the cyberscope - q2 2015 market review
TRANSCRIPT
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…with global reach
1
About Results International
Results International Global Cyber Security Indices
Note: Based on share prices as at 30th June 2015 Note: Indices weighted by market capitalisation Sources: Capital IQ and Results analysis 2
60
80
100
120
140
160
180
200
220
Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15
Broadline Endpoint Network Data Monitoring & Analysis Global Security NASDAQ Comp
38.8%
27.8%
13.1%
41.8%
2.1%
31.1%
41.1%
Q2 2015 Performance
Broadline 0.4%
Endpoint 10.1%
Network 7.5%
Data 24.7%
Monitoring & Analysis (6.7%)
Global Security 7.4%
(1.3%)
3.6%
23.6%
14.6% 14.6%
(35.6%)
n.a. 0.2%
(4.7%)
20.0% 17.5%
4.4%
17.6%
5.4%
(2.4%)
22.2%
55.7%
6.6%
52.6%
(13.6%)
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
Cyber Security: Share Price Performance
Note: Share price performance as at 30th June 2015 Sources: Capital IQ and Results analysis
3
Broadline Endpoint Network Data
Monitoring &
Analysis
Q2
-20
15
Last
12 M
on
ths
1.5%
25.6% 35.2%
n.a.
22.2%
(37.9%)
n.a.
27.7% 18.7%
(44.9%)
64.5%
8.0%
108.3%
31.6%
2.0%
20.6%
158.6%
70.0%
(7.1%)
57.2%
(100.0%)
(50.0%)
0.0%
50.0%
100.0%
150.0%
200.0%
Company IPO
Date Description Raised
Indicative Price
Range ($)
IPO Price
($)
Increase vs.
range
Day 1
Increase
Current
Increase(1)
Current
EV
EV / Revenue
2015E
EV / EBITDA
2015E
Jun-15 Antivirus and network
security 552 n.a. 3.54 n.a. 7.4% 4.1% 1,925 n.a. n.a.
Sep-14 Privileged account
security 86 13.00-15.00 16.00 14.3% 87.1% 292.6% 2,072 14.7 x n.m.
Jun-14 Mobile security and
management 100 8.00-10.00 9.00 0.0% 22.4% (34.3%) 373 2.6 x n.m.
Nov-13 Network security and data storage
64 18.00-21.00 18.00 (7.7%) 19.7% 120.1% 2,008 6.3 x 24.9 x
Sep-13 Forensics and
malware protection 304 15.00-17.00 20.00 25.0% 80.0% 144.6% 7,988 12.7 x n.m.
Sep-12 Cloud security and
compliance 91 11.00-13.00 12.00 0.0% 18.0% 236.3% 1,436 8.7 x 32.0 x
Jul-12 Firewalls and network
security 260 38.00-40.00 42.00 7.7% 26.5% 316.0% 15,310 14.8 x n.m.
Apr-12 Communication
security 82 10.00-12.00 13.00 18.2% 8.3% 389.8% 2,759 10.9 x n.m.
Feb-12 Antivirus and anti-
spyware 128 16.00-18.00 16.00 (5.9%) (18.8%) 70.1% 1,541 3.6 x 10.6 x
Cyber Security: Recent IPO Performances
4
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA Note: (1) Current increase from IPO price; Market data as of 30th June 2015 Source: Capital IQ
Nasdaq
Nasdaq
Nasdaq
Nasdaq
NYSE
NYSE
NYSE
Nasdaq
LSE
Cyber Security: Valuation Benchmarks
5
EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; financials calendarised to December year end
Note: Median values reported; excludes negative multiples
Note: See Selected Publicly Traded Companies (Slide 9) for details of companies included in each category
Source: Capital IQ
1.4%
17.8%
14.5%
26.3%
14.7% 16.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Broadline Endpoint Network Data Monitoring &
Analysis
Global
Security
2.9 x 3.1 x
5.2 x
10.9 x
5.4 x
4.1 x
0.0 x
2.0 x
4.0 x
6.0 x
8.0 x
10.0 x
12.0 x
Broadline Endpoint Network Data Monitoring &
Analysis
Global
Security
33.6%
18.9% 20.6%
(7.1%)
14.5%
19.5%
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Broadline Endpoint Network Data Monitoring &
Analysis
Global
Security
8.7 x
11.4 x
16.5 x
n.m.
32.0 x
12.3 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
Broadline Endpoint Network Data Monitoring &
Analysis
Global
Security
Cyber Security: Global M&A Activity
6 Sources: Press Releases, Capital IQ, Mergermarket and Results analysis
26 26 26 27
23 23
32
24
15
31
25
22
32
28 27
22
34 33
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
5
10
15
20
25
30
35
40
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Tota
l D
isc
lose
d D
ea
l V
alu
e (
$m
)
Nu
mb
er
of D
ea
ls
No. of Deals Total DisclosedDeal Value
Cyber Security: Selected Deals in Q2 2015
Date Buyer Target EV ($m) EV /
Revenue EV /
EBITDA Company description
Target Location
Jun-15 635 - - Cloud-delivered network security and intelligence
Jun-15 - - - Cybersecurity anomaly detection and predictive analytics
Jun-15 165 - - Cybersecurity provider to U.S federal government
Jun-15 - - - Cloud-based email security for managed service providers
Jun-15 20 5.0x - Intelligent identity management application developer
Jun-15 16 1.9x - Vulnerability assessment and penetration testing
Jun-15 - - - Interactive application security testing
May-15 - - - Cloud application control and threat management
May-15 - - - Advanced identity governance and administration solutions
May-15 40 2.0x - Mobile virtual private network provider (VPN)
May-15 - - - Web and mobile application penetration testing
Apr-15 150 5.0x - Enterprise identity and access management
Apr-15 - - - Document control, tracking and protection solutions
Apr-15 1,300 3.5x(1)
- Web filtering and data theft prevention
Apr-15 850 3.9x 65.6x Data security and compliance management solutions
Apr-15 80 - - Mobile threat management platform
Apr-15 - - - Cloud-based mobile authentication startup
7
(1): Multiple of CY2015 projected revenues, as per Raytheon conference call on 20/04/15 Note: Enterprise value (EV) = transaction value scaled to 100% shareholding plus net debt (includes minority interest) Financials relate to the companies’ full fiscal year before the transaction took place Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
Cyber Security: Selected Fundraisings in Q2 2015
Date Company Type of round Funds
raised ($m) Investor participation Company description
Company headquarters
Jun-15 Series B 21.0 Bessemer Venture Partners, Foundry Group, TechStars, ff Venture Capital, Idea Fund, Correlation Ventures
Bot detection and mitigation platform
Jun-15 Venture 39.0 QuestMark Partners, Intel Capital, Foundation Capital, Silver Lake Next-generation trust protection platform
Jun-15 Venture 84.0 Insight Venture Partners Application security testing and attack prevention
Jun-15 Series B 23.0 Comcast Ventures, Menlo Ventures, Globespan Capital Partners, Commonwealth Capital Partners, Flybridge Capital Partners
Data security analytics
Jun-15 Series B 25.0 New Enterprise Associates, Benchmark Capital, Private Investors Crowdsourced cybersecurity solutions
Jun-15 Series B 15.0 Kayne Partners, Medina Capital Content encryption and security
solutions
Jun-15 Series B 25.0 Sutter Hill Ventures, Osage Partners, General Catalyst Partners, Engineering Capital
Advanced malware protection
May-15 Venture 14.9 Goldman Sachs, EDB Investments, Siemens Venture Capital, Alcatel-Lucent, Mitsui, Fairhaven Capital, Arsenal Venture Partners
Real-time endpoint threat detection
May-15 Series C 35.0 Cisco, Glynn Capital, Evolution Equity, Lumia Capital, Mohr Davidow Ventures, Northgate, Greylock , Sequoia Capital, Sutter Hill Ventures
Cloud-delivered network security and intelligence
May-15 Venture 24.0 C5 Capital Identity and access management
May-15 Series B 25.0 Spark Capital, Lockheed Martin, CRV Real-time cyberattack detection and response
Apr-15 Series C 30.0 BDS Ventures, Hewlett Packard Ventures, Index Ventures, Rembrandt Venture Partners, Sequoia Capital
Cloud access security
Apr-15 Series C 30.0 Redpoint Ventures, Benchmark Capital, Google Ventures, Radar Partners, True Ventures
Two-factor authentication network security
Apr-15 Series C 100.0 Accel Partners, BlackRock, Andreessen Horowitz, Data Collective, Formation 8, General Catalyst Partners, Valor Capital Group
Enterprise data centre and cloud computing security
Apr-15 Series B 20.0 New Enterprise Associates, Venrock, Index Ventures Threat analytics and forensics
Apr-15 Series B 17.0 August Capital, Engineering Capital, Norwest, Wing Venture Capital Cloud security automation
Apr-15 Series D 25.0 AITV, Cisco Ventures, EPIC Ventures, Fortinet, Granite Ventures, Intel, Trident Capital, Vanedge Capital, VMware
Virtualised infrastructure security
8
Sources: VentureSource, Capital IQ and Results analysis
Price % of 52 Market Total Net Enterprise Revenue Rev. Growth Gross Margin EBITDA Margin
Company (30-Jun-15) Week High Cap Cash Debt Value CY2015 CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Broadline
Symantec 23.25 85.1% 15,827 3,891 (1,795) 14,032 6,353 (0.7%) 82.3% 32.6% 36.2% 2.2 x 2.2 x 6.8 x 6.1 x
Trend Micro 34.27 92.0% 4,654 955 (955) 3,699 1,009 3.6% 82.3% 34.6% 34.9% 3.7 x 3.5 x 10.6 x 10.1 x
Endpoint
AVG Technologies 27.21 93.5% 1,436 160 105 1,541 433 15.1% 86.1% 33.7% 33.6% 3.6 x 3.1 x 10.6 x 9.2 x
CyberArk 62.82 82.3% 2,264 192 (192) 2,072 141 28.7% 85.7% 16.7% 17.3% 14.7 x 11.4 x n.m. n.m.
F-Secure 3.50 95.4% 551 123 (123) 428 165 6.9% 94.9% 21.1% 22.6% 2.6 x 2.4 x 12.3 x 10.8 x
MobileIron 5.91 45.6% 490 117 (117) 373 145 20.5% 81.8% (41.0%) (19.6%) 2.6 x 2.1 x n.m. n.m.
Sophos 3.68 96.8% 1,656 539 269 1,925 n.a. n.a. 86.0% n.a. n.a. n.a. n.a. n.a. n.a.
Network
Barracuda Networks 39.62 84.7% 2,196 192 (187) 2,008 320 16.8% 78.9% 25.3% 30.1% 6.3 x 5.4 x 24.9 x 17.9 x
Check Point Software 79.55 89.9% 14,799 1,278 (1,278) 13,520 1,625 7.9% 88.2% 56.3% 56.8% 8.3 x 7.7 x 14.8 x 13.6 x
Corero Network Security 0.21 51.9% 25 6 (6) 19 16 40.6% 54.9% 0.6% 9.3% 1.2 x 0.8 x n.m. 8.8 x
Fortinet 41.33 93.7% 7,290 804 (804) 6,486 943 18.3% 70.0% 16.8% 17.8% 6.9 x 5.8 x 41.0 x 32.6 x
F5 Networks 120.35 88.4% 8,665 666 (666) 7,998 1,971 10.4% 82.1% 38.7% 28.6% 4.1 x 3.7 x 10.5 x 12.9 x
Palo Alto Networks 174.70 94.4% 15,558 823 (248) 15,310 1,031 32.1% 73.3% 19.5% 24.6% 14.8 x 11.2 x n.m. 45.7 x
Radware 22.20 89.1% 1,056 77 (77) 979 247 12.2% 81.1% 21.7% 22.3% 4.0 x 3.5 x 18.2 x 15.8 x
Secunet 22.16 89.8% 143 30 (30) 113 92 10.3% 64.3% 10.1% 10.0% 1.2 x 1.1 x 12.2 x 11.1 x
Data
FireEye 48.91 88.4% 8,385 398 (398) 7,988 631 37.2% 58.9% (34.0%) (16.5%) 12.7 x 9.2 x n.m. n.m.
Imperva 67.70 98.1% 2,147 243 (243) 1,905 207 21.5% 77.7% (7.1%) (2.3%) 9.2 x 7.6 x n.m. n.m.
Proofpoint 63.67 93.8% 2,788 194 (29) 2,759 253 26.3% 66.4% 1.1% 6.3% 10.9 x 8.6 x n.m. n.m.
Monitoring & Analysis
Guidance Software 8.47 83.9% 254 24 (24) 230 110 5.3% 66.9% 1.9% 4.6% 2.1 x 2.0 x n.m. 43.4 x
Qualys 40.35 72.7% 1,579 143 (143) 1,436 166 24.2% 78.3% 27.1% 27.8% 8.7 x 7.0 x 32.0 x 25.1 x
25th percentile 84.5% 155 9.1% 69.2% 1.5% 7.8% 2.6 x 2.3 x 10.6 x 10.3 x
Median 89.5% 253 16.8% 80.0% 19.5% 22.3% 4.1 x 3.7 x 12.3 x 13.2 x
75th percentile 93.7% 976 25.2% 83.1% 29.9% 29.3% 8.9 x 7.6 x 21.5 x 23.3 x
Operating Metrics Valuation Metrics
Revenue EBITDA
Cyber Security: Selected Publicly Traded Companies
9
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA; Net debt includes minority interest Source: Capital IQ
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