Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan, authorised and regulated by the Financial Conduct Authority.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its businessaddress at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
www.harriswilliams.de
TECHNOLOGY, MEDIA, & TELECOMQUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
PAGE |
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
CONTENTS
DEAL SPOTLIGHT
M&A TRANSACTIONS – 1Q 2016
SOFTWARE M&A ACTIVITY
SOFTWARE SECTOR OVERVIEWS
SOFTWARE PRIVATE PLACEMENTSOVERVIEW
SOFTWARE PUBLIC COMPARABLESOVERVIEW
TECHNOLOGY IPO OVERVIEW
DEBT MARKET OVERVIEW
APPENDIX: PUBLIC COMPARABLES DETAIL
TMT CONTACTS
UNITED STATES
Jeff BistrongManaging [email protected]
Sam HendlerManaging [email protected]
Mike WilkinsManaging [email protected]
EUROPE
Thierry MonjauzeManaging [email protected]
TO SUBSCRIBE PLEASE EMAIL:*[email protected]
HARRIS WILLIAMS & CO. OVERVIEW
HARRIS WILLIAMS & CO. (HW&CO.) GLOBAL ADVISORY PLATFORM
SOFTWARE / SAAS
Enterprise Software
Data and Analytics
Infrastructure andSecurity Software
IT and Tech-enabledServices
Data Center andManaged Services
INTERNET & DIGITAL MEDIA
AdTech and MarketingSolutions
Consumer Internet
Digital Media and Content
eCommerce
Mobile
HW&CO. TECHNOLOGY, MEDIA & TELECOM (TMT) GROUP FOCUS AREAS
SELECT 2016 AND 2015 HW&CO. TMT TRANSACTIONS
TMT VERTICAL FOCUS AREAS
25 year history with over 120closed transactions in thelast 2 years
Approximately 250professionals across sevenoffices in the U.S. andEurope
Strategic relationships inIndia and China
10 industry groups
KEY FACTS
1
HW&Co. OfficeNetwork Office
has been acquired byhas been acquired by has been acquired byhas been acquired byhas been acquired byhas been acquired byhas been acquired byhas been acquired byhas been
recapitalized by has been acquired by has been acquired by
Baarsma B2C trades as:
Education
Energy, Power, andInfrastructure
Fintech
Healthcare IT
Public Sector and Non-Profit
Supply Chain, Transportation,and Logistics
Manufacturing
Professional Services
has been acquired by
PAGE |
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
DEAL SPOTLIGHT – CLEARLINK
Clearlink is a leading tech-enabled inbound demand generation and sales conversionplatform serving well-known clients across various industries and subsectors, includingtelecommunications, satellite television, home security, and insurance.
Clearlink leverages proprietary marketing content generation and sales analyticstechnologies to capture potential customers, who are then directed towards thecompany’s sales centers and converted into actual customers for its clients.
Founded in 2003, Clearlink is based in Salt Lake City, Utah and has approximately 1,300employees across two offices.
ABOUT CLEARLINK
This transformative acquisition expands Sykes’s service offerings and total addressablemarket, enabling the company to capture a greater share of the customer contactmanagement value chain.
Combining Clearlink’s digital marketing, demand generation, and sales conversionmodel with Sykes’s post-sales customer care and support capabilities will enable thecombined company to provide the market with a unique and differentiated globalcustomer interaction management platform that more effectively engages digitalconsumers at every touch point in the customer life cycle.
There is a significant opportunity for the combined companies to generate revenuesynergies through cross-selling the full solution suite to existing customers, providing acomprehensive outsourced customer management strategy.
HW&Co.’s TMT Group advised Pamlico Capital and its portfolio company, Clear Link Holdings, LLC(dba Clearlink), on its sale to Sykes Enterprises, Inc. (NASDAQ: SYKE).
2
has been acquired by
April 1, 2016
PAGE | 3
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
SELECT SOFTWARE M&A TRANSACTIONS – 1Q 2016
GTCR’s pending acquisition of Lytx
Lytx provides video-based driver safety software and telematics to over 1,400 commercial and government clients worldwide.
The company’s flagship DriveCam™ solution enables clients to realize a significant return on investment by lowering operatingand insurance costs, while achieving greater efficiency, safety and compliance.
Post-acquisition, GTCR will support Lytx in enhancing its solution suite and data set to better serve its expanding client base,furthering the company’s video telematics market leadership.
Ent. Value: $500.0m
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NA
Announced
Summit Partners’ acquisition of Perforce Software
Perforce provides a cloud-based source code management and collaboration platform to over 10,000 clients globally.
The company’s software supports distributed high-change environments, favored by developers, as well as the centralizedcollaborative environment and large file support needed by operations teams.
Summit is partnering with Perforce to capitalize on the rapidly growing collaborative development market opportunity, which isbeing driven by the increasing complexity within enterprise development and deployment environments.
Ent. Value: NA
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NA
February 2, 2016
Insight Venture Partners’ pending take-private acquisition of Diligent Corporation
Diligent is a leading provider of secure corporate governance and collaboration software for boards and senior executives.
Over 3,500 clients in more than 60 countries across all seven continents rely on Diligent to provide secure, intuitive access to theirmost time-sensitive and confidential information, ultimately helping them make better decisions.
This acquisition, which is expected to close in 2Q 2016, represents Insight’s second take-private transaction in the last 12 months,having completed the acquisition of supply chain software provider, E2open, in March 2015.
Ent. Value: $434.3m
Revenue: $98.7m
EV / Revenue: 4.4x
EV / EBITDA: 26.2x
Announced
The Riverside Company’s acquisition of Guestline
Guestline provides a broad suite of hospitality and hotel management software including property management systems,online bookings, channel distribution, social media, PCI compliance, and POS systems.
The company serves a diverse client base of independent hotels, hotel chains, pub companies, and serviced apartmentsacross four continents and over ten countries.
Riverside plans to leverage its global team to help Guestline grow internationally, deepen its penetration in the UK market, andinvest in new technologies and products to ensure Guestline remains an industry leader.
Ent. Value: NA
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NA
March 31, 2016
ResMed’s acquisition of Brightree
Brightree offers cloud-based business management software solutions to the post-acute care industry.
The acquisition furthers ResMed's position as a leading tech-driven medical device company and provides its customers newtools to help them increase operational efficiency and improve cash-flow while delivering best-in-class patient care.
Building healthcare informatics offerings is central to ResMed's growth strategy and its goal of helping customers improvepatient quality of life, slow the progression of chronic disease, and lower overall healthcare system costs.
April 4, 2016
Ent. Value: $800.0m
Revenue: $113.0m
EV / Revenue: 7.1x
EV / EBITDA: 18.6x
PAGE | 4
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
SOFTWARE ACQUISITION ACTIVITY – STRATEGIC ACQUIRERS
MOST ACTIVE STRATEGIC ACQUIRERS OF SOFTWARE ASSETS BY VOLUME
GLOBAL STRATEGIC ACQUIRER SOFTWARE M&A ACTIVITY BY VOLUME
The 10 most active strategic software consolidators combined for 29 acquisitions in 1Q 2016, with IBM being the most active.
IBM is actively expanding its presence in higher-margin businesses like cloud, security, and analytics to offset the decline in its perpetual licensing business. The company’s investment in these areas grew 24% to $28.9 billion in constant currency terms in 2015. Notable 1Q 2016 transactions include Truven Health Analytics, Optevia, IRIS Analytics, and Resilient, among others.
Global strategic software M&A registered 406 transactions in 1Q 2016, which was slightly below the last three quarters, but still among the most active quarters in the last four years.
Historically, software M&A has largely been driven by big technology companies; however, in recent years, many large non-traditional technology companies like GE and Schneider, have become more active in the sector as their business models are being disrupted by new technologies seeking to capitalize on secular trends involving data and the internet of things.
379 362412
352 352 333 327 324371
340309
402454 438 435
406
2Q '12 3Q '12 4Q '12 1Q '13 2Q '13 3Q '13 4Q '13 1Q '14 2Q '14 3Q '14 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15 1Q '16
712
58 10
27 5 3
7
5
9
5
98
92 7 9
5
286
10
4
9
8
55 4
1
12
13
1810
3
3
63 3
6
4
10
5
42
21 1
2016
2015
2014
2013
2012
(# of Transactions)
(# of Transactions)
Note: Includes control investments only.
PAGE | 5
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
SOFTWARE ACQUISITION ACTIVITY – PRIVATE EQUITY
MOST ACTIVE PRIVATE EQUITY BUYERS OF NEW SOFTWARE PLATFORMS BY VOLUME
GLOBAL NEW PLATFORM PRIVATE EQUITY SOFTWARE M&A ACTIVITY BY VOLUME
The 10 most active software investors completed a combined 18 new platform investments in 1Q 2016, with Insight Venture Partners and Vista Equity leading the way with seven investments, collectively.
Of the 18 platform investments, 13 were SaaS / application software transactions, three were data-oriented transactions, and two were infrastructure software transactions. Four deals involved European and Asian targets while three were take-private transactions.
Globally, private equity registered 50 new software platform acquisitions in 1Q 2016, of which the average reported transaction size was $227 million, down from $910 million in 4Q 2015.
Private equity firms continue to exhibit strong interest in the software sector as they seek to deploy record levels of uninvested capital and capitalize on a lending environment that remains favorable, especially for high quality, middle market software companies.
96
3 24
2 3 2
7
3
35
42
12
33
9
5
3 4 3
44 6 3
3
6
5
73
67 4
53
2
3
2
24
11
21
2
2016
2015
2014
2013
2012
49
4246
4138
47 45 43
32
48 4744
54 55
4650
2Q '12 3Q '12 4Q '12 1Q '13 2Q '13 3Q '13 4Q '13 1Q '14 2Q '14 3Q '14 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15 1Q '16
(# of Platform Transactions)
(# of Platform Transactions)
Note: Includes control investments only.
PAGE | 6
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
DATE
CLOSED ACQUIRER TARGET DESCRIPTION
ENTERPRISE
VALUE (MM)
REVENUE
MULTIPLE
APPLICATION SOFTWARE – M&A MARKET SUMMARY
APPLICATION SOFTWARE M&A VOLUME (GLOBAL)
NOTABLE APPLICATION SOFTWARE M&A TRANSACTIONS
Application Software M&A continued at a strong pace with 313 registered transactions, making 1Q 2016 one of the most active quarters over the past four years.
Median reported Application Software M&A revenue multiples remained in line with the prior four quarters, and above historical averages.
MEDIAN M&A REVENUE MULTIPLES (REPORTED)
1.2x
2.1x
2.4x
1.3x
1.4x 1.5x
1.6x
2.5x2.5x
2.1x
2.3x2.3x
1.4x
2.5x
2.3x
2.5x2.4x
Strategic buyers continue to view M&A as a primary growth vehicle, targeting competitors and technology partners to strengthen market positions and bolster service offerings.
Some of the more notable transactions involving direct competitors include CPSI’s acquisition of Healthland and Kronos’s acquisition of Empower. Notable partner acquisitions include Endurance’s purchase of Constant Contact and Siemen's pending purchase of CD-adapco. MEDIAN
255
288
266
298
244 246 252 251
227
282 271
289
272
319 320 316 313
1Q '1
2
2Q '1
2
3Q '1
2
4Q '1
2
1Q '1
3
2Q '1
3
3Q '1
3
4Q '1
3
1Q '1
4
2Q '1
4
3Q '1
4
4Q '1
4
1Q '1
5
2Q '1
5
3Q '1
5
4Q '1
5
1Q '1
6
1Q '1
2
2Q '1
2
3Q '1
2
4Q '1
2
1Q '1
3
2Q '1
3
3Q '1
3
4Q '1
3
1Q '1
4
2Q '1
4
3Q '1
4
4Q '1
4
1Q '1
5
2Q '1
5
3Q '1
5
4Q '1
5
1Q '1
6
Pending CCL Industries Inc. Checkpoint Systems Inc. Manufacturing, distributing, and marketing solutions to the retail and apparel industries. $433 0.7x
Pending GI Partners, Allscripts Solutions Netsmart Technologies Inc. Medical health record management and analytics software. $950 NA
Pending HgCapital Sovos Compliance, LLC Tax, compliance, and reporting software for businesses. NA NA
Pending Siemens Aktiengesellschaft CD-adapco Group, Inc. Engineering simulation and design exploration solutions. $970 4.9x
Pending GTCR, LLC Lytx, Inc. Video-based driver safety, compliance, and telematics solutions. $500 NA
04/04/16 BasWare Oyj Verian Technologies, Inc. Purchasing and invoice processing software. $36 3.4x
03/22/16 NICE Systems Ltd. Nexidia, Inc. Phonetic-based technology solutions for audio and v ideo search. $135 NA
03/03/16 Vista Equity Partners Solera Holdings Inc. Risk and asset management software to the P&C insurance sector. $6,272 5.5x
02/29/16 TriTech Software Systems Inc. The Omega Group, Inc. Geographic and mapping software for law enforcement, public safety, and education. NA NA
02/24/16 WebQA, Inc. Intelligent Serv ices, Inc. File sharing, request submission, tracking, and payment processing software. NA NA
02/09/16 Endurance International Group Constant Contact, Inc. Marketing software and tools designed for small businesses. $932 2.6x
01/29/16 Learning Technologies Group plc Rustici Software LLC Corporate compliance monitoring and training software. $37 5.5x
01/27/16 Pamplona Capital Management MedAssets, Inc. Revenue performance software for healthcare organizations. $2,775 3.6x
01/14/16 Kronos Incorporated Empower Software Solutions, Inc. HR and workforce management software. NA NA
01/08/16 Computer Programs & Systems Inc. Healthland, Inc. Integrated healthcare information technology solutions to rural health centers. $242 NA
01/08/16 ExamWorks, Inc. EDCO Group Inc. Record retrieval software and serv ices for the legal and insurance professionals. $62 NA
12/31/15 Aptean, Inc. AssetPoint, LLC Maintenance and asset management software solutions. NA NA
$467 3.6x
PAGE | 7
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
Pending Insight Venture Partners Diligent Corporation SaaS-based shareholder proxy management software. $434 4.4x
Pending Internet Brands, Inc. Demandforce, Inc. Web-based marketing and customer communications software. NA NA
Pending Nasdaq, Inc. BoardVantage, Inc. Information sharing solutions for board and leadership communication to the Fortune 500. $200 NA
Pending Visma AS Fortnox AB SaaS-based solutions for companies, schools, and accounting and auditing firms in Sweden. $163 9.4x
04/04/16 Resmed Corp. Brightree LLC Cloud-based software solutions to the post-acute industry. $800 7.1x
04/01/16 Aconex Limited CONJECT Holding GmbH Web-based construction and infrastructure management software. $74 2.7x
03/31/16 The Riverside Company Guestline Ltd Cloud-based hotel management and hospitality software solutions. NA NA
02/29/16 Decision Resources, Inc. Adaptive Software LLC SaaS-based process management software solutions for the pharmacy management. $25 7.7x
02/22/16 Verint Systems Inc. Contact Solutions, Inc. Web-based message automation solutions. NA NA
02/03/16 PowerSchool Group LLC Interactive Achievement, Inc. SaaS-based educational assessment and grade reporting software for school districts. NA NA
02/02/16 Summit Partners LLP Perforce Software Inc. Cloud-based software configuration and version management solutions. NA NA
01/25/16 JMI Equity CoreHR Limited Cloud-based human resource, recruiting, and payroll software. NA NA
01/20/16 Civ itas Learning, Inc. College Scheduler, LLC Web-based class scheduling system for the higher education market. NA NA
01/20/16 Sparta Systems, Inc. 123Compliance Corporation SaaS-based quality management, compliance, and reporting software. NA NA
01/12/16 Pitney Bowes Inc. Enroute Systems Corporation Cloud-based transportation management software. NA NA
01/12/16 PTC Inc. Kepware, Inc. Communication and interoperability software solutions for the automation industry. $118 5.9x
01/05/16 SPS Commerce Canada, Ltd. ToolBox Solutions Inc. Category management solutions for retailers and manufacturing companies. $30 NA
01/04/16 Quality Systems Inc. HealthFusion Holdings, Inc. SaaS-based technology for physicians, hospitals, and medical billing. $198 7.9x
$163 7.1x
43
38
42
55
38
49 47
45 46
60
54 53
65
68 70
55
52
NOTABLE SAAS M&A TRANSACTIONS
3.4x
5.5x
4.9x
5.8x
4.6x
5.3x
4.4x
5.3x
5.6x 5.7x
4.4x
3.5x
3.9x
4.4x4.2x
4.6x4.9x
SAAS – M&A MARKET SUMMARY
SAAS M&A VOLUME (GLOBAL)
SaaS M&A volume totaled 52 transactions in 1Q 2016 –below record levels achieved in 2015, but still above historical quarterly averages.
Median reported transaction multiples increased to 4.9x revenue in 1Q 2016, representing the highest mark since 2Q 2014.
In 1Q 2016, strategic buyers and private equity invested across a broad set of verticals, with the automotive, healthcare, construction, and education verticals being among the most active areas.
In particular, strategic buyers demonstrated an ability to pay for growth and synergies as evidenced by transactions led by Visma, Resmed, Decision Resources, and Quality Systems, all of which acquired businesses at multiples greater than 7.0x revenue.
MEDIAN M&A REVENUE MULTIPLES (REPORTED)
DATE
CLOSED ACQUIRER TARGET DESCRIPTION
ENTERPRISE
VALUE (MM)
REVENUE
MULTIPLE
MEDIAN
1Q '1
2
2Q '1
2
3Q '1
2
4Q '1
2
1Q '1
3
2Q '1
3
3Q '1
3
4Q '1
3
1Q '1
4
2Q '1
4
3Q '1
4
4Q '1
4
1Q '1
5
2Q '1
5
3Q '1
5
4Q '1
5
1Q '1
6
1Q '1
2
2Q '1
2
3Q '1
2
4Q '1
2
1Q '1
3
2Q '1
3
3Q '1
3
4Q '1
3
1Q '1
4
2Q '1
4
3Q '1
4
4Q '1
4
1Q '1
5
2Q '1
5
3Q '1
5
4Q '1
5
1Q '1
6
PAGE | 8
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
NOTABLE DATA AND ANALYTICS M&A TRANSACTIONS
63
82
73 74
64
71 74
64 67
72 76
99
89
105
112
102
82
DATA AND ANALYTICS – M&A MARKET SUMMARY
DATA AND ANALYTICS M&A VOLUME (GLOBAL)
After a robust 2015, Data and Analytics M&A volume slowed in 1Q 2016 to 82 reported transactions.
Median reported Data and Analytics sector transaction multiples also decreased to 2.2x revenue, but remain in line with historical averages.
Data and Analytics companies continue to garner strong interest from strategic buyers as they seek to establish new capabilities in specific verticals, or with specific data types.
In one of the largest sector deals, IBM announced the acquisition of Truven Health Analytics for $3.6 billion, or 5.8x revenue. IBM plans to integrate Truven’s extensive data set spanning hundreds of different types of cost, claims, quality and outcomes information with its Watson Health data portfolio.
MEDIAN M&A REVENUE MULTIPLES (REPORTED)
3.3x
1.6x
0.9x
1.8x
1.1x
0.9x
1.4x
1.3x
1.9x 1.9x
2.7x
3.3x
2.8x
2.0x
2.6x2.6x
2.2x
DATE
CLOSED ACQUIRER TARGET DESCRIPTION
ENTERPRISE
VALUE (MM)
REVENUE
MULTIPLE
MEDIAN
1Q '1
2
2Q '1
2
3Q '1
2
4Q '1
2
1Q '1
3
2Q '1
3
3Q '1
3
4Q '1
3
1Q '1
4
2Q '1
4
3Q '1
4
4Q '1
4
1Q '1
5
2Q '1
5
3Q '1
5
4Q '1
5
1Q '1
6
1Q '1
2
2Q '1
2
3Q '1
2
4Q '1
2
1Q '1
3
2Q '1
3
3Q '1
3
4Q '1
3
1Q '1
4
2Q '1
4
3Q '1
4
4Q '1
4
1Q '1
5
2Q '1
5
3Q '1
5
4Q '1
5
1Q '1
6
Pending Delphi Automotive PLC Control-Tec LLC Telematics and analytics solutions for the transportation industry. $145 NA
Pending Genscape, Inc. Locus Energy, LLC Provider of data monitoring and analytics software for the energy sector. NA NA
Pending IBM Truven Health Analytics Analytics software and serv ices for the healthcare industry. $3,567 5.8x
Pending Oracle Corporation AddThis Social sharing and analytics platform for sharing online content. $175 NA
Pending Telenor ASA Tapad, INC. Marketing technology and data analytics solutions. $379 NA
Pending WNS (Holdings) Ltd. Value Edge Research Serv ices BI and analytics software for the pharmaceutical and medical device industries. $18 NA
Pending Guidewire Software, Inc. EagleEye Analytics, Inc. Predictive analytics software and serv ices for property and casualty insurers. $42 NA
03/10/16 Tableau Software, Inc. HyPer Relational DBMS for online transaction processing and analytical processing workloads. NA NA
02/16/16 SAP SE MeLLmo Inc. Data analytics workflow and sharing platform. NA NA
02/10/16 IHS Global Inc. Oil Price Information Serv ice, LLC Real-time and historical spot, wholesale/rack, and retail fuel prices and analytics. $650 NA
01/28/16 Apple Inc. LearnSprout, Inc. Online platform for data and application management for educational institutions. NA NA
01/27/16 Survey Sampling International, LLC Instantly, Inc. Tools and analytics for market researcher and brand management. NA NA
01/26/16 Tyco International plc ShopperTrak RCT Corporation Business analytics software for the retail industry. $175 2.3x
01/22/16 StatPro Group plc Investor Analytics, LLC Portfolio and risk management analytics and serv ices for investment managers. $16 3.2x
01/21/16 Adobe Systems Software Digital Analytix Business SaaS platform to analyze customer data and report v isitor behavior. $45 NA
01/05/16 Thoma Bravo, LLC Infogix, Inc. Data integrity, analytics, and v isibility solutions for enterprises. NA NA
12/31/15 Geotab Inc. Maps BI Web-based data analytics and dashboards creation software. NA NA
12/14/15 Intercontinental Exchange, Inc. Interactive Data Holdings Corporation Provides financial market data, analytics, and related solutions. $7,450 7.9x
12/09/15 NeuStar, Inc. MarketShare Partners LLC Marketing analytics solutions for businesses, media companies, marketers, and agencies. $450 7.9x
$175 5.8x
PAGE | 9
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
Pending Blue Coat Systems Inc. Elastica, Inc. Transaction level security software for cloud applications and serv ices. $280 NA
Pending Cisco Systems Holdings Acano Limited Audio conferencing and IVR communications platform. $700 NA
Pending Golden Brick Silk Road Fund Opera Software ASA Develops and sells Web browsers for computer, tablet, and mobile applications. $1,268 2.1x
Pending Insieme Networks, Inc. CliQr Technologies, Inc. Platform for modeling, deploying, and managing applications. $260 NA
Pending Micro Focus International plc Serena Software, Inc. Application lifecycle management and managed IT solutions. $540 3.3x
Pending Oracle Corporation Ravello Systems Inc. Cloud-based v irtualization software solutions. NA NA
04/06/16 IBM Resilient, an IBM Company Cyber-security management and incident response software. NA NA
03/22/16 Cisco Systems, Inc. Jasper Technologies, Inc. Cloud-based platform to launch, manage, and monetize IoT serv ices. $1,400 NA
03/18/16 Microsoft Corporation Xamarin Inc. Software solutions for mobile application development. NA NA
03/17/16 Thales e-Security, Inc. Vormetric, Inc. Data security software for physical, v irtual, and big data cloud environments. $400 7.5x
03/03/16 Interswitch Limited VANSO International Corporation Wireless messaging and software solutions for the banking industry. $75 NA
02/29/16 salesforce.com, inc. TappingStone Inc. Open source machine learning serv ices for software developers. NA NA
02/17/16 keepITsafe Data Solutions, Ltd. VaultLogix, Online Data Backup Business Online data backup and disaster recovery software and solutions. $24 NA
02/08/16 Infoblox Inc. Digital Footprints International LLC IT-security solutions for detecting, diagnosing, and mitigating Internet threats. $45 NA
02/05/16 Silver Lake; Thoma Bravo, LLC SolarWinds, Inc. Enterprise-class IT and infrastructure management software. $4,446 9.2x
02/03/16 Providence Equity Partners LLC Skybox Security, Inc. Cyber-security management solutions. $96 NA
01/29/16 St Ives plc The App Business Ltd. Offers mobile programming, organizational design, and agile delivery serv ices. $78 4.9x
01/29/16 The Carlyle Group Veritas Technologies LLC Data backup, recovery, archiv ing, eDiscovery, storage management solutions. $7,000 NA
01/14/16 FireEye, Inc. iSight Security, Inc. Cyber threat intelligence software. $269 NA
$280 4.9x
1Q '1
2
2Q '1
2
3Q '1
2
4Q '1
2
1Q '1
3
2Q '1
3
3Q '1
3
4Q '1
3
1Q '1
4
2Q '1
4
3Q '1
4
4Q '1
4
1Q '1
5
2Q '1
5
3Q '1
5
4Q '1
5
1Q '1
6
1Q '1
2
2Q '1
2
3Q '1
2
4Q '1
2
1Q '1
3
2Q '1
3
3Q '1
3
4Q '1
3
1Q '1
4
2Q '1
4
3Q '1
4
4Q '1
4
1Q '1
5
2Q '1
5
3Q '1
5
4Q '1
5
1Q '1
6
49
58
55
67
38
61
56 55 53
48
56
47 45
50
36
52
44
4.2x
3.8x
3.0x
2.3x
1.9x1.7x
1.2x
2.4x2.5x
2.9x
2.4x
2.7x
3.0x3.2x
3.3x3.1x
2.9x
NOTABLE INFRASTRUCTURE SOFTWARE M&A TRANSACTIONS
INFRASTRUCTURE SOFTWARE – M&A MARKET SUMMARY
INFRASTRUCTURE SOFTWARE M&A VOLUME (GLOBAL)
Infrastructure Software M&A activity decreased slightly with 44 registered transactions in 1Q 2016, but remained in line with historical averages.
1Q 2016 median reported Infrastructure Software M&A revenue multiples remained consistent with recent historical periods.
IT security, mobile app development, and Infrastructure-as-a-Service platforms were among the most prevalent acquisition targets in Infrastructure Software.
Strategic buyers remain the most active acquirers of Infrastructure Software companies. Notable strategic acquisitions include Micro Focus’ pending acquisition of Serena, Oracle’s pending acquisition of Ravello, and Cisco’s acquisition of Jasper Technologies.
MEDIAN M&A REVENUE MULTIPLES (REPORTED)
DATE
CLOSED ACQUIRER TARGET DESCRIPTION
ENTERPRISE
VALUE (MM)
REVENUE
MULTIPLE
MEDIAN
PAGE | 10
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
7% 4% 5% 6% 4% 6% 5% 6% 4% 2% 4% 2% 4% 4% 2% 4% 2%
31%
23% 26% 21% 28% 31%
19% 29%
17% 14%
24%
7%
22% 28%
16% 22%
17%
21%
20% 18%
31% 31%
30%
22%
19%
33%
26%
26%
24%
33% 26%
17%
32%
26%
20%
28% 32% 15%
17% 13%
34% 15% 26%
20%
16%
11%
22% 17%
29%
14% 39%
21% 26% 20%
27% 21% 21% 21%
31% 20%
37% 30%
55%
18% 25%
36% 28%
15%
1Q-12 2Q-12 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 4Q-13 1Q-14 2Q-14 3Q-14 4Q-14 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16
Seed Series A Series B Series C Series D / or later
PRIVATE PLACEMENT CAPITAL RAISED BY ROUND (AS PERCENTAGE OF TOTAL REPORTED PRIVATE PLACEMENT CAPITAL)
In 1Q 2016, private placement activity increased 15% quarter over quarter with total reported capital raised increasing to $10.6 billion.
Although large institutional investors like T. Rowe Price have recently marked down their holdings in various tech startups previously valued in excess of $1 billion, private placement activity increased in both capital raised and volume in 1Q 2016.
PRIVATE PLACEMENT ACTIVITY BY SOFTWARE SECTOR
In 1Q 2016, 54% of reported private capital raised was deployed in late stage rounds (Series C or later), up from 42% in the prior quarter.
With 40 reported Series C of later financings in 1Q 2016 compared to 34 in the prior quarter, later stage deals increased to 15% of total financings in terms of total deal volume.
PRIVATE PLACEMENTS BY SOFTWARE SUB-SECTOR AND NEW CAPITAL RAISED
719 700
902
740
820 829
912
829
940 952
1013 997 1033
960
754
869
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
2Q-12 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 4Q-13 1Q-14 2Q-14 3Q-14 4Q-14 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16
$ i
n M
illio
ns
Vo
lum
e
Application Software SaaS Data & Analytics Infrastructure Software Total New Capital (Reported)
PAGE | 11
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
SELECT RECENT SOFTWARE PRIVATE PLACEMENTS
ROUND INVESTORS (CURRENT ROUND) DESCRIPTIONCOMPANYDATEROUND
SIZE ($M)SECTOR
TOTAL RAISED
($M)
03/23/16 SaaSLate
Stage$131 $749 Blackrock, Credit Suisse
SaaS-based executiv e management analytics and
tools platform.
03/22/16Data &
Analytics
Late
Stage$40 $50 Bregal Sagemount
Online platform for loan analytics, risk-based pricing,
and automated decision technology for automotiv e
lenders.
03/21/16 SaaS C $22 $56
Adams Street Partners, LLC; Schooner Capital LLC; Tribeca
Venture Partners; Industry Ventures, LLC; The Guardian Life
Insurance Company of America; Sun Life Financial Inc.
SaaS-based online benefits serv ice.
03/15/16 Infrastructure C $30 $60
Google Ventures; Cisco Inv estments; Index Ventures; Intel
Capital; Northgate Capital Group; Sutter Hill Ventures; Thomv est
Ventures
Enterprise security and IT infrastructure software.
02/09/16Data &
Analytics
Late
Stage$70 $222
UPMC Enterprises; CHV Capital, Inc.; Norwest Venture Partners;
Sequoia Capital; EPIC Ventures; Kaiser Permanente Ventures;
MultiCare Health System; Sands Capital Management
Data warehousing, analytics, and outcomes
improv ement solutions to healthcare organizations.
01/28/16 SaaS C $75 $133 Google Capital; Institutional Venture Partners; Felicis Ventures;
Andreessen Horowitz; Citi Ventures
Caller-ID products to detect, report, and mitigate
phone fraud.
01/26/16 SaaS C $40 $62 Accel Partners; SoftTech VC; Costanoa Venture Capital; RSE
Ventures, Inv estment Arm; Vayner/RSECloud-based employee training platform.
01/26/16 Infrastructure A $20 $20 Norwest Venture Partners; Lightspeed Venture Partners; SingTel
Innov 8 Holdings Network cyber-security solutions.
01/24/16Data &
Analytics
Late
Stage$10 $57 Sky plc
Programmatic marketing software and analytics for
brands and agencies.
01/21/16 InfrastructureLate
Stage$30 $77
Goldman Sachs Group, Merchant Banking Div ision; Accel
Partners; Bay Partners, LLC; Hummer Winblad Venture Partners;
Morgenthaler; New Enterprise Associates
Component-based software dev elopment solutions.
01/20/16 SaaS B $150 $164
Susa Ventures; Data Collectiv e; Victory Park Capital Adv isors;
GV; QED Inv estors; SV Angel; Kapor Capital; Bronze Inv estments;
Eagle Cliff Partners
Direct lending platform for non-prime borrowers.
01/12/16 Infrastructure D $95 $147 ICONIQ Capital, Index Ventures; OpenView Venture Partners;
Contour Venture Partners; Amplify PartnersCloud-based application monitoring platform.
Note: Financial information presented above represents reported capital raised only.
PAGE | 12
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
PUBLIC SOFTWARE VALUATION MULTIPLES BY SECTOR
EBITDA MULTIPLE ANALYSIS 1Q 2016 VS. 1Q 2015
9.4x
8.5x
5.9x
4.6x
6.5x 6.2x
4.3x
6.3x
4.6x
2.9x
6.1x
6.8x
4.2x3.9x
3.5x
2.7x
1.7x
8.1x
6.7x
5.2x 5.0x 4.9x 4.8x 4.7x4.4x 4.4x 4.3x
4.2x 4.1x3.4x
2.9x 2.6x
2.1x
1.3x
1Q 2015 1Q 2016
74.1x
65.2x
17.4x
26.0x
56.4x
37.5x
16.4x
30.1x
14.6x
9.0x
65.5x
15.1x
30.8x
17.5x
29.8x
13.3x 14.2x
34.0x
36.8x
15.6x19.5x
34.6x
15.0x13.8x
20.7x
12.5x9.3x
18.3x
12.8x 12.7x9.7x
13.8x
8.5x
15…
1Q 2015 1Q 2016
REVENUE MULTIPLE ANALYSIS 1Q 2016 VS. 1Q 2015STOCK PERFORMANCE (1- & 3-YEAR)
(3.3%)
10.8%
12.2%
4.6%
10.0%
(8.4%)
3.0%
(13.0%)
6.5%
4.6%
(15.9%)
(6.7%)
(38.3%)
(9.4%)
(27.2%)
(22.6%)
5.5%
45.6%
39.1%
84.5%
113.6%
68.4%
5.2%
35.4%
68.9%
59.8%
26.2%
15.9%
42.6%
14.9%
10.0%
(1.4%)
(12.9%)
(31.4%)
1 Yr Stock 3 Yr Stock
Large-Cap SaaS
HCM
Financial
Public Sector / Non-Profit
Marketing
HCIT
PLM & Engineering
SCM & Logistics
Enterprise
Bellwethers
Small-Cap SaaS
IT Security
Data & Analytics
IT Operations Mgmt.
Communication
Data Storage
Energy
PAGE | 13
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
`
KEY METRICS BY SECTOR – COMPARABLE PUBLIC SOFTWARE COMPANIES
8.1x
6.7x
5.2x
5.0x
4.9x
4.8x
4.7x
4.4x
4.4x
4.3x
4.2x
4.1x
3.4x
2.9x
2.6x
2.1x
1.3x
Large-Cap SaaS
HCM
Financial
Public Sector / Non-Profit
Marketing
HCIT
PLM & Engineering
SCM & Logistics
Enterprise
Bellwethers
Small-Cap SaaS
IT Security
Data & Analytics
IT Operat ions Mgmt.
Communication
Data Storage
Energy
EV / LTM REVENUE MULTIPLE NTM REVENUE GROWTH LTM EBITDA MARGINNTM EBITDA GROWTH NTM REVENUE GROWTH LTM EBITDA MARGINNTM EBITDA GROWTH
COMPARABLE COMPANY SET MEDIANS CORRELATION WITH EV / REVENUE MULTIPLE
25% 168% 7% 52% 16% (35%)
26% 54% 19% 56% 57% (92%)
6% 32% 34% 33% (16%) 78%
15% 70% 22% 80% (23%) 70%
22% 74% 8% 65% (100%) 57%
14% 63% 12% 82% - 17%
6% 36% 20% 21% (19%) 63%
10% 29% 19% (22%) (60%) 94%
5% 27% 27% 82% 87% 22%
(0%) 14% 27% 82% 75% -
23% 60% 13% 79% (63%) 50%
21% 17% 26% 39% - 63%
14% 49% 14% 67% (61%) 37%
14% 33% 22% 27% 54% 37%
8% 105% 15% 31% 14% 38%
4% 26% 15% - (55%) 48%
6% 25% 20% (13%) 52% 63%
PAGE | 14
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
SUMMARY OF TECHNOLOGY IPOS
Not a single technology company went public 1Q 2016, representing the fourth quarter since 1993 where technology IPOs have been absent (e.g., 3Q 2002, 1Q 2003, and 1Q 2009).
According to Dealogic, the lack of deals in those three quarters made sense as they were periods of crisis, when stock markets were trading at record lows. However, the lack of activity in 1Q 2016 does not follow any sort of market correction or bubble bursting. In fact, the broader equity markets are trading just shy of their nominal record highs (not adjusted for inflation).
MARKET CAP AT IPO (LTM) REVENUE GROWTH (1YR PRIOR TO IPO)OFFERING SIZE AT IPO (LTM)
RECENT U.S. IPO ACTIVITY (BY OFFERING SIZE)
26%
35%
39%
< 25% 25 - 75% > 75%
10%
23%
23%
45%
$0-50M $50-500M $500M-$1B $1B+
13%
26%
32%
29%
$0 - 50M $50 - 100M $100 - 250M $250M +
All tech IPOs over the last 12 months All tech IPOs over the last 12 months All tech IPOs over the last 12 months
12
9
7
9
6
16
13 13
11
18
7
11
5
15
3
8
0
1Q-12 2Q-12 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 4Q-13 1Q-14 2Q-14 3Q-14 4Q-14 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16
$0 - 50M $50 - 100M $100 - 250M $250M +
2012 Total: 37 2013 Total: 48 2014 Total: 47 2015 Total: 31
PAGE | 15
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
98.3%
(23.2%)
32.0%
(1.2%)
53.0%
33.1%
3.3%
(29.7%)
(41.6%)
14.7% 14.7%
(1.2%)
7.4%
17.5%
9.9%
(125.0%)
(100.0%)
(75.0%)
(50.0%)
(25.0%)
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
3/26/15 4/23/15 5/20/15 6/4/15 6/18/15 6/25/15 6/25/15 6/25/15 6/30/15 7/16/15 10/6/15 11/12/15 11/18/15 11/18/15 12/9/15
$18.0 $17.0 $25.0 $17.0 $14.0 $8.0 $12.0 $14.0 $19.0 $16.0 $17.0 $16.0 $9.0 $10.0 $21.0
$126.0 $87.0 $222.5 $195.5 $100.1 $56.3 $74.4 $98.0 $156.8 $103.2 $425.0 $70.4 $243.0 $77.5 $462.0
39.7% (49.4%) 19.6% (37.2%) (3.1%) (15.6%) 2.2% 65.3% (48.8%) (16.4%) (22.2%) 11.4% 57.3% (2.7%) 16.2%
Circle Size Denotes Revenue ($)
% R
eve
nu
e G
row
th1
Sto
ck
Pe
rfo
rma
nc
e2
KEY PERFORMANCE METRICS FOR RECENT SOFTWARE IPOS
IPO DATE
OFFER PRICE
OFFERING SIZE ($M)
OFFER TO CURRENT
39.7%
(49.4%)
19.6%
(37.2%)
(3.1%)
(15.6%)
2.2%
65.3%
(48.8%)
(16.4%)(22.2%)
11.4%
57.3%
(2.7%)
16.2%
172.5%
43.4% 11.8%
293.0%
57.4% 34.8%
102.3% 26.9%
194.4%
52.6%
540.7%
150.0%
107.0%
45.4% 64.3%
(150.0%)
(50.0%)
50.0%
150.0%
250.0%
350.0%
450.0%
550.0%
650.0%
750.0%
PAGE | 16
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
17.4%
4.7%
4.8%
7.6%
13.2%
23.1%
29.3%
Other
Retail
Printing & Publishing
Manufacturing &Machinery
Healthcare
Services & Leasing
Technology
LBO LOAN VOLUME BY INDUSTRY MEDIAN LBO DEBT PERCENTAGES
DEBT MARKET OVERVIEW
MIDDLE MARKET LBO LOAN MULTIPLES MIDDLE MARKET LBO VOLUME BY QUARTER
2015 New-Issue LBO Loan Volume: $5.5 billion Percentage of Total Purchase Price
Middle market LBO loan multiples tightened in 1Q 2016.
Middle market LBO loan volumes increased in 1Q 2016, but remained below the average levels experienced during the past few years.
Technology companies were the largest recipients of LBO loans in 2015.
Lenders, however, continue to demand higher equity contributions from sponsors as evidenced by the decline in debt as percentage of total purchase price to a nine-year low of 45%.
63%
60%
50%
57%
55%
60%
66%
60% 58%
45%
2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q 2016
Defined as Issuers with EBITDA of $50 Million or LessDefined as Issuers with EBITDA of $50 Million or Less
4.1x 4.0x
3.4x
3.8x 3.8x
4.3x
4.7x 4.7x
5.6x
4.5x
3.3x
4.2x 4.3x4.5x
4.8x
5.3x 5.3x
4.4x
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q'16
FLD/EBITDA SLD/EBITDA Other Sr Debt/EBITDA Sub Debt/EBITDA
$0.9B
$0.6B$0.7B
$1.0B
$2.0B
$1.2B
$1.6B$1.5B
$1.8B
$1.2B
$1.9B$2.0B
$0.4B
$0.7B
4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16
Institutional Pro Rata
PAGE | 17
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
SELECT HW&CO. TMT TRANSACTIONS
has been acquired by
FINANCIAL
TECHNOLOGY
has been acquired by
MANAGED
SERVICES
has been acquired by
ECOMMERCE
RETAIL
has received an
investment from
APPLICATION
SOFTWARE
has been acquired by
HEALTHCARE
TECHNOLOGY
has received a
majority equity
investment from
PUBLIC SECTOR
SOFTWARE
has been acquired by
INFRASTRUCTURE
SOFTWARE
has been acquired by
DIGITAL
MEDIA
has been acquired by
HEALTHCARE
TECHNOLOGY
has been acquired by
ERP / BUSINESS
MANAGEMENT
has received a
significant investment
from
MARKETING
ANALYTICS
has been acquired by
EDUCATION
TECHNOLOGY
has been acquired by
HEALTHCARE
TECHNOLOGY
has been acquired by
HEALTHCARE
TECHNOLOGY
IT SERVICES
has been acquired by
has been acquired by
TECH-ENABLED
SERVICES
has been acquired by
HEALTHCARE
TECHNOLOGY
has been
recapitalized by
SUPPLY CHAIN
SOFTWARE
has been acquired by
INFRASTRUCTURE
SOFTWARE
ENERGY
TECHNOLOGY
has received a minority
equity investment from
GFI Energy Group
a division of
has been acquired by
HEALTHCARE
TECHNOLOGY
has been acquired by
DATA
ANALYTICS
has been acquired by
ENERGY
TECHNOLOGY
has been acquired by
HEALTHCARE
TECHNOLOGY
has been acquired by
MARKETING
ANALYTICS
has received a minority
investment from
ENERGY
TECHNOLOGY
has been acquired by
ENERGY
TECHNOLOGY
has been acquired by
HEALTHCARE
TECHNOLOGY
has been
recapitalized by
NON-PROFIT
SOFTWARE
HEALTHCARE
TECHNOLOGY
has been acquired by
has received a
majority investment
from
MARKETING
ANALYTICS
has been acquired by
INFRASTRUCTURE
SOFTWARE
has been acquired by
INFRASTRUCTURE
SOFTWARE
has been acquired by
FINANCIAL
TECHNOLOGY
has merged with
DIGITAL
MEDIA
has been acquired by
HCM SOFTWARE
has been acquired by
HEALTHCARE
TECHNOLOGY
has merged with
SUPPLY CHAIN
SOFTWARE
has been acquired by
NON-PROFIT
SOFTWARE
ERP / BUSINESS
MANAGEMENT
has received a
significant equity
investment from
has been acquired by
REAL ESTATE
SOFTWARE
has become a wholly-
owned subsidiary of
ENERGY
TECHNOLOGY
has been
recapitalized by
SUPPLY CHAIN
SOFTWARE
has received a minority
equity investment from
HEALTHCARE
TECHNOLOGY
has been acquired by
HEALTHCARE
TECHNOLOGY
has been acquired by
EDUCATION
TECHNOLOGY
has been acquired by
ERP / BUSINESS
MANAGEMENT
has acquired
HEALTHCARE
TECHNOLOGY
has been acquired by
LEGAL
TECHNOLOGY
has been acquired by
MARKETING
TECHNOLOGY
PAGE | 18
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
APPENDIX: SOFTWARE SECTOR PUBLIC COMPANY UNIVERSESA
AS
HO
RIZ
ON
TAL
INFR
ASTR
UC
TUR
E
SO
FTW
AR
EV
ER
TIC
ALAP
PLI
CA
TIO
N S
OFT
WA
RE
Software Bellwethers Google Microsoft Oracle Cisco IBM SAP EMC Salesforce HP
Communication Software Nuance NICE Synchronoss BroadSoft MobileIron Tangoe Jiv e
Enterprise Software Oracle IBM SAP Adobe Intuit Sage Constellation Open Text TOTVS
Human Capital Management (HCM) Paychex Workday Ultimate Paycom Cornerstone Paylocity Benefitfocus Xactly Halogen
Marketing Software Salesforce Adobe Criteo HubSpot Demandware Marketo Callidus Bazaarv oice ChannelAdv isor
PLM & Engineering Software Dassault Autodesk Ansys Synopsys Cadence PTC Aspen Mentor Nemetschek AVEVA
Supply Chain & Logistics Software Manhattan Fleetmatics Descartes Kinaxis SPS SciQuest American Park City Amber Road Tecsys
Energy Software AVEVA Silv er Spring OPOWER PSI EnerNOC
Financial Software Fiserv MSCI Jack Henry SS&C FIS Black Knight Bottomline Env estnet Q2 Holdings
Healthcare IT (HCIT) Cerner athenahealth Veev a Inov alon Allscripts Medidata Press Ganey HMS Quality Systems Impriv ata
Public Sector / Non-Profit Software Constellation Tyler Tech Blackbaud NIC 2U Instructure K12
Large-Cap SaaS (≥ $2Bn Mkt Cap) Salesforce Workday Serv iceNow athenahealth NetSuite Ultimate Atlassian Guidewire Veev a Proofpoint
Small-Cap SaaS (≤ $2Bn Mkt Cap) Paycom ZenDesk Cornerstone RealPage HubSpot Fleetmatics Xero Limited. Demandware Ebix LogMeIn
Small-Cap SaaS (cont'd) CyberArk RingCentral Alarm.Com Benefitfocus Cv ent Qualys Q2 Holdings Marketo Callidus SPS
Small-Cap SaaS (cont'd) inContact MINDBODY IntraLinks Workiv a Textura Instructure Fiv e9 AppFolio SciQuest OPOWER
Small-Cap SaaS (cont'd) Castlight Health Model N Bazaarv oice Xactly Amber Road
Data & Analytics Splunk Teradata Tableau Inov alon Qlik Verint MicroStrategy Pegasystems Hortonworks PROS Holdings
IT Operations Management VMware Red Hat CA Citrix Serv iceNow F5 Networks Micro Focus Arista Software AG NetScout
IT Operations Management (cont'd) Pegasystems New Relic Progress Infoblox Radware
Data Storage EMC NetApp Iron Mountain Brocade CommVault Box Barracuda Nimble Storage Carbonite
IT Security Cisco Check Point Palo Alto Symantec VeriSign Gemalto Trend Micro Fortinet FireEye Cheetah Mobile
IT Security (cont'd) Proofpoint Imperv a CyberArk AVG Tech Qualys Rapid7 Mimecast Varonis
PAGE | 19
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
APPENDIX: SOFTWARE SECTOR PUBLIC COMPANY METRICS
Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. 2017E Rev. LTM EBITDA Earnings
SOFTWARE BELLWETHERS
Alphabet Inc. GOOGL $454,639 $518,917 94.1% 38.8% 90.4% 13.6% 15.9% 32.6% 6.1x 5.2x 4.6x 12.9x 31.7x
Microsoft Corporation MSFT 379,385 436,831 97.2% 35.6% 93.0% (5.7%) (1.0%) 34.6% 4.3x 4.0x 3.8x 11.1x 38.3x
Oracle Corporation ORCL 159,576 169,771 90.4% (4.7%) 26.2% (4.3%) (3.4%) 40.1% 4.3x 4.3x 4.2x 9.3x 19.2x
Cisco Systems, Inc. CSCO 107,495 143,264 95.2% 4.5% 36.7% 3.1% (0.3%) 28.8% 2.2x 2.2x 2.1x 7.0x 13.9x
IBM Corporation IBM 177,385 145,525 85.9% (4.9%) (28.7%) (11.9%) (4.7%) 24.6% 2.2x 2.3x 2.3x 9.0x 11.0x
SAP SE SAP 103,434 96,846 93.8% 11.5% 0.3% 18.4% 5.9% 27.5% 4.4x 4.1x 3.9x 12.1x 29.1x
EMC Corporation EMC 50,967 51,889 92.6% 4.6% 13.1% 1.1% 0.8% 19.7% 2.1x 2.0x 2.0x 7.5x 26.1x
salesforce.com, inc. CRM 50,248 49,533 89.1% 11.7% 68.4% 24.1% 21.8% 7.0% 7.5x 6.2x 5.2x 30.2x NM
HP Inc. HPQ 24,443 21,399 34.6% (60.6%) (47.1%) 4.7% (53.8%) 10.8% 0.2x 0.5x 0.5x 5.5x 5.7x
Median $107,495 $143,264 92.6% 4.6% 26.2% 3.1% (0.3%) 27.5% 4.3x 4.0x 3.8x 9.3x 22.6x
COMMUNICATION SOFTWARE
Nuance Communications, Inc. NUAN $7,243 $5,690 85.6% 31.3% (7.4%) 0.8% 1.4% 15.3% 3.7x 3.6x 3.4x 11.6x NM
NICE Systems Ltd. NICE 3,459 3,900 93.9% 7.6% 78.2% 6.3% 8.3% 24.1% 3.7x 3.4x 3.2x 13.8x 15.1x
Synchronoss Technologies, Inc. SNCR 1,527 1,436 61.7% (31.6%) 4.6% 26.6% 14.8% 27.2% 2.6x 2.3x 2.0x 7.6x 35.3x
BroadSoft, Inc. BSFT 1,118 1,178 98.2% 22.9% 55.5% 28.6% 20.5% 10.9% 4.0x 3.3x 2.8x 19.1x NM
MobileIron, Inc. MOBL 276 372 34.9% (50.5%) NA 12.9% 15.8% NM 1.8x 1.6x 1.4x NM NM
Tangoe, Inc. TNGO 280 311 52.9% (41.3%) (35.6%) 5.7% 3.7% 4.4% 1.3x 1.2x 1.1x 14.4x NM
Jiv e Software, Inc. JIVE 187 289 63.1% (27.2%) (74.7%) 9.6% 3.9% NM 1.0x 0.9x 0.9x NM NM
Median $1,118 $1,178 63.1% (27.2%) (1.4%) 9.6% 8.3% 15.3% 2.6x 2.3x 2.0x 13.8x 25.2x
ENTERPRISE SOFTWARE
Oracle Corporation ORCL $159,576 $169,771 90.4% (4.7%) 26.2% (4.3%) (3.4%) 40.1% 4.3x 4.3x 4.2x 9.2x 19.2x
IBM Corporation IBM 177,385 145,525 85.9% (4.9%) (28.7%) (11.9%) (4.7%) 24.6% 2.2x 2.3x 2.3x 8.3x 11.0x
SAP SE SAP 103,434 96,846 93.8% 11.5% 0.3% 18.4% 5.9% 27.5% 4.4x 4.1x 3.9x 12.5x 29.1x
Adobe Systems Incorporated ADBE 44,739 46,920 95.7% 25.0% 116.2% 19.1% 21.5% 27.2% 8.8x 7.7x 6.3x 26.1x 58.7x
Intuit Inc. INTU 27,623 26,712 95.2% 6.5% 59.8% 6.4% 9.3% 29.1% 6.2x 5.8x 5.3x 18.4x 52.6x
Sage Group plc SGE 10,270 9,778 99.8% 30.3% 65.0% 6.1% 5.0% 27.1% 5.1x 4.8x 4.5x 16.9x 33.3x
Constellation Software Inc. TSX: CSU 8,879 8,690 88.9% 19.1% 233.4% 10.1% 15.1% 23.2% 4.8x 4.2x 3.6x 19.5x 49.0x
Open Text Corporation OTEX 7,117 6,274 88.7% (4.0%) 78.4% (1.5%) (0.8%) 28.8% 3.9x 3.8x 3.7x 11.5x 28.0x
TOTVS S.A. TOTS3 1,364 1,253 67.7% (32.5%) (62.4%) 7.7% 3.4% 18.6% 2.6x 2.1x 2.1x 11.2x 25.4x
Median $27,623 $9,234 92.1% 12.8% 71.7% 7.0% 7.2% 27.1% 4.9x 4.5x 4.1x 17.7x 41.1x
Large-Cap
SaaS
Small-Cap
SaaS
Data &
Analytics
IT Operations
Data Storage
IT Security
Software
Bellwethers
Communication
Enterprise
HCM
Marketing
PLM &
Engineering
SCM & Logistics
Energy
Financial
HCIT
Public Sector /
Non-Profit
PAGE | 20
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
APPENDIX: SOFTWARE SECTOR PUBLIC COMPANY METRICS (CONT’D)
HUMAN CAPITAL MANAGEMENT SOFTWARE
Paychex, Inc. PAYX $19,123 $19,450 98.6% 9.1% 52.9% 7.6% 7.7% 42.7% 6.7x 6.2x 5.8x 15.8x 26.3x
Workday, Inc. WDAY 13,522 14,984 82.1% (7.9%) 25.4% 47.5% 33.2% NM 11.6x 8.7x 6.7x NM NM
The Ultimate Software Group, Inc. ULTI 5,470 5,582 89.5% 15.9% 88.5% 22.2% 24.9% 10.3% 8.9x 7.1x 5.9x 36.8x 245.9x
Paycom Software, Inc. PAYC 2,079 2,103 76.8% 12.4% NA 48.8% 38.4% 18.7% 9.3x 6.7x 5.2x 43.3x 100.4x
Cornerstone OnDemand, Inc. CSOD 1,784 1,796 80.5% 17.8% (2.1%) 28.9% 26.2% NM 5.3x 4.1x 3.4x NM NM
Paylocity Holding Corporation PCTY 1,589 1,668 69.8% 14.4% NA 46.7% 46.9% NM 8.6x 6.3x 5.0x NM NM
Benefitfocus, Inc. BNFT 951 974 70.2% (7.0%) NA 34.7% 26.5% NM 5.1x 4.1x 3.3x NM NM
Xactly Corporation XTLY 170 202 64.2% NA NA 24.3% 24.8% NM 2.2x 1.8x 1.4x NM NM
Halogen Software Inc. HGN 120 159 85.1% (2.8%) NA 15.9% 11.3% NM 1.8x 1.6x 1.5x NM NM
Median $1,784 $1,796 80.5% 10.8% 39.1% 28.9% 26.2% 18.7% 6.7x 6.2x 5.0x 36.8x 100.4x
MARKETING SOFTWARE
salesforce.com, inc. CRM $50,248 $49,533 89.1% 11.7% 68.4% 24.1% 21.8% 7.0% 7.5x 6.2x 5.2x 43.1x NM
Adobe Systems Incorporated ADBE 44,739 46,920 95.7% 25.0% 116.2% 19.1% 21.5% 27.2% 8.8x 7.7x 6.3x 26.1x 58.7x
Criteo SA CRTO 2,250 2,588 72.3% 3.4% NA 33.9% NA 8.6% 1.7x 3.1x 2.5x 16.1x 43.5x
HubSpot, Inc. HUBS 1,410 1,514 72.6% 10.0% NA 57.0% 37.8% NM 7.8x 5.6x 4.3x NM NM
Demandware, Inc. DWRE 1,278 1,475 51.5% (33.3%) 54.4% 47.8% 27.0% NM 5.4x 4.2x 3.3x NM NM
Marketo, Inc. MKTO 769 869 57.6% (22.5%) NA 40.0% 30.0% NM 3.7x 2.8x 2.2x NM NM
Callidus Software Inc. CALD 841 939 77.1% 34.2% 271.5% 26.7% 22.6% 0.2% 4.9x 4.0x 3.3x 46.4x NM
Bazaarv oice, Inc. BV 204 256 48.0% (45.7%) (56.3%) 6.1% 3.6% NM 1.0x 1.0x 0.9x NM NM
ChannelAdv isor Corporation ECOM 230 286 76.4% 18.4% NA 18.5% 11.9% NM 2.3x 2.0x 1.8x NM NM
Median $1,278 $1,475 72.6% 10.0% 68.4% 26.7% 22.2% 7.8% 4.9x 4.0x 3.3x 34.6x 51.1x
PLM & ENGINEERING SOFTWARE
Dassault Systèmes SE DSY $18,627 $20,144 90.6% 19.5% 36.9% 23.8% 6.6% 27.2% 5.7x 5.3x 4.9x 16.8x 46.1x
Autodesk, Inc. ADSK 12,327 13,090 88.6% (0.7%) 46.0% (0.3%) (20.4%) 5.9% 4.9x 6.2x 5.4x 29.8x NM
Ansys, Inc. ANSS 7,081 7,865 90.9% 1.5% 12.5% 0.7% 6.9% 45.8% 7.5x 7.0x 6.5x 14.7x 31.1x
Synopsys Inc. SNPS 6,862 7,340 91.8% 4.6% 36.6% 7.0% 6.0% 17.7% 3.0x 2.9x 2.7x 11.7x 33.2x
Cadence Design Systems Inc. CDNS 6,793 7,156 99.3% 28.2% 73.1% 7.7% 6.8% 24.0% 4.0x 3.7x 3.5x 12.5x 28.3x
PTC Inc. PTC 4,219 3,798 77.6% (8.3%) 34.1% (10.1%) (3.8%) 19.3% 3.5x 3.5x 3.6x 12.7x NM
Aspen Technology, Inc. AZPN 2,812 3,013 77.3% (5.2%) 13.9% 10.7% 8.3% 44.4% 6.0x 5.7x 5.4x 13.0x 22.8x
Mentor Graphics Corp. MENT 2,113 2,174 72.4% (16.5%) 16.8% (5.1%) 2.8% 18.9% 1.8x 1.7x 1.7x 8.2x 22.6x
Nemetschek SE XTRA:NEM 1,860 1,861 89.4% 43.4% 219.6% 30.6% 13.6% 19.4% 5.7x 5.1x 4.5x 23.5x 47.7x
AVEVA Group plc LSE: AVV 1,298 1,450 67.0% 5.5% (38.3%) (4.7%) (1.5%) 21.3% 4.5x 4.4x 4.2x 15.4x 33.8x
Median $5,506 $5,477 89.0% 3.0% 35.4% 3.9% 6.3% 20.4% 4.7x 4.7x 4.4x 13.8x 32.2x
Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. 2017E Rev. LTM EBITDA Earnings
Large-Cap
SaaS
Small-Cap
SaaS
Data &
Analytics
IT Operations
Data Storage
IT Security
Software
Bellwethers
Communication
Enterprise
HCM
Marketing
PLM &
Engineering
SCM & Logistics
Energy
Financial
HCIT
Public Sector /
Non-Profit
PAGE | 21
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
APPENDIX: SOFTWARE SECTOR PUBLIC COMPANY METRICS (CONT’D)
SUPPLY CHAIN AND LOGISTICS SOFTWARE
Manhattan Associates, Inc. MANH $4,023 $4,151 73.1% 11.9% 209.9% 13.1% 10.1% 30.4% 7.2x 6.6x 6.0x 22.2x 40.1x
Fleetmatics Group PLC FLTX 1,426 1,575 64.8% (8.2%) 70.0% 23.0% 20.9% 24.0% 5.0x 4.1x 3.5x 15.5x 40.6x
The Descartes Systems Group Inc TSX: DSG 1,431 1,477 87.7% 28.3% 108.8% 8.3% 10.1% 32.0% 7.7x 7.0x 6.3x 23.8x 71.8x
Kinaxis Inc. KXS 708 814 82.5% 56.2% NA 30.3% 19.5% 27.8% 7.8x 6.5x 5.3x 24.9x 64.2x
SPS Commerce, Inc. SPSC 594 723 54.8% (35.5%) (1.2%) 23.9% 21.4% 10.5% 3.7x 3.1x 2.6x 27.2x 155.9x
SciQuest, Inc. SQI 244 387 83.8% (14.6%) (42.3%) 3.4% 4.7% 7.7% 2.3x 2.2x 2.0x 12.4x 207.6x
American Software, Inc. AMSW.A 195 260 79.2% (11.3%) 9.0% 11.3% 10.2% 13.5% 1.7x 1.7x 1.6x 9.8x 27.6x
Park City Group Inc. PCYG 165 174 63.4% (35.4%) 145.7% 4.0% NA NM 12.3x NM NM NM NM
Amber Road, Inc. AMBR 148 142 55.8% (40.2%) NA 3.5% 9.5% NM 2.2x 2.0x 1.8x NM NM
Tecsys Inc. TSX: TCS 65 69 71.6% (29.4%) 67.8% 15.3% 10.2% 4.2% 1.4x 1.2x 1.1x 19.1x 76.6x
Median $419 $555 72.4% (13.0%) 68.9% 12.2% 10.2% 18.7% 4.4x 3.1x 2.6x 20.7x 68.0x
ENERGY SOFTWARE
AVEVA Group plc LSE: AVV $1,298 $1,450 67.0% 5.5% (38.3%) (4.7%) (1.5%) 21.3% 4.5x 4.4x 4.2x 15.4x 33.8x
Silv er Spring Networks, Inc. SSNI 626 751 91.2% 63.2% (14.2%) 155.9% 7.4% 20.1% 1.3x 2.1x 1.8x 55.7x 9.4x
OPOWER, Inc. OPWR 302 362 52.5% (33.5%) NA 15.8% 8.3% NM 2.0x 1.9x 1.7x NM NM
PSI Aktiengesellschaft PSAN 199 240 91.2% 18.0% (24.5%) 3.3% 5.7% 7.5% 1.0x 0.9x 0.8x 11.2x 29.6x
EnerNOC, Inc. ENOC 186 213 49.9% (36.4%) (55.8%) (15.3%) (5.0%) NM 0.5x 0.5x 0.5x NM NM
Median $302 $362 67.0% 5.5% (31.4%) 3.3% 5.7% 20.1% 1.3x 1.9x 1.7x 15.4x 29.6x
FINANCIAL SOFTWARE
Fiserv , Inc. FISV $26,887 $22,869 99.7% 28.9% 135.8% 3.7% 5.7% 30.5% 5.1x 4.8x 4.6x 15.0x 32.1x
MSCI Inc. MSCI 8,088 7,286 98.9% 21.4% 122.1% 7.9% 6.2% 44.8% 7.5x 7.1x 6.6x 16.9x 32.6x
Jack Henry & Associates Inc. JKHY 6,715 6,669 98.1% 21.5% 84.5% 6.4% 6.4% 35.0% 5.2x 4.9x 4.6x 14.9x 30.0x
SS&C Technologies Holdings, Inc. SSNC 8,580 6,263 82.2% 2.2% 114.6% 30.3% 50.0% 32.9% 8.6x 5.7x 5.2x 19.0x 146.1x
Oracle Financial Serv ices Software Ltd. 532466 4,136 4,517 79.3% 1.7% 13.4% 4.7% 6.2% 41.9% 6.8x 5.9x 5.2x 16.1x 25.5x
Black Knight Financial Serv ices, Inc. BKFS 4,646 2,144 79.9% NA NA 9.2% 7.1% 34.3% 5.0x 4.6x 4.3x 11.2x 107.2x
Bottomline Technologies (de), Inc. EPAY 1,191 1,156 96.5% 11.4% 12.5% 3.9% 5.1% 12.8% 3.6x 3.3x 3.0x 14.7x NM
Env estnet, Inc. ENV 1,391 1,143 48.2% (51.0%) 57.0% 20.7% 38.0% 12.0% 3.3x 2.4x 2.1x 18.5x NM
Q2 Holdings, Inc. QTWO 826 937 79.0% 13.1% NA 37.6% 34.1% NM 7.6x 5.7x 4.4x NM NM
Median $4,646 $4,517 82.2% 12.2% 84.5% 7.9% 6.4% 33.6% 5.2x 4.9x 4.6x 15.6x 32.3x
Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. 2017E Rev. LTM EBITDA Earnings
Large-Cap
SaaS
Small-Cap
SaaS
Data &
Analytics
IT Operations
Data Storage
IT Security
Software
Bellwethers
Communication
Enterprise
HCM
Marketing
PLM &
Engineering
SCM & Logistics
Energy
Financial
HCIT
Public Sector /
Non-Profit
PAGE | 22
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
APPENDIX: SOFTWARE SECTOR PUBLIC COMPANY METRICS (CONT’D)
HEALTHCARE IT
Cerner Corporation CERN $18,099 $18,007 69.9% (27.5%) 12.4% 31.4% 12.4% 27.7% 4.2x 3.6x 3.3x 12.4x 33.4x
athenahealth, Inc. ATHN 5,563 5,406 81.4% 16.8% 45.6% 22.9% 19.8% 6.6% 6.0x 5.0x 4.2x 31.1x NM
Veev a Systems Inc. VEEV 3,013 3,359 85.3% 0.2% NA 30.6% 25.1% 21.6% 7.4x 5.9x 4.8x 26.0x 61.7x
Inov alon Holdings, Inc. INOV 2,363 2,810 62.7% (36.2%) NA 20.9% 17.6% 32.1% 5.4x 4.6x 3.9x 15.4x 42.5x
Allscripts Healthcare Solutions, Inc. MDRX 3,021 2,501 83.7% 12.7% (1.9%) 0.6% 4.1% 8.1% 2.2x 2.1x 2.0x 12.3x NM
Medidata Solutions, Inc. MDSO 2,163 2,180 63.1% (20.3%) 37.1% 17.1% 17.3% 10.2% 5.5x 4.7x 3.9x 23.7x 165.6x
Press Ganey Holdings, Inc. PGND 1,742 1,588 83.2% NA NA 13.2% 10.4% 8.9% 5.5x 5.0x 4.6x 15.0x NM
HMS Holdings Corp. HMSY 1,258 1,205 77.2% (8.4%) (47.8%) 7.0% 2.2% 19.0% 2.7x 2.6x 2.4x 11.4x 49.1x
Quality Systems Inc. QSII 823 928 84.9% (4.1%) (17.0%) 3.3% 1.2% 11.6% 1.7x 1.5x 1.4x 11.1x 28.4x
Impriv ata, Inc. IMPR 266 317 58.4% (8.9%) NA 22.8% 16.2% NM 2.2x 1.9x 1.7x NM NM
Median $2,263 $2,340 79.3% (8.4%) 5.2% 19.0% 14.3% 11.6% 4.8x 4.1x 3.6x 15.0x 45.8x
PUBLIC SECTOR / NON-PROFIT SOFTWARE
Constellation Software Inc. TSX: CSU $8,879 $8,690 88.9% 19.1% 233.4% 10.1% 15.1% 23.2% 4.8x 4.2x 3.6x 19.5x 49.0x
Tyler Technologies, Inc. TYL 4,674 4,655 69.9% 6.1% 113.8% 19.9% 30.5% 21.8% 7.9x 6.1x 5.4x 30.3x 71.8x
Blackbaud Inc. BLKB 3,210 2,816 91.8% 32.7% 113.6% 13.0% 15.0% 16.4% 5.0x 4.4x 4.0x 21.2x 109.8x
NIC Inc. EGOV 1,101 1,199 86.3% 3.1% (5.7%) 7.5% 6.9% 25.5% 3.8x 3.5x 3.3x 14.2x 28.6x
2U, Inc. TWOU 855 1,039 56.9% (11.4%) NA 36.2% 33.0% NM 5.7x 4.3x 3.3x NM NM
Instructure, Inc. INST 400 491 75.9% NA NA 65.0% 47.4% NM 5.5x 3.7x 2.6x NM NM
K12, Inc. LRN 248 385 56.1% (37.6%) (58.3%) (2.7%) (10.1%) 5.3% 0.3x 0.3x NM 2.8x NM
Median $1,101 $1,199 75.9% 4.6% 113.6% 13.0% 15.1% 21.8% 5.0x 4.2x 3.5x 19.5x 60.4x
LARGE-CAP SAAS (Market Cap > $2Bn)
salesforce.com, inc. CRM $50,248 $49,533 89.1% 11.7% 68.4% 24.1% 21.8% 7.0% 7.5x 6.2x 5.2x 43.1x NM
Workday, Inc. WDAY $13,522 $14,984 82.1% (7.9%) 25.4% 47.5% 33.2% NM 11.6x 8.7x 6.7x NM NM
Serv iceNow, Inc. NOW $9,510 $9,837 67.0% (19.1%) 73.7% 47.3% 35.3% NM 9.5x 7.0x 5.4x NM NM
athenahealth, Inc. ATHN $5,563 $5,406 81.4% 16.8% 45.6% 22.9% 19.8% 6.6% 6.0x 5.0x 4.2x 31.1x NM
NetSuite Inc. N $5,397 $5,478 66.8% (24.7%) (13.2%) 33.2% 29.8% NM 7.3x 5.6x 4.4x NM NM
The Ultimate Software Group, Inc. ULTI $5,470 $5,582 89.5% 15.9% 88.5% 22.2% 24.9% 10.3% 8.9x 7.1x 5.9x 36.8x 245.9x
Atlassian Corporation Plc TEAM $4,660 $5,342 79.9% NA NA NA NA 4.1% 12.8x 9.2x 7.0x NM NM
Guidewire Software, Inc. GWRE $3,335 $3,926 84.1% 3.8% 44.5% 7.1% 8.8% 5.4% 8.4x 7.7x 6.7x 46.2x NM
Veev a Systems Inc. VEEV $3,013 $3,359 85.3% 0.2% NA 30.6% 25.1% 21.6% 7.4x 5.9x 4.8x 26.0x 61.7x
Proofpoint, Inc. PFPT $2,153 $2,214 71.3% (6.8%) 221.1% 35.7% 31.1% NM 8.1x 6.2x 4.8x NM NM
Medidata Solutions, Inc. MDSO $2,163 $2,180 63.1% (20.3%) 37.1% 17.1% 17.3% 10.2% 5.5x 4.7x 3.9x 23.7x 165.6x
Median $5,397 $5,406 81.4% (3.3%) 45.6% 27.4% 25.0% 7.0% 8.1x 6.2x 5.2x 34.0x 165.6x
Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. 2017E Rev. LTM EBITDA Earnings
Large-Cap
SaaS
Small-Cap
SaaS
Data &
Analytics
IT Operations
Data Storage
IT Security
Software
Bellwethers
Communication
Enterprise
HCM
Marketing
PLM &
Engineering
SCM & Logistics
Energy
Financial
HCIT
Public Sector /
Non-Profit
PAGE | 23
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
APPENDIX: SOFTWARE SECTOR PUBLIC COMPANY METRICS (CONT’D)
SMALL-CAP SAAS (Market Cap < $2Bn)
Paycom Software, Inc. PAYC $2,079 $2,103 76.8% 12.4% NA 48.8% 38.4% 18.7% 9.3x 6.7x 5.2x 43.3x 100.4x
Zendesk, Inc. ZEN $1,649 $1,894 74.2% (7.3%) NA 64.3% 42.4% NM 7.9x 5.5x 4.2x NM NM
Cornerstone OnDemand, Inc. CSOD $1,784 $1,796 80.5% 17.8% (2.1%) 28.9% 26.2% NM 5.3x 4.1x 3.4x NM NM
RealPage, Inc. RP $1,649 $1,640 86.9% 4.7% 2.3% 15.8% 22.3% 11.3% 3.5x 2.9x 2.5x 18.3x NM
HubSpot, Inc. HUBS $1,410 $1,514 72.6% 10.0% NA 57.0% 37.8% NM 7.8x 5.6x 4.3x NM NM
Fleetmatics Group PLC FLTX $1,426 $1,575 64.8% (8.2%) 70.0% 23.0% 20.9% 24.0% 5.0x 4.1x 3.5x 15.5x 40.6x
Xero Limited. XRO $1,294 $1,450 63.0% (39.3%) 15.9% 74.8% 70.5% NM 12.0x 6.4x 4.5x NM NM
Demandware, Inc. DWRE $1,278 $1,475 51.5% (33.3%) 54.4% 47.8% 27.0% NM 5.4x 4.2x 3.3x NM NM
Ebix Inc. EBIX $1,521 $1,372 97.5% 36.6% 154.5% 23.9% 6.0% 36.8% 5.7x 5.4x 4.4x 15.7x 17.3x
LogMeIn, Inc. LOGM $1,118 $1,267 66.9% (9.9%) 172.8% 22.4% 19.7% 12.8% 4.1x 3.4x 3.0x 16.4x 87.0x
CyberArk Software, Ltd. CYBR $1,182 $1,420 55.8% (23.1%) NA 56.1% 28.8% 21.8% 7.3x 5.7x 4.7x 30.5x 55.1x
RingCentral, Inc. RNG $1,016 $1,134 61.4% 2.6% NA 34.7% 19.0% NM 3.4x 2.9x 2.4x NM NM
Alarm.Com Holdings, Inc. ALRM $960 $1,082 97.9% NA NA 24.8% 14.0% 14.4% 4.6x 4.0x 3.5x 34.5x 91.9x
Benefitfocus, Inc. BNFT $951 $974 70.2% (7.0%) NA 34.7% 26.5% NM 5.1x 4.1x 3.3x NM NM
Cv ent, Inc. CVT $754 $900 57.4% (23.0%) NA 32.0% 22.5% 0.5% 4.0x 3.3x 2.7x 32.6x NM
Qualys, Inc. QLYS $693 $871 45.6% (46.2%) 108.1% 23.0% 20.1% 23.8% 4.2x 3.5x 2.9x 12.8x 54.9x
Q2 Holdings, Inc. QTWO $826 $937 79.0% 13.1% NA 37.6% 34.1% NM 7.6x 5.7x 4.4x NM NM
Marketo, Inc. MKTO $769 $869 57.6% (22.5%) NA 40.0% 30.0% NM 3.7x 2.8x 2.2x NM NM
Callidus Software Inc. CALD $841 $939 77.1% 34.2% 271.5% 26.7% 22.6% 0.2% 4.9x 4.0x 3.3x 46.4x NM
SPS Commerce, Inc. SPSC $594 $723 54.8% (35.5%) (1.2%) 23.9% 21.4% 10.5% 3.7x 3.1x 2.6x 27.2x 155.9x
inContact, Inc. SAAS $530 $552 76.9% (19.1%) 14.6% 29.2% 17.4% NM 2.4x 2.0x 1.7x NM NM
MINDBODY, Inc. MB $451 $529 72.5% NA NA 44.8% 33.0% NM 4.5x 3.3x 2.6x NM NM
IntraLinks Holdings, Inc. IL $479 $456 61.6% (23.5%) 27.1% 7.9% 8.6% 3.0% 1.7x 1.6x 1.5x 12.1x NM
Workiv a Inc. WK $424 $477 62.0% (17.2%) NA 28.9% 23.0% NM 2.9x 2.4x 2.0x NM NM
Textura Corporation TXTR $409 $488 59.7% (30.7%) NA 37.7% 24.4% NM 4.7x 3.8x 3.1x NM NM
Instructure, Inc. INST $400 $491 75.9% NA NA 65.0% 47.4% NM 5.5x 3.7x 2.6x NM NM
Fiv e9, Inc. FIVN $444 $456 90.3% 62.5% NA 25.0% 16.5% NM 3.4x 3.0x 2.5x NM NM
AppFolio, Inc. APPF $389 $411 61.4% NA NA 57.3% 36.7% NM 5.2x 3.8x 2.9x NM NM
SciQuest, Inc. SQI $244 $387 83.8% (14.6%) (42.3%) 3.4% 4.7% 7.7% 2.3x 2.2x 2.0x 12.4x 207.6x
OPOWER, Inc. OPWR $302 $362 52.5% (33.5%) NA 15.8% 8.3% NM 2.0x 1.9x 1.7x NM NM
Castlight Health, Inc. CSLT $201 $322 32.1% (55.6%) NA 65.1% 33.5% NM 2.7x 2.0x 1.5x NM NM
Model N, Inc. MODN $221 $291 84.8% (11.2%) (46.4%) 16.8% 14.3% NM 2.3x 2.0x 1.6x NM NM
Bazaarv oice, Inc. BV $204 $256 48.0% (45.7%) (56.3%) 6.1% 3.6% NM 1.0x 1.0x 0.9x NM NM
Xactly Corporation XTLY $170 $202 64.2% NA NA 24.3% 24.8% NM 2.2x 1.8x 1.4x NM NM
Amber Road, Inc. AMBR $148 $142 55.8% (40.2%) NA 3.5% 9.5% NM 2.2x 2.0x 1.8x NM NM
Median $754 $871 64.8% (15.9%) 15.9% 28.9% 22.6% 12.8% 4.2x 3.4x 2.7x 18.3x 87.0x
Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. 2017E Rev. LTM EBITDA Earnings
Large-Cap
SaaS
Small-Cap
SaaS
Data &
Analytics
IT Operations
Data Storage
IT Security
Software
Bellwethers
Communication
Enterprise
HCM
Marketing
PLM &
Engineering
SCM & Logistics
Energy
Financial
HCIT
Public Sector /
Non-Profit
PAGE | 24
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
APPENDIX: SOFTWARE SECTOR PUBLIC COMPANY METRICS (CONT’D)
DATA & ANALYTICS
Splunk, Inc. SPLK $5,468 $6,477 63.7% (15.4%) 22.3% 48.3% 32.0% NM 8.2x 6.2x 4.8x NM NM
Teradata Corporation TDC 3,324 3,383 56.7% (40.4%) (54.0%) (7.4%) (9.3%) 14.9% 1.3x 1.4x 1.5x 5.7x NM
Tableau Software, Inc. DATA 2,615 3,411 34.9% (49.6%) NA 58.4% 28.5% NM 4.0x 3.1x 2.4x NM NM
Inov alon Holdings, Inc. INOV 2,363 2,810 62.7% (36.2%) NA 20.9% 17.6% 32.1% 5.4x 4.6x 3.9x 15.4x 42.5x
Qlik Technologies, Inc. QLIK 2,390 2,710 67.4% (7.4%) 14.9% 10.0% 14.2% 0.6% 3.9x 3.4x 3.0x 41.0x NM
Verint Systems Inc. VRNT 2,416 2,078 50.2% (46.4%) (7.0%) 0.2% (0.5%) 12.3% 2.1x 2.1x 2.0x 8.5x 117.8x
MicroStrategy Inc. MSTR 1,564 2,050 79.4% 6.2% 74.4% (8.6%) 5.3% 28.0% 3.0x 2.8x 2.6x 10.0x 19.3x
Pegasystems Inc. PEGA 1,717 1,936 84.0% 17.5% 81.4% 15.7% 14.3% 12.9% 2.5x 2.2x 2.0x 15.4x 53.3x
Hortonworks, Inc. HDP 522 617 39.1% (53.2%) NA 164.8% 54.4% NM 4.3x 2.8x 1.9x NM NM
PROS Holdings, Inc. PRO 310 357 43.3% (52.5%) (56.5%) (9.5%) (10.0%) NM 1.8x 2.0x 1.9x NM NM
Median $2,377 $2,394 59.7% (38.3%) 14.9% 12.9% 14.2% 13.9% 3.4x 2.8x 2.2x 12.7x 47.9x
IT OPERATIONS MANAGEMENT
VMware, Inc. VMW $16,153 $22,158 56.0% (36.3%) (33.0%) 10.1% 3.4% 26.7% 2.4x 2.3x 2.2x 6.8x 22.2x
Red Hat, Inc. RHT 13,122 13,607 88.2% (1.2%) 54.2% 14.7% 16.7% 17.7% 6.4x 5.7x 5.0x 25.2x 68.3x
CA, Inc. CA 12,582 12,832 94.5% (4.2%) 23.9% (6.6%) (6.1%) 30.5% 3.1x 3.1x 3.1x 8.3x 16.9x
Citrix Systems, Inc. CTXS 12,553 12,100 93.4% 25.0% 10.0% 4.2% 1.4% 25.9% 3.8x 3.8x 3.7x 12.1x 37.9x
Serv iceNow, Inc. NOW 9,510 9,837 67.0% (19.1%) 73.7% 47.3% 35.3% NM 9.5x 7.0x 5.4x NM NM
F5 Networks, Inc. FFIV 5,630 6,422 78.3% (7.4%) 20.4% 8.8% 4.6% 30.5% 2.9x 2.8x 2.6x 7.3x 17.6x
Micro Focus International plc LSE:MCRO 6,525 5,169 96.8% 31.2% 85.6% 183.7% 47.6% 37.4% 5.3x 5.1x 5.0x 13.3x 37.3x
Arista Networks, Inc. ANET 3,663 4,308 71.3% (9.4%) NA 43.4% 27.4% 19.5% 4.4x 3.4x 2.9x 15.2x 35.6x
Software AG XTRA:SOW 2,794 2,777 98.0% 46.7% 0.9% 1.8% 1.3% 29.8% 2.8x 2.8x 2.7x 9.7x 18.3x
NetScout Systems, Inc. NTCT 2,156 2,264 50.5% (46.9%) (4.4%) 76.6% 118.5% 12.0% 2.7x 1.8x 1.6x 8.4x NM
Pegasystems Inc. PEGA 1,717 1,936 84.0% 17.5% 81.4% 15.7% 14.3% 12.9% 2.5x 2.2x 2.0x 15.4x 53.3x
New Relic, Inc. NEWR 1,101 1,292 65.0% (20.0%) NA 67.5% 62.6% NM 6.8x 4.9x 3.7x NM NM
Progress Software Corporation PRGS 1,104 1,215 78.9% (10.6%) 8.0% 13.6% 0.5% 22.2% 2.9x 2.7x 2.6x 8.3x NM
Infoblox Inc. BLOX 662 989 61.0% (27.6%) (19.4%) 33.0% 22.9% 0.6% 1.9x 1.7x 1.4x 12.9x NM
Radware Ltd. RDWR 405 536 47.5% (42.8%) (36.5%) (2.4%) (0.8%) 12.7% 1.9x 1.9x 1.7x 9.5x 28.9x
Median $3,663 $4,308 78.3% (9.4%) 10.0% 14.7% 14.3% 22.2% 2.9x 2.8x 2.7x 9.7x 32.2x
Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. 2017E Rev. LTM EBITDA Earnings
Large-Cap
SaaS
Small-Cap
SaaS
Data &
Analytics
IT Operations
Data Storage
IT Security
Software
Bellwethers
Communication
Enterprise
HCM
Marketing
PLM &
Engineering
SCM & Logistics
Energy
Financial
HCIT
Public Sector /
Non-Profit
PAGE | 25
TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
APPENDIX: SOFTWARE SECTOR PUBLIC COMPANY METRICS (CONT’D)
DATA STORAGE
Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. 2017E Rev. LTM EBITDA Earnings
EMC Corporation EMC $50,967 $51,889 92.6% 4.6% 13.1% 1.1% 0.8% 19.7% 2.1x 2.0x 2.0x 7.7x 26.1x
NetApp, Inc. NTAP 4,445 7,978 73.6% (22.6%) (19.9%) (8.4%) (9.0%) 10.7% 0.8x 0.8x 0.8x 4.3x 21.5x
Iron Mountain Incorporated IRM 11,909 7,172 88.1% (6.6%) (5.9%) (3.5%) 3.8% 29.7% 6.5x 3.9x 3.8x 13.0x 58.2x
Brocade Communications Systems, Inc. BRCD 3,645 4,239 82.1% (10.0%) 86.9% 1.7% 1.4% 25.0% 1.6x 1.6x 1.6x 5.5x 12.2x
CommVault Systems, Inc. CVLT 1,549 1,950 90.3% (0.7%) (46.6%) (4.5%) (2.5%) 1.4% 2.6x 2.5x 2.3x 23.0x NM
Box, Inc. BOX 1,343 1,484 59.5% (34.3%) NA 39.9% 29.9% NM 4.4x 3.4x 2.7x NM NM
Barracuda Networks, Inc. CUDA 668 818 32.9% (60.1%) NA 16.2% 14.3% 1.1% 2.2x 2.0x 1.8x 9.2x NM
Nimble Storage, Inc. NMBL 399 611 24.4% (65.0%) NA 41.5% 20.5% NM 1.2x 1.0x 0.8x NM NM
Carbonite, Inc. CARB 150 215 62.1% (44.0%) (26.2%) 11.4% 30.5% NM 1.1x 0.8x 0.8x NM NM
Median $1,549 $1,950 73.6% (22.6%) (12.9%) 1.7% 3.8% 15.2% 2.1x 2.0x 1.8x 8.5x 23.8x
IT SECURITY
Cisco Systems, Inc. CSCO $107,495 $143,264 95.2% 4.5% 36.7% 3.1% (0.3%) 28.8% 2.2x 2.2x 2.1x 7.6x 13.9x
Check Point Software Technologies Ltd. CHKP 14,535 15,819 98.8% 6.8% 89.2% 9.0% 8.0% 52.3% 8.9x 8.3x 7.7x 15.6x 23.1x
Palo Alto Networks, Inc. PANW 13,950 14,417 81.3% 15.3% 194.8% 55.6% 46.6% NM 12.1x 8.9x 6.9x NM NM
Symantec Corporation SYMC 11,459 11,988 70.3% (21.2%) (24.9%) 32.0% (29.2%) 31.5% 1.9x 3.2x 3.1x 6.5x 19.4x
VeriSign, Inc. VRSN 9,647 9,692 94.3% 33.0% 87.2% 4.9% 4.6% 63.0% 9.1x 8.5x 8.3x 13.5x 25.8x
Gemalto NV GTO 6,908 6,519 76.1% (9.3%) (15.5%) 26.6% 5.3% 14.9% 1.9x 1.8x 1.7x 11.2x 44.8x
Trend Micro Inc. TSE: 4704 3,708 5,005 75.6% 11.0% 28.5% 7.9% 11.4% 31.6% 3.2x 2.9x 2.7x 9.8x 28.1x
Fortinet Inc. FTNT 4,365 5,256 60.9% (10.1%) 33.3% 31.0% 24.2% 5.5% 4.3x 3.5x 2.9x 26.8x NM
FireEye, Inc. FEYE 2,522 2,985 32.5% (52.8%) NA 46.4% 33.0% NM 4.0x 3.0x 2.4x NM NM
Cheetah Mobile Inc. CMCM 2,085 2,325 44.6% (6.5%) NA 108.9% 59.4% 9.1% 3.7x 2.3x 1.6x 23.7x 85.5x
Proofpoint, Inc. PFPT 2,153 2,214 71.3% (6.8%) 221.1% 35.7% 31.1% NM 8.1x 6.2x 4.8x NM NM
Imperv a Inc. IMPV 1,364 1,629 64.8% 22.0% 32.8% 42.9% 30.3% NM 5.8x 4.5x 3.6x NM NM
CyberArk Software, Ltd. CYBR 1,182 1,420 55.8% (23.1%) NA 56.1% 28.8% 21.8% 7.3x 5.7x 4.7x 30.5x 55.1x
AVG Technologies N.V. AVG 1,202 1,086 71.2% (4.0%) 48.4% 14.5% 4.0% 29.0% 2.8x 2.7x 2.5x 7.8x 22.2x
Qualys, Inc. QLYS 693 871 45.6% (46.2%) 108.1% 23.0% 20.1% 23.8% 4.2x 3.5x 2.9x 12.8x 54.9x
Rapid7, Inc. RPD 457 544 47.6% NA NA 43.8% 35.3% NM 4.1x 3.1x 2.4x NM NM
Mimecast Limited MIME 429 526 87.7% NA NA NA NA 10.1% 3.2x 2.7x 2.2x NM 221.7x
Varonis Systems, Inc. VRNS 371 477 61.0% (26.1%) NA 25.5% 21.7% NM 2.9x 2.4x 2.0x NM NM
Median $2,338 $2,655 70.7% (6.7%) 42.6% 31.0% 21.7% 26.3% 4.1x 3.1x 2.8x 12.8x 28.1x
Large-Cap
SaaS
Small-Cap
SaaS
Data &
Analytics
IT Operations
Data Storage
IT Security
Software
Bellwethers
Communication
Enterprise
HCM
Marketing
PLM &
Engineering
SCM & Logistics
Energy
Financial
HCIT
Public Sector /
Non-Profit
Healthcare & Life Sciences
IndustrialsEnergy, Power & Infrastructure
Industrials
PAGE |
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QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
Technology, Media & Telecom
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TECHNOLOGY, MEDIA, & TELECOM
QUARTERLY SOFTWARE SECTOR REVIEW │ 1Q 2016
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