Software industry financial_report_1_q16

Q1

20

16

SEG Capital Advisors, L.L.C.

12220 El Camino Real

Suite 320

San Diego, CA 92130

[email protected]

(858) 509-2800

The Software Industry

Financial Report

SOFTWARE EQUITY GROUP | Q1 2016 SOFTWARE INDUSTRY FINANCIAL REPORTCopyright © SEG Capital Advisors, LLC, All Rights Reserved 2

About Software Equity GroupLeaders in Software M&A 5Extensive Global Reach 6Leading Market Position

Public SaaS Company Financial and Valuation PerformanceThe SEG SaaS Index 8The SEG SaaS Index: Financial Performance 9-11The SEG SaaS Index: Public Market Multiples 12-14The SEG SaaS Index by Product Category: Financial Performance 15The SEG SaaS Index by Product Category: Public Market Multiples 16

Public Software Financial and Valuation PerformanceThe SEG Software Index 18The SEG Software Index: Financial Performance 19-21The SEG Software Index: Public Market Multiples 22-23The SEG Software Index by Product Category 24The SEG Software Index by Product Category: Financial Performance 25The SEG Software Index by Product Category: Public Market Multiples 26

Public Internet Company Financial and Valuation PerformanceThe SEG Internet Index 28The SEG Internet Index: Financial Performance 29-31The SEG Internet Index: Public Market Multiples 32-33The SEG Internet Index by Product Category 34The SEG Internet Index by Product Category: Financial Performance 35The SEG Internet Index by Product Category: Public Market Multiples 36

SOFTWARE INDUSTRY FINANCIAL REPORT CONTENTS


SOFTWARE INDUSTRY FINANCIAL REPORT CONTENTS

SaaS/Software Industry M&A Market UpdateSoftware/SaaS M&A Deal Volume and Spending 38SaaS M&A Deal Volume and Exit Multiples 39-40SaaS M&A by Product Category 41SaaS M&A 3Q15 Transactions 42-46Software M&A Exit Multiples 47Software M&A by Ownership Structure and Size 48Software M&A by Vertical and Horizontal Markets 49Software M&A Deal Volume by Product Category 50Software M&A Exit Multiples by Product Category 51

AppendixThe SEG SaaS Index: Public Market Multiples (Annual) 53The SEG SaaS Index: Financial Performance (Annual) 54The SEG Software Index: Public Market Multiples (Annual) 55The SEG Software Index: Financial Performance (Annual) 56The SEG Internet Index: Public Market Multiples (Annual) 57The SEG Internet Index: Financial Performance (Annual) 58SEG SaaS Index Key Metrics 59-60SEG SaaS Index Key Metrics by Product Category 61SEG Software Index Key Metrics 62-65SEG Software Index Key Metrics by Product Category 66-67SEG Internet Index Key Metrics 68-70SEG Internet Index Key Metrics by Product Category 713Q15 Select Public Sellers 723Q15 Mega Deals 733Q15 Most Active Buyers 74About Software Equity Group 75

SOFTWARE EQUITY GROUP | Q1 2016 SOFTWARE INDUSTRY FINANCIAL REPORTCopyright © SEG Capital Advisors, LLC, All Rights Reserved

ABOUT SOFTWARE EQUITY GROUP


• Industry leading boutique investment bank, founded in 1992, representing public and private software and internet companies seeking:

• Strategic Mergers & Acquisitions• Sell & Buy Side Advisory Services• Majority Buyouts & Recapitalizations• Board Advisory Services• Data Driven Research & Valuation

• Sell-side client revenue range: $5 - 75 million

• Buy-side clients include private equity firms and NASDAQ, NYSE and foreign exchange listed companies

• Clients span virtually every software technology, product category, delivery model and vertical market

• Global presence providing advice and guidance to more than 2,000 private and public companies throughout US, Canada, Europe, Asia-Pacific, Africa and Israel

• Strong cross-functional team leveraging transaction, operating, legal and engineering experience

• Unparalleled software industry reputation and track record.

• Highly referenceable base of past clients

We Do Deals.

LEADERS IN SOFTWARE M&A


SEG Research Distribution

Current Sell-side Representation

Recent Sell-side Representation

• SEG currently represents software companies in the United States, Canada, France, Germany, Australia & Saudi Arabia

• In addition to the countries listed above, SEG has recently represented software companies in the United Kingdom, France, Netherlands, Israel, and South Africa

• SEG’s Quarterly and Annual Software Industry Equity Reports and Monthly Flash Reports are distributed to an opt-in list of 70,000 public software company CEOs, software entrepreneurs, private equity managing directors, VCs, high tech corporate lawyers, public accountants, etc. in 76 countries.

EXTENSIVE GLOBAL REACH


THE SEG SOFTWARE INDUSTRY FINANCIAL REPORT

PUBLIC SaaS COMPANY FINANCIAL PERFORMANCE AND MARKET MULTIPLE TRENDS


THE SEG SaaS INDEX

• The SEG SaaS Index tracks public companies that primarily offerhosted, on-demand software under a subscription and/or transactionbased pricing model.

• The SEG SaaS Index is currently comprised of 64 publicly traded,pure-play SaaS companies,* up from 17 companies in 1Q08 (theinitial quarter in which we published our SEG SaaS Index).

• See appendix for SEG SaaS Index public market multiples andfinancial performance on an annual basis

* See appendix for complete list of companies in the SEG SaaS Index

8

SEG - SaaS: Median Metrics

Measure 1Q15 2Q15 3Q15 4Q15 1Q16

EV/Revenue 6.1x 6.8x 4.7x 4.6x 4.0x

EV/EBITDA 41.2x 36.9x 27.0x 26.0x 33.0x

EV/Earnings 65.9x 58.9x 50.1x 46.3x 73.5x

Gross Profit Margin 65.8% 65.9% 65.8% 66.6% 67.2%

EBITDA Margin -13.6% -11.4% -10.5% -7.4% -6.2%

Net Income Margin -21.6% -17.5% -17.5% -16.1% -16.1%

TTM Revenue Growth 32.5% 32.7% 30.2% 27.7% 28.6%

TTM Total Revenue ($M) $139.8 $150.7 $164.0 $180.4 $196.6

TTM EBITDA Growth 24.4% 29.7% 25.3% 27.5% 20.7%

TTM Total EBITDA ($M) -$11.5 -$9.4 -$9.6 -$9.3 -$11.8

Cash & Eq ($M) $103.0 $106.0 $110.6 $112.0 $106.7

Current Ratio 1.8 1.9 1.9 1.8 1.9

Debt / Equity Ratio 1.0% 1.9% 1.8% 1.4% 1.3%


2%

15%

10%

29%

18%

11%

16%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

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TTM Revenue Growth0.0%

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25.0%

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35.0%

$0

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1Q15 2Q15 3Q15 4Q15 1Q16

TT

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TTM Total Revenue ($M) TTM Revenue Growth

THE SEG SaaS INDEX: FINANCIAL PERFORMANCE

• The median TTM revenue growth rate of Public SaaS companies in 1Q16 was 28.6%, slightly higher than 4Q15’s 27.7% mark. The growth rate has trendeddown over the past year as the median TTM revenue base has grown larger.

• Median growth rates alone do not capture the standout performances of the most successful SaaS companies. In Q1, over one fourth of public SaaScompanies grew TTM revenue by 40% or more year over year. As further testament to the widespread and ramping adoption of SaaS, theseoutperformers come from a variety of product categories including Healthcare, Human Capital Management, Life Sciences, Service Management, Security,and Business Intelligence/Analytics. Especially noteworthy were: HortonWorks (164.8%); New Relic (67.5%); Castlight Health (65.1%); Zendesk (64.3%);Workday (47.5%) and FireEye (46.4%).

• The median TTM revenue of public SaaS companies was $196.6M in 1Q16, a significant YoY increase from 1Q15’s $139.8M. In part, the revenue growth isattributable to wider, and deeper, enterprise adoption of cloud-based solutions; and in part the revenue growth is inorganic, as the group has becomeincreasingly acquisitive.

• Salesforce continued to lead the SaaS revenue pack by several lengths, reporting 1Q16 TTM revenue of $6.7B, nearly 6.0x greater than the next largestpublic SaaS company. Still, many public SaaS companies have amassed significant TTM revenue (>$350 million) as of 1Q16, a feat made more difficult by arevenue model that requires deferring a significant percentage of booked revenue. SaaS providers with revenues of $350M+ can now be found among awide array of product categories and industry sectors, including Workday (HCM/Financial, $1.2B); AthenaHealth (Healthcare, $924.74M); RealPage (RealEstate, $468.5M); and Service-Now (IT Service Mgmt., $1.0B). SaaS companies currently below this threshold but expected to generate TTM revenue of$350M or more over the next few quarters include, among others, Cornerstone OnDemand, FleetMatics & RingCentral.

TTM Revenue Growth Rate Distribution– 1Q16

9

Median Revenue Performance – Quarterly


59%

17% 17%

3% 3%

<= 0% > 0%<= 10%

> 10%<= 20%

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TTM EBITDA Margin


• Over the past year, public SaaS companies have endeavored toimprove EBITDA margin as revenue growth has slowed and macroeconomic concerns have investors worrisome of those generatingsignificant losses.

• Median EBITDA margin in 1Q16 was -6.2% compared to -13.6% in1Q15.

• However, a good number of public SaaS companies posting GAAPlosses, due to significant levels of deferred revenue, are indeedgenerating positive cash flow from operations. As an example, in Q42015 Netsuite posted negative $14.3 million EBITDA, whilegenerating positive $21.1 million in CFO and a positive $8.4 millionnet change in cash during the period.

TTM EBITDA Margin Distribution– 1Q16Median EBITDA Margin Performance – Quarterly

10

(13.6%)

(11.4%)(10.5%)

(7.4%)

(6.2%)

1Q15 2Q15 3Q15 4Q15 1Q16

EB

ITD

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Median Margin PerformanceMedian Operating Ratios

11

• OpEx: Public SaaS companies continue to spend heavily on sales & marketing in order to drive revenue growth and capture market share.

• In 1Q16, public SaaS companies invested a median 39.6% of total revenue on sales & marketing, almost double their on-premise counterparts. However,this represents a modest decline from the 43.4% S&M spend in 1Q15.

• R&D spending as a percent of revenue has held relatively flat year over year (19.0% in 1Q16 vs. 19.4% in 1Q15). That being said, public SaaS companies in1Q16 spent 3.2% more on R&D as a percent of revenue than their on-premise peers, as they endeavored to expand their offerings, enhance theirtechnology and platforms, and address new markets.

• On a GAAP basis, operating losses of public SaaS companies bottomed out at a -13.6% median EBITDA margin in 1Q15. Since then, EBITDA margin for thegroup has steadily rose to -6.2% as these organizations have pulled back slightly on their investments in sales & marketing and R&D.

-20%

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1Q15 2Q15 3Q15 4Q15 1Q16

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Gross Profit Margin EBITDA Margin Net Income Margin

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1Q15 2Q15 3Q15 4Q15 1Q16

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S&M (% of Revenue) R&D (% of Revenue) G&A (% of Revenue)


THE SEG SaaS INDEX: PUBLIC MARKET MULTIPLES

• At the close of 1Q16, the median market multiple of public SaaS companies was 4.0x EV/Revenue, down from last quarter’s median multiple of 4.6x.

• While nearly one-fifth of the companies in the SEG SaaS Index achieved a median EV/Revenue multiple of 9x or higher in 4Q15, only five percent of ourpublic SaaS index was valued at 9.0x or higher. Public SaaS companies continued to trade at a premium to their on-premise peers (4.0x vs. 2.5x medianEV/Revenue), however, the spread has shrunk considerably in recent quarters as many high growth SaaS companies, generating significant losses, havefallen out of flavor with investors. As an example, Marketo which traded as high as 7.5x TTM revenue during the fourth quarter of 2015, saw its valuationdrop as low as 2.8x TTM revenue during 1Q16, despite posting TTM revenue growth of 40% in 2015. The culprit, softer than expected forward guidanceand continued operating losses.

• That said, investors continue to place their bets on the next wave of SaaS category leaders that are positioned to displace incumbent on-premise providersacross multiple product categories. Just as Salesforce did to Siebel years ago in the CRM category – Netsuite (6.9x TTM revenue) and Workday (10.5x TTMrevenue) are displacing legacy vendors in ERP, Paycom (8.9x TTM revenue) and Paylocity (8.3x TTM revenue) are displacing legacy vendors in HR,Atlassian (11.2x TTM revenue) is displacing legacy vendors in the development tools and IT asset management segment, and ServiceNow (9.4x TTMrevenue) is displacing legacy vendors in IT service & systems management.

EV/Revenue Multiple Distribution– 1Q16Median EV/Revenue and EV/EBITDA Multiples – Quarterly

12

6%

14%

11%

17%

14%

13%

3%

11%

5% 5%

<= 1.0x > 1.0x<= 2.0x

> 2.0x<= 3.0x

> 3.0x<= 4.0x

> 4.0x<= 5.0x

> 5.0x<= 6.0x

> 6.0x<= 7.0x

> 7.0x<= 8.0x

> 8.0x<= 9.0x

> 9.0x

% o

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EV/Revenue

6.1x 6.8x4.7x 4.6x 4.0x

41.2x

46.6x

36.9x35.0x

33.0x

1Q15 2Q15 3Q15 4Q15 1Q16

EV/Revenue EV/EBITDA



• In 1Q16, investors continued to reward the fastest growing public SaaS companies, but have begun to penalize those sustaining significant losses. PublicSaaS companies that grew TTM revenue in between 40 - 50% were anointed with the highest median EV/Revenue multiple of 8.0x in 1Q16, compared toa median market multiple of 7.6x in the prior quarter. Those generating revenue growth greater than 50%, yet sustaining higher losses, were viewed lessfavorably.

• Select public SaaS companies exceeding 50% revenue growth in the fourth quarter included HortonWorks (164.8% TTM revenue growth), Hubspot(56.6% TTM revenue growth), New Relic (67.5% TTM revenue growth), and Zendesk (54.3% TTM revenue growth).

• In past years, investors deemed profitability to be an unacceptable tradeoff for accelerated growth. SaaS companies generating high EBITDA margins wereoften penalized with much lower median EV/Revenue multiples as compared to their high growth (often unprofitable) peers. This trend has amelioratedover the past few quarters as investors have taken stock of current macro economic concerns and placed much higher performance on cash generation.

• While a number of high growth SaaS companies generating negative EBITDA continue to be rewarded by investors (ie. Workday – 47.5% TTM revenuegrowth, -15.6% TTM EBITDA Margin, 10.5x TTM revenue multiple), many of those recently favored fast growing and significantly EBITDA negativecompanies have seen valuation diminish significantly. Marketo (40%, -26.5%) and HortonWorks (164.8%, -143.3%) have seen their multiples drop fromnorth of 10.0x revenue in recent quarters to 3.4x and 4.0x, respectively, in 1Q16.

EV/Revenue Multiples vs. TTM EBITDA Margins – 1Q16EV/Revenue Multiples vs. TTM Revenue Growth – 1Q16

13

0.5x

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Company Ticker EV (Median)

TTM

Revenue

TTM

Revenue

Growth

EV/

Revenue

TTM

EBITDA

EBITDA

Margin

EV/

EBITDA

Atlassian Corp TEAM $4,330.5 $387.3 - 11.2x $15.7 4.1% 275.0x

Workday WDAY $12,149.1 $1,162.3 47.5% 10.5x -181.72 -15.6% -

Service-now.com NOW $9,489.3 $1,005.5 47.3% 9.4x -$106.0 -10.5% -

Ellie Mae ELLI $2,252.2 $253.9 57.2% 8.9x $48.0 18.9% 46.9x

Paycom Software PAYC $1,857.6 $224.7 48.8% 8.3x $42.1 18.7% 44.2x

Paylocity Holding PCTY $1,506.7 $187.6 46.7% 8.0x -$0.4 -0.2% -

The Ultimate Software Group ULTI $4,912.1 $618.1 22.2% 7.9x $64.0 10.3% 76.8x

HubSpot HUBS $1,428.3 $181.9 57.0% 7.9x -$43.7 -24.0% -

Shopify SHOP $1,607.0 $205.2 95.4% 7.8x -$12.0 -5.9% -

Salesforce.com CRM $47,717.1 $6,667.2 24.1% 7.2x $465.8 7.0% 102.5x

Veeva Systems VEEV $2,918.8 $409.2 30.6% 7.1x $88.6 21.6% 33.0x

New Relic NEWR $1,152.2 $162.2 67.5% 7.1x -$52.7 -32.5% -

Netsuite N $5,129.9 $741.1 33.2% 6.9x -$61.7 -8.3% -

Q2 Holdings QTWO $720.9 $108.9 37.6% 6.6x -$16.2 -14.8% -

Athenahealth ATHN $5,459.1 $924.7 22.9% 5.9x $60.9 6.6% 89.7x

Instructure INST $400.1 $73.2 65.0% 5.5x -$49.7 -67.9% -

2U TWOU $804.0 $150.2 36.2% 5.4x -$25.0 -16.6% -

AppFolio APPF $394.3 $75.0 57.3% 5.3x -$12.1 -16.1% -

J2 Global JCOM $3,760.2 $720.8 20.3% 5.2x $292.6 40.6% 12.9x

Medidata Solutions MDSO $2,047.5 $392.5 17.1% 5.2x $40.1 10.2% 51.1x

Demandware DWRE $1,226.0 $237.3 47.8% 5.2x -$34.2 -14.4% -

Fleetmatics FLTX $1,429.9 $284.8 23.0% 5.0x $68.2 24.0% 21.0x

Cornerstone OnDemand CSOD $1,687.6 $339.7 28.9% 5.0x -$60.3 -17.8% -

Ebix EBIX $1,284.4 $265.5 23.9% 4.8x $97.8 36.8% 13.1x

Benefitfocus BNFT $857.5 $185.1 34.7% 4.6x -$45.2 -24.4% -

Qualys QLYS $707.3 $164.3 23.0% 4.3x $39.2 23.8% 18.1x

Textura TXTR $373.1 $86.7 37.7% 4.3x -$7.9 -9.1% -

Callidus Software CALD $732.8 $173.1 26.7% 4.2x $0.4 0.2% 1975.1x

RingCentral RNG $1,211.0 $296.2 34.7% 4.1x -$16.4 -5.5% -

Box BOX $1,235.7 $302.7 39.9% 4.1x -$164.5 -54.3% -

HortonWorks HDP $493.0 $121.9 164.8% 4.0x -$174.7 -143.3% -

MINDBODY MB $406.0 $101.4 44.8% 4.0x -$28.7 -28.3% -

Cvent CVT $745.1 $187.7 32.0% 4.0x $0.9 0.5% 797.8x

SPS Commerce SPSC $622.2 $158.5 23.9% 3.9x $16.6 10.5% 37.5x

Tableau Software DATA $2,490.4 $653.6 58.4% 3.8x -$28.4 -4.3% -

FireEye FEYE $2,209.0 $623.0 46.4% 3.5x -$395.7 -63.5% -

RealPage RP $1,610.6 $468.5 15.8% 3.4x $52.8 11.3% 30.5x

DealerTrack TRAK $107.4 $31.9 39.7% 3.4x $4.4 13.7% 24.5x

Marketo MKTO $703.4 $209.9 40.0% 3.4x -$55.7 -26.5% -

Mimecast MIME $452.1 $135.7 - 3.3x $13.7 10.1% 33.0x

Alarm.com ALRM $633.0 $208.9 24.8% 3.0x $30.2 14.4% 21.0x

Workiva WK $439.2 $145.3 28.9% 3.0x -$39 -27.0% -

HealthStream HSTM $502.4 $209.0 22.4% 2.4x $25.3 12.1% 19.8x

Castlight Health CSLT $179.6 $75.3 65.1% 2.4x -$78.2 -103.8% -

OPOWER OPWR $351.2 $148.7 15.8% 2.4x -$40.3 -27.1% -

inContact SAAS $523.7 $222.0 29.2% 2.4x -$1.5 -0.7% -

ChannelAdvisors ECOM $230.9 $100.6 18.5% 2.3x -$11.5 -11.5% -

Xactly XTLY $155.0 $76.0 24.3% 2.0x -$17 -22.7% -

SciQuest SQI $214.1 $105.4 3.4% 2.0x $8.1 7.7% 26.6x

Apigee Corporation NasdaqGS:APIC $157.7 $79.4 28.3% 2.0x -$42.4 -53.3% -

Amber Road AMBR $119.3 $67.1 3.5% 1.8x -$22.6 -33.6% -

IntraLinks Holdings IL $485.5 $276.2 7.9% 1.8x $8.3 3.0% 58.2x

TrueCar NasdaqGS: TRUE$403.3 $259.8 25.7% 1.6x -$37.1 -14.3% -

Upland Software UPLD $104.9 $69.9 8.3% 1.5x $0.7 1.0% 153.6x

Tangoe TNGO $279.2 $219.4 5.7% 1.3x $9.6 4.4% 29.0x

LivePerson LPSN $274.9 $239.0 13.9% 1.2x $17.0 7.1% 16.2x

Bazaarvoice BV $224.6 $197.4 6.1% 1.1x -$18.2 -9.2% -

Halogen Software TSX:HGN $72.4 $65.7 15.9% 1.1x -$4.0 -6.0% -

Jive Software JIVE $162.1 $195.8 9.6% 0.8x -$21.0 -10.7% -

Marin Software MRIN $82.7 $108.5 9.2% 0.8x -$21.1 -19.4% -

Medical Transcript MTBC $14.2 $23.1 26.1% 0.6x -$1.5 -6.5% -

Covisint COVS $43.2 $79.5 -11.2% 0.5x -$19.8 -24.9% -


Top 25%

Bottom 25%

• When the SEG SaaS Index is segmented onthe basis of median EV/Revenue multiple,the top 25% boasted an impressive median7.9x in 1Q16, albeit down from 4Q15’s 9.8xmultiple.

• These SaaS high flyers are market leaders ina wide array of SaaS categories includingdevelopment tools (Atlassian); ERP(Workday); Service Management(ServiceNow); Human Capital Management(Paycom); Marketing Automation(Hubspot); eCommerce (Shopify); andAnalytics (New Relic).

• The median TTM revenue growth rate ofthose in the top 25% percentile was 47%.Seven companies in the top rank generatedpositive EBITDA margin in 1Q16 (Atlassian,Ellie Mae, Paycom, Ultimate Software,Salesforce, Veeva Systems & AthenaHealth).

• In contrast, the median TTM revenuegrowth rate of those comprising the bottom25% of EV/Revenue multiples was 9.2%. Inaddition to lagging revenue growth, thebottom quartile posted median TTMrevenue of $105.4M, roughly one fourth thatof the top quartile ($387.3). Clearly, growthand size remain key inputs to public SaaSvaluations.

14


THE SEG SaaS INDEX BY PRODUCT CATEGORY:FINANCIAL PERFORMANCE (YOY COMPARISON)

1Q16 Median TTM Revenue Growth

1Q16 Median TTM EBITDA Margin

15

28.0%

23.9%

33.4%

27.8%

CRM &Marketing

ERP &Supply Chain

VerticallyFocused

HumanCapital

Management

(14.3%)

(8.3%)

0.1%

(3.1%)

CRM &Marketing

ERP &Supply Chain

VerticallyFocused

HumanCapital

Management



28.5%

27.0%

39.1%

31.2%

CRM &Marketing

ERP &Supply Chain

VerticallyFocused

WorkforceManagement

(12.1%)

(2.1%)

7.2%

(7.3%)

CRM &Marketing

ERP &Supply Chain

VerticallyFocused

WorkforceManagement


THE SEG SaaS INDEX BY PRODUCT CATEGORY: PUBLIC MARKET MULTIPLES

• As the SaaS delivery model matures, investors are favoring newer, vertically oriented, best of breed providers that are rapidly gaining share in largevertical markets, often at the expense of larger, slower and less vertically focused SaaS and on-premise providers. Public SaaS companies comprisingVertically Focused category posted the highest median public market multiple (5.0x EV/Revenue) of our four SaaS tracking categories in 1Q16. Thecategory was led by Ellie Mae (8.9x EV/Revenue multiple) and Veeva Systems (7.1x EV/Revenue).

• The market success of Vertically Focused SaaS companies was largely attributable to their ability to post strong revenue growth and avoid postingsignificant losses. It was the only category not to post negative median EBITDA margin in 1Q16, albeit generating close to break-even 0.1% medianEBITDA Margin. The category was buoyed by standouts such as Veeva Systems (30.6% revenue growth, 21.6% EBITDA Margin), Ellie Mae (57.2%revenue growth, 18.9% EBITDA Margin), EBIX (23.9% revenue growth, 36.8% EBITDA margin), and DealerTrack (39.7% revenue growth, 13.7% EBITDAMargin).

1Q16 YoY Change in Median EV/Revenue1Q16 Median EV/Revenue Multiple

16

3.7x

3.9x

5.0x

4.8x

CRM &Marketing

ERP &Supply Chain

VerticallyFocused

HumanCapital

Management

(54.6%)

(46.3%)

(26.1%)

(25.9%)

CRM &Marketing

ERP &Supply Chain

VerticallyFocused

HumanCapital

Management


THE SEG SOFTWARE INDEX

PUBLIC SOFTWARE COMPANY FINANCIAL PERFORMANCE AND MARKET MULTIPLE TRENDS


THE SEG SOFTWARE INDEX

• The SEG Software Index tracks public software companies thatprimarily offer on-premise software under a perpetual license withannual M&S.

• The SEG Software Index is currently comprised of 127 publicsoftware companies*, down from 218 in 1Q08 (the quarter in whichwe began publishing individual Software, SaaS and Internet indices.

• The number of public companies comprising the SEG Software Indexhas declined steadily over the past ten years, as many on premiseproviders have been acquired, taken private or migrated to a SaaSbusiness model.

• See appendix for SEG Software Index public market multiples andfinancial performance on an annual basis

* A number of on-premise software companies are transitioning to subscription based delivery and pricing models; however their SaaS revenue contribution is insufficient for them to be deemed primarily SaaS. ** See appendix for a complete list of companies in The SEG Software Index and detailed financial and trading metrics

SEG - Software: Median Metrics

Measure 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 16.3x 15.9x 14.8x 15.2x 14.4x



EBITDA Margin 17.9% 17.9% 17.9% 17.8% 17.7%

Net Income Margin 8.0% 7.9% 8.6% 7.5% 8.2%




TTM Total EBITDA ($M) $99.3 $93.1 $95.5 $95.2 $99.2

Cash & Eq ($M) $225.3 $225.3 $244.7 $251.3 $258.2

Current Ratio 1.9 1.9 1.9 1.9 1.9



THE SEG SOFTWARE INDEX: FINANCIAL PERFORMANCE

• After falling sharply in 4Q15, the median TTM revenue growth rate ofpublic on-premise software companies rose to 7.6% in 1Q16.

• Nearly one in five of the public on-premise software companiescomprising the SEG Software Index reported negative revenue growthin Q1; more than half grew revenue by a meager 10% or less.However, a portion of this revenue growth can be attributed to aconversation to SaaS pricing and the significant accompanyingdeferred revenue. It is rumored that Oracle, SAP and Microsoft nowhave $1B+ SaaS businesses.

• Predictably, the few public on-premise software companies growingrevenue 30%+ were focused on two of IT’s hottest product categories:security (Palo Alto Networks, 55.6%) and mobility (Momo, 199.4%).

TTM Revenue Growth Rate Distribution – 1Q16Median Revenue Performance – Quarterly

19

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

$0

$100

$200

$300

$400

$500

$600

$700

$800

1Q15 2Q15 3Q15 4Q15 1Q16

TT

M R

ev

en

ue

Gro

wth

TT

M T

ota

l R

ev

en

ue


23%

33%

21%

6% 6%

10%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

% o

f C

om

pa

nie

s

TTM Revenue Growth



• Slowed growth has prompted most on-premise companies to maintain akeen eye on expenses. The median EBITDA margin of public on-premisesoftware companies has remained steady (at or above 17%) the past sixquarters.

• Nearly 45% of public on-premise software companies achieved EBITDAmargins of 20% or better in the fourth quarter.

• Check Point Software, a security software provider, lead the pack onceagain in 1Q16 with an EBITDA margin of 52.3%. Check Point’sextraordinary profitability can be attributed in part to a strong, well-performing channel that reduces its cost of sales.

TTM EBITDA Margin Distribution – 1Q16Median EBITDA Margin Performance – Quarterly

20

17.9% 17.9% 17.9% 17.8% 17.7%

1Q15 2Q15 3Q15 4Q15 1Q16

EB

ITD

A M

arg

in

18%

15%

24%26%

12%

6%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

% o

f C

om

pa

nie

s

TTM EBITDA Margin




21

• OpEx: Median spending on operations by public on-premise software companies in 1Q16 was consistent with historic norms: 15.8% for Research &Development, 23.1% for Sales & Marketing, and 10.7% for General & Administrative.

• Over the past year, median S&M, R&D and G&A expenses as a percent of revenue have remained relatively flat.

• Median S&M spending as a percent of total revenue by on-premise public software companies lagged far behind their SaaS counterparts, whichcontinued to place significant bets on new customer acquisition (23.1% for on-premise vs. 39.6% for SaaS).

66.7% 65.1% 64.7% 64.8% 64.0%

17.9% 17.9% 17.9% 17.8% 17.7%

8.0% 7.9% 8.6% 7.5% 8.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

1Q15 2Q15 3Q15 4Q15 1Q16

% M

arg

in


0%

5%

10%

15%

20%

25%

1Q15 2Q15 3Q15 4Q15 1Q16

% o

f R

ev

en

ue



• The EV/Revenue multiples of smaller public on-premise softwarecompanies – those with revenues <$100 million – lagged well behindtheir larger counterparts.

• During 1Q16, the EV/Revenue median public market multiples fell forall but the largest companies (those with $1 billion of revenue orgreater), another indication that investors are comforted by size andincumbency and willing to ignore slowed growth amidst economicuncertainty.

THE SEG SOFTWARE INDEX: PUBLIC MARKET MULTIPLES

• The median EV/Revenue market multiple for public on-premisesoftware providers was 2.5x in 1Q16.

• The 2.5-3.0x median EV/Revenue multiple that’s prevailed over thepast five quarters, despite lackluster growth, reflects the importanceof stability and profitability to investors in the current market.

• The higher EV/Rev multiple premium enjoyed by companies withrevenue over $1 billion expanded in the first quarter as investorshave found safety in less risky assets.

• We believe investors will continue to find comfort in large cap on-premise software companies in 2Q16 as a hedge against globaleconomic concerns and slower projected IT spend and softwarecompanies revenue growth.

EV/Revenue Multiples by Size (TTM Revenue) – QuarterlyMedian EV/Revenue and EV/EBITDA Multiples – Quarterly

22

2.9x 2.9x 2.6x 2.8x 2.5x

16.3x 15.9x14.8x 15.2x

14.4x

1Q15 2Q15 3Q15 4Q15 1Q16

Me

dia

n M

ult

ipe

EV/Revenue EV/EBITDA

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

1Q15 2Q15 3Q15 4Q15 1Q16

Me

dia

n E

V/

Re

ve

nu

e

Revenue Greater Than $1 billion

Revenue Between $500 million & $1 billion

Revenue Between $100 million & $500 million

Revenue Less Than $100 million


THE SEG SOFTWARE INDEX: PUBLIC MARKET MULTIPLES

• While market performance of on-premise public software companiesremains closely correlated with their ability to sustainably driveprofits, a select group of companies able to generate significantrevenue growth in Q1 were rewarded by the street with a median5.9x EV/Revenue multiple.

• Members of Q1’s 30%+ growth club that rewarded investorshandsomely during the quarter came from a number of productcategories, including Business Intelligence and Security: Splunk(48.3% TTM revenue growth, 7.6x EV/Revenue), Palo Alto Networks(55.6% TTM revenue growth, 11.0x EV/Revenue), and Proofpoint(35.7% TTM revenue growth, 7.7x EV/Revenue).

• As in quarters past, the median market multiples of on-premisesoftware companies generally reflected their median operatingmargins.

• On premise providers with a median EBITDA margin >40% receivedan EV/Revenue multiple more than four times higher than thosegenerating EBITDA margins less than 10%.

• On-premise providers with EBITDA margins greater than 40%included: Check Point Software (52.3% EBITDA margin, 8.2xEV/Revenue multiple); Aspen Technology (44.4%, 5.7x EV/Revenue);MSCI (44.8%, 7.1x EV/Revenue); and Evertec (45.0%, 4.5xEV/Revenue).


23

2.0x

2.9x

2.3x2.0x

3.9x

5.9x

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

Me

dia

n E

V/

Re

ve

nu

e

TTM Revenue Growth

1.2x1.8x 2.0x

3.0x

4.0x

7.1x

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

Me

dia

n E

V/

Re

ve

nu

e

TTM EBITDA Margin


THE SOFTWARE INDEX BY PRODUCT CATEGORY

• The SEG Software Index is segmented into 16 product categories.

• Among these product categories, market multiples, TTM growth rates and EBITDA margins fluctuate considerably from quarter to quarter due topublic market conditions and investor sentiment. For example, Financial and Accounting providers saw median EV/Revenue decrease from 4.0x in4Q15 to 3.3x in 1Q16, despite posting higher median revenue growth and EBITDA margin over the same period.

• See Appendix for the complete list of companies within each product category.

SEG Software Index

CategoryEV/Revenue EV/EBITDA TTM Revenue Growth EBITDA Margin

1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16

Billing & Service Management 1.8x 2.0x 2.1x 2.1x 2.0x 10.3x 10.4x 9.3x 9.7x 8.8x 18.3% 7.6% 3.1% -0.4% 0.2% 26.6% 27.1% 27.2% 23.9% 21.2%

Business Intelligence 3.3x 3.3x 3.2x 3.1x 2.8x 19.2x 19.0x 17.4x 16.9x 14.9x 9.5% 10.3% 11.4% 10.1% 10.0% 12.8% 12.4% 18.5% 17.2% 14.9%

Development Platforms 2.2x 2.8x 3.0x 2.9x 2.7x 12.5x 10.9x 11.0x 10.2x 9.1x 4.5% 7.2% 10.6% 11.5% 11.1% 18.5% 18.9% 19.0% 18.6% 17.7%

Engineering & PLM 3.2x 3.0x 3.2x 3.3x 3.3x 16.9x 15.0x 16.5x 16.5x 15.6x 8.3% 8.7% 8.4% 7.5% 0.7% 20.8% 21.4% 22.9% 22.4% 19.3%

Enterprise Resource Planning 3.8x 3.8x 4.2x 4.2x 3.9x 16.5x 16.8x 14.2x 13.2x 15.3x 2.5% 2.3% 4.8% 6.1% 6.1% 28.3% 28.3% 27.2% 27.1% 27.1%

Financial & Accounting 4.2x 3.9x 4.4x 4.0x 3.3x 16.6x 16.5x 15.8x 16.6x 15.9x 3.4% 4.2% 5.4% 4.7% 6.1% 23.3% 22.3% 22.3% 22.6% 24.9%

Gaming 2.2x 2.1x 2.4x 2.5x 2.1x 17.6x 16.3x 19.3x 16.2x 18.0x -2.2% 2.6% 6.0% 4.4% 8.4% 19.0% 13.0% 9.2% 9.1% 10.8%

Healthcare 2.2x 2.1x 2.1x 2.1x 2.0x 16.4x 14.5x 15.4x 15.2x 14.8x 5.1% 8.0% 10.0% 9.9% 6.6% 12.1% 12.7% 12.4% 12.8% 12.5%

IT Conglomerates 3.8x 3.8x 4.0x 4.2x 3.9x 8.9x 8.9x 10.1x 10.4x 9.6x 2.5% -0.1% -1.1% -3.5% -4.3% 31.0% 30.0% 29.3% 29.3% 27.5%

Mobile Solutions/Content 1.9x 2.1x 2.0x 2.0x 1.7x 17.5x 14.8x 16.8x 19.1x 25.4x 31.0% 30.4% 25.5% 19.4% 17.3% 1.7% 1.0% -3.7% 1.3% 1.3%

Networking & Network Performance Management

2.5x 1.8x 2.1x 2.1x 1.9x 14.0x 10.3x 9.2x 9.5x 9.5x 17.5% 14.7% 4.3% 4.9% 5.0% 17.7% 18.4% 19.5% 18.0% 12.7%

Security 3.8x 3.5x 3.2x 3.1x 3.2x 16.8x 16.3x 14.3x 9.9x 12.3x 18.9% 12.6% 8.8% 16.2% 25.4% 4.8% 4.7% 4.7% 3.8% 3.3%

Storage, Data Management & Integration

2.2x 2.0x 2.1x 2.1x 2.0x 8.2x 8.6x 9.3x 9.7x 9.5x 1.1% 3.1% 1.5% 2.8% 1.7% 16.0% 14.3% 12.1% 11.3% 10.7%

Systems Management 3.9x 3.6x 4.0x 3.5x 2.9x 18.1x 15.9x 17.3x 15.9x 13.2x 15.9% 14.4% 5.6% 11.4% 10.1% 24.6% 25.1% 25.7% 24.7% 25.9%

Vertical - Finance 5.0x 5.2x 5.3x 5.3x 5.0x 14.9x 15.1x 15.3x 15.8x 14.5x 7.7% 8.6% 7.1% 6.6% 7.4% 33.7% 34.4% 34.8% 32.7% 32.9%

Vertical - Other 5.4x 4.9x 5.1x 5.0x 4.5x 35.2x 30.8x 31.0x 28.0x 19.3x 16.3% 13.3% 14.1% 12.5% 13.9% 11.9% 12.9% 13.9% 14.9% 16.4%

Median 2.9x 2.9x 2.6x 2.8x 2.5x 16.3x 15.9x 14.8x 15.2x 14.4x 8.4% 8.6% 8.0% 6.9% 7.6% 17.9% 17.9% 17.9% 17.8% 17.7%


THE SEG SOFTWARE INDEX BY PRODUCT CATEGORY:FINANCIAL PERFORMANCE (YoY COMPARISON)



0.2%

10.0%

11.1%

0.7%

6.1%

6.1%

8.4%

6.6%

(4.3%)

17.3%

5.0% 25.4%

1.7%

10.1%

7.4%

13.9%

Billing & Service Management

Business Intelligence

Development Platforms

Engineering & PLM

Enterprise Resource Planning

Financial & Accounting

Gaming

Healthcare

IT Conglomerates

Mobile Solutions/Content

Networking & Network Performance…

Security


Systems Management

Vertical - Finance

Vertical - Other

21.2%14.9%

17.7%19.3%

27.1%24.9%

10.8%12.5%

27.5%1.3%

12.7%3.3%

10.7%25.9%

32.9%16.4%

Billing & Service ManagementBusiness Intelligence

Development PlatformsEngineering & PLM

Enterprise Resource PlanningFinancial & Accounting

GamingHealthcare

IT ConglomeratesMobile Solutions/Content

Networking & Network Performance…Security

Storage, Data Management & IntegrationSystems Management

Vertical - FinanceVertical - Other



18.3%

10.0%

4.5%

8.3%

2.5%

5.2%

(3.2%)

3.9%

2.5% 22.9%

17.5%

18.7%

3.2%

16.3%

5.6%

16.3%




Engineering & PLM



Gaming

Healthcare

IT Conglomerates



Security


Systems Management

Vertical - Finance

Vertical - Other

26.6%

15.7%

18.7%

20.9%

28.4%

23.3%

18.5%

16.0%

34.2%

3.8%

9.9%

6.7%

17.3%

25.4%

30.3%

11.9%




Engineering & PLM



Gaming

Healthcare

IT Conglomerates


Networking & Network…

Security

Storage, Data Management &…

Systems Management

Vertical - Finance

Vertical - Other


• In 1Q16, ten product categories achieved median EV/Revenue multiples above the SEG Software Index median of 2.5x, led by Vertical Finance (5.0x), andVertical Other (4.5x), and Enterprise Resource Planning (3.9x). Select providers comprising the Vertical Finance category include MSCI, SS&C, Fidessa,and Broadridge Financial.

• Six product categories posted median TTM growth rates of 10% or higher in 1Q16 – Business Intelligence, Development Platforms, Mobile, Security,Systems Management and Vertical-Other. In comparison, each public SaaS category posted median TTM revenue growth in excess of 23%. The ITconglomerates category was the only category to post negative TTM revenue growth (-4.3%) in Q1, as these massive software companies have struggledto compete against new cloud and mobility providers.

THE SEG SOFTWARE INDEX BY PRODUCT CATEGORY:PUBLIC MARKET MULTIPLES

Median 1Q16 YoY Change in EV/Revenue1Q16 Median EV/Revenue Multiples

2.0x

2.8x

2.7x

3.3x

3.9x

3.3x

2.1x

2.0x

3.9x

1.7x

1.9x

3.2x

2.0x

2.9x

5.0x

4.5x




Engineering & PLM



Gaming

Healthcare

IT Conglomerates



Security


Systems Management

Vertical - Finance

Vertical - Other

8.6%

(15.1%)

26.2% 1.2%

0.4%

(21.9%)

(1.8%)

(10.9%)

0.4%

(11.4%)

(25.1%)

(14.7%)

(8.9%)

(25.2%)

(1.2%)

(17.0%)




Engineering & PLM



Gaming

Healthcare

IT Conglomerates



Security


Systems Management

Vertical - Finance

Vertical - Other


THE SEG INTERNET INDEX

PUBLIC INTERNET COMPANY FINANCIAL PERFORMANCE AND MARKET MULTIPLE TRENDS


THE SEG INTERNET INDEX

• The SEG Internet Index tracks public companies that primarily offerB2C and B2B solutions over the Internet using a wide array of pricingmodels.

• The SEG Internet Index is currently comprised of 98 public Internetcompanies*.

• See appendix for SEG Internet Index public market multiples andfinancial performance on an annual basis

* See appendix for complete list of companies in the SEG Internet Index

28

SEG - Internet: Median Metrics

Measure 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 17.2x 20.2x 16.9x 18.6x 18.2x



EBITDA Margin 7.8% 7.9% 6.7% 6.9% 7.4%

Net Income Margin 0.0% 0.2% 0.0% -0.3% -0.4%




TTM Total EBITDA ($M) $24.6 $27.4 $26.7 $22.9 $30.3

Cash & Eq ($M) $184.8 $187.5 $185.4 $162.0 $208.3

Current Ratio 2.2 2.3 2.4 2.3 2.3



THE SEG INTERNET INDEX: FINANCIAL PERFORMANCE

• Approximately 60% of the companies comprising the SEG InternetIndex offer online services and solutions primarily or exclusively toconsumers; their revenue growth typically lags a quarter behind theperformance of the U.S. economy.

• After rising from 18.3% growth in 1Q15 to 18.4% in 2Q15 medianTTM revenue growth of the SEG Internet Index is down considerablyover the past three quarters.

• Once again demonstrating the Internet is an ecosystem of unequals,20% of public Internet providers far outpaced the pack, posting TTMrevenue growth greater than 40% in 1Q16. These high flyersincluded 58.com (169.8%), BitAuto Holdings (63.1%), and YY(60.3%).

• Conversely, 40% of public Internet companies struggled to advance,reporting TTM revenue growth of 10% or less in 1Q16. The slowgrowers included Priceline, Yahoo!, Limelight Networks, Brightcove,and Monster Worldwide.

TTM Revenue Growth Rate Distribution – 1Q16Median Revenue Performance – Quarterly

29

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

18.0%

19.0%

$400

$420

$440

$460

$480

$500

$520

$540

1Q15 2Q15 3Q15 4Q15 1Q16

TT

M R

ev

en

ue

Gro

wth

TT

M T

ota

l R

ev

en

ue


19%

21% 21%

11%

6%

20%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

% o

f C

om

pa

nie

s

TTM Revenue Growth



• After declining from 7.9% in 2Q15 to 6.7% in 3Q15, the medianEBITDA margin of the SEG internet Index has risen slowly over thelast two quarters and roughly 30% of SEG Internet Index companieswere unprofitable in 1Q16.

• At the other end of the spectrum, 3% of public Internet companies,mostly those with significant transaction or advertising revenue,achieved EBITDA margins above 40%, led by VeriSign (63.0%),Facebook (46.0%) and Tencent Holdings (41.8%).

• With few exceptions, many of the most profitable public Internetcompanies reported stellar TTM revenue growth. Among them wereTencent Holdings (41.8% EBITDA margin, 30.3% revenue growth);Facebook (46.0% EBITDA margin, 43.8% revenue growth) andBaidu.com (23.6% EBITDA margin, 35.3% revenue growth).

TTM EBITDA Margin Distribution – 1Q16Median EBITDA Margin Performance – Quarterly

30

7.8% 7.9%

6.7% 6.9%7.4%

1Q15 2Q15 3Q15 4Q15 1Q16

EB

ITD

A M

arg

in

28%30%

16%

11% 11%

3%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

% o

f C

om

pan

ies

TTM EBITDA Margin




31

• OpEx: Median spending on operations by public Internet companies in 1Q16 was consistent with historic norms: 13.8% for Research & Development,25.1% for Sales & Marketing, and 12.5% for General & Administrative.

• Over the past year, S&M, R&D and G&A expenses as a percent of revenue have remained relatively flat.

• The median R&D spend as a percent of total revenue was the lowest among our three tracking indices.

• Public internet companies have kept their cost structures in line, resulting in a median EBITDA margin of 7.4% in 1Q16. For the past year, medianEBITDA margin for the Internet Index has hovered around 7-8%.

0%

5%

10%

15%

20%

25%

30%

1Q15 2Q15 3Q15 4Q15 1Q16

% o

f R

ev

en

ue


0%

10%

20%

30%

40%

50%

60%

70%

1Q15 2Q15 3Q15 4Q15 1Q16

% M

arg

in



THE SEG INTERNET INDEX: PUBLIC MARKET MULTIPLES

• The median public market EV/Revenue multiple of public Internet providers closed 1Q16 at 1.9x, on par with 4Q15 and slightly lower than the thirdquarter. Roughly 51% of public Internet companies closed Q1 with an EV/Revenue multiple of 2.0x or less.

• That said, investors in Q1 continued to richly reward the most rapidly growing and most promising Internet providers, especially those that generatedsignificant revenue from online advertising and ecommerce. 11% of companies closed the quarter with a market multiple of 7.0x EV/Revenue or higher,including Wowo Limited (19.3x EV/Rev), Facebook (16.3x EV/Rev) , 58.com (10.8x EV/Rev) and RenRen (16.6x EV/Rev).

Median EV/Revenue Multiple Distribution – 1Q16Median EV/Revenue and EV/EBITDA Multiples – Quarterly

32

2.0x 2.2x 2.0x 1.9x 1.9x

17.2x

20.2x

16.9x18.2x 18.2x

1Q15 2Q15 3Q15 4Q15 1Q16

EV/Revenue EV/EBITDA 31%

20%

10%8%

11%

4%3%

2% 2%

7%

<= 1.0x > 1.0x<= 2.0x

> 2.0x<= 3.0x

> 3.0x<= 4.0x

> 4.0x<= 5.0x

> 5.0x<= 6.0x

> 6.0x<= 7.0x

> 7.0x<= 8.0x

> 8.0x<= 9.0x

>= 9.0x

% o

f C

om

pa

nie

s

EV/Revenue


THE SEG INTERNET INDEX: PUBLIC MARKET MULTIPLES

• Here, too, investors favored growth, albeit not to the extend of software and SaaS vendors. Public Internet companies with TTM revenue growth of 40% orhigher had a median EV/Revenue multiple of 4.8x in Q1, compared to less than 1.7x for their slower growing (<20%) peers. The outperformers includedGrubHub (42.5%, 4.4x EV/Revenue); Twitter (58.1%, 4.5 x EV/Revenue); 58.com (169.8%, 10.8x EV/Revenue); and Facebook (43.8%, 16.3xEV/Revenue).

• Investors in public Internet companies kept a keen eye on margins, and rewarded more profitable performers with significantly higher public marketmultiples. Public Internet companies with EBITDA margins above 40% posted a median EV/Revenue multiple of 6.8x in 1Q16, over 3.5x higher than theoverall Index median.

• When valuing Internet vs. SaaS stocks, investors have clearly taken into consideration the likely longevity of the customer relationship and associatedrecurring revenue, and the nature and extent of switching costs. By those measures, the likely lifetime value of a SaaS customer appears to greatlyoutweigh the perceived value of an online consumer.


33

0.9x1.2x

1.9x 1.7x

4.9x 4.8x

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

Me

dia

n E

V/

Re

ve

nu

e

TTM Revenue Growth

1.1x1.4x 1.5x

4.0x4.7x

6.8x

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

Me

dia

n E

V/

Re

ve

nu

e

TTM EBITDA Margin


Ad Tech Commerce Content & Media Gaming

Infrastructure Services Social Travel

• The SEG Internet Index is segmented into nine product categories.

• Representative companies in each Internet category are referenced below.

• See the appendix for the complete list of companies within each product category.

THE SEG INTERNET INDEX BY PRODUCT CATEGORY

34

Search


THE SEG INTERNET INDEX BY PRODUCT CATEGORY:FINANCIAL PERFORMANCE



35

14.7%

17.1%

10.2%

13.3%

4.9%

15.7%

19.2%

39.3%

12.5%

Ad Tech

Commerce

Content & Media

Gaming

Infrastructure

Search

Services

Social

Travel

4.0%

2.1%

7.1%

32.2%

8.1%

25.9%

7.7%

14.8%

8.9%

Ad Tech

Commerce

Content & Media

Gaming

Infrastructure

Search

Services

Social

Travel



21.0%

17.8%

12.1%

22.7%

5.3%

23.7%

28.2%

58.4%

22.5%

Ad Tech

Commerce

Content & Media

Gaming

Infrastructure

Search

Services

Social

Travel

3.3%

7.8%

12.2%

13.1%

6.0%

33.4%

6.5%

10.5%

13.8%

Ad Tech

Commerce

Content & Media

Gaming

Infrastructure

Search

Services

Social

Travel


THE SEG INTERNET INDEX BY PRODUCT CATEGORY:PUBLIC MARKET MULTIPLES

• Public Internet companies comprising the Social product category closed Q1 with a median revenue growth rate of 39.3%, roughly 2.7x the overallInternet median growth rate of 14.2%. Conversely, the Infrastructure category posted median growth of 4.9%, roughly one third the index median.

• Public Internet companies comprising the Search category closed 1Q16 with the highest median EV/Revenue multiple, 5.1x, led by Google (5.8x) andYandex (4.9x).

• The success social media Internet providers have had monetizing their services, largely through advertising, has come at the expense of many in the AdTech space, with marketers clearly favoring the scalability and ROI of advertising on larger platforms.

• Companies within the Search and Gaming product categories continued to be very profitable in Q1, posting median EBITDA margin of 25.9% and 32.2%,respectively.

• Eight of nine product categories experienced a decline in YoY EV/Rev multiples.

Median 1Q16 YoY Change in EV/Revenue1Q16 Median EV/Revenue Multiples

36

1.1x

1.1x

2.1x

2.8x

1.2x

5.1x

1.6x

4.5x

4.4x

Ad Tech

Commerce

Content & Media

Gaming

Infrastructure

Search

Services

Social

Travel

(29.6%)

(9.3%)

(24.5%)

2.1%

(16.7%)

(17.8%)

(19.6%)

(54.4%)

(20.1%)

Ad Tech

Commerce

Content & Media

Gaming

Infrastructure

Search

Services

Social

Travel


SOFTWARE INDUSTRY M&A MARKET UPDATE


Average On-Premise Software Deal SizeU.S. Software Mergers & Acquisitions Activity

• There were 533 reported software M&A transactions in 1Q16, a modest decline from 3Q15’s 547 software M&A transactions. However, the first quartertally will likely increase by approximately 15 – 20 transactions as unpublicized deals are added. The fourth quarter also marks the fifth consecutivequarter in which transaction volume has eclipsed 500 deals, a sign of the continued bull market in software M&A.

• Software M&A spending in 1Q16 totaled $43.4 billion, up from Q4 2015’s $34.0 billion aggregate price tag, and equaled the prior Q4’s twelve mega deals(EV>500M). The largest announced M&A transaction in the quarter was private equity firm Veritas Capitali’s exit of healthcare analytics portfoliocompany Truven Holdings to IBM’s Watson division ($3.6 billion EV, 5.8x TTM revenue). Other notable megadeals in Q1 included Cisco’s acquisition ofcloud IOT provider, Jasper Technologies ($1.4 billion), private equity firm Golden Brick’s acquisition of mobile infrastructure software provider, OperaSoftware ($1.3 billion, 2.0x TTM revenue), and Siemens’ acquisition of engineering and simulation software provider, CD-adapco ($970 million, 4.9x TTMrevenue).

• We see the robust volume of mega-deals and increasing average deal size ($70 million in 1Q16) as a sign of continued bullishness amongst softwareindustry buyers.

1Q16 SOFTWARE / SAAS M&A DEAL VOLUME AND SPENDING

38

*Note – total deal value reported for transactions with publicly disclosed financial metrics

$36 $35$40

$43

$53 $54

$65$60

$52 $54 $53

$59

$70

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

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

TT

M A

ver

age

Dea

l Val

ue

(Mil

lio

ns)

394431

444 455460

517488

505 513

587570 556

533

$9.9

$20.8 $20.2$22.8

$31.4

$26.6

$43.5

$17.7

$17.7

$34.8

$45.5

$34.0

$43.4

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

0

100

200

300

400

500

600

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16

Valu

e (BIllio

ns)

Nu

mb

er o

f D

eals

Deals Value


Median SaaS EV/Revenue Exit MultiplesSaaS M&A Volume

• There were 180 SaaS M&A transactions in 1Q16, the most on record for any quarter. Since 3Q13, each quarter has set a new high for SaaS M&A transactionactivity.

• The median TTM EV/Revenue multiple for SaaS companies was 4.6x in 1Q16, up from 3.4x in 1Q15. With public SaaS company median EV/Revenuedeclining from 6.1x to 4.0x over the same time period, we would not be surprised to see a pull back in M&A activity and valuations in the near future as theprivate markets historically take cue from the public markets, often lagging by six to nine months.

• Select TTM SaaS transactions posting exit multiples well above the median included Visma’s 1Q16 purchase of FortNox AB for $163 million (~9.4x TTMrevenue); Decision Resources’ 1Q16 acquisition of Adaptive Software for $24.5 million (7.7x TTM revenue), Neustar’s 4Q15 acquisition of MarketSharePartners for $450 million (7.9x TTM revenue), Thales eSecurity’s 4Q15 acquisition of Vormetric for $400 million (7.5x TTM revenue), Pandora’s 4Q15acquisition of Ticketfly for $480 million ($8.7 million), and Zillow’s 3Q15 acquisition of DotLoop for $108 million (7.2x TTM revenue).

SaaS M&A: DEAL VOLUME AND MEDIAN EXIT MULTIPLES

39

86104 97 103 104 108

118132 134

150 157 160

180

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

20

40

60

80

100

120

140

160

180

200

SaaS

M&

A D

eal

s as

a %

of

Tota

l So

ftw

are

M&

A D

eal

s

# o

f Sa

aS M

&A

De

als

SaaS M&A Deals SaaS as % of Software

3.4x3.7x 3.7x

4.2x

4.6x

1Q15 2Q15 3Q15 4Q15 1Q16


EV/Revenue By Seller Size (Last 3 Years)

SaaS M&A: MEDIAN EXIT MULTIPLES

40

2.7x

3.6x3.8x

4.5x 4.7x 4.6x

<5M 5M-10M 10M-20M 20M-50M 50M-100M 100M+

6.0% 5.1%

20.5%18.8%

17.1%

9.4%

23.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

<= 1.0x > 1.0x &<= 2.0x

> 2.0x &<= 3.0x

> 3.0x &<= 4.0x

> 4.0x &<= 5.0x

> 5.0x &<= 6.0x

> 6.0x

TTM Revenue Exit Multiple Bins

% o

f D

ea

ls -

La

st 3

Ye

ars

Median EV/Revenue Exit Multiple Distribution

Seller Revenue ($)

EV

/Rev

enu

e

• Over the past three years, 11.1% of all SaaS targets were acquired for2.0x TTM or less, and 31.6% for 3.0x or less. In comparison, over 60%of TTM on-premise software transactions received valuations of 3.0xTTM revenue or less.

• 23.1% of SaaS targets were acquired for 6.0x or more, when analyzingSaaS transactions over the past three years.

• While 1Q16’s 4.6x median multiple impressed, it is important toassess SaaS multiples on the basis of seller size.

• When analyzing SaaS transactions over the past three years, thosecompanies exhibting scale fetched much high price tags than thoseless proven. Companies generating revenue of less than five millionreceived a median multiple of 2.7x TTM revenue, while those largerthan $20M fetched a median multiple of 4.5x TTM revenue or greater.

•

*Note – Analyzed last three years SaaS transactions in order to generate meaningful sample size


BI, Risk & Compliance5.6%

Content & Document Mgmt1.1%

CRM, Marketing & Sales18.3%

Data Mgmt/Integration0.6%

Dev. Tools & IT Asset Mgmt2.8%

eCommerce3.9%

Engineering & PLM1.1%

ERP0.6%

HR & Workforce Mgmt10.6%

Messaging, Conferencing & Communications

7.8%

Multimedia, Graphics & Communications

2.2%Network Performance

Mgmt2.2%

Security0.6%Systems Mgmt

5.0%

Supply Chain Mgmt & Logistics

2.2%

Education2.8%

Financial Services3.9%

Healthcare2.2%

Hospitality1.1%

Insurance1.1%

Legal1.1%

Manufacturing1.1%

Non-Profit1.7% Oil&Gas

1.1%

Other Verticals 8.3%

Public Sector 1.1%

Real Estate3.9%

Retail1.7%

Accounting & Finance2.2%

Asset Management1.1% Billing & Service

Provisioning1.1%

• As has been the trend for years, theCRM, Marketing & Sales productcategory led all others in terms of SaaStransaction volume (18.3%) in 1Q16.

• The HR and Workforce Managementproduct category accounted for thesecond most announced SaaS M&Atransactions in 1Q16 asunemployment remains near historiclows. The category accounted for10.6% of activity during the quarters.

• Other notable product categorycontributors included thosehistorically laggard to deliver solutionsvia a SaaS delivery model - Bi, Risk &Compliance (5.6%) and SystemsManagement (5.0%)

• Notable vertical categories includedFinancial Services (3.9%), Education(2.8%) and Real Estate (3.9%). Inparticular, the strong real estatemarket remains a healthy driver ofSaaS M&A activity in the multi-family,commercial and for-sale markets.

SaaS M&A BY PRODUCT CATEGORY – 1Q16

41

Ve

rtic

al


1Q16 SaaS M&A TRANSACTIONS

42

Date Buyer Seller Enterprise Value (mm)TTM Revenue

(mm) EV/Rev04/05/16 Toptal, LLC Skillbridge, Inc. - - -

04/01/16 Modica Group Papillon Technology Limited $3.1 - -

03/31/16 Golden River Resources Corp. (OTCPK:GORV) GlobeKeeper LLC - - -

03/31/16 TDC A/S (CPSE:TDC) Cirque A/S - - -

03/31/16 BasWare Oyj (HLSE:BAS1V) Verian Technologies, Inc. $36.2 $10.6 3.4x

03/30/16 Lendified Inc. Mentio Technologies Inc. - - -

03/30/16 Follett Corporation Wobo, Inc. - - -

03/30/16 IPFone, Inc. IntelaCloud, LLC - - -

03/30/16 Comture Corporation (TSE:3844) JMode Enterprise Co.,LTD. $2.1 - -

03/29/16 Tinder, Inc. Humin, Inc. - - -

03/29/16 MedStreaming, LLC M2S, Inc. - - -

03/29/16 Beamr Ltd. Vanguard Video, LLC - - -

03/29/16 Load DynamiX, Inc. Virtual Instruments Corporation - - -

03/29/16 Guidewire Software, Inc. (NYSE:GWRE) EagleEye Analytics, Inc. $42.0 - -

03/25/16 Cloudera, Inc. Sense, Inc. - - -

03/24/16 AppDirect, Inc. Xendo, Inc. - - -

03/24/16 HgCapital Raet B.V. - - -

03/23/16 IntraLinks Holdings, Inc. (NYSE:IL) Verilume, Inc. - - -

03/23/16 Olapic Inc. Piqora Inc. - - -

03/23/16 Morizon Spolka Akcyjna (WSE:MZN) FinPack Sp. z o.o. - - -

03/22/16 Propel Business Services, Inc. Conversion Innovations, Inc. $11.8 - -

03/22/16 Practice Unite LLC Uniphy Health Holdings LLC - - -

03/21/16 gShift Labs Inc. InNetwork Inc. - - -

03/21/16 Jupai Holdings Limited (NYSE:JP) Shanghai Runju Financial Information Services Co. Ltd. $13.9 - -

03/21/16 Asure Software, Inc. (NasdaqCM:ASUR) Mangrove Software, Inc. $18.4 - -

03/21/16 Nasdaq, Inc. (NasdaqGS:NDAQ) BoardVantage, Inc. $200.0 - -

03/21/16 j2 Global, Inc. (NasdaqGS:JCOM) Callstream Ltd - - -

03/21/16 Mediengruppe RTL Deutschland GmbH smartclip Holding AG $52.8 - -

03/18/16 International Business Machines Corporation (NYSE:IBM) Optevia Ltd. - - -

03/18/16 Indus Net Technologies Pvt. Ltd. Influx ERP Solutions Pvt. Ltd. - - -

03/17/16 Voxtel BV XL Internet Services BV - - -

03/17/16 Aconex Limited (ASX:ACX) CONJECT Holding GmbH $73.6 $27.8 2.7x

03/17/16 SiteOrganic, LLC Active Network, LLC, Faith Division - - -

03/17/16 The Riverside Company Guestline Ltd - - -

03/16/16 Verizon Digital Media Services, Inc. Volicon, Inc. - - -

03/15/16 Etteplan Oyj (HLSE:ETT1V) Soikea Solutions Oy - - -

03/14/16 Visma AS Fortnox AB (NGM:FNOX MTF) $168.6 $18.0 9.4x

03/14/16 Scribble Technologies Inc. Scompler GmbH - - -

03/14/16 Persistent Systems Limited (BSE:533179) PRM Cloud Solutions Pty Ltd. $0.6 - -

03/11/16 GeoOP Limited (NZSE:GEO) InterfaceIT Pty Ltd. $6.1 - -


1Q16 SaaS M&A TRANSACTIONS (CON’T)

43


(mm) EV/Rev03/11/16 T Brand Studio HelloSociety, LLC - - -

03/10/16 Bigtree Entertainment Pvt. Ltd. Fantain Sports private Limited - - -

03/10/16 WebLinc LLC Orderbot Software, Inc. - - -

03/10/16 DigitalTown, Inc. (OTCPK:DGTW) Cloud.Market - - -

03/09/16 KORE Wireless Group Inc. Wyless Inc. - - -

03/09/16 Mitratech Holdings, Inc. Viewabill - - -

03/08/16 V.i. Laboratories, Inc. Trackerbird Limited - - -

03/08/16 Booker Software, Inc. Frederick Labs, Inc. - - -

03/08/16 UserZoom Technologies SL Youeye, Inc. - - -

03/08/16 Barnes & Noble Education, Inc. (NYSE:BNED) LoudCloud Systems, Inc. $0.0 - -

03/08/16 HgCapital Trace One sa - - -

03/08/16 Reward Gateway (UK) Ltd. Yomp - - -

03/08/16 Cisco Systems, Inc. (NasdaqGS:CSCO) Synata, Inc - - -

03/08/16 PledgeMusic.com Limited Set.fm, Inc. - - -

03/07/16 Consolidated Gems, Inc. (OTCPK:CGEM) Byondata Ltd $4.7 - -

03/07/16 Softfront (JASDAQ:2321) Fudemame Co.,Ltd. $6.0 $10.7 0.6x

03/04/16 Solvy Tech Solutions Pvt. Ltd. Upsilon Consulting Private Limited $0.5 - -

03/03/16 Blenheim Chalcot Management Limited iJento Limited - - -

03/03/16 Callcredit Information Group Limited Smart Analytics Limited - - -

03/03/16 Hexatom SARL Serveur Express SAS - - -

03/03/16 Greenlight Marketing Limited Powa Technologies Limited, PowaWeb Business - - -

03/03/16 Nexonia Inc. ExpenseWatch, Inc. - - -

03/02/16 Interviewing Service Of America, LLC Sentient Services, LP - - -

03/02/16 RO Innovation, Inc. Boulder Logic, LLC - - -

03/02/16 Publicis.Sapient Vertiba, Inc. - - -

03/02/16 SugarCRM Inc Contastic Inc. - - -

03/02/16 AMP New Ventures MoneyBrilliant Pty Ltd - - -

03/02/16 Symphony Technology Group Innovantage - - -

03/02/16 NetSuite Inc. (NYSE:N) IQity Solutions, LLC - - -

03/02/16 RAC Ltd Nebula Systems Ltd - - -

03/01/16 Postmedia Network Inc. Start23 Inc., Ampifii Technology Platform - - -

03/01/16 FI Navigator Corporation AppData, LLC - - -

03/01/16 Insieme Networks, Inc. CliQr Technologies, Inc. $260.0 - -

03/01/16 NCR Corporation (NYSE:NCR) CimpleBox, Inc. - - -

02/29/16 Decision Resources, Inc. Adaptive Software LLC $24.5 $3.2 7.7x

02/29/16 VelocityEHS Ergoweb, Inc. - - -

02/29/16 j2 Global, Inc. (NasdaqGS:JCOM) Yotta280, Inc. - - -

02/29/16 Vertafore, Inc. Keal Technology Inc. - - -

02/26/16 IVR Technology Group, LLC Phonologies (India) Private Limited - - -

02/26/16 LogicNow Limited iScan Online, Inc. - - -



44

Date Buyer SellerEnterprise Value

(mm)TTM Revenue

(mm) EV/Rev02/26/16 Global ICT (Thailand) Co., Ltd. Demeter ICT Company Limited $0.2 - -

02/25/16 BEUTiFi Ltd SalonAddict Limited - - -

02/25/16 ABILITY Network Inc. G4 Health Systems, Inc. - - -

02/25/16 Selected Team Limited Gold Carpet (Beijing) Culture Media Limited $30.3 - -

02/24/16 WebQA, Inc. Intelligent Services, Inc. - - -

02/24/16 Data Intensity, LLC Inatech Solutions Limited - - -

02/24/16 Sopra Banking Software SA Cassiopae SAS - - -

02/23/16 First Fellow Oy QuestBack AS - - -

02/23/16 Hodes, LLC QUEsocial, LLC - - -

02/22/16 Resco, sro CWR Mobility BV, Mobile CRM - - -

02/22/16 Advantix Solutions Group Inc. BlueKloud - - -

02/22/16 Verint Systems Inc. (NasdaqGS:VRNT) Contact Solutions, Inc. - - -

02/22/16 Oracle Corporation (NYSE:ORCL) Ravello Systems Inc. - - -

02/22/16 Pandell Technology Corporation Jobutrax Services Ltd. - - -

02/19/16 Tangicloud Technologies, Inc. OneCloudCo Limited, Certain Assets - - -

02/19/16 United Capital Financial Advisers LLC FlexScore, Inc. - - -

02/19/16 Gust, LLC Fundacity, Inc. - - -

02/19/16 - Powa Technologies Limited - - -

02/18/16 GTCR, LLC Lytx, Inc. $500.0 - -

02/18/16 Contently Inc. Docalytics Inc. - - -

02/18/16 Broadridge Financial Solutions, Inc. (NYSE:BR) AMA Partners BV - - -

02/17/16 Invoice Cloud, Inc. Metropolitan Communications, LLC - - -

02/16/16 Credo Resources Limited (ASX:CRQ) Vault GRC Ltd. $4.4 - -

02/16/16 New Harbor Capital Management LLC Certica Solutions, Inc. - - -

02/16/16 Amazon Seller Services Private Limited EMVANTAGE Payments Private Limited - - -

02/16/16 HubLogix, Inc. OrderPigeon - - -

02/15/16 Palantir Technologies Inc. Kimonolabs, Inc. - - -

02/15/16 Insight Venture Partners Diligent Corporation (NZSE:DIL) $434.3 $99.4 4.4x

02/11/16 Time Inc. (NYSE:TIME) Viant Technology Inc. - - -

02/11/16 Eventbrite, Inc. Queue Ticketing, LLC - - -

02/11/16 News Corp Australia Pty Limited DIAKRIT International Ltd. - - -

02/10/16 Artilium plc (AIM:ARTA) Livecom International B.V. $0.6 $1.0 0.6x

02/10/16 - 0969607 B.C. Ltd. $0.1 - -

02/10/16 Golden Brick Silk Road Fund Management (Shenzhen) LLP Opera Software ASA (OB:OPERA) $1,267.6 $615.3 2.1x

02/09/16 - Commerce Guys SAS - - -

02/09/16 PSI Services LLC EnlightKS Limited - - -

02/09/16 Dialogic, Inc. APEX Communications, Inc. - - -

02/09/16 Heartland Payment Systems, Inc. (NYSE:HPY) Beanstalk Data, LLC - - -

02/08/16 BluePay, Inc. Billhighway Inc. - - -

02/08/16 Lyra Network SAS Pure Machine, SL - - -



45

Date Buyer SellerEnterprise Value

(mm)TTM Revenue

(mm) EV/Rev02/08/16 BroadSoft, Inc. (NasdaqGS:BSFT) Transera Communications Inc. - - -

02/08/16 SketchUp Sefaira Limited - - -

02/05/16 ASUKA Co., Ltd. Ktk Inc., Solution Business $0.2 - -

02/04/16 Halo Business Intelligence, Inc. Mental Desk Ltd. - - -

02/04/16 LinkedIn Corporation (NYSE:LNKD) Connectifier, Inc. $100.0 - -

02/03/16 EtQ, Inc. VERSE Solutions, Inc. - - -

02/03/16 Amdocs Limited (NasdaqGS:DOX) cVidya Networks Inc. - - -

02/03/16 PowerSchool Group LLC Interactive Achievement, Inc. - - -

02/03/16 Cisco Systems, Inc. (NasdaqGS:CSCO) Jasper Technologies, Inc. $1,400.0 - -

02/03/16 PROACTIS Holdings PLC (AIM:PHD) Due North Limited $6.6 $2.6 2.5x

02/03/16 ServiceChannel, Inc. Big Sky Technologies, Inc. - - -

02/02/16 Societe Reseau France Billet Eazieer SAS - - -

02/01/16 Telenor ASA (OB:TEL) Tapad, INC. $379.0 - -

02/01/16 PrismHR Summit Software, Inc. - - -

02/01/16 Centre Technologies, Inc. Tradentrix, LLC - - -

02/01/16 YourCause, LLC Orange Leap, LLC - - -

01/29/16 Learning Technologies Group plc (AIM:LTG) Rustici Software LLC $36.5 $6.6 5.5x

01/28/16 Nordian Capital Partners Open Line B.V. - - -

01/27/16 Survey Sampling International, LLC Instantly, Inc. - - -

01/27/16 Excalibur Mining Corporation Limited (ASX:EXM) Dropsuite Pte Ltd $1.4 - -

01/26/16 Launchmetrics Augure SA - - -

01/26/16 Juniper Networks, Inc. (NYSE:JNPR) BTI Systems Inc. - - -

01/22/16 StatPro Group plc (AIM:SOG) Investor Analytics, LLC $16.0 $5.0 3.2x

01/22/16 Mobivity Holdings Corp. (OTCPK:MFON) Livelenz, Inc. $0.7 - -

01/22/16 Intapp, Inc. Rekoop Limited - - -

01/21/16 Dev Digital LLC. Sum Effect Software, Inc. - - -

01/21/16 International Business Machines Corporation (NYSE:IBM) Ustream, Inc. - - -

01/20/16 Sparta Systems, Inc. 123Compliance Corporation - - -

01/20/16 Civitas Learning, Inc. College Scheduler, LLC - - -

01/20/16 Nucleus Software Exports Limited (BSE:531209) Avon Mobility Solutions Pvt. Ltd. - - -

01/19/16 FocusVision Worldwide, Inc. KinesisPanel - - -

01/18/16 HgCapital Sovos Compliance, LLC - - -

01/18/16 Visma Software AB Trimma AB - - -

01/18/16 Open Systems, Inc. Blaschko Computers, Inc. - - -

01/15/16 Reckon Ltd. (ASX:RKN) SmartVault Corporation - - -

01/15/16 Internet Brands, Inc. Demandforce, Inc. - - -

01/15/16 ForeFlight, LLC Aviation Logistics, LLC - - -

01/14/16 Kronos Incorporated Empower Software Solutions, Inc. - - -

01/14/16 Vista Equity Partners Telarix, Inc. - - -

01/13/16 IMCap Partners AG Attensity Europe GmbH - - -



46


(mm) EV/Rev

01/13/16 TTI Success Insights France SAS TakewInc - -

01/13/16 MNJ Technologies Direct, Inc. Equivoice,LLC - - -

01/12/16 Blue Software, LLC Viki Solutions Inc. - - -

01/12/16 LMC s.r.o. Jobote s.r.o - - -

01/12/16 Argos Soditic Talentia Software - - -

01/12/16 Pitney Bowes Inc. (NYSE:PBI) Enroute Systems Corporation - - -

01/12/16 Preferred Systems Solutions, Inc. Tetra Concepts, LLC - - -

01/11/16 Jiangsu Fengdong Thermal Technology Co.,Ltd. (SZSE:002530) Foresee Science & Technology Co., Ltd. $273.9 $39.3 7.0x

01/11/16 Accelerite Citrix Systems International GmbH, Cloudplatform And Cloudportal Business Manager Product Lines

- - -

01/11/16 Nordic Capital Cint AB - - -

01/07/16 H.I.G. Capital, LLC; Prudential Capital Group, L.P. Salary.com, Inc. - - -

01/07/16 Quikr India Private Limited maxHeap Technologies Private Limited $200.0 $7.3 27.4x

01/06/16 Sterling Infosystems, Inc. TalentWise, Inc. - - -

01/06/16 Alphabet Inc. (NasdaqGS:GOOGL) Circus Ponies Software, Inc. - - -

01/06/16 The TEAM Companies Inc. Lightspeed EPS, Inc. - - -

01/05/16 Thoma Bravo, LLC Infogix, Inc. - - -

01/05/16 Oracle Corporation (NYSE:ORCL) AddThis $175.0 - -

01/05/16 Viabl, LLC Halupi LLC - - -

01/05/16 MiTek Industries, Inc. Sales Simplicity Software, Inc. - - -

01/04/16 TomTom Telematics BV Finder Sp. z o.o. - - -


• The median EV/Rev exit multiple for on-premise software providerswas 2.2x in 1Q16, down from 2.6x in 4Q15. 1Q16’s 2.2x median fellbelow 2.3x for the first time since 2Q13’s 1.8x TTM revenue medianmultiple.

• The median EV/EBITDA exit multiple for public on-premise softwarecompanies was 23.2x TTM EBITDA in 1Q16, down slightly from theprior quarter.

ON-PREMISE SOFTWARE M&A EXIT MULTIPLES

• On a TTM basis, 46.9% of all on-premise software targets in 1Q16were acquired for 2.0x TTM or less, and 63.7% for 3.0x or less. Incomparison, 36.1% were acquired for 2.0x TTM revenue or less and56.5% for 3.0x or less in 4Q15.

• 14.2% of TTM on-premise targets were acquired for 6.0x or more in1Q16 versus 18.5% the quarter prior.

• Notable on-premise transactions significantly exceeding medianmultiples included IBM’s acquisition of healthcare analytics provider,Truven Holding ($3.6 billion, 5.8x TTM revenue) and Siemens’acquisition of engineering and simulation software provider CD-adapco ($970 million, 4.9x TTM revenue).

Median EV/Revenue Exit Multiple DistributionMedian Exit Multiples

47

*Note - EV/EBITDA multiples comprised public sellers only

2.5x 2.5x 2.5x 2.6x 2.2x

17.5x 17.3x18.1x

24.7x23.2x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

1Q15 2Q15 3Q15 4Q15 1Q16

EV/Revenue

EV/EBITDA

22.1%24.8%

16.8%

12.4%

7.1%

2.7%

14.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

<= 1.0x > 1.0x & <=2.0x

> 2.0x & <=3.0x

> 3.0x & <=4.0x

> 4.0x & <=5.0x

> 5.0x & <=6.0x

> 6.0x

TTM Revenue Exit Multiple Bins

% o

f D

eal

s-

1Q

16

TTM


Large Vs. Smaller BuyerPublic vs. Private Target

ON-PREMISE SOFTWARE M&A: BY OWNERSHIP STRUCTURE AND SIZE

• Of the TTM deals announced with an ascertainable EV/Rev exitmultiple, nearly four out of five software M&A transactions featuredprivately-held targets.

• The median TTM exit multiple was significantly higher for public on-premise software sellers (3.0x TTM revenue) than for their privatecounterparts (2.0x TTM revenue).

• Over the last 12 months, public buyers paid a median 2.0x TTMrevenue for their targets, compared to a median of 2.7x paid byprivate buyers.

• Buyers with revenue greater than $200 million paid a median 2.4xTTM revenue for their targets, compared to a median 1.9x TTMrevenue paid by sub-$200 million revenue buyers.

• On a TTM basis, software M&A transactions with the highest exitmultiples featured a large public or private buyer (greater than $200million in revenue) acquiring a small target (less than $20 million).For the last 12 months, this match-up produced a median 2.8xEV/Revenue exit multiple.

48

Seller Less

Than $20

million: 2.4x

Seller Less

Than $20

million: 1.8x

Seller Greater

Than $20

million: 1.5x

Seller Greater

Than $20

million: 0.8x

Seller Less

Than $20

million: 2.8x

Seller Less

Than $20

million

Seller Greater

Than $20

million: 2.4x

Seller Greater

Than $20

million: 2.6x

Buyer Less Than $200

million1.9x Median Multiple

Buyer Greater Than

$200 million2.4x Median Multiple


ON-PREMISE SOFTWARE M&A: BY VERTICAL AND HORIZONTAL MARKETS

Horizontal & Vertical M&A Median EV/Revenue Exit MultiplesHorizontal & Vertical M&A Volume

• The median exit valuation of horizontal software companies was 2.1x TTM revenue in 1Q16, equivalent to that of the prior two quarters. RepresentativeQ1 horizontal transactions included IFS’ acquisition of enterprise asset management provider, MainIOT ($8.0 million, 1.5x TTM revenue) and privateequity firm Silverlake’s sales of application lifecycle software portfolio company, Serena Software ($540 million, 3.3x TTM revenue), to Micro Focus.

• The median exit valuation of vertical software companies was 2.5x TTM revenue in 1Q16, on par with recent quarters. Vertical software targets havefetched a higher median EV/Revenue exit multiple than their horizontal software counterparts for the past seven quarters. That represents a markedturnaround for vertical software median exit valuations after a dismal 2012 and 2013 (1.5x). The vertical exit recovery began in 2014 when the medianmultiple advanced to 2.2x.

• Q1’s more noteworthy vertical software deals included IBM’s acquisition of healthcare analytics provider, Truven Holding ($3.6 billion, 5.8x TTMrevenue); CI:z’s acquisition of automotive navigation systems provider, C’s Lab Co. ($48.3 million, 2.6x TTM revenue); and Servelec’s acquisition of publicsector software provider Synergy Business ($27.8 million, 3.2x TTM revenue).

49

33% 35% 34% 36% 31%

67% 65% 66% 64% 69%

0%

20%

40%

60%

80%

100%

1Q15 2Q15 3Q15 4Q15 1Q16

Vertical Horizontal

2.4x

2.5x

2.4x

2.5x 2.5x

2.3x 2.3x

2.1x 2.1x 2.1x

1Q15 2Q15 3Q15 4Q15 1Q16

Vertical Horizontal


Content & Document Mgmt2.7% CRM, Marketing & Sales

4.2%

Data Mgmt/Integration1.0%

Dev. Tools & IT Asset Mgmt2.0%

eCommerce0.7% EDA

0.7%

Engineering & PLM4.7%

ERP1.2%

Entertainment1.7%

HR & Workforce Mgmt2.7%

Messaging, Conferencing & Communications

4.2%

Multimedia, Graphics & Communications

2.0%

Network Performance Mgmt1.0%

Security5.1%

Systems Mgmt2.5%

Supply Chain Mgmt & Logistics

2.2%

Mobile21.8%

Automotive1.5%

Education3.2%

Financial Services6.6%

Healthcare4.2%

Hospitality0.7%

Insurance1.2%

Legal0.7%

Other Verticals 7.6%

Public Sector 0.7%

Real Estate2.9%

Retail0.5%

Utilities1.2%

Accounting & Finance

1.5%

Asset Management2.5%

Billing & Service Provisioning

0.2% BI, Risk & Compliance4.4%

ON-PREMISE SOFTWARE M&A ACTIVITY BY PRODUCT CATEGORY

• Mobile was the most active productcategory by far in the fourth quarter,accounting for 21.8% of all software M&Atransactions. Distant runner-ups wereFinancial Services (6.6%), Security (5.1%),Engineering & PLM (4.7%), and BI, Risk &Compliance (4.4%)

• Historically, deal activity in any givenproduct category varies widely from yearto year, based upon evolving marketadoption, changing technology platforms,economic cycles, etc. Examples include:

• CRM, Marketing & Sales transactionsaccounted for 4.2% of all software M&Aactivity in 1Q16, compared with 0.8%in 1Q15.

• Asset Management deals represented2.5% of all software M&A activity in1Q16, compared with only 0.5% in1Q15.

• Supply Chain Mgmt & Logistics dealswere 2.2% of software M&A activity in1Q16, compared with 0.8% in 1Q15.

• Mobile accounted for 21.8% of allsoftware M&A activity in 1Q16,compared with only 27.4% in 1Q15.

50

Ve

rtic

al


ON-PREMISE SOFTWARE M&A EXIT VALUATIONS BY PRODUCT CATEGORY

Median EV/Revenue Exit Multiples by Software Product Category

• Among the 36 on-premise software product categories we track, ten had both sufficient deal activity and deal data to ascertain a category TTM revenuemultiple in 1Q16.

• On a TTM basis, the Healthcare category was rewarded with the highest median exit multiple (4.3x), followed by Financial Services with a median exitmultiple of 2.8x.

• Notable Healthcare transactions include IBM’s 1Q16 acquisition of healthcare analytics provider, Truven Holding ($3.6 billion, 5.8x TTM revenue); IBM’s3Q15 acquisition of Merge Healthcare (4.3x TTM revenue) and Progenics Pharmaceuticals’ 4Q15 acquisition of EXINI Diagnostics AB ($7.1 million, 6.3xTTM revenue).

• Notable Financial Services software transactions included Deutsche Boerse’s 3Q15 acquisition of 360 Treasury Systems ($796 million, 14.5x TTMrevenue) and Intercontinental Exchange’s 4Q15 acquisition of Trayport ($860 million, 11.0x TTM revenue).

• On-premise CRM and Marketing exit multiples lagged far behind most other product categories on a TTM basis – posting a meager 0.9x median TTMrevenue multiple in 1Q16.

51

4.3x

2.8x 2.8x2.3x 2.3x

1.9x 1.8x 1.6x 1.6x

0.9x

Hea

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Mo

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APPENDIX


THE SEG SaaS INDEX: PUBLIC MARKET MULTIPLES (ANNUAL)

53

Median EV/EBITDA – AnnualMedian EV/Revenue – Annual

31.4x 32.2x35.2x 35.2x

42.4x

56.8x

33.9x

2009 2010 2011 2012 2013 2014 2015

Me

dia

n E

V/

EB

ITD

A M

ult

iple

2.6x

3.6x

4.5x5.0x

6.7x

5.7x 5.8x

2009 2010 2011 2012 2013 2014 2015

Me

dia

n E

V/

Re

ve

nu

e M

ult

iple


Median Revenue Growth - Annual Median TTM Total Revenue ($M) - Annual

$123.7

$104.7

$155.4 $169.0 $163.5

$128.7

$164.1

2009 2010 2011 2012 2013 2014 2015

TT

M T

ota

l R

ev

en

ue

Median Gross Profit Margin – Annual Median EBITDA Margin – Annual

68.3% 68.6%

63.4%

70.9%70.0%

66.1% 66.0%

2009 2010 2011 2012 2013 2014 2015

Gro

ss P

rofi

t M

arg

in

THE SEG SaaS INDEX: FINANCIAL PERFORMANCE (ANNUAL)

26.0%

14.2%

26.9%25.5% 26.0%

28.4%27.1%

2009 2010 2011 2012 2013 2014 2015

TT

M R

ev

en

ue

Gro

wth

6.7%

9.6%8.8%

8.1%

1.0%

-8.9% -9.4%

2009 2010 2011 2012 2013 2014 2015

EB

ITD

A M

arg

in


THE SEG SOFTWARE INDEX: PUBLIC MARKET MULTIPLES (ANNUAL)


1.5x

2.3x

2.7x 2.7x

3.0x 3.0x

2.8x

2009 2010 2011 2012 2013 2014 2015

EV

/R

ev

en

ue

Mu

ltip

le

10.0x

12.4x 12.3x 11.9x

14.0x15.0x

14.0x

2009 2010 2011 2012 2013 2014 2015

EV

/E

BIT

DA

Mu

ltip

le


THE SEG SOFTWARE INDEX: FINANCIAL PERFORMANCE (ANNUAL)



$239.80

$387.90 $381.40

$470.50

$535.80

$743.10

2010 2011 2012 2013 2014 2015

TT

M T

ota

l R

ev

en

ue

4.2% 4.5%

16.1%

13.3%

9.3%8.0% 7.5%

2009 2010 2011 2012 2013 2014 2015

TT

M R

ev

en

ue

Gro

wth

66.6%

68.6%

65.8%66.1%

66.5%66.0%

65.7%

2009 2010 2011 2012 2013 2014 2015

Gro

ss P

rofi

t M

arg

in

15.3%

17.4%

18.9%

17.9%17.5% 17.6%

18.5%

2009 2010 2011 2012 2013 2014 2015

EB

ITD

A M

arg

in


THE SEG INTERNET INDEX: PUBLIC MARKET MULTIPLES (ANNUAL)


1.2x

1.6x

2.9x

2.1x

2.6x2.5x

1.8x

2009 2010 2011 2012 2013 2014 2015

Me

dia

n E

V/

RE

ve

nu

e M

ult

iple

10.0x11.8x

15.2x13.9x

20.8x

24.6x

17.0x

2009 2010 2011 2012 2013 2014 2015

Me

dia

n E

V/

EB

ITD

A M

ult

iple


THE SEG INTERNET INDEX: FINANCIAL PERFORMANCE (ANNUAL)



$216.2

$278.1

$333.0

$392.8

$440.2 $411.2

$492.9

2009 2010 2011 2012 2013 2014 2015

TT

M T

ota

l R

ev

en

ue

2.9% 3.4%

26.4%

23.9%

18.7%20.6%

17.5%

2009 2010 2011 2012 2013 2014 2015

TT

M R

ev

en

ue

Gro

wth

60.1%60.9%

66.2%65.0% 64.7%

63.8%63.2%

2009 2010 2011 2012 2013 2014 2015

Gro

ss P

rofi

t M

arg

in

10.2%

12.2%

13.1%

10.6%

8.9%8.3%

7.3%

2009 2010 2011 2012 2013 2014 2015

EB

ITD

A M

arg

in


THE SEG SaaS INDEX COMPANIES – KEY METRICS

59

SEG SaaS Index

Company EV/Revenue EV/EBITDA TTM Revenue Growth EBITDA Margin


2U 12.3x 8.1x 6.2x 6.6x 5.4x - - - - - 32.6% 31.2% 33.9% 32.0% 36.2% -24.4% -21.9% -19.4% -18.6% -16.6%

Alarm.com 4.3x 4.1x 3.4x 4.6x 3.0x 28.0x 31.5x 25.5x 30.4x 21.0x 28.5% 26.9% 25.4% 26.1% 24.8% 15.5% 12.9% 13.3% 15.1% 14.4%

Amber Road 1.6x 1.8x 1.8x 2.0x 1.8x - - - - - 23.4% 16.3% 11.4% 7.5% 3.5% -35.2% -10.8% -19.0% -26.8% -33.6%

Apigee Corporation 3.0x 2.7x 2.3x 2.8x 2.0x - - - - - - - 30.2% 26.6% 28.3% -85.2% -76.9% -68.6% -60.6% -53.3%

AppFolio 10.7x 9.6x 6.5x 5.7x 5.3x - - - - - 79.6% - - - 57.3% -14.1% -14.9% -15.6% -17.9% -16.1%

Athenahealth 7.0x 7.9x 6.5x 6.3x 5.9x 85.8x 101.2x 88.4x 80.8x 89.7x 26.5% 25.9% 24.2% 23.8% 22.9% 8.2% 7.8% 7.4% 7.8% 6.6%

Atlassian Corp - 26.3x 13.5x 11.9x 11.2x - 207.9x 454.9x 283.9x 275.0x 44.8% 44.8% 48.5% - - 12.7% 12.7% 3.0% 4.2% 4.1%

Bazaarvoice 1.7x 1.7x 1.2x 1.0x 1.1x - - - - - 20.0% 13.7% 11.7% 9.3% 6.1% -14.5% -11.3% -10.5% -9.1% -9.2%

Benefitfocus 5.9x 6.9x 5.4x 6.1x 4.6x - - - - - 31.2% 33.9% 33.6% 34.1% 34.7% -37.6% -34.7% -31.6% -27.5% -24.4%

Box 5.6x 5.7x 4.8x 4.7x 4.1x - - - - - 74.3% 62.0% - 45.5% 39.9% -63.1% -60.2% -57.7% -56.3% -54.3%

Callidus Software 6.1x 6.8x 4.7x 5.2x 4.2x - - - - 1975.1x 21.6% 23.4% 24.2% 27.8% 26.7% -1.9% -2.5% -3.3% -3.1% 0.2%

Castlight Health 4.7x 4.7x 2.9x 3.1x 2.4x - - - - - 251.5% 173.5% 121.2% 88.9% 65.1% -180.2% -150.6% -129.8% -115.4% -103.8%

ChannelAdvisors 2.1x 3.1x 2.5x 2.5x 2.3x - - - - - 24.8% 21.7% 18.6% 16.5% 18.5% -33.2% -31.1% -25.3% -19.4% -11.5%

Cornerstone OnDemand 6.8x 6.8x 5.6x 5.7x 5.0x - - - - - 42.4% 36.7% 35.7% 32.3% 28.9% -16.1% -16.9% -17.5% -18.5% -17.8%

Covisint 0.4x 0.5x 0.5x 0.4x 0.5x - - - - - -9.1% -8.9% -9.7% -10.6% -11.2% -37.6% -30.4% -26.8% -25.8% -24.9%

Cvent 8.7x 8.2x 4.5x 4.1x 4.0x 199.2x 560.3x 1185.8x 292.9x 797.8x 28.0% 28.6% 31.7% 31.8% 32.0% 4.4% 1.5% 0.4% 1.4% 0.5%

DealerTrack 3.6x 4.6x 3.5x 4.0x 3.4x 29.1x 39.1x 27.1x 28.9x 24.5x 132.4% 94.2% 60.3% 39.7% 39.7% 12.4% 11.9% 12.9% 13.7% 13.7%

Demandware 10.9x 9.9x 6.2x 6.2x 5.2x - - - - - 50.6% 50.2% 47.8% 46.3% 47.8% -13.1% -11.5% -14.7% -14.7% -14.4%

Ebix 4.6x 5.5x 5.4x 5.6x 4.8x 12.4x 15.2x 15.1x 16.0x 13.1x 4.7% 11.4% 17.6% 25.1% 23.9% 36.9% 36.2% 35.5% 35.1% 36.8%

Ellie Mae 11.3x 10.0x 10.7x 11.0x 8.9x 58.0x 47.8x 49.1x 53.0x 46.9x 25.7% 41.4% 54.6% 62.2% 57.2% 19.5% 20.9% 21.9% 20.7% 18.9%

FireEye 11.1x 6.8x 4.2x 4.3x 3.5x - - - - - 163.5% 130.3% 97.4% 71.0% 46.4% -89.3% -83.8% -74.8% -66.9% -63.5%

Fleetmatics 7.3x 8.0x 5.5x 4.9x 5.0x 29.1x 31.0x 21.0x 19.5x 21.0x 30.6% 28.5% 27.0% 24.7% 23.0% 25.1% 25.9% 26.3% 24.9% 24.0%

Halogen Software 1.8x 1.6x 1.2x 1.6x 1.1x - - - - - 18.1% 18.2% 18.0% 17.4% 15.9% -18.0% -16.0% -13.9% -9.7% -6.0%

HealthStream 3.1x 3.3x 2.7x 2.7x 2.4x 22.5x 19.2x 16.2x 16.7x 19.8x 29.0% 27.3% 24.8% 22.2% 22.4% 13.9% 17.3% 16.4% 16.3% 12.1%

HortonWorks 16.9x 12.9x 6.2x 5.3x 4.0x - - - - - 71.8% 96.6% 109.6% 124.1% 164.8% -365.1% -311.3% -260.9% -217.2% -143.3%

HubSpot 12.4x 13.1x 9.8x 8.3x 7.9x - - - - - 49.3% 52.7% 55.3% 56.6% 57.0% -40.4% -37.5% -35.5% -33.2% -24.0%

inContact 2.2x 3.0x 2.6x 2.6x 2.4x - - - - - 32.1% 37.4% 36.1% 33.3% 29.2% -4.0% -4.9% -4.3% -2.5% -0.7%

Instructure - 11.1x 6.9x 5.8x 5.5x - - - - - 70.2% - - - 65.0% -83.1% -94.5% -92.5% -85.3% -67.9%

IntraLinks Holdings 1.9x 2.1x 1.8x 1.8x 1.8x 41.2x 45.3x 40.0x 45.9x 58.2x 9.1% 10.1% 9.7% 8.5% 7.9% 4.7% 4.6% 4.5% 3.9% 3.0%

J2 Global 5.8x 6.4x 5.7x 4.7x 5.2x 13.9x 15.7x 14.0x 11.3x 12.9x 15.0% 15.7% 20.7% 19.9% 20.3% 41.6% 40.9% 40.8% 41.4% 40.6%

Jive Software 1.4x 1.4x 0.8x 1.0x 0.8x - - - - - 22.6% 20.8% 18.0% 13.5% 9.6% -22.2% -17.2% -13.8% -11.8% -10.7%

LivePerson 1.9x 1.8x 1.2x 1.2x 1.2x 41.9x 36.0x 29.6x 16.9x 16.2x 18.1% 21.2% 20.5% 19.9% 13.9% 4.5% 5.0% 4.0% 7.0% 7.1%

Marin Software 0.8x 1.0x 0.8x 0.8x 0.8x - - - - - 28.5% 24.1% 19.5% 13.1% 9.2% -27.1% -26.4% -27.8% -25.7% -19.4%

Marketo 7.4x 7.1x 3.9x 4.0x 3.4x - - - - - 56.3% 50.9% 46.2% 42.8% 40.0% -31.0% -31.9% -31.0% -29.5% -26.5%

Medical Transcript 0.9x 0.9x 0.6x 0.4x 0.6x - - - - - 74.8% 102.3% 126.9% 75.0% 26.1% -12.9% -11.8% -11.1% -7.0% -6.5%

Medidata Solutions 6.8x 6.8x 5.6x 5.8x 5.2x 62.8x 60.4x 54.6x 55.0x 51.1x 21.0% 20.9% 19.8% 19.5% 17.1% 10.8% 11.3% 10.2% 10.5% 10.2%

Mimecast - 5.0x 3.7x 3.3x 3.3x - 65.4x 33.9x 23.2x 33.0x - 31.4% - - - -2.7% 7.6% 10.9% 14.4% 10.1%


THE SEG SaaS INDEX COMPANIES – KEY METRICS

60

SEG SaaS Index



MINDBODY 6.9x 7.1x 4.8x 5.0x 4.0x - - - - - 43.8% - - - 44.8% -30.4% -30.4% -29.8% -27.4% -28.3%

Netsuite 11.9x 11.2x 8.0x 8.0x 6.9x - - - - - 34.2% 34.2% 35.0% 34.9% 33.2% -9.2% -8.3% -9.7% -8.3% -8.3%

New Relic 16.3x 14.7x 9.1x 7.2x 7.1x - - - - - 82.2% 74.7% 73.2% 68.8% 67.5% -40.6% -40.7% -38.2% -36.2% -32.5%

OPOWER 2.7x 3.0x 2.5x 2.2x 2.4x - - - - - 44.8% 35.7% 27.3% 19.6% 15.8% -29.7% -30.4% -26.1% -26.8% -27.1%

Paycom Software 14.0x 13.7x 10.0x 9.8x 8.3x 96.1x 77.6x 48.7x 48.8x 44.2x 40.3% 44.6% 46.2% 48.4% 48.8% 14.6% 17.6% 20.6% 20.1% 18.7%

Paylocity Holding 11.2x 13.8x 9.8x 10.0x 8.0x - - - - - 41.2% 40.9% 40.5% 42.0% 46.7% -7.3% -6.7% -5.2% -3.6% -0.2%

Q2 Holdings 10.0x 10.5x 7.7x 7.7x 6.6x - - - - - 39.1% 42.0% 41.8% 38.5% 37.6% -18.9% -16.2% -15.1% -14.9% -14.8%

Qualys 6.4x 7.4x 4.8x 4.4x 4.3x 40.2x 38.9x 23.1x 19.8x 18.1x 23.7% 24.0% 24.1% 24.1% 23.0% 15.8% 19.0% 20.7% 22.3% 23.8%

RealPage 3.3x 4.0x 3.7x 3.5x 3.4x 43.0x 67.5x 48.9x 39.2x 30.5x 7.3% 6.7% 11.6% 14.1% 15.8% 7.7% 5.9% 7.6% 9.0% 11.3%

RingCentral 5.2x 5.9x 4.8x 3.9x 4.1x - - - - - 37.0% 36.8% 35.3% 35.1% 34.7% -15.8% -13.1% -10.6% -7.9% -5.5%

Salesforce.com 9.1x 9.2x 8.0x 8.1x 7.2x 288.6x 216.5x 150.6x 128.2x 102.5x 32.0% 28.4% 25.3% 24.2% 24.1% 3.1% 4.3% 5.3% 6.3% 7.0%

SciQuest 1.5x 2.0x 2.1x 2.5x 2.0x 29.3x 42.5x 40.4x 36.4x 26.6x 13.0% 7.9% 4.7% 2.0% 3.4% 5.1% 4.6% 5.1% 6.8% 7.7%

Service-now.com 16.0x 17.4x 11.3x 10.9x 9.4x - - - - - 60.7% 58.1% 54.0% 50.5% 47.3% -16.1% -16.1% -14.9% -12.5% -10.5%

Shopify 25.3x 16.3x 11.1x 12.7x 7.8x - - - - - 109.0% - - - 95.4% -16.8% -11.9% -7.2% -5.9% -5.9%

SPS Commerce 7.8x 8.0x 4.3x 3.8x 3.9x 75.8x 78.4x 44.0x 37.9x 37.5x 22.6% 24.1% 25.0% 25.8% 23.9% 10.3% 10.2% 9.8% 10.1% 10.5%

Tableau Software 12.5x 12.2x 4.7x 4.3x 3.8x 260.9x 561.8x - - - 77.5% 75.4% 71.4% 69.1% 58.4% 4.8% 2.2% -0.3% -1.4% -4.3%

Tangoe 1.2x 1.4x 1.3x 1.2x 1.3x 15.1x 17.7x 19.3x 27.7x 29.0x 12.5% 10.9% 8.3% 5.7% 5.7% 7.7% 7.7% 6.7% 4.4% 4.4%

Textura 9.5x 8.2x 4.9x 5.1x 4.3x - - - - - 54.5% 48.6% 44.7% 41.6% 37.7% -27.1% -18.8% -13.1% -5.8% -9.1%

The Ultimate Software Group 10.0x 10.3x 8.8x 9.4x 7.9x 69.3x 77.1x 72.5x 83.1x 76.8x 23.3% 22.2% 21.1% 20.8% 22.2% 14.4% 13.4% 12.2% 11.3% 10.3%

TrueCar 1.5x 2.2x 1.7x 1.4x 1.6x - - - - - 54.3% 44.8% 37.2% 31.6% 25.7% -19.4% -18.2% -16.1% -13.7% -14.3%

Upland Software 1.8x 1.7x 1.5x 1.8x 1.5x - 99.8x - - 153.6x 56.8% 38.1% 25.0% 14.2% 8.3% -13.1% 1.8% -0.2% -0.1% 1.0%

Veeva Systems 8.5x 9.3x 8.1x 8.2x 7.1x 36.4x 38.5x 33.2x 34.5x 33.0x 49.0% 43.7% 37.9% 32.2% 30.6% 23.3% 24.2% 24.5% 23.8% 21.6%

Workday 15.8x 15.9x 12.4x 12.9x 10.5x - - - - - 68.0% 63.7% 58.2% 51.4% 47.5% -20.0% -17.3% -15.6% -15.5% -15.6%

Workiva 5.0x 5.5x 3.5x 3.2x 3.0x - - - - - 32.3% 28.6% 27.8% 27.7% 28.9% -30.8% -30.9% -29.3% -28.8% -27.0%

Xactly 3.3x 3.6x 2.3x 2.5x 2.0x - - - - - 29.4% - - 20.9% 24.3% -20.9% -19.7% -19.8% -20.2% -22.7%

Zendesk 11.7x 12.5x 9.6x 8.9x 7.5x - - - - - 76.3% 73.3% 69.1% 66.3% 64.3% -46.9% -46.5% -40.4% -35.3% -32.8%

Zix 4.3x 5.2x 3.9x 3.5x 3.7x 25.9x 30.7x 22.7x 17.9x 20.2x 4.6% 5.6% 5.3% 6.9% 8.7% 16.6% 16.9% 17.3% 19.5% 18.4%


CRM & Marketing 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 199.2x 216.8x 151.1x 128.2x 102.5x

EV/Earnings 687.5x - - - -


EBITDA Margin -20.8% -18.8% -19.1% -17.4% -14.3%


TTM Revenue Growth (YoY) 30.3% 28.5% 28.5% 28.0% 28.0%

TTM EBITDA Growth (YoY) 0.2% -11.9% -16.7% -5.6% 14.0%

TTM Earnings Growth (YoY) 13.9% 17.2% 26.9% 14.7% -2.0%

Current Ratio 1.8 2.0 1.9 1.8 1.7

Cash as Percent of Market Cap 13.5% 11.7% 11.0% 10.8% 14.1%

Enterprise Value Growth (YoY) -17.3% 11.1% 2.0% 5.5% -24.0%

ERP & Supply Chain 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 29.3x 42.8x 40.5x 36.4x 26.6x



EBITDA Margin -9.2% -8.3% -9.7% -8.3% -8.3%



TTM EBITDA Growth (YoY) 12.6% 33.5% 25.2% 16.2% 17.3%

TTM Earnings Growth (YoY) 73.7% 76.2% 58.8% 39.7% 56.4%

Current Ratio 2.1 2.7 2.4 2.2 2.2


Enterprise Value Growth (YoY) -5.7% -7.3% 16.9% 3.2% -8.8%

Vertically Focused 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 39.7x 43.5x 39.9x 36.9x 31.7x



EBITDA Margin -2.6% -2.9% -1.9% 1.0% 0.1%





Current Ratio 1.9 1.7 1.9 2.2 1.9


Enterprise Value Growth (YoY) 2.5% 41.4% 12.0% 3.8% 0.8%

Human Capital Management 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 69.3x 77.2x 48.8x 48.8x 60.5x



EBITDA Margin -11.7% -11.3% -9.6% -6.7% -3.1%



TTM EBITDA Growth (YoY) -40.3% -40.9% -22.4% -24.6% 9.5%

TTM Earnings Growth (YoY) 75.2% 41.6% 28.4% -0.5% -17.1%

Current Ratio 1.3 1.4 1.5 1.3 1.2


Enterprise Value Growth (YoY) -10.1% 34.1% 22.3% 36.8% 4.7%

THE SEG SaaS INDEX METRICS BY PRODUCT CATEGORY

61

Other SaaS 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 33.1x 45.3x 23.2x 23.2x 31.0x



EBITDA Margin -16.0% -12.5% -12.2% -9.8% -8.2%



TTM EBITDA Growth (YoY) -22.9% -29.4% -5.1% 5.6% 5.5%

TTM Earnings Growth (YoY) -0.2% 0.6% -49.5% 15.5% 6.6%

Current Ratio 2.3 2.1 2.0 2.1 2.3




THE SEG SOFTWARE INDEX COMPANIES – KEY METRICS

62

SEG Software Index



A10 Networks 1.8x 1.6x 1.6x 1.5x 1.4x - - - - - 26.6% 12.6% 4.2% 6.2% 10.8% -12.8% -18.8% -19.7% -18.0% -13.8%

Accretive Health 0.5x 0.5x 0.5x - 0.5x 7.3x 8.5x 8.3x - 7.8x 0.5% 5.8% 10.8% 13.3% 16.6% 6.3% 6.1% 6.1% 6.1% 6.0%

ACI Worldwide 3.4x 2.9x - 3.1x 2.9x 16.7x 14.2x - 16.3x 17.2x 17.5% 11.2% 6.7% 1.8% 2.9% 20.5% 20.5% 20.2% 19.3% 16.7%

Activision Blizzard 5.8x - 5.8x - 5.4x 20.0x - 19.0x - 17.9x -3.8% 4.7% 8.4% 12.3% 5.8% 29.2% 30.4% 30.4% 32.8% 30.4%

Allot Communications - 0.4x - 0.4x 0.4x - 10.6x - - - 21.4% 17.6% 3.9% -7.6% -14.7% 2.7% 3.5% -0.8% -3.3% -4.3%

Allscripts Healthcare Solutions 2.4x - 2.2x 2.3x 2.1x 53.9x - 36.9x 33.0x 26.3x 0.4% 0.4% 0.0% -0.5% 0.6% 4.5% 4.6% 5.8% 6.9% 8.1%

Amdocs Limited - 2.1x 2.0x 2.1x 2.0x - 10.8x 10.4x 10.7x 10.6x 6.6% 4.8% 3.1% 2.2% 1.5% 18.9% 19.4% 19.4% 19.3% 18.9%

American Software 2.0x 2.2x 1.9x 1.7x 1.8x 18.2x 19.4x 15.3x 12.3x 13.5x 1.3% 2.3% 4.6% 11.6% 11.3% 11.0% 11.5% 12.5% 13.7% 13.5%

ANSYS 7.5x 7.9x 7.3x 7.3x 7.3x 16.3x 17.2x 15.8x 16.0x 15.9x 8.7% 6.8% 5.1% 3.0% 0.7% 46.0% 46.0% 46.0% 45.6% 45.8%

Aspen Technology 7.1x 7.6x 6.0x 6.0x 5.7x 18.1x 18.6x 14.3x 13.8x 12.8x 20.4% 14.6% 12.5% 10.4% 10.7% 38.9% 40.7% 41.9% 43.1% 44.4%

Autodesk 3.5x 5.0x 4.3x 4.7x 4.4x 32.8x 51.9x 54.0x 69.7x 74.7x 10.5% 11.8% 7.1% 3.5% -0.3% 10.7% 9.7% 7.9% 6.8% 5.9%

AVG Technologies 3.4x 3.1x 2.8x 2.8x 2.6x 10.6x 9.9x 9.1x 9.7x 9.0x -8.1% -3.2% 5.1% 11.5% 14.5% 32.4% 31.0% 30.3% 29.1% 29.0%

Bango PLC 7.9x 10.8x 8.8x 4.2x 11.0x - - - - - -42.0% -44.9% -48.3% -43.7% -37.2% -95.7% -110.0% -129.3% -135.2% -142.1%

Barracuda Networks 2.3x 2.7x 1.7x 2.1x 1.6x 80.2x 123.3x 103.4x 182.3x 143.3x 18.7% 18.7% 17.4% 16.2% 16.2% 2.8% 2.2% 1.6% 1.1% 1.1%

Blackbaud 4.9x 5.2x 4.9x 5.1x 4.6x 30.0x 32.2x 30.2x 32.1x 28.3x 12.0% 13.2% 13.4% 12.5% 13.0% 16.5% 16.2% 16.3% 15.9% 16.4%

Bottomline Technologies 2.9x 3.4x 3.4x 3.6x 3.3x 24.1x 27.4x 25.6x 27.4x 26.0x 19.8% 15.2% 10.1% 5.6% 3.9% 12.2% 12.4% 13.2% 13.0% 12.8%

Broadridge Financial 2.6x 2.7x 2.6x 2.7x 2.5x 13.3x 13.6x 12.2x 12.8x 11.9x 4.6% 4.5% 5.3% 6.4% 6.7% 19.6% 19.6% 21.4% 21.2% 21.2%

Brocade Communications Systems 1.6x 1.6x 1.3x 1.5x 1.4x 6.4x 6.3x 5.1x 5.8x 5.5x 1.1% 1.6% 1.5% 2.4% 1.7% 25.6% 26.0% 26.2% 25.7% 25.0%

BSQUARE 0.5x 0.6x 0.4x 0.4x 0.4x 16.3x 11.4x 6.0x 5.9x 5.5x 4.1% 5.8% 10.6% 11.5% 11.1% 3.2% 5.2% 6.1% 6.6% 6.6%

CA 2.5x 2.6x 2.8x 3.0x 2.9x 7.9x 8.2x 8.8x 9.7x 9.5x -2.8% -3.4% -4.9% -6.1% -6.6% 31.3% 32.3% 32.2% 30.9% 30.5%

Cadence Design Systems 3.5x 3.7x 3.6x 4.0x 3.4x 16.8x 17.5x 15.1x 16.7x 14.4x 8.3% 8.7% 10.0% 9.7% 7.7% 21.0% 21.4% 23.5% 23.7% 24.0%

Cerner 6.3x 5.9x 4.9x 4.7x 4.3x 21.3x 20.8x 17.3x 16.9x 15.4x 16.6% 20.0% 24.0% 29.0% 31.4% 29.5% 28.4% 28.1% 27.6% 27.7%

Check Point Software Tech 8.8x 8.9x 8.6x 8.9x 8.2x 16.3x 16.5x 16.1x 16.9x 15.8x 7.3% 8.0% 8.6% 8.9% 9.0% 54.3% 54.0% 53.5% 52.9% 52.3%

Cisco Systems 2.0x 2.2x 2.0x 2.1x 2.0x 7.3x 7.8x 7.2x 7.5x 6.8x 0.4% 3.1% 4.3% 4.9% 3.1% 27.3% 27.6% 27.2% 27.6% 28.8%

Citrix Systems 3.7x 3.9x 3.5x 3.8x 3.4x 17.4x 18.2x 15.2x 15.5x 13.2x 7.7% 5.2% 4.0% 4.2% 4.2% 21.4% 21.4% 23.1% 24.7% 25.9%

CommVault Systems 1.9x 2.3x 2.2x 2.5x 2.2x 16.5x 27.4x 46.4x 108.9x 154.7x 8.1% 3.6% -1.7% -4.9% -4.5% 11.5% 8.4% 4.7% 2.3% 1.4%

Computer Programs and Sys 2.1x 2.3x 3.1x 3.7x 3.3x 8.3x 9.4x 14.0x 19.2x 18.2x 1.9% -2.2% -5.1% -12.2% -11.0% 26.0% 24.7% 22.5% 19.1% 18.3%

Constellation 5.7x 5.4x 4.8x 4.9x 4.5x 38.9x 33.6x 27.6x 27.7x 19.3x 37.9% 25.8% 17.6% 12.5% 10.1% 14.6% 16.1% 17.3% 17.8% 23.2%

CSG Systems International 1.5x 1.6x 1.7x 2.0x 1.7x 9.4x 9.9x 10.4x 11.6x 8.7x 0.5% -0.8% -0.8% -0.4% 0.2% 15.7% 16.3% 16.3% 17.5% 19.4%

Cyberark Software 13.0x 10.0x 7.7x 7.7x 6.5x 63.0x 41.6x 31.9x 33.8x 29.7x 55.7% 67.4% 76.5% 67.9% 56.1% 20.6% 24.1% 24.0% 22.7% 21.8%

Cyren 2.0x 2.0x 1.6x 2.0x 1.7x - - - - - -1.0% -4.9% -10.2% -11.9% -13.0% -13.3% -12.5% -9.4% -10.4% -5.9%

Dassault Systèmes 6.3x 7.1x 6.2x 6.2x 5.8x 25.0x 28.1x 25.4x 23.3x 21.4x 11.0% 17.3% 22.9% 24.2% 23.8% 25.1% 25.4% 24.4% 26.5% 27.2%

DST Systems 1.5x 1.7x 1.5x 1.5x 1.5x 9.8x 10.9x 9.6x 10.3x 10.2x 3.4% 4.1% 3.7% 3.6% 2.8% 15.5% 15.7% 15.5% 14.6% 14.3%

Electronic Arts 4.2x 4.3x 3.8x 3.9x 4.0x 16.8x 17.2x 13.3x 14.9x 18.2x 21.6% 26.3% 17.3% 4.7% -4.0% 24.9% 25.2% 28.5% 26.3% 22.0%

EMC 2.0x 2.1x 2.0x 2.0x 2.0x 8.2x 9.1x 9.1x 9.6x 10.1x 5.2% 5.4% 4.7% 2.8% 1.1% 23.9% 22.9% 21.9% 21.0% 19.7%

EPIQ Systems 1.9x 2.1x 1.9x 1.9x 1.7x 16.5x 16.1x 13.7x 14.1x 11.0x 1.2% -3.6% -2.5% 4.7% 13.9% 11.8% 12.9% 13.9% 13.2% 15.5%

Evertec 5.7x 5.3x 4.5x 4.4x 4.5x 13.5x 12.6x 10.7x 10.6x 10.0x 0.9% 1.9% 1.9% 2.5% 3.3% 41.9% 42.1% 42.4% 42.0% 45.0%



63

SEG Software Index



Evolving Systems 2.0x 2.1x 2.2x 2.7x 2.4x 6.6x 6.9x 8.2x 11.2x 11.5x 18.3% 19.0% 2.7% -8.9% -13.8% 30.4% 31.1% 27.2% 23.9% 21.2%

F5 Networks 4.2x 3.6x 3.0x 2.7x 2.9x 13.5x 11.5x 9.5x 8.6x 9.5x 17.5% 15.6% 13.3% 10.8% 8.8% 31.1% 31.6% 31.7% 31.0% 30.5%

Fair Isaac 4.0x 4.1x 4.3x 4.5x 4.2x 17.4x 18.5x 19.1x 20.1x 18.1x 7.6% 9.7% 9.2% 6.3% 6.9% 23.3% 22.3% 22.3% 22.6% 23.0%

FalconStor Software 1.5x 1.3x 1.1x 1.0x 1.2x - 404.2x 262.8x 18875.9x 159.3x -21.1% -2.1% -0.4% 3.8% 5.0% -18.4% 0.3% 0.4% 0.0% 0.7%

Fidessa 2.1x 2.5x 2.4x 2.7x 2.5x 11.8x 13.8x 13.8x 15.6x 14.5x -1.4% 0.5% 2.5% 5.0% 7.4% 18.2% 17.8% 17.5% 17.2% 17.0%

First Data Corp - 5.1x 4.5x 4.3x 4.4x - 15.5x 13.0x 12.8x 14.4x 3.4% 3.9% 3.4% 3.5% 2.9% 33.8% 32.9% 34.4% 33.8% 30.6%

Fiserv 4.8x 5.0x 5.0x 5.1x 4.9x 16.1x 16.5x 16.3x 16.4x 15.9x 5.2% 4.3% 4.1% 3.8% 3.7% 29.7% 30.3% 30.5% 30.8% 30.5%

Fortinet 8.4x 6.2x 4.5x 4.6x 3.9x 80.4x 69.0x 58.4x 70.3x 70.8x 25.2% 25.6% 27.0% 29.4% 31.0% 10.5% 9.0% 7.8% 6.6% 5.5%

GameLoft SA 1.0x 1.8x 1.8x 2.4x 1.8x 19.1x 45.8x 62.6x 89.9x 62.2x -2.6% 0.5% 3.5% 8.0% 12.7% 5.1% 3.9% 2.9% 2.7% 2.9%

Gigamon 3.0x 3.9x 3.2x 3.8x 2.9x - 139.8x 52.0x 48.9x 38.0x 17.8% 27.0% 38.4% 41.3% 41.3% -1.6% 2.8% 6.1% 7.7% 7.7%

Glu Mobile 1.6x 1.0x 0.8x 0.7x 0.8x 23.9x 15.3x 16.6x 14.0x 31.9x 111.3% 97.5% 85.3% 41.4% 12.0% 6.6% 6.7% 4.7% 5.3% 2.5%

Gree 0.5x 0.6x 0.6x 0.8x 0.7x 1.4x 2.1x 2.3x 2.9x 2.8x -25.0% -27.9% -26.4% -25.4% -25.0% 31.4% 30.3% 27.3% 26.3% 24.8%

GSE Systems 0.4x 0.4x 0.5x 0.6x 0.5x - - - - 25.8x -21.1% -1.6% 18.0% 50.2% 51.3% -13.4% -7.3% -4.9% -1.0% 1.8%

Guidance Software 1.4x 1.5x 1.2x 1.1x 1.2x - - - - - -1.7% -0.6% -0.2% -0.7% -1.5% -3.6% -2.6% -3.4% -4.3% -7.2%

Guidewire Software 8.6x 9.7x 8.6x 8.5x 8.2x 98.9x 142.8x 144.4x 188.8x 151.4x 17.2% 13.3% 8.6% 5.4% 7.1% 8.7% 6.8% 5.9% 4.5% 5.4%

Hewlett Packard 0.6x 0.4x 0.3x 0.2x 0.2x 4.5x 2.8x 2.1x 2.0x 2.2x -13.3% -14.8% -17.0% -7.3% 4.7% 12.4% 12.4% 12.6% 11.8% 10.8%

IBM 1.8x 1.8x 1.8x 2.1x 2.0x 7.0x 7.0x 7.1x 8.1x 7.9x -5.7% -7.3% -10.4% -12.8% -11.9% 26.3% 26.2% 25.7% 25.6% 24.6%

iDream Sky Technologies 2.2x 2.2x 2.3x 2.4x 2.3x 126.8x 116.5x 176.0x 184.2x 176.0x 299.1% 196.5% - - - 1.7% 1.9% 1.3% 1.3% 1.3%

Imperva 10.9x 10.7x 6.6x 6.3x 5.4x - - - - - 19.1% 26.0% 30.1% 37.1% 42.9% -32.3% -31.4% -29.3% -22.5% -18.5%

Intuit 5.6x 6.5x 6.2x 6.4x 5.8x 16.6x 23.7x 23.8x 23.4x 19.8x 1.7% -9.5% -1.2% 1.4% 6.4% 33.6% 27.3% 25.9% 27.2% 29.1%

Jack Henry & Associates 4.5x 4.9x 5.1x 5.2x 5.0x 13.4x 14.4x 14.7x 14.9x 14.1x 8.4% 9.1% 7.1% 6.6% 6.4% 33.7% 34.4% 34.8% 35.1% 35.0%

Juniper Networks 2.2x 2.5x 2.1x 2.1x 2.0x 12.4x 13.8x 11.0x 9.8x 9.0x -0.9% -5.3% -7.0% -3.3% 5.0% 17.7% 18.4% 19.5% 21.0% 22.2%

Konami 1.4x 1.6x 1.5x 1.9x 1.4x 10.7x 12.0x 10.4x 12.2x 7.4x -1.9% 0.3% 0.1% 4.0% 11.0% 13.1% 13.3% 14.8% 15.6% 18.6%

Magic Software Enterprises 1.0x 1.1x 1.2x 1.3x 1.2x 5.7x 5.6x 6.9x 7.5x 6.8x 13.3% 7.3% 4.5% 4.7% 7.1% 17.9% 18.9% 17.9% 17.2% 17.1%

Manhattan Associates 9.1x 10.1x 7.5x 7.2x 7.1x 33.7x 36.9x 26.4x 24.9x 23.5x 18.7% 18.7% 17.1% 16.2% 13.1% 27.1% 27.5% 28.4% 29.0% 30.4%

Mentor Graphics 2.3x 2.3x 1.6x 1.6x 1.7x 11.4x 10.8x 7.0x 7.3x 9.2x 7.6% 6.9% 8.1% 6.4% -5.1% 20.1% 21.6% 22.9% 22.4% 18.9%

Microsoft 3.2x 3.9x 3.8x 4.1x 4.0x 8.8x 11.0x 10.6x 11.5x 11.7x 12.0% 13.7% 7.8% -0.8% -5.7% 36.0% 35.5% 35.9% 35.7% 34.6%

MicroStrategy 3.2x 2.7x 2.5x 2.9x 2.7x 46.0x 22.2x 11.9x 11.1x 9.5x 0.7% -3.1% -5.2% -10.3% -8.6% 6.9% 12.4% 20.8% 26.2% 28.0%

MIND C.T.I. 1.6x 1.4x 1.2x 0.9x 1.4x 5.1x 4.3x 3.5x 2.6x 4.3x 35.4% 26.8% 10.7% -4.1% -16.4% 30.7% 32.3% 34.2% 34.1% 31.5%

MobileIron 1.0x 1.6x 1.4x 2.0x 1.3x - - - - - 25.3% 27.4% 23.3% 17.3% 12.9% -43.8% -47.0% -52.2% -56.3% -46.2%

Model N 2.0x 2.2x 2.3x 2.3x 2.1x - - - - - -18.6% -13.3% -0.6% 14.7% 16.8% -21.8% -20.6% -18.2% -16.1% -18.5%

Momo 34.6x 25.6x 16.9x 19.0x 11.1x - - - 452.3x 120.9x 1330.3% 665.4% 416.7% 296.5% 199.4% -52.1% -24.6% -9.7% 4.2% 9.2%

Monotype Imaging Holdings 4.2x 4.9x 4.5x 4.3x 4.4x 13.6x 16.4x 15.9x 15.9x 15.9x 10.7% 8.1% 6.5% 3.9% 4.3% 31.1% 30.1% 28.5% 27.4% 27.5%

MSCI 6.7x 7.5x 7.4x 7.6x 7.1x 16.3x 18.2x 17.7x 17.5x 15.9x 9.1% 9.2% 8.0% 7.2% 7.9% 41.3% 41.2% 41.7% 43.6% 44.8%

Myriad Group AG 8.0x 7.5x 8.3x 10.3x 10.9x 109.4x 740.2x - - - -6.9% -12.1% -17.3% -24.4% -32.1% 7.3% 1.0% -6.0% -27.2% -55.1%

NetApp 0.8x 1.0x 0.6x 0.7x 0.6x 5.2x 6.6x 5.0x 6.0x 6.0x -2.5% -3.2% -5.2% -6.7% -8.4% 16.0% 14.3% 12.1% 11.3% 10.7%

Netscout Systems 7.5x 7.4x 4.4x 3.5x 2.5x 30.6x 26.9x 16.6x 19.4x 20.9x 16.8% 14.4% 5.6% 39.1% 76.6% 24.6% 27.5% 26.4% 18.0% 12.0%



64

SEG Software Index



NetSol Technologies 1.7x 1.6x 1.8x 1.8x 1.6x - 112.5x 10.7x 9.4x 6.3x -9.6% 16.6% 41.3% 51.2% 49.7% -10.6% 1.4% 16.9% 19.3% 24.9%

NeuStar 1.9x 1.8x 2.2x 2.2x 2.1x 5.1x 4.7x 5.7x 5.6x 5.6x 6.8% 7.6% 7.7% 7.7% 9.0% 37.2% 38.6% 39.1% 39.9% 38.1%

NICE Systems Ltd 3.5x 3.1x 3.1x 3.1x 3.5x 17.1x 15.9x 15.7x 14.9x 14.4x 6.1% 7.9% 7.4% 6.5% 6.3% 20.7% 19.5% 19.7% 20.8% 24.1%

NQ Mobile 0.9x 1.1x 1.0x 1.1x 0.9x - - - - - 68.9% 40.5% 27.7% 18.8% 22.4% -20.1% -18.0% -9.7% -4.0% -2.9%

Nuance Communications, Inc. 3.5x 3.7x 3.8x 3.8x 3.8x 37.5x 33.9x 30.8x 29.6x 24.7x 3.5% 2.1% 1.9% 0.4% 0.8% 9.3% 10.9% 12.3% 12.8% 15.3%

Omnicell 2.3x 2.2x 1.9x 1.9x 1.9x 15.5x 14.4x 13.7x 13.5x 13.9x 15.8% 15.2% 13.9% 11.9% 9.9% 14.8% 15.0% 14.2% 14.2% 13.4%

Open Text Corp 3.5x 3.6x 3.7x 3.9x 3.7x 11.5x 12.3x 13.0x 14.1x 12.8x 35.4% 26.1% 14.0% 4.5% -1.5% 30.0% 28.9% 28.1% 27.8% 28.8%

Opera 1.6x 1.8x 2.1x 2.1x 1.9x 8.0x 9.9x 12.5x 13.1x 12.0x 60.2% 60.1% 60.6% 38.7% 28.1% 20.7% 17.9% 16.9% 16.1% 16.1%

Oracle 3.6x 3.9x 3.8x 4.2x 3.9x 8.4x 9.3x 9.1x 10.2x 9.6x 2.5% -0.1% -1.1% -3.5% -4.3% 43.2% 42.0% 41.4% 40.6% 40.1%

Palo Alto Networks 19.3x 17.4x 13.6x 12.3x 11.0x - - - - - 53.0% 54.5% 55.1% 56.0% 55.6% -9.9% -11.7% -11.3% -10.5% -10.6%

Pandora Media 4.4x 2.6x 1.9x 1.6x 1.7x - - - - - 40.6% 30.4% 28.0% 26.0% 26.4% -1.7% -3.6% -3.7% -3.4% -5.8%

Parametric Technology 2.9x 3.3x 3.0x 3.3x 3.3x 13.9x 16.0x 15.1x 16.2x 16.9x 4.5% 2.2% -1.9% -7.5% -10.1% 20.8% 20.3% 20.0% 20.2% 19.3%

PDF Solutions 1.9x 2.2x 2.0x 2.7x 2.0x 6.2x 7.2x 7.6x 10.0x 8.6x -1.3% -4.3% -5.5% -1.2% -2.2% 29.9% 30.1% 26.6% 27.3% 23.9%

Pegasystems 2.8x 3.2x 2.6x 2.6x 2.4x 21.9x 26.4x 21.7x 20.4x 18.6x 15.9% 13.2% 11.4% 12.7% 15.7% 12.8% 12.0% 12.1% 12.6% 12.9%

Progress Software 3.6x 3.2x 3.2x 3.0x 3.0x 13.4x 14.7x 15.8x 15.8x 13.5x 4.5% 7.2% 11.4% 13.5% 13.6% 26.5% 22.1% 20.1% 19.2% 22.2%

Proofpoint 12.0x 12.4x 8.9x 8.3x 7.7x - - - - - 41.8% 40.6% 38.5% 36.8% 35.7% -16.1% -17.1% -19.1% -20.0% -20.9%

PROS Holdings 3.3x 3.5x 1.6x 1.6x 1.8x - - - - - 28.3% 24.0% 15.5% 5.4% -9.5% -2.7% -5.3% -9.6% -16.6% -25.1%

QAD 1.2x 1.2x 0.8x 0.9x 0.9x 17.0x 16.7x 10.8x 13.0x 15.3x 10.8% 8.4% 4.8% -0.3% -5.8% 7.0% 7.1% 7.6% 6.9% 5.7%

Qihoo 360 Technology 4.8x 5.6x 5.9x 6.2x 5.9x 19.3x 21.8x 21.8x 23.0x 21.8x 107.2% 82.7% 64.2% 64.2% 64.2% 24.8% 25.9% 27.0% 27.0% 27.0%

Qiwi 2.7x 3.1x 1.8x 2.2x 2.1x 9.4x 10.0x 5.6x 7.4x 7.0x 26.2% 24.5% 24.1% 22.8% 20.4% 29.1% 31.4% 32.1% 29.9% 30.2%

Qlik Technologies 5.5x 4.7x 3.6x 4.1x 3.4x 1077.4x 863.0x 1771.3x 896.6x 569.5x 18.4% 16.7% 14.1% 10.1% 10.0% 0.5% 0.5% 0.2% 0.5% 0.6%

Quality Systems 1.3x 1.6x 1.6x 1.6x 1.6x 14.1x 15.5x 15.5x 13.8x 14.1x 8.2% 10.2% 9.2% 8.0% 3.3% 9.3% 10.4% 10.5% 11.5% 11.6%

Radware 3.0x 2.6x 1.7x 1.6x 1.9x 16.6x 13.7x 8.5x 9.2x 14.7x 15.0% 14.7% 12.7% 4.0% -2.4% 17.8% 19.1% 20.4% 18.0% 12.7%

Rapid7 14.5x 8.8x 4.9x 4.4x 4.1x - - - - - 28.1% - - - 43.8% -32.4% -28.1% -26.4% -27.5% -35.6%

Red Hat 7.3x 7.6x 6.5x 6.6x 6.1x 39.3x 40.3x 34.3x 35.2x 34.1x 16.6% 15.8% 14.3% 14.3% 14.7% 18.5% 18.9% 19.0% 18.6% 17.7%

Redknee Solutions 1.1x 1.1x 0.8x 0.9x 0.9x 22.2x 15.8x 7.5x 8.0x 9.7x 38.1% -3.1% -11.9% -13.6% -19.1% 4.8% 6.7% 10.9% 11.4% 9.3%

Sage Group 4.3x 4.8x 4.3x 4.6x 4.4x 15.2x 17.1x 15.8x 17.0x 16.3x -1.6% 1.9% 7.6% 6.1% 6.1% 28.3% 28.3% 27.2% 27.1% 27.1%

SAP 3.9x 5.1x 4.6x 4.5x 4.4x 12.7x 16.9x 15.8x 15.3x 16.0x 4.4% 8.6% 12.8% 15.7% 18.4% 31.0% 30.0% 29.3% 29.3% 27.5%

Sapiens International 3.1x 3.0x 2.8x 3.0x 2.6x 26.3x 23.5x 20.6x 20.3x 16.6x 16.3% 15.2% 14.1% 17.7% 17.9% 11.9% 12.7% 13.8% 14.9% 15.4%

Silver Spring Networks 2.7x 2.0x 1.5x 1.6x 1.0x - - - 19.7x 5.1x -41.5% -8.4% 27.7% 74.2% 155.9% -41.7% -6.2% -2.6% 7.9% 20.1%

Software AG 2.2x 2.5x 2.7x 2.9x 2.7x 8.8x 9.5x 10.1x 10.1x 9.1x -11.8% -11.9% -6.8% -2.2% 1.8% 25.4% 26.1% 26.9% 28.6% 29.8%

Sourcefire 1.2x 1.5x 1.5x 1.4x 1.2x 18.3x 21.7x 13.7x 8.8x 7.9x 10.3% 2.2% 5.6% 27.2% 33.9% 6.7% 7.1% 10.9% 15.5% 15.7%

Splunk 14.0x 13.2x 9.5x 9.1x 7.6x - - - - - 49.0% 48.1% 46.8% 47.7% 48.3% -45.1% -45.5% -42.0% -41.5% -39.9%

Square - 4.6x 3.5x 3.9x 2.9x - - - - - 53.9% - - - 49.0% -12.9% -10.4% -8.3% -8.1% -7.5%

SS&C 8.7x 11.7x 10.4x 9.6x 8.4x 22.3x 31.1x 27.2x 29.3x 25.6x 7.7% 8.6% 10.2% 20.1% 30.3% 38.9% 37.5% 38.2% 32.7% 32.9%

Stratasys 1.3x 1.4x 0.9x 1.6x 1.1x 9.5x 12.2x 15.1x 39.9x - 54.9% 43.4% 27.2% 7.5% -7.2% 14.1% 11.2% 6.2% 4.0% -1.6%

Symantec 2.4x 1.9x 1.9x 1.8x 1.9x 11.2x 6.6x 6.5x 6.1x 6.0x -31.1% -2.5% -6.4% 15.2% 32.0% 21.6% 28.3% 28.8% 29.7% 31.5%



65

SEG Software Index



Synchronoss Technologies 3.1x 3.3x 2.6x 2.7x 2.4x 11.8x 12.3x 9.4x 9.5x 8.8x 31.0% 33.2% 35.3% 30.1% 26.6% 26.6% 27.1% 28.0% 28.5% 27.2%

Synopsys 3.0x 3.1x 2.8x 3.0x 2.7x 15.8x 15.9x 14.8x 16.5x 15.3x 7.9% 8.8% 8.4% 9.0% 7.0% 18.9% 19.3% 18.8% 18.4% 17.7%

Take-Two Interactive 1.8x 2.1x 1.8x 1.6x 1.7x - - - - - -60.2% -53.9% -47.2% -37.1% 36.7% -4.9% -21.9% -21.3% -10.0% -15.8%

Tangoe 1.2x 1.4x 1.3x 1.2x 1.3x 15.1x 17.7x 19.3x 27.7x 29.0x 12.5% 10.9% 8.3% 5.7% 5.7% 7.7% 7.7% 6.7% 4.4% 4.4%

TeleNav 1.3x 1.1x 0.8x 0.8x 0.7x - - - - - -21.7% -7.1% 6.6% 20.1% 21.7% -25.6% -22.7% -20.0% -19.3% -18.7%

Teradata 1.3x 1.4x 1.2x 1.2x 1.3x 6.1x 6.8x 6.6x 7.2x 8.6x 1.5% -1.7% -3.9% -6.1% -7.4% 22.0% 20.1% 18.5% 17.2% 14.9%

The Descartes Systems Group 7.9x 7.9x 7.2x 7.6x 6.9x 26.9x 26.4x 23.6x 24.2x 21.6x 12.9% 10.3% 8.8% 8.6% 8.3% 29.5% 30.0% 30.6% 31.3% 32.0%

Trend Micro 3.8x 4.4x 4.1x 3.4x 3.9x 10.7x 12.7x 11.9x 10.1x 12.3x 6.4% 6.8% 8.8% 9.3% 7.9% 35.8% 34.4% 34.3% 33.9% 31.6%

Tyler Technologies 10.9x 10.9x 8.7x 8.7x 7.9x 49.9x 48.7x 38.7x 38.5x 36.3x 18.4% 18.9% 18.2% 17.5% 19.9% 21.8% 22.3% 22.5% 22.6% 21.8%

Ubisoft Entertainment 1.3x 2.1x 2.2x 2.7x 2.4x 4.2x 16.6x 61.8x - - 16.9% 45.3% 20.2% -0.9% -0.9% 30.6% 12.6% 3.5% -7.7% -7.7%

Varonis Systems 2.7x 3.0x 3.2x 3.0x 2.8x - - - - - 35.8% 34.5% 29.1% 25.5% 25.5% -15.8% -18.3% -19.3% -17.8% -13.7%

VASCO Data Security International 2.6x 2.4x 1.8x 2.1x 1.8x 12.9x 10.7x 7.4x 9.3x 7.9x 30.0% 43.7% 45.4% 38.7% 19.8% 19.9% 22.5% 23.7% 22.4% 22.6%

Verint Systems Inc 2.7x 2.8x 2.2x 2.1x 2.3x 19.3x 19.7x 15.8x 15.3x 18.7x 24.4% 18.8% 14.3% 8.3% 0.2% 14.1% 14.3% 14.2% 13.9% 12.3%

Verisk 9.4x 8.9x 8.2x 8.2x 7.4x 20.7x 19.2x 17.6x 17.5x 16.3x 9.5% 10.3% 12.6% 16.1% 18.4% 45.2% 46.1% 46.7% 46.8% 45.7%

VMWare 4.7x 3.1x 2.4x 2.4x 2.3x 18.7x 12.4x 9.2x 9.2x 8.5x 15.9% 15.1% 13.2% 11.4% 10.1% 25.3% 25.1% 25.7% 26.2% 26.7%

Zynga 1.5x 1.8x 1.3x 1.4x 1.2x - - - - - -20.9% -9.3% 7.5% 14.4% 10.8% -18.7% -11.8% -6.9% -2.1% -6.4%


THE SEG SOFTWARE INDEX METRICS BY PRODUCT CATEGORY

66

Billing & Service Management 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 10.3x 10.4x 9.2x 9.5x 8.8x



EBITDA Margin 26.6% 27.1% 27.2% 23.9% 21.2%


TTM Revenue Growth (YoY) 18.3% 7.6% 3.1% -0.4% 0.2%



Current Ratio 2.6 2.7 2.8 2.5 1.8


Enterprise Value Growth (YoY) 0.2% 13.8% 4.1% -10.2% -25.2%

Business Intelligence 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 19.2x 19.0x 17.1x 16.6x 14.9x



EBITDA Margin 12.8% 12.4% 18.5% 17.2% 14.9%

Net Income Margin 5.6% 5.7% 4.2% -1.8% -1.2%


TTM EBITDA Growth (YoY) -6.0% -19.2% -23.6% -6.2% 5.6%

TTM Earnings Growth (YoY) -12.6% -11.8% 4.3% 21.3% 26.4%

Current Ratio 1.7 1.9 2.0 1.8 1.8



Development Platforms 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 12.5x 10.9x 10.9x 10.1x 9.1x



EBITDA Margin 18.5% 18.9% 19.0% 18.6% 17.7%



TTM EBITDA Growth (YoY) -3.3% 1.7% -4.9% 4.5% 7.3%

TTM Earnings Growth (YoY) -9.9% -10.5% -2.2% 14.1% 18.5%

Current Ratio 1.6 1.7 1.7 1.6 1.6



Engineering & PLM 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 16.9x 15.0x 16.2x 16.4x 15.6x



EBITDA Margin 20.8% 21.4% 22.9% 22.4% 19.3%




TTM Earnings Growth (YoY) -3.3% -7.6% 2.8% 3.1% -0.9%

Current Ratio 1.7 1.7 1.7 1.9 1.9


Enterprise Value Growth (YoY) 2.0% 17.5% 12.9% 7.4% -8.3%

Enterprise Resource Planning 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 16.5x 16.8x 14.0x 13.0x 15.3x



EBITDA Margin 28.3% 28.3% 27.2% 27.1% 27.1%



TTM EBITDA Growth (YoY) -4.1% -13.3% -4.5% -2.7% -5.8%

TTM Earnings Growth (YoY) -1.4% -9.3% -7.4% 3.4% -6.6%

Current Ratio 1.5 1.6 1.7 1.8 1.6



Financial & Accounting 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 16.6x 16.5x 15.4x 16.3x 15.9x



EBITDA Margin 23.3% 22.3% 22.3% 22.6% 24.9%



TTM EBITDA Growth (YoY) 1.2% -5.0% 3.4% 2.9% 5.6%

TTM Earnings Growth (YoY) 16.4% 9.3% 2.5% -2.7% 1.1%

Current Ratio 1.2 1.3 1.3 1.2 1.2



Gaming 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 17.6x 16.3x 19.0x 15.8x 18.0x



EBITDA Margin 19.0% 13.0% 9.2% 9.1% 10.8%


TTM Revenue Growth (YoY) -2.2% 2.6% 6.0% 4.4% 8.4%


TTM Earnings Growth (YoY) -21.8% 122.1% 201.3% 111.3% 6.8%

Current Ratio 2.5 2.1 2.0 1.7 1.8


Enterprise Value Growth (YoY) 15.4% -2.8% 9.8% 47.1% 38.2%

Healthcare 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 16.4x 14.6x 15.4x 15.3x 14.8x



EBITDA Margin 12.1% 12.7% 12.4% 12.8% 12.5%



TTM EBITDA Growth (YoY) -1.1% -2.7% -5.6% 1.0% 11.3%


Current Ratio 2.2 2.1 2.0 2.0 2.0



IT Conglomerates 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 8.9x 8.9x 9.9x 10.2x 9.6x



EBITDA Margin 31.0% 30.0% 29.3% 29.3% 27.5%


TTM Revenue Growth (YoY) 2.5% -0.1% -1.1% -3.5% -4.3%


TTM Earnings Growth (YoY) -6.6% -10.8% -13.2% -9.2% -18.3%

Current Ratio 1.2 1.3 1.3 1.2 1.2


Enterprise Value Growth (YoY) 8.6% 3.0% -6.9% -8.0% -15.5%

Mobile Solutions/Content 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 17.5x 14.8x 15.5x 18.5x 25.4x



EBITDA Margin 1.7% 1.0% -3.7% 1.3% 1.3%



TTM EBITDA Growth (YoY) -7.3% -14.3% 3.0% -6.3% 6.4%


Current Ratio 3.9 3.8 3.6 3.6 3.3


Enterprise Value Growth (YoY) -36.3% -14.6% -31.0% -25.5% -28.7%

Networking & Network Perf Mgmt 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 14.0x 10.3x 8.6x 9.2x 9.5x



EBITDA Margin 17.7% 18.4% 19.5% 18.0% 12.7%

Net Income Margin -2.1% -0.4% 3.2% 2.8% 8.6%


TTM EBITDA Growth (YoY) 1.5% 10.8% 2.1% 8.2% -0.6%


Current Ratio 2.4 2.4 2.3 2.2 2.3



Security 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 16.8x 16.3x 14.2x 10.1x 12.3x



EBITDA Margin 4.8% 4.7% 4.7% 3.8% 3.3%



TTM EBITDA Growth (YoY) -4.7% -6.4% -3.4% 0.9% -1.4%

TTM Earnings Growth (YoY) 6.8% -0.4% 3.2% 5.0% 0.0%

Current Ratio 1.9 1.6 1.8 1.8 1.9




THE SEG SOFTWARE INDEX METRICS BY PRODUCT CATEGORY

67

Storage, Data Mgmt & Integration 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 8.2x 8.6x 9.2x 9.6x 9.5x



EBITDA Margin 16.0% 14.3% 12.1% 11.3% 10.7%




TTM Earnings Growth (YoY) -13.7% -6.1% 0.6% -6.5% -5.2%

Current Ratio 2.6 2.5 2.5 2.4 2.2



Systems Management 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 18.1x 15.9x 16.9x 15.5x 13.2x



EBITDA Margin 24.6% 25.1% 25.7% 24.7% 25.9%




TTM Earnings Growth (YoY) -12.6% -7.4% 3.7% -4.0% 11.6%

Current Ratio 1.5 1.4 1.4 1.4 1.3



Vertical - Finance 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 14.9x 15.1x 15.2x 15.6x 14.5x



EBITDA Margin 33.7% 34.4% 34.8% 32.7% 32.9%




TTM Earnings Growth (YoY) 10.7% 1.6% 9.2% -3.3% 1.3%

Current Ratio 1.5 1.4 1.7 1.9 1.6



Vertical - Other 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 35.2x 30.8x 30.6x 27.7x 19.3x



EBITDA Margin 11.9% 12.9% 13.9% 14.9% 16.4%



TTM EBITDA Growth (YoY) -1.5% 17.5% 17.4% 20.5% 49.8%


Current Ratio 1.5 1.7 1.6 1.7 1.0




THE SEG INTERNET INDEX COMPANIES – KEY METRICS

68

SEG Internet Index



1-800-FLOWERS.COM 0.7x 0.7x 0.5x 0.4x 0.5x 7.4x 9.3x 7.8x 6.2x 6.7x 45.6% 48.3% 51.4% 13.3% 13.3% 8.8% 7.2% 6.0% 6.8% 6.8%

58.com 22.1x 22.7x 19.2x 14.3x 10.8x 477.6x - - - - 81.8% 78.4% 99.7% 134.6% 169.8% 4.6% -15.5% -18.8% -33.0% -34.3%

8x8 3.7x 5.1x 4.8x 4.1x 4.2x 62.2x 96.3x 92.9x 122.9x 191.5x 28.2% 26.3% 25.6% 25.8% 26.4% 5.9% 5.3% 5.1% 3.4% 2.2%

Akamai Technologies 6.3x 5.3x 4.4x 4.3x 4.2x 18.0x 15.5x 13.4x 13.3x 13.5x 24.5% 22.5% 19.3% 15.6% 11.9% 34.8% 34.0% 33.1% 32.4% 31.5%

Alibaba 12.1x 16.3x 13.3x 14.1x 11.9x 29.4x 45.0x 40.7x 42.3x 35.0x 44.1% 45.1% 40.3% 35.7% 33.3% 41.0% 36.3% 32.7% 33.2% 34.1%

Amazon.com 2.8x 3.4x 2.8x 2.8x 2.5x 56.7x 64.0x 46.8x 39.5x 34.0x 19.5% 17.7% 17.2% 18.0% 20.2% 4.9% 5.3% 6.0% 7.0% 7.4%

Angie's List 0.9x 1.6x 1.5x 1.4x 1.4x - 128.4x 32.4x 24.1x 22.9x 28.2% 22.5% 17.0% 12.7% 9.2% -1.4% 1.3% 4.6% 5.9% 6.3%

Baidu.com 5.4x 7.5x 6.0x 6.0x 5.3x 15.7x 23.1x 19.7x 23.3x 22.7x 53.6% 47.4% 42.5% 38.6% 35.3% 34.2% 32.3% 30.2% 26.0% 23.6%

Bankrate 3.4x 2.7x 2.3x 1.6x 3.4x 11.6x 15.1x 12.9x 8.0x 11.7x 18.2% 13.5% 8.5% 4.1% 5.8% 29.5% 18.2% 17.6% 20.4% 29.1%

Baozun 0.4x 0.8x 0.5x 0.5x 0.4x - - - 37.1x 50.2x 4.1% - - 68.2% 64.0% -2.8% -2.2% -1.8% 1.4% 0.8%

Bitauto Holdings 2.4x 2.5x 1.4x 1.9x 1.2x 10.0x 13.6x 13.2x 49.4x - 70.8% 80.7% 89.3% 90.5% 63.1% 24.1% 18.7% 10.6% 3.8% -3.6%

BlueNile 0.7x 0.8x 0.5x 0.4x 0.5x 20.8x 23.8x 13.6x 11.8x 13.0x 5.2% 4.3% 6.2% 5.5% 1.4% 3.3% 3.4% 3.4% 3.5% 3.6%

Brightcove 1.1x 1.5x 1.3x 1.3x 1.2x - - - - 111.8x 13.8% 9.0% 6.9% 6.1% 7.8% -3.1% -2.4% -1.9% -0.8% 1.1%

BroadSoft 3.8x 4.1x 3.7x 4.5x 3.2x 44.9x 32.4x 42.2x 64.7x 29.3x 21.5% 25.1% 25.8% 25.7% 28.6% 8.4% 12.7% 8.7% 6.9% 10.9%

Carbonite 1.9x 1.7x 1.1x 1.1x 1.1x 52.5x - - - - 14.4% 13.1% 12.3% 11.7% 11.4% 3.7% -0.2% -1.4% -4.9% -5.7%

Care.com 0.9x 1.0x 0.9x 1.0x 1.0x - - - - - 42.9% 43.1% 35.5% 25.3% 25.3% -23.1% -19.2% -13.8% -7.3% -7.3%

ChangYou.com 1.0x 1.0x 0.9x 1.0x 0.9x 10.2x 4.9x 3.2x 2.6x 2.9x 2.4% 5.7% 9.7% 11.1% 0.8% 10.0% 20.9% 27.5% 36.0% 31.9%

Chegg 1.8x 1.7x 1.1x 1.0x 1.1x 23.5x 31.8x 19.3x 14.9x 124.8x 19.3% 17.2% 14.5% 6.8% -1.1% 7.8% 5.4% 5.5% 6.5% 0.9%

Cimpress 2.2x 2.3x 2.2x 2.3x 2.1x 15.1x 15.4x 16.6x 17.4x 16.0x 15.2% 19.8% 17.6% 15.6% 13.9% 14.6% 14.9% 13.6% 13.0% 13.1%

Coupons.com 2.5x 1.8x 2.4x 3.1x 2.3x - - - - - 32.1% 23.5% 17.6% 6.3% 7.0% -8.7% -6.0% -6.5% -10.0% -9.4%

Criteo SA 2.0x 2.4x 1.8x 1.8x 1.5x 24.2x 27.9x 22.5x 21.5x 17.3x 67.7% 70.3% 69.1% 64.2% 33.9% 8.2% 8.5% 8.2% 8.5% 8.6%

Ctrip 8.2x 15.4x 13.9x 14.7x 11.9x 2112.1x - - 730.5x 181.6x 36.4% 39.1% 41.4% 44.6% 48.3% 0.4% -2.6% -2.5% 2.0% 6.5%

DangDang 0.2x 0.2x 0.2x 0.2x 0.2x 11.2x 50.6x - - - 25.8% 25.4% 22.2% 21.4% 21.4% 1.4% 0.4% -0.2% -0.4% -0.4%

DemandMedia 0.2x 0.4x 0.4x 0.5x 0.5x 2.8x 15.8x - - - -17.7% 4.4% -22.5% -25.6% -26.9% 8.3% 2.7% -4.2% -13.1% -13.3%

eBay 3.1x 2.0x 1.6x 1.6x 3.4x 8.7x 7.1x 5.9x 5.8x 9.8x 6.5% 10.9% 39.4% 61.0% -2.3% 35.9% 28.3% 27.8% 27.6% 34.3%

eHealth 1.0x 0.8x 0.6x 0.6x 0.6x 237.0x 23.5x 19.6x 21.0x 21.1x 0.3% 1.7% -1.3% -2.4% 5.5% 0.4% 3.6% 3.2% 2.7% 3.0%

Everyday Health 1.9x 1.6x 1.1x 1.2x 1.0x 16.8x 18.1x 12.4x 12.7x 9.6x 18.3% 15.4% 20.5% 22.4% 25.9% 11.1% 8.7% 9.3% 9.3% 10.4%

Expedia 2.9x 3.0x 3.0x 2.9x 2.8x 22.2x 24.3x 26.2x 26.0x 25.3x 20.8% 19.7% 16.3% 13.9% 15.8% 13.1% 12.4% 11.6% 11.1% 11.0%

Facebook 19.4x 20.7x 20.0x 19.8x 16.3x 39.1x 44.5x 45.8x 47.4x 35.5x 58.4% 51.5% 46.2% 42.3% 43.8% 49.8% 46.6% 43.6% 41.8% 46.0%

GoDaddy 1.9x 2.1x 2.0x 2.0x 1.9x 31.1x 31.3x 34.6x 30.0x 22.8x 22.7% 21.5% 19.9% 17.6% 15.9% 6.2% 6.7% 5.7% 6.7% 8.1%

Google 5.6x 6.6x 6.2x 6.3x 5.8x 17.2x 20.5x 19.2x 19.4x 17.8x 18.9% 17.0% 14.4% 12.8% 13.6% 32.5% 32.3% 32.5% 32.5% 32.6%

Groupon 0.3x 0.4x 0.5x 0.5x 0.5x 10.0x 11.5x 15.2x 19.5x 22.5x 18.2% 19.0% 15.2% 10.5% 2.5% 3.4% 3.2% 3.0% 2.7% 2.1%

GrubHub 7.0x 6.6x 5.1x 5.1x 4.4x 26.6x 24.0x 18.5x 19.4x 17.9x 85.1% 66.8% 53.3% 46.0% 42.5% 26.2% 27.4% 27.8% 26.5% 24.7%

Harmonic 0.9x 0.9x 0.5x 0.5x 0.5x 21.7x 19.9x 8.6x 12.0x 23.6x -6.1% -8.3% -8.2% -10.7% -13.0% 4.3% 4.7% 5.4% 3.8% 2.2%

Interactive Intelligence 1.7x 1.9x 1.6x 2.0x 1.5x - 752.2x 62.1x 82.4x 159.6x 7.2% 8.3% 12.1% 10.7% 14.5% -0.2% 0.3% 2.5% 2.4% 0.9%

InterActiveCorp 1.9x 1.8x 1.5x 1.4x 1.4x 12.4x 13.0x 11.5x 11.0x 12.0x 2.9% 4.0% 6.0% 7.0% 3.9% 15.6% 14.1% 12.7% 12.8% 11.9%

LendingClub - - - - - - - - - - 115.4% 110.5% 104.5% 105.4% 103.6% - - - - -



69

SEG Internet Index



LifeLock 1.1x 2.0x 1.6x 1.6x 1.4x 13.6x 31.7x 23.0x 22.0x 18.4x 28.8% 27.3% 26.3% 25.0% 23.4% 7.8% 6.4% 6.8% 7.3% 7.7%

Limelight Networks 0.7x 0.7x 0.4x 0.6x 0.4x - - - - - -6.4% -3.2% -0.9% 3.2% 5.3% -4.0% -4.4% -5.0% -5.9% -2.8%

LinkedIn 10.3x 11.9x 5.3x 4.6x 4.5x 98.0x 118.2x 62.4x 56.1x 54.7x 45.2% 42.1% 38.6% 37.1% 34.8% 10.5% 10.1% 8.5% 8.3% 8.3%

Liquidity Services 0.2x 0.3x 0.2x 0.2x 0.2x 2.5x 3.4x 2.5x 3.5x - -1.3% -6.0% -13.8% -19.9% -32.3% 9.9% 8.7% 6.7% 5.1% -0.2%

Mail.ru Group 7.2x 7.6x 6.9x 7.9x 8.4x 14.8x 16.5x 15.8x 19.2x 21.9x 19.5% 19.7% 19.9% 19.0% 18.1% 48.6% 46.2% 44.0% 41.1% 38.3%

MakeMyTrip 1.6x 1.9x 2.2x 2.3x 2.2x - - - - - 16.9% 17.3% 9.3% 5.0% 5.1% -2.8% -3.4% -4.4% -6.2% -10.6%

Marchex 0.4x 0.4x 0.3x 0.5x 0.4x 17.1x 8.6x 8.0x 11.4x 28.5x 17.4% 2.7% -9.5% -18.5% -17.6% 2.2% 4.7% 4.2% 4.4% 1.3%

Match Group - 3.7x 3.9x 3.9x 3.7x - 13.3x 15.4x 14.8x 15.2x 10.6% - - - 14.9% 28.4% 27.9% 25.5% 26.3% 24.0%

MaxPoint Interactive 0.7x 0.6x 0.2x 0.3x 0.1x - - - - - 61.1% 70.2% 60.4% 49.5% 31.6% -8.5% -9.7% -9.9% -9.6% -11.9%

Mecox Lane 0.3x 0.4x 0.5x 0.6x 0.6x 2.0x 3.2x 5.0x 2.4x 2.3x 16.4% 61.3% -27.1% 46.5% 46.5% 17.1% 13.2% 10.6% 26.5% 26.5%

Mercadolibre 7.1x 8.5x 7.2x 8.1x 6.8x 21.2x 25.4x 23.4x 27.3x 24.8x 17.8% 21.4% 21.2% 19.4% 17.1% 33.6% 33.3% 30.9% 29.8% 27.4%

Mitel Networks 1.2x 1.4x 1.3x 1.4x 1.2x 9.1x 10.6x 10.0x 10.8x 9.9x 106.0% 75.1% 41.5% 22.2% 4.9% 13.6% 13.1% 12.9% 12.5% 12.4%

MOL Global 0.6x 0.6x 0.5x 0.6x 0.6x 53.9x - - - - 18.2% 16.5% 11.2% 23.9% 23.9% 1.2% -13.4% -45.7% -43.0% -43.0%

Monster Worldwide 1.0x 1.0x 0.4x 0.4x 0.5x 13.4x 10.1x 4.0x 3.3x 3.5x -5.0% -4.8% -3.4% -2.9% -8.1% 7.5% 9.6% 11.2% 13.1% 14.1%

NCSoft 3.3x 3.7x 4.1x 5.4x 4.4x 8.9x 10.0x 11.1x 15.9x 13.5x 10.8% 13.2% 10.5% 2.8% -0.1% 37.3% 36.9% 37.0% 34.0% 32.5%

Netease 6.4x 7.7x 6.7x 5.3x 4.6x 15.1x 19.5x 18.5x 15.5x 14.0x 27.4% 38.2% 49.4% 72.1% 94.7% 42.2% 39.3% 36.4% 34.3% 32.7%

Netflix 8.1x 8.4x 6.9x 7.0x 6.2x 98.0x 105.7x 103.0x 120.3x 114.0x 25.8% 25.7% 24.9% 24.0% 23.2% 8.3% 7.9% 6.7% 5.8% 5.4%

Overstock.com 0.2x 0.2x 0.1x 0.1x 0.1x 13.1x 11.3x 8.5x 10.0x 18.2x 14.8% 16.6% 17.3% 15.7% 10.7% 1.7% 1.5% 1.5% 1.2% 0.7%

Pandora 4.4x 2.6x 1.9x 1.6x 1.7x - - - - - 40.6% 30.4% 28.0% 26.0% 26.4% -1.7% -3.6% -3.7% -3.4% -5.8%

PetMed Express 1.2x 1.2x 1.2x 1.3x 1.2x 9.1x 9.4x 9.1x 8.9x 8.8x -3.3% -1.7% -1.4% -0.5% 0.5% 12.9% 13.1% 13.7% 14.2% 14.1%

Polycom 0.8x 1.0x 0.8x 0.9x 0.8x 6.3x 8.3x 6.2x 7.0x 6.5x -1.7% -0.8% -1.0% -3.3% -5.8% 11.9% 12.3% 12.5% 12.7% 12.8%

Priceline 7.8x 7.8x 7.4x 7.4x 7.0x 19.9x 20.5x 19.8x 19.4x 18.5x 24.3% 21.1% 16.1% 11.3% 9.3% 38.9% 38.1% 37.1% 37.9% 38.0%

Qihoo 4.8x 5.6x 5.9x 6.2x 5.9x 19.3x 21.8x 21.8x 23.0x 21.8x 107.2% 82.7% 64.2% 64.2% 64.2% 24.8% 25.9% 27.0% 27.0% 27.0%

QuinStreet 0.7x 0.7x 0.4x 0.4x 0.4x - - - - - -7.6% -4.1% -0.1% 3.8% 3.0% -0.6% -1.4% -1.0% -0.8% -1.4%

ReachLocal 0.1x 0.1x 0.1x 0.2x 0.2x - - - - - -7.6% -13.0% -17.3% -19.3% -19.4% -6.8% -8.3% -8.1% -7.1% -4.5%

Renren 9.9x 12.9x 14.3x 17.9x 16.6x - - - - - -43.9% -43.5% -45.0% -31.6% -31.6% -108.3% -125.9% -136.4% -138.8% -138.8%

Rocket Fuel 0.5x 0.4x 0.3x 0.3x 0.3x - - - - - 69.8% 58.5% 47.9% 34.1% 13.0% -9.2% -12.4% -11.3% -11.3% -7.3%

Rovi 3.3x 3.3x 4.7x 4.4x 4.7x 9.5x 10.1x 14.8x 14.4x 14.8x 0.9% -2.4% -5.5% -8.8% -3.0% 34.3% 33.0% 31.8% 30.4% 31.8%

SeaChange International 1.2x 1.4x 1.2x 1.1x 1.2x - - - - - -21.1% -15.4% -12.0% -7.3% -7.3% -12.1% -12.1% -11.3% -9.2% -16.4%

ShoreTel 1.1x 1.5x 1.1x 1.0x 1.1x 16.6x 23.2x 14.5x 12.8x 12.5x 5.7% 5.2% 6.1% 4.2% 2.4% 6.7% 6.3% 7.4% 7.9% 8.6%

Shutterfly 1.6x 1.9x 1.7x 1.7x 1.6x 16.4x 20.6x 18.6x 17.9x 14.5x 17.6% 17.5% 16.8% 17.2% 15.0% 9.8% 9.2% 9.2% 9.3% 10.8%

Shutterstock 2.5x 2.6x 2.4x 2.8x 2.1x 16.8x 19.5x 17.7x 22.2x 16.1x 39.3% 37.2% 34.3% 31.4% 29.6% 14.7% 13.4% 13.3% 12.4% 13.0%

SINA 2.0x 2.8x 2.8x 2.7x 2.5x 81.0x 438.8x 195.9x 56.4x 38.7x 15.5% 10.0% 9.2% 10.8% 14.6% 2.5% 0.6% 1.4% 4.7% 6.5%

Sohu.com 0.8x 0.8x 0.7x 0.7x 0.7x 24.3x 9.6x 5.3x 3.6x 3.6x 19.5% 20.9% 22.2% 23.2% 15.8% 3.3% 8.7% 13.0% 18.6% 18.6%

Sonus Networks 0.7x 0.9x 1.0x 1.0x 1.0x - - - - - -3.0% -12.3% -15.6% -15.6% -16.0% -4.6% -7.5% -6.6% -6.6% -6.0%

Stamps.com 7.8x 9.6x 9.2x 9.2x 7.4x 29.9x 37.5x 37.4x 36.3x 24.7x 15.2% 22.5% 31.2% 34.9% 45.3% 25.9% 25.6% 24.5% 25.3% 30.0%

Synacor 0.1x 0.3x 0.4x 0.3x 0.4x - 68.5x 13.1x 5.0x 9.6x -4.7% 0.1% 3.0% 3.5% 3.4% -0.4% 0.5% 2.9% 6.3% 4.0%



70

SEG Internet Index



Tencent Holdings 11.9x 13.2x 12.0x 13.0x 10.6x 30.6x 32.3x 28.7x 31.3x 25.4x 30.6% 27.0% 22.6% 24.7% 30.3% 38.9% 41.0% 42.0% 41.5% 41.7%

The Rubicon Project 4.2x 4.3x 3.6x 3.9x 2.4x - - - - 31.3x 49.5% 54.5% 65.1% 75.9% 98.3% -8.1% -7.2% -6.0% -3.6% 7.7%

TheStreet.com 0.4x 0.4x 0.2x 0.2x 0.2x 30.0x 644.8x 17.7x 13.9x 7.3x 12.1% 13.0% 14.6% 16.0% 10.8% 1.4% 0.1% 1.1% 1.5% 2.7%

Travelzoo 0.4x 0.6x 0.6x 0.6x 0.6x 5.1x 6.8x 9.4x 8.1x 8.8x -10.2% -11.4% -14.0% -15.1% -7.5% 8.5% 9.2% 6.6% 7.7% 6.8%

Tree.Com 5.6x 6.1x 4.2x 4.4x 3.2x 82.8x 71.8x 44.9x 42.4x 27.9x 20.2% 17.9% 22.6% 37.4% 51.9% 6.8% 8.6% 9.3% 10.4% 11.4%

Tremor 0.2x 0.2x 0.2x 0.2x 0.2x - - - - - 21.0% 16.4% 11.6% 15.5% 9.0% -10.4% -9.7% -9.0% -8.4% -6.3%

TripAdvisor 7.1x 8.7x 6.5x 6.0x 6.1x 23.5x 31.0x 25.6x 24.1x 32.5x 31.9% 33.3% 31.5% 25.6% 19.7% 30.1% 28.1% 25.2% 24.9% 18.8%

TubeMogul 2.5x 2.8x 2.4x 2.6x 1.9x - - - - - 99.7% 75.9% 62.4% 58.0% 58.2% -0.9% -5.0% -6.5% -7.1% -5.1%

Tucows 1.7x 1.7x 1.4x 1.4x 1.3x 20.4x 15.2x 11.7x 11.9x 10.7x 13.6% 14.4% 16.0% 17.4% 17.1% 8.3% 11.0% 11.7% 11.7% 12.0%

Twitter 10.4x 9.9x 5.6x 5.0x 4.5x - - - - - 111.0% 98.3% 82.6% 70.3% 58.1% -24.7% -21.1% -16.1% -10.5% -7.9%

VeriSign 8.0x 9.0x 8.7x 9.4x 8.5x 12.9x 14.5x 14.0x 15.0x 13.5x 4.7% 4.3% 4.4% 4.3% 4.9% 62.2% 62.0% 61.8% 62.6% 63.0%

WebMD Health 2.8x 3.0x 3.5x 3.9x 3.3x 14.5x 14.6x 16.9x 18.6x 14.1x 12.6% 10.0% 8.4% 7.6% 9.6% 19.5% 20.4% 20.4% 21.2% 23.0%

Wix.com 4.2x 5.1x 4.0x 3.8x 3.4x - - - - - 76.3% 67.9% 57.8% 50.3% 43.5% -37.4% -35.0% -30.0% -25.2% -21.4%

Wowo Limited 26.4x 23.4x 19.3x 10.2x 19.3x - - - - - -17.0% -2.0% -2.0% -2.0% -2.0% -139.0% -121.9% -148.2% -148.2% -148.2%

XO Group 1.8x 2.2x 2.0x 2.3x 2.0x 15.7x 17.3x 15.3x 17.6x 14.3x 7.4% 5.8% 3.2% 1.0% -1.4% 11.7% 12.9% 13.2% 13.0% 14.2%

Xunlei 0.1x 0.3x - 0.2x - 0.8x 1.7x - 1.3x - 2.8% 6.7% -5.8% -3.4% -27.8% 17.7% 15.4% 16.8% 18.1% 25.2%

Yahoo! 4.9x 5.7x 5.0x 6.0x 4.9x 33.2x 44.8x 44.9x 62.2x 73.7x -1.3% 0.8% 5.4% 6.8% 7.6% 14.8% 12.7% 11.1% 9.6% 6.7%

Yandex 3.9x 5.2x 4.2x 5.4x 4.9x 10.5x 14.4x 13.0x 17.7x 17.5x 28.5% 23.2% 19.0% 17.0% 17.8% 37.5% 36.4% 32.5% 30.7% 28.2%

Yelp 3.2x 3.8x 2.6x 2.2x 2.2x 48.8x 55.6x 41.7x 69.1x 14853.8x 62.0% 59.4% 56.5% 49.5% 45.6% 6.5% 6.8% 6.1% 3.2% 0.0%

Youku 3.7x 5.8x 5.3x 4.8x 4.8x 30.4x 63.8x 65.0x 63.5x 63.1x 37.6% 37.9% 43.8% 51.6% 51.6% 12.2% 9.1% 8.2% 7.6% 7.6%

YuMe 0.2x 0.3x 0.3x 0.5x 0.4x - - - - - 17.6% 11.6% 7.6% 1.0% -2.5% -2.6% -2.7% -4.7% -6.5% -6.8%

YY 4.8x 4.6x 4.3x 4.2x 3.6x 15.3x 15.9x 15.8x 17.9x 16.8x 101.7% 91.4% 79.5% 65.6% 60.3% 31.5% 29.0% 27.4% 23.2% 21.4%

Zillow 13.8x 11.5x 7.7x 6.4x 5.8x - - - - - 65.0% 72.1% 86.9% 94.5% 97.8% -0.8% -1.3% -2.1% -2.8% -0.7%

Zynga 1.5x 1.8x 1.3x 1.4x 1.2x - - - - - -20.9% -9.3% 7.5% 14.4% 10.8% -18.7% -11.8% -6.9% -2.1% -6.4%


THE SEG INTERNET INDEX METRICS BY PRODUCT CATEGORY

71

Ad Tech 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 23.2x 19.9x 20.0x 19.4x 20.2x



EBITDA Margin 0.7% 1.0% -0.2% 0.4% 4.0%



TTM EBITDA Growth (YoY) -40.1% -22.6% -11.1% 0.9% -0.1%


Current Ratio 2.2 3.1 2.5 2.4 2.1



Commerce 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 15.3x 13.8x 14.8x 14.9x 22.5x



EBITDA Margin 7.8% 5.4% 6.0% 5.1% 2.1%



TTM EBITDA Growth (YoY) 2.0% 1.9% -1.7% 0.4% -6.7%

TTM Earnings Growth (YoY) -8.1% -7.2% -4.8% 5.0% 18.0%

Current Ratio 1.6 1.5 1.6 1.7 1.7



Content & Media 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 19.1x 30.0x 19.5x 18.6x 16.1x



EBITDA Margin 11.9% 10.9% 9.7% 8.6% 7.1%

Net Income Margin 5.4% 3.8% 2.6% 2.6% -0.2%



TTM Earnings Growth (YoY) 91.3% 48.5% 64.7% -29.8% -32.8%

Current Ratio 3.3 2.7 2.6 2.8 2.7


Enterprise Value Growth (YoY) -31.7% -3.4% -18.6% 7.2% -17.4%

Gaming 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 20.2x 11.1x 13.6x 15.5x 13.5x



EBITDA Margin 23.6% 28.9% 31.9% 34.2% 32.2%



TTM EBITDA Growth (YoY) -15.8% 28.9% 39.9% 55.9% 53.1%


Current Ratio 3.1 3.1 3.2 3.3 2.4


Enterprise Value Growth (YoY) 2.8% 25.0% -0.8% 10.3% -9.6%

Infrastructure 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 20.9x 14.2x 13.4x 13.3x 14.1x



EBITDA Margin 6.2% 6.3% 5.7% 6.7% 8.1%




TTM Earnings Growth (YoY) -3.6% -4.2% 45.0% 45.2% 5.6%

Current Ratio 2.2 2.4 2.4 2.4 2.5


Enterprise Value Growth (YoY) 0.6% -3.7% 5.2% 13.8% -8.1%

Search 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 18.0x 16.2x 17.4x 18.5x 17.6x



EBITDA Margin 33.4% 32.3% 31.3% 28.3% 25.9%





Current Ratio 3.4 3.5 4.1 3.7 3.8


Enterprise Value Growth (YoY) -8.3% 5.1% -9.1% -6.6% -16.7%

Services 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 24.7x 19.1x 18.6x 19.4x 17.9x



EBITDA Margin 6.8% 6.4% 6.8% 7.3% 7.7%





Current Ratio 2.7 2.6 2.8 2.4 2.1


Enterprise Value Growth (YoY) -22.3% 0.4% -21.7% 6.1% -22.7%

Social 1Q15 2Q15 3Q15 4Q15 1Q16


EV/EBITDA 31.2x 29.3x 27.8x 33.3x 28.7x



EBITDA Margin 19.5% 19.0% 17.0% 15.7% 14.8%





Current Ratio 7.2 6.5 4.9 3.5 3.3


Enterprise Value Growth (YoY) n/a n/a n/a 13.0% 3.8%

Travel 1Q15 2Q15 3Q15 4Q15 1Q16

EV/Revenue 5.6x 5.0x 4.6x 4.4x 4.4xEV/EBITDA 23.8x 22.2x 22.6x 24.1x 25.3xEV/Earnings 44.9x 40.5x 28.3x 26.7x 25.4xGross Profit Margin 83.5% 83.6% 83.3% 83.4% 83.5%EBITDA Margin 10.8% 10.8% 9.1% 9.4% 8.9%Net Income Margin 7.7% 8.8% 9.1% 14.5% 12.4%TTM Revenue Growth (YoY) 22.5% 20.4% 16.2% 12.6% 12.5%TTM EBITDA Growth (YoY) 8.4% 6.9% -4.1% -4.5% -14.1%TTM Earnings Growth (YoY) 19.1% 13.6% 5.6% 10.0% 5.4%Current Ratio 1.6 1.9 1.8 1.5 1.4Cash as Percent of Market Cap 13.0% 9.7% 10.1% 15.2% 11.0%Enterprise Value Growth (YoY) 2.4% -2.6% -7.4% 13.2% 1.1%


Select Public Sellers

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Date Buyers SellerPurchase

Price (mm)Enterprise

Value (mm) EV/ RevEV/

EBITDATTM Revenue

Growth

03/14/16 Visma AS Fortnox AB (NGM:FNOX MTF) $168.6 $163.1 9.4x 46.1x 38.1%

02/15/16 Insight Venture Partners Diligent Corporation (NZSE:DIL) $504.5 $434.3 4.4x 26.2x 19.6%

02/18/16 Vivendi SA (ENXTPA:VIV) GameLoft S.E. (ENXTPA:GFT) $467.2 $627.4 2.4x 82.2x 12.7%

02/10/16 Golden Brick Silk Road Fund Management Opera Software ASA (OB:OPERA) $1,365.3 $1,267.6 2.1x 13.2x 28.1%


Select Mega Deals

73

Date Buyer SellerPurchase Price

(mm)Enterprise Value

(mm) EV/ Rev EV/ EBITDATTM Rev Growth

02/18/16 IBM Watson Health Truven Holding Corp. $3,581.0 $3,566.6 5.8x 34.9x 12.2%

04/01/16 Silver Lake Ancestry - $2,600.0 3.8x 10.2x -

02/03/16 Cisco Systems, Inc. (NasdaqGS:CSCO) Jasper Technologies, Inc. $1,400.0 $1,400.0 - - -

02/10/16 Golden Brick Silk Road Fund Management Opera Software ASA (OB:OPERA) $1,365.3 $1,267.6 2.1x 13.2x 28.1%

01/25/16 Siemens Aktiengesellschaft (DB:SIE) CD-adapco Group, Inc. $970.0 $970.0 4.9x - -

03/23/16 Allscripts Healthcare (NasdaqGS:MDRX) Netsmart Technologies Inc. $950.0 $950.0 - - -

01/11/16 IHS Global Inc. Oil Price Information Service, LLC $650.0 $650.0 - - -

02/18/16 Vivendi SA (ENXTPA:VIV) GameLoft S.E. (ENXTPA:GFT) $467.2 $627.4 2.4x 82.2x 12.7%

03/22/16 Micro Focus International plc (LSE:MCRO) Serena Software, Inc. $540.0 $540.0 3.3x 6.8x -

02/18/16 GTCR, LLC Lytx, Inc. $500.0 $500.0 - - -


Most Active Buyers

74

Buyer Seller

Enterprise

Value (mm)

EV/

Rev

EV/

EBITDA

Dentsu Aegis Network Ltd. Achtung BV

Barnes, Catmur & Friends Dentasu

Darwin Marketing Ltd.

Flock Advertising Mexico S.A.P.I. DE C.V.

Grip Limited - - -

NVH Participacoes S.A - - -

International Business Machines Corporation (NYSE:IBM) IRIS Analytics GmbH

Optevia LTD.

Resilient, an IBM Company

Resource Ventrues, Ltd.

Ustream, Inc.

InVisionApp Inc. Macaw LLC

Silver Flows

Waybury, LLC

Callstream Ltd - - -

Mailout Interactive Inc. - - -

Yotta280, Inc. - - -

Microsoft Corporation (NasdaqGS:MSFT) Event Zero Pty Ltd

MinecraftEdu

TeacherGaming LLC

TouchType Limited

Xamarin Inc. - - -

Zikera Inc., Groove - - -

Open Systems Technologies, Inc. Blaschko Computers, Inc -

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-SouthWare Innocations, Inc. - - -

Visualhero Design Inc. - - -

Webedia SAS 3D Juegos Publicaciones On Line Media S.L. - - -

Flimmer GmbH - - -

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