gca weekly digital media sector summary · 1 weekly internet / digital media / saas sector summary...

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Weekly Internet / Digital Media / SaaS Sector Summary

Week of December 5th, 2016

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60%

80%

100%

120%

140%

12/7/2015 1/28/2016 3/20/2016 5/11/2016 7/2/2016 8/23/2016 10/14/2016 12/5/2016

80%

90%

100%

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9/6/2016 9/21/2016 10/6/2016 10/21/2016 11/5/2016 11/20/2016 12/5/2016

(11.2%)

(3.0%) (1.7%)

(11.5%)

2.2% 3.0%

(11.4%)

INDUSTRY STOCK MARKET VALUATION

Internet / Digital Media / SaaS

Notes: (1) Search/Online Advertising Composite includes: CRTO, GOOGL, FUEL, MCHX, MRIN, MSFT, MXPT, QNST, RTHM, RUBI, TRMR, TTD, YNDX, YUME. (2) Internet Commerce Composite includes: AMZN, ANGI, BABA, CMPR, CPRT, EBAY, ETSY, EXPE, FLWS, GRUB, NFLX, NILE, OSTK, PCLN, PRSS, QUOT, QVCA, SSTK, STMP, TZOO. (3) Internet Content Composite includes: CRCM, DHX, EHTH, GDDY, IAC, RATE, RENN, SCOR, SFLY, TGNA, TTGT, WBMD, WEB, XOXO, ZG. (4) Publishers Composite includes: GCI, GHC, MMB-FR, NWSA, NYT, PSON-GB, SSP, TIME, TRI, UBM-GB. (5) Diversified Marketing Composite includes: ACXM, ADS, EFX, EXPN-GB, HAV-FR, HHS, IPG, MDCA, NLSN, WPP-GB. (6) Media Conglomerates Composite includes: 6758-JP, CBS, CMCSA, DIS, DISCA, FOXA, LGF, SNI, TRCO, VIAB. (7) Gaming Composite includes: A035420-KR, A036570-KR, 2432-JP, 3632-JP, 3765-JP, 700-HK, ATVI, CYOU, EA, GAM, GLUU, NTES, UBI-FR, ZNGA. (8) SaaS Composite includes: APPF, APTI, BCOV, BOX, BV, COUP, CRM, CSOD, ECOM, EVBG, HUBS, JIVE, LPSN, MB, MRIN, NOW, NTNX, RNG, RP, SHOP, ULTI, WDAY, XTLY, ZEN. (9) Social Media includes: 3938-JP, FB, P, TWTR, YELP.

Diversified Marketing (5)

Internet Content (3)

Search / Online Advertising (1)

Gaming (7)

Media Conglomerates (6)

Internet Commerce (2)

SaaS (8)

Publishers (4)

NASDAQ

Social Media (9)

Last 12 Months Last 3 Months

19.9%

9.3%

(6.8%)

7.4%

(10.8%)

(9.3%)

3.4% 3.8%

(0.4%)

(4.0%)

(11.2%)

(1.8%)

(6.1%)

INDUSTRY STOCK MARKET VALUATION

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INDUSTRY STOCK MARKET VALUATION Internet / Digital Media / SaaS: Financial Metrics

EV / 2016E Revenue EV / 2016E EBITDA

Notes: (1) Search/Online Advertising Composite includes: CRTO, GOOGL, FUEL, MCHX, MRIN, MSFT, MXPT, QNST, RTHM, RUBI, TRMR, TTD, YNDX, YUME. (2) Internet Commerce Composite includes: AMZN, ANGI, BABA, CMPR, CPRT, EBAY, ETSY, EXPE, FLWS, GRUB, NFLX, NILE, OSTK, PCLN, PRSS, QUOT, QVCA, SSTK, STMP, TZOO. (3) Internet Content Composite includes: CRCM, DHX, EHTH, GDDY, IAC, RATE, RENN, SCOR, SFLY, TGNA, TTGT, WBMD, WEB, XOXO, ZG. (4) Publishers Composite includes: GCI, GHC, MMB-FR, NWSA, NYT, PSON-GB, SSP, TIME, TRI, UBM-GB. (5) Diversified Marketing Composite includes: ACXM, ADS, EFX, EXPN-GB, HAV-FR, HHS, IPG, MDCA, NLSN, WPP-GB. (6) Media Conglomerates Composite includes: 6758-JP, CBS, CMCSA, DIS, DISCA, FOXA, LGF, SNI, TRCO, VIAB. (7) Gaming Composite includes: A035420-KR, A036570-KR, 2432-JP, 3632-JP, 3765-JP, 700-HK, ATVI, CYOU, EA, GAM, GLUU, NTES, UBI-FR, ZNGA. (8) SaaS Composite includes: APPF, APTI, BCOV, BOX, BV, COUP, CRM, CSOD, ECOM, EVBG, HUBS, JIVE, LPSN, MB, MRIN, NOW, NTNX, RNG, RP, SHOP, ULTI, WDAY, XTLY, ZEN. (9) Social Media includes: 3938-JP, FB, P, TWTR, YELP.

5.5x

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3.5x3.2x

2.9x2.5x 2.4x

1.9x1.6x

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1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

41.7x

20.5x 20.5x

13.2x 12.7x 11.8x 11.4x 10.7x8.5x

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10.0x

20.0x

30.0x

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PUBLIC COMPANY VALUATIONS Internet / Digital Media / SaaS: Financial Metrics (Cont’d)

Notes: Source: Capital IQ and Wall Street Estimates. Multiples <0 and >100 considered NM. (1) Revenue multiples reflective of Net Revenue.

$MM, Except Per Share Data

Stock LTM EPSPrice Price Range Equity Net Enterprise EV / Revenue EV / EBITDA Price / EPS Long Term Revenue Growth

12/5/16 Low High Value Debt Value LTM CY 16E CY 17E LTM CY 16E CY 17E LTM CY 16E CY 17E Growth PEG 17E/16E Y/Y MRQ

Search / Online Advertising

Alphabet Inc. $778.22 $672.66 $839.00 $536,381 ($79,118) $457,263 5.3x 5.1x 4.4x 16.2x 12.7x 10.9x 28.5x 22.4x 18.9x 17.3% 1.1 16.0% 20.2%Microsoft Corporation 60.22 48.04 61.41 468,232 (60,857) 407,375 4.8 4.4 4.2 NA 11.6 10.9 NA 21.1 19.8 9.1% 2.2 4.2% NAYandex N.V. 19.22 11.00 23.87 6,185 (690) 5,508 4.8 4.7 3.9 16.4 13.4 10.8 46.8 27.1 21.6 23.7% 0.9 19.2% NACriteo SA (1) 39.33 24.23 47.81 2,508 (398) 2,120 4.5 3.0 2.3 NA 9.8 7.4 NA 21.0 17.1 28.3% 0.6 29.8% 27.4%The Trade Desk, Inc. (1) 26.62 22.00 33.40 1,027 (72) 955 NA 5.0 3.8 17.9 17.1 13.6 NA 35.3 31.4 25.9% 1.2 28.8% NAThe Rubicon Project, Inc. (1) 7.61 6.12 20.37 373 (193) 180 0.6 0.7 0.7 3.8 2.8 2.8 17.1 8.1 10.9 NM NM 0.7% NARhythmOne plc 0.48 0.20 0.57 193 (41) 153 1.0 0.7 0.6 NM 33.1 15.6 NM 12.1 26.6 NM NM 2.1% (11.7%)QuinStreet, Inc. 3.24 2.61 4.96 148 (39) 110 0.4 0.4 0.3 NM 11.0 6.3 NM NM NM 10.7% NM 2.8% NAYuMe, Inc. 3.47 2.77 4.36 119 (62) 57 0.3 0.4 0.4 NM 8.0 5.7 NM NM 18.3 NA NA (0.7%) NAMarchex, Inc. 2.64 2.46 4.68 114 (105) 9 0.1 0.1 0.1 NM NM NM NM NM NM 15.0% NM (12.5%) NATremor Video, Inc. 2.06 1.29 2.19 107 (48) 59 0.4 0.4 0.3 NM NM 9.2 NA NM NM NA NA 11.9% NAMarin Software Incorporated 2.40 1.88 3.97 93 (33) 59 0.6 0.6 0.6 NM NM 22.3 NM NM NM NA NA (3.5%) (8.8%)Rocket Fuel Inc. 1.85 1.70 4.10 84 9 93 0.2 0.2 0.2 NA 7.4 7.5 NA NA NM 3.0% NM 3.5% NAMaxPoint Interactive, Inc. 8.51 4.64 11.94 56 2 58 0.4 0.6 0.6 NM NM 65.7 NA NM NM 20.0% NM 5.1% 4.0%

Mean 1.8x 1.9x 1.6x 13.6x 12.7x 14.5x 30.8x 21.0x 20.6x 17.0% 1.2 7.7% 6.2% Median 0.6 0.6 0.6 16.3 11.3 10.8 28.5 21.1 19.3 17.3% 1.1 3.8% 4.0%

Internet Content

Zillow Group, Inc. $34.28 $16.46 $39.99 $6,137 ($215) $5,922 NA 7.0x 5.7x NA 42.3x 25.4x NM NM 58.9x 58.0% 1.0 22.5% 27.1%IAC/InterActiveCorp 66.38 38.82 68.75 5,263 274 5,674 NA 1.8 1.7 14.5 11.4 9.3 NM 26.1 19.1 19.0% 1.0 7.9% (8.9%)TEGNA Inc. 22.42 17.91 28.37 4,807 4,131 9,279 2.8 2.8 2.7 NA 7.5 8.1 NA 10.0 NA 13.5% NA 2.9% 13.6%GoDaddy Inc. 34.74 23.88 37.21 3,039 475 3,712 2.1 2.0 1.8 NA 8.9 7.7 NA 21.7 20.5 NM NM 13.2% NAWebMD Health Corp. 53.31 45.46 67.55 2,038 6 2,044 NA 2.9 2.8 11.6 8.9 8.3 29.8 28.0 26.4 12.5% 2.1 5.5% 12.3%Shutterfly, Inc. 51.28 35.91 54.60 1,741 308 2,049 1.8 1.8 1.6 15.2 9.3 8.0 NA NM 56.1 NM NM 9.3% 11.8%comScore, Inc. 29.16 21.74 45.00 1,667 (114) 1,553 NA 3.0 2.7 NA 13.0 10.2 NM 19.3 16.4 30.0% 0.5 12.9% 8.4%Bankrate, Inc. 10.65 6.59 14.47 960 159 1,119 2.7 2.5 2.2 12.0 9.7 9.0 NM 16.9 15.5 17.5% 0.9 14.2% 29.2%Web.com Group, Inc. 16.25 12.90 24.43 766 664 1,430 2.2 2.0 1.9 11.4 8.1 7.6 10.5 6.0 5.7 18.7% 0.3 3.5% 39.4%Renren Inc. 1.80 1.51 3.77 612 27 639 NA 10.4 7.3 NM NM NM NA NM NM 20.0% NM 41.9% NAXO Group Inc. 18.52 13.64 19.92 471 (101) 370 NA 2.4 2.2 18.1 11.7 10.5 NA 46.3 40.6 15.0% 2.7 10.6% NADHI Group, Inc. 6.20 4.95 10.05 309 61 370 1.6 1.6 1.7 7.1 6.4 6.9 NA 17.2 19.2 NA NA (3.0%) (13.9%)Care.com, Inc. 8.08 4.90 12.00 233 (71) 162 1.0 1.0 0.9 36.8 13.9 9.7 NM 54.4 28.8 15.0% 1.9 13.0% 12.7%TechTarget, Inc. 8.24 5.98 9.24 229 8 237 2.2 2.2 2.0 16.4 13.4 8.6 62.4 32.0 18.6 26.0% 0.7 11.9% (11.2%)eHealth, Inc. 10.51 6.38 15.14 193 (67) 126 0.6 0.7 0.7 13.1 20.2 14.6 NM 30.9 95.5 10.0% 9.6 (1.3%) (16.1%)


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Notes: Source: Capital IQ and Wall Street Estimates. Multiples <0 and >100 considered NM.




Internet Commerce

Amazon.com, Inc. $759.36 $474.00 $847.21 $360,822 $641 $361,463 2.8x 2.6x 2.1x 33.0x 24.0x 18.3x NM NM 83.7x 55.6% 1.5 22.9% 29.0%Alibaba Group Holding Limited 90.99 59.25 109.87 227,475 (7,448) 220,767 11.8 15.3 11.9 33.7 29.8 23.9 44.2 37.3 29.9 24.5% 1.2 28.7% 47.4%The Priceline Group Inc. 1,499.76 954.02 1,600.93 74,006 2,967 76,973 7.4 7.2 6.2 19.2 18.1 15.5 38.3 21.8 19.1 17.3% 1.1 16.1% 18.9%Netflix, Inc. 119.16 79.95 133.27 51,138 1,031 52,168 6.4 5.9 4.7 NM 88.9 48.3 NM NM NM 45.8% NM 24.9% 31.7%eBay Inc. 28.35 21.52 33.19 31,693 986 32,679 3.7 3.6 3.5 10.8 9.5 8.9 17.7 15.1 13.6 8.5% 1.6 4.7% 5.6%Expedia, Inc. 123.69 88.40 133.55 18,557 1,319 21,522 2.6 2.5 2.1 21.2 13.3 10.7 98.4 26.0 19.4 20.8% 0.9 14.9% 33.2%QVC Group 20.79 17.88 27.58 9,709 6,104 15,935 1.5 1.5 1.5 9.0 8.3 7.8 7.9 12.3 11.0 12.8% 0.9 3.6% 14.7%Copart, Inc. 54.58 32.26 56.98 6,254 576 6,830 5.2 5.0 4.7 14.6 13.8 12.7 17.0 23.0 21.2 12.0% 1.8 6.9% 19.8%GrubHub Inc. 36.34 17.77 44.58 3,110 (297) 2,814 6.2 5.7 4.5 26.8 19.4 15.2 66.1 39.9 31.6 23.8% 1.3 25.3% 44.1%Cimpress N.V. 85.65 67.89 104.18 2,711 635 3,411 1.8 1.8 1.6 16.1 12.7 11.7 NM 29.1 28.0 20.5% 1.4 11.3% 18.1%Stamps.com Inc. 108.60 68.82 123.75 1,852 81 1,933 5.9 5.4 4.7 16.0 11.8 9.9 42.3 13.0 11.6 20.3% 0.6 16.0% 79.1%Shutterstock, Inc. 47.61 25.44 65.16 1,672 (290) 1,382 2.9 2.8 2.4 21.2 14.1 11.6 57.4 30.4 28.1 16.5% 1.7 15.8% 14.7%Etsy, Inc. 12.09 6.04 16.05 1,397 (258) 1,139 3.3 3.1 2.6 30.8 20.2 15.2 NM NM 48.4 10.0% 4.8 22.8% 33.3%Quotient Technology Inc. 12.10 5.00 14.36 1,065 (139) 927 3.4 3.4 3.0 NM 33.4 21.4 NM NM 57.1 43.6% 1.3 14.8% 17.7%1-800-FLOWERS.COM, Inc. 10.55 6.11 11.35 689 229 918 0.8 0.8 0.7 12.2 10.7 9.1 27.7 24.6 19.8 19.0% 1.0 4.9% 6.3%Angie's List, Inc. 8.42 6.32 10.76 498 20 518 1.6 1.6 1.6 26.9 20.8 14.4 NM NM NM 8.0% NM 0.1% (8.3%)Blue Nile, Inc. 40.44 22.33 41.39 474 (40) 434 0.9 0.9 0.9 26.5 17.6 16.9 49.9 46.0 43.5 5.0% 8.7 2.1% (4.4%)Overstock.com, Inc. 17.30 10.03 18.20 439 (75) 362 0.2 0.2 0.2 NM 10.3 20.5 46.6 NM NM NA NA 8.0% 12.9%Travelzoo Inc. 11.30 6.63 13.27 156 (25) 131 1.0 1.0 1.0 10.7 10.6 11.7 43.5 25.5 27.4 5.0% 5.5 (0.5%) (9.7%)CafePress Inc. 2.91 2.80 4.48 48 (35) 13 0.1 0.1 0.1 NM 22.9 11.0 NM NM NM NA NA 6.3% (1.6%)


Media Conglomerates / Selected Entertainment

Comcast Corporation $68.68 $52.34 $70.34 $164,340 $57,621 $225,629 2.9x 2.8x 2.7x 8.7x 8.5x 8.1x 20.1x 19.7x 18.2x 11.4% 1.6 3.9% 14.2%The Walt Disney Company 99.96 86.25 114.75 159,082 15,560 178,700 3.2 3.2 3.0 10.6 10.4 9.9 17.4 17.9 16.1 8.9% 1.8 5.5% (2.7%)Twenty-First Century Fox, Inc. 27.56 22.66 31.25 51,133 14,807 67,741 2.4 2.4 2.3 10.1 9.7 9.2 18.7 14.4 13.9 12.3% 1.1 5.6% 7.1%Sony Corporation 27.66 19.25 30.58 34,915 (3,539) 37,586 0.5 0.6 0.6 6.2 7.3 5.2 62.4 NM 20.7 18.0% 1.2 2.1% 5.5%CBS Corporation 60.99 41.36 61.34 26,208 8,778 34,986 2.4 2.4 2.4 10.4 10.2 10.0 16.9 14.8 13.8 16.6% 0.8 1.0% 4.3%Discovery Communications, Inc. 27.39 23.66 30.85 16,313 7,609 24,169 3.7 3.7 3.5 9.9 9.9 9.5 15.5 13.1 11.8 13.9% 0.9 5.2% (0.1%)Viacom, Inc. 36.63 30.11 47.47 14,535 11,420 26,219 2.1 2.1 2.0 8.9 9.5 8.1 10.1 11.0 9.1 0.8% 11.4 2.9% (14.8%)Scripps Networks Interactive, Inc. 69.20 50.81 73.71 8,934 3,253 12,494 3.7 3.7 3.5 8.4 9.1 8.8 11.4 13.1 13.0 11.3% 1.2 4.3% 3.5%Lions Gate Entertainment Corp. 23.24 16.21 36.63 3,447 1,372 4,912 1.9 1.9 1.8 NM 29.6 17.0 11.1 NM 48.5 22.5% 2.2 5.0% 34.1%Tribune Media Company 34.29 26.10 40.72 2,997 2,772 5,775 2.7 2.7 2.6 14.0 10.1 11.5 NM 42.1 24.6 3.0% 8.2 1.4% 6.0%


Publishers

Thomson Reuters Corporation $43.38 $35.85 $44.03 $31,874 $8,520 $40,876 3.4x 3.6x 3.6x 16.0x 13.1x 12.3x 25.7x 21.2x 18.5x 8.0% 2.3 1.6% (0.1%)Pearson plc 9.97 8.19 12.57 8,133 2,162 10,299 1.8 1.8 1.7 12.6 10.8 9.1 NM 14.2 12.1 1.2% 10.4 5.8% (21.0%)News Corporation 11.81 10.21 14.68 6,868 (1,122) 5,962 0.7 0.7 0.7 9.1 6.6 6.5 NM 39.9 28.3 8.2% 3.4 (2.2%) (2.4%)UBM plc 8.80 6.74 9.53 3,462 49 3,551 3.3 3.4 3.1 12.5 11.7 10.4 29.3 18.6 15.0 7.9% 1.9 8.5% (8.7%)Lagardere SCA 24.61 19.68 29.84 3,154 1,931 5,227 0.6 0.7 0.7 8.6 7.7 7.5 26.4 12.5 11.7 6.0% 2.0 (2.3%) 3.2%Graham Holdings Company 498.60 425.14 531.70 2,799 (504) 2,304 0.9 NA NA 6.5 NA NA 15.5 NA NA NA NA NA (3.1%)The New York Times Company 13.20 10.60 13.92 2,126 (311) 1,811 1.2 1.2 1.2 7.9 7.8 8.3 49.1 26.0 22.1 NA NA 0.2% (1.0%)Time Inc. 16.00 12.23 17.66 1,585 937 2,522 0.8 0.8 0.8 8.0 6.3 6.1 NM 13.3 11.9 8.5% 1.4 (1.9%) (3.0%)The E. W. Scripps Company 16.98 12.16 21.81 1,408 308 1,716 2.0 1.8 1.9 19.7 8.5 12.3 NM 22.2 42.5 3.0% 14.2 (1.4%) 22.9%Gannett Co., Inc. 9.53 7.30 17.73 1,111 268 1,379 0.5 0.5 0.4 4.1 4.3 4.0 28.6 8.9 8.8 NM NM 5.6% 10.1%

Mean 1.5x 1.6x 1.6x 10.5x 8.5x 8.5x 29.1x 19.7x 19.0x 6.1% 5.1 1.5% (0.3%) Median 1.0 1.2 1.2 8.8 7.8 8.3 27.5 18.6 15.0 7.9% 2.3 0.2% (1.7%)

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Diversified Marketing

WPP plc $21.42 $15.30 $23.82 $27,438 $5,649 $33,696 2.0x 1.9x 1.7x 13.2x 11.3x 10.3x 25.0x 15.2x 13.4x 9.5% 1.4 10.7% (5.4%)Experian plc 18.98 13.52 20.41 18,031 3,161 21,206 4.6 NA 4.4 15.1 NA 12.4 21.5 NA 19.5 10.0% 1.9 NA 2.6%Nielsen Holdings plc 42.41 41.85 55.94 15,159 7,523 22,871 3.6 3.6 3.5 14.7 11.9 11.3 26.1 15.4 14.6 8.9% 1.6 3.2% 2.5%Equifax Inc. 114.33 91.72 136.97 13,692 2,732 16,465 5.5 5.2 4.8 15.9 14.7 13.3 28.9 20.9 19.2 12.0% 1.6 8.5% 20.5%Alliance Data Systems Corporation 223.39 176.63 284.96 12,903 17,839 30,742 4.4 4.2 3.9 18.4 15.2 14.0 23.6 13.2 11.9 16.0% 0.7 9.8% 18.7%The Interpublic Group of Companies, Inc. 24.00 19.79 24.82 9,528 846 10,655 1.4 1.4 1.3 10.0 9.6 9.2 18.0 18.2 16.6 11.1% 1.5 3.7% 3.0%Havas SA 8.10 6.94 8.54 3,398 99 3,511 1.4 1.4 1.4 8.8 8.8 8.3 17.4 16.3 15.2 7.6% 2.0 3.8% 4.8%Acxiom Corporation 25.73 17.32 27.70 1,993 (1) 1,992 2.3 2.3 2.2 23.0 12.9 11.3 NM 39.2 36.1 15.0% 2.4 4.9% 4.8%MDC Partners Inc. 6.40 2.75 23.90 342 930 1,399 1.0 1.0 1.0 10.1 8.0 6.8 NM NM 9.3 6.0% 1.5 5.8% 6.3%Harte Hanks, Inc. 1.53 0.85 3.73 94 54 149 0.3 0.3 0.3 11.6 4.1 3.3 NM 10.9 7.3 NA NA 0.5% (10.4%)


Gaming

Tencent Holdings Limited $24.50 $17.03 $28.47 $229,838 ($443) $230,917 11.1x 10.5x 7.8x 26.1x 25.0x 19.3x 41.1x 35.8x 27.1x 28.8% 0.9 33.9% 44.8%NetEase, Inc. 226.17 129.60 272.58 29,736 (4,177) 25,596 5.0 4.7 3.7 14.9 13.6 11.1 19.8 17.1 14.5 21.0% 0.7 26.7% 31.6%Activision Blizzard, Inc. 36.48 26.49 45.55 27,112 2,333 29,445 5.0 4.5 4.2 15.6 12.1 11.6 31.7 17.7 16.6 18.9% 0.9 5.5% 58.4%Electronic Arts Inc. 77.45 53.01 86.07 23,371 (2,276) 21,095 4.6 4.4 4.1 17.7 13.8 12.5 19.7 22.8 19.5 12.4% 1.6 7.1% 10.2%Naver Corporation 653.72 465.48 772.66 19,048 (2,937) 16,584 4.8 4.8 4.1 16.2 15.1 11.6 30.5 30.5 23.3 34.5% 0.7 17.5% 29.8%Gamesa Corporación Tecnológica S.A. 20.15 14.29 23.72 5,578 (281) 5,296 1.1 1.1 0.9 9.3 7.6 6.4 19.3 17.9 16.9 22.1% 0.8 21.0% 31.0%NCsoft Corporation 203.22 173.27 262.69 4,316 (676) 3,649 4.3 4.5 3.6 12.0 12.7 9.5 19.4 19.5 15.1 30.1% 0.5 23.9% 19.7%DeNA Co., Ltd. 27.14 13.41 34.62 3,937 (782) 3,227 2.2 2.5 2.5 9.1 9.6 7.1 25.3 25.1 22.4 22.4% 1.0 1.7% 21.7%Ubisoft Entertainment SA 33.32 19.95 41.70 3,726 (42) 3,683 2.2 2.3 1.5 15.7 4.7 4.2 33.1 29.7 20.6 36.1% 0.6 51.2% 36.7%Zynga Inc. 2.95 1.78 3.04 2,631 (871) 1,760 2.4 2.4 2.1 NM 30.3 16.8 NM NM 46.3 19.0% 2.4 13.3% (6.8%)GungHo Online Entertainment, Inc. 2.13 1.98 3.37 1,513 (256) 1,273 1.1 1.2 1.5 2.5 3.1 3.8 6.8 6.9 7.7 NA NA (18.7%) (16.7%)Changyou.com Limited 23.91 15.21 30.28 1,215 (848) 396 0.7 0.8 0.7 2.5 2.7 2.3 8.9 8.9 7.7 NM NM 15.2% (28.1%)Gree, Inc. 5.17 4.01 5.95 1,211 (806) 405 0.6 0.7 0.8 3.2 3.6 4.8 7.3 11.6 16.4 NA NA (4.8%) (8.7%)Glu Mobile Inc. 2.18 1.73 4.00 291 (148) 143 0.7 0.7 0.7 NM NM NM NM NM NM 15.0% NM 6.5% (18.8%)


Social Media & New Platform

Facebook, Inc. $117.43 $89.37 $135.60 $338,453 ($26,140) $312,313 12.7x 11.4x 8.5x 24.3x 17.7x 13.5x 45.3x 28.5x 22.5x 31.9% 0.7 34.4% 55.8%Twitter, Inc. 18.23 39.40 26.25 12,932 771 13,703 5.4 5.4 4.9 NM 19.1 16.2 NM 35.2 29.9 24.9% 1.2 10.2% 8.2%LINE Corporation 36.90 0.00 45.78 8,016 (1,284) 6,735 5.0 5.0 4.1 35.2 23.7 14.7 81.8 NM 34.4 56.4% 0.6 23.7% 54.6%Pandora Media, Inc. 13.37 7.10 16.23 3,120 80 3,199 2.4 2.4 1.9 NM NM NM NM NM NM 46.0% NM 22.5% 12.9%Yelp Inc. 36.49 14.53 43.36 2,863 (432) 2,431 3.6 3.4 2.7 NM 21.5 14.9 NM 50.6 34.1 33.0% 1.0 25.6% 29.7%


7






SaaS

salesforce.com, inc. $70.80 $52.60 $84.48 $48,080 $1,315 $49,395 6.2x 5.9x 4.9x 92.5x 28.6x 23.1x NM 72.3x 55.0x 27.1% 2.0 21.3% 25.3%Workday, Inc. 73.68 47.32 93.35 14,810 (1,386) 13,423 9.2 8.6 6.7 NM 99.0 61.0 NM NM NM 37.0% NM 27.5% 34.2%ServiceNow, Inc. 79.87 46.00 91.28 13,259 (308) 12,952 10.0 9.4 7.2 NM 49.6 33.2 NM NM 76.2 46.9% 1.6 30.0% 37.0%The Ultimate Software Group, Inc. 192.96 148.26 224.07 5,596 (100) 5,496 7.4 7.0 5.7 85.1 29.5 23.2 NM 59.5 48.2 26.8% 1.8 24.0% 26.8%Nutanix, Inc. 27.98 23.11 46.78 3,841 (347) 3,494 6.7 6.1 4.0 NM NM NM NM NM NM 30.0% NM 52.4% 90.1%Shopify Inc. 40.57 18.48 45.45 3,609 (400) 3,209 9.7 8.4 5.7 NM NM NM NM NM NM 25.0% NM 47.8% 88.6%RealPage, Inc. 28.80 16.06 29.75 2,318 (133) 2,185 4.0 3.8 3.4 29.1 17.5 14.4 NM 38.9 31.9 20.0% 1.6 14.7% 21.7%Zendesk, Inc. 21.06 11.06 31.88 2,008 (211) 1,796 6.3 5.8 4.4 NM NM NM NM NM NM 22.5% NM 32.3% 45.0%Cornerstone OnDemand, Inc. 35.22 22.25 47.75 1,979 (1) 1,978 4.8 4.7 4.0 NM 57.1 40.4 NM NM NM 20.0% NM 15.7% 23.5%Box, Inc. 14.73 8.82 16.59 1,948 (102) 1,845 4.9 4.6 3.7 NM NM NM NM NM NM NM NM 26.0% 30.7%HubSpot, Inc. 51.85 27.00 60.11 1,846 (113) 1,733 7.0 6.4 4.9 NM NM NM NM NM NM 25.0% NM 30.3% 48.0%RingCentral, Inc. 21.85 13.88 25.67 1,608 (136) 1,471 4.1 3.9 3.1 NM 68.3 46.8 NM NM NM 28.8% NM 24.4% 26.1%Coupa Software Incorporated 26.02 0.00 34.75 1,252 (80) 1,172 10.7 9.5 7.4 NM NM NM NM NM NM NA NA 27.9% 66.4%MINDBODY, Inc. 20.60 9.20 22.95 834 (71) 764 5.9 5.5 4.3 NM NM NM NM NM NM 15.0% NM 28.8% 35.2%AppFolio, Inc. 21.75 11.07 22.55 733 (18) 715 7.3 6.8 5.2 NM NM NM NM NM NM 30.0% NM 30.1% 38.7%Apptio, Inc. 18.71 17.52 24.60 717 (122) 594 3.9 3.8 3.1 NM NM NM NM NM NM NA NA 19.4% 26.0%LivePerson, Inc. 7.65 3.74 8.85 443 (51) 392 1.7 1.8 1.7 23.3 20.7 16.9 NM NM 85.0 20.0% 4.3 3.6% (10.3%)Everbridge, Inc. 15.93 0.00 18.73 432 (62) 370 5.2 4.9 3.9 NM NM NM NM NM NM 20.0% NM 25.8% 31.2%Xactly Corporation 14.05 4.68 16.10 432 (31) 401 4.6 4.1 3.4 NM NM NM NM NM NM 25.0% NM 23.4% 30.6%Bazaarvoice, Inc. 4.85 2.82 6.14 402 (49) 353 1.7 1.7 1.7 NM 27.1 20.0 NM NA NM NA NA 4.4% 1.0%ChannelAdvisor Corporation 14.30 10.28 15.91 369 (63) 306 2.8 2.7 2.4 NM 59.2 43.7 NM NM NM NA NA 14.1% 14.8%Jive Software, Inc. 4.05 2.84 4.95 316 (100) 217 1.1 1.1 1.1 NM 12.8 10.7 NM 62.3 36.8 NA NA 0.8% 1.6%Brightcove Inc. 7.90 4.70 13.80 267 (34) 233 1.6 1.5 1.4 NM 31.4 21.3 NM NM 62.4 15.0% 4.2 9.8% 13.5%Marin Software Incorporated 2.40 1.88 3.97 93 (33) 59 0.6 0.6 0.6 NM NM 22.3 NM NM NM NA NA (3.5%) (8.8%)

Mean 5.3x 4.9x 3.9x 57.5x 41.7x 29.0x NM 58.3x 56.5x 25.5% 2.6 22.1% 30.7% Median 5.0 4.8 3.9 57.1 30.4 23.1 NM 60.9 55.0 25.0% 1.9 24.2% 28.7%

8

Valuation Correlation to Growth and Cash Flow

Notes: Source: Capital IQ and Wall Street Estimates. When analyzing the same data set, R value of 2017E Revenue Multiple and 2017E Revenue Growth % is 0.73. COUP excluded from R calculation since outlier.

CY 2017E Revenue Growth % + CY 2017E FCF Margin %

Ente

rpri

se V

alu

e /

CY

20

17

E R

eve

nu

e

PUBLIC SAAS COMPANIES

Company Identifier

APPF

APTI

BCOV

BOX

BV

COUP

CRM

CSOD

ECOM

EVBG

HUBS

JIVE

LPSN

MB

MRIN

NOW

NTNX

RNG

RP

SHOP

ULTI

WDAY

XTLY

ZEN

Selected Public Saas Companies

WDAY

NOW

ULTISHOP

ZENCSOD

RP

HUBS

BOX

RNG

MB

APPF

LPSN BV

XTLY

BCOVJIVE

ECOM

MRIN

COUP

CRM

EVGB

APTI

NTNX

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

(10%) 0% 10% 20% 30% 40% 50% 60% 70%

R = 0.88

9

Valuation Correlation to S&M Effectiveness

Notes: Source: Capital IQ and Wall Street Estimates. COUP excluded from R calculation since outlier.

Annual Change in Revenue (CY16E) / LTM Sales & Marketing Expense

Ente

rpri

se V

alu

e /

CY

20

16

E R

eve

nu

e

PUBLIC SAAS COMPANIES

Company Identifier

APPF

APTI

BCOV

BOX

BV

COUP

CRM

CSOD

ECOM

EVBG

HUBS

JIVE

LPSN

MB

MRIN

NOW

NTNX

RNG

RP

SHOP

ULTI

WDAY

XTLY

ZEN

Selected Public Saas Companies

CRM

WDAYNOW

ULTI

SHOP

ZEN

CSODRP

HUBS

BOX

RNG

MB

APPF

LPSNBV

XTLY

BCOV

JIVE

ECOM

MRIN

COUP

APTI

EVBG

NTNX

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

(0.5x) 0.0x 0.5x 1.0x 1.5x 2.0x

R = 0.81

10

Notes: Multiples <0x or >50x considered NM. Disclosed transactions with Enterprise Value <$50MM not included. (1) Enterprise Value and LTM multiples based on Wall Street Estimates. (2) LTM multiple based on period ending 9/30/16. (3) Reflects an 80.1% stake acquisition. (4) NTM multiples based on Capital IQ consensus estimates. (5) Uses gross profit as proxy for net revenue. (6) LTM multiple based on period ending 6/30/16.

RECENT ACQUISITIONS Internet / Digital Media / SaaS

($MM)

Announced Date Acquirer Target Enterprise Value EV / LTM Sales EV / LTM EBITDA EV / NTM Sales EV / NTM EBITDA

12/6/2016 $774 2.7x 38.7x 2.4x 12.2x

12/6/2016 $2,800 NA NA NA NA

12/5/2016 $68 NA NA NA NA

11/30/2016 $112 2.2x NA NA NA

11/29/2016 $250 NA NA NA NA

11/29/2016 CONF. CONF. CONF. CONF. CONF.

11/20/2016 $2,362 3.6x 50.0x 3.3x 24.0x

11/17/2016 CONF. CONF. CONF. CONF. CONF.

11/10/2016 $446 3.1x NM 2.6x 48.2x

10/22/2016 $106,021 3.8x 13.7x 3.5x 12.4x

10/21/2016 $465 1.9x NM 1.7x 8.8x

10/21/2016 $410 NA NA NA NA

10/20/2016 $55 NA NA NA NA

(4) (6)

(4) (6)

(4) (5)

(1) (4)

(1) (2)

(1) (2)

(3)

11

Notes: Multiples <0x or >50x considered NM. Disclosed transactions with Enterprise Value <$50MM not included. (1) Enterprise Value and LTM multiples based on Wall Street Estimates. (2) LTM multiple based on period ending 9/30/16. (3) NTM multiples based on Capital IQ consensus estimates. (4) LTM multiple based on period ending 7/31/16. (5) LTM multiple based on period ending 6/30/16. (6) LTM multiple based on period ending 3/31/16.


($MM)


10/20/2016 $500 2.6x NA NA NA

10/13/2016 $300 NA NA NA NA

10/4/2016 $60 30.0x NA NA NA

10/4/2016 $250 NA NA NA NA

10/3/2016 $680 13.1x NA NA NA

9/26/2016 $153 NA NA NA NA

9/26/2016 $1,400 NA NA NA NA

9/19/2016 $1,342 3.7x NM 3.6x 19.3x

9/8/2016 $515 6.0x NM 4.6x NM

8/31/2016 $1,400 3.3x NM 3.1x 38.4x

8/26/2016 $4,300 2.1x 6.4x 2.1x 6.1x

8/25/2016 $225 45.9x NM NA NA

8/22/2016 $900 2.8x NA NA NA(6)

(5)

(3) (5)

(3) (5)

(3)(5)

(3) (4)

(2)

(1) (2)

12

Notes: Multiples <0x or >50x considered NM. Disclosed transactions with Enterprise Value <$50MM not included. (1) NTM multiples based on Capital IQ consensus estimates. (2) LTM multiple based on period ending 6/30/16. (3) Enterprise value and LTM multiple based on Wall Street Estimates. (4) LTM and NTM sales multiple are reflective of gross revenue. (5) LTM multiple based on period ending 3/31/16. (6) LTM multiple based on CY15 ending annualized recurring net revenue.


($MM)


8/22/2016 $59 NA NA NA NA

8/18/2016 $120 NA NA NA NA

8/16/2016 $135 NA NA NA NA

8/9/2016 $355 0.5x 3.8x 0.6x 4.2x

8/8/2016 $1,500 3.4x NA NA NA

8/8/2016 $3,300 NA NA NA NA

8/3/2016 $85 0.5x NM 0.4x 14.1x

8/1/2016 $582 NA NA NA NA

7/28/2016 $8,694 10.3x NM 8.5x NM

7/27/2016 $1,010 1.9x 12.8x 1.9x 8.8x

7/25/2016 $4,826 1.3x 6.2x 1.4x 5.7x

7/21/2016 $215 NA NA NA NA

7/21/2016 $130 8.7x NA NA NA

(1) (2)

(6)

(1) (5)

(1) (2)

(1) (2) (4)

(3)

(1)(2)

13


Notes: Multiples <0x or >50x considered NM. Disclosed transactions with Enterprise Value <$50MM not included. (1) NTM multiples based on Capital IQ consensus estimates. (2) LTM multiple based on period ending 3/31/16. (3) Reflects the acquisition of remaining 95.4% stake. (4) Reflects the acquisition of remaining 83.0% stake. (5) LTM multiple based on Wall Street estimates as of 6/21/16.

($MM)


7/21/2016 $3,800 NA NA NA NA

7/13/2016 $60 NA NA NA NA

7/5/2016 $45 NA NA NA NA

7/1/2016 $1,220 NA NA NA NA

6/30/2016 $4,295 2.6x 11.0x 2.5x 8.9x

6/28/2016 $125 NA NA NA NA

6/28/2016 $156 15.6x NM NM NM

6/28/2016 $151 NA NA NA NA

6/27/2016 $55 NA NA NA NA

6/27/2016 $157 0.4x NM 0.5x 8.8x

6/21/2016 $900 6.9x NA NA NA

6/20/2016 $63 NA NA NA NA

6/13/2016 $24,610 7.7x NM 6.4x 23.3x(1)

(5)

(1) (2)

(4)

(1) (2) (3)

14


Notes: Multiples <0x or >50x considered NM. Disclosed transactions with Aggregate Value <$50MM not included. (1) NTM multiples based on Capital IQ consensus estimates. (2) LTM multiple based on period ending 3/31/16. (3) Reflects the acquisition of remaining 95.1% stake. (4) LTM multiple based on period ending 12/31/15.

($MM)


6/12/2016 $4,723 7.9x NM NA NA

6/10/2016 $260 5.7x 19.3x NA NA

6/8/2016 $148 NA NA NA NA

6/2/2016 $163 NA NA NA NA

6/2/2016 $2,614 4.1x NM 3.5x 30.5x

6/1/2016 $2,905 11.4x NM 9.1x NM

5/31/2016 $1,790 7.9x NM 6.2x NM

5/30/2016 $365 3.4x 38.7x 3.3x 15.3x

5/18/2016 $915 3.9x NM 3.4x 42.4x

5/13/2016 $117 0.8x 17.0x NA NA

5/5/2016 $250 NA NA NA NA

5/5/2016 $71 0.5x 4.7x 0.6x 4.7x

5/3/2016 $115 NA NA NA NA

(1)

(4)

(1)

(1)(3)

(1)

(1)

(1)

(1)

(2)

15

Offering Amounts $10MM or Greater

Primary Initial Initial Offering LTM

Issuer Industry Filing Date Amount ($MM) Description Revenue EBIT % Adj. EBITDA

IT Consulting 11/22/16 $100 Presidio, Inc. provides professional and managed

services for IT solutions. $2,761 3.4% $210

IT Consulting 11/18/16 $100 Optiv Security Inc. provides cyber solutions to plan,

build, and operate security programs.$644 4.6% $61

(2)

(1)

IPO PIPELINE Internet / Digital Media / SaaS: IPOs in Public Registration

Notes: Source: Capital IQ and SEC.gov. (1) LTM as of 9/30/16. (2) Figures represent 9 months ended 9/30/16.

16

0

200

400

600

800

1,000

$0

$2

$4

$6

$8

$10

$12

Q3 2001 Q3 2002 Q3 2003 Q3 2004 Q3 2005 Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2015 Q3 2016

Nu

mb

er o

f In

vest

men

ts

$B

n

Quarter - Year

Number of Deals Investment Amount

VENTURE CAPITAL INDUSTRY TMT: Transactions Since Q3 2001

Notes: (1) Number of TMT VC Investments per PriceWaterhouseCoopers / NVCA MoneyTree report. TMT inclusive of Computers and Peripherals, Electronics / Instrumentation, IT Services, Media

and Entertainment, Networking and Equipment, Semiconductors, Software and Telecommunications.

(1)

17

GCA OVERVIEW Selected Recent Digital Media and Software Transactions

Acquired By Acquired By Sale of Controlling Preferred Stock Acquired by Acquired by Acquired by Acquired by Acquired by

Interest to

We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller

Pending November 2016 November 2016 October 2016 October 2016 October 2016 September 2016 September 2016 August 2016

Divestiture of

Preferred Stock Equity Investment Acquisition of Acquired by Acquired by Acquired by Acquired by Preferred Stock

to Undisclosed

We Advised the Seller Financial Advisor Financial Advisor We Advised the Buyer We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor

August 2016 February 2016 February 2016 December 2015 August 2015 July 2015 July 2015 June 2015 June 2015

Preferred Stock Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by

Consortium Led by A subsidiary of

Financial Advisor We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller

May 2015 August 2012 April 2015 March 2015 February 2015 December 2014 May 2012 October 2014 May 2012

Sale of

Acquired by Acquired by Acquired by Preferred Stock Acquired by Acquisition of Acquired by Acquired by

to

We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor We Advised the Seller We Advised the Buyer We Advised the Seller We Advised the Seller

September 2014 August 2014 August 2014 March 2012 May 2014 April 2014 April 2014 March 2014 March 2014

Acquired by Sale of Entertainment Acquired by Acquired by Preferred Stock Acquired by Acquired by Acquired by Preferred Stock

Store Assets to

We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor

November 2013 September 2013 August 2013 August 2013 July 2013 July 2013 January 2013 September 2012 August 2012

Reality Media Holdings

Japan

18

GCA OVERVIEW Digital Media / Software Team

*Tomohiko Kubota is a Vice President at GCA Corporation. *Saif Malik is a Vice President at GCA Savvian Europe Limited.

San Francisco

One Maritime Plaza, 25th Fl. San Francisco, CA 94111

United States Phone: (415) 318-3600

New York

640 Fifth Avenue, 10th

Fl. New York, NY 10019

United States Phone: (212) 999-7090

Tokyo

11-1 Marunouchi 1-chome Chiyoda-ku, Tokyo 100-6230

Japan Phone: +81 (3) 6212-7100

London

1 Southampton Street London WC2R0LR United Kingdom

Phone: +44 (0) 207 038-3200

Paul DiNardo Steve Fletcher Rich Jasen Seihun Kong John Lambros James Orozco Joshua WepmanAdvisory Director Managing Director Managing Director Managing Director Managing Director Managing Director Managing Director

Phone: (212) 999-7097 Phone: (415) 318-3661 Phone: (415) 318-3653 Phone: (415) 318-3682 Phone: (212) 999-7083 Phone: (415) 318-3667 Phone: (212) 999-7092

Mobile: (415) 509-4501 Mobile: (415) 518-6725 Mobile: (415) 308-4760 Mobile: (415) 823-7300 Mobile: (917) 744-9011 Mobile: (415) 722-0922 Mobile: (917) 306-4168

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Dan Etchevers Ashley Ma Gautam Garg Giuseppe Diprima Tomohiko Kubota* Saif Malik*Director Director Vice President Vice President Vice President Vice President

Phone: (415) 318-3644 Phone: (212) 999-7076 Phone: (415) 318-3692 Phone: (212) 999-7088 Phone: +81 (3) 6212-7129 Phone: +44 (0) 207 038-3216

Mobile: (415) 572-3549 Mobile: (917) 575-0103 Mobile: (650) 504-1722 Mobile: (347) 622-1887 [email protected] Mobile: +44 (0) 778 606-8553

[email protected] [email protected] [email protected] [email protected] [email protected]

gca weekly digital media sector summary · 1 weekly internet / digital media / saas sector summary...

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