saas - q2 2015 market review

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  1. 1. 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
  2. 2. 70 80 90 100 110 120 130 140 150 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 2 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
  3. 3. (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 Q2-2015Last12Months 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%
  4. 4. 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 Q2-2015Last12Months 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%
  5. 5. Global SaaS: Valuation Benchmarks 5 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
  6. 6. 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. ServiceNow, 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 6
  7. 7. 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 7 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 IPOd 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. 8. 8 Disclaimer: This document has been produced by Results International Group LLP (Results) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Results officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Authorised and regulated by the Financial Conduct Authority. Contact Us 27 Soho Square, London, W1D 3AY t +44 20 7629 7575 | f +44 20 7629 2233 www.resultsig.com Julie Langley Partner Di: +44 (0) 20 7514 8247 E: jlangley@resultsig.com Chris Lewis Managing Director Di: +44 (0) 20 7514 8236 E: clewis@resultsig.com 588 Broadway, Suite 1010, New York, NY 10012 t +1 646 747 6500