piper jaffray software activity update · ltm revenue $361.5 $130.5 $124.3 $65.1 mrq revenue $89.9...
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MINNEAPOLIS | BOSTON | CHICAGO | HOUSTON | LONDON | LOS ANGELES | NEW YORK | SAN FRANCISCO | ZÜRICH
Piper JaffraySoftware Activity Update First Quarter 2018
Michael KimHead of Technology Investment BankingPiper Jaffray & Co.
2PIPER JAFFRAY
Piper Jaffray Software Team OverviewGlobal Reach
Our firm consists of 1,300+ professionals in 59 offices globally including Minneapolis (HQ), San Francisco, Charlotte, New York,
Chicago, Seattle, Boston, Aberdeen, London, Hong Kong and Zürich
Technology Office Locations: San Francisco, CA Minneapolis, MNBoston, MA
23 investment bankers focused on Software, Financial Technology, Tech-Enabled
Services, BPO and Internet & Digital Media
Recent Transactions
Technology Team
Michael KimHead of Technology Investment BankingApplication Software
Peter LombardManaging Director
Head of Technology Mergers & [email protected]
Garin ArevianManaging Director
Vertical Applications & Tech-Enabled [email protected]
Andy LivadariuManaging Director
Application [email protected]
Jason MylerManaging Director
Vertical Applications & Tech-Enabled [email protected]
Steven SchmidtManaging Director
Financial and Application [email protected]
Greg KlancherPrincipal
Infrastructure & Security [email protected]
Domestic Expertise
has purchased a majority stake in
Undisclosed
Buy-Side Advisor
has been acquired by
Sell-Side Advisor
Undisclosed
has been acquired by
Undisclosed
Sell-Side Advisor
has merged with
Undisclosed
Sell-Side Advisor
portfolio company of
Initial Public Offering
$150,880,000
Co-Manager
Initial Public Offering
$884,400,000
Co-Manager
Initial Public Offering
$120,000,000
Co-Manager
Undisclosed
has been acquired by
$200,000,000 / $360,000,000
Follow-On Offering / Convertible Sr Notes
Co-Manager
Undisclosed
has Recapitalized
February 2018
Undisclosed
has been Acquired by
$869,400,000
Initial Public Offering
$550,000,000
Convertible Debt Offering
$629,300,000
Initial Public Offering
$200,000,000
Initial Public Offering
3PIPER JAFFRAY
Leading Industry Conferences and Events
30 senior representatives from leading software and internet companies, venture capital and private equity firms focused on the technology and business services sectors
Technology Private Equity SummitOctober 2018 | New York, NY
Technology Ski SummitJanuary 2019 | Aspen, CO
• 50+ leading privately held software and internet companies
• 100+ leading technology growth equity and strategic investors
• 500+ one-on-one meetings between attending CEO's/CFO's and investors
Technology SelectSeptember 2018 | Laguna Niguel, CA
30+ of the most notable public technology companies will be paired with major institutional investors in one-on-one meetings providing direct insights and feedback
4PIPER JAFFRAY
Pricing Date Company Deal Description Deal Amount ($M)
3/22/18
Dropbox is a San Francisco, Calif.-based developer of a cloud-based storage platform designed to store documents, files, videos and photos.
The Company sold 41,400,000 shares at a price of $21 per share on the Nasdaq stock exchange under the ticker symbol of DBX
$869
3/15/18
Zscaler is a San Jose, Calif.-based provider of a software-as-a-service based security platform that secures access for users and devices to applications and services
The Company sold 13,800,000 shares at a price of $16 per share on the Nasdaq stock exchange under the ticker symbol of ZS
$221
Snapshot Of Select Software Initial Public Offerings During Q1 2018
Source: Public news releases, Pitchbook and CapitalIQ.
5PIPER JAFFRAY
Source: Dealogic.Deals, current market cap, and offer to current data as of 3/31/2018Includes all IPOs and FOs since 2016 greater than $20MM.
Recent Software IPO and Follow-On PerformanceRecent Technology Follow-onsRecent Software IPOs
PricingDate
IssuerDeal Val ($MM)
Mkt Cap ($MM)
Deal Val /Mkt Cap
CurrentMkt Cap ($MM)*
% SellingShdr
% Price FTO
Offer /30-Day
Offer /Current*
3/20/18 ForeScout Technologies Inc $147 $1,137 13% $1,271 89% (15.9%) 24% 12%
3/20/18 Cision Ltd $71 $1,420 5% $1,439 100% (15.2%) 30% 8%
3/13/18 Rapid7 Inc $53 $1,266 4% $1,164 100% (4.6%) 6% (3%)
3/12/18 BlackLine Inc $332 $2,323 14% $2,095 100% (5.0%) (3%) (6%)
3/12/18 Sabre Corp $337 $6,256 5% $5,890 100% (1.5%) (11%) (4%)
3/9/18 Guidewire Software Inc $230 $7,019 3% $6,459 0% (4.0%) (8%) (8%)
3/6/18 Talend SA $190 $1,475 13% $1,417 100% (3.0%) (4%) (1%)
2/21/18 Shopify Inc $658 $14,992 4% $13,126 0% (4.1%) 12% (9%)
2/16/18 Instructure Inc $99 $1,374 7% $1,406 0% (4.1%) 12% 7%
1/25/18 Rapid7 Inc $131 $1,037 13% $1,164 71% (0.1%) 11% 16%
12/6/17 Attunity Ltd $23 $145 16% $155 0% (6.5%) 3% 11%
12/4/17 BlackLine Inc $155 $1,892 8% $2,095 100% (3.9%) 2% 14%
11/16/17 Veritone Inc $26 $427 6% $226 0% (20.6%) (1%) (39%)
11/15/17 Appian Corp $88 $1,281 7% $1,529 100% (12.9%) 3% 24%
11/15/17 Talend SA $111 $1,218 9% $1,417 100% (3.7%) (0%) 20%
11/15/17 Everbridge Inc $20 $762 3% $1,041 100% (8.8%) 6% 36%
9/27/17 Cloudera Inc $254 $2,227 11% $3,048 78% (10.5%) (9%) 31%
9/14/17 Quintiles IMS Holdings Inc $476 $20,667 2% $20,433 100% (0.2%) 5% 3%
9/7/17 Alteryx Inc $170 $1,262 13% $2,056 100% (6.8%) (3%) 61%
9/6/17 2U Inc $206 $2,542 8% $4,430 4% (3.2%) 20% 71%
7/19/17 USA Technologies Inc $43 $234 18% $483 0% (14.3%) 18% 100%
6/13/17 Donnelley Financial Solutions Inc $150 $711 21% $581 100% 7.8% 6% (19%)
6/6/17 Upland Software Inc $40 $448 9% $598 0% (2.5%) 0% 34%
Mean $174 $3,136 9% $3,197 63% (6%) 5% 16%
Median $147 $1,281 8% $1,417 100% (4%) 3% 11%
PricingDate
IssuerPricing
to Range
Deal Value ($MM)
Mkt Cap ($MM)
Deal Val / Mkt Cap
CurrentMkt Cap ($MM)*
% Selling Shdr
% Price FTO
Offer /30-Day
Offer /Current*
3/22/18 Dropbox Inc Above $869 $8,230 11% $12,282 25% 24% 38% 49%
3/15/18 Zscaler Inc Above $221 $1,877 12% $3,293 0% 45% 72% 75%
11/16/17 Stitch Fix Inc Below $138 $1,431 10% $1,971 0% (21%) 56% 35%
11/14/17 SendGrid Inc Above $151 $653 23% $1,202 0% 10% 20% 76%
11/9/17 Bandwidth Inc In Range $83 $352 24% $576 0% (5%) 6% 63%
10/26/17 ForeScout Technologies In Range $134 $814 16% $1,271 0% 5% 30% 47%
10/18/17 MongoDB Inc Above $221 $1,175 19% $2,195 0% 26% 24% 81%
6/29/17 Tintri Inc Below $67 $216 31% $54 0% (39%) (2%) (76%)
5/24/17 Appian Corp In Range $86 $704 12% $1,529 0% 0% 54% 110%
4/27/17 Cloudera Inc Above $259 $1,921 13% $3,048 0% 15% 49% 44%
4/12/17 Yext Inc Above $133 $940 14% $1,191 0% 22% 25% 15%
4/6/17 Okta Inc Above $215 $1,543 14% $4,171 0% 21% 48% 134%
3/23/17 Alteryx Inc In Range $145 $788 18% $2,056 0% 8% 10% 144%
3/16/17 MuleSoft Inc Above $254 $2,142 12% $5,865 0% 31% 31% 159%
10/27/16 BlackLine Inc Above $168 $839 20% $2,095 0% 21% 58% 131%
10/5/16 Coupa Software Inc Above $153 $866 18% $2,583 0% 20% 40% 153%
9/29/16 Nutanix Inc Above $274 $2,196 12% $8,069 0% 33% 55% 207%
9/22/16 Gridsum Holding Inc Above $100 $373 27% $251 0% 13% 23% (37%)
9/22/16 Apptio Inc Above $110 $597 19% $1,208 0% 14% 25% 77%
9/20/16 Trade Desk Inc Above $97 $688 14% $2,086 0% 20% 47% 176%
9/15/16 Everbridge Inc In Range $104 $323 32% $1,041 17% 0% 30% 205%
6/22/16 Twilio Inc Above $173 $1,233 14% $3,598 0% 15% 172% 155%
6/9/16China Online Education Group
In Range $52 $374 14% $195 0% 0% 3% (49%)
Mean $183 $1,316 17% $2,688 2% 12% 40% 86%
Median $145 $839 14% $2,056 0% 15% 31% 77%
6PIPER JAFFRAY
SUB-SECTOR
SaaS High Growth
Moderate Growth SaaS
CRM / Marketing
Infrastructure / IT Management
BI / Data Analytics
Human Capital Management
Contact Center
Security Software
HR Outsourcing
Large-Cap Technology
SUB-SECTOR
SaaS High Growth
Moderate Growth SaaS
Human Capital Management
CRM / Marketing
BI / Data Analytics
Contact Center
Security Software
Infrastructure / IT Management
Large-Cap Technology
HR Outsourcing (0.5%)
2.6%
4.7%
5.9%
9.4%
10.6%
13.6%
17.2%
19.0%
25.1%
(2.9%)
(2.0%)
0.8%
12.4%
12.9%
18.0%
33.4%
38.0%
38.0%
38.4%
43.4%
56.4%
80.1%
11.8%
16.7%
19.5%
Software Stock PerformancePerformance in LTM Period and YTD Period – By Sub-Sector
Source: Capital IQNote: LTM Date between 3/31/17 and 3/29/18. YTD data between 1/2/18 and 3/29/18.
YTD PerformanceLTM Performance
7PIPER JAFFRAY
IPO Valuation Breakpoint Analysis 2015 – 2018 YTD, At Pricing
Source: Capital IQ.
Forward Year Revenue Growth vs. Revenue Multiple
$ in millions
Summary Statistics - Software IPOs 2015-2018 YTD
Metric Median Median Median Median
Growth Profile: Less than 20% 20.0% - 30.0% 30.0% - 40.0% Greater than 40.0%
Number of Deals 6 19 18 12
Operating Metrics:
LTM Revenue $361.5 $130.5 $124.3 $65.1
MRQ Revenue $89.9 $32.4 $37.3 $45.0
LTM Gross Margin 66.7% 65.9% 71.9% 62.4%
LTM EBITDA $68.1 ($26.8) ($30.5) ($42.6)
LTM EBITDA Margin 12.4% (19.5%) (26.7%) (31.2%)
MRQ EBITDA $5.6 ($5.9) ($7.2) ($9.5)
CAC Ratio 0.93 0.49 0.55 0.57
Pricing Statistics:
Forward Year Rev. Multiple 6.4x 2.9x 4.7x 3.5x
% Change from Offer to:
One Day 6.0% 30.6% 33.6% 21.2%
One Month 5.7% 29.4% 34.6% 31.9%
Current (03/31/2018) 48.8% 64.5% 143.9% 153.4%
6.4x
2.9x
4.7x
3.5x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
Less than 20% 20.0% - 30.0% 30.0% - 40.0% Greater than 40.0%
Forw
ard
Year
Rev
enue
M
ultip
le
Forward Year Revenue Growth
8PIPER JAFFRAY
Historical Public Software Company IPO Statistics 2014–2018 YTD
Source: Capital IQ.(1) EV / EBITDA multiples less than 0.0x or greater than 50.0x deemed not meaningful.
($ in Millions) 2015 Median 2016 Median 2017 Median 2018 Median
Number of Deals 12 11 10 2Deal StatisticsDeal Size $101.7 $108.7 $147.9 $545.1
Post-Deal Market Cap $620.3 $771.3 $1,091.1 $5,672.1
Deal Size / Post-Deal Market Cap 16.4% 14.1% 13.6% 9.6%
Financial Metrics at IPO
LTM Revenue $107.6 $112.3 $145.9 $630.6
Current Year Revenue $117.3 $122.6 $163.3 $617.2
Forward Year Revenue $144.5 $165.6 $208.0 $722.3
Forward Year Revenue Growth 30.2% 35.1% 31.7% 31.0%
MRQ Revenue $30.1 $47.2 $38.5 $175.2
LTM EBITDA ($18.9) ($29.3) ($54.6) $17.8
LTM EBITDA Margin (18.1%) (19.3%) (30.9%) (7.4%)
MRQ EBITDA ($4.7) ($6.7) ($12.6) $0.4
MRQ EBITDA Margin (16.4%) (10.5%) (28.4%) (4.4%)
Valuation Metrics at IPO
Current Year Revenue Multiple 5.4x 4.2x 6.3x 11.1x
Current Year EBITDA Multiple(1) 35.6x 14.1x 47.4x 35.0x
Forward Year Revenue Multiple 4.1x 3.0x 4.9x 10.5x
Forward Year EBITDA Multiple 34.9x 20.4x 43.9x 28.2x
9PIPER JAFFRAY
6.0% 7.6%
9.7% 10.7%
12.1% 18.2% 18.3%
25.1% 25.2%
31.9%
0.0% 10.0% 20.0% 30.0% 40.0%
Large-Cap Technology
HR Outsourcing
Contact Center
Security
BI / Data Analytics
Infrastructure / IT Mgmt
Human Capital Mgmt
Moderate Growth SaaS
CRM / Marketing
SaaS High Growth
Comparable Public Software Comps (Valuation Metrics)
Source: Capital IQ.Note: Figures represent the median of each comparable group.
2018E EV / REV 2019E EV / REV
2018E Rev Growth 2019E Rev Growth
7.2% 7.7%
9.4% 10.5% 11.5%
14.8% 17.8%
22.6% 24.1%
28.3%
0.0% 10.0% 20.0% 30.0%
HR Outsourcing
Large-Cap Technology
Contact Center
Security
BI / Data Analytics
Infrastructure / IT Mgmt
Human Capital Mgmt
Moderate Growth SaaS
CRM / Marketing
SaaS High Growth
2.8x3.9x4.1x4.3x4.4x
4.8x6.6x6.7x
7.6x9.0x
0.0x 2.0x 4.0x 6.0x 8.0x 10.0x
HR Outsourcing
Contact Center
BI / Data Analytics
Security
Large-Cap Technology
Infrastructure / IT Mgmt
Human Capital Mgmt
CRM / Marketing
Moderate Growth SaaS
SaaS High Growth
2.6x3.5x
3.9x4.3x4.3x4.5x
5.4x5.6x
6.2x6.6x
0.0x 2.0x 4.0x 6.0x 8.0x
HR Outsourcing
Contact Center
Security
Large-Cap Technology
BI / Data Analytics
Infrastructure / IT Mgmt
Human Capital Mgmt
CRM / Marketing
Moderate Growth SaaS
SaaS High Growth
10PIPER JAFFRAY
SaaS Valuation Framework
Source: Capital IQ as of 3/29/2018, Thomson Reuters, Company Filings.*Piper Jaffray estimate using EBITDA as proxy for FCF.
Given the rapid maturity of the business model, free cash flow conversion combined with revenue growth provides a clearer understanding of valuation for SaaS companies
AVG EV/Rev10.4x
AVG Rev Growth + FCF Margin51.8%
AVG EV/Rev7.3x
AVG Rev Growth + FCF Margin31.0%
AVG EV/Rev2.9x
AVG Rev Growth + FCF Margin8.0%
AMBR
APTIBNFT
SEND
DATA
ECOM
DBX
LPSN
MODN
SREV
CSOD
GWRE
HUBSTYL
ULTI
ZEN
BLKB
BL
BOX
COUP
MB
NEWR
PCTY
QTWO
TWLO
TWOUADBE
CRM
NOW
SPLK
WDAY
ELLI
PAYC
SHOPTEAMVEEV
HDP
y = 17.099x + 1.7125R² = 0.7702
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
0% 10% 20% 30% 40% 50% 60% 70%
2018
E E
V /
Rev
enue
2018E FCF Margin + Revenue Growth
11PIPER JAFFRAY
Best & Worst Performing Software Stocks Top and Bottom 20 LTM Performers
Source: Capital IQ.Note: Dates between 3/31/17 and 3/29/18.
Bottom 20 Performers Top 20 Performers
73.9%
78.3%
78.9%
79.6%
80.0%
80.1%
80.8%
81.0%
81.2%
86.7%
89.2%
90.3%
92.0%
99.9%
107.6%
118.4%
124.4%
138.7%
161.6%
448.3%
Callidus Software Inc.
Everbridge Inc
HubSpot, Inc.
Coupa Software
Atlassian Corporation
Instructure, Inc.
Mulesoft
Five9, Inc.
Upland Software
Paycom Software, Inc.
ServiceNow, Inc.
Varonis Systems, Inc.
Qualys, Inc.
New Relic, Inc.
HortonWorks
Alteryx
RingCentral, Inc.
LivePerson Inc.
Nutanix
eGain Corporation
0.3%
0.0%
(1.8%)
(1.8%)
(3.2%)
(4.1%)
(5.9%)
(11.2%)
(11.3%)
(11.9%)
(12.7%)
(14.9%)
(15.7%)
(15.9%)
(18.4%)
(30.6%)
(31.3%)
(37.5%)
(47.2%)
(55.0%)
CyberArk Software, Ltd.
Castlight Health
Verint Systems Inc.
ServiceSource International, Inc.
Check Point Software
VASCO Data Security
j2 Global, Inc.
Zix Corporation
Parkit Enterprise Inc.
IBM
Benefitfocus, Inc.
SecureWorks Corp.
Symantec Corporation
Inovalon Holdings
ChannelAdvisor Corporation
NetScout Systems, Inc.
MicroStrategy Inc.
WageWorks, Inc.
Marin Software Incorporated
Micro Focus International plc
12PIPER JAFFRAY
Announced Date
Acquirer Target Deal Description Deal Amount ($M)
3/30/18
Salesforce acquires Mulesoft, a San Francisco-based developer of a cloud-based application integration platform, in a continued effort toexpand its integrations for customers more easily access corporate data wherever it may be stored
$6,580
3/6/18
GTCR and Sycamore Partners jointly acquire CommerceHub, a New York-based provider of supply chain software in an effort to continue executing on their vision for a platform and network to tie together all sources of demand, supply and delivery in global ecommerce
$1,100
3/6/18 S&P acquires Kensho Technologies, a Massachusetts-based provider of
a cloud-based financial analytics software, to fund and expand its sophisticated algorithms and machine learning capabilities
$550
2/26/18 HGGC recaps Minnesota-based Helpsystems as it continues to grow
and extend its market leading system and network management solutions
N/A
2/13/18
Marlin Equity acquires San Francisco-based Inkling Systems, a provider of an end-to-end cloud publishing platform designed to provide instructions for the field workers, to further accelerating growth through a focused expansion within key target verticals
N/A
2/2/18 Trimble acquires Florida-based e-Builder to extend its ability to
accelerate industry transformation by providing an integrated project delivery solution
$500
2/1/18 MOVE acquires Polaris Global Mobility, a UK-based human resources
company that offers mobility administration solutions, to create the first complete global mobility management platform for enterprise logistics
N/A
1/30/18 SAP acquires Callidus Software, a leading cloud-based performance
management platform, to complete SAP's new front office that extends beyond legacy CRM to an intelligent customer experience suite
$2,400
Snapshot Of Select Software M&A Transactions During Q1 2018
Source: Public news releases, Pitchbook and CapitalIQ.
13PIPER JAFFRAY 13PIPER JAFFRAY
Software M&A ActivityQ1 2015 – Q1 2018
Source: 451 Research, S&P Capital IQ.Note: Software transactions greater than 10 million USD in enterprise value.
# of Deals 47 54 50 49 29 42 38 33 31 39 30 34 56
$11,740$13,482
$22,438
$15,304 $18,421
$53,011
$33,046
$11,545 $11,374$8,709 $10,991
$15,101
$19,409
5.6x
4.5x5.0x
7.3x
4.7x
5.9x6.1x
6.0x
7.8x
3.5x
3.5x
4.0x
6.6x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018
Total Deal Value Average EV / REV Multiple( USD in millions)
14PIPER JAFFRAY
Public Target M&A Activity in SoftwareQ1 2015 – Q1 2018
Source: S&P Capital IQ.Note: Software transactions greater than 10 million USD in enterprise value.
( USD in millions)
# of Deals 6 11 10 12 6 18 13 6 8 5 5 4 19
$6,125 $5,807 $6,967$9,085
$11,721
$40,761
$26,207
$4,631
$1,160$2,478 $3,304 $3,204
$12,569
4.4x
3.1x4.9x 3.3x
5.0x5.3x
4.9x
2.9x
2.4x
3.1x 2.9x
4.4x
8.8x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018
Total Deal Value Average EV / REV Multiple
15PIPER JAFFRAY
Private Target M&A Activity in SoftwareQ1 2015 – Q1 2018
Source: S&P Capital IQ.Note: Software transactions greater than 10 million USD in enterprise value.
( USD in millions)
# of Deals 41 43 40 37 23 24 25 27 23 34 25 30 36
$5,615
$7,675
$15,472
$6,220
$6,700
$12,251
$6,839 $6,914
$10,214
$6,232
$7,687
$11,897
$6,8416.0x 5.0x
5.0x
9.3x
4.6x
6.5x
7.2x
7.0x
8.3x
3.6x 3.7x 3.7x
5.6x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018
Total Deal Value Average EV / REV Multiple
16PIPER JAFFRAY 16PIPER JAFFRAY
Strategic Public Acquirer M&A Activity in SoftwareQ1 2015 – Q1 2018
Acquirer
Target
Announced Date 11/20/16 1/24/17 3/7/17 4/18/17 7/25/2017 10/23/2017 12/18/2017 1/30/18 3/20/18
Deal Amount ($M) $2,334 $3,700 $614 $850 $850 $2,288 $1,260 $2,400 $6,580
EV / LTM REV 3.5x 17.4x 5.6x 13.3x 9.7x 5.3x 10.0x 10.0x 21.9x
# of Deals 40 33 31 36 24 29 22 29 20 11 14 23 38
Notable Recent Announced Transactions ($ millions)
Source: 451 Research, S&P Capital IQ.Note: Software transactions greater than 10 million USD in enterprise value.
$8,247$6,348
$11,302$7,040
$17,689
$40,912
$21,282
$9,935 $8,321
$1,582 $5,076$8,570
$15,344
6.4x5.9x
4.9x
9.1x
4.7x
6.9x
10.8x
6.0x
9.3x
6.0x4.4x
5.4x
7.7x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018
Total Deal Value Average EV / REV Multiple( USD in millions)
17PIPER JAFFRAY 17PIPER JAFFRAY
Private Equity M&A Activity in SoftwareQ1 2015 – Q1 2018
# of Deals 5 12 9 8 4 10 8 2 4 15 3 5 4
Notable Recent Announced Transactions ($ millions)
Acquirer
Target
Announced Date 6/7/16 7/13/16 8/31/16 9/7/16 1/3/17 1/19/17 5/30/17 10/17/17 11/27/17 3/6/18
Deal Amount $3,000 $544 $1,400 $2,200 $1,150 $800 $564 $1,082 $1,612 $1,100
EV / LTM REV 4.2x 4.4x 3.3x 6.8x 2.6x 4.6x 5.9x 3.5x 3.8x 9.9x
Source: 451 Research, S&P Capital IQ.Note: Software transactions greater than 10 million USD in enterprise value.
$3,388 $2,870
$9,543 $7,827
$722
$11,434
$8,778
$1,150
$2,586
$5,716
$2,269
$4,745
$1,689
3.8x 3.6x 3.7x
4.3x4.3x
3.1x
7.9x
3.6x
2.7x 0.9x 3.2x
6.7x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018
Total Deal Value Average EV / REV Multiple
( USD in millions)
18PIPER JAFFRAY
Announced Date Company Deal Description Deal Amount ($M)
3/23/18 ServiceTitan, a developer of a field service management software for
home services contractors, has raised $62 million through both debt and Series C venture funding led by Battery Ventures
$62
3/7/18 Magic Leap, a developer of human computing interfaces and software
technology, has raised $964 million of Series D venture funding in a deal led by Temasek Holding
$964
3/6/18 UiPath, a developer of robotic process automation software, has raised
$153 million of Series B venture funding led by Accel, CapitalG and Kleiner Perkins Caufield & Byers
$153
2/12/18 XebiaLabs, a developer of enterprise DevOps and application release
automation tools, has raised $100 of Series B venture funding in a deal led by Susquehanna Growth Equity and Accel
$100
1/24/18 FrontApp, a provider of a mobile application to manage and automate
team emails and inboxes, has raised $67 million of Series B venture funding in a deal led by Sequoia Capital
$67
1/15/18 Pony.ai, a provider of an AI based self-driving software algorithm, has
raised $112 million of Series A funding in a deal led by Morningside Venture Capital and Legend Capital
$112
Snapshot Of Select Software Private Placements During Q4 2017
Source: Public news releases, Pitchbook and CapitalIQ.
19PIPER JAFFRAY
Private Placement ActivitySoftware Private VC / PE Summary: Q1 2015 – Q1 2018
Source: S&P Capital IQ.
( USD in millions)
$5,883
$1,589
$3,320
$2,097
$3,306
$4,963
$2,695
$1,816$1,573
$3,953
$2,784
$4,535
$3,739136
164 161
143
151
143133
121
168
196 200189
216
0
50
100
150
200
250
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018
Total Deal Value Total # of Deals
20PIPER JAFFRAY
64%
59%62% 60%
65% 66%68%
60%
54% 55%59% 59%
54%
60%55% 57%
53%57%
Debt Market Overview
Source: S&P Global Market Intelligence
Middle Market LBO Debt Contribution Middle Market LBO Volume by Industry – 2017
2.2%
2.4%
2.7%
3.4%
4.0%
4.2%
7.5%
8.2%
10.7%
10.8%
15.5%
28.4%
Forest Product
Chemicals
Not for Profit
Food & Beverage
Insurance
Building Materials
Home Furnishings
Manufacturing &…
Retail
Services & Leasing
Computers & Electronics
Healthcare
Total Transaction Volume of $6.8 Billion
Middle Market LBO Loan Multiples Middle Market LBO Volume by Quarter
4.0x
3.4x3.9x 3.8x
4.2x4.7x 4.7x
5.6x
4.5x
3.3x
4.2x 4.3x4.5x
4.8x5.3x 5.3x 5.3x 5.5x 5.4x
0123456
1 Lien 2 Lien Other Senior Sub. Debt
$1.2
$1.6 $1.5
$1.8
$1.2
$1.9$2.0
$0.4
$0.9
$1.2
$0.7$0.9
$1.0
$1.8
$2.9
$1.1
$1.5
Institutional Pro Ratast ndDebt Tranche / EBITDA:
Defined as Issuers with EBITDA of $50 Million or Less
Defined as Issuers with EBITDA of $50 Million or Less Defined as Issuers with EBITDA of $50 Million or Less($ In Billions)
Appendix
22PIPER JAFFRAY
SaaS High Growth
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital.
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
High-Growth SaaS
ServiceNow, Inc. $31,477 $30,294 94% 2,093 75% 450 32% 29% 11.9 9.2 46.4 32.4
Atlassian Corporation Plc 12,522 11,759 87% 804 79% 156 31% 27% 12.1 9.5 42.1 35.4
Zendesk, Inc. 5,005 4,585 95% 466 70% (1) 31% 28% 8.2 6.4 NM NM
Okta, Inc. 4,171 3,941 93% 260 69% (61) 34% 33% 11.3 8.6 NM NM
Zscaler, Inc. 3,293 3,428 81% 154 79% (25) 32% 33% 16.8 12.7 NM NM
The Trade Desk, Inc. 2,206 2,077 74% 308 79% 96 31% 25% 5.1 4.1 17.6 12.9
MongoDB, Inc. 2,195 1,916 94% 155 72% (73) 38% 35% 9.0 6.6 NM NM
Alteryx, Inc. 2,056 1,862 88% 132 83% (5) 36% 32% 10.4 7.9 NM NM
Instructure, Inc. 1,447 1,310 91% 172 71% (29) 30% 27% 6.3 5.0 NM NM
Talend S.A. 1,417 1,331 92% 149 77% (20) 35% 28% 6.6 5.2 NM NM
Everbridge, Inc. 1,041 979 94% 112 70% (6) 31% 26% 7.2 5.7 NM NM
75th Percentile $4,588 $4,263 94% $387 79% $47 34% 32% 11.6x 8.9x 44.2x 33.9x
Median $2,206 $2,077 92% $172 75% ($6) 32% 28% 9.0x 6.6x 42.1x 32.4x
Mean $6,075 $5,771 89% $437 75% $44 33% 29% 9.5x 7.3x 35.4x 26.9x
25th Percentile $1,751 $1,597 87% $151 70% ($27) 31% 27% 6.9x 5.4x 29.9x 22.7x
23PIPER JAFFRAY
Moderate Growth SaaS
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
Moderate Growth SaaS
Adobe Systems Incorporated $107,917 $103,653 93% 7,699 87% 3,213 21% 18% 11.7x 10.0x 25.7x 21.2x
BlackLine, Inc. 2,095 1,981 87% 190 77% 1 26% 25% 8.9x 7.1x NM NM
Box, Inc. 2,826 2,704 84% 506 73% (17) 20% 22% 4.5x 3.7x NM NM
Cloudera, Inc. 3,619 3,176 92% 367 57% (88) 27% 22% 6.9x 5.6x NM NM
Constellation Software Inc. 18,525 18,447 95% 2,643 37% 505 20% 14% 6.2x 5.4x 23.9x 20.8x
Coupa Software Incorporated 2,583 2,333 90% 187 68% (11) 23% 24% 10.2x 8.2x NM NM
CyberArk Software Ltd. 1,860 1,516 92% 274 84% 54 20% 18% 4.8x 4.1x 23.3x 18.7x
Dropbox, Inc. 12,282 12,138 91% 1,107 67% 233 21% 15% 9.1x 7.9x 42.2x 34.8x
ForeScout Technologies, Inc. 1,271 1,108 86% 221 73% (39) 21% 20% 4.1x 3.4x NM NM
Guidewire Software, Inc. 6,459 5,879 87% 576 58% 119 21% 17% 8.5x 7.3x 46.7x 34.4x
HubSpot, Inc. 4,100 3,854 87% 376 80% 17 29% 24% 8.0x 6.4x NM NM
Mimecast Limited 2,048 1,960 90% 241 74% 22 26% 18% 6.5x 5.5x NM 44.0x
MINDBODY, Inc. 1,834 1,617 90% 183 72% 7 28% 25% 6.9x 5.6x NM 43.3x
New Relic, Inc. 4,109 3,876 94% 330 82% (1) 28% 25% 9.1x 7.3x NM NM
Nutanix, Inc. 8,069 7,567 89% 941 58% (150) 25% 25% 6.4x 5.1x NM NM
Palo Alto Networks, Inc. 16,672 14,852 95% 1,989 72% 441 22% 17% 6.1x 5.2x 23.5x 19.1x
Paycom Software, Inc. 6,343 6,310 93% 467 85% 151 25% 24% 11.6x 9.4x 29.4x 23.7x
Paylocity Holding Corporation 2,819 2,690 90% 357 60% 61 22% 23% 6.6x 5.4x 31.9x 24.6x
Proofpoint, Inc. 5,745 5,828 92% 562 72% 75 29% 28% 8.4x 6.5x NM 44.3x
Qualys, Inc. 3,051 2,657 92% 243 77% 93 20% 18% 9.6x 8.1x 26.7x 22.5x
RingCentral, Inc. 4,996 4,814 91% 502 76% 31 26% 23% 7.6x 6.2x NM NM
salesforce.com, inc. 87,163 84,197 90% 10,480 74% 1,894 21% 19% 6.7x 5.6x 29.7x 23.7x
SendGrid, Inc. 1,245 1,094 88% 120 74% 12 25% 25% 7.8x 6.3x NM NM
Splunk Inc. 14,171 13,076 87% 1,271 80% 141 28% 24% 8.0x 6.5x NM 39.1x
Twilio Inc. 3,598 3,307 90% 399 54% (5) 28% 24% 6.5x 5.2x NM NM
Varonis Systems, Inc. 1,740 1,586 95% 231 90% 9 21% 18% 6.0x 5.1x NM NM
Workday, Inc. 26,947 25,142 91% 2,143 71% 312 25% 23% 9.4x 7.6x NM 38.2x
75th Percentile $10,176 $9,852 92% $1,024 79% $146 27% 24% 9.0x 7.3x 31.4x 38.6x
Median $4,100 $3,854 90% $399 73% $31 25% 23% 7.6x 6.2x 28.1x 24.6x
Mean $13,114 $12,495 90% $1,282 71% $262 24% 21% 7.6x 6.3x 30.3x 30.2x
25th Percentile $2,339 $2,157 88% $242 67% ($0) 21% 18% 6.4x 5.3x 30.1x 21.9x
24PIPER JAFFRAY
Business Intelligence / Data Analytics
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital.
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
Business Intelligence / Data Analytics
Alteryx, Inc. $2,056 $1,862 88% $132 83% ($5) 36% 32% 10.4x 7.9x NM NM
Cegedim SA 625 893 84% 545 46% 59 4% 6% 1.5x 1.4x 8.7x 7.5x
Datawatch Corporation 107 102 68% 38 90% (3) 12% NA 2.4x NA NM NA
Inovalon Holdings, Inc. 1,531 1,303 60% 449 66% 93 9% 6% 2.1x 2.0x 7.7x 6.7x
MicroStrategy Incorporated 1,482 785 66% 505 80% 76 0% 2% 1.5 1.5 12.3 10.8
MongoDB, Inc. 2,195 1,916 94% 155 72% (73) 38% 35% 9.0 6.6 NM NM
Splunk Inc. 14,171 13,076 87% 1,271 80% 141 28% 24% 8.0 6.5 NM 39.1
Tableau Software, Inc. 6,590 5,567 92% 923 87% 70 11% 13% 5.7 5.1 NM NM
The Descartes Systems Group Inc 2,223 2,225 92% 237 73% 81 15% 10% 8.1 7.4 23.8 20.8
Verint Systems Inc. 2,775 3,183 96% 1,135 64% 181 8% 6% 2.6 2.4 10.9 9.7
Workiva Inc. 1,016 954 89% 216 71% (21) 13% 14% 4.1 3.6 NM NM
75th Percentile $2,499 $2,704 92% $734 82% $87 22% 22% 8.1x 6.6x 12.3x 18.3x
Median $2,056 $1,862 88% $449 73% $70 12% 11% 4.1x 4.3x 10.9x 10.2x
Mean $3,161 $2,897 83% $510 74% $54 16% 15% 5.1x 4.4x 12.7x 15.8x
25th Percentile $1,249 $923 76% $185 69% ($4) 8% 6% 2.3x 2.1x 8.7x 8.1x
25PIPER JAFFRAY
Infrastructure / IT Management
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital.
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
Infrastructure / IT Management
Atlassian Corporation Plc $12,522 $11,759 87% $804 79% $156 31% 27% 12.1x 9.5x 42.1x 35.4x
Box, Inc. 2,826 2,704 84% 506 73% (17) 20% 22% 4.5x 3.7x NM NM
CA, Inc. 14,134 14,089 91% 4,164 86% 1,337 3% 1% 3.3x 3.2x 8.5x 8.3x
Citrix Systems, Inc. 13,585 13,467 96% 2,859 87% 1,023 2% 3% 4.7 4.5 14.0 13.3
Cloudera, Inc. 3,619 3,176 92% 367 57% (88) 27% 22% 6.9 5.6 NM NM
Commvault Systems, Inc. 2,602 2,139 89% 699 86% 84 10% 11% 2.8 2.5 20.0 15.3
Constellation Software Inc. 18,525 18,447 95% 2,643 37% 505 20% 14% 6.2 5.4 23.9 20.8
Dropbox, Inc. 12,282 12,138 91% 1,107 67% 233 21% 15% 9.1 7.9 42.2 34.8
Hortonworks, Inc. 1,587 1,515 93% 262 69% (80) 25% 24% 4.6 3.7 NM NM
Micro Focus International plc 4,303 8,445 34% 1,930 84% 759 (5%) (4%) 2.1 2.2 6.1 5.4
NetScout Systems, Inc. 2,299 2,452 68% 987 72% 203 (7%) 3% 2.5 2.4 12.1 11.0
Nutanix, Inc. 8,069 7,567 89% 941 58% (150) 25% 25% 6.4 5.1 NM NM
Pegasystems Inc. 4,737 4,512 94% 841 67% 117 13% 12% 4.7 4.2 32.3 25.9
Progress Software Corporation 1,825 1,778 72% 401 88% 162 2% 1% 4.4 4.4 9.0 9.2
Red Hat, Inc. 26,564 24,847 89% 2,920 85% 764 19% 16% 7.5 6.5 28.0 23.4
ServiceNow, Inc. 31,477 30,294 94% 2,093 75% 450 32% 29% 11.9 9.2 46.4 32.4
Software Aktiengesellschaft 3,750 3,552 85% 1,025 76% 331 3% 3% 3.2 3.1 10.1 9.5
Talend S.A. 1,417 1,331 92% 149 77% (20) 35% 28% 6.6 5.2 NM NM
Tintri, Inc. 54 90 23% 126 58% (90) (20%) 16% 0.9 0.8 NM NM
Twilio Inc. 3,598 3,307 90% 399 54% (5) 28% 24% 6.5 5.2 NM NM
Upland Software, Inc. 598 688 91% 98 66% 26 18% 7% 5.2 4.8 14.5 13.3
VMware, Inc. 49,150 41,585 73% 7,922 86% 2,798 10% 8% 4.8 4.4 12.8 11.7
75th Percentile $13,319 $13,134 92% $2,053 85% $491 25% 24% 6.6x 5.4x 30.1x 24.6x
Median $4,027 $4,032 90% $891 74% $159 18% 15% 4.8x 4.5x 14.5x 13.3x
Mean $9,978 $9,540 82% $1,511 72% $386 14% 14% 5.5x 4.7x 21.5x 18.0x
25th Percentile $2,375 $2,217 84% $399 66% ($14) 3% 4% 3.6x 3.4x 11.1x 10.3x
26PIPER JAFFRAY
Large-Cap Technology
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital.
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
Large-Cap Technology
Adobe Systems Incorporated $107,917 $103,653 93% $7,699 87% $3,213 21% 18% 11.7x 10.0x 25.7x 21.2x
HP Inc. 36,584 37,725 89% 53,889 18% 4,755 6% 1% 0.7 0.7 8.1 7.8
International Business Machines Corp 141,986 172,997 87% 80,056 46% 17,175 1% 0% 2.2 2.2 8.9 8.7
Intuit Inc. 44,397 44,746 97% 5,434 84% 1,984 10% 11% 7.5 6.8 20.4 18.6
Oracle Corporation 188,582 179,409 86% 39,472 80% 17,036 4% 3% 4.4 4.3 9.5 9.1
salesforce.com, inc. 87,163 84,197 90% 10,480 74% 1,894 21% 19% 6.7 5.6 29.7 23.7
SAP SE 121,122 119,321 85% 27,942 70% 8,509 3% 8% 4.0 3.7 11.7 10.7
75th Percentile $131,554 $146,159 92% $46,681 82% $12,772 15% 14% 7.1x 6.2x 23.0x 19.9x
Median $107,917 $103,653 89% $27,942 74% $4,755 6% 8% 4.4x 4.3x 11.7x 10.7x
Mean $103,964 $106,007 89% $32,139 66% $7,795 9% 8% 5.3x 4.7x 16.3x 14.3x
25th Percentile $65,780 $64,471 86% $9,089 58% $2,598 4% 2% 3.1x 2.9x 9.2x 8.9x
27PIPER JAFFRAY
Human Capital Management
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital.
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
Human Capital Management
Benefitfocus, Inc. $765 $833 66% $261 53% $17 (1%) 12% 3.3x 2.9x NM 42.5x
Cornerstone OnDemand, Inc. 2,262 2,135 85% 482 70% 30 4% 11% 4.2 3.8 24.0 16.4
Paycom Software, Inc. 6,343 6,310 93% 467 85% 151 25% 24% 11.6 9.4 29.4 23.7
Paylocity Holding Corporation 2,819 2,690 90% 357 60% 61 22% 23% 6.6 5.4 31.9 24.6
The Ultimate Software Group, Inc. 7,580 7,442 94% 989 63% 240 18% 18% 6.7 5.7 26.8 22.3
WageWorks, Inc. 1,820 1,172 59% 462 63% 125 9% 8% 2.2 2.1 7.0 6.3
Workday, Inc. 26,947 25,142 91% 2,143 71% 312 25% 23% 9.4 7.6 NM 38.2
75th Percentile $6,962 $6,876 92% $735 70% $195 24% 23% 8.0x 6.7x 29.4x 31.4x
Median $2,819 $2,690 90% $467 63% $125 18% 18% 6.6x 5.4x 26.8x 23.7x
Mean $6,934 $6,532 82% $737 66% $134 15% 17% 6.3x 5.3x 23.8x 24.9x
25th Percentile $2,041 $1,653 75% $409 61% $45 7% 11% 3.8x 3.4x 24.0x 19.4x
28PIPER JAFFRAY
HR Outsourcing
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital.
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
HR Outsourcing
Aon plc $35,111 $40,738 92% $10,707 45% $2,807 7% 5% 3.8x 3.6x 14.0x 12.8x
Automatic Data Processing, Inc. 50,317 50,019 91% 13,072 43% 2,939 7% 7% 3.6 3.4 17.0 15.5
Barrett Business Services, Inc. 605 479 92% 934 62% 43 12% 11% 0.5 0.4 11.1 9.2
CBIZ, Inc. 1,021 1,206 93% 880 13% 107 6% 6% 1.3 1.3 11.2 10.3
H&R Block, Inc. 5,316 7,331 80% 3,095 49% 941 0% 2% 2.4 2.3 8.1 9.1
Insperity, Inc. 2,922 2,628 96% 3,432 18% 179 13% 10% 0.7 0.6 13.3 11.5
Instructure, Inc. 1,447 1,310 91% 172 71% (29) 30% 27% 6.3 5.0 NM NM
Paychex, Inc. 22,296 21,527 84% 3,308 70% 1,445 8% 7% 6.2 5.8 15.0 14.4
TriNet Group, Inc. 3,348 2,735 95% 3,328 19% 293 6% 9% 3.2 2.9 8.8 8.0
WageWorks, Inc. 1,820 1,172 59% 462 63% 125 9% 8% 2.2 2.1 7.0 6.3
75th Percentile $18,051 $17,978 93% $3,406 63% $1,319 11% 10% 3.8x 3.6x 14.0x 12.8x
Median $3,135 $2,681 91% $3,202 47% $236 8% 7% 2.8x 2.6x 11.2x 10.3x
Mean $12,420 $12,914 87% $3,939 45% $885 10% 9% 3.0x 2.7x 11.7x 10.8x
25th Percentile $1,540 $1,232 86% $894 25% $111 6% 6% 1.6x 1.5x 8.8x 9.1x
29PIPER JAFFRAY
CRM / Marketing
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital.
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
CRM / Marketing
ChannelAdvisor Corporation 246 194 72% 123 79% 5 5% 6% 1.5 1.4 30.0 21.4
Coupa Software Incorporated 2,583 2,333 90% 187 68% (11) 23% 24% 10.2 8.2 NM NM
Marin Software Incorporated 38 12 43% 75 57% (15) NA NA NA NA NA NA
Mimecast Limited 2,048 1,960 90% 241 74% 22 26% 18% 6.5 5.5 NM 44.0
MINDBODY, Inc. 1,834 1,617 90% 183 72% 7 28% 25% 6.9 5.6 NM 43.3
Model N, Inc. 532 541 96% 142 55% (11) 6% 5% 3.6 3.4 NM 39.2
salesforce.com, inc. 87,163 84,197 90% 10,480 74% 1,894 21% 19% 6.7 5.6 29.7 23.7
SendGrid, Inc. 1,245 1,094 88% 120 74% 12 25% 25% 7.8 6.3 NM NM
The Trade Desk, Inc. 2,206 2,077 74% 308 79% 96 31% 25% 5.1 4.1 17.6 12.9
Zendesk, Inc. 5,005 4,585 95% 466 70% (1) 31% 28% 8.2 6.4 NM NM
75th Percentile $2,489 $2,269 90% $291 74% $20 28% 25% 7.8x 6.3x 29.9x 42.3x
Median $1,941 $1,789 90% $185 73% $6 25% 24% 6.7x 5.6x 29.7x 31.5x
Mean $10,290 $9,861 83% $1,232 70% $200 22% 19% 6.3x 5.2x 25.8x 30.7x
25th Percentile $710 $680 77% $127 69% ($8) 21% 18% 5.1x 4.1x 23.7x 21.9x
30PIPER JAFFRAY
Contact Center
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital.
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
Contact Center
8x8, Inc. $1,719 $1,558 92% $284 77% $17 16% 21% 4.7x 3.9x NM 40.4x
eGain Corporation 217 214 94% 60 64% 4 10% 8% 3.3 3.1 42.2 NA
Five9, Inc. 1,718 1,685 92% 212 59% 25 16% 17% 7.2 6.2 NM 43.5
LivePerson, Inc. 983 925 98% 226 74% 20 10% 11% 3.9 3.5 42.5 31.4
NICE Ltd. 5,640 5,562 95% 1,332 65% 364 8% 7% 3.9 3.6 13.2 12.0
Verint Systems Inc. 2,775 3,183 96% 1,135 64% 181 8% 6% 2.6 2.4 10.9 9.7
75th Percentile $2,511 $2,808 95% $922 72% $142 15% 16% 4.5x 3.8x 42.3x 40.4x
Median $1,719 $1,621 94% $255 64% $22 10% 9% 3.9x 3.5x 27.7x 31.4x
Mean $2,176 $2,188 94% $542 67% $102 11% 12% 4.3x 3.8x 27.2x 27.4x
25th Percentile $1,167 $1,084 92% $216 64% $18 9% 7% 3.5x 3.2x 12.7x 12.0x
31PIPER JAFFRAY
Security
Source: S&P Capital IQ, Thomson Reuter’s Consensus, and Renaissance Capital
EV/Revenue > 20x Not Meaningful (NM).
EV/EBITDA > 60x Not Meaningful (NM).
Market Enterprise Gross Revenue EV / EV /
Cap Value Price % Revenue Margin EBITDA Growth Revenue EBITDA
($ in millions, except per share data) 3/31/2018 3/31/2018 52 Wk High LTM LTM LTM 2018 2019 2018 2019 2018 2019
Security
Akamai Technologies, Inc. $12,209 $11,554 91% $2,571 65% $830 8% 9% 4.3x 3.9x 11.6x 10.3x
CA, Inc. 14,134 14,089 91% 4,164 86% 1,337 3% 1% 3.3 3.2 8.5 8.3
Check Point Software Technologies L 16,236 12,227 83% 1,872 89% 1,033 5% 6% 6.3 5.9 11.7 10.9
CyberArk Software Ltd. 1,860 1,516 92% 274 84% 54 20% 18% 4.8 4.1 23.3 18.7
Everbridge, Inc. 1,041 979 94% 112 70% (6) 31% 26% 7.2 5.7 NM NM
Experian plc 14,345 17,534 90% 4,439 43% 1,615 4% 7% 3.6 3.4 10.7 10.0
FireEye, Inc. 3,193 3,094 90% 765 65% 16 9% 8% 3.8 3.5 29.2 23.1
ForeScout Technologies, Inc. 1,271 1,108 86% 221 73% (39) 21% 20% 4.1 3.4 NM NM
Fortinet, Inc. 9,205 7,819 97% 1,553 75% 334 14% 13% 4.6 4.1 20.2 16.6
Imperva, Inc. 1,507 1,128 83% 334 80% 48 15% 15% 3.0 2.7 16.0 13.2
MobileIron, Inc. 498 399 73% 178 83% (17) 10% 10% 2.1 1.9 NM 42.5
NetScout Systems, Inc. 2,299 2,452 68% 987 72% 203 (7%) 3% 2.5 2.4 12.1 11.0
Okta, Inc. 4,171 3,941 93% 260 69% (61) 34% 33% 11.3 8.6 NM NM
Palo Alto Networks, Inc. 16,672 14,852 95% 1,989 72% 441 22% 17% 6.1 5.2 23.5 19.1
Parkit Enterprise Inc. 11 (5) 69% 1 100% 1 NA NA NA NA NA NA
Proofpoint, Inc. 5,745 5,828 92% 562 72% 75 29% 28% 8.4 6.5 NM 44.3
Qualys, Inc. 3,051 2,657 92% 243 77% 93 20% 18% 9.6 8.1 26.7 22.5
Radware Ltd. 951 593 97% 217 81% 14 9% 9% 2.6 2.4 24.5 18.0
Rapid7, Inc. 1,164 1,072 91% 201 72% (21) 15% 22% 4.7 3.8 NM NM
SecureWorks Corp. 661 559 62% 468 52% (27) 10% 10% 1.1 1.0 NM 45.8
Splunk Inc. 14,171 13,076 87% 1,271 80% 141 28% 24% 8.0 6.5 NM 39.1
Symantec Corporation 17,242 19,965 76% 4,739 79% 1,516 2% 7% 4.1 3.9 8.4 7.7
Trend Micro Incorporated 883,799 677,389 95% 148,811 81% 50,392 11% 7% 4.1 3.9 12.3 11.4
Varonis Systems, Inc. 1,740 1,586 95% 231 90% 9 21% 18% 6.0 5.1 NM NM
VASCO Data Security International, In 516 353 86% 193 70% 18 5% 11% 1.7 1.6 15.3 9.9
VeriSign, Inc. 14,643 14,700 93% 1,176 84% 820 4% 4% 12.2 11.7 17.1 16.4
Zscaler, Inc. 3,293 3,428 81% 154 79% (25) 32% 33% 16.8 12.7 NM NM
Zix Corporation 233 204 64% 66 80% 16 4% 7% 3.0 2.8 10.0 8.9
75th Percentile $14,143 $12,439 93% $1,633 82% $535 21% 19% 6.7x 5.8x 23.3x 22.5x
Median $3,122 $2,875 90% $401 78% $51 11% 11% 4.3x 3.9x 15.3x 16.4x
Mean $37,352 $29,789 86% $6,359 76% $2,100 14% 14% 5.5x 4.7x 16.5x 19.4x` 25th Percentile $1,133 $1,049 82% $213 71% ($1) 5% 7% 3.2x 3.0x 11.6x 10.3x
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Date of First Use 6/6/18