% 20.9% 1.8x 1.6x NM 21.2x NM NM 12.0% 9.5% 4.8% 7.7% NA 16.9%Check Point Software Technologies Ltd. $17,402.5 $15,718.0 3.0% 2.1% 15.7% 48.1% 7.9x 7.7x 15.4x 15.1x NM NM 4.0% 2.8% 51.0% 50.9% 7.9% 55.1%
Cheetah Mobile Inc. $482.0 $161.7 (4.7%) (48.9%) (65.0%) (82.3%) 0.3x 0.3x NA NA NM NM (27.3%) (10.7%) 0.0% 0.0% NA (27.3%)
Cisco Systems, Inc. $195,016.8 $186,624.8 (4.1%) (2.8%) 49.6% 74.4% 3.6x 3.6x 9.9x 9.9x NM NM 1.4% (0.3%) 36.4% 36.8% 6.1% 37.8%
Citrix Systems, Inc. $15,785.2 $16,148.7 9.3% 18.2% 32.9% 104.6% 5.4x 5.2x 15.1x 15.4x NM NM 1.0% 3.8% 35.5% 33.6% 7.8% 36.5%
Commvault Systems, Inc. $2,098.0 $1,777.9 0.9% (31.9%) (8.3%) 3.3% 2.6x 2.5x 16.5x 16.7x NM NM (4.3%) 2.5% 15.8% 15.2% 10.0% 11.5%
CyberArk Software Ltd. $5,236.0 $4,729.4 18.6% 57.5% 160.5% 308.1% 11.0x 9.3x NM 32.6x NM NM 25.5% 18.6% 30.1% 28.4% 17.0% 55.5%
Digimarc Corporation $373.8 $335.8 (6.7%) 60.6% 18.6% 15.9% 14.5x 12.3x NA NA NM NM 8.9% 17.8% 0.0% 0.0% NA 8.9%
Dropbox, Inc. $7,068.8 $6,939.0 (5.0%) (31.1%) NA NA 4.2x 3.6x 18.6x 14.9x NM NM 19.1% 14.7% 22.5% 24.5% 22.2% 41.6%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 44
Trading Analysis
Infrastructure (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
F5 Networks, Inc. $7,425.3 $6,605.3 (12.6%) (24.1%) (8.9%) 9.4% 2.9x 2.7x 8.0x 7.9x NM NM 3.8% 7.5% 36.3% 34.2% 9.6% 40.1%
FireEye, Inc. $3,410.3 $3,503.4 (3.3%) (9.6%) 17.9% (52.7%) 4.0x 3.7x 32.4x 30.6x NM NM 6.0% 7.5% 12.3% 12.1% 22.1% 18.3%
Forescout Technologies, Inc. $1,344.9 $1,299.9 (13.1%) (6.5%) NA NA 3.8x 3.4x NM NM NM NM 14.4% 13.5% (7.8%) (3.3%) NA 6.6%
Fortinet, Inc. $19,730.5 $17,831.8 8.1% 50.7% 246.8% 285.9% 8.3x 7.2x 30.6x 25.5x NM NM 19.0% 15.4% 27.2% 28.3% 17.0% 46.3%
Iron Mountain Incorporated $9,076.6 $19,417.2 (0.8%) (15.0%) (11.7%) (20.7%) 4.6x 4.5x 13.6x 12.6x NM NM 62.3% 2.3% 33.7% 35.3% 4.4% 95.9%
j2 Global, Inc. $4,671.3 $5,824.6 2.3% 27.5% 14.4% 66.9% 4.3x 4.0x 10.6x 9.9x 15.2x 13.6x 12.7% 6.9% 40.3% 40.6% 13.5% 53.0%
LogMeIn, Inc. $4,176.4 $4,366.5 0.3% (7.6%) (20.5%) 80.8% 3.5x 3.3x 10.6x 11.0x 16.1x 16.8x 4.6% 4.7% 32.7% 30.2% 5.0% 37.3%
Micro Focus International plc $4,489.8 $6,523.8 (3.6%) (41.4%) (63.3%) (25.1%) 1.9x 2.0x 4.9x 5.0x NM NM 8.6% (5.4%) 39.7% 41.0% NA 48.3%
Mimecast Limited $3,163.4 $3,207.5 17.6% 35.8% 140.0% NA 8.0x 6.6x NM 34.8x NM NM 25.3% 21.0% 16.8% 18.9% 20.0% 42.1%
MobileIron, Inc. $534.4 $453.6 (1.9%) (1.6%) 9.7% (45.6%) 2.2x 2.1x NM NM NM NM 6.7% 5.0% (0.9%) 3.6% NA 5.8%
NetApp, Inc. $12,187.3 $10,985.3 (14.2%) (16.3%) 39.4% 41.3% 1.9x 1.9x 8.0x 7.7x NM NM (8.5%) 3.1% 24.2% 24.5% 11.3% 15.7%
NetScout Systems, Inc. $1,924.1 $2,109.1 6.8% (0.8%) (22.8%) (28.4%) 2.4x 2.3x NA 11.5x NM NM (2.5%) 4.0% 0.0% 19.8% NA (2.5%)
New Relic, Inc. $3,880.6 $3,597.5 0.5% (35.1%) 82.3% 112.5% 6.3x 5.4x NM NM NM NM 27.5% 17.0% 16.8% 14.6% 20.7% 44.4%
Okta, Inc. $15,520.2 $15,250.1 11.0% 55.3% NA NA 26.5x 20.1x NM NM NM NM 43.9% 31.7% (7.1%) (4.5%) NA 36.8%
Palo Alto Networks, Inc. $22,998.4 $22,016.1 1.5% 9.3% 59.1% 85.8% 7.0x 5.8x 29.7x 25.2x NM NM 21.3% 20.4% 23.5% 23.1% 22.4% 44.9%
Pegasystems Inc. $6,839.3 $6,799.3 8.2% 53.2% 122.2% 340.5% 7.4x 6.5x NM NM NM NM 3.8% 12.4% 3.0% 3.9% 20.0% 6.7%
Progress Software Corp. $2,035.4 $2,158.5 8.6% 24.6% 61.1% 80.2% 5.1x 4.8x 12.8x 11.9x NM NM 12.6% 5.9% 39.4% 40.2% 10.5% 52.0%
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 45
Infrastructure (cont.)
(USD in millions) Capitalization Trading Performance Enterprise Value / Revenue
Enterprise Value /EBITDA2 P / E Revenue
GrowthEBITDAMargin
Long-TermEPS
Growth
2019ERule of
401Company Equity
ValueEnterprise
Value YTD 1 Year 3 Year 5 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
Proofpoint, Inc. $6,973.6 $6,888.7 7.0% 20.6% 53.2% 145.6% 7.8x 6.5x NM NM NM NM 23.3% 20.5% 17.4% 13.4% 22.5% 40.6%
Qualys, Inc. $3,323.5 $3,063.7 2.8% (0.9%) 138.8% 125.5% 9.5x 8.4x 22.1x 19.7x NM NM 15.3% 14.1% 43.1% 42.5% NA 58.4%
Radware Ltd. $1,194.9 $992.6 (1.2%) 5.2% 73.5% 32.4% 3.9x 3.6x 22.6x 20.7x NM NM 7.6% 9.2% 17.4% 17.4% 17.0% 25.1%
Rapid7, Inc. $2,932.5 $2,947.9 6.0% 47.8% 376.2% NA 9.1x 7.4x NM NM NM NM 32.5% 22.9% 3.5% 6.4% NA 36.0%
RingCentral, Inc. $17,700.9 $17,544.6 21.9% 122.4% 780.4% 1422.8% 19.7x 16.0x NM NM NM NM 45.1% 23.3% 13.1% 12.6% 18.5% 58.2%
ServiceNow, Inc. $63,776.4 $63,216.2 19.8% 53.7% 273.2% 364.0% 18.3x 14.2x NM NM NM NM 32.2% 29.1% 28.2% 28.7% 33.5% 60.4%
Smartsheet Inc. $5,695.3 $5,196.9 7.9% 54.5% NA NA 19.2x 13.8x NM NM NM NM 52.0% 39.3% (15.9%) (11.8%) NA 36.1%
SolarWinds Corporation $5,809.0 $7,503.9 2.0% 7.8% NA NA 8.0x 7.1x 16.6x 15.6x 33.3x 22.8x 13.0% 11.6% 48.0% 45.8% 20.1% 60.9%
Sophos Group plc $3,624.9 $3,773.1 (0.1%) 65.3% 103.3% NA 5.5x 4.6x NM 26.3x 64.5x 54.5x (1.4%) 18.2% 14.7% 17.5% 99.7% 13.4%Symphony Communication Public Company Limited $36.9 $66.0 (11.3%) (46.6%) (69.6%) (80.7%) NA NA NA NA NM NM NA NA NA NA NA NA
GlobalData Plc $2,023.3 $2,146.9 0.8% 120.3% 145.3% 542.0% 9.2x 8.7x NM 34.3x 66.0x 55.5x 16.7% 4.9% 24.0% 25.5% NA 40.7%
Twilio Inc. $17,053.6 $15,795.6 26.5% 11.7% 331.3% NA 14.2x 10.8x NM NM NM NM 71.7% 31.2% 9.3% 8.2% 16.9% 78.2%
Upland Software, Inc. $986.2 $1,220.7 9.3% 25.0% 222.9% 392.9% 5.6x 4.7x 14.9x 12.2x 24.4x 16.0x 46.3% 19.2% 37.2% 38.4% 22.5% 83.6%
Varonis Systems, Inc. $2,550.3 $2,484.9 7.7% 41.6% 179.8% 153.7% 9.8x 8.7x NM NM NM NM (6.1%) 12.9% (8.7%) (2.9%) NA (14.8%)
VeriSign, Inc. $24,437.5 $25,004.8 8.0% 23.0% 159.5% 282.0% 20.3x 19.4x 28.0x 26.6x NM NM 1.5% 4.8% 72.4% 72.7% NA 73.9%
VMware, Inc. $60,691.3 $64,307.3 (2.5%) (2.0%) 69.1% 92.0% 6.4x 5.7x 16.4x 15.6x NM NM 12.7% 12.3% 38.7% 36.4% 13.8% 51.5%Zoom Video Communications, Inc. $21,089.5 $20,333.9 12.1% NA NA NA 33.3x 23.4x NM NM NM NM 84.9% 42.1% 18.7% 14.2% 73.5% 103.6%
Zscaler, Inc. $7,177.1 $6,833.7 20.6% 16.0% NA NA 19.1x 14.6x NM NM NM NM 47.3% 31.0% 9.5% 9.5% 36.5% 56.9%Infrastructure Software Median $5,695.3 $6,523.8 2.8% 10.5% 56.2% 80.5% 6.2x 5.5x 15.5x 15.6x 26.3x 21.2x 13.5% 12.6% 17.4% 18.2% 17.0% 40.7%
Trading Analysis
Note: Comparables are pro forma for acquisitions and divestitures.Source: Capital IQ as of market close on January 31st, 20201. Rule of 40% calculated as revenue growth + EBITDA margin.2. EV/EBITDA Multiple >35x is denoted as “NM”.
INVESTMENT BANKING SOFTWARE INSIGHT – FEB 2020 46
Sources of data include Capital IQ, FactSet and other news organizations. Information obtained from third-party sources is considered reliable,but we do not guarantee that the information herein is accurate or complete. This report was prepared within Raymond James & Associates’Investment Banking Department and is for information purposes only. This report is not a product of Raymond James & Associates’ ResearchDepartment; recipients of this report should not interpret the information herein as sufficient grounds for an investment decision or any otherdecision. The report shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities mentioned herein; pastperformance does not guarantee future results.
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Ent. Value = Enterprise ValueLTM = Last Twelve MonthsEBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
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