Strictly private and confidential
Global Software Market Perspectives
Q3 2017
2
Key Sector Takeaways and Commentary
Recent Software Transaction Trends
Public Market SaaS Analyses
Key SaaS Metrics
Appendix A: GP Bullhound SaaS Index
Appendix B: Software Public Comps by Category
1
2
3
4
5
6
7
Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
3
 Software consolidators are actively pursuing M&A to build out their software platforms, acquiring new products and point
solutions in order to deliver market-differentiating, comprehensive product suites to their customers
 Sizeable software players are driven to capture a larger percentage of their enterprise customers’ wallet share by
adding and offering a comprehensive set of products
– The platform strategy is particularly evident in the human capital management, enterprise resource planning and marketing software spaces
» HCM – Asure Software/iSystems, Bullhorn/Connexys, Workday/Pattern Technologies
» ERP – Aptean/Apprise, Sage/Intacct
» Marketing – SAP/Gigya, Sizmek/Rocket Fuel
 Many of the software consolidators have built vertical businesses on their platform: most notably, Salesforce in the
financial services industry
– Others include: Oracle in construction and in utilities; Verizon in telematics
 Vertical SaaS companies, in particular focused on construction, education, government, healthcare, and real estate
sectors, continue to see strong demand from their customers/users, and interest from investors and strategic partners
Our Views on Current Trends in Software
Source: Capital IQ
”PF” = Pro Forma
0
10
20
30
40
50
2013
2014
2015
2016
2017
# of Verical SaaS M&A Deals
YTD
PF
– The nature of vertical SaaS customers tends to be
very sticky with long project terms and a low
appetite to change software providers (e.g.
government organizations change software
providers very infrequently due to their budgets
and installed software integrations)
» Results in impressive unit economics, high
retention rates, customer lifetime value, low
CAC, etc.
– Specialized vertical SaaS solutions result in a greater ability to cross-sell related solutions that are added inorganically or through internal R&D
for the vertical market
» Several vertical SaaS roll-ups are being built by private equity: Applied Systems (Hellman & Friedman), Blue Star Sports (Genstar Capital),
Ministry Brands (Genstar Capital), Navicure (Bain Capital), PeopleAdmin (Vista Equity), Personify (Rubicon Technology Partners)
4
 Consumer software companies are using hardware devices as a means to an end to prove use cases with consumers,
enable a ubiquitous software experience across several devices, and hook consumers
– Software subscription business model, whether through licensing or direct to consumer, is much more efficient and valuable than traditional
consumer hardware businesses
» For example, Apple, while enjoying unrivaled market share and margins in hardware, their largest source of growth is now coming from
software and services
» Acquisitions of Nest and Dropcam by Google has created a market leading brand in the smart home space with a combination of
hardware, software and subscription revenue streams
– Currently, the private company winners in the consumer market are the ones that have the best software available across many devices
– Having hardware agnostic software gives the provider the ability to generate multi-channel revenue streams by getting into the hands of
more consumers worldwide
» Amazon and Google initially produced hardware products that carried Alexa and Google Assistant software, now these virtual assistants
can be found on Lenovo, Belkin, LG and numerous other hardware devices
 Tech giants will continue to acquire SaaS companies to improve cross-selling opportunities across enterprise customers’
departments and strengthen their position in the fastest-growing SaaS sectors; recent examples include:
» Sage acquisition of Intacct
– Key rationale: Strengthens positioning in the cloud and provides access to North American customers where there is faster cloud
adoption; several cross-selling opportunities exist particularly with Sage People in HCM
» Global Payments acquisition of Active Network
– Key rationale: Entering two new markets in health and fitness verticals with attractive growth prospects; integration of Global
Payments’ technology will enhance payment offering to Active Network’s customers
Our Views on Current Trends in Software (Cont’d)
5

Interest in the software sector continues to be bullish, in terms of strategic transactions and private investments. Across a
number of sectors, SaaS businesses are being acquired as major consolidators recognize the significant value
opportunity presented by SaaS companies
– We continue to see private equity firms acquiring SaaS businesses at a faster clip than ever seen before, with 78 PE acquisit ions in Q3
continuing the positive trend - we expect Q4 will be another busy period for funds investing and buying in SaaS
M&A, Investment and Valuation Takeaways
Source(s): Pitchbook, Capital IQ
Note: Multiples shown are EV/LTM Revenue & exclude any outlying data
“PF” = Pro Forma
–
Increasingly we are seeing PE firms make platform
acquisitions in a particular vertical and then
complete add-on acquisitions of smaller
companies that provide niche products or fill gaps
in the platforms service offerings. We have seen PE
backed software companies go on an acquisition
spree in an attempt by their backers to provide
scale and improve offerings
0
100
200
300
400
2013
2014
2015
2016
2017
# of PE Platform Acquisitions
# of PE SaaS M&A Deals
» E.g. Accruent (Genstar Capital)/Verisae, Accruent/Lucernex, Sizmek/Rocket Fuel, Saba Software (Vector Capital, HarbourVest
Partners)/Halogen Software, Energy Services Group (Accel-KKR)/Utiligroup, Forcepoint (Vista Equity)/Imperva Skyfence
– There has been a distinct slowdown in the IPO market in Q3 with no large cap software IPOs in the last three months. Instead we have seen
multiple late stage software companies raising capital in anticipation of going public at some point over the next 24 months. With Softbank’s
Vision Fund and others flooding the market with late stage venture capital, private companies that are valuation sensitive, and/or do not
want to face public scrutiny in the market are able to delay their expected IPOs
» E.g. Slack/Softbank/Thrive, etc., Qualtrics/Accel/Insight, etc., Domo/Blackrock/TPG/IVP, etc.
YTD
PF
6
SaaS Company Executive Commentary
GUSTAVO GOMEZ
Co-Founder & CEO
“Large organizations have seen their business models turned
upside-down by new digital disruptors. Their first reaction
was to create a shiny new mobile app, but this has only
scratched the surface. Companies have now recognized that they
need to provide a contextualized customer experience, not just
redesign the user interface. That means completely changing
the way they operate and deal with data, and both were
previously cast in stone by rigid legacy systems. But business
processes can no longer live within such monolithic systems.
Organizations must now use agile processes to orchestrate
information, devices, applications and people on a global scale.”
Bizagi helps organizations to transform into digital
businesses. Its process automation software platform
connects people, applications, devices and
information to deliver the engaging experience that
today’s customers demand
7
SaaS Company Executive Commentary (Cont’d)
DUSAN OMERCEVIC
Founder & CEO
“In 2017 a 200-person company will use 120-135 cloud apps
and services - there is literally a deployable subscription
software for every activity. While we see no sign of SaaS
vendor list consolidation - our customers are growing their
subscription list by 10-15% a year - we see clear platform
winners emerging. Salesforce, and Atlassian are prime
examples of SaaS platforms that have become indispensable as
customers build their entire tech stacks on top of them.”
Cleanshelf is a fully automated solution to manage
cloud software subscriptions. Drawbridge, Revinate,
and other top Silicon Valley companies use
Cleanshelf to lower their SaaS spend by up to 30%
8
SaaS Company Executive Commentary (Cont’d)
MALCOLM COWLEY
Co-Founder & CEO
“There’s never been a better time for entrepreneurs to build a
large SaaS company than right now! The world is connected,
cross border business has become the norm, and multiple sources
of capital exist to fund and grow your business. SaaS
companies achieve greatness because of three things: customer-
centricity, meaningful and defensible benefits, and a laser focus
on creating great organizations that deliver for their
customers. In my experience as CEO of Performance Horizon,
I’ve found that when you do those three things well, growth is
inevitable. Great businesses crush it on all three. Failing
businesses get at least one of those pillars wrong.”
Performance Horizon is a global SaaS business that
helps companies create partnerships that drive
measurable business growth
9
Key Sector Takeaways and Commentary
Recent Software Transaction Trends
Public Market SaaS Analyses
Key SaaS Metrics
Appendix A: GP Bullhound SaaS Index
Appendix B: Software Public Comps by Category
1
2
3
4
5
6
7
Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
10
Announce
Date
Issuer
Selected Investors
Issuer Description
Capital
Raised ($)
Sep 13
Bizagi
Invus
Process automation
software
48
Sep 12
SendinBlue
Caloga, Partech Ventures
Marketing suite
36
Sep 6
Aras
Bantam Group, Bay Capital,
Blue Cloud Ventures, GE,
Greylock, Silver Lake
Product lifecycle
management
40
Sep 5
Gather
Technologies
Ludlow Ventures, Storm
Ventures, Vista Equity
Event management
software
55
Aug 22
Tulip Retail
Align Ventures, Commerce
Ventures, Kima Ventures,
KPCB, Lerer Hippeau
Ventures, Math Venture
Partners, OneEleven, Promus
Ventures, SoftTech VC
Mobile retail software
40
Aug 22
Druva
Riverwood Capital, Nexus
Venture Partners, Sequoia
Capital, Tenaya Capital
Data management and
governance
80
Aug 15
Grupa Pracuj
TCV
HR software
95
Aug 9
Appboy
Accelerator Ventures,
Battery Ventures, Blumberg
Capital, Bullpen Capital, Citi
Ventures, Shasta Ventures,
ICONIQ Capital
Lifecycle engagement
platform
50
Aug 3
Databricks
A Capital Partners,
Andreessen Horowitz, Battery
Ventures, Geodisic Capital,
NEA, Green Bay Ventures
Cloud based big data
processing
140
Jul 23
Toast
Bessemer Venture Partners,
Generation Investment
Management, Lead Edge
Capital
Point of sale software
101
Jul 18
Freshbooks
Accomplice VC, Agman
Partners, Atlas Venture,
eBay, Oak Investment
Partners
SMB accounting software
43
Announce
Date
Target
Buyer
Target Description
Value ($)
Implied
EV/LTM Rev
Sep 28
Exa Corporation Dassault Systemes
Simulation software
382
5.3x
Sep 24
Gigya
SAP
Customer identity
management software
350
-
Sep 19
CarteGraph
Pamlico
Management software for
government agencies
-
-
Sep 7
HPE (software
division)
Micro Focus
International
Horizontal software business
across several categories
8,315
2.6x
Sep 6
Newgistics
Pitney Bowes
E-commerce and logistics
475
1.0x
Aug 30
HighJump
Software
Korber
Supply chain execution
software
750
3.8x
Aug 15
MacroPoint
Descartes Systems
Global freight visibility
software
107
8.6x
Aug 14
Huddle
Turn/River Capital
Cloud based collaboration
software
88
-
Aug 14
ZoomInfo
Great Hill Partners
B2B subscription data
240
6.0x
Aug 8
proAlpha Group
Intermediate
Capital Group
ERP software tailored to
manufacturing companies
354
4.5x
Aug 8
EtQ
TCV
Compliance management
software
130
-
Aug 3
Active Network Global Payments
Cloud based community
sports management
1,200
-
Aug 1
Nanorep
LogMeIn
Customer service
management platform
50
-
Jul 26
Guidance
Software
Open Text
Corporation
Endpoint cybersecurity
solutions
245
2.3x
Jul 25
Intacct
The Sage Group
Cloud accounting software
850
12.7x
Jul 24
Civica Group
OMERS Private
Equity
Specialized software and
business process services
1,375
-
Jul 10
Innoetics
Samsung
Cloud based text to speech
50
-
Jul 6
Syncsort
Centerbridge
Partners
Big data software
1,260
-
Notable Software M&A Deals & Private Financings
(Q3 2017)
Selected M&A Transactions
Selected Private Financings
Source(s): Capital IQ, Pitchbook
Note: Only includes M&A deals above $40m and private financings deals above $20m
Deals are sorted by date
Median
4.5x
11
0
100
200
300
400
500
600
$0B
$20B
$40B
$60B
$80B
$100B
$120B
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
2017
Q2
2017
Q3
M&A
Buyout
M&A Deals
Buyout Deals
Global Software Transaction Trends
M&A and Private Placement Activity by Quarter
Source(s): Pitchbook as of 09/29/2017
Note: Data includes all “SaaS” M&A and private placement deals as defined by Pitchbook regardless of
geography or transaction size
M&A Deal Volume is Picking Up, Driven by PE
Fewer, Larger Private Placements are Still Occurring
The US and Europe Continue to Dominate M&A Deal Volume
Private Placement Deal Volume by Region has Stayed Consistent
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
2017
Q2
2017
Q3
U.S. & Canada
Europe
Asia
Other
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
$0B
$5B
$10B
$15B
$20B
$25B
$30B
$35B
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
2017
Q2
2017
Q3
Value
Deals
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
2017
Q2
2017
Q3
U.S. & Canada
Europe
Asia
Other
12
Key Sector Takeaways and Commentary
Recent Software Transaction Trends
Public Market SaaS Analyses
Key SaaS Metrics
Appendix A: GP Bullhound SaaS Index
Appendix B: Software Public Comps by Category
1
2
3
4
5
6
7
Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
13
11,5
11,1
9,3
8,0
7,9
5,8
5,7
5,0
4,6
4,5
3,9
3,3
3,3
3,2
3,1
3,1
2,9
Salesforce
Workday
ServiceNow
j2 Global
Square
Splunk
Atlassian
Veeva
LogMeIn
Ultimate Software
athenahealth
Medidata Solutions
Paycom
Proofpoint
RealPage
Wix
RingCentral
HubSpot
Xero
Zendesk
GP Bullhound Selected SaaS Index Market Valuations
Source(s): Capital IQ as of 09/29/2017
Note: Includes the 20 largest companies by market cap from the GP Bullhound SaaS index, constituents
can be found in Appendix A
(Market Cap Values in $ in billions)
67.1
21.9
20.1
14
0x
2x
4x
6x
8x
10x
12x
14x
09-29-2012 03-29-2013 09-29-2013 03-29-2014 09-29-2014 03-29-2015 09-29-2015 03-29-2016 09-29-2016 03-29-2017 09-29-2017
GP Bullhound SaaS Index – TEV/LTM Revenue
GP Bullhound SaaS Index – TEV/NTM Revenue
Analysis of GP Bullhound SaaS Index Valuations
Revenue Multiple Trends – Last Five Years
Source(s): Capital IQ as of 09/29/2017
Note: GP Bullhound SaaS Index constituents can be found in Appendix A
Mean: 8.4x
Mean: 6.7x
As of Sep 29: 7.4x
As of Sep 29: 6.1x
Bubble? Current SaaS multiples are below five year historical averages
15
Rule of 40% – Public SaaS
2017E Growth and Profitability of Public SaaS Companies in GPB Index
Source(s): Capital IQ as of 09/29/2017
Note: Data based on GP Bullhound SaaS Index, constituents can be found in Appendix A,
excludes outliers and companies with “N/A”
The Rule of
40% Line
VEEV
BL
TEAM
PAYC
NOW
WDAY
WIX
QTWO
APPF
PFPT
SQ
SPLK
ZEN
TWLO
HUBS
ULTI
MDSO
MB
CRM
PCTY
NEWR
TLND
MIME
QLYS
EVBG
CALD
FIVN
CSOD
EGHT
RP
RNG
INST
BOX
SPSC
ATHN
BNFT
BSFT
WK
VIT B
AMBR
CSLT
CARB
APTI
ECOM
LPSN
MOBL
BCOV
BV
SCWX
UPLD
XRO
AYX
YEXT
(40%)
(35%)
(30%)
(25%)
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
25%
30%
(5%)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
2017E Revenue Growth
Rule of 40: SaaS companies
represent 38% of the total
companies and 73% of the
total Enterprise Value in
the GPB Index
2017E Unlevered FCF Margin
16
CRM
WDAY
NOW
SPLK
VEEV
SQ
ULTI
ATHN
MDSO
PAYC
PFPT
WIX
RP
RNG
HUBS
ZEN
BOX
PCTY
NEWR
XRO
TWLO
CSOD
BL
QTWO
QLYS
MIME
CALD
MB
EGHT
FIVN
BSFT
YEXT
AYX
SPSC
TLND
BNFT
APPF
SCWX
WK
INST
EVBG
APTI
LPSN
CARB
CSLT
MOBL
UPLD
BV
ECOM
VIT B
BCOV
AMBR
0x
1x
2x
3x
4x
5x
6x
7x
8x
9x
10x
11x
12x
13x
14x
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
EV/2017E Revenue Multiple2017E Revenue Growth + 2017E Unlevered FCF Margin
Rule of 40% – Public SaaS (Cont'd)
Source(s): Capital IQ as of 09/29/2017
Note: Data based on GP Bullhound SaaS Index, constituents can be found in Appendix A,
excludes outliers and companies with “N/A”
Sub-Performers
Market-Performers
Out-Performers
Companies whose summed revenue growth rate and FCF margin is greater than 40%, are valued higher
by investors than those below this 'rule of 40' line
17
91%
65%
54%
50%
49%
37%
29%
41%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Vertically Focused Cloud Software
Significantly Lower Sales & Marketing Spend as a Percentage of Revenue
However, generally lower growth and valuation multiples
Horizontal Software
Vertically-Specific Software
Median: 24%
Median: 50%
Source(s): Capital IQ as of 09/29/2017
Note: GP Bullhound SaaS Index constituents can be found in Appendix A
41%
27%
24%
24%
24%
20%
21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
12.1x
10.0x
8.6x
12.0x
7.1x
11.0x
6.5x
7.4x
6.2x
12.8x
5.5x
4.5x
8.8x
11.7x
5.9x
EV/LTM
Revenue
CY17/16E
Revenue
Growth
52.7% 49.3% 34.4% 37.2% 23.9% 34.0% 19.8% 31.0%
29.8%
32.1%
18.2%
13.2%
19.5%
23.8%
7.6%
18
 Description (NASDAQ:APPN): Provider of
low-code software development platform
that enables organizations to develop
various applications

Listing Date: 05/25/17
 Offering Amount: $75.0m
 Offering Price/Share: $12
 % Change/IPO Price: 137%

Revenue (LTM December 31 2016):
$132.9m

EV/Revenue1: 7.2x

Selected Metrics:
– Revenue Growth 16/15: 20%
–
Subscription Revenue %: 45%
– Average ACV: $475K
–
Subscription Revenue Retention Rate:
112%
 Description (NYSE:AYX): Provider of self-
service data analytics software that
enables organizations to improve
productivity and business outcomes

Listing Date: 03/24/17
 Offering Amount: $126.0m
 Offering Price/Share: $14
 % Change/IPO Price: 46%

Revenue (LTM December 31 2016): $85.8m

EV/Revenue1: 7.6x

Selected Metrics:
– Revenue Growth 16/15: 59%
–
Subscription Revenue %: >95%
–
YoY Customer Growth (16/15): 66%
–
$ Based Net Retention Rate: >120%
Software IPOs in 2017
 Description (NYSE:CLDR): Developer of a
hybrid open source software (HOSS)
platform for data management, machine
learning and advanced analytics

Listing Date: 05/28/2017
 Offering Amount: $225.0m
 Offering Price/Share: $15
 % Change/IPO Price: 11%

Revenue (LTM December 31 2016):
$261.0m

EV/Revenue1: 7.3x

Selected Metrics:
– Revenue Growth 16/15: 57%
–
Subscription Revenue %: 77%
– Net Expansion Rate for Subscription
Revenue: 142%
– Revenue from Cloudera Global 8000:
73%
 Description (NYSE:MULE): Developer of an
integration solution for connecting
applications, data, to devices

Listing Date: 03/17/17
 Offering Amount: $221.0m
 Offering Price/Share: $17
 % Change/IPO Price: 19%

Revenue (LTM December 31 2016):
$187.7m

EV/Revenue: 10.2x

Selected Metrics:
– Revenue Growth 16/15: 70%
–
Subscription Revenue %: 81%
– Average ACV 2016: $169K
–
YoY Customer Growth (16/15): 27%
–
$ Based Net Retention Rate: 117%
 Description (NasdaqGS:OKTA): Provider of
identity verification software for the
enterprise

Listing Date: 04/07/2017
 Offering Amount: $187.0m
 Offering Price/Share: $17
 % Change/IPO Price: 66%

Revenue (LTM January 31 2017): $160.3m

EV/Revenue: 9.4x

Selected Metrics:
– Revenue Growth 17/16: 87%
–
Subscription Revenue %: 89%
–
YoY Customer Growth (17/16)2: 40%
–
$ Based Net Retention Rate (2017)2:
123%
 Description (NYSE:YEXT): Provider of
platform that lets businesses manage
their digital knowledge in the cloud

Listing Date: 04/13/2017
 Offering Amount: $115.5m
 Offering Price/Share: $11
 % Change/IPO Price: 21%

Revenue (LTM January 31 2017): $124.3m

EV/Revenue: 6.1x

Selected Metrics:
– Revenue Growth 17/16: 39%
–
$ Based Net Retention Rate (2017)2:
119%
– Revenue Growth from Existing
Enterprise and Mid Size Customers
(2016): 63%
1. CY 2017E revenue multiple
2. Year Ended January 31
Source(s): Company SEC filings from Edgar, Capital IQ as of 09/29/2017
 Description (NASDAQ:MDB): The leading
modern general purpose database
platform

File date: 09/21/17

Revenue (LTM January 31 2017): $101.4m
 Offering:
–
8,000,000 Shares
–
Price per share: $24
– Market Cap: $1.2bn

Selected Metrics:
– Revenue Growth 17/16: 55%
–
Subscription Revenue %: 90%
– ARR expansion rate: 120%
–
YoY Customer Growth (17/16): 88%
– Average expansion multiple of top 25
end-customers: 12.3x
 Description (NASDAQ:FSCT): Provider of
security software to monitor devices
connected to the network

File date: 10/02/17

Revenue (LTM December 31 2016):
$166.8m
 Offering:
–
4,800,000 Shares
–
Price per share: $20-$22
– Market Cap: $733m-$806m

Selected Metrics:
– Revenue Growth 16/15: 32%
– Average ACV: $200K+
– Average expansion multiple of top 20
end-customers: 4.5x
Coming Soon
Listed in 2017
19
LogMeIn
US
2,778
$110.05
21.9%
11.7%
(2.0%)
$5,803
$5,517
$285
8.9x
5.5x
4.7x
43.2x
15.3x
12.4x
201.0%
82.7%
35.6%
DXC Technology
US
60,000
85.88
NA
NA
1.4%
24,449
29,725
2,517
2.6x
1.5x
1.2x
24.4x
8.5x
6.4x
165.3%
NA
17.5%
CLX Communications
SE
333
14.23
71.4%
15.9%
9.3%
763
793
82
2.6x
2.1x
1.9x
25.7x
20.2x
15.2x
89.0%
27.2%
10.5%
Micro Focus
UK
4,287
32.00
4.7%
6.6%
0.5%
13,924
15,386
151
11.1x
6.1x
3.7x
28.2x
15.1x
9.3x
85.5%
NA
40.5%
Iron Mountain
US
24,000
38.90
3.0%
9.9%
(0.9%)
10,370
16,601
291
7.2x
4.4x
4.2x
13.7x
13.1x
12.3x
76.6%
56.1%
33.5%
Shopify
CA
1,900
116.49
171.2%
60.2%
11.6%
11,537
10,605
932
20.8x
16.3x
11.4x
NM
NM
NM
67.1%
56.1%
1.8%
Gridsum
CN
929
10.30
(38.5%)
(18.3%)
11.8%
316
300
44
4.3x
3.2x
2.0x
NM
NM
7.8x
60.9%
NA
2.7%
Wisetech
AU
900
6.83
57.7%
57.9%
7.7%
1,979
1,903
78
16.1x
13.5x
10.5x
50.0x
37.9x
28.2x
56.0%
NA
35.5%
Okta
US
898
28.21
NA
NA
15.2%
2,696
2,483
213
12.1x
10.1x
7.5x
NM
NM
NM
52.7%
69.5%
(28.3%)
Synchronoss
US
1,765
9.33
(77.4%)
(62.3%)
(44.1%)
433
556
194
1.2x
0.8x
0.7x
10.2x
3.1x
2.6x
52.5%
65.7%
24.7%
Xero
NZ
1,721
22.33
55.5%
69.7%
16.6%
3,064
2,982
80
14.7x
10.7x
7.9x
NM
NM
63.6x
50.1%
NA
1.6%
Trade Desk
US
467
61.51
112.2%
62.0%
18.9%
2,508
2,420
116
9.6x
8.0x
6.3x
37.7x
26.7x
19.9x
50.0%
79.1%
29.7%
MuleSoft
US
1,049
20.14
NA
(15.4%)
(6.5%)
2,597
2,341
256
10.0x
8.4x
6.2x
NM
NM
NM
49.3%
74.0%
(18.8%)
Alteryx
US
491
20.37
NA
35.7%
(10.9%)
1,196
1,043
153
9.8x
8.3x
6.1x
NM
NM
NM
46.3%
83.7%
(12.5%)
Wix
IL
1,266
71.85
63.4%
7.6%
17.8%
3,266
3,082
185
8.7x
7.3x
5.5x
NM
40.5x
22.9x
45.8%
84.4%
18.0%
Atlassian
UK
2,193
35.15
15.9%
17.8%
1.6%
7,988
7,438
550
12.8x
10.3x
7.9x
NM
40.8x
29.3x
43.9%
NA
25.3%
Extreme Networks
US
1,628
11.89
163.1%
84.1%
5.6%
1,345
1,307
130
2.2x
1.7x
1.4x
29.5x
15.0x
11.3x
41.2%
NA
11.6%
Metaps
JP
239
31.88
116.0%
20.4%
9.1%
413
369
85
3.1x
2.8x
2.7x
34.7x
64.9x
NM
40.9%
NA
4.4%
Blackline
US
704
34.12
NA
16.3%
14.5%
1,790
1,683
107
11.3x
9.8x
7.6x
NM
NM
NM
39.8%
80.2%
(1.4%)
Talend
FR
765
40.94
63.0%
41.3%
5.9%
1,185
1,090
95
8.6x
7.4x
5.7x
NM
NM
NM
38.8%
77.1%
(13.6%)
Instructure
US
1,099
33.15
30.7%
40.5%
8.7%
974
948
26
7.1x
6.2x
4.7x
NM
NM
NM
38.6%
72.2%
(19.8%)
Pure Storage
US
1,900
15.99
17.2%
64.7%
8.9%
3,382
2,859
523
3.4x
2.8x
2.2x
NM
NM
32.8x
38.5%
65.9%
1.6%
WageWorks
US
1,958
60.70
0.9%
(14.9%)
3.4%
2,410
1,880
775
4.5x
3.9x
3.6x
23.0x
13.0x
11.3x
38.4%
64.0%
30.0%
RingCentral
US
1,037
41.75
77.2%
51.0%
5.2%
3,199
3,032
167
7.5x
6.2x
5.0x
NM
NM
65.8x
38.4%
75.9%
6.3%
2U
US
1,164
56.04
46.4%
46.1%
13.9%
2,913
2,891
37
12.1x
10.2x
7.4x
NM
NM
NM
38.1%
81.2%
3.7%
Cloudera
US
1,470
16.62
NA
NA
(10.3%)
2,235
1,840
395
5.9x
5.1x
4.1x
NM
NM
NM
37.4%
72.1%
(31.9%)
ServiceNow
US
5,571
117.53
49.8%
34.2%
5.2%
20,064
19,512
1,692
12.0x
10.2x
7.8x
NM
46.6x
31.8x
37.2%
77.0%
21.9%
Yext
US
700
13.28
NA
NA
0.5%
1,198
1,071
127
7.4x
6.3x
4.8x
NM
NM
NM
36.8%
74.9%
(23.8%)
Mimecast
UK
957
28.42
48.8%
30.4%
7.0%
1,616
1,518
112
7.5x
6.5x
5.2x
NM
74.3x
48.9x
36.8%
NA
8.7%
HubSpot
US
1,777
84.05
49.1%
44.5%
22.8%
3,112
2,909
492
9.1x
7.9x
6.3x
NM
NM
NM
35.6%
80.6%
4.9%
Zendesk
US
1,880
29.11
(4.1%)
4.4%
6.7%
2,926
2,685
240
7.4x
6.3x
4.9x
NM
NM
NM
35.5%
73.5%
3.1%
Twilio
US
887
29.85
(56.6%)
3.7%
3.0%
2,744
2,455
289
7.3x
6.6x
5.3x
NM
NM
NM
35.0%
57.0%
(4.2%)
Proofpoint
US
1,573
87.22
15.9%
16.9%
(3.5%)
3,875
3,823
429
8.6x
7.6x
5.9x
NM
63.6x
42.0x
34.4%
76.9%
11.9%
Hortonworks
US
1,120
16.95
98.5%
74.0%
3.8%
1,137
1,066
72
4.9x
4.3x
3.4x
NM
NM
68.0x
34.2%
70.4%
(9.9%)
Workday
US
7,400
105.39
16.6%
24.6%
0.9%
21,921
20,372
2,098
11.0x
9.7x
7.7x
NM
63.8x
45.3x
34.0%
73.8%
15.2%
New Relic
US
1,164
49.80
32.1%
35.6%
4.5%
2,715
2,488
227
8.7x
7.7x
6.0x
NM
NM
NM
33.9%
NA
0.8%
Park City Group
US
77
12.15
7.4%
1.7%
(0.4%)
236
227
14
12.0x
10.4x
7.9x
52.3x
NA
22.3x
33.7%
NA
NA
Everbridge
US
548
26.42
61.9%
28.0%
17.2%
742
697
45
7.8x
6.8x
5.4x
NM
NM
NM
33.5%
71.6%
(1.5%)
Software Public Company Valuations
High Growth (2017 Revenue Growth Rate >30%)
Source(s): Capital IQ as of 09/29/2017
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and not taken into average
calculation consideration
Share
Price
Market
Cap
EV
Cash
EV/Revenue
EV/EBITDA
CY
Revenue
Growth
Company Name
HQ Employee 09-29-17
LTM
L6M
L1M
(m)
(m)
(m)
LTM
CY17E
CY18E
LTM
CY17E
CY18E
17/16
Gross
EBITDA
Share Price Performance
CY17E
Margins
20
Coupa Software
US
652
$31.15
NA
26.8%
3.7%
$1,670
$1,461
$208
9.2x
8.2x
6.6x
NM
NM
NM
33.4%
69.7%
(9.9%)
Symantec
US
13,000
32.81
31.2%
6.4%
10.5%
20,163
24,051
2,314
5.6x
4.8x
4.5x
33.7x
10.8x
9.4x
32.6%
NA
44.6%
NICE Systems
IL
4,930
79.75
19.2%
19.1%
3.4%
4,813
4,895
360
4.2x
3.6x
3.4x
19.5x
13.4x
12.2x
32.6%
69.3%
27.1%
AppFolio
US
626
47.95
150.9%
83.4%
15.8%
1,626
1,594
32
12.8x
11.4x
9.0x
NM
67.3x
51.2x
32.1%
60.6%
17.0%
Yonyou
CN
13,889
3.56
5.3%
34.1%
12.2%
5,207
5,269
629
7.1x
5.6x
4.9x
NM
43.0x
48.0x
31.6%
68.9%
13.0%
Open Text
CA
10,900
32.29
(0.5%)
(5.0%)
2.1%
8,532
10,660
443
4.7x
4.1x
3.8x
16.9x
12.0x
10.3x
31.3%
NA
34.6%
Paycom
US
2,075
74.96
49.9%
31.6%
4.2%
4,466
4,432
68
11.6x
10.3x
8.2x
60.0x
35.7x
28.1x
31.1%
83.4%
28.7%
Castlight Health
US
381
4.30
4.4%
16.2%
17.8%
566
476
96
4.1x
3.6x
2.8x
NM
NM
NM
30.7%
67.9%
(19.7%)
j2 Global
US
2,426
73.88
11.9%
(13.2%)
0.2%
3,571
4,483
331
4.5x
3.9x
3.6x
11.7x
9.4x
8.4x
30.6%
84.4%
41.9%
Average
8.2x
6.8x
5.3x
30.2x
31.4x
26.8x
48.7%
71.4%
9.0%
Median
7.8x
6.5x
5.2x
28.2x
23.5x
22.3x
38.4%
72.8%
7.5%
Software Public Company Valuations (Cont'd)
High Growth (2017 Revenue Growth Rate >30%)
Source(s): Capital IQ as of 09/29/2017
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and not taken into average
calculation consideration
Share
Price
Market
Cap
EV
Cash
EV/Revenue
EV/EBITDA
CY
Revenue
Growth
Company Name
HQ Employee 09-29-17
LTM
L6M
L1M
(m)
(m)
(m)
LTM
CY17E
CY18E
LTM
CY17E
CY18E
17/16
Gross
EBITDA
Share Price Performance
CY17E
Margins
21
MINDBODY
US
1,454
$25.85
29.8%
(7.2%)
13.4%
$1,198
$990
$224
6.2x
5.5x
4.4x
NM
NM
52.9x
29.8%
72.1%
3.0%
Q2 Holdings
US
742
41.65
46.1%
17.8%
1.3%
1,720
1,641
79
9.5x
8.4x
6.7x
NM
NM
NM
29.7%
52.5%
4.5%
SimCorp
DK
1,418
61.07
5.1%
1.4%
1.6%
2,413
2,410
9
6.8x
6.0x
5.5x
29.4x
22.7x
19.7x
29.1%
61.9%
26.3%
Amazon
US
341,400
961.35
16.0%
10.0%
0.8%
461,813
463,981
21,451
3.1x
2.7x
2.1x
37.7x
25.4x
18.9x
28.1%
36.3%
10.5%
Splunk
US
2,700
66.43
15.1%
5.9%
3.2%
9,300
8,297
1,084
7.7x
6.8x
5.4x
NM
59.5x
41.0x
28.0%
83.3%
11.5%
Upland Software
US
251
21.16
138.0%
38.9%
(6.9%)
440
455
57
5.5x
4.8x
4.3x
49.3x
15.4x
12.6x
27.2%
67.5%
30.9%
Paylocity
US
2,115
48.82
11.4%
23.6%
4.1%
2,526
2,423
103
8.2x
7.3x
6.0x
NM
37.7x
30.3x
27.2%
NA
19.4%
Box
US
1,668
19.32
27.0%
17.2%
0.2%
2,584
2,502
165
5.5x
4.9x
4.0x
NM
NM
NM
26.8%
75.0%
(4.1%)
Vitec Software Group
SE
500
10.15
25.3%
35.5%
0.4%
300
331
6
3.4x
3.2x
2.9x
16.4x
11.3x
10.4x
26.3%
99.0%
28.3%
Rapid7
US
887
17.60
2.3%
18.5%
8.8%
766
682
84
3.8x
3.5x
2.9x
NM
NM
NM
25.1%
74.0%
(10.7%)
Model N
US
814
14.95
37.8%
48.0%
12.4%
435
440
52
3.5x
3.2x
2.8x
NM
NM
46.7x
24.6%
NA
(3.6%)
Palo Alto Networks
US
4,562
144.10
(7.7%)
27.0%
10.8%
13,234
12,384
1,375
7.0x
6.4x
5.3x
NM
26.6x
20.4x
24.4%
NA
23.9%
Salesforce
US
25,000
93.42
31.2%
13.4%
(0.4%)
67,141
66,222
3,501
7.1x
6.4x
5.3x
NM
29.5x
23.8x
23.9%
76.2%
21.6%
Veeva
US
1,794
56.41
36.2%
10.7%
(1.3%)
7,932
7,208
725
11.7x
10.7x
9.0x
46.6x
32.9x
27.2x
23.8%
71.3%
32.6%
Adobe
US
15,706
149.18
38.4%
15.1%
(1.9%)
73,537
70,058
5,368
10.1x
9.7x
8.1x
30.2x
23.0x
19.0x
23.8%
87.4%
42.0%
MYOB
AU
1,400
2.70
(6.5%)
(1.9%)
(4.6%)
1,637
1,947
30
6.4x
5.9x
5.4x
19.0x
12.9x
11.8x
23.4%
91.5%
45.8%
Appian
US
1,000
28.46
NA
NA
26.8%
1,711
1,633
78
11.2x
10.0x
8.6x
NM
NM
NM
22.7%
64.7%
(16.6%)
PROS
ES
166,165
7.48
7.8%
28.1%
10.9%
4,478
4,631
1,433
1.0x
0.9x
0.9x
8.3x
7.6x
7.1x
22.0%
88.1%
12.1%
Guidewire Software
US
1,893
77.86
29.7%
37.1%
5.1%
5,840
5,267
573
10.2x
9.6x
8.0x
NM
48.3x
35.5x
21.9%
NA
19.9%
F-Secure
FI
1,091
5.05
31.6%
39.2%
0.6%
791
695
92
3.7x
3.4x
3.1x
32.3x
34.3x
20.4x
21.8%
NA
10.0%
IRESS
AU
1,790
8.94
(1.5%)
(1.4%)
(4.8%)
1,512
1,648
16
5.3x
4.8x
4.4x
22.2x
17.0x
14.9x
21.7%
91.0%
28.2%
Imperva
US
980
43.40
(17.7%)
4.7%
(0.2%)
1,468
1,148
320
3.9x
3.6x
3.0x
NM
28.1x
20.4x
21.5%
80.5%
12.7%
SAP
DE
87,114
109.44
22.1%
11.5%
4.2%
131,212
133,185
5,823
5.0x
4.7x
4.4x
20.2x
13.5x
13.0x
21.0%
72.4%
35.0%
Five9
US
825
23.90
54.8%
36.5%
13.9%
1,317
1,306
57
7.3x
6.7x
5.7x
NM
NM
67.6x
20.2%
60.3%
6.5%
Alphabet
US
75,606
973.72
21.3%
14.6%
4.1%
669,590
578,832
94,713
5.8x
5.3x
4.5x
17.9x
13.3x
11.2x
20.2%
60.2%
40.0%
Average
6.4x
5.8x
4.9x
27.5x
25.5x
25.0x
24.6%
73.3%
17.2%
Median
6.2x
5.5x
4.5x
25.8x
24.2x
20.4x
23.9%
73.2%
19.4%
Software Public Company Valuations (Cont'd)
Strong Growth (2017 Revenue Growth Rate Between 20% and 30%)
Source(s): Capital IQ as of 09/29/2017
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and not taken into average
calculation consideration
Share
Price
Market
Cap
EV
Cash
EV/Revenue
EV/EBITDA
CY
Revenue
Growth
Company Name
HQ Employee 09-29-17
LTM
L6M
L1M
(m)
(m)
(m)
LTM
CY17E
CY18E
LTM
CY17E
CY18E
17/16
Gross
EBITDA
Share Price Performance
CY17E
Margins
22
Verisign
US
990
106.39
36.0%
22.0%
4.7%
10,631
10,689
1,808
9.3x
9.2x
8.9x
14.3x
13.2x
12.6x
1.7%
83.4%
69.8%
Check Point Software
IL
4,281
114.02
48.6%
10.2%
4.6%
18,636
17,037
1,599
9.4x
9.1x
8.5x
19.1x
16.4x
15.3x
7.5%
88.6%
55.6%
MSCI
US
2,970
116.90
40.0%
21.3%
3.4%
10,528
11,854
751
9.9x
9.4x
8.6x
19.5x
18.0x
16.1x
10.1%
78.3%
52.0%
ANSYS
US
2,800
122.73
34.9%
15.2%
(3.0%)
10,403
9,539
863
9.2x
8.9x
8.4x
20.7x
17.6x
16.8x
8.0%
89.4%
50.7%
Aspen Technology
US
1,419
62.81
33.6%
7.8%
2.5%
4,591
4,629
102
9.6x
9.5x
9.2x
21.1x
19.7x
18.9x
3.0%
NA
48.3%
Black Knight
US
4,250
43.05
5.3%
11.4%
3.4%
2,964
5,495
99
NA
5.1x
4.7x
NA
10.7x
9.6x
4.9%
NA
47.9%
MYOB
AU
1,400
2.70
(6.5%)
(1.9%)
(4.6%)
1,637
1,947
30
6.4x
5.9x
5.4x
19.0x
12.9x
11.8x
23.4%
91.5%
45.8%
Symantec
US
13,000
32.81
31.2%
6.4%
10.5%
20,163
24,051
2,314
5.6x
4.8x
4.5x
33.7x
10.8x
9.4x
32.6%
NA
44.6%
Progress Software
US
1,912
38.17
40.3%
33.1%
15.6%
1,843
1,775
191
4.4x
4.5x
4.4x
13.3x
10.6x
10.5x
(2.2%)
87.6%
42.3%
Adobe
US
15,706
149.18
38.4%
15.1%
(1.9%)
73,537
70,058
5,368
10.1x
9.7x
8.1x
30.2x
23.0x
19.0x
23.8%
87.4%
42.0%
j2 Global
US
2,426
73.88
11.9%
(13.2%)
0.2%
3,571
4,483
331
4.5x
3.9x
3.6x
11.7x
9.4x
8.4x
30.6%
84.4%
41.9%
SS&C Technologies
US
8,001
40.15
24.8%
12.8%
5.4%
8,248
10,457
90
6.5x
6.2x
5.9x
18.0x
15.2x
13.8x
13.5%
57.5%
40.8%
Micro Focus
UK
4,287
32.00
4.7%
6.6%
0.5%
13,924
15,386
151
11.1x
6.1x
3.7x
28.2x
15.1x
9.3x
85.5%
NA
40.5%
Intel
US
106,000
38.08
2.0%
7.1%
9.6%
178,938
184,994
25,929
3.0x
3.0x
2.9x
7.5x
7.5x
7.0x
3.3%
63.0%
40.5%
Alphabet
US
75,606
973.72
21.3%
14.6%
4.1%
669,590
578,832
94,713
5.8x
5.3x
4.5x
17.9x
13.3x
11.2x
20.2%
60.2%
40.0%
F5 Networks
US
4,420
120.56
(2.3%)
(15.2%)
2.4%
7,661
6,647
1,014
3.2x
3.2x
3.0x
10.6x
8.0x
7.4x
4.1%
NA
39.5%
Oracle Financial
IN
8,705
55.58
16.0%
(4.5%)
3.0%
4,742
4,360
386
6.3x
6.1x
5.5x
15.8x
15.6x
13.7x
10.2%
NA
39.2%
Microsoft
US
124,000
74.49
29.8%
13.8%
2.0%
573,740
533,337
129,207
5.9x
5.3x
4.9x
17.5x
13.7x
12.7x
16.8%
NA
38.9%
VMware
US
18,905
109.19
49.4%
18.9%
4.1%
44,636
37,234
7,985
5.2x
4.8x
4.4x
20.1x
12.4x
12.2x
10.4%
87.3%
38.2%
Intuit
US
8,200
142.14
30.0%
20.6%
3.0%
36,242
35,953
777
6.9x
6.7x
6.1x
22.1x
18.0x
16.3x
10.5%
NA
37.2%
Akamai Technologies
US
7,084
48.72
(7.0%)
(23.2%)
6.6%
8,352
8,320
683
3.4x
3.4x
3.1x
12.2x
9.2x
8.5x
5.5%
65.8%
36.8%
Verizon
US
163,400
49.49
(5.0%)
0.7%
2.0%
201,890
316,603
4,583
2.6x
2.5x
2.5x
7.2x
7.0x
6.9x
(0.7%)
59.3%
36.1%
Cisco
US
72,900
33.63
7.1%
(0.3%)
6.8%
166,534
129,759
70,492
2.7x
2.7x
2.7x
8.8x
7.5x
7.4x
(1.4%)
NA
36.1%
CenturyLink
US
39,800
18.90
(31.3%)
(18.1%)
(8.4%)
10,388
35,123
342
2.1x
2.1x
2.2x
5.8x
6.0x
5.8x
(6.0%)
54.4%
35.8%
Fiserv
US
23,000
128.96
29.3%
11.3%
4.8%
27,142
31,584
299
5.6x
5.5x
5.2x
18.1x
15.4x
14.5x
4.0%
46.8%
35.8%
LogMeIn
US
2,778
110.05
21.9%
11.7%
(2.0%)
5,803
5,517
285
8.9x
5.5x
4.7x
43.2x
15.3x
12.4x
201.0%
82.7%
35.6%
Wisetech
AU
900
6.83
57.7%
57.9%
7.7%
1,979
1,903
78
16.1x
13.5x
10.5x
50.0x
37.9x
28.2x
56.0%
NA
35.5%
Jack Henry & Associates
US
5,972
102.79
20.0%
9.3%
1.7%
7,960
7,895
115
5.5x
5.4x
5.1x
17.7x
15.3x
14.5x
5.2%
NA
35.2%
Average
6.7x
6.0x
5.4x
19.4x
14.1x
12.5x
20.8%
74.6%
42.2%
Median
5.9x
5.4x
4.8x
18.0x
13.5x
12.3x
9.0%
82.7%
40.2%
Software Public Company Valuations (Cont'd)
High Profitability (2017 EBITDA Margin >35%)
Source(s): Capital IQ as of 09/29/2017
Note: Multiples in excess of 75.0x or less than 0.0x are considered not-material (“NM”) and not taken into average
calculation consideration
Share
Price
Market
Cap
EV
Cash
EV/Revenue
EV/EBITDA
CY
Revenue
Growth
Company Name
HQ Employee 09-29-17
LTM
L6M
L1M
(m)
(m)
(m)
LTM
CY17E
CY18E
LTM
CY17E
CY18E
17/16
Gross
EBITDA
Share Price Performance
CY17E
Margins
23
GP Bullhound SaaS Index Performance
L1M
L3M
L6M
L12M
Source(s): Capital IQ as of 09/29/2017
Note: GP Bullhound SaaS Index constituents can be found in Appendix A
80,0%
85,0%
90,0%
95,0%
100,0%
105,0%
110,0%
115,0%
2017-07-03 2017-07-14 2017-07-25 2017-08-05 2017-08-16 2017-08-27 2017-09-07 2017-09-18 2017-09-29
Index ValueGPB SaaS Index
S&P 500
NASDAQ Composite
95,0%
100,0%
105,0%
110,0%
115,0%
120,0%
125,0%
2017-04-03
2017-06-01
2017-07-30
2017-09-27
Index ValueGPB SaaS Index
S&P 500
NASDAQ Composite
90,0%
95,0%
100,0%
105,0%
110,0%
115,0%
120,0%
125,0%
130,0%
135,0%
2016-10-03
2016-12-02
2017-01-31
2017-04-01
2017-05-31
2017-07-30
2017-09-28
Index ValueGPB SaaS Index
S&P 500
NASDAQ Composite
90,0%
95,0%
100,0%
105,0%
110,0%
2017-09-01
2017-09-08
2017-09-15
2017-09-22
2017-09-29
Index ValueGPB SaaS Index
S&P 500
NASDAQ Composite
24
Key Sector Takeaways and Commentary
Recent Software Transaction Trends
Public Market SaaS Analyses
Key SaaS Metrics
Appendix A: GP Bullhound SaaS Index
Appendix B: Software Public Comps by Category
1
2
3
4
5
6
7
Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
25
Key SaaS Metrics
Definitions & Calculations
Metric
Definition
Calculation
Normalized measurement of recurring revenue, most frequently
measured with a constant value in each month of the
subscription period
MRR
All S&M expenses for new customers. Sometimes excludes people
management S&M costs
CAC =