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Important disclosures appear at the back of this report
GP Bullhound LLP is authorized and regulated by the Financial Conduct Authority GP Bullhound Inc is a member of FINRA
Global Software Market PerspectivesQ1 2019
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2
Software Perspectives – Executive Summary
▪ GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to category leaders with a robust focus on Software globally
▪ We publish this quarterly SaaS market report to provide quantitative insights into public and private market valuations across the transaction spectrum and qualitative insights into company business models, technology and customer trends
▪ We also feature many of the leading SaaS companies & CEOs across interesting sub-sectors
▪ Based in our San Francisco office, Jonathan Cantwell is the head of our Software practice with over
15 years of experience and has completed over 50 transactions with public and private tech companies globally
▪ We have completed 12 Software deals in the last year; several of our recent Software advisory transactions and investments are showcased below
Sold to Sold to Sold to Sold to
Investment fromInvestment from Investment fromInvestment from
3
Key Sector Takeaways
Recent Software Transaction Trends
Public Market SaaS Analyses
SaaS CEO Commentary
Appendix A: GP Bullhound SaaS Index
1
2
3
4
6
8Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
5 Key SaaS Metrics
Appendix B: Software Public Comparables by
Category7
4
Rise of the Monoclouds1
Software providers look to the Salesforce AppExchange for growth3
New-age POS solutions augment customer engagement in retail4
HCM Software activity to be dominated by PE roll-ups5
The Zero Trust Cloud Security Model will become an industry standard6
Acquisitions fuel enterprise software portfolio expansion2
GP Bullhound’s Views on Current Trends in Software更多资料欢迎添加微信:zsxf2017
5
– The desire to integrate new areas of the enterprise software stack is driving M&A deals as software providers expect large gains when inserting new and scalable offerings into their existing marketing channels
– We anticipate major acquisitions to continue as industry players are looking to further invest in their enterprise suite, especially their AI, data and analytics capabilities, supported by strong public markets
– Median enterprise SaaS deal size climbed to $70m in 2018 from $34m in 2017
– SAP, IBM and Twilio top the charts, paying high premiums in a hotly contested market to secure leading SaaS Targets
GP Bullhound’s Views on Current Trends in Software (Cont’d)
Source: CapitalIQ, Pitchbook
Rise of the Monoclouds
Acquisitions fuel enterprise software portfolio expansion
1
2
– Adobe, Amazon, Google, Microsoft, and Salesforce lead the Monocloudinitiative to become more dynamic across verticals, offering consumers the ability to utilize multiple services on a single platform
– Driven by companies with billions on their balance sheet, allowing for strong engineering teams that can rapidly enhance their platforms
– With Tech players expanding their SaaS offerings, startups have an opportunity to enter partnerships with cloud providers by providing services specific to the development of these cloud ecosystems and product suites
– By offering hosted services of popular services, startups will increase their technological capabilities and value propositions, and focus their use cases to find niches that broader platforms won’t pursue
EV: $875mEV/ Rev: N/A
Deal Date: 12/21/2018
EV: $32.8bnEV/ Rev: 18.7x
Deal Date: 10/15/2018
EV: 8.0bnEV/ Rev: 20.0x
Deal Date: 11/11/2018
EV: $32.2bnEV/ Rev: 10.2x
Deal Date: 10/28/2018
EV: N/AEV/ Rev: N/A
Deal Date: 10/5/2018
EV: N/AEV/ Rev: N/A
Deal Date: 10/2/2018
EV: $200m+EV/ Rev: N/A
Deal Date: 1/10/2019
EV: N/AEV/ Rev: N/A
Deal Date: 11/19/2018
6
– Vendors expect POS solutions to provide live data and integrated analytics, in addition to payment processing capabilities, to allow for more dynamic and comprehensive management of customers and inventory
» Digital payment integration and comprehensive CRM management will ensure a robust and streamlined customer retail experience
– Demand for POS solutions will be driven by increasingly affordable wireless technologies and a transition towards credit cards and digital payment apps as dominant payment methods
– New age POS Solutions will adopt the form factor of mobile devices to create a seamless checkout for customers
GP Bullhound’s Views on Current Trends in Software (Cont’d)
Source: CapitalIQ, Pitchbook
Software providers look to the Salesforce AppExchange for growth
New-age POS solutions augment customer engagement in retail
3
4
– The Salesforce AppExchange platform is the fuel for the Salesforce ecosystem economic engine
» 89% of Fortune 100s have installed at least one app on the Salesforce AppExchange, with more than 35m apps currently on the platform
– The App ecosystem is vital for the success of Salesforce – for every $1.00 spent on Salesforce licenses, the Salesforce ecosystem is expected to earn $4.54 on successful deployments by 2020
» Assuming their licenses revenue reaches $16bn by 2020, AppExchange has the potential to generate $73bn in revenue for the ecosystem
– We anticipate that SaaS providers will increasingly try to capitalize on this demand within Salesforce's growing enterprise solutions ecosystem
EV: N/AEV/ Rev: N/A
Deal Date: 2/26/2019
EV: $37.7bnEV/Rev: 2.7x
Deal Date: 1/16/2019
EV: $1.4bnEV/Rev: N/A
Deal Date: 10/07/2018
EV: N/AEV/Rev: N/A
Deal Date: 9/27/2018
EV: $415mEV/ Rev: N/A
Deal Date: 10/24/2018
EV: N/AEV/ Rev: N/A
Deal Date: 9/4/2018
EV: N/AEV/ Rev: N/A
Deal Date: 2/4/2019
EV: N/AEV/ Rev: N/A
Deal Date: 9/25/2018
Clovis Point Capital
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7
GP Bullhound’s Views on Current Trends in Software (Cont’d)
Source: CapitalIQ, Pitchbook
HCM Software activity to be dominated by PE roll-ups5
– HCM software (recruiting, talent management, learning, collaboration & engagement) is a core focus for organizations as employee experience is a growing point competition in tight labor markets. More money has been allocated to HR budgets because organizations have identified HCM as a key determinant of employee experience
– The HCM software market is still fragmented, yet consolidation activity is beginning to pick up in the recruitment space
» We expect this activity to continue to play out in adjacent areas of HCM software, namely learning & training, given their big impact on CX
– Several roll-ups are playing out in the PE world: Visma Group (HG Capital), Allocate Software (Vista Equity), Bullhorn (Insight Ventures), Saba Software (Vector Capital)
EV: N/AEV/Rev: N/A
Deal Date: 2/11/2019
EV: $11bnEV/ Rev: 10.0x
Deal Date: 2/4/2019
EV: N/AEV/Rev: N/A
Deal Date: 10/01/2018
EV: N/AEV/Rev: N/A
Deal Date: 8/15/2018
– Zero Trust is a security concept that an organization should not trust anything inside or outside its perimeters and instead must verify anything trying to connect to its systems before granting access
– This model is driven by the mobile-first workplace as firms shift more of their infrastructure into the cloud with users accessing applications from a range of devices and multiple locations
– The technology is becoming more available, allowing firms to easily implement a robust cybersecurity system, utilizing micro-segmentation, multifactor authentication, identity and access management, orchestration, encryption, scoring and file system permissions
– Enterprises started implementing multifactor authentication and identity access management, plus micro-segmentation in parts of their environment
The Zero Trust Cloud Security Model will become an industry standard 6
Capital Raised: $100mEV/ Rev: N/A
Deal Date: 1/10/2019
Capital Raised: $55mEV/ Rev: N/A
Deal Date: 1/29/2019
EV: $1.5bnEV/ Rev: N/A
Deal Date: 2/4/2019
EV: $2.4bnEV/ Rev: NA
Deal Date: 9/28/2018
8
Key Sector Takeaways
Recent Software Transaction Trends
Public Market SaaS Analyses
SaaS CEO Commentary
Appendix A: GP Bullhound SaaS Index
Appendix B: Software Public Comparables by
Category
1
2
3
4
6
7
8Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
5 Key SaaS Metrics
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9
Announce
DateIssuer Lead Investor Issuer Description
Capital
Raised ($m)
Feb 18th
Digital banking platform 35
Feb 11th
Delivery platform,
connecting couriers with
customers
400
Feb 5th Cloud-based data
integration platform250
Jan 29th
Online payment manager 100
Jan 28th Micro-investing software
application platform105
Jan 16th Enterprise software
services1,500
Jan 10th Cloud identity-
management platform100
Jan 9th Human capital
management platform50
Dec 21st Internet-connected sensor
systems provider100
Dec 20th Vehicle leasing software
application385
Dec 19th Social media
management40
Nov 12th Ride Sharing application
platform114
Nov 9th
Cloud-based business
management software for
home service companies
165
Announce
DateTarget Buyer Target Description
Value
($m)
Implied
EV/LTM Rev
Feb 4th Cloud-based human
capital management10,875 9.4x
Jan 28th Digital fax manager
platform provider230 -
Jan 16th Electronic commerce
solutions41,941 4.8x
Jan 3rd Social media listening
platform- -
Dec 21st Cloud business
management2,154 8.0x
Dec 13th Cloud-based field
management - -
Nov 20th
Cloud-based
construction document
collaboration platform
875 -
Nov 11th
Customer, employee,
and brand
management solutions
8,000 -
Nov 11th Cloud-based business
management platform2,122 8.3x
Nov 5th
Cloud-based
application security
platform
950 -
Oct 28th Open-source enterprise
software solutions35,690.9 10.7x
Oct 15th
Cloud-based digital
communications
platform
2,020 13.4x
Oct 10th
Cloud-based cyber
and application
platform
2,119 5.2x
Oct 8th Data-driven employee
engagement platform400 -
Oct 3rd Data management
service platform2,107 6.1x
Notable Software M&A Deals & Private Financings(Q4 2018 / Q1 2019)
Selected M&A Transactions Selected Private Financings
Source(s): Capital IQ, Pitchbook
Median 8.2x
10
Global Software Transaction TrendsM&A and Private Placement Activity by Quarter
Source(s): Pitchbook as of 2/28/2019
Note: Data includes all “SaaS” M&A and private placement deals as defined by Pitchbook regardless of geography or transaction size
Transaction Deal Value & Volume Trending Upward Private Placement Deal Values Becoming Larger
The US and Europe Continue to Dominate M&A Deal Volume Private Placement Deal Volume by Region has Stayed Consistent
0
100
200
300
400
500
600
$0M
$20B
$40B
$60B
$80B
$100B
$120B
M&A Buyout M&A Deals Buyout Deals
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
$0M
$5B
$10B
$15B
$20B
$25B
$30B
$35B
$40B
Total Capital Invested Deal Count
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
2017
Q2
2017
Q3
2017
Q4
2018
Q1
2018
Q2
2018
Q3
2018
Q4
2019
Q1
YTD
U.S. & Canada Europe Asia Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
2017
Q2
2017
Q3
2017
Q4
2018
Q1
2018
Q2
2018
Q3
2018
Q4
2019
Q1
YTD
U.S. & Canada Europe Asia Other
11
Software IPOs
Source(s): Company SEC filings from Edgar, Capital IQ as of 2/28/2019
▪ Description (HKG: 2013): Developer of
CRM software designed to help businesses
to build m-commerce platforms on
▪ Listing Date: 01/15/2019
▪ Offering Amount: $107.8m
▪ Offering Price/Share: $0.36
▪ % Change/IPO Price: 17.4%
▪ LTM Revenue: $17.0m
▪ LTM EV/Revenue: 11.0x
▪ Selected Metrics:
– 2.7m registered merchants
– Paying customers: +50,000
Listed in Q1 2019Filed in Q1 2019
▪ Description (NYSE:ESTC): Developer of
software products that ingest and store
data from any source and format,
performing search, analysis, and
visualization
▪ Listing Date: 05/10/2018
▪ Offering Amount: $252.0m
▪ Offering Price/Share: $36
▪ LTM Revenue: $159.9m
▪ EV/Revenue: 28.2x
▪ % Change/IPO Price: 146%
▪ Selected Metrics:
– Rev % growth: 81%
– Subscription rev as % of total: 93%
– Customers: 5,500
Listed in Q4 2018
▪ Description (NYSE:PLAN): Provider of a
cloud-based modelling and planning
platform
▪ Listing Date: 10/12/2018
▪ Offering Amount: $263.5m
▪ Offering Price/Share: $17
▪ LTM Revenue: $217.7m
▪ LTM EV/Revenue: 17.14x
▪ % Change/IPO Price: 93%
▪ Selected Metrics:
– Rev % growth: 39%
– Rev. generated from Global 2000
clients: 56%
– Customers: 979
Filings to look for in 2019
Market volatility in late 2018 Q4 and the lengthy government shutdown postponed recent IPO considerations
Although the amount of IPOs is down roughly 70% compared to this point last year, several large filings are expected in the remainder of 2019
12
Key Sector Takeaways
Recent Software Transaction Trends
Public Market SaaS Analyses
SaaS CEO Commentary
Appendix A: GP Bullhound SaaS Index
1
2
3
4
6
8Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
5 Key SaaS Metrics
Appendix B: Software Public Comparables by
Category7
13
GP Bullhound Selected SaaS Index Market Valuations
Source(s): Capital IQ
1. Market capitalization as of 12/31/2018
2. Change in market capitalization through 2/28/2019
(Market Cap Values in $ in billions)
104.8
35.1
31.9
23.2
21.2
15.3
15.5
13.0
8.8
7.2
7.7
8.3
7.0
6.6
6.2
6.6
4.9
4.8
4.6
5.1
4.6
4.4
2.0
1.6
1.1
20.4
8.4
11.0
10.7
4.6
5.7
4.6
4.2
6.2
3.5
2.7
1.5
2.3
2.5
2.3
1.9
2.0
2.1
2.0
1.4
1.5
0.9
0.6
0.6
0.3
125.2
43.5
42.9
33.9
25.7
20.9
20.1
17.1
15.0
10.6
10.4
9.8
9.4
9.1
8.6
8.6
6.9
6.8
6.5
6.5
6.1
5.3
2.6
2.2
1.4
Market Cap Change in Market Cap1 2
14
Tech Giants – Show Me The Money
Source: Capital IQ
Note: existing cash balances allow companies to spend over 100% of operating cash flow
1. As of Q3 2018
LTM1 % of Operating Cash Flow ($ 000s) LTM - 2017 % of Operating Cash Flow ($ 000s)
▪ Substantial uses of cash for acquisitions in 2018
– Workday acquired Adaptive Insights for $1.5bn in an all cash deal
– Adobe’s acquisitions of Marketo and Magento for a total of $6.3bn in all cash and Salesforce acquisition of Mulesoft utilizing $4.9bn in cash of a $6.4bn total deal value
▪ Significant uptick in both R&D and share buybacks, the former up 6% YoY and the latter up 19% YoY respectively
0%100%200%300%400%500%600%700% 0% 100% 200% 300% 400% 500% 600% 700%
▪R&D ▪Debt Paydown ▪CAPEX ▪Dividends ▪Share Buybacks ▪Acquisitions
$52,904
$784
$3,152
$859
$1,287
$46,913
$428
$1,503
$77,848
$124,028
$10,564
$8,735
$160
$54,847
$749
$1,058
$518
$633
$24,175
$304
$828
$49,824
$75,434
$3,204
$2,542
$142
$39,319$63,951
15
3.00x
4.00x
5.00x
6.00x
7.00x
8.00x
9.00x
10.00x
11.00x
12.00x
13.00x
2/28/2014 2/28/2015 2/29/2016 2/28/2017 2/28/2018 2/28/2019
2019 Q1 GPB SaaS Index - TEV/LTM Revenues 2019 Q1 GPB SaaS Index - TEV/NTM Total Revenue
Analysis of GP Bullhound SaaS Index ValuationsRevenue Multiple Trends – Last Five Years
Source(s): Capital IQ as of 2/28/2018
Note: GP Bullhound SaaS Index constituents can be found in Appendix A
Current SaaS valuations are now higher than the five year mean;
showing the robustness of the current market environment
Mean: 8.4x
Mean: 6.8x
As of Feb 28 : 10.9x
As of Feb 28: 9.1x
16
CRM
WDAY
TEAM
SPLK
SHOP
VEEV
TWLO
PAYCULTI
OKTA
ZEN
DOCU
RNG
CDAY
HUBS
RP
NEWR
ZS
COUP
PVTL MDB
WIX
PCTY
AYX
MDSO
TWOU
CSOD
FIVNQTWO
MIME
BOX
BL
TENB
ZUO
APPF
APPN
WK
PS
EVBG
YEXT
EGHT
LPSN
SPSC
SCWX
FSCTBNFT
INST
TLND
UPLD
SINCH
CBLK
CARB
MOBL
CSLTECOM
BCOV
AMBR
(20.0%)
(15.0%)
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
(5%) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65%
2018E U
nle
ve
red
FC
F M
arg
in
2018E Revenue Growth
Rule of 40% – Public SaaS2018E Growth and Profitability of Public SaaS Companies in GPB Index
Source(s): Capital IQ as of 2/28/2019
Note: Data based on GP Bullhound SaaS Index, constituents can be found in Appendix A,
excludes outliers and companies with “N/A”
The Rule of
40% Line
17
Rule of 40% – Public SaaS (Cont'd)
Source(s): Capital IQ as of 2/28/2019
Note: Data based on GP Bullhound SaaS Index, constituents can be found in Appendix A,
excludes outliers and companies with “N/A”
Sub-Performers Market-Performers Out-Performers
Companies whose summed revenue growth rate and FCF margin is greater than 40%, are valued higher
by investors than those below this 'rule of 40' line
CRM
SPLK
ULTI
DBX
DOCURNG
CDAY
HUBS
PFPT
RP
NEWR
PVTL
JCOM
WIX
PCTY
MDSO
LOGM
TWOU
CSOD
FIVN
QLYS
QTWO
MIME
BOX
BL
TENBZUO
APPF
APPN
WK
PS
YEXT
EGHT
LPSN
SPSC
SCWX
FSCTBNFT
INSTTLND
SINCH
CBLK
CARBMOBL
BCOVAMBR
AMBR
JIVE
0x
1x
2x
3x
4x
5x
6x
7x
8x
9x
10x
11x
12x
13x
14x
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70%
EV
/2018E R
eve
nu
e M
ultip
le
2018E Revenue Growth + 2018E Unlevered FCF Margin
18
75%
60%
46% 46%
32% 32%
25%
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Horizontal vs. Vertical Focused Cloud Software TrendsVertical-specific has lower Sales & Marketing spend as a percentage of revenue
However, generally lower growth and valuation multiples
Horizontal Software Vertical-Specific Software
Median: 21%Median: 46%
Source(s): Capital IQ as of 2/28/2019
Note: GP Bullhound SaaS Index constituents can be found in Appendix A
13.0x 25.0x 10.1x 16.2x 6.4x 15.2x 7.0x 4.7x 6.8x 12.8x 18.6xEV/LTM
Revenue
FY19/18E
Revenue
Growth6.9% 50.7% 26.8% 31.3% 18.3% 31.7%
2.4x
0.3% 16.1% 4.8% 13.7% 34.6% 25.9%
9.0x
20.2%
31%
24% 23%19% 18% 17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
19
GP Bullhound SaaS Index Performance
L1M L3M
L6M L12M
Source(s): Capital IQ as of 2/28/2019
Note: GP Bullhound SaaS Index constituents can be found in Appendix A
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
110.0%
115.0%
120.0%
125.0%
130.0%
11/28/2018 12/9/2018 12/20/2018 12/31/2018 1/11/2019 1/22/2019 2/2/2019 2/13/2019 2/24/2019
Ind
ex V
alu
e
2019 Q1 GPB SaaS Index - Index Value S&P 500 NASDAQ Composite
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
110.0%
8/28/2018 9/28/2018 10/28/2018 11/28/2018 12/28/2018 1/28/2019 2/28/2019
Ind
ex
Va
lue
2019 Q1 GPB SaaS Index - Index Value S&P 500 NASDAQ Composite
80.0%
90.0%
100.0%
110.0%
120.0%
130.0%
140.0%
150.0%
160.0%
2/28/2018 4/21/2018 6/12/2018 8/3/2018 9/24/2018 11/15/2018 1/6/2019 2/27/2019
Ind
ex
Va
lue
2019 Q1 GPB SaaS Index - Index Value S&P 500 NASDAQ Composite
95.0%
100.0%
105.0%
110.0%
115.0%
1/28/2019 2/4/2019 2/11/2019 2/18/2019 2/25/2019
Ind
ex V
alu
e
2019 Q1 GPB SaaS Index - Index Value S&P 500 NASDAQ Composite
20
Key Sector Takeaways
Recent Software Transaction Trends
Public Market SaaS Analyses
SaaS CEO Commentary
Appendix A: GP Bullhound SaaS Index
1
2
3
4
6
8Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
5 Key SaaS Metrics
Appendix B: Software Public Comparables by
Category7
21
SaaS Company CEO Profile
A modern POS, inventory and analytics SaaS platform changing
how enterprises manage guest transactions. With an omni-
channel approach, Appetize makes front of house transactions
more intuitive while providing robust kitchen and back office
tools. Appetize serves the largest, highest volume businesses,
including sports and entertainment properties, education
campuses, travel and leisure sites, and national chain brands.
Max RoperCEO & Co-Founder
“Most enterprise businesses are facing the same
challenges today: rising labor costs, lack of data
and poor guest experience. Solving for these
important issues is critical, and legacy players are
not moving fast enough for their enterprise
clients.”
22
SaaS Company CEO Profile (Cont’d)
A provider of high-performance SaaS solutions that help local
government agencies manage their physical assets and
associated operations. Through the combined effort of success
coaching, expert consulting, and state-of-the-art software
solutions, Cartegraph provides governments the ability to help them manage their assets and spend smarter.
Josh MallamudCEO
“We continue to see evidence that software
adoption is increasingly relying on smart devices
to enhance communication, productivity, and
more—which is bleeding into their work lives
and creating expectations around the availability
of consumer-quality applications to assist in their
day-to-day work. Urgency around technology
adoption is being driven, in part, by the fact that
experienced team members will retire at an
increasing rate, given demographic trends among
government employees.”
23
SaaS Company CEO Profile (Cont’d)
Hugo WernhoffCEO & Co-Founder
“Education is the last big societal vertical where
technology is yet to have significant impact.
There are 1.5 billion school students and more
than 100 million teachers in the world. In the
coming years, SaaS has the capacity to move
from dealing with admin and class lists, to
leveraging the very core activity of any school
and any teacher: Making sure that students learn
faster and better.”
A provider of digital textbooks that adapts to the learning needs of
students and help teachers coach their students through their
education. By mixing technology with education, Kognity brings life
to textbooks in order to provide a digital, interactive and intelligent
textbook across multiple academic qualifications. Kognity provides intelligent textbooks to schools in over 80 countries on 5 continents.
24
Key Sector Takeaways
Recent Software Transaction Trends
Public Market SaaS Analyses
SaaS CEO Commentary
Appendix A: GP Bullhound SaaS Index
1
2
3
4
6
8Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
5 Key SaaS Metrics
Appendix B: Software Public Comparables by
Category7
25
Key SaaS MetricsDefinitions & Calculations
Metric Definition Calculation
Normalized measurement of recurring revenue, most frequently
measured with a constant value in each month of the
subscription periodMRR
All S&M expenses for new customers. Sometimes excludes
personnel management S&M costsCAC =
𝑆&𝑀
# 𝑜𝑓 𝑛𝑒𝑤 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠
Customer Acquisition Cost (CAC)
Amount of profit a customer is calculated to deliver to the
company over the lifetime of the customerCLV =
𝐴𝑅𝑃𝑈 ∗ 𝐺𝑀
𝐶ℎ𝑢𝑟𝑛 𝑟𝑎𝑡𝑒
Customer Lifetime Value
(CLV)
The number of months a company requires to pay back its cost of
customer acquisitionPayback Period =
𝐶𝐴𝐶
𝐴𝑅𝑃𝐴 ∗ 𝐺𝑀Payback Period
Churn (Gross & Net)
Gross Churn is the number of customers lost in a given period or
cohort regardless of account expansion or growth
Net Churn is the number of customers gained or lost in a given
period or cohort after taking into consideration new, reactivated,
or expanded accounts Net Churn =
(𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑙𝑜𝑠𝑡𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑 − 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑔𝑎𝑖𝑛𝑒𝑑
𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑)𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑎𝑡
𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
Gross Churn = 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑙𝑜𝑠𝑡 𝑜𝑣𝑒𝑟 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑎𝑡 𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑝𝑒𝑖𝑟𝑜𝑑
MRR= # 𝑜𝑓 𝑝𝑎𝑦𝑖𝑛𝑔 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 ∗ 𝐴𝑅𝑃𝐴/𝑚𝑜𝑛𝑡ℎ
26
Key SaaS Metrics (Cont’d)
• Monthly Recurring Revenues (MRR), Annual Recurring Revenue (ARR), Annual Run Rate Revenue (ARRR) are the key
metrics that investors will focus on
– Note: ARRR = ARR + Non-recurring revenue items
– Also important to understand, the % on-demand SaaS vs. traditional license, and the mix between software and
services
• Important to show continued growth in top line revenue (both for reported financials and the above metrics)
MRR / ARR / ARRR
• Customer Acquisition Cost (CAC) payback period is typically stated in months. Represents the time taken to fully pay
back sales and marketing investment to acquire a single customer
• Growth is the key target for SaaS companies, but sales and marketing investments should ultimately be profitable. CAC
payback periods:
– For SMEs, CAC payback period should be 6-12 months
– For Enterprise Customers, CAC payback period should be 9-15 months
– A CAC payback period of >24months should be a cause for concern
• Customer Lifetime Value = NPV of recurring gross profit of a customer less the initial cost of customer acquisition
• For SMEs, CLV should be between 3 & 4 years
– For Enterprise Customers, CLV should be between 5 & 7 years
CAC vs. CLV
• Logo Churn: Churn of absolute number of customers. Top companies have a Logo Churn of <7%
• MRR Churn: Churn of customer MRR that has been lost over given period of time. Top companies have a MRR Churn of
<5%; including upgrades/customer expansion, churn is ideally negative (Negative Net Churn)
• MRR Renewal: Total MRR of renewed customers/Total MRR of existing customers at year beginning. Top companies
have a MRR Renewal percentage of 105-110% due to upsells to its installed base
• Net Revenue Retention:
– Key metric for performance of SaaS business
– >100% upsells more than make up for churn
– ARR as a Percentage of Upsells: 15%+
Churn & Renewal Rates
• Growth is of paramount importance, with excess cash being used to fuel growth
• Important, therefore, to understand the cash burn in the business and planning for capital efficient hyper-growth
Free Cash Flow /
Burn Rate
Source(s): GP Bullhound analysis
Investors focus on key SaaS metrics, long-term business model viability and valuations
27
Key Sector Takeaways
Recent Software Transaction Trends
Public Market SaaS Analyses
SaaS CEO Commentary
Appendix A: GP Bullhound SaaS Index
1
2
3
4
6
8Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
5 Key SaaS Metrics
Appendix B: Software Public Comparables by
Category7
28
Public Comps – GP Bullhound SaaS Index
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
Share
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Salesforce US 29,000 $163.65 40.8% 7.0% 11.1% $125,192 $126,133 $4,342 9.5x 7.9x 6.6x NM 31.6x 25.2x NA 77.1% 24.9%
Workday US 10,200 197.93 56.3% 30.0% 14.7% 43,545 42,971 1,778 15.2x 12.2x 9.9x NM 67.1x 48.5x 25.0% 75.9% 18.1%
ServiceNow US 8,154 239.44 48.7% 23.3% 27.4% 43,219 42,383 1,498 16.2x 12.4x 9.7x NM 45.5x 33.8x 31.4% 81.0% 27.2%
Square US 3,349 81.24 76.4% 0.5% 6.6% 34,096 33,872 1,124 10.3x 15.0x 11.2x NM NM 52.3x (31.4%) 80.4% 18.6%
Atlassian UK 3,061 107.48 98.0% 22.6% 13.5% 25,742 24,934 1,644 26.1x 18.4x 14.6x NM 72.7x 57.7x 41.8% NA 25.3%
Splunk US 3,200 135.88 45.8% 6.6% 13.7% 20,081 18,958 2,757 10.5x 8.8x 7.2x NM 54.1x 40.6x 20.1% 83.9% 16.2%
Shopify CA 4,000 189.15 36.9% 30.4% 18.6% 20,927 18,948 1,979 17.7x 12.7x 9.7x NM NM NM 38.8% 55.7% 3.7%
Veeva Systems US 2,171 117.91 69.2% 14.8% 9.9% 17,133 16,042 1,090 18.6x 15.6x 13.2x 67.7x 41.8x 34.9x 19.5% 74.1% 37.3%
Twilio US 1,440 121.69 256.2% 51.7% 19.1% 15,022 14,709 748 22.6x 13.7x 10.4x NM NM NM 65.3% 55.8% 3.9%
Paycom Software US 3,050 181.73 83.7% 19.3% 26.2% 10,649 10,638 46 18.8x 14.9x 12.2x 55.7x 36.7x 29.2x 25.8% 84.3% 40.7%
The Ultimate Software US 5,113 331.50 39.0% 9.2% 21.2% 10,385 10,235 162 9.0x 7.5x 6.3x NM 31.7x 25.6x 19.8% 65.4% 23.6%
Okta US 1,176 84.88 120.0% 40.4% 7.5% 9,374 9,096 546 25.0x 17.5x 13.4x NM NM NM NA 75.1% (4.7%)
Dropbox US 2,323 23.86 NA (12.2%) (1.2%) 9,813 8,890 1,089 6.4x 5.4x 4.7x NM 24.3x 19.3x 17.8% 75.3% 22.3%
Zendesk US 2,740 79.02 83.0% 17.4% 19.9% 8,563 8,594 427 14.4x 10.7x 8.3x NM NM NM 34.0% 74.1% 7.1%
DocuSign US 2,255 55.15 NA (16.8%) 13.0% 9,114 8,452 1,094 13.0x 9.8x 8.1x NM NM 61.8x NA 79.5% 9.4%
RingCentral US 1,871 105.29 68.1% 12.3% 18.7% 8,554 8,355 566 13.6x 9.8x 7.9x NM NM 59.5x 39.5% 77.6% 12.6%
Ceridian HCM US 4,444 49.02 NA 26.8% 23.7% 6,888 7,341 218 9.8x 9.0x 8.0x 62.9x 39.7x 32.5x 9.1% 47.7% 22.7%
HubSpot US 2,638 168.38 51.6% 17.8% 12.2% 6,932 6,659 592 13.0x 10.2x 8.3x NM NM 58.9x 27.0% 82.2% 12.1%
Proofpoint US 2,613 118.09 10.2% (0.1%) 20.5% 6,536 6,305 232 8.8x 7.2x 6.0x NM 47.6x 35.5x 21.8% 78.1% 15.2%
RealPage US 6,267 61.21 17.1% 0.3% 12.2% 5,587 5,956 228 6.8x 6.0x 5.4x 42.4x 21.2x 18.2x 14.1% 62.9% 28.4%
New Relic US 1,627 105.75 47.3% 1.2% 8.7% 6,065 5,747 722 12.9x 10.1x 8.1x NM 70.0x 49.6x 27.5% NA 14.4%
Zscaler US 1,050 49.68 NA 5.7% 9.0% 6,073 5,733 340 23.6x 18.4x 14.1x NM NM NM 28.2% NA 4.4%
Coupa Software US 833 94.19 111.2% 34.2% 17.9% 5,599 5,364 406 22.4x 17.0x 13.6x NM NM NM NA 73.6% 8.1%
Pivotal Software US 2,894 22.42 NA (18.3%) 28.0% 5,884 5,220 665 8.4x 6.4x 5.2x NM NM 61.7x NA 68.0% (3.2%)
MongoDB US 962 101.56 215.3% 41.3% 14.9% 5,444 5,135 522 23.8x 14.8x 11.1x NM NM NM NA 72.9% (15.5%)
j2 Global US 2,587 85.01 14.8% 1.7% 13.9% 4,190 4,994 209 4.1x 3.8x 3.6x 11.1x 9.4x 8.7x 7.9% 83.3% 40.6%
Wix IL 1,771 109.25 45.6% 0.2% 3.9% 5,282 4,918 704 8.1x 6.5x 5.3x NM 31.8x 23.6x 25.9% 78.3% 20.4%
Paylocity Holding US 2,600 87.57 87.2% 12.7% 29.7% 4,634 4,530 104 11.2x 9.0x 7.5x NM 31.3x 25.0x 24.7% NA 28.8%
Alteryx US 800 76.31 123.2% 35.6% 9.0% 4,684 4,528 330 17.9x 12.9x 9.8x NM NM NM 37.9% 91.1% 12.8%
Medidata US 1,998 75.02 14.3% (10.5%) 8.7% 4,602 4,450 241 7.0x 6.0x 5.2x 51.7x 24.6x 20.5x 16.3% 75.6% 24.5%
LogMeIn US 3,515 79.44 (31.3%) (6.3%) (12.7%) 4,039 4,090 149 3.4x 3.3x 3.1x 11.6x 10.0x 10.2x 4.3% 81.7% 32.6%
2U US 2,626 73.70 (11.0%) (14.2%) 30.2% 4,285 3,834 475 9.3x 7.0x 5.3x NM NM NM 33.0% 78.5% 2.4%
Cloudera US 1,648 14.57 (23.5%) 4.1% 10.5% 3,838 3,449 390 7.9x 3.7x 3.0x NM 16.7x 10.0x NA 76.3% 21.9%
Cornerstone OnDemand US 1,953 56.50 37.8% 0.7% 0.6% 3,339 3,286 388 6.1x 5.8x 5.1x NM 27.1x 20.4x 4.8% 75.8% 21.5%
Five9 US 983 53.04 74.7% 10.9% 10.2% 3,143 3,059 292 11.9x 10.2x 8.7x NM 60.9x 47.4x 16.8% 63.7% 16.7%
Qualys US 1,194 83.63 12.9% (8.6%) 1.6% 3,293 3,006 289 10.8x 9.3x 8.0x 37.9x 24.5x 20.4x 15.4% 78.7% 38.1%
Q2 US 1,190 68.82 51.1% 10.0% 20.7% 2,999 3,005 177 12.5x 9.8x 8.0x NM NM NM 27.6% 52.9% 6.8%
Mimecast UK 1,192 48.28 39.0% 16.2% 39.3% 2,917 2,949 157 9.2x 7.4x 6.1x NM 43.9x 34.9x 23.7% NA 16.9%
Box US 1,968 20.24 (15.9%) (23.9%) (0.3%) 2,921 2,816 218 4.6x 4.0x 3.5x NM 60.5x 35.0x 15.4% 71.3% 6.6%
BlackLine US 850 52.34 19.0% (0.2%) 16.3% 2,876 2,748 133 12.1x 9.9x 8.1x NM NM NM 21.9% 80.8% 7.6%
29
Public Comps – GP Bullhound SaaS Index (Cont’d)
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
Share
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Tenable US 1,252 $31.18 NA (4.0%) 16.2% $2,904 $2,631 $283 9.8x 7.7x 6.2x NM NM NM 27.9% 81.3% (14.0%)
Zuora US 933 23.76 NA (26.5%) 12.4% 2,578 2,418 175 10.9x 8.2x 6.7x NM NM NM NA 56.8% (13.1%)
AppFolio US 916 72.28 80.2% (11.6%) 18.1% 2,451 2,410 91 12.7x 10.1x 8.1x NM 37.8x 28.3x 26.1% 61.5% 26.6%
Appian US 1,058 36.49 34.9% 5.4% 14.6% 2,345 2,250 95 9.9x 8.6x 7.3x NM NM NM 15.0% 65.4% (7.8%)
Workiva US 1,319 49.45 117.4% 47.8% 28.2% 2,191 2,111 98 8.6x 7.4x 6.4x NM NM NM 16.1% 77.6% (3.8%)
Pluralsight US 1,100 32.51 NA (2.2%) 10.4% 2,166 2,095 194 9.0x 6.7x 5.1x NM NM NM 34.5% 76.8% (8.6%)
Everbridge US 777 70.71 121.6% 21.9% 18.3% 2,097 2,086 106 14.2x 10.7x 8.5x NM NM NM 33.1% 71.2% 2.3%
Yext US 800 18.58 46.3% (29.9%) 24.2% 1,874 1,767 107 8.3x 5.9x 4.6x NM NM NM NA 75.8% (10.3%)
8x8 US 1,225 19.67 7.8% (12.2%) 1.2% 1,882 1,767 115 5.2x 4.4x 3.7x NM NM NA 18.0% NA (2.7%)
LivePerson US 1,106 27.96 93.5% 5.9% 22.4% 1,788 1,721 66 6.9x 6.0x 5.0x NM NM 58.6x 15.3% 74.6% 3.9%
SPS Commerce US 1,231 106.78 77.9% 10.6% 22.3% 1,896 1,718 178 6.9x 6.2x 5.7x 43.6x 27.0x 23.1x 10.7% 68.1% 23.1%
SecureWorks US 2,555 22.19 124.8% 75.6% 10.3% 1,813 1,698 116 3.3x 3.0x 2.7x NM NM 56.6x NA 54.7% 3.5%
ForeScout US 1,107 41.54 39.5% 16.1% 42.9% 1,780 1,682 115 5.6x 4.6x 3.8x NM NM NM 24.1% 78.2% (1.9%)
Benefitfocus US 1,450 49.12 103.0% 14.9% (11.0%) 1,574 1,621 191 6.3x 5.3x 4.6x NM NM 46.8x 18.0% 53.0% 5.9%
Instructure US 1,219 46.73 7.7% 17.6% 20.8% 1,673 1,520 153 7.3x 5.9x 4.9x NM NM NM 22.6% 72.9% (4.9%)
Talend FR 1,068 47.90 1.7% (24.9%) 31.2% 1,452 1,419 34 6.9x 5.7x 4.6x NM NM NM 21.6% 76.9% (7.5%)
Upland Software US 375 35.10 47.1% (4.9%) 17.8% 758 900 16 6.8x 4.7x 4.6x 31.4x 13.0x 12.0x NA 69.6% 36.4%
CLX Communications SE 385 12.90 74.6% 9.5% 9.7% 691 735 20 1.6x 1.4x 1.3x 17.5x 14.9x 13.0x 14.6% 25.3% 9.6%
Carbon Black US 932 13.09 NA (47.8%) (8.5%) 889 728 161 3.5x 3.0x 2.5x NM NM NM 15.7% 78.9% (15.6%)
Carbonite US 965 23.27 (17.3%) (44.3%) (16.4%) 800 720 198 2.4x 1.5x 1.2x 24.0x 5.5x 4.4x 65.4% 80.9% 26.7%
MobileIron US 889 5.06 5.4% 4.3% 4.3% 540 435 106 2.3x 2.1x 1.9x NM NM 22.2x 9.4% 83.0% 2.0%
Castlight Health US 470 3.19 (10.1%) 8.1% 21.8% 446 372 77 2.4x 2.3x 2.0x NM 45.1x 21.8x 1.3% 68.0% 5.2%
ChannelAdvisor US 730 12.93 46.1% (0.2%) 22.3% 354 310 47 2.4x 2.2x 2.1x NM 22.5x 17.5x 4.9% 78.5% 10.0%
Brightcove US 495 8.87 29.5% 8.2% 18.0% 325 296 29 1.8x 1.7x 1.6x NM 50.6x 21.9x 2.9% 62.7% 3.5%
Amber Road US 692 9.84 8.1% 13.4% 16.4% 276 290 8 3.4x 3.2x 3.0x NM 47.0x 35.8x 5.7% 56.5% 6.9%
Average 10.3x 8.1x 6.6x 38.1x 36.0x 32.5x 21.4% 71.8% 11.5%
Median 9.2x 7.4x 6.2x 40.1x 31.8x 28.7x 20.9% 75.6% 9.6%
30
Key Sector Takeaways
Recent Software Transaction Trends
Public Market SaaS Analyses
SaaS CEO Commentary
Appendix A: GP Bullhound SaaS Index
1
2
3
4
6
8Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
5 Key SaaS Metrics
Appendix B: Software Public Comparables by
Category7
31
Public Comps – Large-Cap ConsolidatorsShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Microsoft US 131,000 $112.03 19.5% 1.6% 6.6% $859,518 $817,328 $127,673 6.9x 6.3x 5.7x 16.5x 14.7x 12.9x 9.8% NA 42.7%
Intel US 107,400 52.96 7.4% 9.0% 13.4% 238,161 252,870 11,650 3.6x 3.6x 3.4x 7.8x 7.8x 7.4x 0.4% 61.4% 45.6%
Cisco US 74,200 51.77 15.6% 10.3% 13.2% 227,893 213,168 40,383 4.2x 4.1x 3.9x 14.0x 11.4x 10.9x 3.3% NA 35.7%
Oracle US 137,000 52.13 2.9% 7.2% 5.3% 187,090 196,475 49,391 4.9x 4.9x 4.8x 12.4x 10.6x 10.2x 0.3% NA 46.3%
IBM US 350,600 138.13 (11.4%) (5.8%) 2.9% 122,917 156,937 12,006 2.0x 2.0x 2.0x 9.4x 8.4x 8.2x 0.3% 47.1% 23.8%
SAP DE 96,498 107.11 1.5% (12.4%) 0.0% 127,842 130,858 10,390 4.6x 4.2x 3.9x 14.9x 12.5x 11.2x 9.2% NA 34.0%
Salesforce US 29,000 163.65 40.8% 7.0% 11.1% 125,192 126,133 3,450 10.1x 7.9x 6.6x NM 31.6x 25.2x NA NA 24.9%
Hewlett Packard US 60,000 16.38 (11.9%) (2.2%) 4.6% 22,555 31,169 3,781 1.0x 1.0x 1.0x 6.3x 6.0x 5.7x 2.4% NA 16.9%
Average 4.7x 4.2x 3.9x 11.6x 12.9x 11.5x 3.7% 54.3% 33.7%
Median 4.4x 4.1x 3.9x 12.4x 11.0x 10.6x 2.4% 54.3% 34.9%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
32
Public Comps – Advertising TechnologyShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Alphabet US 98,771 $1,126.55 2.0% (9.6%) 4.3% $780,846 $675,718 $109,140 4.9x 4.1x 3.6x 16.7x 11.4x 9.9x 19.5% 55.3% 36.2%
Adobe US 21,357 262.50 25.5% (0.2%) 8.5% 128,028 128,934 3,229 14.3x 11.6x 9.8x 40.5x 26.3x 21.5x 23.6% 87.3% 43.9%
Salesforce US 29,000 163.65 40.8% 7.0% 11.1% 125,192 126,133 3,450 10.1x 7.9x 6.6x NM 31.6x 25.2x NA NA 24.9%
Trade Desk US 944 197.54 251.1% 41.0% 45.6% 8,706 8,499 207 17.8x 13.2x 10.4x 73.6x 44.5x 33.6x 34.9% 76.0% 29.7%
Hubspot US 2,638 168.38 51.6% 17.8% 12.2% 6,932 6,659 592 13.0x 10.2x 8.3x NM NM 58.9x 27.0% 82.2% 12.1%
Teradata US 10,152 48.37 31.4% 17.2% 9.6% 5,674 5,503 715 2.5x 2.7x 2.6x 44.7x 14.5x 12.4x (5.9%) NA 18.6%
Criteo FR 2,744 27.14 (9.5%) 3.9% 10.2% 1,838 1,501 364 0.7x 1.5x 1.4x 5.9x 5.0x 4.4x (56.5%) NA 29.8%
TechTarget US 622 16.58 (4.1%) (32.2%) 15.8% 461 451 35 3.7x 3.4x 3.1x 21.3x 12.4x 10.5x 9.8% NA 27.3%
ChannelAdvisor US 730 12.93 46.1% (0.2%) 22.3% 354 310 47 2.4x 2.2x 2.1x NM 22.5x 17.5x 4.9% NA 10.0%
Average 7.7x 6.3x 5.3x 33.8x 21.0x 21.5x 7.2% 75.2% 25.8%
Median 4.9x 4.1x 3.6x 30.9x 18.5x 17.5x 14.7% 79.1% 27.3%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
33
Public Comps – Business Intelligence/AnalyticsShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Alphabet US 98,771 $1,126.55 2.0% (9.6%) 4.3% $780,846 $675,718 $109,140 4.9x 4.1x 3.6x 16.7x 11.4x 9.9x 19.5% NA 36.2%
IBM US 350,600 138.13 (11.4%) (5.8%) 2.9% 122,917 156,937 12,006 2.0x 2.0x 2.0x 9.4x 8.4x 8.2x 0.3% 47.1% 23.8%
SAP DE 96,498 107.11 1.5% (12.4%) 0.0% 127,842 130,858 10,390 4.6x 4.2x 3.9x 14.9x 12.5x 11.2x 9.2% 72.0% 34.0%
Adobe US 21,357 262.50 25.5% (0.2%) 8.5% 128,028 128,934 3,229 14.3x 11.6x 9.8x 40.5x 26.3x 21.5x 23.6% 87.3% 43.9%
Splunk US 3,200 135.88 45.8% 6.6% 13.7% 20,081 18,958 2,757 10.5x 8.8x 7.2x NM 54.1x 40.6x 20.0% 83.7% 16.2%
NetApp US 10,300 65.20 7.7% (24.1%) 3.1% 16,103 13,755 4,054 2.2x 2.2x 2.1x 10.5x 8.3x 7.5x 2.4% NA 26.0%
Tableau Software US 4,181 131.90 61.5% 22.4% 4.7% 11,355 10,332 1,022 8.9x 7.6x 6.4x NM 47.9x 35.0x 18.3% NA 15.8%
Fair Isaac US 3,772 247.82 45.8% 10.5% 14.6% 7,204 7,957 80 7.5x 6.9x 6.5x 32.2x NA NA 7.8% NA 0.0%
New Relic US 1,627 105.75 47.3% 1.2% 8.7% 6,065 5,747 722 12.9x 10.1x 8.1x NM 70.0x 49.6x 27.5% NA 14.4%
Teradata US 10,152 48.37 31.4% 17.2% 9.6% 5,674 5,503 715 2.5x 2.7x 2.6x 44.7x 14.5x 12.4x (5.9%) NA 18.6%
Alteryx US 756 76.31 123.2% 35.6% 9.0% 4,684 4,528 330 17.9x 12.9x 9.8x NM NM NM 37.9% NA 12.8%
Blackbaud US 3,353 77.24 (24.7%) (25.0%) 10.3% 3,654 4,010 31 4.7x 4.5x 4.3x 30.0x 22.6x 20.7x 5.0% NA 20.0%
Verint US 5,700 53.25 36.9% 8.2% 13.4% 3,476 3,864 406 3.2x 2.9x 2.7x 23.5x 11.8x 10.4x NA NA 24.5%
Cloudera US 1,648 14.57 (23.5%) 4.1% 10.5% 3,838 3,449 390 7.9x 3.7x 3.0x NM 16.7x 10.0x NA NA 21.9%
Inovalon US 2,302 13.14 9.5% 11.8% (7.1%) 2,006 2,859 123 5.4x 4.5x 4.1x 25.4x 14.1x 12.8x 19.8% NA 32.2%
Workiva US 1,319 49.45 117.4% 47.8% 28.2% 2,191 2,111 98 8.6x 7.4x 6.4x NM NM NM 16.1% NA (3.8%)
Yext US 800 18.58 46.3% (29.9%) 24.2% 1,874 1,767 107 8.3x 5.9x 4.6x NM NM NM NA NA (10.3%)
LivePerson US 1,106 27.96 93.5% 5.9% 22.4% 1,788 1,721 66 6.9x 6.0x 5.0x NM NM 58.6x 15.3% NA 3.9%
Talend FR 1,068 47.90 1.7% (24.9%) 31.2% 1,441 1,408 34 6.9x 5.7x 4.6x NM NM NM 21.6% NA (7.5%)
MicroStrategy US 2,528 141.50 10.6% (4.3%) 2.2% 1,454 878 576 1.8x 1.7x 1.7x NM 33.6x 15.5x 3.0% NA 5.1%
SDL UK 3,700 7.74 34.8% 20.1% 7.7% 702 672 30 1.8x 1.4x 1.3x 17.6x 12.4x 11.2x NA NA 11.0%
Attunity IL 256 23.38 219.0% 10.9% (4.0%) 511 467 44 5.4x 4.4x 3.6x 51.4x 28.0x NA 22.7% NA 15.8%
Gridsum CN 1,078 3.85 (64.6%) (35.1%) 65.2% 119 165 9 2.0x NA NA NM NA NA NA NA NA
Expert System IT 230 1.84 14.5% 32.3% 19.0% 66 72 16 1.7x 1.9x 1.6x NM 8.5x 6.5x NA NA 21.7%
Hottolink JP 87 3.74 (43.6%) (55.0%) (2.8%) 57 42 18 1.4x NA NA 6.6x NA NA (100.0%) NA NA
Average 6.2x 5.4x 4.6x 24.9x 23.6x 20.1x 8.6% 72.5% 16.4%
Median 5.4x 4.5x 4.1x 23.5x 14.5x 12.4x 16.1% 77.8% 16.2%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
34
Public Comps – Communication
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
Share
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Microsoft US 131,000 $112.03 19.5% 1.6% 6.6% $859,518 $817,328 $127,673 6.9x 6.3x 5.7x 16.5x 14.7x 12.9x 9.8% NA 42.7%
Cisco US 74,200 51.77 15.6% 10.3% 13.2% 227,893 213,168 40,383 4.2x 4.1x 3.9x 14.0x 11.4x 10.9x 3.3% NA 35.7%
Atlassian UK 3,061 107.48 98.0% 22.6% 13.5% 25,742 24,934 1,644 26.1x 18.4x 14.6x NM 72.7x 57.7x 41.8% NA 25.3%
Twilio US 1,440 121.69 256.2% 51.7% 19.1% 15,022 14,709 748 22.6x 13.7x 10.4x NM NM NM 65.3% 55.8% 3.9%
Citrix US 8,200 105.50 14.7% (6.9%) 3.5% 13,897 14,592 1,202 4.9x 4.7x 4.5x 17.4x 13.3x 12.5x 3.8% NA 35.6%
RingCentral US 1,871 105.29 68.1% 12.3% 18.7% 8,554 8,355 566 13.6x 9.8x 7.9x NM NM 59.5x 39.5% NA 12.6%
NICE Systems IL 5,208 117.45 20.3% 2.7% 9.2% 7,267 7,237 486 5.0x 4.6x 4.2x 20.1x 15.3x 14.1x 8.8% NA 30.0%
Nuance US 10,400 16.77 4.4% 1.5% 7.6% 4,786 6,553 431 3.1x 3.5x 3.3x 16.0x 11.5x 10.7x (10.5%) NA 30.3%
j2 Global US 2,487 85.01 14.8% 1.7% 13.9% 4,190 4,994 209 4.1x 3.8x 3.6x 10.8x 9.4x 8.7x 7.9% NA 40.6%
Everbridge US 783 70.71 121.6% 21.9% 18.3% 2,097 2,086 106 14.2x 10.7x 8.5x NM NM NM 33.1% NA 2.3%
8x8 US 1,225 19.67 7.8% (12.2%) 1.2% 1,882 1,767 115 5.2x 4.4x 3.7x NM NM NA 18.0% NA (2.7%)
LivePerson US 1,106 27.96 93.5% 5.9% 22.4% 1,788 1,721 66 6.9x 6.0x 5.0x NM NM 58.6x 15.3% NA 3.9%
Average 9.7x 7.5x 6.3x 15.8x 21.2x 27.3x 19.7% 55.8% 21.7%
Median 6.1x 5.4x 4.8x 16.3x 13.3x 12.9x 12.5% 55.8% 27.6%
35
Public Comps – ERP & Enterprise ApplicationShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Oracle US 137,000 $52.13 2.9% 7.2% 5.3% $187,090 $196,475 $49,391 4.9x 4.9x 4.8x 12.4x 10.6x 10.2x 0.3% NA 46.3%
SAP DE 96,498 107.11 1.5% (12.4%) 0.0% 127,842 130,858 10,390 4.6x 4.2x 3.9x 14.9x 12.5x 11.2x 9.2% 72.0% 34.0%
Salesforce US 29,000 163.65 40.8% 7.0% 11.1% 125,192 126,133 3,450 10.1x 7.9x 6.6x NM 31.6x 25.2x NA NA 24.9%
Workday US 10,200 197.93 56.3% 30.0% 14.7% 43,545 42,971 1,778 15.2x 12.2x 9.9x NM 67.1x 48.5x 25.0% 75.5% 18.1%
Shopify CA 4,000 189.15 36.9% 30.4% 18.6% 20,927 18,948 1,979 17.7x 12.7x 9.7x NM NM NM 38.8% 55.7% 3.7%
Constellation Software CA 14,335 853.44 31.6% 16.5% 15.2% 18,086 17,858 589 5.8x 5.0x 4.4x 30.7x 19.0x 16.3x 16.1% NA 26.5%
Sage Group UK 13,003 8.79 (8.0%) 4.7% 6.3% 9,540 10,403 355 4.3x 3.9x 3.7x 16.3x 15.3x 14.3x NA NA 25.6%
Yonyou Networks CN 15,674 4.55 14.3% 8.8% 19.0% 8,726 8,960 460 8.3x 6.1x 4.8x 40.9x 38.6x 31.3x NA NA 15.9%
Zendesk US 2,740 79.02 83.0% 17.4% 19.9% 8,563 8,594 427 14.4x 10.7x 8.3x NM NM NM 34.0% NA 7.1%
Tyler Technologies US 4,525 204.79 0.8% (15.8%) 7.4% 7,842 7,663 179 8.2x 7.0x 6.4x 39.9x 24.4x 21.7x 16.3% NA 28.9%
Guidewire Software US 2,302 91.74 14.2% (6.9%) 7.5% 7,434 6,651 1,091 9.1x 8.7x 7.6x NM 47.9x 30.5x NA NA 18.1%
Aveva Group UK 4,400 40.01 NA 11.6% 12.1% 6,450 6,341 122 7.8x 6.2x 5.8x 42.5x 22.2x 19.7x NA NA 27.8%
RealPage US 6,267 61.21 17.1% 0.3% 12.2% 5,587 5,955 228 6.8x 6.0x 5.4x 43.9x 21.1x 18.2x 14.1% NA 28.4%
j2 Global US 2,487 85.01 14.8% 1.7% 13.9% 4,190 4,994 209 4.1x 3.8x 3.6x 10.8x 9.4x 8.7x 7.9% NA 40.6%
Medidata Solutions US 1,680 75.02 14.3% (10.5%) 8.7% 4,602 4,450 241 7.0x 6.0x 5.2x 51.5x 24.6x 20.5x 16.3% NA 24.5%
Wisetech AU 1,500 14.12 70.1% (9.3%) (3.0%) 4,107 4,099 30 20.4x 14.8x 11.6x 67.2x 46.4x 33.7x 37.8% NA 31.9%
Blackbaud US 3,353 77.24 (24.7%) (25.0%) 10.3% 3,654 4,010 31 4.7x 4.5x 4.3x 30.0x 22.6x 20.7x 5.0% NA 20.0%
Prosegur ES 170,350 5.60 (30.3%) (17.5%) 3.1% 3,351 3,993 1,199 0.9x 0.8x 0.8x 7.6x 6.6x 6.0x 5.6% NA 12.6%
Five9 US 983 53.04 74.7% 10.9% 10.2% 3,143 3,059 292 11.9x 10.2x 8.7x NM 60.9x 47.4x 16.8% NA 16.7%
Appian US 1,058 36.49 34.9% 5.4% 14.6% 2,345 2,250 95 9.9x 8.6x 7.3x NM NM NM 15.0% NA (7.8%)
Workiva US 1,319 49.45 117.4% 47.8% 28.2% 2,191 2,111 98 8.6x 7.4x 6.4x NM NM NM 16.1% NA (3.8%)
Everbridge US 783 70.71 121.6% 21.9% 18.3% 2,097 2,086 106 14.2x 10.7x 8.5x NM NM NM 33.1% NA 2.3%
SPS Commerce US 1,231 106.78 77.9% 10.6% 22.3% 1,896 1,718 178 6.9x 6.2x 5.7x 43.6x 27.0x 23.1x 10.7% NA 23.1%
Technology One AU 848 5.37 43.4% 28.3% 9.1% 1,663 1,589 76 7.4x 6.7x 6.0x 30.8x 26.5x 22.9x NA NA 25.2%
Enghouse CA 1,446 28.94 11.6% (5.8%) 3.8% 1,580 1,434 148 5.5x 5.1x NA 20.8x 16.6x NA NA NA 30.5%
QAD US 1,950 45.26 0.6% (25.4%) 4.6% 848 724 138 2.2x 2.1x 1.9x NM 30.2x 26.0x NA NA 6.9%
Model N US 782 17.30 1.2% 7.1% 20.9% 546 547 52 3.6x 3.8x 3.4x NM 58.5x 37.8x (5.2%) NA 6.5%
BasWare FI 1,412 34.51 (36.3%) (8.3%) (21.8%) 496 515 47 3.2x 3.0x 2.8x 68.1x NM NM 4.4% NA 1.5%
ChannelAdvisor US 730 12.93 46.1% (0.2%) 22.3% 354 310 47 2.4x 2.2x 2.1x NM 22.5x 17.5x 4.9% NA 10.0%
Amber Road US 692 9.84 8.1% 13.4% 16.4% 276 290 8 3.4x 3.2x 3.0x NM 47.0x 35.8x 5.7% NA 6.9%
American Software US 462 11.59 (6.8%) (36.2%) 6.6% 359 276 83 2.5x 2.4x 2.2x 26.0x 17.3x 14.1x 2.5% NA 13.9%
Freelancer AU 390 0.47 36.8% 14.0% (6.6%) 214 190 23 5.2x 4.7x 4.1x NM NM NM 10.3% NA 2.6%
Average 7.5x 6.3x 5.4x 33.2x 29.1x 23.4x 14.2% 67.7% 17.8%
Median 6.9x 6.0x 5.2x 30.8x 24.4x 21.2x 12.4% 72.0% 18.1%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
36
Public Comps – Financial ApplicationShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
IRESS AU 1,850 8.70 7.5% (12.1%) 3.5% 1,459 1,582 22 4.8x 4.5x 4.2x 20.5x 16.2x 14.8x 7.8% NA 27.7%
MYOB AU 1,500 2.41 (2.2%) 11.5% (0.6%) 1,419 1,728 25 5.6x 5.0x 4.6x 18.9x 12.7x 11.4x 10.5% NA 39.7%
Bottomline Technologies US 1,700 49.88 31.3% (23.3%) 0.8% 2,032 2,045 97 5.0x 4.7x 4.2x 48.1x 19.5x 17.2x 6.9% NA 24.0%
Ebix US 4,515 58.27 (30.6%) (25.4%) 7.0% 1,822 2,364 155 5.1x 3.8x 2.8x 15.3x 11.9x 9.5x NA NA 32.3%
Envestnet US 3,516 61.01 10.7% (2.5%) 14.1% 2,790 2,959 289 3.6x 3.4x 2.9x 32.2x 16.9x 14.3x 8.3% 69.0% 19.9%
Q2 Holdings US 1,190 68.82 51.1% 10.0% 20.7% 2,999 3,005 177 12.5x 9.8x 8.0x NM NM NM 27.6% NA 6.8%
Ellie Mae US 1,550 99.49 12.2% (4.5%) 36.8% 3,471 3,168 303 6.6x 6.2x 5.7x 38.6x 21.7x 19.3x 6.2% NA 28.6%
SimCorp DK 1,660 90.13 43.4% (3.8%) 13.8% 3,579 3,525 54 8.0x 7.3x 6.8x 28.9x 25.1x 23.5x 10.3% NA 29.0%
Oracle Financial IN 8,818 49.43 (18.1%) (16.3%) (5.6%) 4,240 3,811 437 5.5x 5.0x 4.6x 13.4x 11.7x 10.4x 9.9% NA 42.8%
Fair Isaac US 3,772 247.82 45.8% 10.5% 14.6% 7,204 7,957 80 7.5x 6.9x 6.5x 32.2x NA NA 7.8% NA 0.0%
Black Knight US 4,700 52.25 9.7% (2.0%) 8.2% 7,730 9,050 20 8.1x 7.6x 7.1x 24.9x 15.3x 14.0x 6.9% NA 49.6%
Jack Henry & Associates US 6,307 132.63 13.1% (15.5%) 0.2% 10,236 10,210 26 6.4x 6.3x 5.9x 20.8x 18.9x 17.1x 1.1% NA 33.5%
Temenos CH 4,980 145.13 23.5% (19.9%) 8.4% 10,074 10,594 287 12.5x 10.7x 9.7x 33.9x 28.5x 24.9x 16.8% NA 37.6%
MSCI US 3,112 184.72 30.5% 4.3% 13.7% 15,576 17,248 904 12.0x 11.3x 10.3x 22.6x 20.6x 18.5x 6.7% NA 54.7%
SS&C US 8,287 61.58 24.4% 5.4% 21.7% 15,445 23,534 167 6.9x 5.0x 4.8x 22.5x 12.6x 11.7x 38.7% NA 39.4%
Fiserv US 24,000 84.69 18.1% 8.0% (0.6%) 33,164 38,708 415 6.6x 6.3x 6.0x 20.4x 16.3x 15.4x 6.2% NA 38.4%
Fidelity National US 47,000 108.15 11.3% 0.5% 3.7% 34,924 43,213 703 5.1x 5.1x 5.0x 18.1x 13.2x 12.4x (0.2%) NA 39.0%
Intuit US 8,900 $247.13 48.1% 14.4% 17.1% $64,025 $63,105 $1,333 10.1x 9.1x 8.3x 35.5x 25.4x 22.5x 10.8% NA 36.0%
Average 7.3x 6.6x 6.0x 26.3x 17.9x 16.1x 10.7% 69.0% 32.2%
Median 6.6x 6.2x 5.8x 22.6x 16.6x 15.1x 7.8% 69.0% 34.7%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
37
Public Comps – Human Capital ManagementShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
ADP US 57,000 $153.03 32.7% 6.4% 12.9% $66,664 $67,084 $2,789 5.0x 4.6x 4.3x 20.8x 19.0x 16.8x 9.9% NA 24.1%
Workday US 10,200 197.93 56.3% 30.0% 14.7% 43,545 42,971 1,778 15.2x 12.2x 9.9x NM 67.1x 48.5x 25.0% 75.5% 18.1%
ServiceNow US 8,154 239.44 48.7% 23.3% 27.4% 43,219 42,383 1,498 16.2x 12.4x 9.7x NM 45.5x 33.8x 31.4% 81.0% 27.2%
Paycom US 3,050 181.73 83.7% 19.3% 26.2% 10,649 10,638 46 18.8x 14.9x 12.2x 55.7x 36.7x 29.2x 25.8% 84.3% 40.7%
Ultimate Software US 5,100 331.50 39.0% 9.2% 21.2% 10,385 10,235 162 9.0x 7.5x 6.3x NM 31.7x 25.6x 19.8% 65.4% 23.6%
Paylocity US 2,600 87.57 87.2% 12.7% 29.7% 4,634 4,530 104 11.2x 9.0x 7.5x NM 31.3x 25.0x 24.7% NA 28.8%
TriNet US 3,100 61.29 29.9% 4.6% 37.2% 4,301 4,432 282 1.3x 4.8x 4.3x 16.2x 11.9x 10.7x (73.5%) NA 40.0%
Benefitfocus US 1,450 49.12 103.0% 14.9% (11.0%) 1,574 1,621 191 6.3x 5.3x 4.6x NM NM 47.2x 18.0% NA 5.9%
Instructure US 1,219 46.73 7.7% 17.6% 20.8% 1,673 1,520 153 7.3x 5.9x 4.9x NM NM NM 22.6% NA (4.9%)
Upland Software US 375 35.10 47.1% (4.9%) 17.8% 758 900 16 6.8x 4.7x 4.6x 31.4x 13.0x 12.0x NA NA 36.4%
Solium CA 769 14.54 71.0% 70.2% 46.0% 825 742 96 7.1x 5.7x 5.0x NM 26.5x 20.9x NA NA 21.4%
WageWorks US 1,958 32.90 (37.3%) (36.9%) 9.3% 1,304 656 892 1.5x 1.3x 1.3x 7.2x 4.4x 4.1x NA NA 30.4%
Freelancer AU 390 0.47 36.8% 14.0% (6.6%) 214 190 23 5.2x 4.7x 4.1x NM NM NM 10.3% NA 2.6%
Average 8.5x 7.2x 6.1x 26.3x 28.7x 24.9x 11.4% 76.6% 22.6%
Median 7.1x 5.7x 4.9x 20.8x 28.9x 25.0x 21.2% 78.3% 24.1%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
38
Public Comps – InfrastructureShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
VMware US 20,615 $171.81 30.4% 15.7% 16.0% $70,423 $71,816 $2,849 8.0x 7.3x 6.7x 26.7x 19.3x 16.2x 10.3% 87.8% 37.6%
ServiceNow US 8,154 239.44 48.7% 23.3% 27.4% 43,219 42,383 1,498 16.2x 12.4x 9.7x NM 45.5x 33.8x 31.4% 81.0% 27.2%
Red Hat US 11,870 182.60 23.9% 26.7% 3.7% 32,276 30,866 1,926 9.5x 8.3x 7.1x 49.7x 29.8x 27.6x 14.9% NA 27.7%
Atlassian UK 3,061 107.48 98.0% 22.6% 13.5% 25,742 24,934 1,644 26.1x 18.4x 14.6x NM 72.7x 57.7x 41.8% NA 25.3%
Splunk US 3,200 135.88 45.8% 6.6% 13.7% 20,081 18,958 2,757 10.5x 8.8x 7.2x NM 54.1x 40.6x 20.0% 83.7% 16.2%
Symantec US 11,830 22.49 (14.5%) 11.0% 7.9% 14,376 16,842 2,579 3.5x 3.4x 3.3x 16.9x 7.8x 7.3x 3.3% NA 43.7%
Micro Focus UK 14,800 24.88 (12.6%) 50.6% 29.5% 10,275 14,708 621 4.6x 4.2x 4.5x 14.2x 10.0x 9.9x NA NA 41.5%
Citrix US 8,200 105.50 14.7% (6.9%) 3.5% 13,897 14,592 1,202 4.9x 4.7x 4.5x 17.4x 13.3x 12.5x 3.8% NA 35.6%
Akamai Technologies US 7,519 69.66 3.3% (6.4%) 7.2% 11,355 11,023 1,892 4.1x 3.9x 3.6x 14.9x 9.4x 8.5x 4.7% NA 41.2%
F5 Networks US 4,484 168.14 13.2% (11.3%) 5.9% 9,994 8,862 1,133 4.1x 4.0x 3.8x 13.1x 10.2x 9.7x 2.6% NA 38.9%
Nutanix US 4,380 50.09 37.4% (17.3%) (2.7%) 8,973 8,451 966 6.8x 5.3x 4.1x NM NM 40.7x 28.7% NA (0.9%)
Juniper Networks US 9,283 27.08 5.5% (6.4%) (3.8%) 9,422 8,050 3,570 1.7x 1.8x 1.7x 10.1x 8.3x 7.8x (3.4%) NA 21.6%
Proofpoint US 2,613 118.09 10.2% (0.1%) 20.5% 6,536 6,305 232 8.8x 7.2x 6.0x NM 47.6x 35.5x 21.8% NA 15.2%
New Relic US 1,627 105.75 47.3% 1.2% 8.7% 6,065 5,747 722 12.9x 10.1x 8.1x NM 70.0x 49.6x 27.5% NA 14.4%
Trend Micro JP 5,970 49.74 (12.7%) (20.4%) (15.3%) 6,882 5,287 1,620 3.6x 3.5x 3.3x 11.2x 11.2x 10.4x 4.1% NA 31.0%
Pure Storage US 2,650 20.48 (5.5%) (22.9%) 14.2% 4,948 4,248 1,197 3.1x 2.4x 2.0x NM 20.9x 15.2x 29.3% NA 11.5%
LogMeIn US 3,515 79.44 (31.3%) (6.3%) (12.7%) 4,039 4,090 149 3.4x 3.3x 3.1x 11.6x 10.0x 10.2x 4.3% NA 32.6%
FireEye US 3,200 16.76 1.0% 3.6% (3.8%) 3,348 3,194 1,117 3.8x 3.6x 3.4x NM 25.4x 21.2x 6.7% NA 14.2%
Qualys US 1,117 83.63 12.9% (8.6%) 1.6% 3,293 3,006 289 10.8x 9.3x 8.0x 36.5x 24.5x 20.4x 15.4% NA 38.1%
Mimecast UK 1,192 48.28 39.0% 16.2% 39.3% 2,917 2,949 157 9.2x 7.4x 6.1x NM 43.9x 34.9x 23.7% NA 16.9%
Commvault US 2,839 67.39 29.5% (1.5%) 9.5% 3,093 2,635 458 3.7x 3.5x 3.2x 58.6x 17.3x 13.2x 6.4% NA 20.1%
Software AG DE 4,763 36.61 (30.7%) (28.1%) (2.5%) 2,709 2,522 547 2.5x 2.5x 2.4x 8.7x 8.3x 7.9x 3.4% NA 29.5%
NetScout Systems US 3,019 27.37 3.1% 5.1% 4.9% 2,130 2,255 475 2.5x 2.4x 2.3x 22.1x NA NA 2.6% NA 0.0%
Sophos UK 3,362 4.36 (36.6%) (36.9%) 5.9% 2,094 2,228 171 3.2x 3.0x 2.7x 57.0x 15.8x 14.2x NA NA 19.3%
Rapid7 US 1,218 46.03 74.3% 22.2% 26.5% 2,177 2,093 259 8.6x 6.8x 5.6x NM NM 70.6x 26.3% NA 3.4%
SecureWorks US 2,555 22.19 124.8% 75.6% 10.3% 1,813 1,698 116 3.3x 3.0x 2.7x NM NM 56.6x NA NA 3.5%
Progress Software US 1,412 36.78 (21.5%) (8.6%) 3.3% 1,661 1,637 140 4.1x 4.3x 4.2x 11.7x 9.0x 9.0x (3.5%) NA 47.5%
Talend FR 1,068 47.90 1.7% (24.9%) 31.2% 1,441 1,408 34 6.9x 5.7x 4.6x NM NM NM 21.6% NA (7.5%)
A10 Networks US 835 6.98 11.1% 0.4% 7.1% 515 387 128 1.7x 1.6x 1.5x NM 56.9x 14.5x 3.1% NA 2.8%
Brightcove US 495 8.87 29.5% 8.2% 18.0% 325 296 29 1.8x 1.7x 1.6x NM 50.6x 21.9x 2.9% NA 3.5%
Average 6.5x 5.5x 4.7x 23.8x 27.7x 24.2x 13.1% 84.2% 21.7%
Median 4.1x 4.1x 3.9x 15.9x 19.3x 15.7x 6.7% 83.7% 20.8%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
39
Public Comps – IT SecurityShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Cisco US 74,200 $51.77 15.6% 10.3% 13.2% $227,893 $213,168 $40,383 4.2x 4.1x 3.9x 14.0x 11.4x 10.9x 3.3% NA 35.7%
Verisign US 900 178.04 53.5% 11.9% 7.1% 21,314 21,829 1,270 18.0x 17.8x 17.0x 26.8x 24.4x 23.7x 1.1% 84.9% 72.8%
Palo Alto Networks US 5,856 246.27 42.0% 7.4% 18.6% 23,084 21,809 2,830 8.4x 7.0x 5.9x NM 25.9x 21.0x 20.3% NA 27.0%
Splunk US 3,200 135.88 45.8% 6.6% 13.7% 20,081 18,958 2,757 10.5x 8.8x 7.2x NM 54.1x 40.6x 20.0% 83.7% 16.2%
Check Point Software IL 4,576 122.30 17.7% 5.6% 11.5% 19,105 17,353 1,752 9.1x 8.7x 8.4x 18.6x 16.7x 15.9x 4.2% 89.6% 51.9%
Symantec US 11,830 22.49 (14.5%) 11.0% 7.9% 14,376 16,842 2,579 3.5x 3.4x 3.3x 16.9x 7.8x 7.3x 3.3% NA 43.7%
Fortinet US 5,845 86.79 72.0% 7.3% 17.7% 14,809 13,160 1,650 7.3x 6.3x 5.6x 45.9x 24.1x 20.9x 15.9% NA 26.1%
Okta US 1,176 84.88 120.0% 40.4% 7.5% 9,374 9,096 546 25.0x 17.5x 13.4x NM NM NM NA NA (4.7%)
Proofpoint US 2,613 118.09 10.2% (0.1%) 20.5% 6,536 6,305 232 8.8x 7.2x 6.0x NM 47.6x 35.5x 21.8% NA 15.2%
Gemalto NL 15,000 57.97 (3.8%) (0.2%) 0.2% 5,259 5,890 300 1.7x 1.7x 1.6x 14.3x 9.6x 8.9x 3.2% NA 17.4%
Trend Micro JP 5,970 49.74 (12.7%) (20.4%) (15.3%) 6,882 5,287 1,620 3.6x 3.5x 3.3x 11.2x 11.2x 10.4x 4.1% NA 31.0%
Verint US 5,700 53.25 36.9% 8.2% 13.4% 3,476 3,864 406 3.2x 2.9x 2.7x 23.5x 11.8x 10.4x NA NA 24.5%
CyberArk IL 1,015 109.77 121.7% 49.0% 30.5% 3,958 3,531 427 10.3x 8.5x 7.2x 61.6x 33.5x 27.0x 20.7% NA 25.5%
FireEye US 3,200 16.76 1.0% 3.6% (3.8%) 3,348 3,194 1,117 3.8x 3.6x 3.4x NM 25.4x 21.2x 6.7% NA 14.2%
Qualys US 1,117 83.63 12.9% (8.6%) 1.6% 3,293 3,006 289 10.8x 9.3x 8.0x 36.5x 24.5x 20.4x 15.4% NA 38.1%
Mimecast UK 1,192 48.28 39.0% 16.2% 39.3% 2,917 2,949 157 9.2x 7.4x 6.1x NM 43.9x 34.9x 23.7% NA 16.9%
Rapid7 US 1,218 46.03 74.3% 22.2% 26.5% 2,177 2,093 259 8.6x 6.8x 5.6x NM NM 70.6x 26.3% NA 3.4%
Secureworks US 2,555 22.19 124.8% 75.6% 10.3% 1,813 1,698 116 3.3x 3.0x 2.7x NM NM 56.6x NA NA 3.5%
Varonis Systems US 1,460 56.96 1.4% (20.0%) 2.3% 1,685 1,526 159 5.6x 5.1x 4.5x NM NM NM 11.2% NA 3.3%
Cheetah Mobile CN 2,465 7.30 (48.7%) (30.3%) 9.6% 1,023 622 527 0.9x 0.8x 0.7x 5.5x 5.5x 5.4x NA NA 14.1%
Zix US 233 9.03 123.0% 66.3% 30.3% 489 465 24 6.8x 6.2x NA 32.6x 18.7x NA NA NA 33.2%
MobileIron US 889 5.06 5.4% 4.3% 4.3% 540 435 106 2.3x 2.1x 1.9x NM NM 22.2x 9.4% NA 2.0%
F-Secure FI 1,666 2.69 (37.1%) (33.0%) (9.1%) 424 434 32 2.0x 1.7x 1.6x 43.3x 24.6x 13.0x 15.1% NA 7.0%
Absolute Software CA 479 6.96 38.8% 13.9% 11.0% 282 247 34 2.6x 2.5x 2.2x 25.7x 13.4x 12.1x 4.5% NA 18.4%
Average 7.1x 6.1x 5.3x 26.9x 22.9x 23.3x 12.1% 86.1% 22.3%
Median 6.2x 5.6x 4.5x 24.6x 24.1x 20.9x 11.2% 84.9% 17.9%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
40
Public Comps – Marketing ApplicationShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
SAP DE 96,498 $107.11 1.5% (12.4%) 0.0% $127,842 $130,858 $10,390 4.6x 4.2x 3.9x 14.9x 12.5x 11.2x 9.2% NA 34.0%
Five9 US 983 53.04 74.7% 10.9% 10.2% 3,143 3,059 292 11.9x 10.2x 8.7x NM 60.9x 47.4x 16.8% NA 16.7%
LivePerson US 1,106 27.96 93.5% 5.9% 22.4% 1,788 1,721 66 6.9x 6.0x 5.0x NM NM 58.6x 15.3% 74.6% 3.9%
SDL UK 3,700 7.74 34.8% 20.1% 7.7% 702 672 30 1.8x 1.4x 1.3x 17.6x 12.4x 11.2x NA NA 11.0%
ChannelAdvisor US 730 12.93 46.1% (0.2%) 22.3% 354 310 47 2.4x 2.2x 2.1x NM 22.5x 17.5x 4.9% 78.5% 10.0%
Average 5.5x 4.8x 4.2x 16.2x 27.1x 29.2x 11.6% 76.6% 15.1%
Median 4.6x 4.2x 3.9x 16.2x 17.5x 17.5x 12.3% 76.6% 11.0%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
41
Public Comps – StorageShare
Price
Market
Cap EV Cash EV/Revenue EV/EBITDA
CY
Revenue
Growth
Company Name HQ Employee 02-28-19 LTM L6M L1M (m) (m) (m) LTM CY19E CY20E LTM CY19E CY20E 19/18 Gross EBITDA
Share Price Performance
CY19E
Margins
Microsoft US 131,000 $112.03 19.5% 1.6% 6.6% $859,518 $817,328 $127,673 6.9x 6.3x 5.7x 16.5x 14.7x 12.9x 9.8% NA 42.7%
Amazon US 647,500 1,639.83 8.4% (15.2%) 0.1% 805,489 813,528 41,250 3.5x 3.0x 2.5x 29.3x 19.2x 14.9x 18.1% 42.0% 15.4%
Alphabet US 98,771 1,126.55 2.0% (9.6%) 4.3% 780,846 675,718 109,140 4.9x 4.1x 3.6x 16.7x 11.4x 9.9x 19.5% 55.3% 36.2%
Verizon US 144,500 56.92 19.2% 4.2% 3.4% 235,196 347,956 2,745 2.7x 2.6x 2.6x 6.6x 7.2x 7.0x 1.1% 57.6% 36.7%
Oracle US 137,000 52.13 2.9% 7.2% 5.3% 187,090 196,475 49,391 4.9x 4.9x 4.8x 12.4x 10.6x 10.2x 0.3% NA 46.3%
IBM US 350,600 138.13 (11.4%) (5.8%) 2.9% 122,917 156,937 12,006 2.0x 2.0x 2.0x 9.4x 8.4x 8.2x 0.3% NA 23.8%
Salesforce US 29,000 163.65 40.8% 7.0% 11.1% 125,192 126,133 3,450 10.1x 7.9x 6.6x NM 31.6x 25.2x NA NA 24.9%
CenturyLink US 46,000 13.19 (25.4%) (41.4%) (12.6%) 14,254 49,827 488 2.1x 2.2x 2.2x 5.9x 5.5x 5.5x (3.1%) NA 39.9%
Iron Mountain US 26,200 35.42 12.6% (2.2%) (2.3%) 10,143 18,193 165 6.9x 4.2x 4.1x 12.6x 12.2x 11.5x 64.6% NA 34.6%
NetApp US 10,300 65.20 7.7% (24.1%) 3.1% 16,103 13,755 4,054 2.2x 2.2x 2.1x 10.5x 8.3x 7.5x 2.4% NA 26.0%
Dropbox US 2,323 23.86 NA (12.2%) (1.2%) 9,813 8,890 1,089 6.4x 5.4x 4.7x NM 24.3x 19.3x 17.8% NA 22.3%
Nutanix US 4,380 50.09 37.4% (17.3%) (2.7%) 8,973 8,451 966 6.8x 5.3x 4.1x NM NM 40.7x 28.7% NA (0.9%)
Box US 1,968 20.24 (15.9%) (23.9%) (0.3%) 2,921 2,816 218 4.6x 4.0x 3.5x NM 60.5x 35.0x 15.4% NA 6.6%
CommVault US 2,839 67.39 29.5% (1.5%) 9.5% 3,093 2,635 458 3.7x 3.5x 3.2x 58.6x 17.3x 13.2x 6.4% NA 20.1%
Carbonite US 954 23.27 (17.3%) (44.3%) (16.4%) 804 724 198 2.4x 1.5x 1.3x 19.0x 5.5x 4.5x 65.4% NA 26.7%
Brightcove US 495 8.87 29.5% 8.2% 18.0% 325 296 29 1.8x 1.7x 1.6x NM 50.6x 21.9x 2.9% NA 3.5%
Average 4.5x 3.8x 3.4x 18.0x 19.2x 15.5x 16.6% 51.6% 25.3%
Median 4.2x 3.7x 3.3x 12.6x 12.2x 12.2x 9.8% 55.3% 25.5%
Source(s): Capital IQ as of 2/28/2018
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and are not included in average calculation
42
Key Sector Takeaways
Recent Software Transaction Trends
Public Market SaaS Analyses
SaaS CEO Commentary
Appendix A: GP Bullhound SaaS Index
1
2
3
4
6
8Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
5 Key SaaS Metrics
Appendix B: Software Public Comparables by
Category7
43
Private Placement Sold to Sold to Sold to Sold to Sold to
Sold to Sold to Private Placement Sold toSold to Private Placement
Private Placement Private Placement Sold to Sold to Sold to Sold to
Private placement Sold to Private Placement Sold to Sold to Sold to
GP Bullhound’s Recent Activity in the Software Space
44
Authors
OKAN INALTAY
MATT FINEGOLD
PER ROMAN
Managing [email protected]
JONATHAN CANTWELL
Executive [email protected]
ERIC CROWLEY
Vice [email protected]
MARVIN MAERZ
Vice [email protected]
CONNOR SMITH
BRANDON OVERMYER
Vice [email protected]
45
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