3Q13 Software Industry Financial Report

The Software Industry

Financial Report

The Software Industry

Financial Report

SOFTWARE INDUSTRY FINANCIAL REPORT CONTENTSAbout Software Equity Group

Leaders in Software M&A 4Extensive Global Reach 5

Software Industry MacroeconomicsGlobal GDP 8Global GDP 8U.S. GDP and Unemployment 9Global IT Spending 10E-Commerce and Digital Advertising Spend 11SEG Indices vs. Benchmark Indices 12

Public Software Financial and Valuation PerformancePublic Software Financial and Valuation PerformanceThe SEG Software Index 14The SEG Software Index: Financial Performance 15-17The SEG Software Index: Market Multiples 18-19The SEG Software Index by Product Category 20The SEG Software Index by Product Category: Financial Performance 21The SEG Software Index by Product Category: Financial Performance 21The SEG Software Index by Product Category: Market Multiples 22

Public SaaS Company Financial and Valuation PerformanceThe SEG SaaS Index 24The SEG SaaS Index Detail 25The SEG SaaS Index: Financial Performance 26-28The SEG SaaS Index: Financial Performance 26 28The SEG SaaS Index: Market Multiples 29-30The SEG SaaS Index by Product Category 31The SEG SaaS Index by Product Category: Financial Performance 32The SEG SaaS Index by Product Category: Market Multiples 33

Public Internet Company Financial and Valuation PerformancePublic Internet Company Financial and Valuation PerformanceThe SEG Internet Index 35The SEG Internet Index: Financial Performance 36-38The SEG Internet Index: Market Multiples 39-40The SEG Internet Index by Product Category 41The SEG Internet Index by Product Category: Financial Performance 42

1 Q3 2013 Software Industry Financial ReportCopyright © 2013 by Software Equity Group, LLC

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The SEG Internet Index by Product Category: Financial Performance 42The SEG Internet Index by Product Category: Market Multiples 43

SOFTWARE INDUSTRY FINANCIAL REPORT CONTENTSSoftware Industry M&A Market Update

Software/SaaS M&A Deal Volume and Spending 45Software M&A Exit Multiples 46Software M&A by Ownership Structure and Size 47Software M&A by Vertical and Horizontal Markets 48Software M&A by Vertical and Horizontal Markets 48Software M&A by Product Category 49-50SaaS M&A Deal Volume and Exit Multiples 51SaaS M&A by Product Category 52SaaS M&A: 3Q13 Transactions 53-55Internet M&A: Deal Volume and Exit Multiples 56-57Internet M&A: Deal Volume and Exit Multiples 56 57

AppendixThe SEG Software Index Companies 58-61The SEG SaaS Index Companies 62The SEG Internet Index Companies 63-65The SEG Software Index by Key Metrics 66-69The SEG Software Index by Key Metrics 66 69The SEG SaaS Index by Key Metrics 70The SEG Internet Index by Key Metrics 71-73The SEG Software Index Metrics by Product Category 74-75The SEG SaaS Index Metrics by Product Category 76The SEG Internet Index Metrics by Product Category 77The SEG Internet Index Metrics by Product Category 773Q13 Public Sellers 783Q13 Software Mega Deals (>$500M) 793Q13 Most Active Buyers 80


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ABOUT SOFTWARE EQUITY GROUP


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• Industry leading boutique investment bank founded in

LEADERS IN SOFTWARE M&AIndustry leading boutique investment bank, founded in 1992, representing public and private software and internet companies seeking:

• Strategic exit• Growth capital

We Do Deals.

Growth capital• Buyout • Inorganic growth via acquisition• Buy and sell-side mentoring• Fairness opinions and valuationsFairness opinions and valuations

• 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

th 2 000 i t d bli i th h t USthan 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


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EXTENSIVE GLOBAL REACH

Current Sell-side Representation

• SEG currently represents software companies in the United States, Canada, France,

Recent Sell-side Representation

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 Research Distribution

• SEG’s Quarterly and Annual Software Industry Equity Reports and Monthly Flash Reports are q y p y pdistributed to an opt-in list of 50,000 public software company CEOs, software entrepreneurs, private equity managing directors, VCs, high tech corporate lawyers, public accountants, etc. in 76 countries.


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p ,

Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has guided and

ABOUT SOFTWARE EQUITY GROUPq y p y g gy , g

advised companies on five continents, including privately-held software and technology companies in the United States, Canada, Europe, Asia Pacific, Africa and Israel. We have represented public companies listed on the NASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity Group also advises several of the world's leading private equity firms. We are ranked among the top ten investment banks worldwide for application software mergers and acquisitions.

Our value proposition is unique and compelling We are skilled and accomplished investment bankers with extraordinary software internet and technologyOur value proposition is unique and compelling. We are skilled and accomplished investment bankers with extraordinary software, internet and technology domain expertise. Our industry knowledge and experience span virtually every software product category, technology, market and delivery model, including Software-as-a-Service (Saas), software on-demand and perpetual license. We have profound understanding of software company finances, operations and valuation. We monitor and analyze every publicly disclosed software M&A transaction, as well as the market, economy and technology trends that impact these deals. We're formidable negotiators and savvy dealmakers who facilitate strategic combinations that enhance shareholder value.

P h t i t t th l ti hi ' b ilt d th i d t t ti j S ft E it G i k d t d b bli lPerhaps most important are the relationships we've built and the industry reputation we enjoy. Software Equity Group is known and respected by publicly traded and privately owned software and technology companies worldwide, and we speak with them often. Our Quarterly and Annual Software Industry Equity Reports are read and relied upon by more than thousands of industry executives, entrepreneurs and equity investors in sixty-one countries, and we have been quoted widely in such leading publications as The Wall Street Journal, Barrons, Information Week, The Daily Deal, The Street.com, U.S. News & World Report, Reuters, Mergers & Acquisitions, USA Today, Arizona Republic, Detroit Free Press, Entrepreneur Magazine, Softletter, Software Success, Software CEO Online and Software Business Magazine. g

To keep your finger on the pulse of the software equity markets, subscribe to our Annual and Quarterly Research Reports.

Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. For a confidential consultation without obligation, [email protected] , 2800-509) 858Beible, Director, Business Development (Kris please contact

CONTACT INFORMATION:

Software Equity Group, L.L.C.12220 El Camino Real, Suite 320San Diego, CA 92130www softwareequity comwww.softwareequity.comp: (858) 509-2800

The information contained in this Report is obtained from sources we believe to be reliable, but no representation or guarantee is made about the accuracy or completeness of such information, or the opinions expressed herein. Nothing in this Report is intended to be a recommendation of a specific security or company or intended to constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any security. Software Equity Group LLC may have an interest in one or more of the securities or companies discussed herein. Financial data provided by Capital IQ.


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This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C.Software Equity Group registers each Report with the U.S. Copyright Office and vigorously enforces its intellectual property rights.

SOFTWARE INDUSTRY MACROECONOMICS


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GLOBAL GDP

• According to the Economist Global GDP growth slowed in 2Q13 (the latest data available) retreating to 2 1% from 3 1% in• According to the Economist, Global GDP growth slowed in 2Q13 (the latest data available), retreating to 2.1% from 3.1% in 2Q12.

• The global economy was constrained by the Europe’s continuing recession and slowing GDP growth in China, which is where a major experiment is underway to shift its economy from rural to urban based and consumer driven.

• Other key emerging markets struggle with social unrest from high unemployment and lackluster growth.Other key emerging markets struggle with social unrest from high unemployment and lackluster growth.

• For the year, PIMCO forecasts Global GDP to grow 2.0% - 2.5%, up slightly from previous forecasts due to strengthened economies in the U.S. and Japan, which are hoped to offset Europe’s economic malaise and slowed growth among the larger emerging nations.


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Sources: Worldbank, The Economist and PIMCO

U.S. GDP AND UNEMPLOYMENT

3 6%5.0%

4 1%

6%

8%

10%

GDP % Growth Unemployment Rate

3.6%

2.1%

0 7%

1.5%2.2%

3.7%

1.7%2.6%

3.1%

0.4%

2.5%

1.3%

4.1%

2.0%1.3%

3.1%

0.4%

2.5%1.8%

2.2%

0%

2%

4%

-0.7%

-2.7%

-5.4%6 4%

-0.7%

-6%

-4%

-2%

• According to August’s Federal Reserve survey of 42 economists GDP growth in 3Q13 is predicted to be 2 2% For the year

-6.4%-8%

3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13

• According to August s Federal Reserve survey of 42 economists, GDP growth in 3Q13 is predicted to be 2.2%. For the year, expectations are the U.S. economy will grow 2.0%.

• PIMCO, however, is a bit more conservative. In its 3Q13 market perspectives, PIMCO forecast U.S. GDP growth of 1.5% - 2.0% for the year, citing continuing strength in the housing market.


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GLOBAL IT SPENDING

9.0%

6.0%

8.0%

6.0%

4.1%5.0%

10.0%

2.0% 2.0%

0.0%2007 2008 2009 2010 2011 2012 2013 2014 (F)

in IT

Spe

nding

-10 0%‐10.0%

‐5.0%

YoY Ch

ange

• In July analysts lowered their earlier forecast of 3 9% increase in Global IT spending to a mere 2% increase

10.0%

‐15.0%

• In July, analysts lowered their earlier forecast of 3.9% increase in Global IT spending to a mere 2% increase.

• Estimates for 2014 are more promising, with an array of economists forecasting 4.1% growth in Global IT spending.

• According to Forrester, software is garnering the largest share of Global IT dollars, $542M in 2013. Software spending is expected to grow 3.3% in 2013, and 6.2% in 2014.

S S ft di i j t d t i 25% i 2013• SaaS software spending is projected to increase 25% in 2013.

• Especially hot IT Software spending priorities include: collaboration (13% YoY growth), business intelligence (11%), ePurchasing(10%), HR management (9%), and healthcare systems (8%).


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Sources: IT spending numbers shown in charts are a blended average of Goldman Sachs, IDC, Forrester, Gartner forecasts

E-COMMERCE AND DIGITAL ADVERTISING SPENDilli

ons)

llions

)

Digital Advertising RevenueE-Commerce Spending

20%60,000

25%

30%12,000

oY %

Cha

nge

rce

Spen

ding

($ M

oY %

Cha

nge

ng R

even

ue ($

Mi l

5%

10%

15%

20 000

30,000

40,000

50,000

5%

10%

15%

20%

25%

6,000

8,000

10,000

Yo

E-C

omm

er Yo

Inte

rnet

Adv

ertis

i

‐5%

0%

0

10,000

20,000

‐10%

‐5%

0%

5%

0

2,000

4,000

• U.S. e-commerce retail sales totaled $49.8B in 2Q13 (the latest data available), just shy of a third consecutive $50B+ quarter.

Th Q2 t t l f li t il di t d f 9 6% f ll

• U.S. digital advertising revenues totaled $10.3B in 2Q13 (the latest quarter data was available), which equates to an 18% YoY growth increase For the first half of 2013 Internet• The Q2 total for online retail spending accounted for 9.6% of all

discretionary retail dollars spent, the highest on record.

• 2Q13’s 16% YoY growth in online sales marks the eleventh consecutive quarter of double-digit growth.

Other e commerce categories with at least 19% YoY growth

18% YoY growth increase. For the first-half of 2013, Internet ad revenues surged to a landmark $20.1 billion.

• 2Q13’s strong first quarter follows on the heels of a strong 2012, when digital advertising soared 15% to $36.6B.

• For the first time growth in mobile advertising revenue• Other e-commerce categories with at least 19% YoY growth included: Digital Content & Subscriptions, Apparel & Accessories, Sport & Fitness, Consumer Electronics, and Consumer Packaged Goods.

For the first time, growth in mobile advertising revenue reached $3 billion for the first half of 2013, up 145% YoY.


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Sources: comScore, IAB, IBD

SEG INDICES VS. BENCHMARK INDICES

40 0%

50.0%

60.0% DOW S&P NASDAQ SEG SaaS SEG SW Index SEG Internet Index

20.0%

30.0%

40.0%

0.0%

10.0%

• Optimism continued to prevail on Wall Street despite repeated warnings by the Federal Reserve in Q3 that it would retreat from its $85 billion monthly bond buying program – which it subsequently reversed in 3Q13.

(10.0%)Jan Feb Mar Apr May Jun Jul Aug Sep

$85 billion monthly bond buying program which it subsequently reversed in 3Q13.

• The NASDAQ posted the best stock return of the three major stock indices in Q3, finishing up 11.2%. Through three quarters, the NASDAQ is up a whopping 24.9%.

• The S&P, which returned 12.8% in the first half of the year, tacked on an additional 4.7% in 3Q.

• After leading all major indices through the first half of the year with a return of 14 6% the DOW only gained an additional 1 2% in• After leading all major indices through the first half of the year with a return of 14.6%, the DOW only gained an additional 1.2% in Q3. YTD, the DOW’s 15.8% return is still highly respectable.

• Both the SEG SaaS and the SEG Internet Index benefited from investors with greater risk tolerance, posting 28.2% (SaaS) and 23.7% (Internet) returns, respectively, by close of Q3. By contrast, the SEG Software lagged well behind, returning 13.3% in 3Q.

• By close of Q3 the SEG SaaS and SEG Internet indexes have gained 50 7% (SaaS) and 48 5% (Internet) respectively


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By close of Q3, the SEG SaaS and SEG Internet indexes have gained 50.7% (SaaS) and 48.5% (Internet), respectively.

PUBLIC SOFTWARE COMPANY FINANCIAL ANDPUBLIC SOFTWARE COMPANY FINANCIAL AND VALUATION PERFORMANCE:

THE SEG SOFTWARE INDEX


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THE SEG SOFTWARE INDEXSEG - Software: Median Metrics

• The SEG Software Index tracks public software companies that primarily offer on-premise software under a perpetual

Measure 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.7x 2.6x 2.8x 2.7x 3.0xEV/EBITDA 11.5x 11.8x 13.3x 12.6x 13.5xEV/Earnings 22.6x 22.1x 24.0x 24.4x 28.0xGross Profit Margin 65.8% 65.9% 66.1% 66.5% 67.1%EBITDA M i 19 2% 19 6% 19 3% 18 6% 18 7% license with annual M&S

• The SEG Software Index is currently comprised of 133 public software

i *

EBITDA Margin 19.2% 19.6% 19.3% 18.6% 18.7%Net Income Margin 9.4% 9.9% 8.7% 8.2% 8.2%TTM Revenue Growth 14.7% 14.0% 12.8% 11.7% 10.0%TTM Total Revenue ($M) $427.0 $452.3 $461.7 $471.9 $483.6TTM EBITDA Growth 15.9% 9.4% 7.2% 5.4% 6.1%TTM Total EBITDA ($M) $71.2 $75.1 $76.0 $82.7 $86.0

companies*TTM Total EBITDA ($M) $71.2 $75.1 $76.0 $82.7 $86.0Cash & Eq ($M) $157.3 $159.7 $169.3 $180.9 $175.9Current Ratio 2.0 2.0 1.9 1.9 2.0Debt / Equity Ratio 21.3% 22.5% 25.1% 26.6% 23.1%


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* See appendix for a complete list of companies in The SEG Software Index

THE SEG SOFTWARE INDEX: FINANCIAL PERFORMANCE

70% of public on-premise software companies had TTM revenue growth rates of 20% or below

Of the 16% of companies with TTM revenue

Revenue Performance TTM Revenue Growth Rate Distribution

16%$490

TTM Total Revenue ($M) TTM Revenue Growth

31%35%

Of the 16% of companies with TTM revenue growth rates of 30% or more, a disproportionate number are focused on mobility and cloud computing

8%

10%

12%

14%

$440$450$460$470$480$

nue Grow

th

l Reven

ue

15%

31%

24%

14%

20%

25%

30%

ompanies

0%

2%

4%

6%

8%

$390$400$410$420$430$440

TTM Reven

TTM Tota 14%

6%

10%

0%

5%

10%

15%

% of C

o

• On-premise software companies lost market share to SaaSproviders, and continued to be buffeted by tightly constrained IT capital budgets and macro economic headwinds The

0%$390

3Q12 4Q12 1Q13 2Q13 3Q13

0%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

TTM Revenue Growth

IT capital budgets and macro economic headwinds. The median TTM revenue growth rate of the SEG Software Index dropped to 10.0%, the fourth consecutive quarterly of decline.

• Perhaps as testament to how much consolidation has occurred among on-premise providers, the median TTM revenue of the SEG Software Index reached $483.6M, the highest in history, and the highest among our three tracking indices.

• We expect TTM revenue growth for most on-premise public software companies to remain modest for the balance of the year which portends more acquisitions and R&D spending to


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year, which portends more acquisitions and R&D spending to spur top line growth.

THE SEG SOFTWARE INDEX: FINANCIAL PERFORMANCETTM EBITDA Margin DistributionEBITDA Margin Performance

Almost one in three on-premise software companies posted EBITDA margins of 20% - 30%

18%22%

EBITDA Margin TTM EBITDA Growth

26% 27%30%

10%

12%

14%

16%

18%

12%14%16%18%20%22%

DA Growth

Margin 18%

26%

15%

20%

25%

ompanies

0%

2%

4%

6%

8%

0%2%4%6%8%

10%

TTM EBITD

EBITDA

10%11%

6%

0%

5%

10%% of C

o

• The median EBITDA margin of public on-premise software companies remained at historic levels, closing 3Q13 at

0%0%

3Q12 4Q12 1Q13 2Q13 3Q13

0%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

TTM EBITDA Margin

p , g Q18.7%.

• In the current scenario, it’s unlikely members of the SEG Software Index will be able to push much more to the bottom line. Their median TTM EBITDA growth plunged from 15.9% YoY in 3Q12 to only 5 4% YoY growth in 3Q13YoY in 3Q12 to only 5.4% YoY growth in 3Q13.


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THE SEG SOFTWARE INDEX: FINANCIAL PERFORMANCEMargin PerformanceOperating Ratios

25%

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

80%

Gross Prof it Margin EBITDA Margin Net Income Margin

15%

20%

Revenu

e

40%

50%

60%

70%

Mar

gin

0%

5%

10%

% of R

0%

10%

20%

30%% M

• Among public on-premise software compnaies, median spending in Q3 was consistant with historical norms: 14.9%

• In 3Q13, median gross profit, EBITDA and net income margins were 67.1%, 18.7% and 8.2%, respectively.

0%

3Q12 4Q12 1Q13 2Q13 3Q130%

3Q12 4Q12 1Q13 2Q13 3Q13

p g Qfor Research & Development, 23.2% for Sales & Marketing, and 10.8% for General & Administrative.

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

g , , p y

• Several on-premise providers achieved gross profit margins of 89% or greater, including: Sage Group (93.9%), Unit 4 (92.8%), SolarWinds (92.7%), Splunk (89.0%).

• We anticipate EBITDA margins and net income margins will • Median S&M spending among on-premise public software

companies lagged far behind their SaaS counterparts, which continued to invest heavily in new customer acquisition (39.3% for SaaS and 23.2% for on-premise).

likely decline over the next several quarters, as on-premise software companies increase their investments in R&D to improve products/delivery models, and in sales & marketing to accelerate TTM revenue growth.


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THE SEG SOFTWARE INDEX: MARKET MULTIPLESEV/Revenue Multiples by Size (TTM Revenue)EV/Revenue and EV/EBITDA Multiples

4.0x

Revenue Greater Than $1 billion Revenue Between $500 million and $1 billion

Revenue Between $100 million and $500 million Revenue Less Than $100 million

16 0x

EV/Revenue EV/EBITDA

2 0x

2.5x

3.0x

3.5x

V/Re

venu

e11.5x 11.8x13.3x

12.6x13.5x

8 0x

10.0x

12.0x

14.0x

16.0x

0 0x

0.5x

1.0x

1.5x

2.0x

Med

ian EV

2.7x 2.6x 2.8x 2.7x 3.0x

0 0

2.0x

4.0x

6.0x

8.0x

• Despite slowing growth and EBITDA erosion, the median EV/Revenue multiple of public on-premise software companies ticked up 30 basis points 3Q13, closing the quarter at 3.0x.

• Investors in 3Q13 continued to place higher value on larger public software companies with revenues >$100 million.

• Throughout 2012 and into 3Q13 the EV/Revenue multiples of

0.0x

3Q12 4Q12 1Q13 2Q13 3Q13

0.0x

3Q12 4Q12 1Q13 2Q13 3Q13

p , g q

• This marks only the second time since 1Q06 that the SEG Software Index median EV/Revenue multiple reached 3.0x or higher. The other quarter was 2Q11 when the multiple 3.1x.

• The higher EV/Revenue median multiples are most likely attributed to a higher percentage of recurring revenue as many on premise software

• Throughout 2012, and into 3Q13, the EV/Revenue multiples of on-premise software companies with revenues <$100 million remained markedly lower than their larger counterparts.

• SEG Software Index companies with TTM revenue between $100M and $1B successfully balanced TTM revenue growth (median 16 6%) and profitability (median EBITDA of 15 3%) andhigher percentage of recurring revenue, as many on-premise software

providers transition to subscription pricing and periodic license models.

• Adobe is a great example. As the company converts to a SaaS model, its revenue growth rate has rapidly decelerated (11.0%, 4.4%, (5.3%) in 2010, 2011, 2012, respectively) yet its EV/Revenue multiple has grown from 2 9x to 5 8x over the same period due to a growing percentage of

(median 16.6%) and profitability (median EBITDA of 15.3%), and were rewarded with the highest median EV/Revenue multiples.


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from 2.9x to 5.8x over the same period due to a growing percentage of recurring revenue.

THE SEG SOFTWARE INDEX: MARKET MULTIPLESEV/Revenue Multiples vs. TTM EBITDA MarginsEV/Revenue Multiples vs. TTM Revenue Growth Rates

5.7x 5.6x6.0x6.1x

7.0x

2.8x 3.0x3.3x

3.0x

4.0x

5.0x

EV

/Rev

enue

2 6x3.2x 3.3x

6

3 0

4.0x

5.0x

6.0x

EV

/Rev

enue

1.2x

0.0x

1.0x

2.0x

Med

ian

E

2.4x 2.6x2.0x

0.0x

1.0x

2.0x

3.0x

Med

ian

E

• Investors awarded markedly higher market multiples to public on premise software companies with revenue growth

• Premium market multiples were awarded to the select few on-premise software providers generating EBITDA margins north

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

TTM Revenue Growth

0.0x<= 0% > 0%

<= 10%> 10%

<= 20%> 20%

<= 30%> 30%

<= 40%> 40%

TTM EBITDA Margin

public on-premise software companies with revenue growth exceeding 20%.

• Indeed, public on-premise software companies with revenue growth rates of 20%-30% and greater than 40% closed 3Q13 with median EV/Revenue multiples of 5.7x and 5.6x,

premise software providers generating EBITDA margins north of 40%.

• Surprisingly, the EV/Revenue multiple range for most on-premise software companies was relatively narrow, suggesting investors were seemingly indifferent to sub 40% profitability, a

respectively stark reversal from prior quarters.


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THE SEG SOFTWARE INDEX: BY PRODUCT CATEGORY

3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13Billing & Service Management 1.3x 1.5x 1.9x 1.9x 2.3x 8.0x 8.2x 8.4x 8.3x 8.7x 9.5% 10.4% 10.4% 8.9% 16.9% 18.8% 19.8% 20.7% 18.7% 18.4%Business Intelligence 3.7x 3.2x 3.4x 3.0x 3.3x 25.6x 17.5x 15.8x 16.5x 17.1x 13.8% 13.2% 11.8% 13.1% 14.2% 16.5% 14.7% 14.0% 13.6% 13.3%Development Platforms 2.5x 2.5x 2.5x 2.6x 2.6x 8.2x 9.6x 9.1x 10.1x 14.2x 3.5% 1.6% 3.0% 0.6% -0.3% 24.7% 23.5% 21.1% 20.3% 20.4%

SEG Software Index

CategoryEV/Revenue EV/EBITDA TTM Revenue Growth EBITDA Margin

Engineering & PLM 2.6x 2.5x 2.7x 2.7x 2.8x 12.1x 11.8x 13.4x 12.4x 13.8x 13.2% 14.0% 13.1% 11.7% 8.4% 20.5% 20.6% 20.7% 20.5% 20.3%

Enterprise Resource Planning 2.1x 2.2x 2.3x 2.5x 2.5x 9.2x 9.1x 10.1x 12.1x 12.2x 4.7% 3.4% 2.6% 1.5% 2.2% 23.2% 23.1% 22.8% 22.4% 22.2%Financial & Accounting 2.9x 2.9x 3.1x 3.3x 3.3x 9.8x 9.8x 10.5x 11.3x 12.0x 17.2% 13.8% 8.6% 10.7% 9.5% 29.0% 28.8% 27.5% 26.6% 26.1%Gaming 1.0x 1.0x 1.1x 1.3x 1.7x 9.1x 8.0x 7.1x 9.4x 11.3x 2.2% 0.1% 7.4% 15.1% 14.9% 14.9% 15.7% 14.9% 15.4% 14.6%Healthcare 2.2x 2.1x 2.1x 2.1x 2.5x 12.8x 11.3x 14.8x 17.6x 16.1x 24.2% 19.6% 10.7% 11.0% 9.4% 20.6% 18.5% 13.4% 14.1% 14.3%IT Conglomerates 2.8x 2.5x 2.5x 2.9x 2.7x 8.4x 8.0x 9.0x 8.7x 8.3x 1.5% 1.4% 0.5% 0.2% 1.2% 36.1% 34.6% 33.8% 33.8% 34.3%Mobile Solutions/Content 3 2x 2 5x 2 7x 2 8x 3 0x 13 8x 11 9x 20 6x 13 2x 13 5x 44 9% 48 1% 44 5% 24 6% 13 2% 7 8% 6 4% 4 5% 7 9% 8 0%Mobile Solutions/Content 3.2x 2.5x 2.7x 2.8x 3.0x 13.8x 11.9x 20.6x 13.2x 13.5x 44.9% 48.1% 44.5% 24.6% 13.2% 7.8% 6.4% 4.5% 7.9% 8.0%Networking & Network Performance Management 3.0x 3.0x 2.8x 2.7x 2.8x 16.4x 14.9x 15.3x 17.0x 17.0x 17.3% 14.6% 15.2% 11.0% 6.5% 16.3% 16.0% 16.1% 15.0% 14.3%

Security 4.2x 3.1x 3.5x 4.5x 4.9x 11.5x 11.9x 20.7x 16.7x 12.7x 22.8% 23.9% 23.8% 21.8% 21.2% 18.4% 17.1% 8.1% 7.3% 7.5%Storage, Data Management & Integration 2.5x 2.3x 2.4x 2.4x 2.7x 9.2x 8.4x 9.2x 8.8x 8.9x 6.3% 6.5% 4.8% 4.1% 3.3% 23.9% 23.8% 22.2% 21.9% 22.2%

Supply Chain Management & Logistics 2.5x 2.9x 3.3x 3.4x 4.1x 10.5x 12.7x 14.5x 15.0x 17.1x 15.9% 11.2% 11.3% 9.3% 10.2% 17.1% 16.6% 16.0% 15.3% 19.2%LogisticsSystems Management 6.9x 5.7x 5.6x 5.0x 5.4x 26.6x 24.6x 23.0x 20.9x 19.7x 18.7% 17.4% 17.2% 16.1% 16.4% 25.9% 25.0% 24.4% 23.8% 24.2%Vertical - Finance 3.2x 3.0x 3.4x 3.8x 3.7x 10.6x 9.4x 10.7x 11.4x 12.6x 6.3% 7.1% 6.7% 7.6% 7.4% 26.2% 26.3% 26.5% 27.3% 26.0%

Vertical - Other 2.9x 2.9x 3.0x 3.2x 3.6x 21.2x 21.3x 22.0x 22.1x 20.8x 28.0% 19.8% 21.3% 21.0% 22.2% 14.3% 14.0% 14.1% 14.4% 15.5%

Median 2.7x 2.6x 2.8x 2.7x 3.0x 11.5x 11.8x 13.3x 12.6x 13.5x 14.7% 14.0% 12.8% 11.7% 10.0% 19.2% 19.6% 19.3% 18.6% 18.7%

• The SEG Software Index is segmented into 17 product categories• See Appendix for the complete list of companies within each product category


All Rights Reserved

THE SEG SOFTWARE INDEX BY PRODUCT CATEGORY: FINANCIAL PERFORMANCE

3Q13 YoY Change in Revenue Growth3Q13 TTM Revenue Growth 3Q13 YoY Change in Revenue Growth3Q13 TTM Revenue Growth

10%

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Bus E B

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THE SEG SOFTWARE INDEX BY PRODUCT CATEGORY: MARKET MULTIPLES

3Q13 YoY Change in Median EV/Revenue Multiples3Q13 Median EV/Revenue Multiples

5 0x

6.0x80%

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• In 3Q13, seven product categories achieved median EV/Revenue multiples above the SEG Software Index median of 3.0x, includingSystems Management (5.4x), Security (4.9x), Supply Chain Mgmt & Logistics (4.1x), Vertical - Finance (3.7x), Vertical - Other (3.6x), Financial & Accounting (3.3x), Business Intelligence (3.3x).

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• For some categories, TTM revenue growth translated to an impressive EV/Rev market valuation (Security, Systems Mgmt), while other categories demonstrated a curious disconnect between market valuation and top line growth (Billing & Service Mgmt, Vertical - Other).

• The Systems Management product category, benefitting from the rapid shift to cloud computing and growing demand for cloud infrastructure, achieved the highest median EV/Revenue multiple (5.4x) in 3Q13, driven by strong TTM revenue growth (16.4%) andEBITDA i (24 2%) b th b th di f th i d


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EBITDA margins (24.2%) – both above the median for the index.

PUBLIC SaaS COMPANY FINANCIAL ANDPUBLIC SaaS COMPANY FINANCIAL AND VALUATION PERFORMANCE:

THE SEG SaaS INDEX


All Rights Reserved

THE SEG SaaS INDEXSEG - SaaS: Median Metrics

• The SEG SaaS Index tracks public companies that primarily offer hosted, on-demand software under a subscription

Measure 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 5.5x 4.8x 5.3x 5.7x 6.5xEV/EBITDA 41.5x 41.7x 35.4x 31.5x 40.6xEV/Earnings 40.9x 40.2x 63.8x 106.1x 125.4xGross Profit Margin 70.5% 70.9% 70.8% 70.8% 70.3%

and/or transaction based pricing model• The SEG SaaS Index is currently

comprised of 41 public pure-play SaaS i *

EBITDA Margin 6.9% 6.9% 5.7% 2.3% 2.1%Net Income Margin -0.9% -0.3% -1.8% -4.0% -4.5%TTM Revenue Growth 28.7% 26.8% 25.3% 25.0% 30.6%TTM Total Revenue ($M) $108.1 $117.5 $127.7 $143.1 $163.8TTM EBITDA Growth 26.0% 20.6% 7.9% 3.0% 7.2%TTM Total EBITDA ($M) $6 0 $6 0 $6 8 $5 1 $2 7 companies*TTM Total EBITDA ($M) $6.0 $6.0 $6.8 $5.1 $2.7Cash & Eq ($M) $67.0 $66.1 $68.0 $74.7 $89.1Current Ratio 1.5 1.6 1.8 1.5 2.2Debt / Equity Ratio 6.9% 5.7% 6.5% 6.4% 8.3%


All Rights Reserved

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

THE SEG SaaS INDEX: FINANCIAL PERFORMANCE

35%

TTM Revenue Growth Rate DistributionRevenue Performance

30% achieved TTM35.0%$180


26%29% 29%

24%

20%

25%

30%

ompa

nies

30% achieved TTM revenue growth of 40% or more

Only 3% of public SaaS companies generated TTM revenue growth of 10% l

20.0%

25.0%

30.0%

35.0%

$100

$120

$140

$160

$180

nue Growth

l Reven

ue

0%3%

6%

0%

5%

10%

15%

% o

f Co 10% or less

0 0%

5.0%

10.0%

15.0%

$0

$20

$40

$60

$80

TTM Reven

TTM Total

0%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%<= 50%

> 50%

TTM Revenue Growth• After declining for four consecutive quarters, the median TTM revenue growth rate for the SEG SaaS Index edged up to 30.6%

0.0%$0

3Q12 4Q12 1Q13 2Q13 3Q13

in 3Q13.

• Public SaaS companies continued to grow, mature and gain market share; Q3’s median TTM revenue exceeded $160M, up sharply from 3Q12’s $108M.

• The sharp uptick in median revenue growth is largely attributed to a host of new market grabbing SaaS IPOs in 3Q13. Select examples include: FireEye (109% TTM Revenue Growth;), Tableau Software (71%), Textura (65%), Marketo (62.0%), and Cvent (36%).


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THE SEG SaaS INDEX: FINANCIAL PERFORMANCETTM EBITDA Margin DistributionEBITDA Margin Performance

85% with EBITDA margins of 20% or lower

30%8%


35%40%

15%

20%

25%

30%

4%

6%

8%

DA Growth

Margin

35%

30%

18%20%

25%

30%

35%

ompanies

0%

5%

10%

15%

0%

2%

4%

TTM EBITD

EBITDA

13%

5%

0%

5%

10%

15%

% of C

o

• After peaking in 2010, the median EBITDA margin of public SaaS companies has declined every quarter since.

0%0%

3Q12 4Q12 1Q13 2Q13 3Q13

0%<= 0% > 0%

<= 10%> 10%

<= 20%> 20%

<= 30%> 30%

TTM EBITDA Margin

SaaS companies has declined every quarter since.

• Ther trend continued in 3Q13 as the median EBITDA margin was 2.1%, down from 3.0% in 2Q13.


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THE SEG SaaS INDEX: FINANCIAL PERFORMANCEMedian Margin PerformanceMedian Operating Ratios

45%


80%

Gross Profit Margin EBITDA Margin Net Income Margin

25%

30%

35%

40%

45%

even

ue

40%

50%

60%

70%

80%

argin

0%

5%

10%

15%

20%

% of R

e

0%

10%

20%

30%

40%

% Ma

• Increased spending on sales and marketing by public SaaS companies accounted for much of the decline in median

• Median gross profit margins for public SaaS companies in 3Q13 were 70.3%, and have remained steady over the past

0%

3Q12 4Q12 1Q13 2Q13 3Q13

0%

3Q12 4Q12 1Q13 2Q13 3Q13

EBITDA margin.

• In 3Q13, 39.3% of total revenue was spent on sales & marketing, relatively unchanged from the 39.7% spent in 3Q12.

, y pfive quarters.

• Stable gross profit margins demonstrate the ability of public SaaS companies to grow without disproportionally scaling infrastructure and increasing application delivery costs.

• R&D spending as a percent of revenue increased to 18.1% in 3Q13, compared to 16.9% in 3Q12.

• With growth as their primary objective, public SaaS companies are running close to break even, with net income in 3Q13 of -4.5%.


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THE SEG SaaS INDEX: MARKET MULTIPLESEV/Revenue Multiple DistributionEV/Revenue and EV/EBITDA Multiples

41.5x 41.7x 40.6x45.0x


41%40%

45%

35.4x31.5x

20 0x

25.0x

30.0x

35.0x

40.0x

20%

25%

30%

35%

40%

Companies

5.5x 4.8x 5.3x 5.7x 6.5x

0.0x

5.0x

10.0x

15.0x

20.0x

0%

5%8%

11%

5%

11%

5%3%

11%

0%

5%

10%

15%

20%

% of C

• Median EV/Revenue multiples for public SaaS providers reached a breathtaking 6.5x at the close of 3Q13.

• A class of Tier 1 SaaS providers is emerging within the SaaS Index, earning premium EV/Revenue multiples from

3Q12 4Q12 1Q13 2Q13 3Q13 <= 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

EV/Revenue

g Q

• This marks the first time since 4Q07 that the median EV/Revenue multiples for public SaaS providers exceeded 6x.

• Public SaaS providers in 3Q13 continued to trade at a

, g p pinvestors

• As testament, a whopping 41% of the companies in the SEG SaaS Index are trading for 9x TTM revenue or greater

• These leaders demonstrate high growth and a dominant significant premium relative to their on-premise peers (6.5x vs. 3.0x).

position in large markets with proven ability to replace incumbent on premise providers. Examples include Salesforce, Workday, NetSuite, etc.

• 30% of public SaaS providers had median EV/Revenue multiples between 5x and 9x


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multiples between 5x and 9x.

THE SEG SaaS INDEX: MARKET MULTIPLESEV/Revenue Multiples vs. TTM EBITDA MarginsEV/Revenue Multiples vs. TTM Revenue Growth Rates

14.2x16.0x25.0x

7.3x8.0x

10.0x

12.0x

14.0x

EV/Reven

ue

19.9x

15.0x

20.0x

EV/Reven

ue

3.8x5.1x 4.8x

0.0x

2.0x

4.0x

6.0x

Med

ian

0.0x2.1x

4.0x5.7x

8.0x6.8x

0.0x

5.0x

10.0x

Med

ian

• There is a very strong correlation between the median TTM revenue growth rate and median EV/Revenue multiple of

• There is an inverse correlation between EBITDA margins and median EV/Revenue multiples

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%

TTM EBITDA Margin

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%<= 50%

> 50%

TTM Revenue Growth

revenue growth rate and median EV/Revenue multiple of public SaaS companies.

• Public SaaS companies growing TTM revenue in excess of 50% achieved a stellar median EV/Revenue multiple of 19.9x.

and median EV/Revenue multiples.

• In the current market, SaaS profitability is penalized, as investors perceive profitability to be at the expense of growth, which they deem all important.

• As proof, public SaaS companies with no profitability• Select companies with TTM growth rates of 50% or higher

include: FireEye (109% TTM revenue growth rate, 38.6x EV/Revenue); Service-now (84.5%, 17.6x); Workday (77.4%, 33.7x); Tableau Software (71.0%, 22.1x); Textura Corp. (65.0%, 23.2x); Marketo (62.0%, 15.1x), Cornerstone

As proof, public SaaS companies with no profitability boasted a remarkable 14.2x median EV/Revenue multiple in 3Q13.


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( , ); ( , ),OnDemand (60.2%, 17.1x); Ellie Mae (57.2%, 5.7x).

THE SEG SaaS INDEX BY PRODUCT CATEGORY

3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13CRM & Marketing 4.7x 3.4x 2.7x 2.7x 4.0x 3.8x 2.4x 2.0x 2.8x 3.4x 33.2% 36.1% 37.2% 26.7% 27.3% 4.4% 3.1% 2.8% 2.2% 2.1%ERP & Supply Chain 5.5x 7.0x 6.6x 7.1x 9.3x 5.3x 5.7x 5.7x 6.7x 7.6x 26.3% 25.3% 31.8% 33.9% 37.7% 6.7% 7.2% 3.2% 0.2% -0.6%Vertically Focused 5.7x 4.7x 5.0x 5.0x 5.7x 4.6x 3.9x 4.2x 3.8x 5.2x 32.0% 27.7% 21.6% 21.5% 22.6% 15.3% 14.6% 16.4% 16.0% 15.8%

SEG SaaS Index

CategoryEV/Revenue Forward EV/Revenue TTM Revenue Growth EBITDA Margin

Currently comprised of 41 public companies, The SEG SaaS Index has critical mass in four distinct SaaS product categories sufficient to analyze and compare financial performance trends Select

Workforce Management 8.3x 10.5x 10.7x 8.5x 10.4x 7.3x 7.6x 8.0x 7.4x 8.8x 28.7% 29.1% 23.4% 43.1% 42.2% -15.0% -16.2% -17.8% -16.1% -14.4%

Median: 5.5x 4.8x 5.3x 5.7x 6.5x 4.9x 4.5x 5.3x 5.3x 6.4x 28.7% 26.8% 25.3% 25.0% 30.0% 6.9% 6.9% 5.7% 2.3% 2.1%

CRM & M k ti ERP & S l Ch i V ti ll F d W kf M t

SaaS product categories sufficient to analyze and compare financial performance trends. Select companies within each SaaS category are included below. See the appendix to this report for the complete list.

CRM & M k ti ERP & S l Ch i V ti ll F d W kf M tCRM & Marketing ERP & Supply Chain Vertically Focused Workforce ManagementCRM & Marketing ERP & Supply Chain Vertically Focused Workforce Management


All Rights Reserved

THE SEG SaaS INDEX BY PRODUCT CATEGORY: FINANCIAL PERFORMANCE


30% 35% 40% 45%

30%40% 50% 60%

0%5%

10% 15% 20% 25%

(40%)(30%)(20%)(10%)0% 10% 20% 30%

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C

ER

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THE SEG SaaS INDEX BY PRODUCT CATEGORY: MARKET MULTIPLES


12 0 80%

6.0x

8.0x

10.0x

12.0x

30% 40% 50% 60% 70% 80%

0.0x

2.0x

4.0x

g n y d t

(20%)(10%)

0% 10% 20%

g n y d nt

• Public SaaS companies comprising the Workforce Management category achieved a 10.4x median EV/Revenue multiple, followed

CRM

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anag

eme n

g g g yclosely by ERP & Supply Chain (9.3x).

• The stellar market valuations of these SaaS Workforce Management providers can be attributed to their breakneck TTM revenue growth (42.2%), albeit, with little or no profitability.

• Workforce management SaaS providers continued to benefit from a continuing migration from legacy, on-premise solutions to hostedSaaS solutions.

• Although ERP & Supply Chain TTM revenue growth was only slightly above the SaaS median, companies within this product category received premium market multiples because of the massive market potential of hosted ERP & Supply Chain solutions.


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PUBLIC INTERNET COMPANY FINANCIAL ANDPUBLIC INTERNET COMPANY FINANCIAL AND VALUATION PERFORMANCE:

THE SEG INTERNET INDEX


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Public Internet Company Market Valuations by Product CategoryTHE SEG INTERNET INDEXSEG - Internet: Median Metrics

• The SEG Internet Index tracks public companies that primarily offer B2C solutions over the Internet using a wide

Measure 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.0x 2.2x 2.1x 2.3x 2.7xEV/EBITDA 13.5x 13.3x 13.6x 15.1x 18.4xEV/Earnings 25.1x 22.0x 21.9x 27.5x 32.5xGross Profit Margin 64.8% 64.9% 65.6% 65.4% 65.1%

array of pricing models• The SEG Internet Index is currently

comprised of 92 public Internet i *

EBITDA Margin 12.5% 12.7% 12.9% 12.4% 11.8%Net Income Margin 3.9% 5.3% 4.2% 2.6% 2.3%TTM Revenue Growth 24.4% 21.0% 20.1% 19.3% 16.8%TTM Total Revenue ($M) $374.2 $387.3 $393.3 $405.8 $427.5TTM EBITDA Growth 21.8% 12.3% 17.8% 10.7% 15.6%TTM Total EBITDA ($M) $39.5 $39.8 $37.5 $38.2 $43.4

companies*($ ) $ $ $ $ $

Cash & Eq ($M) $122.3 $130.4 $142.9 $154.9 $165.6Current Ratio 2.7 2.5 2.3 2.4 2.2Debt / Equity Ratio 13.8% 21.0% 19.7% 20.7% 20.6%


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

Initial Public OfferingsTHE SEG INTERNET INDEX: FINANCIAL PERFORMANCETTM Revenue Growth Rate DistributionRevenue Performance

30 0%$440


22%23%25%

15 0%

20.0%

25.0%

30.0%

$390$400$410$420$430$440

nue Growth

l Reven

ue

22%

13%

16%

19%

15%

20%

ompa

nies

0 0%

5.0%

10.0%

15.0%

$340$350$360$370$380$390

TTM Reven

TTM Total 9%

0%

5%

10%

% o

f Co

• In 3Q13, the median YoY TTM revenue growth rate of public companies comprising the SEG Internet Index declined from 19.3%

0.0%$340

3Q12 4Q12 1Q13 2Q13 3Q13

0%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

TTM Revenue Growth

to 16.8%.

• While lower, Q3’s median Internet growth rate remains healthy, especially considering the median TTM revenue of the SEG Internet Index is $427.5M, compared to only $163.8M for the SEG SaaSIndexIndex.

• The SEG Internet Index had an impressive number of star performers, 19% of companies in the index reported TTM revenue growth greater than 40% in 3Q13.

• Conversely, 22% of companies in the SEG Internet Index posted


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Conversely, 22% of companies in the SEG Internet Index posted negative TTM revenue growth, depressing the median as a whole.

THE SEG INTERNET INDEX: FINANCIAL PERFORMANCETTM EBITDA Margin DistributionEBITDA Margin Performance

25%14%


26%30%

15%

20%

25%

8%

10%

12%

14%

DA Growth

Margin

20%

26%23%

15%

20%

25%

ompanies

0%

5%

10%

0%

2%

4%

6%

TTM EBITD

EBITDA

11% 11%10%

0%

5%

10%% of C

o

• Over the past five quarters, public Internet companies managed to maintain respectable EBITDA margins (11.8%),

0%0%

3Q12 4Q12 1Q13 2Q13 3Q13

0%

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

TTM EBITDA Margin

g p g ( ),despite their declining revenue growth rates.

• The median ~12% Internet Index EBITDA margin for 3Q13is markedly lower than the 18.1% median EBITDA achieved in 1Q11.

• The median EBITDA margin decline was partly due to a greater number of Internet IPOs with stellar revenue growth, but little, if any, profitability.

• 46% of all public Internet companies posted EBITDA margins of 10% or lower


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margins of 10% or lower.

THE SEG INTERNET INDEX: FINANCIAL PERFORMANCEMedian Margin PerformanceMedian Operating Ratios

25%


70%

Gross Profit Margin EBITDA Margin Net Income Margin

15%

20%

25%

even

ue

40%

50%

60%

70%

argin

0%

5%

10%

% of R

e

0%

10%

20%

30%% M

a

• In 3Q13, companies comprising the SEG Internet Index spent 23.2% of total revenue on sales and marketing (S&M), 11.5% on research development (R&D), and 11.3% on general and administrative.

0%

3Q12 4Q12 1Q13 2Q13 3Q13

0%

3Q12 4Q12 1Q13 2Q13 3Q13

p ( ), g

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

• Despite TTM revenue growth declines, public Internet companies kept their cost structures in line, resulting in a median TTM EBITDA margin of 11.8% in 3Q13.


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THE SEG INTERNET INDEX: MARKET MULTIPLESEV/Revenue Multiple DistributionMedian EV/Revenue and EV/EBITDA Multiples

18 4x20.0x


23%25%

13.5x 13.3x 13.6x15.1x

18.4x

10 0x12.0x14.0x16.0x18.0x20.0x

17%

14%15%

15%

20%

ompanies

2.0x 2.2x 2.1x 2.3x 2.7x

0 0x2.0x4.0x6.0x8.0x10.0x

7%8%

3%5%

3%4%

0%

5%

10%

% of C

o

• In 3Q13, the median EV/Revenue multiple of the SEG Internet Index ticked up slightly to 2.7x.

• The EV/Revenue market multiples of public internet providers vary dramatically with the largest concentration at 2 0x or below (40%

0.0x

3Q12 4Q12 1Q13 2Q13 3Q13

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<= 7.0x

> 7.0x<= 8.0x

> 8.0x<= 9.0x

>= 9.0x

EV/Revenue

• The EV/Revenue market multiples of public internet providers vary dramatically, with the largest concentration at 2.0x or below (40% of our Internet Index).

• However, a significant minority – mostly the headline grabbers – are valued highly by the public markets. 27% of public Internet companies closed 3Q13 with EV/Revenue multiples of 6.0x or higher.

• Among the Internet companies boosting the highest EV/Revenue market multiples were a large number of relatively recent IPO’s that• Among the Internet companies boosting the highest EV/Revenue market multiples were a large number of relatively recent IPO s that are capturing a significant share of online advertising dollars; Examples include LinkedIn (20.3x), Zillow (19.5x), Qihoo (18.3x), and Yelp (18.2x).


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THE SEG INTERNET INDEX: MARKET MULTIPLESEV/Revenue Multiples vs. TTM EBITDA MarginsEV/Revenue Multiples vs. TTM Revenue Growth Rates

9.1x10.0x 7.5x8.0x

5.3x5.0x6.0x7.0x8.0x9.0x

EV/Reven

ue

4.6x 4.9x

4.0x

5.0x

6.0x

7.0x

EV/Reven

ue

1.2x1.7x 2.0x

3.3x

0 0x1.0x2.0x3.0x4.0x

Med

ian E

2.7x

1.6x 1.7x

0 0x

1.0x

2.0x

3.0x

Med

ian E

• Public Internet company valuations are being driven by TTM • With few exceptions, and in stark contrast to SaaS

0.0x

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

TTM Revenue Growth

0.0x

<= 0% > 0%<= 10%

> 10%<= 20%

> 20%<= 30%

> 30%<= 40%

> 40%

TTM EBITDA Margin

p y g yrevenue growth, with dramatic differences between new, rapidly growing social and ad-tech providers and their slower growing incumbent counterparts (e.g., Facebook vs. Yahoo).

• Public Internet companies with TTM revenue growth of 40% or higher were rewarded with median EV/Revenue multiples

companies, many of the most profitable public Internet companies also reported stellar TTM revenue growth. Among them were YY, Inc., Tree.com, Trulia, Youku, LinkedIn and Zillow.

• Unlike The SEG SaaS Index where TTM EBITDA marginsor higher were rewarded with median EV/Revenue multiples markedly greater than their slower growing peers.

Unlike The SEG SaaS Index, where TTM EBITDA margins bore little relationship to median EV/Revenue multiples, investors in public Internet companies kept a keen eye on margins, and rewarded strong performers with significantly higher market multiples.


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THE SEG INTERNET INDEX BY PRODUCT CATEGORYSEG Internet Index

3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13Ad Tech & Lead Generation 1.8x 2.2x 2.0x 2.5x 2.5x 13.3x 12.0x 14.9x 14.9x 22.1x 33.4% 31.9% 28.8% 26.8% 17.9% 12.5% 12.6% 12.9% 12.6% 11.3%Commerce 0.9x 1.2x 0.9x 0.9x 1.1x 14.9x 13.6x 10.5x 15.1x 15.6x 14.2% 15.1% 17.5% 17.7% 15.4% 8.4% 8.4% 7.6% 7.5% 6.7%Content & Media 1.3x 1.4x 1.6x 2.3x 2.7x 10.8x 10.9x 15.4x 13.8x 20.8x 12.3% 10.5% 12.6% 12.1% 14.1% 14.1% 14.1% 14.8% 15.5% 15.9%Gaming 2 1x 2 4x 2 7x 2 7x 2 8x 3 4x 4 3x 5 8x 5 9x 7 7x 32 0% 24 8% 21 9% 21 9% 19 8% 43 4% 38 6% 36 3% 38 6% 35 4%

CategoryEV/Revenue EV/EBITDA TTM Revenue Growth EBITDA Margin

Gaming 2.1x 2.4x 2.7x 2.7x 2.8x 3.4x 4.3x 5.8x 5.9x 7.7x 32.0% 24.8% 21.9% 21.9% 19.8% 43.4% 38.6% 36.3% 38.6% 35.4%Infrastructure 1.1x 1.0x 1.7x 1.6x 1.4x 14.2x 10.4x 11.9x 13.6x 14.3x 11.8% 10.9% 9.2% 8.8% 1.7% 8.1% 7.5% 8.0% 7.2% 7.1%Services 3.1x 3.3x 3.5x 3.4x 4.3x 13.3x 15.1x 14.2x 19.7x 23.9x 46.7% 32.7% 41.8% 40.4% 38.1% 9.6% 9.4% 9.6% 7.1% 5.6%Social 12.1x 9.0x 9.3x 10.0x 14.0x 34.3x 39.6x 38.9x 37.1x 38.6x 57.3% 50.9% 49.3% 47.2% 41.4% 8.2% 12.9% 14.7% 16.8% 17.0%Travel 2.4x 2.7x 2.8x 3.4x 4.6x 13.5x 15.7x 16.2x 18.2x 21.2x 21.2% 20.2% 19.3% 20.0% 20.8% 21.9% 19.6% 18.1% 17.9% 16.8%

Median 2.0x 2.2x 2.1x 2.3x 2.7x 13.5x 13.3x 13.6x 15.1x 18.4x 24.4% 21.0% 20.1% 19.3% 16.8% 12.5% 12.7% 12.9% 12.4% 11.8%

The SEG Internet Index is segmented into eight product categories. Select companies within each Internet product category are included below. See the appendix for the complete list of companies within each product category.

Ad Tech & Lead Gen Commerce Content & Media GamingAd Tech & Lead Gen Commerce Content & Media Gaming

Infrastructure Services Social Travel


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THE SEG INTERNET INDEX BY PRODUCT CATEGORY: FINANCIAL PERFORMANCE


40%45% (20%)

0% 20% 40%

0% 5% 10% 15% 20% 25% 30% 35% 40%

e s l

(100%)(80%)(60%)(40%)

on rce

dia ng ure es cial vel

Ad

Tech

&Le

ad

Gen

erat

ion

Com

mer

ce

Con

tent

&M

edia

Gam

ing

Infr

astru

ctur

e

Ser

vice

s

Soc

ial

Trav

el

Ad

Tech

&Le

ad G

ener

ati o

Com

mer

Con

tent

& M

ed

Gam

in

Infr

astru

ctu

Ser

vic

Soc Trav


60%80%

100% 120%

5% 10% 15% 20% 25% 30% 35% 40%

(60%)(40%)(20%)0% 20% 40% 60%

0%

Ad

Tech

&Le

ad

Gen

erat

ion

Com

mer

ce

Con

tent

&

Med

ia

Gam

ing

Infr

astru

ctur

e

Ser

vice

s

Soc

ial

Trav

el

(60%)A

d Te

ch &

ead

Gen

erat

ion

Com

mer

ce

onte

nt &

Med

ia

Gam

ing

Infr

astru

ctur

e

Ser

vice

s

Soc

ial

Trav

el


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I

Le Co

THE SEG INTERNET INDEX BY PRODUCT CATEGORY: MARKET MULTIPLES


14.0x

16.0x

6 0

8.0x

10.0x

12.0x

60%

80%

100%

120%

0.0x

2.0x

4.0x

6.0x

0%

20%

40%

60%

Ad

Tech

&Le

ad G

ener

atio

n

Com

mer

ce

Con

tent

& M

edia

Gam

ing

Infr

astru

ctur

e

Ser

vice

s

Soc

ial

Trav

el

Ad

Tech

&Le

ad G

ener

atio

n

Com

mer

ce

Con

tent

& M

edia

Gam

ing

Infr

astru

ctur

e

Ser

vice

s

Soc

ial

Trav

el

• Public Internet Companies comprising the social product category closed Q3 with the highest median EV/Revenue multiple among the eight Internet categories we track. The 14.0x median market valuation was 204% higher than the next closest product category, Travel (4.6x).

• Social solutions Facebook, LinkedIn, Yelp, etc., continued to expand their online footprints, and investors rewarded them accordingly. Social Market Multiples also reflected significant YoY EBITDA margin improvement, as category members demonstrated a greater ability to monetize their large user bases with advertising, subscriptions, more mobile offerings and other value added services.

• The Commerce product category lagged all other product categories, with a 1.1x EV/Revenue multiple, a tepid TTM revenue growth of 15.4%, and a lackluster 6.7% EBITDA margin. Amazon, one of the most notable commerce companies, is aggressively trying to diversify its content offerings and expand its hardware offerings as a way of differentiating from competitors and driving more spend


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diversify its content offerings and expand its hardware offerings as a way of differentiating from competitors and driving more spend through its platform.

SOFTWARE INDUSTRY M&A MARKET UPDATE


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SOFTWARE/SaaS M&A DEAL VOLUME AND SPENDINGMedian On-Premise Software EV/Revenue Exit MultiplesU.S. Software Mergers & Acquisitions Activity

$37$40

$42 $41 $41 $42

$36$39

$36 $34$37$40.0

$45.0

ons)407 421 426 430

454 456

432454

435

406389

416402

$21 3

$23.4 $23.1

$20

$25

400

450

500

$31$33

$34

$20.0

$25.0

$30.0

$35.0

ge Deal V

alue

(Millio389

$17.9

$12.7 $13.1

$21.3

$12.6

$15.8

$12.3

$15.8

$9.5

$18.7 $16.3

$10

$15

$20

200

250

300

350

400

Value (BIllions)

Num

ber o

f Deals

$0.0

$5.0

$10.0

$15.0

10 10 11 11 11 11 12 12 12 12 13 13 13

TTM A

verag

$0

$5

0

50

100

150

N

• Software M&A deal volume in Q3 hovered, once again, at 400 transactions, a level that’s historically consistent with an active M&A market.

3Q1

4Q1

1Q1

2Q1

3Q1

4Q1

1Q1

2Q1

3Q1

4Q1

1Q1

2Q1

3Q13Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Deals Value*3Q13 Projected

• Software M&A spending aggregated $16.3 billion in 3Q13, slightly lower than 2Q13’s $18.7 billion, but higher than the preceeding three calendar quarters.

• There were nine mega deals (EV > $500M) in 3Q13 across all delivery models (On-premise/SaaS/Internet), one more than in the prior quarter, and a marked increase from 1Q13’s single large deal. Notable mega deals in the third quarter included: Vitera Healthcare Solutions acquisition of Greenway Medical Technologies ($632M EV 4 7x EV/Revenue multiple); Vista Equity Partner’s acquisition ofSolutions acquisition of Greenway Medical Technologies ($632M EV, 4.7x EV/Revenue multiple); Vista Equity Partner s acquisition of The Active Network ($942M, 2.1x); Davis+Henderson’s acquisition of Harland Financial Solutions ($1.6B, 5.8x); Cisco’s acquisition of Sourcefire ($2.2B, 8.9x); and KKR’s acquisition of Mitchell International.

• The average software M&A purchase price rose slightly in 3Q13 to $37M, after retreating the prior three quarters.


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SOFTWARE M&A EXIT MULTIPLESMedian Exit Multiples Median EV/Revenue Exit Multiple Distribution

12.7x14.0x


28.3%30.0%

11.2x11.8x 11.6x 11.5x

8.0x

10.0x

12.0x 23.9%

19.6%

12.0%

16.3%

15.0%

20.0%

25.0%

‐3Q13

TTM

2.3x1.8x 1.6x 1.8x

2.3x2.0x

4.0x

6.0x

0.0%

5.0%

10.0%

<= 1.0x > 1.0x &2 0

> 2.0x &3 0

> 3.0x &4 0

> 4.0x

% of D

eals‐

• TTM revenue exit multiples closed 3Q13 at 2.3x, a marked increase over Q2’s 1.8x multiple and the highest since

• On a TTM basis, 52% of all on-premise software targets were acquired for less than 2.0x TTM revenues in 3Q13.

0.0x3Q12 4Q12 1Q13 2Q13 3Q13

<= 2.0x <= 3.0x <= 4.0x

TTM Revenue Exit Multiple Bins

increase over Q2 s 1.8x multiple and the highest since 3Q12’s 2.3x multiple

• TTM EBITDA exit multiples remained relatively steady in 3Q13, closing at 11.5x.

e e acqu ed o ess t a 0 e e ues 3Q 3

• Targets with 3.0x or higher exit multiples, primarily focused on high-growth software categories, such as big data, network infrastructure and security.

• Among the more noteworthy on-premise acquisitions in g y3Q13: Cisco’s acquisition of Sourcefire ($2.2B, 8.9x rev.), a provider of next generation cyber security applications


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46 Q3 2013 Software Industry Financial Report

Copyright © 2013 by Software Equity Group, LLC

All Rights Reserved

by Size by Ownership Structure

SOFTWARE M&A: BY OWNERSHIP STRUCTURE AND SIZE

• In Q3, as in quarters past, large (greater than $200 million in

revenue), public buyers dug deeper.

• Public buyers in 3Q13 paid a median 2.4x TTM revenue for

their targets in 3Q13, compared to a median of 1.2x paid by

private buyers.

• Public buyers with revenue greater than $200 million paid a

median 2.7x TTM revenue for their targets in 3Q13,

compared to only 1.5x paid by smaller public buyers.

• Whether public or private, buyers with revenue greater than

$200 million paid the highest multiples for a target with less

than $20 million revenue over the past twelve months.

67%33%

Public Sellers

1.8x Median Multiple

Private Sellers


63%37%

Public Sellers


Private Sellers


Horizontal & Vertical M&A Median EV/Revenue Exit

SOFTWARE M&A: BY VERTICAL AND HORIZONTAL MARKETS

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

80%

100%

37% 42% 33% 36% 33%

63% 58% 67% 64% 67%

20%

40%

60%

80%

2.0x1.4x 1.3x

1.9x

2.7x3.0x

2.2x1.8x 1.6x

2.0x

37% 33% 36% 33%

0%3Q12 4Q12 1Q13 2Q13 3Q13

Horizontal Vertical

3Q12 4Q12 1Q13 2Q13 3Q13

Vertical Horizontal

• Horizontal software providers garnered the lion’s share of M&A transactions in 3Q13, as they have for the past five quarters.

• TTM revenue exit multiples for horizontal software companies jumped from 1.6x in 2Q13 to 2.0x in 3Q13, after having fallen in each of the previous three quarterseach of the previous three quarters.

• Noteworthy horizontal deals in Q3 included Kofax’s acquisition of big data integration player Kapow Software for $47.5 million (3.0x revenue), and Cisco’ acquisition of cyber security software provider Sourcefire for $2.2 billion (8.9x revenue).

• The median TTM revenue exit multiple for vertical software providers improved significantly over the past two quarters, closing 3Q13 at 2 7x3Q13 at 2.7x.

• Select Q3 vertical deals included IRESS Limited’s acquisition of financial services software provider Avelo for $320.4 million (3.8x revenue); Sepura PLC’s acquisition of public systems command and control software provider Portalify for $9.3 million (7.0x revenue); and Yotta Limited’s acquisition of public sector software provider Mayrise for $9.1 million (3.1x revenue)


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SOFTWARE M&A BY PRODUCT CATEGORY

• The Mobile product category accounted for 20.7% of all software M&A transactions in the third quarter, making it the most active M&A product category.

CRM, Marketing & Sales2.5%

Data Mgmt & Integration2.8%

Dev. Tools & IT Asset Mgmt2.2%

eCommerce0.3%

Accounting & Finance1.6%

Billing & Service Provisioning

0.3% BI, Risk & Compliance5.3%

Content & Document Mgmt2.5%

p g y

• Other active M&A categories in the third quarter included Healthcare (6.3%), Financial Services (5.3%) and Security (4.4%).

Engineering, PLM & CAD3.8%

Middleware0.3% ERP

1.9%Entertainment

3.1%Public Sector

Real Estate2.2%

Retail1.3%

Utilities0.9%

• BI, Risk & Compliance accounted for 5.3% of deals in 3Q13, up from 2.5% in 2Q13, 2.3% in 1Q13 and 2.5% for all of 2012

• The heightened deal activity was largely attributable to big data needs and continued

3.1%

HR & Workforce Mgmt1.9%

Messaging, Conferencing & Communications

3.4%Manufacturing

Non‐Profit0.9%

Other Verticals6.3%

1.9%

ticals

attributable to big data needs and continued demand for advanced real time analytics (ie: Software AG’s acquisition of Jackbe, Adello Group’s acquisition of Hstreaming, Nice Systems’ acquisition of Causata, FoundationDB’s acquisition of Akiban

Multimedia, Graphics & Communications

2.2%

Network Performance Mgmt1 6%

Healthcare6.3%

Insurance0.6%

Manufacturing4.4%Ve

rt

FoundationDB s acquisition of AkibanTechnologies)

1.6%

Security4.4%

Systems Mgmt2.5%

Automotive

Education1.9%

Financial Services5.3%

Supply Chain Mgmt & Logistics3.4%

Mobile20.7%

1.3%


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SOFTWARE M&A BY PRODUCT CATEGORYMedian EV/Revenue Exit Multiples by Software Product Category

3.0x2.7x

2.4x 2 3x 2 2x2.3x 2.2x1.8x 1.8x

1.5x1.2x

Dat

a M

gmt &

Inte

grat

ion

Sec

urity

Hea

lthca

re

BI,

Ris

k &

Com

plia

nce

Oth

er V

ertic

als

Man

ufac

turin

g

uppl

y C

hain

mt &

Log

istic

s

Edu

catio

n

ncia

l Ser

vice

s

• Among the 32 on-premise software product categories we track, nine had both sufficient deal activity and deal data to ascertain a TTM revenue multiple in 3Q13

O M SM

gm

Fina

TTM revenue multiple in 3Q13.

• Among the nine product categories, Data Mgmt. & Integration garnered the highest median TTM revenue multiple (3.0x) in Q3. Buyers in this product category are paying up for best-of-breed solutions that can improve analysis and management of big data. Examples include Informatica’s 4Q12 acquisition of Heiler Software ($85 million, 3.7x revenue), and Kofax’s 3Q13 acquisition of Kapow Software ($48 million, 3.0x revenue)

• The Security software category posted a strong 2.7x median EV/Revenue exit multiple in 3Q13. Select security deals included Cisco’s acquisition of Sourcefire in Q3 ($2.2 billion, 8.9x revenue); Tyco’s 2Q13’s acquisition of Exacq Technologies ($150 million, 2.7x revenue); and McAfee’s acquisition of Stonesoft ($375 million, 7.0x revenue) in 2Q13.


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SaaS M&A: DEAL VOLUME AND EXIT MULTIPLESMedian SaaS EV/Revenue Exit MultiplesSaaS M&A Volume

30%120

SaaS M&A Deals SaaS as % of Software

48

68 6559

94 9486

10497

15%

20%

25%

30%

60

80

100

120

ls as a % of T

otal

M&A Deals

M&A Deals

3.9x4.1x 4.0x 4.0x

4.6x

39

26

3945 48

0%

5%

10%

15%

0

20

40

60

SaaS M

&A Deal

Software M

# of SaaS M

3Q12 4Q12 1Q13 2Q13 3Q13

• There were 97 SaaS M&A transactions in 3Q13 Year to date there have been 287 SaaS M&A transactions suggesting 2013’s

0%0

• There were 97 SaaS M&A transactions in 3Q13. Year to date, there have been 287 SaaS M&A transactions, suggesting 2013 s year end tally should far outpace 2012’s record breaking total of 311 and SEG’s 2013 projection of 344 by some 40 deals.

• The median TTM EV/Revenue exit multiple of SaaS transactions rose sharply in 3Q13 after holding steady over the past year. The surge was partly due to a number of lower multiple transactions in 3Q12 falling out of the TTM analysis.

• The median SaaS exit multiple was 100% greater than the median on-premise exit multiple in 3Q13 (4.6x vs 2.3x).The median SaaS exit multiple was 100% greater than the median on premise exit multiple in 3Q13 (4.6x vs 2.3x).


All Rights Reserved

SaaS M&A BY PRODUCT CATEGORY

• CRM, Marketing & Sales was the most active SaaS product category, accounting for 13.0% of all M&A transactions in the third quarter

BI, Risk & Compliance3%

Content & Document Mgmt4%

CRM, Marketing & Sales13%

Retail

Accounting & Finance4%

Billing & Service Provisioning

1%

transactions in the third quarter.

• Buyers are seeking targets that can help garner a greater share of IT capital in spending on online marketing technology. According to Gartner, by

Data Mgmt & Integration1%

Dev. Tools & IT Asset M f t i

Other Verticals5%

Real Estate4%

4%

2017 the CMO will purchase more IT than the CIO.

• After two years of comprising almost 20% of all SaaS transactions, the HR & Workforce Mgmt product category had

Mgmt1%

eCommerce3%

Engineering, PLM & CADHealthcare

Insurance1%

Manufacturing2%

Verticals

Workforce Mgmt product category had its third consecutive lackluster quarter, claiming only 2% of SaaS transactions in 3Q13. After a three-year period of consolidation by the large HR software providers the M&A window for many

3%

ERP4%

HR & Workforce MgmtEd ti

Financial Services2%

Healthcare7%

V

providers, the M&A window for many smaller HR SaaS providers is rapidly closing.

• The Systems Management (7%) and Supply Chain (6%) product categories

2%

Messaging, Conferencing & Communications

3%Multimedia, Graphics &

CommunicationsSS l Ch i M t &

Automotive7%

Education3%

also showed strength in 3Q13. Both categories are benefiting from wider adoption of SaaS deployed solutions, which should persist a while longer, as large public legacy vendors continue to

Communications6%

Network Performance Mgmt1%

Security1%

Systems Mgmt7%

Supply Chain Mgmt & Logistics

6%


All Rights Reserved

play catch-up.

3Q13 SaaS M&A TRANSACTIONSEnterprise TTM Rev

Date Buyer SellerEnterprise Value (mm)

TTM Rev. (mm) EV/Rev

09/27/2013 Columbus A/S (CPSE:COLUM) Columbus Norw ay AS - - -09/24/2013 Softw are Paradigms International, Inc. Shiloh Technologies, LLC - - -09/23/2013 Vitera Healthcare Solutions, LLC Greenw ay Medical Technologies, Inc. $632.4 $134.8 4.7x09/20/2013 AmeriCommerce, L.P. Americart LLC - - -09/20/2013 Sucuri Inc Unmask Parasites - - -09/20/2013 Sucuri Inc. Unmask Parasites09/20/2013 Xchanging Inc. MarketMaker4* $22.0 $5.5 4.0x09/20/2013 Blue-Grace Logistics LLC U.S. Transportation Consultants, Inc. - - -09/19/2013 Mindshare Technologies, Inc. Empathica, Inc. - - -09/18/2013 Amber Road, Inc. EasyCargo Inc. - - -09/17/2013 BasWare Oyj (HLSE:BAS1V) BravoSolution SpA - - -09/17/2013 Solera Holdings Inc (NYSE:SLH) Servicios Informaticos Serinfo S A - - -09/17/2013 Solera Holdings Inc. (NYSE:SLH) Servicios Informaticos Serinfo S.A09/16/2013 Stratatel Ltd. (ASX:STE) JCurve Solutions Pty Ltd $4.4 - -09/16/2013 Scivantage, Inc. Portfolio Director, Inc. - - -09/16/2013 Wow zaTV LLC Camfoo GmbH - - -09/16/2013 eFolder, Inc. Anchor Box LLC - - -09/16/2013 PCSYS A/S IBS Systems A/S - - -09/12/2013 Plan Net Campaign Hamburg GmbH & Co KG Webfact GmbH - - -09/12/2013 Plan.Net Campaign Hamburg GmbH & Co. KG Webfact GmbH09/10/2013 PTC Inc. (NasdaqGS:PMTC) NetIDEAS, Inc. - - -09/10/2013 Origo Netw orks, Inc. Standing Cloud, Inc. - - -09/09/2013 Wolters Kluw er Corporate Legal Services CitizenHaw k, Inc. - - -09/09/2013 Desire2Learn Incorporated Know illage, Inc. - - -09/09/2013 ERP Guru, Inc. EnabledSuccess Inc. - - -09/09/2013 Confluence Technologies Inc Data Agent LLC - - -09/09/2013 Confluence Technologies, Inc. Data Agent LLC09/06/2013 Enghouse Systems Limited (TSX:ESL) Safeharbor Know ledge Solutions - - -09/05/2013 Summit Garnishee Solutions (Pty) Limited Business Connexion Group, Q LINK $18.4 - -09/05/2013 Charles Taylor plc (LSE:CTR) Charles Taylor Know ledgeCenter $11.1 $4.2 2.6x09/05/2013 JAK, Ltd. LabMentors Corp. $0.2 - -09/05/2013 FactSet Research Systems Inc. (NYSE:FDS) Revere Data LLC $15.4 - -09/04/2013 Answ ers Corporation Easy2 Technologies Inc - - -09/04/2013 Answ ers Corporation Easy2 Technologies, Inc.09/03/2013 To The New ThoughtBuzz Pte Ltd $3.9 - -09/03/2013 Eventbrite, Inc. South Interactive S.A. - - -09/03/2013 Arbor Netw orks, Inc. Packetloop Pty Limited - - -09/03/2013 Cultura Technologies Inc. E-Markets, Inc. - - -08/30/2013 Digium, Inc. Digium Cloud Services, LLC - - -08/30/2013 SciQuest Inc (NasdaqGS:SQI) CombineNet Inc $43 1 $12 0 3 6x


All Rights Reserved

08/30/2013 SciQuest, Inc. (NasdaqGS:SQI) CombineNet, Inc. $43.1 $12.0 3.6x

*Revenue estimate

3Q13 SaaS M&A TRANSACTIONS (CON’T)Enterprise TTM Rev



08/28/2013 McKinsey & Company, Inc. Lixto Softw are GmbH - - -08/28/2013 - eQtickets (Pty) Ltd $0.5 - -08/27/2013 Fax87.com Wired Fax, Inc. - - -08/26/2013 Authenticom, Inc. RyanTech, Inc., Auto.Tech. Portfolio - - -08/23/2013 Vista Equity Partners Omnitracs Inc $800 0 - -08/23/2013 Vista Equity Partners Omnitracs, Inc. $800.008/19/2013 Verisae, Inc. FM Solutions LLC - - -08/19/2013 The Reynolds and Reynolds Company iMakeNew s, Inc. - - -08/19/2013 Altisource Portfolio Solutions S.A. (NasdaqGS:ASPS) Equator, LLC $150.0 - -08/18/2013 Darw in Strategic Limited, Investment Arm FTG Finance Services Limited - - -08/16/2013 Open Text Corporation (NasdaqGS:OTEX) Cordys B.V. $33.0 - -08/16/2013 Welsh Carson Anderson & Stow e Alert Logic Inc - - -08/16/2013 Welsh, Carson, Anderson & Stow e Alert Logic, Inc.08/15/2013 LookSmart, Ltd. (NasdaqCM:LOOK) Syncapse Corp., Key Assets $3.0 - -08/15/2013 International Business Machines Corporation (NYSE:IBM) Trusteer, Inc. - - -08/12/2013 Xtari, LLC RhinoSEO - - -08/10/2013 Transport I.T. Solutions Private Limited Four Soft USA, Inc. $0.3 - -08/08/2013 McGregor BFA (Pty) Ltd. I-Net Bridge (Pty) Ltd. $12.7 - -08/08/2013 Proofpoint Inc (NasdaqGM:PFPT) Armorize Technologies Inc $25 0 - -08/08/2013 Proofpoint, Inc. (NasdaqGM:PFPT) Armorize Technologies Inc. $25.008/07/2013 LexisNexis Risk Solutions, Inc. WorldCompliance, Inc. - - -08/07/2013 ALL-STATE International, Inc. Vizibility Inc. - - -08/07/2013 MicroD, Inc. Internet Databases Corporation - - -08/06/2013 Intuit Inc. (NasdaqGS:INTU) GoodApril, Inc. $20.0 - -08/06/2013 Market Track, LLC Dynamite Data LLC - - -08/06/2013 3D Systems Corp (NYSE:DDD) VisPow er Technology Inc - - -08/06/2013 3D Systems Corp. (NYSE:DDD) VisPow er Technology, Inc.08/06/2013 Interactive Leisure Systems, Inc. (OTCPK:IALS) Travel Time Technologies, Inc. - - -08/02/2013 Angie's List, Inc. (NasdaqGM:ANGI) SmartHabitat, Inc. $2.7 - -08/01/2013 - Tracer Management Systems Ltd. - - -07/31/2013 HgCapital; HgCapital Trust plc (LSE:HGT) e-conomic international a/s $120.6 - -07/31/2013 Kaplan, Inc. Grockit Inc., Test Prep Assets - - -07/31/2013 HealthTech Solutions Group LLC Gaffey and Associates Inc - - -07/31/2013 HealthTech Solutions Group, LLC Gaffey and Associates, Inc.07/31/2013 - Primal Parking Ltd - - -07/31/2013 Guar Global Limited (OTCPK:GGBL) Guar Global Ltd. - - -07/28/2013 Virtual Atmosphere Ltd. YCD Atmosphere $2.8 - -07/24/2013 Cloud Bees, Inc. FoxWeave - - -07/24/2013 HotelPlanner.com Meetings.com - - -07/24/2013 LightSpeed Retail Inc MerchantOS - - -


All Rights Reserved

07/24/2013 LightSpeed Retail Inc. MerchantOS

3Q13 SaaS M&A TRANSACTIONS (CON’T)



07/23/2013 To The New Techsailor Group Pte Ltd. - - -07/23/2013 Aimia Inc. (TSX:AIM) Smart Button Associates, Inc. $18.0 - -07/19/2013 Proofpoint, Inc. (NasdaqGM:PFPT) Abaca Technology Corporation $2.5 - -07/18/2013 Ipreo Holdings LLC Discovery Data - - -07/18/2013 Ipreo Holdings LLC Discovery Data - - -07/17/2013 Cineplex Inc. (TSX:CGX) Cineplex Digital Netw orks $112.3 $24.9 4.5x07/16/2013 Concur Technologies, Inc. (NasdaqGS:CNQR) GDSX, Ltd. - - -07/15/2013 Intuit Singapore Pte. Limited Fifo Pty Ltd - - -07/15/2013 Pin Payments Spreedly, Inc., US Tech. Assets - - -07/12/2013 Panasonic Europe Ltd. Cameramanager B.V. - - -07/11/2013 Imprezzio Inc Racing Snail Inc - - -07/11/2013 Imprezzio Inc. Racing Snail, Inc. - - -07/11/2013 EMC Corporation (NYSE:EMC) Scaleio, Inc. - - -07/10/2013 Boost Holding AG Xsmart AG - - -07/10/2013 Garantia Data Ltd. MyRedis - - -07/10/2013 - SaaSMAX Corp. $0.0 - -07/09/2013 Tom's Planner N.V. Gantto Inc. - - -07/09/2013 Idera Inc CopperEgg Corporation - - -07/09/2013 Idera, Inc. CopperEgg Corporation - - -07/08/2013 Bandzoogle Inc. Onesheet, LLC - - -07/07/2013 PropertyIQ NZ Ltd Terralink International Limited - - -07/04/2013 All for One Steeb AG (XTRA:A1OS) WEBMAXX GmbH - - -07/03/2013 Scottish Equity Partners LLP; Investec plc (LSE:INVP) Purepromoter Limited - - -07/03/2013 Yardi Systems, Inc. Pierce-Eislen, Inc. - - -07/02/2013 ABS Capital Partners; Persimmon Capital Partners IgnitionOne Inc - - -07/02/2013 ABS Capital Partners; Persimmon Capital Partners IgnitionOne, Inc. - - -07/02/2013 Thistle Insurance Services Limited Risk Management Support Ltd. - - -07/01/2013 ServiceNow , Inc. (NYSE:NOW) Mirror42 B.V. - - -07/01/2013 ClearSlide, Inc. Crunched - - -07/01/2013 Thoma Bravo, LLC Digital Insight Corporation $1,025.0 3.4x07/01/2013 Mentorix ApS Scoll Methods Ltd., Training Division - - -


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INTERNET M&A: DEAL VOLUME AND EXIT MULTIPLESMedian Internet EV/Revenue Exit MultiplesInternet M&A Volume

1.9x 1.9x 1.9x 1.9x 1.9x

263

222185

204231

er o

f Dea

ls

3Q12 4Q12 1Q13 2Q13 3Q133Q12 4Q12 1Q13 2Q13 3Q13

Num

be

• In 3Q13, there were 231 Internet M&A transactions, the second consecutive quarter of marked improvement over 1Q13, but still well below 2012 deal levels.

• Internet M&A remained highly volatile, in large part due to shifting marketing strategies, evolving business models, and constant changes in the competitive landscape.

• In early 2012, a large number of Internet targets exited amidst the hype of the pending Facebook IPO (5/2012), creating a spike i M&A l Aft th F b k IPO d b l I t t i t d b lik b ti d i tin M&A volume. After the Facebook IPO debacle, Internet investors and buyers alike became more cautious and circumspect, and M&A volume declined markedly, plunging to 185 transactions in 1Q13, down from 273 transactions in 2Q12.

• Internet median TTM EV/Revenue exit multiples have held steady, finishing 3Q13 at 1.9x. This is an M&A world of haves and have nots, with wide disparities in exit multiples.


All Rights Reserved

INTERNET M&A: BY PRODUCT CATEGORYM&A Volume by QuarterTTM M&A Volume by Product Category

8.2%

36.8%16.9%

Ad‐Tech & Lead Gen

Commerce

Content & Media

Category 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013Ad-Tech & Lead Gen 85 57 58 60 85Commerce 40 41 34 39 44Content & Media 52 55 42 34 36Gaming 13 12 7 11 8I f t t 41 27 24 41 39

3.5% Gaming

Infrastructure

Social Tech

Infrastructure 41 27 24 41 39Social Tech 32 30 20 19 19Total 263 222 185 204 231

• Internet ad-tech continued to remain to most active internet M&A category in 3Q13 accounting for over 1/3 of all sector

19.0%

15.6%

• Internet ad-tech continued to remain to most active internet M&A category in 3Q13, accounting for over 1/3 of all sector transactions

• Following a wave of social technology deals in 2011/2012, social tech acquisition activity has significantly tapered off, closing each of the last two quarters at 19 acquisitions.

• After a respectable 2Q12 showing with 25 M&A transactions, the Internet Gaming M&A has been largely dormant over the pastAfter a respectable 2Q12 showing with 25 M&A transactions, the Internet Gaming M&A has been largely dormant over the past four quarters, averaging less than ten transactions per quarter. The product category has been decimated by the emergence ofmobile gaming, (ie. Zynga’s recent public stock market performance).


All Rights Reserved

APPENDIX


All Rights Reserved

C Ti k P d t C t

THE SEG SOFTWARE INDEX COMPANIESCompany Ticker Product Category

Amdocs Limited DOX Billing & Service ManagementAsiaInfo Holdings, Inc. ASIA Billing & Service ManagementCSG Systems International, Inc. CSGS Billing & Service ManagementEvolving Systems, Inc. EVOL Billing & Service ManagementMIND C T I Ltd MNDO Billing & Service ManagementMIND C.T.I. Ltd. MNDO Billing & Service ManagementNeuStar, Inc NSR Billing & Service ManagementRedknee Solutions TSX:RKN Billing & Service ManagementSynchronoss Technologies, Inc. SNCR Billing & Service ManagementActuate Corporation BIRT Business IntelligenceMicroStrategy Incorporated MSTR Business IntelligencePegasystems Inc PEGA Business IntelligencePegasystems Inc. PEGA Business IntelligenceProgress Software Corporation PRGS Business IntelligencePROS Holdings PRO Business IntelligenceQlik Technologies QLIK Business IntelligenceTeradata NYSE:TDC Business IntelligenceVerisk VRSK Business IntelligenceActuate Corporation BIRT Development Platformsp pAdobe Systems Incorporated ADBE Development PlatformsBSQUARE Corporation BSQR Development PlatformsCompuware Corporation CPWR Development PlatformsMagic Software Enterprises Ltd. MGIC Development PlatformsMicrosoft Corporation MSFT Development PlatformsOracle Corporation ORCL Development PlatformsProgress Software Corporation PRGS Development PlatformsRed Hat, Inc. RHT Development PlatformsSoftware AG XTRA:SOW Development PlatformsANSYS, Inc. ANSS Engineering & PLMAutodesk, Inc. ADSK Engineering & PLMCadence Design Systems, Inc CDNS Engineering & PLMCimatron Ltd CIMT Engineering & PLMCimatron Ltd. CIMT Engineering & PLMDassault Systèmes DSY Engineering & PLMGSE Systems Inc. GVP Engineering & PLMMentor Graphics Corp MENT Engineering & PLMParametric Technology Corporation PMTC Engineering & PLMPDF Solutions Inc PDFS Engineering & PLMStratasys Inc SSYS Engineering & PLM


All Rights Reserved

Stratasys, Inc. SSYS Engineering & PLMSynopsys Inc SNPS Engineering & PLM

C Ti k P d t C t

THE SEG SOFTWARE INDEX COMPANIES (CON’T)Company Ticker Product Category

American Software, Inc. AMSW.A Enterprise Resource PlanningOracle Corporation ORCL Enterprise Resource PlanningQAD Inc. QADA Enterprise Resource PlanningSage Group plc LSE:SGE Enterprise Resource PlanningSAP AG SAP E t i R Pl iSAP AG SAP Enterprise Resource PlanningUnit 4 ENXTAM:U Enterprise Resource PlanningACI Worldwide, Inc. ACIW Financial & AccountingBottomline Technologies EPAY Financial & AccountingDST Systems, Inc. DST Financial & AccountingEvertec EVTC Financial & AccountingFair Isaac Corporation FICO Financial & AccountingFair Isaac Corporation FICO Financial & AccountingFiserv FISV Financial & AccountingIntuit Inc INTU Financial & AccountingModel N, Inc MODN Financial & AccountingNetSol Technologies Inc. KASE:NET Financial & AccountingSage Group plc LSE:SGE Financial & AccountingQiwi plc QIWI Financial & AccountingQiwi plc QIWI Financial & AccountingActivision Blizzard ATVI GamingElectronic Arts Inc. EA GamingGameLoft SA ENXTPA:G GamingKonami Corporation TSE: 9766 GamingTake-Two Interactive TTWO GamingUbisoft Entertainment ENXTPA:U GaminggAccretive Health AH HealthcareAllscripts Healthcare Solutions Inc. MDRX HealthcareCerner Corporation CERN HealthcareComputer Programs and Sys, Inc. CPSI HealthcareGreenway Medical Technologies, Inc GWAY HealthcareMedAssets MDAS HealthcareMerge Healthcare MRGE HealthcareOmnicell, Inc. OMCL HealthcareQuality Systems, Inc. QSII HealthcareHewlett Packard HPQ IT ConglomeratesIBM IBM IT ConglomeratesMicrosoft Corporation MSFT IT ConglomeratesOracle Corporation ORCL IT Conglomerates


All Rights Reserved

Oracle Corporation ORCL IT ConglomeratesSAP AG SAP IT Conglomerates

C Ti k P d t C t


Bango PLC BGO Mobile Solutions/ContentGlu Mobile, Inc. GLUU Mobile Solutions/ContentGree TSE:3632 Mobile Solutions/ContentMillennial Media Inc MM Mobile Solutions/ContentM i d G AG MYRN M bil S l ti /C t tMyriad Group AG MYRN Mobile Solutions/ContentNQ Mobile Inc. NQ Mobile Solutions/ContentOpera OB:OPERA Mobile Solutions/ContentQihoo 360 Technology Co. Ltd QIHU Mobile Solutions/ContentPandora Media P Mobile Solutions/ContentSynchronoss Technologies, Inc. SNCR Mobile Solutions/ContentTangoe, Inc. TNGO Mobile Solutions/ContentTangoe, Inc. TNGO Mobile Solutions/ContentTeleCommunication Systems TSYS Mobile Solutions/ContentTeleNav TNAV Mobile Solutions/ContentVelti Plc VELT Mobile Solutions/ContentZynga, Inc ZNGA Mobile Solutions/ContentAllot Communications Ltd. ALLT Networking & Network Performance Aruba Networks, Inc. ARUN Networking & Network Performance Brocade Communications Systems, BRCD Networking & Network Performance Cisco Systems, Inc. CSCO Networking & Network Performance Compuware Corporation CPWR Networking & Network Performance Cyan, Inc. CYNI Networking & Network Performance F5 Networks, Inc. FFIV Networking & Network Performance Gigamon, LLC GIMO Networking & Network Performance Juniper Networks Inc JNPR Networking & Network PerformanceJuniper Networks, Inc. JNPR Networking & Network Performance Radware Ltd. RDWR Networking & Network Performance Riverbed Technology, Inc. RVBD Networking & Network Performance AVG Technologies N.V. AVG SecurityCheck Point Software Tech Ltd. CHKP SecurityCommtouch Software Ltd. CTCH SecurityFortinet Inc. FTNT SecurityGuidance Software, Inc. GUID SecurityImperva IMPV SecurityPalo Alto Networks, Inc PANW SecurityProofpoint, Inc. PFPT SecuritySourcefire, Inc. FIRE SecuritySymantec Corporation SYMC SecurityTrend Micro TSE:4704 Secuity


All Rights Reserved

Trend Micro TSE:4704 SecuityVASCO Data Security International VDSI Security

C Ti k P d t C t


Brocade Communications Systems, BRCD Storage, Data Management & IntegrationCA, Inc. CA Storage, Data Management & IntegrationCisco Systems, Inc. CSCO Storage, Data Management & IntegrationCommVault Systems, Inc. CVLT Storage, Data Management & IntegrationEMC EMC Storage, Data Management & IntegrationEMC EMC Storage, Data Management & IntegrationFalconStor Software, Inc. FALC Storage, Data Management & IntegrationIBM IBM Storage, Data Management & IntegrationInformatica Corporation INFA Storage, Data Management & IntegrationMicrosoft Corporation MSFT Storage, Data Management & IntegrationNetApp, Inc. NTAP Storage, Data Management & IntegrationOracle Corporation ORCL Storage, Data Management & IntegrationSplunk Inc SPLK Storage Data Management & IntegrationSplunk, Inc. SPLK Storage, Data Management & IntegrationTIBCO Software Inc. TIBX Storage, Data Management & IntegrationAmerican Software, Inc. AMSW.A Supply Chain Management & LogisticsAspen Technology, Inc. AZPN Supply Chain Management & LogisticsManhattan Associates, Inc. MANH Supply Chain Management & LogisticsThe Descartes Systems Group Inc. TSX:DSG Supply Chain Management & LogisticsUnit 4 ENXTAM:U Supply Chain Management & LogisticsCA T h l i CA S t M tCA Technologies CA Systems ManagementCitrix Systems, Inc. CTXS Systems ManagementNetscout Systems, Inc. NTCT Systems ManagementRed Hat, Inc. RHT Systems ManagementSolarWinds, Inc. SWI Systems ManagementVMWare, Inc. VMW Systems ManagementAdvent Software, Inc. ADVS Vertical - FinanceBroadridge Financial BR Vertical - FinanceFidessa LSE:FDSA Vertical - FinanceJack Henry & Associates, Inc. JKHY Vertical - FinanceMSCI, Inc. MSCI Vertical - FinanceSS&C Corporation SSNC Vertical - FinanceBlackbaud, Inc. BLKB Vertical - OtherConstellation TSX:CSU Vertical - OtherConstellation TSX:CSU Vertical OtherEPIQ Systems, Inc. EPIQ Vertical - OtherGuidewire Software, Inc. GWRE Vertical - OtherMicros Systems MCRS Vertical - OtherPROS Holdings PRO Vertical - OtherSapiens International SPNS Vertical - OtherSilver Spring Networks, Inc. SSNI Vertical - OtherThe Active Network Inc ACTV Vertical Other


All Rights Reserved

The Active Network, Inc. ACTV Vertical - OtherTyler Technologies, Inc. TYL Vertical - Other

C Ti k P d t C t

THE SEG SaaS INDEX COMPANIESCompany Ticker Product Category

Bazaarvoice, Inc BV CRM & MarketingConstant Contact CTCT CRM & MarketingCvent NYSE:CVT CRM & MarketingLivePerson LPSN CRM & MarketingMarketo MKTO CRM & MarketinggMarin Software MRIN CRM & MarketingResponsys MKTG CRM & MarketingSalesforce.com CRM CRM & MarketingVocus VOCS CRM & MarketingE2open, Inc EOPN ERP & Supply ChainFleetmatics FLTX ERP & Supply ChainNetsuite N ERP & Supply ChainSciQuest SQI ERP & Supply ChainSPS Commerce SPSC ERP & Supply ChainWorkday, Inc. WDAY ERP & Supply ChainAthenahealth, Inc ATHN Vertically FocusedDealerTrack TRAK Vertically FocusedEbix Inc. EBIX Vertically FocusedEllie Mae ELLI Vertically FocusedMedidata Solutions MDSO Vertically FocusedRealPage RP Vertically FocusedTextura Corp. TXTR Vertically FocusedCallidus Software Inc. CALD Workforce ManagementCornerstone OnDemand CSOD Workforce ManagementHalogen Software, Inc. TSX:HGN Workforce ManagementThe Ultimate Software Group, Inc. ULTI Workforce ManagementWorkday, Inc. WDAY Workforce ManagementBenefitfocus, Inc. BNFT Other SaaSChannelAdvisors ECOM Other SaaSConcur CNQR Other SaaSDemandware, Inc. DWRE Other SaaSFireEye, Inc. FEYE Other SaaSinContact, Inc. SAAS Other SaaSI t Li k H ldi IL Oth S SIntraLinks Holdings IL Other SaaSJ2 Global JCOM Other SaaSJive Software, Inc JIVE Other SaaSOpenTable, Inc. OPEN Other SaaSQualys, Inc. QLYS Other SaaSService-now.com NOW Other SaaSTableau Software DATA Other SaaST TNGO Oth S S


All Rights Reserved

Tangoe TNGO Other SaaSZix Corporation ZIXI Other SaaS

C Ti k P d t C t

THE SEG INTERNET INDEX COMPANIESCompany Ticker Product Category

Angie's List, Inc. ANGI Ad Tech & Lead GenerationBaidu.com, Inc. BIDU Ad Tech & Lead GenerationBankrate, Inc. RATE Ad Tech & Lead GenerationDigital Generation, Inc. DGIT Ad Tech & Lead GenerationeHealth, Inc. EHTH Ad Tech & Lead GenerationGoogle Inc. GOOG Ad Tech & Lead GenerationGroupon GRPN Ad Tech & Lead GenerationInterActiveCorp IACI Ad Tech & Lead GenerationLinkedIn LNKD Ad Tech & Lead GenerationMarchex Inc. MCHX Ad Tech & Lead GenerationMarchex Inc. MCHX Ad Tech & Lead GenerationQuinStreet QNST Ad Tech & Lead GenerationReachLocal, Inc. RLOC Ad Tech & Lead GenerationRocket Fuel FUEL Ad Tech & Lead GenerationSINA Corporation SINA Ad Tech & Lead GenerationSohu.com Inc. SOHU Ad Tech & Lead GenerationTree Com Inc TREE Ad Tech & Lead GenerationTree.Com, Inc. TREE Ad Tech & Lead GenerationTremor Video, Inc. TRMR Ad Tech & Lead GenerationValueClick, Inc. VCLK Ad Tech & Lead GenerationYandex YNDX Ad Tech & Lead GenerationYuMe, Inc. YUME Ad Tech & Lead Generation1-800-FLOWERS.COM, Inc. FLWS CommerceA I AMZN CAmazon.com, Inc. AMZN CommerceBitauto Holdings Limited BITA CommerceBlueNile NILE CommerceDangDang DANG CommerceDigital River Inc. DRIV CommerceeBay Inc. EBAY CommerceyGeekNet GKNT CommerceLiquidity Services, Inc. LQDT CommerceMecox Lane Limited MCOX CommerceMercadolibre, Inc. MELI CommerceOverstock.com, Inc. OSTK CommercePetMed Express Inc PETS Commerce


All Rights Reserved

PetMed Express, Inc. PETS CommerceStamps.com STMP Commerce

C Ti k P d t C t

THE SEG INTERNET INDEX COMPANIES (CON’T)Company Ticker Product Category

AOL, Inc. AOL Content & MediaDemandMedia DMD Content & MediaInterActiveCorp IACI Content & MediaNetflix NFLX Content & MediaP d P C t t & M diPandora P Content & MediaShutterstock, Inc. SSTK Content & MediaTheStreet.com, Inc. TST Content & MediaWebMD Health Corp. WBMD Content & MediaXO Group XOXO Content & MediaYahoo! Inc. YHOO Content & MediaYouku YOKU Content & MediaYouku YOKU Content & MediaChangYou.com CYOU GamingGiant Interactive GA GamingNetease NTES GamingNCSoft KOSE:A036 GamingPerfect World PWRD GamingSohu.com Inc. SOHU GaminggTencent Holdings SEHK:700 GamingZynga, Inc. ZNGA Gaming8x8, Inc. EGHT InfrastructureAkamai Technologies, Inc. AKAM InfrastructureBrightcove Inc. BCOV InfrastructureBroadSoft, Inc. BSFT InfrastructureDigital River Inc. DRIV InfrastructureEnvivio, Inc. ENVI InfrastructureHarmonic Inc HLIT InfrastructureInteractive Intelligence, Inc. ININ InfrastructureLimelight Networks, Inc. LLNW InfrastructureMitel Networks Corp. MITL InfrastructureP l I PLCM I f t tPolycom, Inc. PLCM InfrastructureRovi Corporation ROVI InfrastructureSeaChange International Inc. SEAC InfrastructureShoreTel, Inc. SHOR InfrastructureSonus Networks, Inc SONS InfrastructureSynacor, Inc SYNC InfrastructureTucows Inc TCX Infrastructure


All Rights Reserved

Tucows Inc. TCX InfrastructureVeriSign VRSN Infrastructure

C Ti k P d t C t

THE SEG INTERNET INDEX COMPANIES (CON’T)Company Ticker Product Category

Angie's List, Inc. ANGI ServicesBankrate, Inc. RATE ServicesCarbonite, Inc. CARB ServicesLifeLock, Inc. LOCK ServicesMonster Worldwide, Inc. MWW ServicesQihoo QIHU ServicesShutterfly SFLY ServicesSouFun Holdings Ltd. SFUN ServicesTree.Com, Inc. TREE ServicesTrulia, Inc. TRLA ServicesTrulia, Inc. TRLA ServicesVistaPrint VPRT ServicesXoom XOOM ServicesZillow Z ServicesFacebook FB SocialLinkedIn LNKD SocialMail ru Group LSE:MAIL SocialMail.ru Group LSE:MAIL SocialRenren Inc RENN SocialYelp, Inc. YELP SocialYY, Inc. YY SocialCtrip CTRP TravelExpedia EXPE TravelH A AWAY T lHomeAway AWAY TravelMakeMyTrip MMYT TravelOrbitz OWW TravelPriceline PCLN TravelTravelzoo TZOO TravelTripAdvisor Inc TRIP Travel


All Rights Reserved

SEG Software Index

THE SEG SOFTWARE INDEX COMPANIES – KEY METRICS3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13

Accretive Health 0.9x 1.0x 1.0x 0.9x 0.8x 19.9x 32.8x 33.3x 29.5x 26.5x 43.5% 32.2% 32.2% 32.2% 32.2% 4.6% 2.9% 2.9% 2.9% 2.9%

ACI Worldwide, Inc. 3.7x 3.4x 3.2x 3.4x 3.3x 18.0x 17.2x 13.8x 16.1x 15.2x 17.2% 22.5% 43.3% 38.7% 39.7% 20.4% 19.7% 23.6% 21.1% 21.9%

Activision Blizzard 2.2x 2.0x 2.3x 2.4x 2.9x 9.1x 8.0x 7.1x 7.1x 7.7x -7.6% -5.9% 2.1% 11.8% 13.1% 24.6% 25.5% 32.4% 33.3% 37.6%

Actuate Corporation 1.8x 1.4x 1.6x 1.7x 2.0x 8.2x 7.0x 9.2x 11.5x 16.0x 1.6% 5.0% 2.9% 0.9% -1.9% 22.4% 19.7% 17.2% 14.9% 12.6%

Adobe Systems Incorporated 3.3x 3.4x 3.9x 4.7x 5.1x 9.5x 10.0x 13.3x 17.7x 22.1x 8.1% 4.4% 3.1% -1.9% -5.3% 34.2% 33.5% 29.7% 26.6% 23.3%

Advent Software Inc 3 3x 2 9x 3 5x 4 1x 3 7x 17 0x 14 5x 16 3x 17 9x 19 0x 14 7% 11 9% 10 0% 7 9% 6 7% 19 6% 19 9% 21 2% 22 7% 19 3%

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

Advent Software, Inc. 3.3x 2.9x 3.5x 4.1x 3.7x 17.0x 14.5x 16.3x 17.9x 19.0x 14.7% 11.9% 10.0% 7.9% 6.7% 19.6% 19.9% 21.2% 22.7% 19.3%

Allot Communications Ltd. 7.1x 5.4x 2.8x 2.4x 2.9x 44.2x 35.1x 22.8x 32.3x 336.0x 39.4% 39.6% 34.7% 23.4% 7.2% 16.2% 15.5% 12.3% 7.5% 0.9%Allscripts Healthcare Solutions Inc. 1.5x 1.7x 1.6x 1.9x 2.2x 9.3x 10.9x 18.4x 26.3x 40.2x 19.9% 9.0% 0.2% -3.0% -5.6% 15.9% 15.3% 8.6% 7.4% 5.6%

Amdocs Limited 1.4x 1.4x 1.5x 1.5x 1.5x 7.4x 7.5x 8.0x 7.8x 8.1x 3.5% 2.2% 1.8% 1.9% 2.6% 18.4% 18.5% 18.5% 18.6% 18.7%

American Software, Inc. 1.6x 1.5x 1.7x 1.7x 1.7x 9.2x 9.0x 10.6x 11.4x 12.2x 16.2% 11.2% 3.3% -2.1% -6.6% 17.1% 16.6% 16.0% 15.3% 14.3%

ANSYS, Inc. 7.6x 7.5x 8.2x 7.9x 8.7x 16.1x 15.8x 17.2x 16.8x 18.6x 19.9% 17.5% 15.4% 12.8% 10.5% 47.3% 47.5% 47.6% 47.1% 46.7%

Aruba Networks, Inc. 3.0x 3.5x 4.0x 2.7x 2.6x 52.3x 55.4x 55.6x 43.8x 61.0x 30.3% 25.2% 22.8% 19.3% 16.1% 5.8% 6.3% 7.1% 6.1% 4.3%

AsiaInfo Holdings Inc 1 2x 1 0x 1 0x 1 0x 0 9x 7 5x 7 7x 7 9x 8 2x 8 1x 9 8% 10 5% 13 9% 15 7% 16 2% 16 0% 13 0% 12 2% 11 7% 11 5%AsiaInfo Holdings, Inc. 1.2x 1.0x 1.0x 1.0x 0.9x 7.5x 7.7x 7.9x 8.2x 8.1x 9.8% 10.5% 13.9% 15.7% 16.2% 16.0% 13.0% 12.2% 11.7% 11.5%

Aspen Technology, Inc. 8.4x 8.6x 9.7x 9.1x 9.4x - 173.7x 127.2x 65.7x 49.1x 22.7% 27.7% 22.9% 26.1% 28.1% -5.5% 4.9% 7.6% 13.8% 19.2%

Autodesk, Inc. 2.7x 2.6x 3.2x 3.1x 3.0x 12.6x 12.7x 15.7x 15.1x 14.8x 10.5% 6.8% 4.4% 0.8% -0.5% 21.2% 20.6% 20.7% 20.5% 20.3%

AVG Technologies N.V. 2.1x 2.2x 2.3x 2.5x 3.0x 7.7x 7.4x 7.5x 8.1x 8.8x - 31.1% 30.7% 28.2% 27.2% 26.8% 29.3% 30.1% 31.4% 34.1%

Bango PLC 4.6x 5.3x 8.2x 8.8x 8.5x - - - - - -19.3% -19.3% - - - -6.1% -6.1% -26.0% -29.0% -32.4%

Blackbaud, Inc. 3.4x 2.9x 3.2x 3.4x 3.7x 22.1x 21.3x 22.0x 22.1x 20.8x 12.9% 16.6% 20.6% 23.6% 22.3% 15.2% 13.8% 14.5% 15.3% 17.8%

Bottomline Technologies 3.2x 3.4x 3.7x 3.3x 3.4x 22.7x 27.2x 40.9x 38.3x 35.0x 18.4% 16.9% 14.9% 15.7% 13.6% 14.0% 12.5% 9.1% 8.7% 9.8%

Broadridge Financial 1.3x 1.3x 1.4x 1.5x 1.6x 7.9x 7.9x 7.9x 8.5x 8.5x 6.3% 4.5% 3.4% 3.8% 5.5% 16.8% 16.9% 17.1% 17.4% 18.6%

Brocade Communications Systems, Inc. 1.2x 1.1x 1.2x 1.1x 1.4x 5.4x 5.3x 5.5x 5.2x 6.2x 3.0% 4.2% 4.8% 4.8% 1.5% 21.2% 21.0% 21.8% 21.9% 22.2%

BSQUARE Corporation 0.1x 0.1x 0.2x 0.1x 0.1x - 9.4x 7.8x 8.8x 12.9x -4.8% -2.1% 4.7% 0.3% -3.5% -0.3% 1.4% 2.1% 1.5% 1.0%

CA Technologies 2.3x 2.0x 2.2x 2.4x 2.7x 6.5x 5.9x 6.5x 6.6x 7.4x 6.0% 2.4% -1.6% -3.6% -3.5% 35.4% 33.6% 33.9% 36.1% 36.4%

Cadence Design Systems, Inc 2.6x 2.5x 2.7x 2.6x 2.8x 12.1x 11.3x 11.9x 11.3x 12.3x 19.9% 18.2% 15.4% 13.8% 12.7% 21.1% 22.6% 22.7% 23.0% 22.4%

Cerner Corporation 4.9x 4.9x 5.4x 5.9x 5.9x 17.9x 18.1x 20.0x 21.0x 20.4x 24.5% 23.1% 20.9% 14.7% 12.3% 27.2% 27.3% 27.3% 28.2% 28.8%Check Point Software Tech Ltd. 6.5x 6.0x 6.5x 6.0x 7.2x 11.5x 10.5x 11.5x 10.7x 12.9x 11.4% 10.1% 7.7% 5.7% 4.4% 56.6% 56.6% 56.7% 56.4% 56.1%

Cimatron Ltd. 0.5x 0.7x 1.3x 1.3x 1.3x 3.1x 4.5x 8.7x 8.5x 8.9x 9.6% 6.8% 3.9% 2.1% 1.6% 16.0% 14.9% 15.2% 14.7% 14.4%

Cisco Systems, Inc. 1.4x 1.5x 1.7x 1.8x 2.0x 4.9x 5.1x 6.0x 6.3x 7.2x 6.6% 6.8% 5.4% 5.1% 5.5% 27.6% 28.8% 28.7% 28.1% 28.2%

Citrix Systems, Inc. 5.5x 4.5x 4.8x 4.3x 4.6x 22.3x 18.9x 20.5x 19.0x 20.8x 18.1% 16.5% 17.2% 15.8% 16.5% 24.9% 23.7% 23.6% 22.5% 21.9%

Commtouch Software Ltd. 2.0x 2.0x 3.0x 2.7x 2.4x 9.5x 11.9x 37.6x 182.2x - 10.3% 2.8% 3.9% 10.9% 21.2% 21.3% 17.1% 8.1% 1.5% -2.3%

CommVault Systems, Inc. 4.7x 5.6x 6.6x 6.0x 6.7x 32.9x 36.3x 39.9x 34.7x 38.3x 25.4% 23.4% 23.4% 21.9% 21.7% 14.1% 15.6% 16.5% 17.3% 17.6%

Computer Programs and Sys, Inc.

3.1x 3.1x 3.0x 2.9x 3.1x 12.8x 12.8x 12.5x 12.0x 12.5x 0.7% 1.9% 5.7% 6.1% 12.3% 24.1% 23.9% 24.2% 24.2% 24.9%

Compuware Corporation 2.0x 2.1x 2.6x 2.5x 2.4x 12.5x 13.0x 15.3x 18.3x 17.4x 5.6% -2.2% -2.3% -6.5% -6.0% 16.3% 16.0% 16.8% 13.9% 13.9%

Constellation 2.5x 3.0x 2.9x 3.1x 3.5x 11.9x 14.4x 13.9x 15.6x 17.5x 13.6% 10.9% 15.2% 20.4% 29.4% 20.7% 20.7% 20.7% 19.7% 19.7%

CSG Systems International, Inc. 1.0x 0.9x 1.0x 1.0x 1.1x 4.6x 4.5x 4.9x 5.8x 6.6x 13.3% 6.4% 3.0% 2.2% 2.1% 21.5% 21.0% 19.3% 17.8% 17.1%

Cyan, Inc. - - - 6.0x 3.3x - - - - - 72.1% - 137.2% - - -35.7% -10.9% -9.8% -11.9% -17.1%

Dassault Systèmes 4.3x 4.6x 4.6x 5.0x 5.3x 13.6x 14.7x 14.8x 16.0x 17.2x 12.1% 14.0% 13.8% 11.7% 8.4% 31.3% 31.1% 31.3% 31.0% 31.0%

DST Systems, Inc. 1.3x 1.3x 1.4x 1.4x 1.4x 9.2x 9.4x 9.7x 9.4x 9.2x 7.7% 8.3% 7.9% 6.4% 5.2% 14.4% 14.2% 14.5% 14.7% 14.9%

Electronic Arts Inc. 0.8x 0.8x 1.1x 1.4x 1.9x 11.8x 12.4x 10.5x 16.6x 20.2x 8.6% 6.2% 2.4% -8.4% -7.5% 6.6% 6.8% 10.2% 8.6% 9.5%

EMC 2.5x 2.3x 2.2x 2.1x 2.3x 10.5x 9.9x 9.3x 8.8x 9.7x 13.0% 10.0% 8.5% 7.4% 6.4% 23.9% 23.8% 23.9% 23.8% 23.9%


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EPIQ Systems, Inc. 2.2x 2.1x 2.0x 1.9x 1.9x 9.6x 9.0x 9.1x 9.2x 9.9x 32.2% 28.5% 32.0% 25.9% 22.2% 22.9% 23.1% 21.6% 20.5% 19.1%

SEG Software Index


Evertec - - - 6.7x 7.6x - - - 14.9x 20.7x - - 6.4% 6.2% 5.4% 33.8% 42.3% 37.2% 44.9% 36.7%

Evolving Systems, Inc. 2.7x 2.5x 2.4x 2.3x 3.1x 26.6x 14.0x 10.1x 8.3x 11.6x 6.1% 25.9% 38.0% 38.2% 20.2% 10.3% 18.2% 23.8% 27.5% 27.0%

F5 Networks, Inc. 5.5x 5.0x 5.0x 3.8x 4.3x 16.5x 14.9x 14.9x 11.7x 13.7x 21.8% 19.6% 17.8% 12.9% 9.0% 33.4% 33.5% 33.4% 32.4% 31.6%

Fair Isaac Corporation 2.8x 2.8x 2.9x 2.9x 3.0x 9.8x 9.6x 10.5x 10.7x 11.4x 5.9% 9.2% 9.8% 11.7% 13.6% 29.0% 28.8% 27.5% 26.6% 26.1%

FalconStor Software, Inc. 0.8x 1.0x 1.3x 0.6x 0.4x - - - - - -4.7% -6.6% -9.0% -14.4% -14.1% -11.0% -12.1% -13.5% -15.1% -14.5%


Fidessa 1.7x 1.7x 2.0x 2.3x 2.7x 8.5x 8.2x 10.2x 11.5x 13.5x 4.3% 2.2% 0.1% -1.0% -2.1% 20.1% 20.1% 20.0% 19.9% 19.8%

Fiserv 2.9x 3.0x 3.1x 3.4x 3.5x 9.9x 10.0x 10.4x 11.3x 11.9x 4.6% 4.9% 3.3% 3.4% 5.4% 29.5% 29.8% 29.8% 29.7% 29.7%

Fortinet Inc. 7.3x 5.6x 6.2x 4.5x 4.9x 35.3x 27.2x 29.9x 22.8x 27.3x 29.0% 23.9% 23.1% 20.7% 18.0% 20.8% 20.5% 20.9% 19.8% 18.1%

GameLoft SA 1.7x 2.0x 1.8x 1.7x 2.0x 15.0x 13.3x 11.6x 10.4x 12.4x 21.1% 21.5% 26.7% 18.6% 16.6% 11.6% 14.9% 15.3% 16.4% 16.3%

Gigamon, LLC - - - 7.1x 8.2x - - - 85.5x - - - 42.0% 41.6% 41.8% 17.3% 13.0% 9.3% 8.3% -22.3%

Glu Mobile, Inc. 3.2x 1.4x 1.2x 1.5x 1.5x - - - - - 46.7% 50.2% 46.1% 26.4% 6.0% -12.8% -7.2% -8.1% -9.9% -12.7%

Gree 1.7x 1.7x 1.5x 1.5x 1.1x 3.3x 3.3x 3.2x 3.7x 3.1x 146.6% 101.6% 49.5% 11.5% -3.8% 53.4% 50.7% 47.1% 40.4% 36.1%Greenway MedicalGreenway Medical Technologies, Inc 3.3x 3.7x 3.2x 2.6x 2.6x 58.7x 63.7x 67.5x 183.2x - 38.0% 32.5% 27.4% 15.9% 8.7% 5.6% 5.8% 4.8% 1.4% -2.2%

GSE Systems Inc. 0.5x 0.3x 0.4x 0.2x 0.2x 6.7x 4.7x 5.8x 6.6x - 13.2% 12.6% 2.2% -1.8% -9.3% 6.8% 7.3% 6.2% 3.3% -0.4%

Guidance Software, Inc. 2.1x 2.1x 1.9x 1.8x 1.8x 38.0x 34.1x 34.3x 108.0x - 17.4% 22.3% 23.8% 21.8% 10.9% 5.5% 6.0% 5.5% 1.6% -2.3%

Guidewire Software, Inc. 5.4x 6.0x 6.3x 7.9x 8.0x 47.3x 77.9x 88.0x 241.2x 110.7x 34.5% 27.8% 28.2% 25.9% 29.6% 11.4% 7.7% 7.2% 3.3% 7.2%

Hewlett Packard 0.5x 0.4x 0.4x 0.5x 0.6x 4.2x 3.2x 3.5x 4.2x 4.6x -4.6% -5.4% -5.0% -6.8% -7.7% 11.4% 12.2% 12.1% 12.1% 12.0%

IBM 2.3x 2.3x 2.4x 2.4x 2.3x 9.4x 9.1x 9.3x 9.4x 8.9x 1.5% -1.7% -2.3% -3.5% -3.5% 24.8% 25.0% 25.7% 25.6% 25.6%

Imperva 6.8x 6.8x 7.2x 7.6x 9.0x - - - - - 35.3% 33.0% 33.1% 33.5% 32.5% -7.9% -6.3% -5.0% -7.1% -10.1%

Informatica Corporation 3.5x 3.0x 4.1x 3.8x 4.1x 14.3x 12.4x 18.5x 18.8x 20.9x 12.4% 6.5% 3.5% 2.2% 6.5% 24.8% 23.8% 22.2% 20.4% 19.5%

Intuit Inc 4.3x 4.2x 4.5x 3.9x 4.2x 11.7x 12.4x 14.2x 11.6x 12.0x 10.4% 10.7% 6.5% 10.7% 9.5% 37.0% 33.5% 31.3% 33.8% 35.1%

Jack Henry & Associates, Inc. 3.1x 3.1x 3.4x 3.6x 3.7x 9.6x 9.5x 10.8x 11.3x 11.6x 6.2% 7.1% 7.9% 8.7% 10.0% 32.2% 32.5% 31.7% 31.9% 32.2%

Juniper Networks, Inc. 1.6x 1.6x 2.0x 1.7x 1.9x 11.2x 11.6x 14.6x 11.1x 12.2x -2.1% -3.8% -1.9% 0.3% 3.1% 14.3% 13.7% 13.7% 15.0% 15.9%

Konami Corporation 0.9x 0.9x 0.9x 1.2x 1.3x 4.7x 5.5x 6.5x 8.3x 10.3x 0.1% -6.0% -12.4% -15.0% -14.4% 18.1% 16.5% 14.4% 14.3% 12.8%Magic Software Enterprises Ltd.

1.1x 1.0x 1.2x 1.2x 1.5x 5.9x 5.7x 6.1x 6.5x 7.7x 18.2% 12.3% 11.5% 10.1% 15.1% 18.1% 17.9% 18.9% 19.2% 18.9%

Manhattan Associates Inc 2 5x 2 9x 3 3x 3 4x 4 1x 11 1x 12 7x 14 5x 15 0x 17 4x 15 9% 14 9% 14 3% 9 3% 10 2% 22 1% 22 7% 22 8% 23 0% 23 7%Manhattan Associates, Inc. 2.5x 2.9x 3.3x 3.4x 4.1x 11.1x 12.7x 14.5x 15.0x 17.4x 15.9% 14.9% 14.3% 9.3% 10.2% 22.1% 22.7% 22.8% 23.0% 23.7%

MedAssets 3.1x 3.0x 3.2x 3.0x 3.3x 10.4x 9.9x 10.4x 9.3x 10.5x 27.6% 19.8% 10.7% 11.0% 9.4% 29.7% 30.6% 30.5% 31.7% 31.6%

Mentor Graphics Corp 1.7x 1.7x 1.8x 1.9x 2.2x 9.0x 8.5x 9.2x 11.0x 12.2x 7.0% 7.6% 7.3% 3.4% 1.9% 19.0% 19.8% 19.7% 17.6% 18.2%

Merge Healthcare 2.1x 2.0x 1.8x 2.0x 2.0x 9.9x 10.8x 14.8x 17.6x 18.4x 24.2% 15.8% 7.1% 4.5% -0.9% 20.6% 18.5% 12.4% 11.5% 11.0%

Micros Systems 2.9x 2.6x 2.5x 2.2x 2.5x 12.6x 11.8x 11.4x 10.4x 12.6x 9.9% 11.6% 14.3% 15.1% 14.5% 22.8% 21.9% 21.7% 21.4% 19.9%

Microsoft Corporation 2.8x 2.5x 2.5x 2.9x 2.7x 6.7x 6.2x 6.2x 7.3x 7.1x 5.4% 1.7% 1.2% 4.1% 5.6% 41.7% 39.8% 39.6% 40.0% 38.7%

MicroStrategy Incorporated 2.0x 1.5x 1.5x 1.2x 1.3x 31.8x 19.1x 18.4x 17.4x 26.2x 12.0% 6.7% 5.8% 1.4% 2.3% 6.5% 7.7% 8.4% 6.9% 5.0%

Millennial Media Inc 6 6x 6 2x 4 4x 2 4x 2 4x - - - - - - 75 6% 71 4% 68 7% 60 3% -2 9% -3 6% -1 0% -0 9% -0 6%Millennial Media Inc 6.6x 6.2x 4.4x 2.4x 2.4x 75.6% 71.4% 68.7% 60.3% 2.9% 3.6% 1.0% 0.9% 0.6%

MIND C.T.I. Ltd. 0.7x 1.0x 1.1x 0.7x 0.8x 3.5x 4.4x 4.9x 4.0x 4.4x 9.2% 10.2% 6.9% -1.6% -9.4% 21.1% 21.7% 23.0% 18.8% 18.2%

Model N, Inc - - 4.7x 4.2x 3.1x - - 275.9x 90.9x 41.8x 29.2% 29.3% - - - 5.9% 2.8% 1.7% 4.7% 7.3%

MSCI, Inc. 5.2x 4.1x 4.8x 4.8x 5.0x 11.6x 9.2x 10.6x 10.6x 11.1x - - 5.5% 7.3% 8.0% 45.0% 44.7% 45.1% 45.0% 45.0%

Myriad Group AG 2.7x 2.9x 2.7x 2.9x 3.0x - - - - - -34.6% -22.8% -7.8% -2.9% 3.0% -18.7% -16.2% -18.6% -17.4% -16.2%

NetApp, Inc. 1.3x 1.1x 1.2x 1.3x 1.6x 9.2x 8.4x 9.2x 10.4x 11.6x 14.6% 10.0% 6.0% 1.6% 3.0% 13.8% 13.0% 13.6% 13.0% 13.9%

Netscout Systems, Inc. 2.6x 2.6x 2.8x 2.4x 2.6x 12.0x 11.2x 12.1x 10.3x 11.3x 12.1% 15.0% 15.1% 13.6% 10.6% 21.9% 23.1% 23.0% 22.9% 23.1%

NetSol Technologies Inc. 0.6x 0.7x 0.6x 0.8x 1.2x 1.3x 1.5x 1.3x 1.5x 2.3x 21.4% 28.6% 40.8% 61.5% 61.5% 47.1% 48.1% 51.5% 52.6% 52.6%


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g

NeuStar, Inc 3.8x 3.8x 3.9x 3.9x 4.2x 8.6x 8.6x 8.7x 8.8x 9.3x 30.8% 35.7% 34.0% 25.9% 17.7% 44.1% 43.9% 44.5% 44.6% 44.8%

SEG Software Index


NQ Mobile Inc. 3.6x 2.2x 1.9x 2.8x 5.8x 30.2x 37.7x 46.9x 52.9x 129.9x 113.4% 118.6% 125.6% 122.4% 117.0% 11.9% 5.9% 4.0% 5.3% 4.5%

Omnicell, Inc. 1.6x 1.5x 1.7x 1.7x 2.0x 13.5x 11.3x 12.5x 12.0x 13.8x 15.2% 19.6% 27.9% 33.5% 33.1% 11.5% 13.6% 13.4% 14.1% 14.3%

Opera 4.1x 3.1x 3.2x 3.6x 3.8x 13.8x 10.8x 11.7x 13.2x 13.5x 25.6% 33.1% 35.2% 35.9% 38.0% 29.5% 28.5% 27.8% 27.2% 27.8%

Oracle Corporation 3.8x 3.6x 4.1x 3.9x 3.7x 8.4x 8.0x 9.0x 8.7x 8.3x 1.2% 1.4% 0.5% 0.2% 1.2% 44.7% 45.1% 45.3% 44.7% 44.0%

Palo Alto Networks, Inc 15.9x 12.0x 10.7x 9.1x 7.6x 403.9x 3808.6x - - - 115.1% 86.7% 74.8% 63.6% 55.3% 3.9% 0.3% -0.4% -1.9% -2.2%

P d M di 4 8 3 6 4 5 5 4 6 3 66 4% 59 3% 55 7% 55 2% 56 0% 7 9% 6 5% 7 2% 8 2% 7 5%


Pandora Media 4.8x 3.6x 4.5x 5.4x 6.3x - - - - - 66.4% 59.3% 55.7% 55.2% 56.0% -7.9% -6.5% -7.2% -8.2% -7.5%Parametric Technology Corporation 1.9x 1.9x 2.3x 2.3x 2.6x 11.1x 10.7x 13.0x 12.4x 12.9x 15.9% 7.6% 3.2% 1.5% 0.3% 17.4% 17.8% 17.9% 18.8% 19.9%

PDF Solutions Inc 3.3x 4.2x 4.5x 5.1x 5.7x 18.1x 19.4x 18.5x 19.3x 20.4x 22.9% 27.5% 34.2% 28.6% 22.6% 18.3% 21.5% 24.5% 26.3% 27.7%

Pegasystems Inc. 2.3x 1.7x 1.7x 2.1x 2.6x 42.6x 29.1x 16.1x 16.9x 18.3x 10.9% 10.9% 10.8% 9.7% 12.2% 5.4% 5.9% 10.8% 12.2% 14.0%

Progress Software Corporation 3.9x 2.8x 3.0x 2.7x 3.2x 6.8x 10.3x 13.6x 13.5x 15.5x -55.2% -7.1% 8.9% 34.7% 45.8% 56.6% 26.7% 21.9% 20.4% 20.5%

Proofpoint, Inc. 4.2x 3.1x 3.5x 4.8x 7.9x - - - - - - 30.0% 29.9% 28.2% 26.2% -12.2% -12.1% -11.3% -12.4% -12.1%

PROS Holdings 3 5x 3 7x 5 3x 5 6x 6 3x 33 1x 38 6x 59 9x 74 0x 96 1x 31 5% 22 9% 21 9% 21 7% 23 6% 10 6% 9 6% 8 8% 7 6% 6 5%PROS Holdings 3.5x 3.7x 5.3x 5.6x 6.3x 33.1x 38.6x 59.9x 74.0x 96.1x 31.5% 22.9% 21.9% 21.7% 23.6% 10.6% 9.6% 8.8% 7.6% 6.5%

QAD Inc. 0.6x 0.6x 0.6x 0.5x 0.5x 7.5x 7.7x 9.4x 12.7x 12.8x 4.7% 2.9% 2.0% -0.5% 1.6% 8.1% 7.5% 6.4% 4.3% 4.2%

Qihoo 360 Technology Co. Ltd 7.0x 8.4x 10.3x 12.2x 18.3x 30.1x 38.9x 50.8x 68.2x 81.9x 169.9% 130.1% 96.0% 72.6% 78.1% 23.1% 21.7% 20.3% 17.9% 22.3%

Qiwi plc - - - 1.7x 4.3x - - - 7.9x 19.3x 32.5% 32.5% 9.2% - - 13.0% 13.0% 19.4% 20.8% 22.4%

Qlik Technologies 4.8x 4.2x 4.8x 5.5x 6.1x 66.7x 75.0x 94.4x 192.7x 475.6x 29.7% 22.2% 21.2% 20.5% 22.8% 7.2% 5.6% 5.1% 2.8% 1.3%

Quality Systems, Inc. 2.2x 2.1x 2.1x 2.1x 2.5x 7.9x 8.1x 9.1x 9.6x 11.6x 20.7% 14.9% 9.6% 7.1% 0.8% 27.2% 25.3% 23.5% 21.9% 21.6%

Radware Ltd. 3.3x 3.2x 3.8x 3.2x 3.2x 16.4x 15.2x 17.5x 15.6x 17.0x 15.1% 14.6% 13.3% 9.1% 5.7% 20.1% 21.3% 21.6% 20.4% 18.6%

Red Hat, Inc. 8.3x 7.0x 7.2x 6.1x 6.2x 38.9x 33.7x 35.2x 30.2x 30.5x 19.3% 18.2% 17.3% 16.4% 16.7% 21.3% 20.6% 20.4% 20.1% 20.2%

Redknee Solutions 1.1x 1.7x 3.4x 3.9x 3.3x 10.4x 14.8x 34.3x 82.9x 44.7x -0.7% -2.5% -0.6% -1.4% 74.4% 10.8% 11.5% 10.0% 4.7% 7.4%

Riverbed Technology, Inc. 3.4x 3.0x 3.2x 2.9x 2.8x 21.8x 18.1x 19.8x 19.1x 19.8x 19.5% 16.4% 15.2% 20.8% 23.1% 15.6% 16.4% 16.1% 15.3% 14.3%

Sage Group plc 2.7x 2.7x 2.9x 3.0x 3.1x 9.2x 9.2x 9.7x 10.3x 10.3x - 0.5% 1.7% 2.9% 2.9% 29.3% 29.6% 29.6% 29.6% 29.6%

SAP AG 4.0x 4.3x 4.6x 4.5x 4.2x 11.1x 12.5x 13.7x 13.2x 12.2x 13.2% 13.8% 14.0% 13.2% 9.8% 36.1% 34.6% 33.8% 33.8% 34.3%

Sapiens International 1.2x 1.0x 1.4x 1.5x 1.6x 9.1x 7.1x 9.9x 11.4x 12.1x 72.4% 78.9% 62.9% 44.6% 31.2% 13.4% 14.3% 13.8% 13.5% 13.3%

Silver Spring Networks, Inc. - - 4.5x 4.0x 3.7x - - - - - 39.4% 4.0% -17.0% -20.7% 8.0% -34.0% -38.0% -41.5% -51.1% -27.3%

S ft AG 2 1 2 6 2 5 2 2 2 1 7 9 9 8 8 9 8 3 8 2 4 4% 5 9% 4 6% 5 8% 7 9% 27 0% 26 3% 27 5% 26 2% 26 0%Software AG 2.1x 2.6x 2.5x 2.2x 2.1x 7.9x 9.8x 8.9x 8.3x 8.2x -4.4% -5.9% -4.6% -5.8% -7.9% 27.0% 26.3% 27.5% 26.2% 26.0%

SolarWinds, Inc. 16.7x 15.1x 14.7x 11.2x 9.1x 34.4x 30.8x 29.9x 22.9x 18.6x 36.1% 36.3% 35.6% 31.2% 26.8% 48.5% 48.9% 49.0% 49.0% 49.0%

Sourcefire, Inc. 6.7x 5.9x 5.3x 6.4x 8.8x 63.0x 55.2x 65.9x 87.2x 117.7x 38.2% 38.9% 34.7% 28.6% 26.7% 10.7% 10.6% 8.1% 7.3% 7.5%

Splunk, Inc. 17.2x 14.3x 15.8x 19.0x 20.6x - - - - - - 76.0% 64.5% 59.2% 54.7% -6.8% -7.0% -8.7% -12.0% -14.4%

SS&C Corporation 6.8x 6.0x 5.1x 5.6x 5.6x 18.3x 15.8x 13.3x 14.6x 14.3x 15.6% 31.7% 48.8% 68.1% 70.1% 37.4% 37.8% 38.6% 38.5% 38.8%

Stratasys, Inc. 7.2x 7.4x 12.6x 11.3x 11.6x 27.5x 28.6x 52.9x 57.1x 58.3x 29.7% 27.8% 38.1% 60.9% 82.4% 26.1% 25.7% 23.7% 19.8% 19.9%

Symantec Corporation 1.7x 1.7x 2.1x 2.2x 2.3x 6.3x 6.5x 7.9x 8.0x 8.4x 2.3% 2.3% 1.7% 2.6% 3.0% 26.6% 26.6% 26.5% 27.3% 27.4%Synchronoss TechnologiesSynchronoss Technologies, Inc. 3.0x 2.5x 4.0x 3.9x 4.2x 15.6x 11.9x 17.9x 17.8x 20.4x 25.6% 21.5% 19.5% 19.4% 20.3% 19.2% 21.4% 22.2% 21.8% 20.7%

Synopsys Inc 2.4x 2.3x 2.6x 2.7x 2.7x 11.5x 11.8x 13.4x 12.0x 12.1x 11.3% 14.4% 13.1% 14.5% 13.0% 20.5% 19.6% 19.4% 22.2% 21.9%

Take-Two Interactive 1.1x 1.1x 1.2x 1.1x 1.4x - - - 58.4x 15.9x -34.5% -7.8% 23.6% 47.1% 57.6% -23.2% -14.7% -6.4% 1.9% 8.8%

Tangoe, Inc. 5.5x 3.2x 3.3x 2.8x 3.8x 70.3x 41.7x 38.9x 32.9x 41.3x 50.8% 48.1% 47.2% 41.5% 38.1% 7.8% 7.6% 8.5% 8.7% 9.1%

TeleCommunication Systems 0.4x 0.5x 0.5x 0.5x 0.5x 5.7x 7.9x 6.5x 6.2x 6.7x 13.3% 17.4% 14.6% 10.8% 2.5% 6.5% 6.4% 7.9% 7.9% 8.0%

TeleNav 0.2x 0.4x 0.5x 0.1x 0.2x 0.9x 2.2x 3.1x 0.8x 2.4x 3.2% -0.2% -1.1% 0.4% -6.7% 25.3% 19.9% 14.7% 11.3% 8.1%

Teradata 4.7x 3.9x 3.8x 3.2x 3.4x 19.4x 15.9x 15.2x 13.6x 14.9x 20.2% 16.1% 12.8% 6.9% 3.6% 24.3% 24.3% 24.8% 23.3% 23.0%


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The Active Network, Inc. 1.7x 0.6x 0.6x 0.6x 1.1x 114.8x 25.5x 58.0x 24.5x 37.7x 24.6% 24.2% 24.2% 19.9% 15.6% 1.5% 2.3% 1.0% 2.6% 3.0%

SEG Software Index


The Descartes Systems Group Inc. 4.0x 4.1x 4.3x 4.7x 4.9x 14.0x 14.5x 14.9x 16.2x 17.1x 9.1% 10.2% 11.3% 12.2% 17.1% 28.5% 28.4% 28.9% 29.1% 28.4%

TIBCO Software Inc. 4.6x 3.9x 3.3x 3.0x 3.5x 21.2x 18.5x 16.4x 16.4x 18.9x 16.7% 11.3% 7.9% 4.4% 3.3% 21.5% 20.9% 20.3% 18.6% 18.7%

Trend Micro 2.0x 1.8x 2.3x 2.7x 3.3x 5.9x 5.6x 7.3x 8.2x 9.8x -2.8% -3.1% -2.6% 2.1% 7.7% 33.3% 32.6% 31.9% 32.8% 33.0%

Tyler Technologies, Inc. 3.8x 4.2x 4.7x 5.5x 6.2x 21.2x 21.7x 24.6x 28.0x 31.2x 12.5% 16.8% 17.4% 18.1% 16.4% 18.2% 19.2% 19.1% 19.6% 19.8%

Ubisoft Entertainment 0.4x 0.8x 0.8x 0.7x 0.8x 1.3x 2.5x 2.2x 2.0x 2.3x 4.3% 6.4% 12.5% 18.4% 18.4% 31.6% 31.5% 34.4% 36.8% 36.8%


Unit 4 1.5x 1.6x 1.8x 2.0x 1.9x 9.8x 12.3x 12.7x 13.4x 12.9x 2.3% 3.8% 5.4% 5.4% 5.4% 15.2% 13.2% 14.3% 14.6% 14.8%VASCO Data Security International 1.6x 1.2x 1.3x 1.4x 1.5x 8.7x 6.3x 8.4x 8.7x 12.5x 22.8% 7.3% -8.4% -4.3% -12.5% 18.4% 18.5% 16.0% 16.0% 12.3%

Velti Plc 1.7x 1.4x 0.9x 0.6x 0.5x 13.3x 11.9x 27.4x - - 66.0% 62.9% 42.9% 22.8% -1.6% 13.1% 11.6% 3.2% -1.9% -58.8%

Verisk 6.5x 6.5x 6.9x 7.1x 7.2x 14.8x 14.6x 15.5x 16.0x 15.4x 15.6% 15.5% 15.2% 16.5% 16.1% 44.2% 44.7% 44.8% 44.5% 46.5%

VMWare, Inc. 8.3x 7.9x 6.4x 5.7x 6.4x 30.9x 30.2x 25.5x 22.9x 25.3x 26.1% 23.4% 22.2% 19.2% 16.3% 26.9% 26.2% 25.2% 24.7% 25.3%

Zynga, Inc 0.9x 0.5x 1.0x 1.1x 1.2x - - 23.2x 9.5x 7.8x 43.1% 25.1% 12.4% 0.5% -11.8% -36.0% -37.0% 4.5% 11.7% 15.0%


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SEG SaaS Index

THE SEG SaaS INDEX COMPANIES – KEY METRICS3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13

Athenahealth, Inc 8.2x 6.1x 7.2x 7.2x 8.6x 62.8x 48.9x 59.9x 78.6x 99.8x 34.2% 32.4% 30.3% 28.7% 31.3% 13.1% 12.6% 12.1% 9.1% 8.6%

Bazaarvoice, Inc 7.2x 4.3x 2.7x 2.7x 4.0x - - - - - 62.6% 59.3% 57.9% 51.0% 41.3% -17.3% -17.4% -17.8% -28.1% -27.4%

Benefitfocus, Inc. - - - - 12.9x - - - - - 2.5% 2.5% 18.8% - 24.0% -10.3% -10.3% -9.5% -10.2% -16.2%

Callidus Software Inc. 2.0x 2.0x 2.1x 2.5x 3.1x - - - - - 15.0% 14.9% 13.3% 14.5% 12.6% -15.0% -16.2% -17.8% -16.1% -14.4%

ChannelAdvisors - - - 5.8x 9.0x - - - - - 18.8% - 23.0% - 29.0% -2.6% -1.5% -1.8% -3.7% -5.1%

C 8 7 7 8 7 9 8 7 10 3 69 2 67 5 81 7 113 9 112 0 25 7% 25 8% 25 1% 22 3% 21 5% 12 6% 11 5% 9 7% 7 7% 9 2%


Concur 8.7x 7.8x 7.9x 8.7x 10.3x 69.2x 67.5x 81.7x 113.9x 112.0x 25.7% 25.8% 25.1% 22.3% 21.5% 12.6% 11.5% 9.7% 7.7% 9.2%

Constant Contact 2.0x 1.3x 1.4x 1.3x 1.7x 19.6x 14.2x 17.9x 18.5x 23.5x 20.0% 19.1% 17.6% 16.1% 14.8% 10.4% 9.3% 7.8% 7.3% 7.3%

Cornerstone OnDemand 12.9x 13.1x 13.4x 14.6x 17.1x - - - - - 72.2% 68.1% 61.5% 61.9% 60.2% -21.9% -24.6% -23.4% -21.5% -19.5%

Cvent - - - - 14.1x - - - - 176.2x - - 37.2% - 36.0% 6.9% 6.9% 13.6% 10.7% 8.0%

DealerTrack 2.9x 2.9x 3.3x 3.3x 4.0x 19.2x 19.9x 23.9x 24.0x 28.6x 28.7% 16.8% 10.1% 10.5% 15.1% 15.3% 14.4% 13.8% 13.8% 14.1%

Demandware, Inc. 9.8x 10.0x 8.9x 9.5x 14.2x - - - - - 45.0% 42.3% 40.5% 37.5% 33.4% -3.5% -5.9% -4.8% -10.7% -13.5%

E2open, Inc 4.6x 4.5x 5.9x 4.5x 6.5x 92.6x 76.6x 754.0x - - - 22.2% 25.6% 17.4% 17.4% 5.0% 5.9% 0.8% -3.4% -3.4%

Ebix Inc 5 2x 3 7x 3 4x 3 7x 2 1x 12 2x 8 6x 7 9x 8 8x 5 4x 18 2% 18 4% 18 0% 20 5% 18 6% 42 8% 42 8% 42 4% 41 8% 39 2%Ebix Inc. 5.2x 3.7x 3.4x 3.7x 2.1x 12.2x 8.6x 7.9x 8.8x 5.4x 18.2% 18.4% 18.0% 20.5% 18.6% 42.8% 42.8% 42.4% 41.8% 39.2%

Ellie Mae 7.8x 6.0x 5.0x 5.0x 5.7x 37.9x 24.6x 19.5x 19.9x 24.2x 67.0% 83.5% 83.5% 69.9% 57.2% 20.6% 24.4% 25.5% 24.8% 23.6%

FireEye, Inc. - - - - 38.6x - - - - - 186.1% 186.1% 147.5% - 109.0% -37.0% -37.0% -31.6% -43.9% -61.9%

Fleetmatics - 7.5x 6.9x 5.6x 8.9x - 45.1x 37.0x 27.8x 36.1x - - 38.1% 39.6% 38.7% 16.8% 16.6% 18.6% 20.3% 24.7%

Halogen Software, Inc. - - - 8.0x 5.7x - - - - - 36.4% 36.4% 22.5% - 23.0% -8.0% -8.0% -10.4% -11.1% -8.2%

inContact, Inc. 2.5x 2.4x 2.7x 3.2x 3.4x - - 458.2x 236.3x 243.8x 16.0% 20.2% 24.6% 25.5% 24.9% -4.9% -2.2% 0.6% 1.4% 1.4%

IntraLinks Holdings 1.4x 1.6x 1.6x 1.5x 2.1x 20.5x 48.8x 51.1x 66.2x 170.2x 2.9% 0.1% 1.8% 4.6% 6.2% 6.9% 3.4% 3.2% 2.3% 1.2%

J2 Global 3.3x 3.4x 4.1x 4.5x 4.8x 6.7x 6.7x 8.3x 9.8x 10.9x 18.6% 12.1% 12.5% 16.0% 29.7% 49.7% 50.5% 49.6% 46.1% 44.5%J2 Global 3.3x 3.4x 4.1x 4.5x 4.8x 6.7x 6.7x 8.3x 9.8x 10.9x 18.6% 12.1% 12.5% 16.0% 29.7% 49.7% 50.5% 49.6% 46.1% 44.5%

Jive Software, Inc 8.7x 6.9x 7.6x 7.0x 5.9x - - - - - 56.8% 49.3% 47.1% 41.2% 36.5% -38.3% -34.9% -32.2% -35.4% -37.0%

LivePerson 6.0x 4.3x 4.3x 2.6x 2.7x 37.1x 30.3x 35.4x 29.8x 35.5x 21.4% 19.7% 18.3% 17.0% 14.9% 16.3% 14.1% 12.1% 8.7% 7.5%

Marin Software - - 8.2x 4.2x 4.2x - - - - - 90.1% - 64.9% - 30.0% -42.4% -37.2% -38.0% -39.9% -41.4%

Marketo - - - 11.5x 15.1x - - - - - 130.8% 130.8% 80.3% - 62.0% -67.9% -67.9% -56.2% -53.2% -49.4%

Medidata Solutions 4.0x 4.4x 5.3x 7.3x 9.0x 23.0x 26.5x 31.8x 45.6x 55.8x 10.0% 12.1% 18.4% 19.2% 24.5% 17.6% 16.5% 16.6% 16.0% 16.1%

Netsuite 14.2x 14.6x 15.4x 18.7x 19.7x - - - - - 26.3% 28.4% 30.7% 31.3% 32.8% -5.8% -5.4% -5.2% -6.3% -7.8%

OpenTable, Inc. 5.9x 6.1x 7.1x 7.9x 8.8x 20.7x 20.3x 25.0x 27.2x 28.1x 22.0% 17.1% 15.9% 15.6% 15.5% 28.5% 29.8% 28.5% 29.2% 31.2%

Qualys, Inc. 4.8x 4.8x 3.1x 3.4x 4.9x 57.4x 50.5x 27.7x 30.2x 39.8x - - 20.0% 19.3% 18.9% 8.4% 9.5% 11.3% 11.1% 12.3%

RealPage 6.1x 5.1x 5.0x 4.4x 4.4x 45.1x 34.8x 30.6x 27.3x 28.1x 32.0% 27.7% 24.9% 22.5% 20.7% 13.6% 14.6% 16.4% 16.0% 15.8%

Responsys 2.7x 1.4x 1.7x 2.1x 3.4x 20.6x 11.4x 14.0x 19.0x 36.7x 27.2% 21.1% 20.7% 21.3% 23.2% 12.9% 12.1% 11.8% 11.2% 9.2%

Salesforce.com 7.4x 7.4x 8.2x 7.4x 7.4x 168.0x 235.9x 298.6x 331.3x 352.7x 36.5% 36.1% 34.6% 32.1% 31.4% 4.4% 3.1% 2.8% 2.2% 2.1%

SciQuest 5.4x 4.7x 5.5x 6.6x 6.0x 47.1x 50.7x 96.2x 167.3x 273.9x 22.0% 21.4% 24.4% 31.5% 36.7% 11.6% 9.4% 5.7% 3.9% 2.2%

Service-now.com 20.3x 17.7x 14.9x 17.0x 17.6x - - - - - - - 90.3% 87.8% 84.5% -6.1% -9.2% -8.9% -9.4% -10.3%

SPS Commerce 5.6x 6.6x 6.4x 7.7x 9.6x 67.2x 78.0x 73.9x 86.7x 108.3x 31.5% 30.4% 33.0% 36.3% 40.2% 8.4% 8.5% 8.7% 8.9% 8.9%

Tableau Software - - - 21.4x 22.1x - - - 20132.4x - 82.5% 82.5% 104.8% - 71.0% 9.6% 9.6% 6.3% 0.1% -2.7%

Tangoe 5.5x 3.2x 3.3x 2.8x 3.8x 70.3x 41.7x 38.9x 32.9x 41.3x 50.8% 48.1% 47.2% 41.5% 38.1% 7.8% 7.6% 8.5% 8.7% 9.1%

Textura Corp. - - - 18.7x 23.2x - - - - - 74.7% 106.2% - - 65.0% -102.3% -68.0% -62.6% -55.1% -93.0%The Ultimate Software Group, Inc. 8.3x 8.0x 7.9x 8.5x 10.4x 80.0x 69.4x 63.7x 61.9x 72.9x 21.0% 21.8% 23.4% 24.4% 24.2% 10.4% 11.6% 12.5% 13.8% 14.3%

Vocus 3.3x 2.6x 2.1x 1.3x 1.4x 258.9x 170.1x - 92.0x 286.5x 29.9% 39.7% 48.7% 48.4% 34.3% 1.3% 1.5% -0.2% 1.4% 0.5%

Workday, Inc. - 33.2x 29.9x 32.0x 33.7x - - - - - - - 103.6% 88.3% 77.4% -38.1% -35.7% -32.5% -31.9% -28.4%

Zix Corporation 3.5x 3.6x 4.2x 4.7x 5.4x 11.3x 12.7x 15.3x 21.1x 27.1x 11.1% 12.0% 13.7% 14.4% 15.5% 30.7% 28.1% 27.6% 22.2% 19.9%


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p

Median: 5.5x 4.8x 5.3x 5.7x 6.5x 41.5x 41.7x 35.4x 31.5x 40.6x 28.7% 26.8% 25.3% 25.0% 30.0% 6.9% 6.9% 5.7% 2.3% 2.1%

SEG Internet Index

THE SEG INTERNET INDEX COMPANIES – KEY METRICS3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13

1-800-FLOWERS.COM, Inc. 0.3x 0.4x 0.4x 0.5x 0.5x 6.2x 6.5x 7.2x 8.4x 8.8x 7.0% 4.8% 5.0% 3.8% 4.0% 5.6% 5.5% 5.6% 6.0% 6.1%

8x8, Inc. 4.1x 4.2x 4.3x 4.6x 5.5x 35.0x 31.7x 32.3x 33.8x 39.9x 28.8% 33.4% 29.3% 25.4% 21.4% 11.7% 13.4% 13.4% 13.5% 13.8%

Akamai Technologies, Inc. 4.8x 4.8x 4.5x 5.0x 5.3x 13.6x 13.5x 12.4x 13.6x 14.3x 15.1% 17.9% 18.6% 18.3% 17.0% 35.3% 35.3% 36.5% 36.6% 37.0%

Amazon.com, Inc. 1.9x 1.8x 1.9x 1.8x 2.0x 52.8x 50.6x 45.4x 42.8x 44.9x 34.9% 31.3% 27.1% 24.5% 23.0% 3.6% 3.6% 4.1% 4.2% 4.4%

Angie's List, Inc. 5.3x 4.1x 5.7x 7.5x 6.5x - - - - - 69.7% 74.2% 73.0% 70.9% 67.6% -44.8% -41.0% -31.3% -24.3% -17.2%


AOL, Inc. 0.8x 0.9x 1.1x 1.2x 1.1x 4.4x 4.9x 5.1x 5.3x 4.8x -3.8% -2.4% -0.5% 0.9% 1.9% 19.1% 19.1% 21.5% 21.9% 22.4%

Baidu.com, Inc. 13.1x 9.9x 8.4x 7.5x 10.3x 22.3x 17.2x 14.9x 14.1x 20.4x 74.0% 63.9% 53.8% 47.1% 42.2% 58.5% 57.8% 56.3% 53.5% 50.7%

Bankrate, Inc. 3.9x 2.7x 2.9x 3.4x 4.3x 13.3x 9.7x 11.8x 14.2x 19.7x 37.2% 23.2% 7.8% -2.1% -10.5% 29.6% 28.1% 24.9% 23.8% 21.9%

Bitauto Holdings Limited 0.8x 1.2x 1.7x 1.9x 2.4x 5.7x 8.8x 9.6x 11.4x 13.7x 52.3% 54.7% 57.8% 51.5% 45.6% 13.7% 13.6% 17.5% 17.0% 17.7%

BlueNile 1.1x 1.2x 0.9x 0.9x 1.0x 29.3x 34.0x 26.1x 24.8x 28.0x 5.4% 7.4% 14.9% 18.0% 19.3% 3.7% 3.5% 3.4% 3.5% 3.6%

Brightcove Inc. 3.9x 3.1x 1.7x 2.0x 2.6x - - - - - 48.3% 43.2% 38.4% 31.7% 27.7% -13.4% -11.8% -11.2% -9.9% -8.2%

BroadSoft, Inc. 6.1x 5.4x 5.3x 4.1x 4.9x 28.1x 27.2x 28.0x 29.7x 53.8x 29.4% 19.7% 19.4% 13.2% 9.4% 21.5% 19.9% 18.8% 13.8% 9.2%

Carbonite, Inc. 1.8x 2.1x 2.4x 2.5x 3.1x - - - - - 46.7% 42.0% 38.9% 35.9% 33.2% -22.7% -15.0% -8.1% -6.0% -3.0%

ChangYou.com 1.5x 2.0x 2.4x 2.2x 2.2x 2.3x 3.1x 3.7x 3.5x 3.5x 47.2% 34.3% 28.7% 28.6% 25.2% 64.7% 65.8% 63.3% 63.0% 61.4%

Ctrip 2.5x 3.5x 3.6x 4.6x 6.8x 9.9x 16.0x 20.0x 27.6x 41.6x 18.4% 18.6% 18.9% 21.0% 23.6% 25.7% 21.7% 18.1% 16.7% 16.3%

DangDang 0.3x 0.2x 0.2x 0.4x 0.6x - - - - - 58.5% 55.3% 43.5% 35.6% 29.3% -9.9% -9.5% -8.6% -7.7% -6.4%

DemandMedia 2.4x 1.9x 1.6x 1.6x 1.3x 14.1x 10.3x 8.9x 8.8x 7.1x 15.9% 15.2% 17.1% 19.1% 16.7% 16.9% 18.0% 18.0% 17.9% 17.9%

Digital Generation, Inc. 1.8x 1.7x 1.6x 1.4x 1.7x 6.1x 6.1x 6.3x 5.5x 6.5x 45.7% 34.4% 19.2% 9.1% 1.0% 30.2% 28.7% 26.0% 26.1% 26.7%

Digital River Inc. 0.7x 0.5x 0.3x 0.6x 0.8x 5.0x 3.6x 3.3x 6.8x 11.6x 7.3% 3.4% -3.0% -1.2% -0.4% 14.4% 13.3% 9.7% 9.0% 7.3%

eBay Inc. 4.2x 4.4x 4.6x 4.5x 4.2x 14.7x 15.1x 15.8x 15.1x 14.3x 29.6% 25.0% 20.8% 17.4% 15.4% 28.8% 29.2% 29.3% 29.6% 29.4%

eHealth, Inc. 1.5x 2.4x 2.0x 2.0x 2.6x 11.8x 18.5x 15.2x 15.2x 22.1x -7.0% -3.7% 2.5% 6.9% 10.2% 12.5% 12.7% 13.0% 13.1% 11.6%

Envivio, Inc. 1.3x - - - 0.6x - - - - - - - -22.8% -38.8% -36.5% -4.8% -17.3% -35.7% -49.8% -43.4%

Expedia 1.7x 1.8x 2.0x 1.8x 1.5x 10.0x 11.0x 12.4x 11.8x 10.5x 17.3% 21.8% 16.9% 19.5% 19.8% 16.8% 16.5% 15.9% 15.2% 13.8%

Facebook 8.3x 8.6x 11.3x 10.0x 14.0x 34.3x 36.4x 48.6x 41.7x 30.9x - - 37.1% 35.9% 41.4% 24.2% 23.5% 23.3% 23.9% 45.2%

FriendFinder Networks Inc 25.7x 25.2x 30.4x 31.2x 33.1x - - - - - 1.3% -0.4% -1.8% -3.1% -3.1% - - - - -

GeekNet 0.9x 0.6x 0.5x 0.3x 0.4x - - - - 61.4x 11.3% 14.0% 20.0% 25.2% 19.4% -2.8% -2.3% -0.5% -0.4% 0.7%

Giant Interactive 2.7x 2.7x 3.2x 3.8x 3.8x 4.1x 4.3x 5.0x 5.9x 5.9x 28.7% 24.6% 20.1% 16.8% 14.4% 65.2% 64.6% 64.3% 64.9% 65.0%

Google Inc. 4.3x 4.0x 4.4x 4.6x 4.5x 11.9x 12.0x 13.5x 14.6x 14.7x 28.3% 31.8% 32.4% 33.8% 30.5% 36.3% 33.6% 32.4% 31.4% 30.5%

Groupon 1.1x 0.8x 1.0x 1.4x 2.2x 21.9x 12.0x 15.2x 22.9x 40.0x 117.6% 69.6% 45.0% 26.8% 17.9% 5.1% 6.7% 6.5% 6.0% 5.5%

Harmonic Inc 0.7x 0.7x 0.8x 0.8x 1.2x 9.3x 9.1x 12.6x 14.4x 20.3x -4.6% -4.6% -3.4% -3.2% -2.0% 7.1% 7.1% 6.6% 5.9% 5.8%

HomeAway 6.8x 5.8x 6.5x 7.7x 7.6x 37.4x 33.2x 35.8x 40.1x 41.4x 27.2% 23.0% 21.8% 22.0% 21.7% 18.1% 17.5% 18.1% 19.1% 18.3%

Interactive Intelligence, Inc. 2.3x 2.4x 3.1x 3.6x 4.0x 28.7x 40.3x 65.6x 61.8x 57.9x 13.1% 10.9% 13.3% 20.2% 28.5% 7.9% 5.9% 4.7% 5.8% 6.9%

InterActiveCorp 1.6x 1.4x 1.2x 1.4x 1.4x 10.8x 9.9x 8.3x 9.0x 8.8x 34.5% 37.6% 36.0% 29.6% 24.1% 14.4% 14.1% 15.0% 15.5% 15.9%

LifeLock, Inc. - 3.8x 3.5x 2.4x 2.8x - 49.4x 47.5x 33.9x 51.2x - - 42.5% 44.9% 41.2% 5.0% 7.7% 7.5% 7.1% 5.6%

Limelight Networks, Inc. 0.7x 0.5x 0.5x 0.4x 0.5x 106.0x - - - - 6.7% 6.8% 5.2% 4.3% 1.7% 0.7% -0.5% -2.8% -1.9% -4.0%

LinkedIn 14.5x 13.1x 16.8x 16.8x 20.3x 115.5x 105.1x 130.2x 124.6x 159.0x 101.9% 91.8% 86.2% 79.8% 71.9% 12.6% 12.4% 12.9% 13.5% 12.8%

Liquidity Services, Inc. 3.2x 2.5x 2.1x 2.0x 1.8x 15.1x 12.2x 10.5x 10.5x 10.3x 40.6% 45.2% 37.3% 25.8% 15.4% 21.1% 20.6% 19.9% 19.3% 17.9%

Mail.ru Group 11.9x 9.3x 8.9x 6.7x 8.2x 26.4x 21.2x 20.7x 15.4x 18.5x 60.9% 44.9% 40.2% 35.8% 32.2% 44.9% 43.7% 42.8% 43.6% 44.3%

MakeMyTrip 2.3x 2.0x 2.0x 1.8x 1.8x 123.0x 3995.2x - - - 45.9% 29.2% 21.9% 16.4% 15.9% 1.9% 0.0% -3.2% -6.6% -8.2%

Marchex Inc. 0.6x 0.8x 0.8x 1.4x 1.6x 17.4x 29.4x 78.4x 84.1x 73.7x 23.6% 5.6% -5.7% -9.2% -2.9% 3.6% 2.8% 1.1% 1.6% 2.1%


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Mecox Lane Limited - - - 0.1x 0.3x - - - - - -17.3% -24.1% -30.3% -34.4% -36.7% -15.8% -13.7% -13.3% -14.2% -16.5%

SEG Internet Index


Mercadolibre, Inc. 10.0x 9.2x 9.8x 11.8x 12.4x 27.4x 25.8x 26.5x 32.4x 35.1x 36.8% 29.7% 25.0% 22.2% 22.1% 36.3% 35.9% 37.1% 36.4% 35.4%

Mitel Networks Corp. 0.7x 0.6x 0.7x 0.7x 0.8x 5.2x 4.8x 5.2x 5.1x 5.4x 3.9% -1.3% -3.8% -5.7% -3.5% 12.8% 13.5% 13.9% 13.8% 15.1%

Monster Worldwide, Inc. 0.9x 0.8x 0.7x 0.7x 0.7x 4.6x 4.3x 4.4x 4.5x 4.4x -5.7% -10.2% -10.4% -10.1% -10.1% 19.2% 17.9% 16.0% 15.6% 15.8%

NCSoft 7.9x 4.8x 3.0x 3.2x 3.4x - 32.5x 12.1x - 10.2x -9.8% -3.1% 23.8% 34.1% 46.6% - 14.8% 25.0% - 33.8%

Netease 3.7x 3.1x 3.2x 3.7x 4.4x 7.5x 6.5x 6.7x 7.9x 9.2x 27.4% 17.6% 12.5% 8.1% 8.8% 49.6% 47.9% 47.5% 47.4% 47.6%


Netflix 0.8x 1.1x 2.7x 3.3x 3.8x 12.9x 27.6x 102.9x 94.2x 86.7x 30.1% 21.0% 12.6% 12.1% 14.1% 6.6% 4.1% 2.6% 3.5% 4.4%

Orbitz 0.8x 0.7x 0.8x 1.3x 1.6x 5.5x 5.3x 6.1x 9.6x 11.6x 0.9% -0.8% 1.6% 2.6% 6.0% 13.8% 13.2% 13.6% 13.4% 13.5%

Overstock.com, Inc. 0.1x 0.3x 0.2x 0.4x 0.5x 18.8x 15.7x 7.2x 15.7x 16.9x -3.6% -1.6% 4.3% 9.3% 13.9% 0.8% 1.7% 2.6% 2.9% 3.1%

Pandora 4.8x 3.6x 4.5x 5.4x 6.3x - - - - - 66.4% 59.3% 55.7% 55.2% 56.0% -7.9% -6.5% -7.2% -8.2% -7.5%

Perfect World 0.8x 0.9x 0.8x 0.8x 1.6x 2.4x 2.7x 2.8x 3.3x 7.5x 4.7% 2.5% -7.1% -10.3% -6.0% 35.2% 33.2% 27.3% 24.6% 21.2%

PetMed Express, Inc. 0.5x 0.6x 0.9x 0.9x 1.1x 4.9x 5.6x 7.5x 7.7x 8.8x 1.2% 2.5% -0.3% -4.4% -0.2% 11.2% 11.2% 11.7% 12.3% 12.6%

Polycom, Inc. 0.8x 0.8x 0.9x 0.9x 0.8x 6.1x 7.4x 10.1x 11.1x 11.3x 10.5% 5.2% -0.7% -2.9% -5.1% 13.6% 11.5% 8.9% 8.0% 7.4%

Priceline 6.1x 5.6x 5.9x 6.5x 7.6x 17.4x 15.3x 16.2x 18.2x 21.2x 31.9% 23.6% 20.8% 20.6% 22.3% 35.0% 36.3% 36.4% 35.9% 35.8%

Qihoo 7.0x 8.4x 10.3x 12.2x 18.3x 30.1x 38.9x 50.8x 68.2x 81.9x 169.9% 130.1% 96.0% 72.6% 78.1% 23.1% 21.7% 20.3% 17.9% 22.3%

QuinStreet 1.0x 0.8x 0.8x 0.9x 1.2x 6.6x 5.4x 5.8x 7.5x 10.9x -8.1% -13.2% -16.4% -16.8% -17.6% 15.8% 14.5% 13.0% 12.1% 11.0%

ReachLocal, Inc. 0.6x 0.6x 0.6x 0.7x 0.5x 47.1x 31.5x 38.0x 35.1x 28.0x 24.0% 22.2% 21.3% 19.7% 17.7% 1.3% 1.8% 1.7% 1.9% 1.9%

Renren Inc 4.2x 2.4x 1.8x 1.2x 2.3x - - - - - 53.7% 50.9% 49.3% 47.2% 35.8% -39.4% -44.0% -42.9% -42.3% -46.7%

Rocket Fuel - - - - 11.6x - - - - - - - 138.7% - - -7.5% -7.5% -6.1% -8.5% -7.7%

Rovi Corporation 3.3x 3.4x 3.8x 4.7x 4.1x 8.5x 8.9x 10.5x 13.7x 12.2x 10.4% 1.1% -4.5% -9.1% -7.0% 38.5% 38.5% 36.2% 34.2% 33.8%

SeaChange International Inc. 1.0x 1.3x 1.8x 1.6x 1.7x 14.7x 21.4x 21.6x 21.7x 15.9x -8.3% -7.1% -4.6% -3.2% -1.8% 7.1% 6.0% 8.1% 7.3% 10.8%

ShoreTel, Inc. 0.9x 0.9x 0.7x 0.7x 0.8x - - - - - 23.2% 27.7% 29.3% 36.4% 27.1% -2.5% -2.6% -4.3% -3.1% -2.2%

Shutterfly 1.9x 1.7x 2.0x 2.5x 2.8x 19.5x 17.7x 15.3x 19.7x 23.9x 52.4% 47.1% 35.4% 31.3% 32.0% 9.6% 9.4% 12.9% 12.5% 11.8%

Shutterstock, Inc. - 5.2x 5.3x 7.8x 8.9x - 29.5x 28.1x 37.0x 40.8x - - 41.0% 38.4% 38.4% 16.7% 17.6% 18.8% 21.0% 21.8%

SINA Corporation 5.7x 5.3x 5.3x 5.6x 7.8x 134.0x 163.2x 132.9x 98.1x 297.3x 14.7% 14.0% 9.6% 12.3% 14.7% 4.2% 3.3% 4.0% 5.7% 2.6%

Sohu.com Inc. 1.0x 1.0x 1.3x 1.7x 1.7x 2.7x 2.9x 3.9x 5.2x 5.7x 35.3% 30.1% 25.2% 27.0% 28.1% 37.4% 35.0% 32.7% 32.1% 30.4%

Sonus Networks, Inc 0.7x 0.7x 1.7x 1.9x 2.9x - - - - - -5.6% -5.6% -2.1% -1.4% 0.8% -3.0% -3.0% -8.1% -9.8% -5.8%, % % % % % % % % % %

SouFun Holdings Ltd. 3.1x 4.1x 5.4x 4.9x 6.2x 7.3x 9.1x 11.2x 9.8x 12.2x 36.1% 20.6% 25.1% 28.0% 34.9% 42.9% 44.9% 47.9% 49.7% 50.7%

Stamps.com 2.9x 3.2x 3.1x 4.3x 4.8x 15.7x 15.3x 13.8x 17.3x 18.3x 17.1% 16.2% 13.9% 11.6% 13.5% 18.7% 20.6% 22.3% 24.7% 26.3%

Synacor, Inc 1.7x 1.0x 0.9x 0.4x 0.4x 20.6x 13.1x 10.9x 6.0x 6.8x - 47.9% 34.0% 16.9% 1.7% 8.4% 7.6% 7.9% 7.0% 5.3%

Tencent Holdings 9.4x 9.2x 8.7x 8.1x 9.8x 21.6x 21.9x 21.8x 21.0x 26.5x 49.4% 52.0% 54.0% 50.3% 45.1% 43.4% 42.1% 40.0% 38.6% 37.0%

TheStreet.com, Inc. 0.2x 0.3x 0.4x 0.4x 0.4x - - - - - -7.3% -12.1% -12.2% -10.6% -4.5% -6.0% -4.8% -4.5% -2.6% -3.3%

Travelzoo 2.0x 1.5x 1.8x 2.2x 2.4x 7.9x 6.7x 8.6x 11.7x 13.8x 16.7% 5.4% 1.9% 2.2% 2.3% 25.9% 23.0% 20.5% 19.2% 17.4%

Tree.Com, Inc. 1.5x 1.4x 1.4x 1.6x 1.5x - - - 80.9x 33.1x -6.9% 14.9% 41.8% 71.1% 108.9% -21.9% -14.7% -6.0% 1.9% 4.5%,

Tremor Video, Inc. - - - 3.7x 3.8x - - - - - - - 16.5% - - -15.3% -15.3% -9.6% -5.5% -1.4%

TripAdvisor Inc 7.1x 6.9x 8.4x 10.3x 12.1x 17.0x 16.3x 20.8x 25.6x 31.1x 24.0% 17.6% 19.8% 20.5% 22.8% 41.9% 42.1% 40.6% 40.1% 39.0%

Trulia, Inc. 11.4x 6.7x 8.9x 10.1x 13.3x - - - - - - - 76.8% 87.8% 81.1% -15.6% -12.6% -10.3% -5.3% -0.7%

Tucows Inc. 0.5x 0.5x 0.6x 0.7x 0.8x 7.1x 7.4x 9.5x 11.9x 15.1x 20.5% 20.0% 18.2% 14.8% 12.2% 7.1% 7.3% 6.4% 5.5% 5.0%

ValueClick, Inc. 2.2x 2.2x 3.0x 2.9x 2.3x 7.6x 7.7x 9.9x 9.4x 7.3x 31.0% 32.1% 25.0% 21.7% 13.6% 28.4% 28.8% 30.3% 31.1% 31.8%

VeriSign 8.1x 6.5x 7.0x 6.8x 6.8x 14.8x 11.7x 11.9x 11.1x 11.0x 13.6% 13.4% 13.2% 13.6% 13.3% 54.6% 55.6% 58.5% 60.7% 61.9%

VistaPrint 1.4x 1.2x 1.3x 1.5x 1.7x 12.6x 12.5x 13.1x 15.6x 18.4x 24.9% 23.3% 19.8% 16.3% 14.4% 10.9% 9.8% 9.6% 9.5% 9.1%


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WebMD Health Corp. 1.1x 1.1x 1.4x 2.3x 2.7x 8.0x 11.6x 28.8x 27.0x 25.1x -12.4% -15.4% -15.9% -10.9% -3.4% 14.1% 9.4% 4.9% 8.5% 10.9%

SEG Internet Index


XO Group 1.1x 1.0x 1.2x 1.5x 1.7x 8.2x 7.0x 8.0x 8.8x 10.0x 8.7% 5.8% 3.9% 2.5% 3.1% 13.2% 14.3% 14.8% 16.5% 17.4%

Xoom - - 8.8x 6.3x 8.4x - - - - 195.2x 52.3% - 60.0% - - -7.1% -4.5% -3.5% -2.3% 4.3%

Yahoo! Inc. 3.4x 2.9x 4.1x 5.0x 5.5x 13.0x 10.9x 15.4x 18.6x 20.8x -10.6% -4.2% 0.0% -1.7% -3.1% 26.2% 26.6% 26.4% 27.1% 26.6%

Yandex 8.6x 8.1x 8.0x 8.4x 10.3x 19.7x 18.5x 18.5x 19.1x 23.4x 54.7% 48.9% 43.6% 40.3% 37.1% 43.7% 44.0% 43.1% 43.8% 44.2%

Yelp, Inc. 12.3x 9.0x 9.3x 11.6x 18.2x - - - - - - 64.7% 65.2% 66.0% 66.6% -12.6% -9.3% -8.3% -2.8% -1.2%


Youku 8.4x 10.6x 9.6x 7.9x 8.4x - 696.0x 504.1x - 342.4x 107.3% 98.3% 100.0% 96.3% 95.8% -0.9% 1.5% 1.9% -0.5% 2.5%

YuMe, Inc. - - - - 2.4x - - - - 40.8x 32.2% 32.2% 70.3% - - -12.7% -12.7% 8.5% 7.1% 6.0%

YY, Inc. - 5.7x 4.8x 6.5x 9.8x - 42.7x 29.1x 32.6x 46.3x - - 156.5% 151.5% 132.1% 3.7% 13.3% 16.5% 20.0% 21.1%

Zillow 12.3x 6.6x 9.7x 12.8x 19.5x 123.8x 62.1x 91.4x 210.1x - 99.4% 83.7% 76.9% 71.3% 69.9% 9.9% 10.7% 10.6% 6.1% -1.6%

Zynga, Inc. 0.9x 0.5x 1.0x 1.1x 1.2x - - 23.2x 9.5x 7.8x 43.1% 25.1% 12.4% 0.5% -11.8% -36.0% -37.0% 4.5% 11.7% 15.0%


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THE SEG SOFTWARE INDEX METRICS BY PRODUCT CATEGORY

Billing & Service Management 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 1.3x 1.5x 1.9x 1.9x 2.3xEV/EBITDA 8.0x 8.2x 8.4x 8.3x 8.7xEV/Earnings 15.9x 17.1x 15.4x 14.2x 17.2xGross Profit Margin 58.0% 58.3% 59.4% 58.4% 58.3%EBITDA Margin 18.8% 19.8% 20.7% 18.7% 18.4%Net Income Margin 11.7% 12.1% 11.0% 9.9% 9.8%TTM Revenue Growth (YoY) 9.5% 10.4% 10.4% 8.9% 16.9%TTM EBITDA Growth (YoY) 10.2% 15.7% 14.5% 9.8% 11.6%TTM E i G th (Y Y) 4 9% 5 6% 7 6% 6 7% 24 5%

Enterprise Resource Planning 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.1x 2.2x 2.3x 2.5x 2.5xEV/EBITDA 9.2x 9.1x 10.1x 12.1x 12.2xEV/Earnings 15.2x 15.7x 22.9x 30.7x 28.7xGross Profit Margin 75.4% 75.6% 75.8% 76.2% 76.6%EBITDA Margin 23.2% 23.1% 22.8% 22.4% 22.2%Net Income Margin 15.6% 14.6% 11.5% 7.9% 7.7%TTM Revenue Growth (YoY) 4.7% 3.4% 2.6% 1.5% 2.2%TTM EBITDA Growth (YoY) 5.5% 8.2% 4.2% 0.3% 0.1%TTM E i G th (Y Y) 20 9% 24 7% 10 4% 12 3% 1 8%

IT Conglomerates 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.8x 2.5x 2.5x 2.9x 2.7xEV/EBITDA 8.4x 8.0x 9.0x 8.7x 8.3xEV/Earnings 14.4x 13.7x 14.7x 14.2x 13.5xGross Profit Margin 71.6% 71.4% 71.2% 71.6% 71.9%EBITDA Margin 36.1% 34.6% 33.8% 33.8% 34.3%Net Income Margin 23.0% 18.6% 17.4% 17.6% 17.8%TTM Revenue Growth (YoY) 1.5% 1.4% 0.5% 0.2% 1.2%TTM EBITDA Growth (YoY) 0.5% -0.6% 0.9% 2.4% -0.3%TTM E i G th (Y Y) 4 1% 20 0% 24 9% 16 9% 7 9%TTM Earnings Growth (YoY) 4.9% -5.6% -7.6% 6.7% 24.5%

Current Ratio 2.4 2.7 3.0 2.7 2.8Cash as Percent of Market Cap 21.6% 21.8% 16.0% 17.8% 19.2%Enterprise Value Growth (YoY) -5.0% 13.9% 10.2% 21.5% 22.6%

Business Intelligence 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 3.7x 3.2x 3.4x 3.0x 3.3xEV/EBITDA 25.6x 17.5x 15.8x 16.5x 17.1xEV/Earnings 47.0x 30.9x 34.6x 25.2x 34.0xGross Profit Margin 73 9% 73 4% 72 8% 72 3% 71 8%

TTM Earnings Growth (YoY) -20.9% -24.7% -10.4% -12.3% -1.8%Current Ratio 1.1 1.1 1.1 1.1 1.0Cash as Percent of Market Cap 13.1% 13.8% 12.7% 13.2% 15.6%Enterprise Value Growth (YoY) 3.2% 2.7% 9.7% 18.3% 8.7%

Financial & Accounting 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.9x 2.9x 3.1x 3.3x 3.3xEV/EBITDA 9.8x 9.8x 10.5x 11.3x 12.0xEV/Earnings 20.1x 20.3x 22.8x 24.4x 28.0xGross Profit Margin 58 7% 55 3% 54 6% 55 7% 56 7%

TTM Earnings Growth (YoY) -4.1% 20.0% 24.9% 16.9% -7.9%Current Ratio 1.2 1.2 1.1 1.2 1.2Cash as Percent of Market Cap 19.6% 20.9% 19.2% 21.6% 26.1%Enterprise Value Growth (YoY) 9.4% 2.4% 1.6% 1.7% 4.1%

Mobile Solutions/Content 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 3.2x 2.5x 2.7x 2.8x 3.0xEV/EBITDA 13.8x 11.9x 20.6x 13.2x 13.5xEV/Earnings 22.2x 21.4x 40.1x 50.5x 62.9xGross Profit Margin 56 0% 57 1% 55 1% 54 2% 54 4%Gross Profit Margin 73.9% 73.4% 72.8% 72.3% 71.8%

EBITDA Margin 16.5% 14.7% 14.0% 13.6% 13.3%Net Income Margin 7.9% 7.8% 6.1% 9.5% 8.9%TTM Revenue Growth (YoY) 13.8% 13.2% 11.8% 13.1% 14.2%TTM EBITDA Growth (YoY) 8.4% 0.6% 3.0% -8.7% -22.8%TTM Earnings Growth (YoY) -14.0% 1.8% -7.5% -6.1% -75.4%Current Ratio 2.0 2.2 1.9 2.0 2.0Cash as Percent of Market Cap 13.2% 18.8% 15.7% 13.4% 11.2%Enterprise Value Growth (YoY) 1.5% -9.3% -7.2% -9.1% 21.0%

Gross Profit Margin 58.7% 55.3% 54.6% 55.7% 56.7%EBITDA Margin 29.0% 28.8% 27.5% 26.6% 26.1%Net Income Margin 11.0% 12.8% 12.6% 12.6% 11.2%TTM Revenue Growth (YoY) 17.2% 13.8% 8.6% 10.7% 9.5%TTM EBITDA Growth (YoY) 6.6% 4.1% 2.9% 5.3% 8.2%TTM Earnings Growth (YoY) -22.6% -22.2% -17.4% -7.0% -0.8%Current Ratio 1.2 1.2 1.3 1.5 1.4Cash as Percent of Market Cap 9.4% 6.5% 5.8% 7.9% 8.0%Enterprise Value Growth (YoY) 14.6% 19.8% 12.0% 20.9% 22.9%

Gross Profit Margin 56.0% 57.1% 55.1% 54.2% 54.4%EBITDA Margin 7.8% 6.4% 4.5% 7.9% 8.0%Net Income Margin -0.4% -5.1% -3.1% -2.7% 2.3%TTM Revenue Growth (YoY) 44.9% 48.1% 44.5% 24.6% 13.2%TTM EBITDA Growth (YoY) -1.6% -20.3% 13.7% 13.9% 10.7%TTM Earnings Growth (YoY) 27.0% 31.4% 33.7% 17.5% 70.5%Current Ratio 1.9 2.0 1.9 2.1 2.1Cash as Percent of Market Cap 13.3% 10.7% 8.2% 10.5% 10.9%Enterprise Value Growth (YoY) -20.9% -9.1% -18.9% -20.8% 8.6%

Development Platforms 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.5x 2.5x 2.5x 2.6x 2.6xEV/EBITDA 8.2x 9.6x 9.1x 10.1x 14.2xEV/Earnings 13.6x 16.6x 17.1x 14.2x 13.6xGross Profit Margin 77.8% 77.6% 77.9% 78.1% 77.7%EBITDA Margin 24.7% 23.5% 21.1% 20.3% 20.4%Net Income Margin 13.7% 13.8% 14.3% 12.6% 11.2%TTM Revenue Growth (YoY) 3.5% 1.6% 3.0% 0.6% -0.3%TTM EBITDA Growth (YoY) 3.0% -0.6% -3.0% -2.7% -5.5%

Gaming 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 1.0x 1.0x 1.1x 1.3x 1.7xEV/EBITDA 9.1x 8.0x 7.1x 9.4x 11.3xEV/Earnings 12.1x 20.2x 16.8x 20.5x 43.6xGross Profit Margin 61.6% 61.9% 64.7% 65.3% 66.5%EBITDA Margin 14.9% 15.7% 14.9% 15.4% 14.6%Net Income Margin 6.0% 5.4% 4.5% 4.4% 4.1%TTM Revenue Growth (YoY) 2.2% 0.1% 7.4% 15.1% 14.9%TTM EBITDA Growth (YoY) -26.8% -12.5% 6.3% 57.8% 52.8%

Networking & Network Perf Mgmt 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 3.0x 3.0x 2.8x 2.7x 2.8xEV/EBITDA 16.4x 14.9x 15.3x 17.0x 17.0xEV/Earnings 25.8x 26.9x 29.8x 21.0x 22.9xGross Profit Margin 70.7% 70.7% 70.4% 70.5% 70.6%EBITDA Margin 16.3% 16.0% 16.1% 15.0% 14.3%Net Income Margin 8.3% 8.7% 6.5% 5.4% 0.5%TTM Revenue Growth (YoY) 17.3% 14.6% 15.2% 11.0% 6.5%TTM EBITDA Growth (YoY) 17.9% 22.6% 15.6% 8.2% -2.0%

TTM Earnings Growth (YoY) 3.9% 3.0% 7.1% 9.5% 15.7%Current Ratio 2.1 2.2 2.3 2.3 2.1Cash as Percent of Market Cap 21.5% 22.1% 19.8% 20.2% 17.4%Enterprise Value Growth (YoY) 6.5% -1.7% 0.1% -3.0% 6.2%

Engineering & PLM 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.6x 2.5x 2.7x 2.7x 2.8xEV/EBITDA 12.1x 11.8x 13.4x 12.4x 13.8xEV/Earnings 23.3x 23.2x 20.0x 19.6x 23.0x

TTM Earnings Growth (YoY) -29.2% -24.8% -24.5% -14.8% -9.5%Current Ratio 2.8 2.4 2.5 2.6 2.4Cash as Percent of Market Cap 31.4% 29.9% 28.7% 22.1% 19.4%Enterprise Value Growth (YoY) -10.5% -12.3% -1.3% 27.1% 65.7%

Healthcare 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.2x 2.1x 2.1x 2.1x 2.5xEV/EBITDA 12.8x 11.3x 14.8x 17.6x 16.1xEV/Earnings 37.9x 41.7x 34.2x 37.3x 34.4x

( )TTM Earnings Growth (YoY) -19.6% 16.9% 27.9% 27.1% 2.3%Current Ratio 2.7 2.5 1.9 1.9 2.4Cash as Percent of Market Cap 17.9% 16.9% 14.4% 17.2% 20.4%Enterprise Value Growth (YoY) 7.1% -7.2% -4.3% 2.2% 8.7%

Security 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 4.2x 3.1x 3.5x 4.5x 4.9xEV/EBITDA 11.5x 11.9x 20.7x 16.7x 12.7xEV/Earnings 18.1x 14.2x 17.6x 18.0x 20.7x

Gross Profit Margin 84.1% 83.4% 83.3% 83.4% 83.6%EBITDA Margin 20.5% 20.6% 20.7% 20.5% 20.3%Net Income Margin 11.4% 10.6% 10.8% 10.4% 10.8%TTM Revenue Growth (YoY) 13.2% 14.0% 13.1% 11.7% 8.4%TTM EBITDA Growth (YoY) 20.8% 17.3% 10.5% 11.3% 10.1%TTM Earnings Growth (YoY) -38.8% -14.9% -9.0% -11.3% 0.1%Current Ratio 1.8 1.8 1.9 2.2 2.2Cash as Percent of Market Cap 16.3% 14.6% 13.9% 14.9% 15.5%Enterprise Value Growth (YoY) 29.0% 31.1% 21.1% 27.4% 32.9%

Gross Profit Margin 55.1% 55.4% 55.7% 54.5% 53.6%EBITDA Margin 20.6% 18.5% 13.4% 14.1% 14.3%Net Income Margin 4.0% 3.3% 1.9% 1.7% 1.7%TTM Revenue Growth (YoY) 24.2% 19.6% 10.7% 11.0% 9.4%TTM EBITDA Growth (YoY) 7.0% 13.7% -0.2% -16.8% -19.9%TTM Earnings Growth (YoY) -24.0% -16.2% -10.8% 22.5% 229.5%Current Ratio 2.1 2.1 2.2 2.2 2.2Cash as Percent of Market Cap 8.1% 7.2% 7.1% 5.8% 5.6%Enterprise Value Growth (YoY) -25.5% -17.3% -10.0% 0.4% 9.3%

Gross Profit Margin 77.0% 77.0% 76.7% 76.7% 76.9%EBITDA Margin 18.4% 17.1% 8.1% 7.3% 7.5%Net Income Margin 9.4% 12.3% 6.2% 2.1% 2.4%TTM Revenue Growth (YoY) 22.8% 23.9% 23.8% 21.8% 21.2%TTM EBITDA Growth (YoY) 8.4% 8.7% 4.6% -18.6% -25.4%TTM Earnings Growth (YoY) -7.5% 1.1% 6.5% 21.1% 33.0%Current Ratio 2.2 2.3 1.8 1.8 1.7Cash as Percent of Market Cap 14.7% 14.6% 12.8% 12.1% 9.4%Enterprise Value Growth (YoY) 9.1% 0.7% 7.7% 10.3% 46.7%


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THE SEG SOFTWARE INDEX METRICS BY PRODUCT CATEGORY

Storage, Data Mgmt & Integration 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.5x 2.3x 2.4x 2.4x 2.7xEV/EBITDA 9.2x 8.4x 9.2x 8.8x 8.9xEV/Earnings 15.2x 14.5x 15.4x 16.9x 15.5xGross Profit Margin 73.7% 72.4% 72.6% 72.3% 72.8%EBITDA Margin 23.9% 23.8% 22.2% 21.9% 22.2%Net Income Margin 12.8% 12.7% 11.5% 10.7% 10.9%TTM Revenue Growth (YoY) 6.3% 6.5% 4.8% 4.1% 3.3%TTM EBITDA Growth (YoY) 8.0% 3.8% 3.9% 3.4% -0.3%TTM E i G th (Y Y) 11 4% 9 9% 8 0% 5 7% 0 4%

Vertical - Other 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.9x 2.9x 3.0x 3.2x 3.6xEV/EBITDA 21.2x 21.3x 22.0x 22.1x 20.8xEV/Earnings 47.5x 39.8x 40.9x 45.5x 51.8xGross Profit Margin 54.6% 54.2% 53.8% 53.5% 53.2%EBITDA Margin 14.3% 14.0% 14.1% 14.4% 15.5%Net Income Margin 6.2% 5.7% 5.7% 5.5% 5.5%TTM Revenue Growth (YoY) 28.0% 19.8% 21.3% 21.0% 22.2%TTM EBITDA Growth (YoY) 9.0% 6.5% 1.1% 11.2% 18.1%TTM E i G th (Y Y) 14 5% 12 5% 22 4% 0 5% 21 9%TTM Earnings Growth (YoY) -11.4% -9.9% -8.0% -5.7% 0.4%

Current Ratio 2.1 2.3 2.2 2.2 2.4Cash as Percent of Market Cap 19.6% 20.9% 22.1% 21.7% 20.6%Enterprise Value Growth (YoY) 7.8% -1.1% -9.1% -0.8% 13.0%

Supply Chain Mgmt & Logistics 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.5x 2.9x 3.3x 3.4x 4.1xEV/EBITDA 10.5x 12.7x 14.5x 15.0x 17.1xEV/Earnings 24.8x 33.1x 34.1x 36.0x 33.9xGross Profit Margin 65 6% 66 0% 66 6% 67 7% 67 7%

TTM Earnings Growth (YoY) -14.5% 12.5% 22.4% -0.5% 21.9%Current Ratio 1.3 1.4 1.4 1.4 1.4Cash as Percent of Market Cap 10.3% 11.2% 11.3% 9.4% 7.9%Enterprise Value Growth (YoY) 15.6% 7.5% 8.4% 50.5% 68.0%

Gross Profit Margin 65.6% 66.0% 66.6% 67.7% 67.7%EBITDA Margin 17.1% 16.6% 16.0% 15.3% 19.2%Net Income Margin 10.4% 10.4% 10.5% 10.4% 11.1%TTM Revenue Growth (YoY) 15.9% 11.2% 11.3% 9.3% 10.2%TTM EBITDA Growth (YoY) 31.6% 36.0% 27.4% 12.0% 16.8%TTM Earnings Growth (YoY) -18.2% -4.0% -8.7% -10.6% 19.7%Current Ratio 2.0 2.0 2.0 2.0 2.1Cash as Percent of Market Cap 10.8% 9.3% 8.1% 6.2% 6.1%Enterprise Value Growth (YoY) 40.9% 38.4% 28.9% 31.7% 40.4%

Systems Management 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 6.9x 5.7x 5.6x 5.0x 5.4xEV/EBITDA 26.6x 24.6x 23.0x 20.9x 19.7xEV/Earnings 41.2x 39.3x 37.6x 34.7x 34.8xGross Profit Margin 85.8% 85.8% 85.6% 85.5% 85.6%EBITDA Margin 25.9% 25.0% 24.4% 23.8% 24.2%Net Income Margin 16.7% 15.5% 14.9% 14.1% 13.8%TTM Revenue Growth (YoY) 18.7% 17.4% 17.2% 16.1% 16.4%TTM EBITDA Growth (YoY) 13.3% 16.0% 18.2% 15.1% 10.1%TTM Earnings Growth (YoY) -15.8% -8.0% -8.8% -8.8% 0.4%Current Ratio 1.9 1.8 1.5 1.5 1.5Cash as Percent of Market Cap 9.3% 10.5% 11.0% 13.2% 11.5%Enterprise Value Growth (YoY) 33.2% 7.8% 4.1% -10.3% -9.0%

Vertical - Finance 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 3.2x 3.0x 3.4x 3.8x 3.7xEV/EBITDA 10.6x 9.4x 10.7x 11.4x 12.6xEV/Earnings 26.0x 23.3x 24.1x 23.2x 24.3xGross Profit Margin 45.4% 44.3% 43.8% 43.3% 43.2%EBITDA Margin 26.2% 26.3% 26.5% 27.3% 26.0%Net Income Margin 10.4% 10.0% 9.7% 10.3% 11.3%TTM Revenue Growth (YoY) 6.3% 7.1% 6.7% 7.6% 7.4%TTM EBITDA Growth (YoY) 7.9% 11.2% 8.8% 9.0% 8.9%TTM Earnings Growth (YoY) 1.3% -3.3% -0.9% -2.6% -8.4%Current Ratio 1.3 1.4 1.3 1.4 1.3Cash as Percent of Market Cap 9.0% 7.6% 7.0% 7.7% 6.9%Enterprise Value Growth (YoY) 2.7% -4.4% 0.9% 20.9% 29.0%


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THE SEG SaaS INDEX METRICS BY PRODUCT CATEGORYCRM & Marketing 3Q12 4Q12 1Q13 2Q13 3Q13

EV/Revenue 4.7x 3.4x 2.7x 2.7x 4.0xEV/EBITDA 37.1x 30.3x 26.6x 29.8x 106.5xEV/Earnings 71.9x 28.4x 35.6x 52.7x 273.3xGross Profit Margin 71.1% 71.0% 70.8% 70.9% 71.0%EBITDA Margin 4.4% 3.1% 2.8% 2.2% 2.1%Net Income Margin -1.4% -8.9% -8.9% -9.8% -6.7%TTM Revenue Growth (YoY) 33.2% 36.1% 37.2% 26.7% 27.3%TTM EBITDA Growth (YoY) -9.4% -11.1% -34.4% -29.3% -47.3%TTM E i G th (Y Y) 52 5% 34 3% 80 3% 71 7% 76 6%

Other SaaS 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 4.8x 4.8x 4.1x 5.8x 8.8xEV/EBITDA 20.5x 20.3x 26.4x 30.2x 33.9xEV/Earnings 5.0x 9.9x 12.5x 15.6x 18.0xGross Profit Margin 71.5% 71.2% 71.2% 71.7% 72.2%EBITDA Margin 0.0% 0.0% 0.0% 0.0% 0.0%Net Income Margin -7.7% -8.0% -4.9% -4.4% -4.9%TTM Revenue Growth (YoY) 18.8% 18.6% 23.0% 19.3% 21.5%TTM EBITDA Growth (YoY) 0.0% 0.0% 2.8% 0.0% -31.9%TTM E i G th (Y Y) 9 6% 13 8% 5 9% 10 9% 5 0%TTM Earnings Growth (YoY) 52.5% 34.3% 80.3% 71.7% 76.6%

Current Ratio 1.5 1.9 1.9 1.5 1.9Cash as Percent of Market Cap 9.1% 14.7% 21.9% 19.3% 14.1%Enterprise Value Growth (YoY) 7.5% 23.3% -20.1% -29.1% -8.4%

ERP & Supply Chain 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 5.5x 7.0x 6.6x 7.1x 9.3xEV/EBITDA 67.2x 63.6x 85.0x 86.7x 108.3xEV/Earnings 131.3x 118.6x 283.7x 331.2x 478.1xGross Profit Margin 70 0% 70 2% 69 3% 68 6% 68 1%

TTM Earnings Growth (YoY) 9.6% 13.8% 5.9% 10.9% 5.0%Current Ratio 1.6 1.6 1.9 1.7 1.8Cash as Percent of Market Cap 12.5% 13.2% 13.0% 12.1% 8.1%Enterprise Value Growth (YoY) 0.0% 1.6% 0.0% 28.6% 61.0%

Gross Profit Margin 70.0% 70.2% 69.3% 68.6% 68.1%EBITDA Margin 6.7% 7.2% 3.2% 0.2% -0.6%Net Income Margin 1.8% 2.7% -1.4% -3.8% -4.3%TTM Revenue Growth (YoY) 26.3% 25.3% 31.8% 33.9% 37.7%TTM EBITDA Growth (YoY) 1.1% -4.8% 19.0% 0.3% -53.2%TTM Earnings Growth (YoY) 7.2% 179.4% 126.5% 110.2% 41.8%Current Ratio 1.4 1.4 2.4 2.1 2.8Cash as Percent of Market Cap 8.5% 8.7% 7.5% 9.4% 7.6%Enterprise Value Growth (YoY) 76.3% 66.7% 64.8% 94.4% 68.1%

Vertically Focused 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 5.7x 4.7x 5.0x 5.0x 5.7xEV/EBITDA 30.4x 25.5x 27.3x 25.7x 28.3xEV/Earnings 23.7x 30.7x 63.2x 137.6x 119.5xGross Profit Margin 61.1% 71.4% 71.3% 71.8% 67.7%EBITDA Margin 15.3% 14.6% 16.4% 16.0% 15.8%Net Income Margin 16.3% 14.0% 5.3% 3.8% 3.3%TTM Revenue Growth (YoY) 32.0% 27.7% 21.6% 21.5% 22.6%TTM EBITDA Growth (YoY) 4.0% 2.9% 6.5% 10.2% 8.5%TTM Earnings Growth (YoY) -38.6% 1.1% 3.4% 28.2% -36.1%Current Ratio 2.2 2.4 2.5 1.6 2.6Cash as Percent of Market Cap 9.7% 7.8% 8.3% 5.4% 8.8%Enterprise Value Growth (YoY) 58.5% 25.7% 26.3% 21.5% 26.9%

Workforce Management 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 8.3x 10.5x 10.7x 8.5x 10.4xEV/EBITDA 80.0x 69.4x 63.7x 61.9x 72.9xEV/Earnings 368.3x 243.2x 180.5x 165.7x 189.8xGross Profit Margin 56.5% 56.6% 57.4% 58.5% 60.2%EBITDA Margin -15.0% -16.2% -17.8% -16.1% -14.4%Net Income Margin -27.5% -27.9% -29.2% -27.7% -28.2%TTM Revenue Growth (YoY) 28.7% 29.1% 23.4% 43.1% 42.2%TTM EBITDA Growth (YoY) -16.6% -42.8% -32.9% -17.9% -32.3%TTM Earnings Growth (YoY) -63.6% 17.9% 25.4% 24.0% 27.0%Current Ratio 1.2 1.2 1.1 1.1 2.2Cash as Percent of Market Cap 5.0% 4.2% 3.8% 13.7% 10.3%Enterprise Value Growth (YoY) 87.1% 62.3% 49.2% 42.8% 75.3%


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THE SEG INTERNET INDEX METRICS BY PRODUCT CATEGORY

Ad Tech & Lead Generation 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 1.8x 2.2x 2.0x 2.5x 2.5xEV/EBITDA 13.3x 12.0x 14.9x 14.9x 22.1xEV/Earnings 29.6x 28.0x 21.9x 25.4x 25.7xGross Profit Margin 65.1% 64.8% 64.5% 64.5% 63.5%EBITDA Margin 12.5% 12.6% 12.9% 12.6% 11.3%Net Income Margin 2.7% 3.3% 5.0% 4.1% 1.7%TTM Revenue Growth (YoY) 33.4% 31.9% 28.8% 26.8% 17.9%TTM EBITDA Growth (YoY) 4.9% 4.3% 10.0% 22.2% 26.6%TTM E i G th (Y Y) 9 3% 17 8% 11 5% 4 6% 129 3%

Infrastructure 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 1.1x 1.0x 1.7x 1.6x 1.4xEV/EBITDA 14.2x 10.4x 11.9x 13.6x 14.3xEV/Earnings 18.2x 20.5x 23.3x 35.3x 50.4xGross Profit Margin 63.7% 63.1% 61.6% 61.2% 62.2%EBITDA Margin 8.1% 7.5% 8.0% 7.2% 7.1%Net Income Margin 3.4% 1.8% -0.8% 0.4% 0.3%TTM Revenue Growth (YoY) 11.8% 10.9% 9.2% 8.8% 1.7%TTM EBITDA Growth (YoY) 1.0% -0.9% -18.7% -16.2% -19.5%TTM E i G th (Y Y) 23 1% 59 7% 51 9% 64 6% 25 4%TTM Earnings Growth (YoY) -9.3% -17.8% -11.5% 4.6% 129.3%

Current Ratio 2.7 2.7 2.4 2.4 2.2Cash as Percent of Market Cap 20.8% 16.4% 19.1% 18.3% 14.3%Enterprise Value Growth (YoY) -3.6% 2.7% 8.8% 39.1% 41.0%

Commerce 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 0.9x 1.2x 0.9x 0.9x 1.1xEV/EBITDA 14.9x 13.6x 10.5x 15.1x 15.6xEV/Earnings 17.1x 18.8x 13.9x 23.8x 24.5xGross Profit Margin 37 4% 38 6% 38 4% 38 5% 38 9%

TTM Earnings Growth (YoY) 23.1% 59.7% 51.9% 64.6% -25.4%Current Ratio 3.3 3.1 3.0 3.1 3.1Cash as Percent of Market Cap 24.8% 27.3% 28.4% 27.5% 22.1%Enterprise Value Growth (YoY) -12.7% 1.6% -2.8% -1.6% 19.5%

Services 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 3.1x 3.3x 3.5x 3.4x 4.3xEV/EBITDA 13.3x 15.1x 14.2x 19.7x 23.9xEV/Earnings 34.6x 40.9x 50.2x 74.6x 117.8xGross Profit Margin 69 6% 70 5% 71 1% 71 8% 71 8%Gross Profit Margin 37.4% 38.6% 38.4% 38.5% 38.9%

EBITDA Margin 8.4% 8.4% 7.6% 7.5% 6.7%Net Income Margin 3.1% 4.5% 4.6% 4.9% 4.8%TTM Revenue Growth (YoY) 14.2% 15.1% 17.5% 17.7% 15.4%TTM EBITDA Growth (YoY) 12.8% 19.1% 25.7% 30.0% 18.5%TTM Earnings Growth (YoY) -38.1% -28.0% -8.4% -12.4% 1.5%Current Ratio 2.0 1.9 1.8 1.6 1.7Cash as Percent of Market Cap 20.6% 20.3% 18.5% 15.5% 13.5%Enterprise Value Growth (YoY) -14.4% 6.2% -6.3% 28.0% 39.8%

Gross Profit Margin 69.6% 70.5% 71.1% 71.8% 71.8%EBITDA Margin 9.6% 9.4% 9.6% 7.1% 5.6%Net Income Margin 4.3% 3.2% 3.6% 0.4% 1.0%TTM Revenue Growth (YoY) 46.7% 32.7% 41.8% 40.4% 38.1%TTM EBITDA Growth (YoY) 7.9% 10.9% 23.5% 30.6% 59.7%TTM Earnings Growth (YoY) -4.9% -33.1% -7.8% 46.5% 76.0%Current Ratio 1.4 2.2 2.1 2.2 2.2Cash as Percent of Market Cap 15.1% 17.0% 13.2% 14.0% 14.1%Enterprise Value Growth (YoY) -3.6% -10.8% 16.1% 65.8% 102.8%

Content & Media 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 1.3x 1.4x 1.6x 2.3x 2.7xEV/EBITDA 10.8x 10.9x 15.4x 13.8x 20.8xEV/Earnings 19.2x 22.0x 18.9x 22.6x 21.8xGross Profit Margin 53.9% 52.5% 52.4% 52.4% 52.3%EBITDA Margin 14.1% 14.1% 14.8% 15.5% 15.9%Net Income Margin 4.0% 1.3% 1.6% 2.2% 2.4%TTM Revenue Growth (YoY) 12.3% 10.5% 12.6% 12.1% 14.1%TTM EBITDA Growth (YoY) -1.2% 4.8% 19.5% 16.6% 23.1%

Social 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 12.1x 9.0x 9.3x 10.0x 14.0xEV/EBITDA 34.3x 39.6x 38.9x 37.1x 38.6xEV/Earnings 98.0x 62.9x 44.2x 43.6x 53.1xGross Profit Margin 74.0% 73.8% 73.2% 72.7% 74.9%EBITDA Margin 8.2% 12.9% 14.7% 16.8% 17.0%Net Income Margin 1.8% 6.3% 2.2% 3.5% 9.1%TTM Revenue Growth (YoY) 57.3% 50.9% 49.3% 47.2% 41.4%TTM EBITDA Growth (YoY) -9.3% -2.2% 18.4% 45.1% 79.2%

TTM Earnings Growth (YoY) 34.3% 9.4% 0.4% -0.9% 70.5%Current Ratio 2.1 1.6 1.8 1.8 2.0Cash as Percent of Market Cap 26.9% 16.2% 17.2% 16.8% 14.4%Enterprise Value Growth (YoY) -21.9% -11.6% 12.8% 23.5% 69.5%

Gaming 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.1x 2.4x 2.7x 2.7x 2.8xEV/EBITDA 3.4x 4.3x 5.8x 5.9x 7.7xEV/Earnings 8.4x 7.1x 7.1x 8.4x 11.2x

TTM Earnings Growth (YoY) -39.4% -44.9% -62.2% -67.3% -65.3%Current Ratio 7.2 5.4 5.2 4.2 3.8Cash as Percent of Market Cap 17.1% 18.7% 14.5% 16.6% 11.5%Enterprise Value Growth (YoY) n/a n/a n/a -3.8% 56.7%

Travel 3Q12 4Q12 1Q13 2Q13 3Q13EV/Revenue 2.4x 2.7x 2.8x 3.4x 4.6xEV/EBITDA 13.5x 15.7x 16.2x 18.2x 21.2xEV/Earnings 23.7x 20.7x 25.2x 35.3x 44.3x

Gross Profit Margin 71.9% 69.4% 71.2% 71.3% 72.5%EBITDA Margin 43.4% 38.6% 36.3% 38.6% 35.4%Net Income Margin 28.9% 27.3% 24.8% 26.7% 27.7%TTM Revenue Growth (YoY) 32.0% 24.8% 21.9% 21.9% 19.8%TTM EBITDA Growth (YoY) 9.7% 4.2% 13.9% 13.4% 18.0%TTM Earnings Growth (YoY) 1.1% -12.8% -13.5% -12.6% -13.2%Current Ratio 2.4 2.2 2.5 2.4 2.4Cash as Percent of Market Cap 33.3% 40.5% 36.7% 33.5% 29.8%Enterprise Value Growth (YoY) -30.8% 9.0% -6.3% 22.8% 63.0%

Gross Profit Margin 79.8% 79.6% 79.4% 79.7% 80.7%EBITDA Margin 21.9% 19.6% 18.1% 17.9% 16.8%Net Income Margin 12.9% 11.5% 9.5% 9.5% 9.1%TTM Revenue Growth (YoY) 21.2% 20.2% 19.3% 20.0% 20.8%TTM EBITDA Growth (YoY) 2.8% -1.4% -0.6% 2.1% 1.0%TTM Earnings Growth (YoY) -40.7% -17.0% -4.7% 29.2% 601.0%Current Ratio 2.1 2.0 1.9 1.9 1.9Cash as Percent of Market Cap 15.5% 20.0% 19.4% 18.7% 15.3%Enterprise Value Growth (YoY) -30.5% -23.5% 1.0% 38.8% 45.0%


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3Q13 PUBLIC SELLERS

Buyer SellerPurchase Price

(mm)Enterprise Value

(mm) EV/Rev EV/EBITDATTM Rev Growth

Cisco Systems, Inc. (NasdaqGS:CSCO) Sourcefire, Inc. (NasdaqGS:FIRE) $2,394.8 $2,193.6 8.9x 118.8x 26.7%Vista Equity Partners The Active Network, Inc. (NYSE:ACTV) $1,050.0 $941.9 2.1x 71.4x 15.6%Vitera Healthcare Solutions, LLC Greenway Medical Technologies, Inc. (NYSE:GWAY) $643.6 $632.4 4.7x - 8.7%, y g , ( )


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3Q13 MEGA DEALS



(mm) EV/ Rev EV/ EBITDATTM Rev Growth

Cisco Systems, Inc. (NasdaqGS:CSCO) Sourcefire, Inc. (NasdaqGS:FIRE) $2,394.8 $2,193.6 8.9x 118.8x 26.7%Davis + Henderson Corporation (TSX:DH) Harland Financial Solutions, Inc. $1,637.5 $1,628.7 5.8x 18.5x -Thoma Bravo, LLC Digital Insight Corporation $1,025.0 $1,025.0 3.4x - 15 5%, g g p $ , $ , 15.5%Kohlberg Kravis Roberts & Co. L.P. (NYSE KKR)

Mitchell International, Inc. $1,000.0 $1,000.0 - - -Vista Equity Partners The Active Network, Inc. (NYSE:ACTV) $1,050.0 $941.9 2.1x 71.4x 15.6%Vista Equity Partners Omnitracs, Inc. $800.0 $800.0 - - -Vitera Healthcare Solutions, LLC Greenway Medical Technologies, Inc. (NYSE:GWAY) $643.6 $632.4 4.7x - 8.7%


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3Q13 MOST ACTIVE BUYERS



(mm)TTM Revenue

(mm)EV /

RevenueApple Inc. (Nasdaq:AAPL) Embark, Inc. - - - -

Locationary Inc. - - - -

Matcha, Inc. - - - -

H ll F d B il J S i d I f áti LtdHelloFood Brasil Janamesa Serviços de Informática Ltda. - - - -

Megamenu Servicos de Busca - - - -

Web Serviços Digitais LTDA - - - -

IBM Corporation (NYSE:IBM) CSL International Ltd - - - -

Daeja Image Systems Ltd - - - -

Trusteer, Inc. - - - -

LexisNexis Risk Solutions, Inc. Enclarity, Inc. - - - -

Mapflow Limited - - - -

WorldCompliance, Inc. - - - -

Thomson Reuters Corporation (TSX:TRI) Omnesys Technologies Private Limited - - - -

SigmaGenix Services Limited - - - -

Tradeweb, Foreign Exchange Options Bus. - - - -

Twitter, Inc. Locomatix Inc. - - - -

MoPub, Inc. $350.0 $350.0 - -

Wiredset LLC - - - -

Vista Equity Partners Digital Technology International, LLC - - - -

Omnitracs, Inc. $800.0 $800.0 - -, $ $

SAXOTECH, Inc. - - - -

The Active Network, Inc. (NYSE:ACTV) $1,050.0 $941.9 $442.2 2.1x

Wall Street Media (OTCBB:WSCO) 360Fire.com - - - -

CoastGuardNews.com - - - -

Wall-Street.com, LLC $3.2 $3.2 - -Y h ! I (N d GS YHOO) AdM t IYahoo! Inc. (NasdaqGS:YHOO) AdMovate, Inc. - - - -

Bignoggins Productions LLC - - - -IQ Engines, Inc. - - - -Lexity, Inc. - - - -Qwiki, Inc. - - - -RockMelt, Inc. - - - -Xobni Corporation - - - -


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p

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