saas - q2 2015 market review
TRANSCRIPT
Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• 40 person team; 250+ completed transactions
• Broad global network
• Creative solutions
• Senior level focus on every transaction
• Founded in 1991
• Entrepreneurial and owner-managed
…with global reach
1
About Results International
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Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15
Large-cap Midcap Small-cap Global SaaS Index NASDAQ Comp
Results International Global SaaS Indices
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5.9%
13.1%
6.8%
(10.8%)
10.7%
Q2 2015 Performance
Large Cap (2.1%)
Mid Cap 8.0%
Small Cap (3.7%)
Global SaaS (0.5%)
Note: Based on share prices as at 30 June 2015
Note: Indices weighted by market capitalisation
Sources: Capital IQ and Results analysis
(4.2%)
(13.9%)
(1.6%)
4.2%
(6.5%) (4.1%)
(11.3%)
1.6%
(26.5%)
13.8% 13.8%
13.8%
18.9%
9.5%
(5.8%)
7.5% 4.6%
26.8%
(8.6%)
14.3%
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
Global SaaS Universe: Large & Mid Cap Share Price Performance
3
Q2
-20
15
Last
12 M
on
ths
Large Cap Mid Cap
Note: Share price performance as at 30 June 2015
Sources: Capital IQ and Results analysis
(8.4%)
(33.6%)
5.6%
19.9% 19.9% 18.9%
(15.0%) (25.3%)
(10.4%)
2.5%
34.0%
34.0%
(24.4%)
26.9%
(15.2%)
(3.5%)
44.8%
124.2%
(3.3%)
38.3%
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
16.5% 19.0%
(7.7%)
n.a. 2.3%
n.a.
(25.7%)
23.5%
2.4%
8.7%
(13.6%) (14.5%)
(2.5%)
22.3% 19.4%
1.9%
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
Global SaaS Universe: Small Cap Share Price Performance
4
Q2
-20
15
Last
12 M
on
ths
Small Cap
Note: Share price performance as at 30 June 2015
Sources: Capital IQ and Results analysis
(5.1%)
(54.7%)
(11.4%)
n.a.
(38.3%)
n.a.
(30.6%)
n.a.
17.7%
(42.7%)
57.2%
(16.3%)
4.1%
21.2%
32.2%
(8.6%)
(80.0%)
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
Global SaaS: Valuation Benchmarks
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EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; Financials calendarised to December year end
Note: Median values reported; excludes negative multiples
Note: See Selected Publicly Traded Companies (slides 6 & 7) for details of companies included in each category
Source: Capital IQ
21.2%
19.2% 19.1% 20.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Large Cap Mid Cap Small Cap Global SaaS
7.6 x
5.6 x 5.2 x
5.6 x
0.0 x
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
Large Cap Mid Cap Small Cap Global SaaS
18.1% 17.4%
0.2%
11.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Large Cap Mid Cap Small Cap Global SaaS
29.9 x
23.8 x
32.0 x
27.7 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
Large Cap Mid Cap Small Cap Global SaaS
Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Subscription Rev. Growth Gross Margin EBITDA Margin Revenue EBITDA
Company (30-Jun-15) Week High Cap Cash Debt Value CY2015 Historical CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Large Cap
salesforce.com, inc. 69.63 88.7% 46,391 1,019 1,020 47,411 6,448 93.9% 21.0% 76.0% 18.2% 19.0% 7.4 x 6.1 x 40.3 x 32.0 x
Solera Holdings Inc. 44.56 64.0% 2,991 395 2,314 5,304 1,169 n.a 7.2% 68.3% 45.0% 40.3% 4.5 x 4.2 x 11.2 x 10.5 x
Workday, Inc. 76.39 78.4% 14,590 1,922 (1,424) 13,167 1,115 75.5% 38.6% 66.4% 3.7% 7.3% 11.8 x 8.5 x n.m. n.m.
Serv iceNow, Inc. 74.31 89.0% 12,403 745 (294) 12,109 990 82.4% 35.9% 63.6% 11.9% 13.2% 12.2 x 9.0 x n.m. 68.3 x
athenahealth, Inc. 114.58 74.8% 4,509 61 205 4,714 918 94.7% 21.2% 59.8% 18.1% 17.8% 5.1 x 4.2 x 28.4 x 23.8 x
NetSuite Inc. 91.75 80.6% 7,290 459 (183) 7,108 733 80.5% 30.0% 68.2% 7.0% 7.7% 9.7 x 7.5 x n.m. 96.4 x
The Ultimate Software Group, Inc. 164.34 89.7% 4,796 123 (113) 4,684 616 81.5% 20.7% 59.8% 24.1% 25.2% 7.6 x 6.3 x 31.5 x 24.9 x
25th percentile 76.6% 826 80.8% 20.8% 61.7% 9.5% 10.5% 6.2 x 5.2 x 24.1 x 24.1 x
Median 80.6% 990 82.0% 21.2% 66.4% 18.1% 17.8% 7.6 x 6.3 x 29.9 x 28.5 x
75th percentile 88.9% 1,142 91.0% 33.0% 68.3% 21.2% 22.1% 10.7 x 8.0 x 33.7 x 59.2 x
Mid Cap
RealPage, Inc. 19.07 82.5% 1,518 28 (13) 1,506 461 96.1% 10.4% 56.8% 17.4% 19.2% 3.3 x 3.0 x 18.8 x 15.4 x
Medidata Solutions, Inc. 54.32 92.1% 3,085 298 (54) 3,031 403 82.3% 19.2% 74.7% 23.3% 24.8% 7.5 x 6.3 x 32.3 x 25.5 x
Veeva Systems Inc. 28.03 83.3% 3,693 429 (429) 3,264 390 69.8% 23.6% 60.7% 29.2% 29.9% 8.4 x 6.8 x 28.7 x 22.7 x
Constant Contact, Inc. 28.76 66.6% 962 179 (179) 783 375 n.a 15.0% 72.5% 19.7% 21.3% 2.1 x 1.8 x 10.6 x 8.5 x
Cornerstone OnDemand, Inc. 34.80 74.0% 1,914 220 7 1,921 340 n.a 26.5% 70.5% 1.4% 4.6% 5.6 x 4.5 x n.m. 96.7 x
Fleetmatics Group PLC 46.83 95.2% 1,832 172 (148) 1,684 282 n.a 20.3% 75.2% 30.4% 32.0% 6.0 x 5.0 x 19.6 x 15.5 x
IntraLinks Holdings, Inc. 11.91 93.0% 707 47 32 739 272 n.a 7.4% 72.9% 14.2% 15.5% 2.7 x 2.5 x 19.1 x 16.3 x
LogMeIn, Inc. 64.49 92.1% 1,637 232 (232) 1,404 264 n.a 16.4% 89.6% 22.4% 22.4% 5.3 x 4.6 x 23.8 x 20.4 x
LivePerson Inc. 9.81 66.7% 560 41 (41) 519 245 n.a 14.5% 74.9% 7.9% 9.8% 2.1 x 1.9 x 26.9 x 18.9 x
Demandware, Inc. 71.08 96.8% 2,802 190 (189) 2,613 234 92.3% 33.3% 73.8% 4.6% 6.9% 11.2 x 8.4 x n.m. n.m.
Ellie Mae, Inc. 69.79 97.6% 2,212 74 (72) 2,140 227 n.a 23.0% 71.4% 22.5% 25.5% 9.4 x 7.7 x 42.0 x 30.1 x
Marketo, Inc. 28.06 78.8% 1,274 104 (97) 1,177 209 90.2% 32.4% 62.7% (12.6%) (9.6%) 5.6 x 4.3 x n.m. n.m.
Bazaarvoice, Inc. 5.89 62.7% 472 107 (50) 422 201 n.a 10.8% 68.5% (3.4%) 3.3% 2.1 x 1.9 x n.m. 57.0 x
25th percentile 74.0% 234 82.3% 14.5% 68.5% 4.6% 6.9% 2.7 x 2.5 x 19.1 x 15.9 x
Median 83.3% 272 90.2% 19.2% 72.5% 17.4% 19.2% 5.6 x 4.5 x 23.8 x 20.4 x
75th percentile 93.0% 375 92.3% 23.6% 74.7% 22.5% 24.8% 7.5 x 6.3 x 28.7 x 27.8 x
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 100x EV / Revenue and 100x EV / EBITDA; Net debt includes minority interest
Note: Market cap classifications categorised by CY2015E revenue:
• Large Cap: Revenues greater than $500m
• Mid Cap: Revenues between $200m and $500m
• Small Cap: Revenues less than $200m
Source: Capital IQ
Global SaaS: Selected Publicly Traded Companies
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Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Subscription Rev. Growth Gross Margin EBITDA Margin Revenue EBITDA
Company (30-Jun-15) Week High Cap Cash Debt Value CY2015 Historical CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Small Cap
Jive Software, Inc. 5.25 60.1% 393 119 (114) 279 198 88.7% 10.7% 68.2% 0.2% 3.7% 1.4 x 1.3 x n.m. 34.3 x
Cvent, Inc. 25.78 86.4% 1,126 177 (177) 949 182 90.2% 22.9% 70.2% 9.0% 12.8% 5.2 x 4.2 x 57.5 x 33.1 x
Benefitfocus, Inc. 43.85 91.8% 1,340 107 (62) 1,278 175 93.3% 24.3% 36.3% (22.2%) (12.9%) 7.3 x 5.9 x n.m. n.m.
Qualys, Inc. 40.35 72.7% 1,579 143 (143) 1,436 166 n.a 24.3% 77.2% 27.1% 27.7% 8.7 x 7.0 x 32.0 x 25.1 x
HubSpot, Inc. 49.58 90.3% 1,823 136 (136) 1,687 167 58.4% 28.2% 68.0% (15.0%) (13.5%) 10.1 x 7.9 x n.m. n.m.
SPS Commerce, Inc. 65.80 90.3% 1,130 134 (134) 997 157 n.a 19.1% 68.7% 13.8% 15.0% 6.3 x 5.3 x 45.9 x 35.4 x
Xero Limited. 12.23 67.1% 1,654 182 (182) 1,472 127 94.9% 56.6% 65.7% (35.2%) (16.6%) 11.6 x 7.4 x n.m. n.m.
Marin Software Incorporated 6.74 55.5% 244 53 (49) 194 115 n.a 17.0% 64.2% (10.7%) (1.3%) 1.7 x 1.4 x n.m. n.m.
SciQuest, Inc. 14.81 77.5% 409 127 (127) 281 108 n.a 11.7% 69.1% 19.3% 20.5% 2.6 x 2.3 x 13.5 x 11.3 x
Textura Corporation 27.83 89.1% 748 67 (67) 681 99 n.a 40.9% 79.6% 11.6% 11.4% 6.9 x 4.9 x 59.1 x 42.7 x
ChannelAdvisor Corporation 11.95 44.0% 303 63 (61) 241 95 n.a 15.1% 71.5% (14.8%) (8.0%) 2.5 x 2.2 x n.m. n.m.
MINDBODY, Inc. 13.83 85.1% 541 239 (50) 491 n.a. 58.0% n.a. 57.1% n.a. n.a. n.a. n.a. n.a. n.a.
Halogen Software Inc. 8.62 96.4% 195 43 (43) 152 67 87.7% 19.1% 71.8% (7.8%) (5.9%) 2.3 x 1.9 x n.m. n.m.
Xactly Corporation 8.59 85.1% 263 133 (106) 157 n.a. 77.4% n.a. 59.0% (20.9%) n.a. 30.9 x n.a. n.m. n.a.
Craneware plc 10.34 95.2% 280 36 (36) 244 50 87.3% 8.2% 95.4% 30.4% 30.7% 4.9 x 4.5 x 16.1 x 14.8 x
StatPro Group plc 1.26 89.9% 85 4 (4) 81 51 n.a. 4.0% n.a. 14.5% 15.3% 1.6 x 1.5 x 11.0 x 9.9 x
25th percentile 71.3% 96 77.4% 12.6% 64.9% (14.9%) (7.5%) 2.4 x 2.0 x 14.8 x 13.9 x
Median 85.8% 121 87.7% 19.1% 68.7% 0.2% 7.6% 5.2 x 4.4 x 32.0 x 29.1 x
75th percentile 90.3% 167 90.2% 24.3% 71.7% 14.1% 15.3% 8.0 x 5.7 x 51.7 x 34.6 x
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Global SaaS: Selected Publicly Traded Companies
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 100x EV / Revenue and 100x EV / EBITDA; Net debt includes minority interest
Note: Mindbody and Xactly Corporation recently IPO’d in June 2015. Broker reports for both companies are currently not available
Note: Market cap classifications categorised by CY2015E revenue:
• Large Cap: Revenues greater than $500m
• Mid Cap: Revenues between $200m and $500m
• Small Cap: Revenues less than $200m
Source: Capital IQ
8
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