SOFTWARE SECTOR REPORT - Q3 2019 - GCA Altium
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
SOFTWARE SECTOR REPORT Q3 2019
EXECUTIVE SUMMARY
Q3 2019 Software
» The global software sector remains one of the most active sectors, with ~$17Bn in financing volume and ~$22Bn in M&A volume during Q3 ’19
- 222 financings in Q3 ‘19 is 19% higher than the number of financings in the same period in ’18
- 384 M&A transactions in Q3 ‘19 is 6% higher than the 363 deals consummated during the same period in ’18
» Significant M&A activity in Q3 driven by acquisitions in the cybersecurity sector; Broadcom’s $10.7Bn acquisition of Symantec’s Enterprise Security Assets,
VMware’s $2.1Bn acquisition of Carbon Black, and Salesforce’ $1.4Bn acquisition of Check Point
» Financial Software had one of the highest financing volume counts in Q3 ‘19 led by the $470MM financing of N26 and $400MM financing of Nubank; the
Operations Management sector also saw a high volume of financings
» Software sector trading performance remained healthy, with overall IGV tech-software index outperforming the S&P 500 by 1.9% over the past twelve
months
– The Vertical software index has grown 19.5% over the last 12 months, outperforming all other software sub segments
» Technical Application companies traded at the highest average multiples of 8.8x and 27.3x for 2019 Revenue and EBITDA, respectively
» Overall momentum and growth rates remain healthy in the software space with Business Intelligence and Analytics leading the 2019E/2018A revenue
growth at 30.2%
Select Q3 Active Investors Select Q3 Active Buyers
Notes:
Source: Pitchbook, 451 Research, Capital IQ. 2
GCA OVERVIEW
The GCA Software Team
KEY GCA STATS SECTOR COVERAGE GCA US TEAM
AI / Machine Learning Paul DiNardo Josh Wepman
Managing Director Managing Director
22 Offices Globally pdinardo@gcaglobal.com jwepman@gcaglobal.com
BI / Analytics
Collaboration Software Rupert Sadler Chris Gough
Managing Director Managing Director
Senior Bankers Covering
25 Software CRM
rsadler@gcaglobal.com cgough@gcaglobal.com
Cybersecurity
Kevin Walsh Saif Malik
Managing Director Director
Senior Bankers Covering Enterprise Content Management kwalsh@gcaglobal.com smalik@gcaglobal.com
60 Technology
Enterprise Resource Planning
Glen Kruger
Infrastructure Management Director
gkruger@gcaglobal.com
Software Transactions in
90+ the Last Three Years
Marketing Technology
GCA EXECUTIVE TEAM
SaaS / Cloud Enablement
Technology-Related Todd Carter Geoff Baldwin
190+ Deals in the Last 3 Years Supply Chain Management Co-CEO, Managing Co-CEO, Managing Director
Director Head of M&A
tcarter@gcaglobal.com gbaldwin@gcaglobal.com
Vertically Focused Software
3GCA OVERVIEW
Strong Momentum in Software Advisory
GCA is one of the most active advisors in the software ecosystem, successfully advising
on 34 deals so far this year and over 90 deals in the past 3 years
October 2019 October 2019 October 2019
September 2019 September 2019 August 2019
4GCA OVERVIEW
Deep software sector expertise with demonstrated success advising large-cap public and private companies on complex assignments
Notes:
The above transactions represent a compilation of past and current deals that GCA entities, including GCA Advisors, LLC, GCA Corporation and GCA Altium, have advised on. Generally, GCA
Corporation advises Asian-based transactions, while GCA Advisors, LLC advises U.S.-based transactions and GCA Altium advises UK/European-based transactions. At times, multiple GCA 5
entities may be retained to advise on the same transaction.SOFTWARE MARKET SPOTLIGHT: MARTECH / LOYALTY PLATFORM
Case Study: Sale of CrowdTwist to Oracle (NYSE: ORCL)
GCA acted as exclusive financial advisor to CrowdTwist, a leading customer loyalty SaaS platform, on its
sale to Oracle (NYSE: ORCL).
Transaction Summary Strategic Rationale
» CrowdTwist provides a complete cloud-native customer » GCA worked with management to prepare their company
loyalty solution to empower brands to offer personalized for sale, including establishing the Company’s operating
customer experiences model, forward projections, and concise marketing
» The Company’s solution offers over 100 out-of-the-box message
TRANSACTION DETAILS engagement paths to provide rapid time-to-value for » GCA guided the shareholders and management through a
Pending marketers to develop a complete view of the customer rigorous negotiation and diligence process, ultimately
October 2019 using competitive tension to drive up the transaction
» CrowdTwist empowers leading enterprise customers in
Undisclosed amount value. Additionally, GCA was able to leverage past
the Retail, Consumer Goods, Media & Entertainment, and
Fitness categories, such as Budweiser, Foot Locker, Sleep experience gleaned from prior sales to Oracle (Grapeshot,
SECTOR Number, and Weight Watchers TOA, Virtue) to guide an overall smooth process
Marketing Technology » Together, Oracle and CrowdTwist will enable
Software / SaaS / Loyalty » On October 2, 2019, CrowdTwist signed an agreement to
be acquired by Oracle (NYSE: ORCL). Upon the close of organizations of all sizes to deliver personalized
the acquisition, the CrowdTwist team will join the Oracle engagement and extend loyalty and reward programs to
DEAL TYPE a brand's most beneficial customer behaviors
Customer Experience (CX) Cloud organization
M&A
» "The combination with Oracle validates CrowdTwist's
world-class technology, employees, and customers," said
Scott Matthews, CEO of CrowdTwist. "We could not have
found a more compelling partner to advance our vision of
customer loyalty at scale."
6SOFTWARE MARKET SPOTLIGHT: VERTICAL SOFTWARE / REAL ESTATE TECH
Case Study: Sale of Inside Real Estate to Lovell Minnick Partners
GCA acted as exclusive financial advisor to Inside Real Estate, a leading provider of software solutions for
top brokerages, agents, and teams, on its majority investment from Lovell Minnick Partners.
Transaction Summary Strategic Rationale
» On August 20, 2019, Inside Real Estate (“IRE”) announced » IRE is one of the fastest growing independently-owned
a majority investment from Lovell Minnick Partners real estate software companies and a trusted technology
(“Lovell Minnick”) partner to agents, teams, and top brokerages
– Financial terms of the transaction were not disclosed – Serves industry primarily comprised of point solution
TRANSACTION DETAILS providers
Closed » Headquartered in Salt Lake City, the Company’s flagship
September 2019 real estate software platform, kvCORE, is a modern and – Over 200,000 top agent, team, and brokerage
comprehensive solution known for delivering profitable customers
Undisclosed amount
growth at every level of a brokerage organization
– Products focus on increasing brokerage profitability,
SECTOR » Lovell Minnick is a private equity firm focused on driving team and agent success and enhancing
Vertically Focused Software investments in the global financial services industry, business differentiation for customers
/ Real Estate Technology including related technology and business services
companies. Since its inception in 1999, Lovell Minnick has – Investment comes during a period of substantial
raised $3.2Bn in committed capital and has completed revenue growth and sustained profitability
DEAL TYPE
investments in over 50 platform companies » Transaction will fuel IRE’s continued growth, provide
M&A
» GCA acted as exclusive financial advisor to IRE and its financing for future acquisition opportunities and help
owner, NexPhase Capital, in connection with the create the best environment to attract, develop, and
transaction retain top talent
7DEAL DASHBOARD
Software
$45.2 Billion 621 1,104 $91.0 Billion
2019 Financing Volume (1)(2) 2019 Financing Transactions (1)(2) 2019 M&A Transactions 2019 M&A Volume
Select Financing Transactions Quarterly Financing Volume (1)(2) Quarterly M&A Volume Select M&A Transactions (3)
Company Amount ($MM) $Bn $Bn Acquirer Target EV ($MM)
$23
$82
$700 $10,700
$17 $17 $57 (Ent. Security Assets)
$15 $14 $14 $15
$11 $12 $39
$490 $2,100
$32 $30
$20 $13 $19 $22
$470 $1,350
Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
$350 $1,050
Quarterly Financing Deal Count (1)(2) Quarterly M&A Deal Count
$300 225 201 375 361 359 384 $1,000
187 198 222 343 363
159 161 155 167 291 268 298
$268 $820
$248 $775
$206 $700
Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
Last 12 Months Software Price Performance vs. S&P 500 (4) M&A EV/ NTM Rev. Over Time (5)
15% All Buyers Strategic Buyers PE Buyers
SPY IGV
10% 6.0x `
5.3x 5.4x
5.0x 4.9x
5% 5.0x 4.6x 4.7x 4.7x
4.2x 4.3x 4.1x 4.5x 4.3x
4.0x 3.9x 3.7x 4.1x
0% 4.0x 3.9x 3.6x 3.7x 3.8x
3.3x
3.1x 2.9x
(5%) 2.7x 2.9x 2.8x
3.0x
2.2x
(10%) 2.0x
(15%) 1.0x
(20%)
0.0x
(25%) 2011 2012 2013 2014 2015 2016 2017 2018 2019
Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19
Notes:
Sources: Capital IQ, PitchBook, 451 Research and Dow Jones VentureSource. Market Data as of 9/30/2019.
1) Criteria based on software series A and subsequent rounds of global financings greater than or equal to $20MM.
2) Financings include Software Venture and Private Equity Growth / Expansion activity.
3) Software M&A transactions reflect select transactions in 2019 YTD. M&A metrics are based on closed and announced transactions. 8
4) iShares North American Tech-Software ETF (IGV), used as proxy for software landscape. Top holdings in the ETF include ADBE, MSFT, ORCL, CRM, and INTU.
5) Criteria based on global public target software M&A deals.RECENT STOCK PERFORMANCE
Index Performance
Last 12 Months
40.0%
30.0%
20.0% 19.5%
15.2%
12.3%
10.5%
10.0% 9.7%
8.0%
6.2%
5.0%
5.0%
0.0% 1.8%
(2.6%)
(7.6%)
(10.0%)
(20.0%)
(30.0%)
(40.0%)
Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19
1) Vertical 2) Financial 3) Platform 4) Business 5) ERP & 6) Development 7) SaaS 8) Sales & 9) Technical 10) 11) Security 12) Content &
Applications Intelligence General and Operations Marketing Applications Infrastructure Storage
& Analysis Business Management Management
19.5% 15.2% 12.3% 10.5% 9.7% 8.0% 6.2% 5.0% 5.0% 1.8% (2.6%) (7.6%)
Notes:
Sources: Capital IQ. Market Data as of 9/30/19. 9
List of companies in each sector can be found in the public comparable tables.SOFTWARE PUBLIC COMPANY LANDSCAPE
Sub Sector Top Players and Key Operating Stats
Platform Infrastructure Security
Combined Market Cap: $1,778Bn Combined Market Cap: $102Bn Combined Market Cap: $186Bn
19/18 Rev. Growth: 2.9% 19/18 Rev. Growth: 13.5% 19/18 Rev. Growth: 18.0%
19 EBITDA Margin: 30.9% 19 EBITDA Margin: 16.0% 19 EBITDA Margin: 14.1%
Content & Storage Management BI & Analytics Financial Applications
Combined Market Cap: $195Bn Combined Market Cap: $38Bn Combined Market Cap: $325Bn
19/18 Rev. Growth: 14.8% 19/18 Rev. Growth: 30.2% 19/18 Rev. Growth: 18.7%
19 EBITDA Margin: 17.3% 19 EBITDA Margin: 8.9% 19 EBITDA Margin: 22.7%
Notes:
Sources: Capital IQ. Market Data as of 9/30/19. 10
Logos shown represent largest players in each sub sector by enterprise value. Operating stats for each sector represent full list of companies shown in public comparable tables.SOFTWARE PUBLIC COMPANY LANDSCAPE
Sub Sector Top Players and Key Operating Stats
Technical Applications Vertical ERP & General Business
Combined Market Cap: $146Bn Combined Market Cap: $225Bn Combined Market Cap: $324Bn
19/18 Rev. Growth: 14.1% 19/18 Rev. Growth: 10.8% 19/18 Rev. Growth: 19.9%
19 EBITDA Margin: 33.7% 19 EBITDA Margin: 19.1% 19 EBITDA Margin: 15.2%
Development & Operations Sales & Marketing SaaS
Combined Market Cap: $210Bn Combined Market Cap: $19Bn Combined Market Cap: $712Bn
19/18 Rev. Growth: 23.3% 19/18 Rev. Growth: 18.2% 19/18 Rev. Growth: 28.9%
19 EBITDA Margin: 11.6% 19 EBITDA Margin: 3.9% 19 EBITDA Margin: 13.1%
Notes:
Sources: Capital IQ. Market Data as of 9/30/19. 11
Logos shown represent largest players in each sub sector by enterprise value. Operating stats for each sector represent full list of companies shown in public comparable tables.TRADING COMPARABLES
Valuation and Operational Metrics
EV / 2019E Revenue EV / 2019E EBITDA
27.3x 27.0x
9.9x 24.6x 24.5x
23.2x
8.8x 8.4x Median: 19.6x
8.1x 7.9x Median: 6.8x 19.8x 19.5x
7.3x 18.3x
6.3x 6.2x 6.2x 6.0x 17.4x
4.9x 13.1x 12.4x
10.8x
3.6x
2019E / 2018E Revenue Growth 2019E EBITDA Margin
30.2% 33.7%
28.9%
30.9%
23.3%
Median: 18.1% Median: 15.6%
19.9% 22.7%
18.7% 18.2% 18.0%
19.1%
17.3%
14.8% 16.0% 15.2%
14.1% 13.5% 14.1%
10.8% 13.1% 11.6% 8.9%
2.9% 3.9%
Notes:
Sources: Capital IQ. Market Data as of 9/30/19.
Figures represent mean values of respective comp groups. 12
List of companies in each sector can be found in the public comparable tables.PUBLIC SAAS COMPANIES – VALUATION CORRELATION TO GROWTH AND CASH FLOW
Valuation Correlation to Growth Valuation Correlation to Growth & Free Cash Flow
40.0x 40.0x
35.0x 35.0x
ZM ZM
Enterprise Value / CY 2019E Revenue
Enterprise Value / CY 2019E Revenue
30.0x DDOG R = 0.72 30.0x DDOG
25.0x 25.0x
R = 0.57
SHOP
COUP SHOPCOUP
TEAM
NET NET TEAM
20.0x VEEV OKTA WORK 20.0x WORKOKTA VEEV
PAYC ZS PAYC
ZS
15.0x 15.0x
NOW SMAR SMAR NOW
APPF TWLO APPF
ADBE RNG RNG ADBETWLO
QTWODOCU
PD QTWO
PD DOCU
WDAY ZEN
FIVNPCTYEVBG WDAY
ZEN
FIVNEVBG
10.0x 10.0x
BL HUBS BL HUBSPCTY
QLYSPFPT PFPT QLYS
LPSNMDLA
CRM
SPLK SPLKMDLA
LPSN CRM
RP WK WK RP
CSOD NEWR
MIME CSOD NEWR
MIME
5.0x DBX 5.0x DBX
JCOM
ENVBOX BOXENV JCOM
LOGM CLDR LOGM CLDR CARB
PSTG CARB NTAP PSTG
0.0x 0.0x
0% 20% 40% 60% 80% 100% 120% 0% 20% 40% 60% 80% 100% 120%
CY2019E Revenue Growth CY 2019E Revenue Growth % + CY 2019E FCF Margin %
Notes:
Source: Capital IQ as of 9/30/2019. Consensus Estimates used for CY2019E figures. 13UNIVERSE OF PUBLICLY TRADED SOFTWARE COMPANIES
Strategic and Private Equity Exits Outweigh New Issues
210
PE Acquisitions Strategic Acquisitions IPO Cardlytics
Zscaler
Dropbox
Zuora
Pivotal Software
Ceridian
200 DocuSign
195 6 (7) Smartsheet
Carbon Black
11 (11) Pluralsight
Avalara
(5) Domo
190 (11) (6) Tenable Holdings
7 (8) Opera Limited
(4) 17 (9) Endava
17 11 (10) SurveyMonkey
Fortinet 16 (7) Upwork
Elastic
180 CDC Software (6) Anaplan
LogMeIn (9) (6) Solarwinds PagerDuty
Medidata
SciQuest (8) 9 Tufin
SolarWinds
RealPage
(12) Zoom Video
Rosetta Stone Fastly
IntraLinks Jive
Envestnet CrowdStrike
Imperva
170 Qlik Carbonite Workday
Workiva
Slack
Medallia
BroadSoft Tangoe Fleetmatics
Mavenir Atlassian Dynatrace
Higher One Responsys Hortonworks
Convio
Qualys
Barracuda New Relic
Mimecast
(9) 10 Cloudflare
SPS Commerce
Cornerstone
Epocrates
Eloqua
Wix.com HubSpot
Instructure (13) Ping
SS&C
E2open
Covisint CyberArk
Rapid7 (16) Datadog
ServiceNow Sophos
160 QuinStreet Exa
RingCentral MobileIron
AppFolio
Twilio
SecureWorks
20
FireEye Kinaxis
Incadea Alarm.Com Talend
Cvent Zendesk
Infloblox Xactly Everbridge
Gigamon Paycom
Proofpoint Shopify Apptio
Splunk
Textura OPOWER
Apigee Gridsum Holding Mulesoft (7)
ChannelAdvisor Five9 Alteryx
ExactTarget Box Nutanix
Marketo 2U
150 Demandware
Tableau Borderfree
Coupa Okta
(11) 11 (9)
Bazaarvoice BlackLine, Inc. Yext
Halogen Amber Road Cloudera
Greenway
Rally A10 Networks Appian
AVG
Marin Paylocity MongoDB
(6) 140
Guidewire
Model N Varonis Systems Altair Engineering
SendGrid
140 SailPoint
130
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
IPO +6 + 11 +7 + 17 + 16 + 17 + 11 +9 + 10 + 20 + 11
Strategic Exits -7 - 11 -8 - 11 -9 -6 - 10 - 12 - 13 - 16 -9
PE Exits -5 -4 -6 -9 -6 -7 -8 -9 -7 - 11 -6
Notes:
Sources: Capital IQ, company filings. Market data as of 9/30/19. 14Q3 2019 M&A DEAL DASHBOARD
Quarterly M&A Activity Select Q3 2019 M&A Transactions
($BN) Number of Deals M&A Volume ($MM)
Ann. Enterprise EV/ LTM
Acquirer Target
Date Value Rev
$82 9/26 $430 NA
384
375 9/20 $189 2.7x
363 361 9/11 $775 NA
359
9/3 $400 5.7x
343
$57 8/26 $700 2.2x
8/22 $2,100 9.1x
8/21 $1,050 21.0x
298 $39 (1)
8/9 $10,700 4.5x
291
$32
$30 8/7 $1,350 NA
268 8/6 $100 6.7x
$20 $22
$19
8/5 $68 NA
$13
8/2 $400 NA
7/26 $820 3.4x
7/3 $1,000 3.1x
Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
7/1 $80 NA
Notes:
Sources: Capital IQ and 451 Research. 15
1. Enterprise Security Assets.Q3 2019 PRIVATE CAPITAL DEAL DASHBOARD
Quarterly Financing Activity Select Q3 2019 Financing Transactions
($BN) Number of Deals Financing Volume ($MM)
Post-
Deal Lead/Selected Amount Funding
Company Money
Date Investor Invested to Date
Valuation
9/25 $388 $393 NA
9/24 $490 $3,580 $6,300
225 222
9/24 $326 $434 $750
201 198
187
$23 9/17 $268 $414 $2,750
167
159 161
155
9/10 $300 $530 $6,300
$17 $17
$15 $14 $15
$14 9/6 $700 $1,410 NA
$12
$11
8/1 $350 $350 NA
7/31 $300 $370 NA
7/30 $400 $909 $10,000
Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 7/18 $470 $683 $3,500
Notes:
Sources: Pitchbook. 16SOFTWARE CAPITAL MARKETS UPDATE
Recent Software IPO Pricings
($MM)
% Change % Change
Market Cap @ IPO % Change Current /
Offer Date (1) Name Amount Raised Pre IPO Filing Range Offer Price Last Close Price Offer / 1st Trading Day /
Date Offer Price
Midpoint Price Offer Price
9/19/2019 $10,883 $648 19.00 - 22.00 $27.00 $33.28 31.7% 39.1% 23.3%
9/19/2019 $1,561 $188 14.00 - 16.00 $15.00 $16.96 0.0% 34.1% 13.1%
9/13/2019 $5,280 $525 12.00 - 14.00 $15.00 $16.03 15.4% 20.0% 6.9%
8/1/2019 $6,572 $570 13.00 -15.00 $16.00 $18.90 14.3% 49.1% 18.1%
7/19/2019 $4,565 $326 16.00 - 18.00 $21.00 $28.49 23.5% 76.4% 35.7%
6/20/2019 $19,484 $4,560 Direct Listing $38.50 $27.65 NA (100.0%) (28.2%)
6/12/2019 $11,408 $612 28.00 - 30.00 $34.00 $47.80 17.2% 70.6% 40.6%
5/17/2019 $2,176 $180 14.00 - 16.00 $16.00 $20.52 6.7% 49.9% 28.3%
4/18/2019 $15,896 $751 33.00 - 35.00 $36.00 $65.49 5.9% 72.2% 81.9%
4/11/2019 $620 $108 12.00 - 14.00 $14.00 $17.16 7.7% 36.4% 22.6%
4/11/2019 $2,816 $218 21.00 - 23.00 $24.00 $22.52 9.1% 59.4% (6.2%)
10/19/2018 $4,538 $375 15.00 - 16.00 $15.00 $19.81 (3.2%) 0.2% 32.1%
10/12/2018 $2,956 $264 15.00 - 17.00 $17.00 $49.28 6.3% 42.9% 189.9%
10/5/2018 $4,864 $252 33.00 - 35.00 $36.00 $73.94 5.9% 94.4% 105.4%
10/3/2018 $2,204 $187 12.00 - 1 4.00 $15.00 $14.72 15.4% 41.2% (1.9%)
9/26/2018 $2,107 $180 9.00 - 11.00 $12.00 $18.42 20.0% 43.7% 53.5%
7/27/2018 $1,336 $127 17.00 - 19.00 $20.00 $41.07 11.1% 26.0% 105.4%
7/27/2018 $1,438 $115 10.00 - 12.00 $12.00 $10.53 9.1% 9.3% (12.3%)
Mean 11.7% 38.6% 43.0%
Median 11.1% 42.1% 30.2%
Notes:
Sources: Capital IQ and Company filings. Market data as of 9/30/19. IPO pricings include public registrations only. 17
(1) First Trading Day listed as Offer Date.APPENDIX
18PUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
Platform
Microsoft Corporation $139.03 $1,060,633 $136,609 $85,570 $1,009,594 8.5x 7.6x 6.8x 20.2x 17.5x 15.7x 16% 12% 11% 65% 66% 66% 42% 44% 44%
Oracle Corporation $55.03 $180,637 $35,704 $56,776 $202,295 5.1x 5.1x 5.0x 10.9x 10.9x 10.8x 2% 0% 2% 79% 80% 80% 47% 47% 46%
Platform
Cisco Systems $49.41 $209,688 $33,413 $24,667 $200,942 4.0x 3.8x 3.7x 11.1x 10.7x 10.4x 6% 3% 3% 62% 62% 62% 36% 36% 36%
International Business Machines Corporation
$145.42 $128,789 $10,820 $71,494 $189,602 2.4x 2.4x 2.3x 10.2x 10.6x 9.8x 1% (0%) 4% 47% 48% 49% 24% 23% 24%
SAP SE $117.63 $140,411 $6,382 $3,043 $137,147 4.8x 4.6x 4.3x 14.0x 12.6x 11.8x 0% 6% 8% 70% 72% 72% 35% 37% 36%
Dell Technologies Inc. $51.86 $37,580 $9,193 $53,568 $87,499 1.0x 0.9x 0.9x 8.5x 7.6x 7.1x 15% 3% 3% 28% 33% 33% 11% 12% 13%
Hewlett Packard Enterprise Company $15.17 $19,806 $3,693 $12,692 $28,852 1.0x 1.0x 1.0x 5.3x 5.5x 5.6x 4% (4%) 2% 31% 31% 31% 18% 18% 18%
Mean 3.8x 3.6x 3.4x 11.5x 10.8x 10.2x 6% 3% 5% 55% 56% 56% 30% 31% 31%
Median 4.0x 3.8x 3.7x 10.9x 10.7x 10.4x 4% 3% 3% 62% 62% 62% 35% 36% 36%
Infrastructure
Zoom Video Communications $76.20 $20,845 $755 $53 $20,143 NM 34.0x 24.2x NM NM NM 118% 79% 41% 82% 81% 81% 4% 13% 10%
Akamai Technologies $91.38 $14,804 $1,570 $2,207 $15,441 5.7x 5.4x 5.0x 14.1x 13.1x 11.9x 9% 5% 7% 65% 69% 68% 40% 41% 42%
Citrix Systems $96.52 $12,635 $549 $964 $13,049 4.4x 4.4x 4.2x 11.1x 12.7x 11.9x 5% 1% 5% 87% 87% 87% 40% 34% 35%
RingCentral $125.66 $10,426 $568 $415 $10,273 16.8x 11.7x 9.5x NM NM NM 32% 43% 23% 84% 77% 77% 13% 13% 13%
Amdocs Limited $66.11 $8,984 $458 $0 $8,568 2.1x 2.1x 2.0x 10.8x 10.0x 9.7x 3% 3% 4% 35% 35% 35% 20% 21% 21%
Juniper Networks $24.75 $8,559 $2,246 $1,851 $8,164 1.8x 1.8x 1.8x 7.8x 8.4x 7.9x (8%) (4%) 3% 59% 60% 60% 23% 22% 22%
Infrastructure
F5 Networks $140.42 $8,477 $972 $0 $7,504 3.4x 3.3x 3.2x 8.8x 9.1x 8.5x 4% 3% 4% 83% 84% 84% 39% 36% 37%
Verint Systems Inc. $42.78 $2,856 $415 $913 $3,369 2.7x 2.5x 2.3x 11.4x 10.3x 8.9x 8% 12% 8% 66% 68% 69% 24% 24% 25%
Five9 $53.74 $3,259 $307 $222 $3,174 12.3x 10.1x 8.6x NM NM 46.2x 29% 22% 17% 60% 64% 64% 18% 17% 19%
Presidio $16.90 $1,408 $31 $947 $2,324 0.8x 0.8x 0.7x 10.2x 10.0x 9.1x 9% 2% 2% 20% 21% 21% 8% 8% 8%
Fastly $24.00 $2,243 $246 $51 $2,048 14.2x 10.6x 8.2x NM NM NM 38% 34% 30% 55% 57% 60% (8%) (12%) (9%)
Everbridge $61.71 $2,071 $239 $114 $1,946 13.2x 9.8x 7.7x NM NM NM 41% 35% 27% 68% 71% 72% (2%) 2% 5%
Software Aktiengesellschaft $27.49 $2,034 $574 $371 $1,831 1.8x 1.9x 1.9x 5.9x 6.8x 6.9x (6%) (3%) 1% 78% 77% 78% 32% 28% 27%
Extreme Networks $7.28 $884 $161 $449 $1,172 1.1x 1.1x 1.0x 10.2x NA NA 34% 0% 10% 56% 56% 56% 11% 0% 0%
Radware Ltd. $24.26 $1,138 $254 $21 $904 3.9x 3.6x 3.2x 29.7x 23.8x 18.5x 11% 8% 10% 82% 83% 83% 13% 15% 18%
A10 Networks $6.94 $533 $123 $2 $413 1.8x 2.0x 1.9x NM NA NA (1%) (12%) 4% 78% 78% 79% 3% 0% 0%
Limelight Networks $3.03 $353 $18 $15 $350 1.8x 1.8x 1.6x 10.8x 19.5x 11.6x 6% 1% 12% 56% 50% 52% 17% 9% 14%
Mean 5.5x 6.3x 5.1x 11.9x 12.4x 13.7x 20% 13% 12% 65% 66% 66% 17% 16% 17%
Median 3.1x 3.3x 3.2x 10.8x 10.2x 9.7x 9% 3% 8% 66% 69% 69% 17% 15% 18%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 19
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
Security
VeriSign $188.63 $22,147 $1,230 $1,797 $22,714 18.7x 18.4x 17.5x 26.2x 25.9x 24.5x 4% 2% 5% 84% 85% 85% 71% 71% 72%
Palo Alto Networks $203.83 $19,769 $2,803 $1,430 $18,396 7.1x 5.8x 4.9x 26.0x 24.3x 20.4x 30% 21% 20% 72% 72% 72% 27% 24% 24%
Symantec Corporation $23.63 $14,604 $1,694 $4,666 $17,576 3.7x 3.6x 3.6x 8.0x 8.3x 7.9x 0% 2% 2% 78% 78% 78% 46% 44% 45%
Splunk Inc. $117.86 $18,191 $2,576 $1,906 $17,521 9.7x 7.6x 6.2x NM 45.7x 33.1x 38% 28% 22% 81% 85% 85% 16% 17% 19%
Citrix Systems $96.52 $12,635 $549 $964 $13,049 4.4x 4.4x 4.2x 11.1x 12.7x 11.9x 5% 1% 5% 87% 87% 87% 40% 34% 35%
CrowdStrike Holdings $58.31 $13,175 $827 $0 $12,348 49.4x 27.4x 19.2x NA NM NM 110% 80% 43% 65% 71% 71% 0% (15%) (6%)
Okta $98.46 $11,495 $557 $439 $11,377 28.5x 20.2x 15.5x NM NM NM 56% 41% 31% 72% 76% 77% (9%) (9%) (2%)
Fortinet $76.76 $13,125 $1,830 $38 $11,333 6.3x 5.4x 4.7x 24.7x 20.3x 17.5x 20% 17% 14% 75% 76% 76% 25% 26% 27%
F5 Networks $140.42 $8,477 $972 $0 $7,504 3.4x 3.3x 3.2x 8.8x 9.1x 8.5x 4% 3% 4% 83% 84% 84% 39% 36% 37%
Proofpoint $129.05 $7,253 $1,052 $799 $7,000 9.8x 8.0x 6.6x NM 48.3x 36.2x 38% 23% 20% 72% 79% 79% 16% 16% 18%
Zscaler $47.26 $6,024 $365 $0 $5,659 23.3x 16.1x 12.4x NM NM NM 57% 45% 29% 80% 80% 80% 6% 9% 9%
Cloudflare $18.57 $5,447 $127 $11 $5,331 27.7x 19.4x 14.7x NA NM NM 43% 42% 33% 77% 77% 76% 0% (15%) (5%)
Trend Micro Incorporated $47.55 $6,610 $1,486 $0 $5,126 3.5x 3.4x 3.2x 10.9x 10.4x 9.9x 11% 5% 5% 80% 80% 80% 32% 32% 32%
CyberArk Software Ltd. $99.82 $3,767 $499 $0 $3,269 9.5x 7.7x 6.5x 32.5x 27.8x 23.3x 31% 23% 19% 86% 88% 88% 29% 28% 28%
Security
FireEye $13.34 $2,820 $997 $1,090 $2,913 3.5x 3.3x 3.1x 26.4x 28.2x 20.1x 7% 5% 8% 67% 73% 73% 13% 12% 15%
Qualys $75.57 $2,965 $298 $38 $2,705 9.7x 8.4x 7.3x 24.1x 21.0x 18.1x 21% 15% 15% 76% 79% 79% 40% 40% 40%
Mimecast Limited $35.67 $2,210 $197 $248 $2,261 7.0x 5.7x 4.7x 49.7x 34.1x 25.3x 33% 24% 21% 73% 74% 74% 14% 17% 18%
Rapid7 $45.39 $2,217 $246 $258 $2,229 9.1x 7.0x 5.7x NM NM NM 21% 31% 23% 71% 75% 76% (6%) 3% 8%
Tenable Holdings $22.38 $2,192 $297 $42 $1,937 7.2x 5.6x 4.5x NM NM NM 42% 30% 24% 84% 84% 81% (16%) (12%) (8%)
Varonis Systems $59.78 $1,822 $131 $59 $1,750 6.5x 6.8x 6.4x NM NM NM 25% (5%) 6% 90% 88% 89% 5% (8%) (3%)
Forescout Technologies $37.92 $1,752 $105 $42 $1,689 5.7x 4.5x 3.8x NM NM NM 33% 25% 21% 77% 80% 80% (3%) (1%) 4%
SailPoint Technologies Holdings $18.69 $1,666 $93 $42 $1,615 6.5x 5.8x 5.0x 40.9x NM 43.3x 34% 12% 16% 78% 80% 80% 16% 8% 11%
Ping Identity Holding Corp. $17.25 $1,372 $83 $243 $1,531 7.6x 6.6x 5.9x NA 38.5x NM 17% 15% 12% 85% 83% 81% 0% 17% 10%
SecureWorks Corp. $12.93 $1,050 $118 $31 $963 1.9x 1.8x 1.7x NM NM NM 11% 5% 7% 53% 56% 56% 2% 1% 2%
MobileIron $6.55 $719 $101 $17 $635 3.3x 3.0x 2.7x NM NM NM 7% 8% 11% 82% 82% 82% (0%) (0%) 5%
Zix Corporation $7.24 $389 $10 $186 $565 8.0x 3.3x 2.7x 28.0x 13.9x 10.7x 7% 15% 20% 78% 58% 59% 29% 24% 26%
OneSpan Inc. $14.50 $579 $81 $11 $509 2.4x 2.2x 2.0x 23.6x 23.5x 14.8x 10% 10% 9% 69% 68% 71% 10% 9% 14%
F-Secure Oyj $3.04 $480 $27 $49 $502 2.3x 2.1x 1.9x 25.2x 14.9x 14.6x 7% 11% 9% 79% 76% 78% 9% 14% 13%
Tufin Software Technologies Ltd. $16.46 $560 $127 $22 $455 5.3x 4.2x 3.4x NM NM NM 32% 28% 24% 84% 83% 83% 3% (6%) (4%)
A10 Networks $6.94 $533 $123 $2 $413 1.8x 2.0x 1.9x NM NA NA (1%) (12%) 4% 78% 78% 79% 3% 0% 0%
Absolute Software Corporation $5.75 $239 $36 $0 $204 2.1x 2.0x 1.9x 15.2x 9.8x 9.8x 4% 6% 7% 86% 86% 86% 14% 20% 19%
Mean 9.5x 7.3x 6.0x 23.8x 23.2x 19.4x 24% 18% 16% 78% 78% 78% 15% 14% 16%
Median 6.5x 5.6x 4.7x 25.0x 22.3x 17.8x 21% 15% 15% 78% 79% 79% 13% 14% 14%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 20
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
Content & Storage Management
Adobe Inc. $276.25 $133,727 $3,651 $4,137 $134,213 14.9x 12.0x 10.2x 33.8x 26.6x 22.2x 24% 24% 18% 87% 87% 88% 44% 45% 46%
Content & Storage Management
Open Text Corporation $40.81 $10,986 $941 $2,615 $12,662 4.5x 4.3x 4.2x 11.9x 11.4x 10.7x 8% 3% 3% 74% 73% 73% 37% 38% 39%
DocuSign $61.92 $10,895 $750 $620 $10,764 15.4x 11.3x 9.1x NM NM NM 35% 36% 25% 73% 79% 79% 8% 7% 10%
NetApp $52.51 $12,493 $3,540 $1,726 $10,679 1.7x 1.9x 1.8x 6.8x 8.1x 7.2x 8% (8%) 3% 64% 63% 63% 25% 23% 25%
Dropbox $20.17 $8,338 $973 $868 $8,233 5.9x 5.0x 4.3x 24.4x 22.0x 17.5x 26% 19% 15% 72% 76% 76% 24% 23% 25%
Nutanix $26.25 $5,044 $909 $459 $4,594 3.7x 3.7x 2.9x NM NM NM 22% (1%) 27% 74% 70% 70% (5%) NM NM
Pure Storage $16.94 $4,340 $1,182 $584 $3,741 2.8x 2.2x 1.9x 30.8x 27.4x 16.7x 33% 23% 21% 66% 68% 67% 9% 8% 11%
Box $16.56 $2,447 $201 $399 $2,644 4.3x 3.8x 3.4x NM 49.5x 26.9x 20% 14% 13% 71% 71% 72% 5% 8% 13%
Mimecast Limited $35.67 $2,210 $197 $248 $2,261 7.0x 5.7x 4.7x 49.7x 34.1x 25.3x 33% 24% 21% 73% 74% 74% 14% 17% 18%
Varonis Systems $59.78 $1,822 $131 $59 $1,750 6.5x 6.8x 6.4x NM NM NM 25% (5%) 6% 90% 88% 89% 5% (8%) (3%)
Commvault Systems $44.71 $2,020 $475 $18 $1,563 2.2x 2.3x 2.3x 13.5x 16.9x 14.8x 5% (5%) 2% 84% 84% 84% 16% 14% 15%
Carbonite $15.49 $537 $83 $653 $1,107 3.7x 2.4x 2.1x 10.6x 8.2x 7.2x 24% 56% 15% 76% 81% 81% 35% 29% 29%
Brightcove Inc. $10.48 $407 $23 $16 $400 2.4x 2.2x 2.0x NM 41.2x 26.1x 6% 12% 11% 60% 60% 60% 1% 5% 8%
Mean 5.8x 4.9x 4.2x 22.7x 24.5x 17.4x 21% 15% 14% 74% 75% 75% 17% 17% 20%
Median 4.3x 3.8x 3.4x 19.0x 24.3x 17.1x 24% 14% 15% 73% 74% 74% 14% 15% 17%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 21
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
Business Intelligence & Analytics
Business Intelligence & Analytics
NICE Ltd. $146.88 $9,126 $509 $594 $9,211 6.4x 5.8x 5.4x 21.0x 18.7x 17.0x 8% 9% 8% 66% 70% 70% 30% 31% 32%
Alteryx $107.43 $6,747 $333 $212 $6,626 26.1x 17.7x 13.3x NM NM NM 93% 47% 34% 91% 91% 91% (0%) 12% 15%
Elastic N.V. $82.34 $6,610 $316 $33 $6,327 26.3x 17.0x 12.2x NM NM NM NA 55% 39% 72% 71% 71% (12%) (18%) (18%)
Teradata Corporation $31.00 $3,537 $635 $661 $3,563 1.6x 1.8x 1.8x 10.5x 9.1x 7.8x 0% (9%) 3% 48% 54% 58% 16% 20% 23%
Inovalon Holdings $16.39 $2,528 $134 $1,013 $3,407 6.5x 5.3x 4.9x 22.4x 16.5x 14.9x 17% 21% 9% 73% 74% 74% 29% 32% 33%
Medallia $27.43 $3,500 $417 $0 $3,082 9.8x 8.0x 6.6x NA NM NM 20% 23% 21% 63% 66% 68% 0% 1% 4%
Cloudera $8.86 $2,478 $420 $227 $2,285 4.8x 3.0x 2.7x NM NM 46.1x 29% 60% 11% 72% 76% 76% (12%) 2% 6%
MicroStrategy Incorporated $148.37 $1,523 $578 $105 $1,050 2.1x 2.1x 2.0x 47.1x 25.3x 21.1x (1%) (2%) 7% 80% 80% 80% 4% 8% 10%
Talend S.A. $33.98 $1,041 $32 $31 $1,040 5.1x 4.2x 3.5x NM NM NM 38% 21% 21% 76% 76% 77% (7%) (8%) (2%)
Domo $15.98 $440 $134 $99 $405 2.8x 2.4x 2.1x NM NM NM 31% 18% 13% 65% 67% 69% NM NM NM
Veritone $3.57 $79 $45 $0 $34 1.3x 0.7x 0.5x NM NM NM 88% 87% 26% 76% 66% 67% NM NM NM
Mean 8.4x 6.2x 5.0x 25.2x 17.4x 21.4x 32% 30% 17% 71% 72% 73% 5% 9% 11%
Median 5.1x 4.2x 3.5x 21.7x 17.6x 17.0x 24% 21% 13% 72% 71% 71% 0% 8% 10%
Technical Applications
Technical Applications
Dassault Systèmes SE $142.57 $37,022 $6,386 $3,969 $34,669 8.7x 8.0x 7.2x 26.0x 22.4x 19.9x 3% 9% 11% 85% 85% 86% 34% 36% 36%
Autodesk $147.70 $32,433 $991 $2,156 $33,598 13.8x 10.3x 8.5x NM 39.0x 24.7x 29% 34% 22% 94% 91% 92% 15% 26% 34%
Synopsys $137.25 $20,627 $687 $142 $20,088 6.3x 5.9x 5.5x 25.5x 20.9x 19.2x 12% 7% 8% 79% 79% 79% 25% 28% 28%
Cadence Design Systems $66.08 $18,542 $655 $464 $18,350 8.6x 7.9x 7.4x 24.0x 22.1x 21.3x 10% 9% 7% 88% 90% 90% 36% 36% 35%
ANSYS $221.36 $18,617 $632 $108 $18,092 14.0x 12.1x 11.0x 28.4x 26.6x 23.7x 18% 15% 10% 90% 91% 91% 49% 46% 46%
Aspen Technology $123.08 $8,400 $58 $355 $8,697 16.7x 14.4x 14.0x 36.8x 27.4x 27.9x 10% 16% 3% 90% 90% 90% 45% 53% 50%
PTC Inc. $68.18 $7,853 $327 $669 $8,195 6.5x 6.2x 5.4x 22.8x 19.4x NA 7% 4% 15% 75% 74% 74% 28% 32% 0%
Altair Engineering Inc. $34.62 $2,480 $252 $204 $2,432 6.2x 5.2x 4.6x 48.5x 40.6x 31.4x 19% 20% 14% 74% 73% 74% 13% 13% 15%
Mean 10.1x 8.8x 7.9x 30.3x 27.3x 24.0x 14% 14% 11% 84% 84% 84% 31% 34% 31%
Median 8.6x 7.9x 7.3x 26.0x 24.5x 23.7x 11% 12% 11% 87% 88% 88% 31% 34% 34%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 22
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
Financial Applications
Fidelity National Information Services $132.76 $81,441 $9,756 $18,668 $90,360 10.7x 8.8x 6.7x 28.8x 20.9x 15.1x (3%) 22% 31% 34% 38% 41% 37% 42% 44%
Fiserv $103.59 $70,409 $8,441 $14,157 $76,125 13.1x 7.3x 4.7x 34.7x 19.4x 12.6x 2% 78% 56% 47% 65% 55% 38% 38% 37%
Intuit Inc. $265.94 $69,164 $2,740 $436 $66,860 10.7x 9.5x 8.5x 27.1x 26.7x 23.4x 11% 13% 11% 83% 84% 84% 40% 35% 36%
SS&C Technologies Holdings $51.57 $13,086 $131 $8,242 $21,197 6.2x 4.6x 4.4x 16.5x 11.8x 11.1x 104% 35% 4% 41% 57% 58% 37% 39% 40%
MSCI Inc. $217.75 $18,443 $771 $2,765 $20,437 14.3x 13.2x 12.2x 26.5x 24.5x 22.2x 13% 8% 9% 80% 80% 80% 54% 54% 55%
Temenos AG $167.38 $11,846 $77 $1,218 $12,987 15.4x 12.9x 10.5x 41.6x 32.7x 27.3x 14% 20% 23% 73% 81% 81% 37% 39% 38%
Jack Henry & Associates $145.97 $11,232 $94 $0 $11,139 7.0x 6.9x 6.5x 20.1x 21.5x 19.9x 10% 1% 7% 43% 42% 42% 35% 32% 33%
Financial Applications
Fair Isaac Corporation $303.52 $8,771 $79 $823 $9,514 9.0x 8.1x 7.5x 35.5x 27.7x 25.4x 12% 10% 9% 71% 70% 70% 25% 29% 29%
Coupa Software Incorporated $129.57 $8,143 $808 $755 $8,089 31.1x 21.7x 16.9x NM NM NM 39% 43% 29% 68% 72% 73% 9% 10% 14%
Xero Limited $42.01 $5,922 $312 $300 $5,910 17.6x 13.8x 10.9x NM NM 48.5x 28% 27% 27% 85% 84% 84% 15% 19% 22%
Avalara $67.29 $5,080 $442 $0 $4,638 17.0x 12.7x 10.2x NM NM NM 28% 34% 25% 71% 72% 73% (14%) (0%) 5%
Q2 Holdings $78.87 $3,757 $618 $447 $3,586 14.9x 11.4x 9.3x NM NM NM 24% 30% 22% 49% 52% 54% 8% 6% 10%
Envestnet $56.70 $2,959 $78 $705 $3,584 4.4x 4.0x 3.5x 22.8x 18.7x 15.2x 19% 10% 15% 29% 69% 70% 19% 21% 23%
SimCorp A/S $87.83 $3,478 $54 $54 $3,478 7.9x 7.1x 6.5x 27.8x 23.0x 21.2x 6% 13% 9% 61% 62% 62% 29% 31% 31%
BlackLine $47.81 $2,645 $145 $17 $2,521 11.1x 8.9x 7.4x NM NM NM 30% 24% 21% 78% 82% 81% 6% 8% 10%
Ebix $42.10 $1,284 $107 $801 $2,029 4.1x 3.4x 2.9x 12.1x 9.9x 9.4x 37% 19% 20% 66% 67% 67% 34% 35% 30%
Asseco Poland S.A. $12.74 $1,057 $508 $734 $1,835 0.7x 0.7x 0.7x 5.5x 4.8x 4.7x 11% 3% 3% 21% 21% 21% 13% 15% 15%
Bottomline Technologies (de) $39.35 $1,730 $100 $111 $1,742 4.3x 4.1x 3.7x 17.5x 17.8x 15.6x 13% 5% 9% 57% 56% 56% 24% 23% 24%
Zuora $15.05 $1,690 $175 $13 $1,528 6.5x 5.5x 4.7x NM NM NM 40% 18% 18% 50% 56% 59% (17%) (12%) (7%)
IRESS Limited $7.81 $1,348 $20 $199 $1,527 4.7x 4.5x 4.1x 18.4x 17.3x 15.5x (2%) 4% 10% 34% 27% 28% 25% 26% 26%
Model N $27.76 $908 $59 $49 $899 6.0x 6.3x 5.7x NM NM NM 6% (6%) 10% 57% 55% 55% 8% 9% 10%
Basware Oyj $23.99 $345 $33 $82 $394 2.4x 2.5x 2.3x NM NM 21.2x (10%) (2%) 8% 51% 51% 57% (3%) (0%) 11%
Mean 10.0x 8.1x 6.8x 23.9x 19.8x 19.3x 20% 19% 17% 57% 61% 61% 21% 23% 24%
Median 8.4x 7.2x 6.5x 24.6x 20.1x 17.8x 13% 15% 13% 57% 64% 61% 25% 24% 25%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 23
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
Vertical Applications
Danaher Corporation $144.43 $103,741 $14,252 $18,668 $108,850 5.5x 5.2x 4.4x 23.1x 21.8x 17.2x 9% 4% 18% 56% 56% 57% 24% 24% 26%
Roper Technologies $356.60 $37,087 $323 $6,198 $42,962 8.3x 7.9x 7.3x 23.8x 22.2x 20.3x 13% 5% 7% 63% 64% 63% 35% 35% 36%
Cerner Corporation $68.17 $21,412 $633 $1,172 $21,951 4.1x 3.8x 3.6x 14.0x 13.2x 11.6x 4% 7% 6% 83% 82% 82% 29% 29% 31%
Veeva Systems Inc. $152.69 $22,596 $1,432 $22 $21,186 24.6x 19.9x 16.7x NM NM 42.8x 25% 24% 19% 72% 75% 76% 37% 40% 39%
Vertical Applications
Tyler Technologies $262.50 $10,128 $194 $25 $9,958 10.6x 9.1x 8.2x 36.3x 32.7x 28.4x 11% 17% 11% 47% 52% 51% 29% 28% 29%
Guidewire Software $105.38 $8,702 $1,134 $317 $7,885 10.7x 11.1x 9.6x 43.2x NM NM 29% (4%) 15% 56% 56% 56% 25% 20% 18%
RealPage $62.86 $5,811 $262 $724 $6,273 7.2x 6.3x 5.7x 27.1x 22.3x 19.2x 30% 14% 11% 62% 61% 62% 27% 28% 30%
CoreLogic $46.27 $3,679 $89 $1,866 $5,455 3.1x 3.1x 3.2x 11.1x 11.3x 10.7x (3%) (3%) (0%) 48% 50% 52% 28% 28% 30%
Blackbaud $90.34 $4,329 $29 $603 $4,903 5.8x 5.5x 5.2x 24.2x 27.0x 26.0x 8% 6% 5% 55% 59% 60% 24% 20% 20%
AppFolio $95.14 $3,241 $40 $72 $3,273 17.2x 12.9x 10.2x NM NM NM 32% 34% 26% 62% 60% 61% 21% 13% 17%
Allscripts Healthcare Solutions $10.98 $1,830 $139 $963 $2,654 1.5x 1.5x 1.4x 6.6x 8.8x 8.0x 17% 2% 4% 47% 43% 44% 23% 17% 18%
2U $16.28 $1,031 $219 $307 $1,120 2.7x 2.0x 1.5x NM NM NM 44% 38% 28% 78% 73% 73% 4% (4%) (0%)
HealthStream $25.89 $838 $173 $34 $699 3.0x 2.7x 2.7x 16.8x 16.4x 17.4x 8% 10% (0%) 59% 58% 59% 18% 17% 16%
Castlight Health $1.41 $205 $56 $18 $167 1.1x 1.2x 1.1x NM NM NM 18% (9%) 3% 62% 64% 66% (4%) (5%) 2%
Boxlight Corporation $1.84 $20 $1 $7 $26 0.7x 0.6x 0.5x NM NM NM 47% 16% 25% 23% 30% 30% (10%) (3%) (0%)
Mean 7.1x 6.2x 5.4x 22.6x 19.5x 20.2x 19% 11% 12% 58% 59% 60% 21% 19% 21%
Median 5.5x 5.2x 4.4x 23.4x 21.8x 18.3x 17% 7% 11% 59% 59% 60% 24% 20% 20%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 24
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
ERP & General Business
salesforce.com $148.44 $129,937 $6,042 $6,432 $130,327 9.8x 7.7x 6.2x 40.4x 29.0x 24.3x 26% 27% 24% 74% 78% 78% 24% 27% 26%
Workday $169.96 $38,751 $1,927 $1,543 $38,367 13.6x 10.7x 8.7x NM NM 41.1x 32% 27% 23% 70% 75% 76% 17% 20% 21%
Shopify Inc. $311.66 $36,119 $2,667 $111 $33,563 31.3x 21.8x 16.3x NM NM NM 59% 43% 34% 56% 56% 55% 4% 4% 5%
Constellation Software Inc. $999.48 $21,180 $219 $563 $21,524 7.0x 6.2x 5.3x 27.5x 22.9x 19.3x 23% 14% 16% 37% 67% 67% 26% 27% 27%
Slack Technologies $23.73 $12,911 $785 $0 $12,137 30.3x 19.9x 14.3x NM NM NM 82% 52% 39% 87% 86% 87% NM NM (14%)
Paycom Software $209.49 $12,079 $108 $33 $12,004 21.2x 16.5x 13.3x 49.8x 39.1x 31.8x 31% 29% 23% 87% 85% 85% 43% 42% 42%
The Sage Group plc $8.50 $9,261 $457 $1,007 $9,811 4.1x 4.1x 3.8x NA 16.2x 15.2x 1% 0% 7% 93% 93% 93% 0% 25% 25%
Zendesk $72.88 $8,088 $435 $586 $8,240 13.8x 10.2x 7.8x NM NM NM 39% 35% 31% 70% 74% 76% 7% 7% 9%
Ceridian HCM Holding Inc. $49.37 $7,092 $238 $716 $7,570 10.1x 9.3x 8.3x 48.2x 40.7x 34.2x 11% 9% 13% 48% 49% 51% 21% 23% 24%
Anaplan $47.00 $6,196 $356 $53 $5,893 24.5x 17.2x 13.1x NM NM NM 43% 42% 31% 72% 75% 77% NM (15%) (9%)
j2 Global $90.82 $4,443 $155 $1,191 $5,478 4.5x 4.1x 3.8x 11.2x 10.0x 9.3x 8% 11% 6% 83% 83% 83% 41% 41% 41%
Manhattan Associates $80.67 $5,155 $114 $40 $5,082 9.1x 8.5x 8.1x 31.3x 37.8x 34.7x (6%) 7% 5% 57% 54% 55% 29% 22% 23%
ERP & General Business
Paylocity Holding Corporation $97.58 $5,222 $130 $76 $5,168 12.8x 10.1x 8.4x NM 35.4x 29.1x 23% 27% 20% 66% 64% 64% 25% 28% 29%
Smartsheet Inc. $36.03 $4,200 $561 $58 $3,697 20.8x 13.8x 10.0x NM NM NM 60% 50% 38% 81% 81% 80% (18%) (19%) (15%)
The Descartes Systems Group Inc $40.40 $3,398 $27 $36 $3,407 12.4x 10.4x 9.4x 36.3x 27.9x 24.8x 16% 19% 11% 73% 74% 75% 34% 37% 38%
Cornerstone OnDemand $54.82 $3,327 $403 $377 $3,301 6.1x 5.8x 5.1x 33.5x 26.9x 20.2x 12% 6% 14% 73% 76% 76% 18% 22% 25%
PROS Holdings $59.60 $2,508 $319 $182 $2,371 12.0x 9.6x 8.1x NM NM NM 17% 26% 18% 61% 65% 65% (10%) (4%) (1%)
Workiva Inc. $43.83 $2,020 $138 $41 $1,923 7.9x 6.6x 5.7x NM NM NM 18% 19% 16% 73% 72% 73% (4%) (3%) (2%)
Pluralsight $16.80 $1,700 $449 $502 $1,821 7.8x 5.8x 4.5x NM NM NM 39% 36% 30% 73% 77% 78% (20%) (17%) (9%)
Technology One Limited $4.84 $1,539 $48 $0 $1,491 7.0x 7.6x 6.5x NA 27.6x 22.5x (2%) (7%) 16% 41% 41% 41% 0% 27% 29%
SPS Commerce $47.07 $1,640 $201 $20 $1,458 5.9x 5.3x 4.8x 28.4x 21.5x 18.5x 13% 12% 10% 67% 68% 69% 21% 24% 26%
Enghouse Systems Limited $27.57 $1,508 $108 $1 $1,401 5.4x 4.6x 4.1x 17.2x 15.9x 13.8x (3%) 17% 11% 70% 69% 69% 31% 29% 30%
Instructure $38.74 $1,437 $127 $49 $1,359 6.5x 5.2x 4.4x NM NM NM 30% 24% 20% 70% 71% 72% (6%) (5%) (2%)
Upland Software $34.86 $880 $108 $312 $1,084 7.2x 5.1x 4.6x 20.4x 13.7x 12.1x 53% 43% 11% 68% 70% 70% 35% 37% 38%
Opera Limited $10.05 $1,195 $151 $17 $1,061 6.2x 3.8x 2.9x 16.1x 28.1x 12.6x 34% 61% 30% 68% 79% 80% 38% 14% 23%
Benefitfocus $23.81 $779 $138 $276 $917 3.5x 3.1x 2.7x NM NM 34.5x 9% 15% 16% 50% 54% 56% 4% 4% 8%
QAD Inc. $46.18 $940 $143 $32 $829 2.5x 2.6x 2.5x 32.3x NM 35.7x 9% (5%) 7% 53% 54% 56% 8% 4% 7%
American Software $15.02 $471 $86 $3 $388 3.5x 3.5x 3.4x 24.5x 26.6x 21.7x 2% (2%) 5% 53% 54% 54% 14% 13% 16%
Synchronoss Technologies $5.40 $220 $78 $120 $274 0.8x 0.8x 0.7x 19.5x 8.1x 6.4x (19%) 6% 8% 51% 56% 56% 4% 10% 11%
ServiceSource International $0.88 $83 $23 $44 $104 0.4x 0.5x 0.5x 7.3x NM 29.6x (0%) (12%) (1%) 31% 30% 30% 6% (0%) 2%
Park City Group $5.77 $114 $19 $6 $102 4.4x 5.0x 4.2x 16.9x 15.9x 13.6x 13% (13%) 21% 71% 72% 72% 26% 32% 31%
Mean 10.1x 7.9x 6.5x 27.1x 24.6x 23.0x 22% 20% 18% 65% 68% 68% 14% 15% 16%
Median 7.2x 6.2x 5.3x 27.5x 26.8x 22.1x 17% 19% 16% 70% 71% 72% 17% 21% 23%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 25
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
Development & Operations Management
VMware $150.06 $61,319 $2,948 $4,981 $63,352 7.1x 6.3x 5.7x 17.3x 16.3x 15.0x 14% 12% 10% 86% 87% 88% 41% 39% 38%
ServiceNow $253.85 $47,866 $1,471 $1,124 $47,519 18.2x 13.7x 10.7x NM 49.6x 37.0x 36% 32% 29% 76% 81% 82% 26% 28% 29%
Atlassian Corporation Plc $125.44 $30,628 $1,775 $1,145 $29,998 31.3x 21.8x 17.2x NM NM NM 38% 44% 27% 88% 85% 85% 31% 25% 25%
Twilio Inc. $109.96 $14,942 $1,882 $624 $13,684 21.1x 12.2x 9.2x NM NM NM 63% 72% 33% 54% 58% 57% 5% 7% 8%
Development & Operations Management
Datadog $33.91 $9,950 $52 $48 $9,946 NM 30.1x 21.2x NA NM NM 97% 67% 42% 77% 75% 76% 0% (9%) (7%)
SolarWinds Corporation $18.45 $5,665 $221 $1,916 $7,360 8.8x 7.8x 7.0x 18.1x 16.4x 14.4x 14% 13% 12% 92% 92% 92% 49% 47% 48%
Dynatrace $18.67 $5,237 $212 $570 $5,595 NA 11.2x 9.1x NA NA 36.7x NA NA 22% NM 78% 78% NA 0% 25%
MongoDB $120.48 $6,785 $436 $302 $6,651 24.9x 16.9x 13.0x NM NM NM 61% 48% 29% 72% 72% 72% (18%) (13%) (7%)
Micro Focus International plc $13.98 $4,642 $2,666 $4,674 $6,650 2.1x 2.0x 2.1x 4.7x 4.9x 4.9x 21% 10% (5%) 75% 77% 77% 46% 40% 42%
LogMeIn $70.96 $3,464 $119 $309 $3,654 3.0x 2.9x 2.8x 8.2x 8.9x 9.2x 22% 5% 5% 77% 82% 82% 37% 33% 30%
Pivotal Software $14.92 $4,106 $808 $143 $3,442 5.2x 4.5x 3.9x NM NM NM 29% 17% 16% 63% 71% 73% (8%) (2%) 5%
New Relic $61.45 $3,589 $769 $483 $3,305 7.4x 5.8x 4.9x 43.8x 40.3x 32.3x 35% 27% 19% 84% 83% 83% 17% 14% 15%
Appian Corporation $47.50 $3,169 $81 $4 $3,091 13.6x 11.8x 10.1x NM NM NM 28% 15% 17% 63% 65% 68% (13%) (10%) (5%)
NetScout Systems $23.06 $1,749 $300 $529 $1,978 2.2x 2.2x 2.2x NA NA NA (15%) (3%) 4% 71% 72% 72% 0% 0% 0%
Progress Software Corporation $38.06 $1,705 $145 $296 $1,856 4.7x 4.3x 4.2x 9.4x 11.0x 10.1x (0%) 7% 2% 89% 86% 86% 50% 40% 42%
PagerDuty $28.25 $2,155 $341 $0 $1,814 15.4x 11.1x 8.7x NM NM NM 48% 39% 28% 85% 85% 85% NM (14%) (7%)
Bandwidth Inc. $65.11 $1,523 $196 $0 $1,327 8.1x 5.6x 4.7x NM NM NM 25% 43% 19% 58% 49% 49% 10% (3%) (1%)
MobileIron $6.55 $719 $101 $17 $635 3.3x 3.0x 2.7x NM NM NM 7% 8% 11% 82% 82% 82% (0%) (0%) 5%
Magic Software Enterprises Ltd. $9.19 $449 $114 $39 $409 1.4x 1.3x 1.2x NA NA NA 10% 9% 6% 31% 32% 31% 0% 0% 0%
Comarch S.A. $43.55 $354 $74 $75 $361 1.0x 0.9x 0.9x 7.6x 6.4x 6.5x 13% 4% 8% 26% 28% 27% 13% 15% 13%
Axway Software SA $11.56 $245 $37 $83 $291 0.9x 0.9x 0.9x 7.0x 10.7x 7.3x (10%) (5%) 1% 18% 72% 72% 13% 9% 13%
Mean 9.5x 8.4x 6.8x 14.5x 18.3x 17.4x 27% 23% 16% 68% 72% 72% 16% 12% 15%
Median 7.1x 5.8x 4.9x 8.8x 11.0x 12.3x 23% 14% 16% 76% 77% 77% 13% 7% 13%
Sales & Marketing Applications
HubSpot $151.61 $6,443 $955 $580 $6,068 11.8x 9.1x 7.4x NM NM NM 37% 30% 24% 80% 82% 82% 11% 13% 14%
Sales & Marketing
Pegasystems Inc. $68.05 $5,385 $155 $69 $5,299 5.9x 5.7x 5.2x NM NM NM 0% 4% 11% 66% 69% 70% 8% 4% 7%
SurveyMonkey $17.10 $2,276 $155 $306 $2,427 9.5x 7.9x 6.5x 41.8x NM NM 16% 20% 21% 69% 77% 78% 23% 12% 13%
LivePerson $35.70 $2,243 $225 $194 $2,212 8.9x 7.6x 6.3x NM NM NM 14% 16% 20% 75% 74% 75% 8% 1% 7%
Yext $15.89 $1,792 $274 $116 $1,633 7.2x 5.4x 4.2x NM NM NM 34% 32% 30% 75% 76% 76% (11%) (13%) (7%)
Cardlytics $33.52 $816 $32 $37 $820 5.4x 4.3x 3.2x NM NM NM 16% 26% 33% 36% 43% 45% (4%) (2%) 4%
ChannelAdvisor Corporation $9.33 $262 $49 $18 $231 1.8x 1.8x 1.7x 23.6x 13.1x 10.6x 7% (1%) 5% 78% 78% 78% 7% 14% 16%
Mean 7.2x 6.0x 4.9x 32.7x 13.1x 10.6x 18% 18% 21% 69% 71% 72% 6% 4% 8%
Median 7.2x 5.7x 5.2x 32.7x 13.1x 10.6x 16% 20% 21% 75% 76% 76% 8% 4% 7%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 26
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
SaaS
Adobe Inc. $276.25 $133,727 $3,651 $4,137 $134,213 14.9x 12.0x 10.2x 33.8x 26.6x 22.2x 24% 24% 18% 87% 87% 88% 44% 45% 46%
salesforce.com $148.44 $129,937 $6,042 $6,432 $130,327 9.8x 7.7x 6.2x 40.4x 29.0x 24.3x 26% 27% 24% 74% 78% 78% 24% 27% 26%
ServiceNow $253.85 $47,866 $1,471 $1,124 $47,519 18.2x 13.7x 10.7x NM 49.6x 37.0x 36% 32% 29% 76% 81% 82% 26% 28% 29%
Workday $169.96 $38,751 $1,927 $1,543 $38,367 13.6x 10.7x 8.7x NM NM 41.1x 32% 27% 23% 70% 75% 76% 17% 20% 21%
Shopify Inc. $311.66 $36,119 $2,667 $111 $33,563 31.3x 21.8x 16.3x NM NM NM 59% 43% 34% 56% 56% 55% 4% 4% 5%
Atlassian Corporation Plc $125.44 $30,628 $1,775 $1,145 $29,998 31.3x 21.8x 17.2x NM NM NM 38% 44% 27% 88% 85% 85% 31% 25% 25%
Veeva Systems Inc. $152.69 $22,596 $1,432 $22 $21,186 24.6x 19.9x 16.7x NM NM 42.8x 25% 24% 19% 72% 75% 76% 37% 40% 39%
Zoom Video Communications $76.20 $20,845 $755 $53 $20,143 NM 34.0x 24.2x NM NM NM 118% 79% 41% 82% 81% 81% 4% 13% 10%
Splunk Inc. $117.86 $18,191 $2,576 $1,906 $17,521 9.7x 7.6x 6.2x NM 45.7x 33.1x 38% 28% 22% 81% 85% 85% 16% 17% 19%
Twilio Inc. $109.96 $15,081 $1,882 $624 $13,823 21.3x 12.4x 9.3x NM NM NM 63% 72% 33% 54% 58% 57% 5% 7% 8%
Slack Technologies $23.73 $12,911 $785 $0 $12,137 30.3x 19.9x 14.3x NM NM NM 82% 52% 39% 87% 86% 87% NM NM (14%)
Paycom Software $209.49 $12,079 $108 $60 $12,030 21.2x 16.5x 13.4x 49.9x 39.2x 31.9x 31% 29% 23% 87% 85% 85% 43% 42% 42%
Okta $98.46 $11,495 $557 $439 $11,377 28.5x 20.2x 15.5x NM NM NM 56% 41% 31% 72% 76% 77% (9%) (9%) (2%)
DocuSign $61.92 $10,895 $750 $620 $10,764 15.4x 11.3x 9.1x NM NM NM 35% 36% 25% 73% 79% 79% 8% 7% 10%
NetApp $52.51 $12,493 $3,540 $1,726 $10,679 1.7x 1.9x 1.8x 6.8x 8.1x 7.2x 8% (8%) 3% 64% 63% 63% 25% 23% 25%
RingCentral $125.66 $10,426 $568 $415 $10,273 16.8x 11.7x 9.5x NM NM NM 32% 43% 23% 84% 77% 77% 13% 13% 13%
Datadog $33.91 $9,950 $52 $48 $9,946 NM 30.1x 21.2x NA NM NM 97% 67% 42% 77% 75% 76% 0% (9%) (7%)
Zendesk $72.88 $8,175 $435 $586 $8,327 13.9x 10.3x 7.9x NM NM NM 39% 35% 31% 70% 74% 76% 7% 7% 9%
SaaS
Dropbox $20.17 $8,338 $973 $868 $8,233 5.9x 5.0x 4.3x 24.4x 22.0x 17.5x 26% 19% 15% 72% 76% 76% 24% 23% 25%
Coupa Software Incorporated $129.57 $8,143 $808 $755 $8,089 31.1x 21.7x 16.9x NM NM NM 39% 43% 29% 68% 72% 73% 9% 10% 14%
Proofpoint $129.05 $7,285 $1,052 $799 $7,033 9.8x 8.0x 6.7x NM 48.5x 36.4x 38% 23% 20% 72% 79% 79% 16% 16% 18%
RealPage $62.86 $5,811 $262 $724 $6,273 7.2x 6.3x 5.7x 27.1x 22.3x 19.2x 30% 14% 11% 62% 61% 62% 27% 28% 30%
HubSpot $151.61 $6,443 $955 $580 $6,068 11.8x 9.1x 7.4x NM NM NM 37% 30% 24% 80% 82% 82% 11% 13% 14%
Zscaler $47.26 $6,024 $365 $0 $5,659 23.3x 16.1x 12.4x NM NM NM 57% 45% 29% 80% 80% 80% 6% 9% 9%
Dynatrace $18.67 $5,237 $212 $570 $5,595 NA 11.2x 9.1x NA NA 36.7x NA NA 22% NM 78% 78% NA 0% 25%
j2 Global $90.82 $4,443 $95 $1,246 $5,594 4.6x 4.2x 3.9x 11.4x 10.2x 9.5x 8% 11% 6% 83% 83% 83% 41% 41% 41%
Cloudflare $18.57 $5,447 $127 $11 $5,331 27.7x 19.4x 14.7x NA NM NM 43% 42% 33% 77% 77% 76% 0% (15%) (5%)
Paylocity Holding Corporation $97.58 $5,222 $130 $84 $5,176 12.8x 10.1x 8.4x NM 35.5x 29.2x 23% 27% 20% 66% 64% 64% 25% 28% 29%
Pure Storage $16.94 $4,340 $1,182 $584 $3,741 2.8x 2.2x 1.9x 30.8x 27.4x 16.7x 33% 23% 21% 66% 68% 67% 9% 8% 11%
Smartsheet Inc. $36.03 $4,200 $561 $58 $3,697 20.8x 13.8x 10.0x NM NM NM 60% 50% 38% 81% 81% 80% (18%) (19%) (15%)
LogMeIn $70.96 $3,464 $119 $309 $3,654 3.0x 2.9x 2.8x 8.2x 8.9x 9.2x 22% 5% 5% 77% 82% 82% 37% 33% 30%
Q2 Holdings $78.87 $3,757 $618 $447 $3,586 14.9x 11.4x 9.3x NM NM NM 24% 30% 22% 49% 52% 54% 8% 6% 10%
Envestnet $56.70 $2,959 $78 $705 $3,584 4.4x 4.0x 3.5x 22.8x 18.7x 15.2x 19% 10% 15% 29% 69% 70% 19% 21% 23%
New Relic $61.45 $3,589 $769 $483 $3,305 7.4x 5.8x 4.9x 43.8x 40.3x 32.3x 35% 27% 19% 84% 83% 83% 17% 14% 15%
Cornerstone OnDemand $54.82 $3,327 $403 $377 $3,301 6.1x 5.8x 5.1x 33.5x 26.9x 20.2x 12% 6% 14% 73% 76% 76% 18% 22% 25%
AppFolio $95.14 $3,241 $40 $72 $3,273 17.2x 12.9x 10.2x NM NM NM 32% 34% 26% 62% 60% 61% 21% 13% 17%
Five9 $53.74 $3,259 $307 $222 $3,174 12.3x 10.1x 8.6x NM NM 46.2x 29% 22% 17% 60% 64% 64% 18% 17% 19%
Medallia $27.43 $3,500 $417 $0 $3,082 9.8x 8.0x 6.6x NA NM NM 20% 23% 21% 63% 66% 68% 0% 1% 4%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 27
MarginsPUBLIC COMPANY VALUATIONS
Software Trading Statistics
($MM)
Trading Metrics Operating Metrics
Stock Price Market Cash & Total Enterprise EV / Revenue EV / EBITDA Revenue Growth Gross Margin EBITDA Margin
Company 9/30/2019 Cap ST. Invest. Debt Value (EV) CY18A CY19E CY20E CY18A CY19E CY20E 18A/17A 19E/18A 20E/19E CY18A CY19E CY20E CY18A CY19E CY20E
SaaS (Cont.)
Qualys $75.57 $2,929 $298 $38 $2,669 9.6x 8.3x 7.2x 23.8x 20.7x 17.9x 21% 15% 15% 76% 79% 79% 40% 40% 40%
Box $16.56 $2,447 $201 $399 $2,644 4.3x 3.8x 3.4x NM 49.5x 26.9x 20% 14% 13% 71% 71% 72% 5% 8% 13%
BlackLine $47.81 $2,645 $145 $17 $2,521 11.1x 8.9x 7.4x NM NM NM 30% 24% 21% 78% 82% 81% 6% 8% 10%
Cloudera $8.86 $2,478 $420 $227 $2,285 4.8x 3.0x 2.7x NM NM 46.1x 29% 60% 11% 72% 76% 76% (12%) 2% 6%
Mimecast Limited $35.67 $2,210 $197 $248 $2,261 7.0x 5.7x 4.7x 49.7x 34.1x 25.3x 33% 24% 21% 73% 74% 74% 14% 17% 18%
LivePerson $35.70 $2,243 $225 $194 $2,212 8.9x 7.6x 6.3x NM NM NM 14% 16% 20% 75% 74% 75% 8% 1% 7%
Everbridge $61.71 $2,071 $239 $114 $1,946 13.2x 9.8x 7.7x NM NM NM 41% 35% 27% 68% 71% 72% (2%) 2% 5%
Workiva Inc. $43.83 $2,020 $138 $41 $1,923 7.9x 6.6x 5.7x NM NM NM 18% 19% 16% 73% 72% 73% (4%) (3%) (2%)
SaaS (Cont.)
PagerDuty $28.25 $2,155 $341 $0 $1,814 15.4x 11.1x 8.7x NM NM NM 48% 39% 28% 85% 85% 85% NM (14%) (7%)
Varonis Systems $59.78 $1,822 $131 $66 $1,757 6.5x 6.8x 6.4x NM NM NM 25% (5%) 6% 90% 88% 89% 5% (8%) (3%)
Ping Identity Holding Corp. $17.25 $1,372 $83 $243 $1,531 7.6x 6.6x 5.9x NA 38.5x NM 17% 15% 12% 85% 83% 81% 0% 17% 10%
Zuora $15.05 $1,690 $175 $13 $1,528 6.5x 5.5x 4.7x NM NM NM 40% 18% 18% 50% 56% 59% (17%) (12%) (7%)
SPS Commerce $47.07 $1,640 $201 $20 $1,458 5.9x 5.3x 4.8x 28.4x 21.5x 18.5x 13% 12% 10% 67% 68% 69% 21% 24% 26%
Instructure $38.74 $1,456 $127 $49 $1,378 6.6x 5.3x 4.4x NM NM NM 30% 24% 20% 70% 71% 72% (6%) (5%) (2%)
Carbonite $15.49 $537 $83 $653 $1,107 3.7x 2.4x 2.1x 10.6x 8.2x 7.2x 24% 56% 15% 76% 81% 81% 35% 29% 29%
Talend S.A. $33.98 $1,041 $32 $31 $1,040 5.1x 4.2x 3.5x NM NM NM 38% 21% 21% 76% 76% 77% (7%) (8%) (2%)
Benefitfocus $23.81 $779 $138 $276 $917 3.5x 3.1x 2.7x NM NM 34.5x 9% 15% 16% 50% 54% 56% 4% 4% 8%
Zix Corporation $7.24 $389 $10 $192 $571 8.1x 7.0x 5.9x 28.3x 14.0x 10.8x 7% 15% 20% 78% NM NM 29% 50% 55%
ChannelAdvisor Corporation $9.33 $262 $49 $18 $231 1.8x 1.8x 1.7x 23.6x 13.1x 10.6x 7% (1%) 5% 78% 78% 78% 7% 14% 16%
Park City Group $5.77 $114 $19 $6 $102 4.4x 5.0x 4.2x 16.9x 15.9x 13.6x 13% (13%) 21% 71% 72% 72% 26% 32% 31%
Veritone $3.57 $79 $45 $0 $34 1.3x 0.7x 0.5x NM NM NM 88% 87% 26% 76% 66% 67% NM NM NM
Mean 12.1x 10.0x 8.0x 27.1x 27.0x 24.6x 34% 29% 21% 72% 74% 75% 13% 13% 15%
Median 9.8x 8.0x 6.7x 27.1x 26.6x 23.3x 30% 26% 21% 73% 76% 76% 11% 13% 14%
Notes:
Sources: Capital IQ and Wall Street Estimates. Market Data as of 9/30/19. 28
MarginsRECENT ACQUISITIONS
Select Software M&A Transactions
($MM)
Announced Enterprise EV / Revenue EV / EBITDA
Date Acquirer Target Value (EV) LTM NTM LTM NTM Target Description
Provides customer analytics and market intelligence SaaS for the purpose of marketing spend optimization for the healthcare and
9/26/19 $430 NA NA NA NA
pharmaceutical sectors.
Provides customer service automation SaaS that enables businesses in the hospitality, travel and retail sectors to communicate
9/24/19 $42 NA NA NA NA
with customers via SMS text message.
Provides asset portfolio analytics SaaS and services for financial markets. Software enables users to manage funds, conduct
9/20/19 $189 2.7x NA NM NA
compliance reporting, share portfolios, and analyze portfolio performance, attribution, contribution, allocation and risk.
Provides endpoint security SaaS for businesses. Software enables the security of enterprise IT systems by using virtualization to
9/19/19 $45 2.3x NA NA NA isolate browser-based attacks, malicious downloads and attachments, and other applications in hardware-enforced micro-virtual
machines.
Provides AI-enabled predictive analytics SaaS for businesses in the healthcare and insurance sectors. Warehousing data from
9/16/19 $37 NA NA NA NA
multiple sources, software enables the creation of population health risk models and care management workflow insights.
Provides engineering simulation SaaS for businesses and governments globally, with a focus on the automobile and
9/11/19 $775 NA NA NA NA transportation sectors. Software enables the virtual testing of engineering designs and systems so as to avoid costly physical
testing.
Provides AI-based IoT device and threat identification management SaaS to businesses. Software provides features for
9/4/19 $75 15.0x NA NA NA automated device discovery, recognition and classification, behavioral analysis and risk assessment, network segmentation,
analytics and reporting.
Provides AI-enabled employee recruitment SaaS to businesses and recruiters. Software enables users to automate scheduling and
9/3/19 $400 5.7x NA NA NA
record video interviews of job seekers. Also provides a related mobile application.
Provides automotive aftermarket supply chain management (SCM) and e-commerce software and SaaS for automotive parts
9/3/19 $154 4.1x NA 29.1x NA wholesale and retail businesses, tire and vehicle repair shops in the US. Software also provides features for cataloging, business
management and analytics.
Provides AI and predictive analytics-based marketing and sales SaaS for businesses. Software provides features for target
8/28/19 $40 6.7x NA NA NA
audience generation and account-based marketing, lead scoring and customer analytics.
The Software Solutions business of Pitney Bowes, which provides data management, BI, customer analytics and customer service
8/26/19 $700 2.2x NA NA NA
automation software and SaaS for businesses.
Provides financial planning SaaS for businesses and governments. Software enables customer relationship management, back-
8/23/19 $34 NA NA NA NA
office administration for financial advisers, and online self-directed digital advice portals for superannuation funds in Australia.
Provides endpoint and server security SaaS and services for businesses. Software provides features for antivirus, risk and
8/22/19 $2,100 9.1x NA NM NA compliance, malware and UI/visualizations to enhance user interfaces. In May 2018, Carbon Black was listed on the NASDAQ
stock exchange under stock ticker CBLK.
Notes:
Sources: Capital IQ and Wall Street Estimates. Reflects M&A activity through 9/30/19, where Enterprise Value is >$50MM. 29
Transactions highlighted in yellow denote private equity transactions. Multiples 50 considered NM.RECENT ACQUISITIONS
Select Software M&A Transactions
($MM)
Announced Enterprise EV / Revenue EV / EBITDA
Date Acquirer Target Value (EV) LTM NTM LTM NTM Target Description
Provides real-time cloud performance monitoring SaaS for businesses globally. Software enables cloud infrastructure,
8/21/19 $1,050 21.0x NA NA NA microservices, and applications monitoring, data collection and metrics analysis, and helps DevOps teams with continuous
integration and delivery.
8/14/19 $63 2.0x 1.7x 3.7x 3.1x Operates as a racing video games developer for gaming consoles and PCs for consumers.
The enterprise security assets of Symantec, including the Symantec brand, which provides security software, SaaS and services
8/9/19 $10,700 4.5x NA NA NA
for businesses globally. Software includes features for web, cloud and endpoint security and data loss prevention.
(Ent. Security Assets)
8/8/19 $92 NA NA NA NA Provides booking and reservation engine SaaS for the sector. Also provides rate distribution and group booking SaaS.
8/8/19 $31 NA NA NA NA Provides post-sale servicing, sales, document management and related analytics SaaS for OEMs globally.
Provides field service management SaaS focusing on workforce management, mobile workforce management and service
8/7/19 $1,350 NA NA NA NA
optimization for businesses globally. Also provides integration services and related mobile applications.
Provides integrated risk management (IRM) SaaS for enterprises. Also provides Governance, risk management and compliance
8/6/19 $100 6.7x NA NA NA
(GRC) systems integration and managed services.
8/5/19 $68 NA NA NA NA Provides marketing automation SaaS for businesses. Software enables users to create online surveys for mobile devices.
Provides automated e-commerce product marketing SaaS to online retailers and brands. Software enables product merchandising
8/5/19 $60 10.0x NA NA NA embedded within native placements alongside retailers organic site content, increasing product visibility and sales. Also enables
real-time analytics.
8/5/19 $40 2.0x NA NM NA Provides targeted online advertising enablement and customer analytics SaaS for businesses globally.
Provides supply chain management (SCM) software, SaaS and related integration services to the chemical and oil industries
8/2/19 $400 NA 4.2x NA NA
globally.
Provides online emergency incident monitoring and collaboration SaaS for government agencies and businesses for the purposes
8/1/19 $83 NA NA NA NA of risk management. Software enables businesses to alert employees to events such as transportation issues, severe weather,
hazardous materials, law enforcement, natural disasters and terrorism via text messages and emails.
Provides real estate lease administration, analysis and accounting SaaS for businesses. Also provides related workforce
7/31/19 $75 7.5x NA NA NA
management software.
Notes:
Sources: Capital IQ and Wall Street Estimates. Reflects M&A activity through 9/30/19, where Enterprise Value is >$50MM. 30
Transactions highlighted in yellow denote private equity transactions. Multiples 50 considered NM.You can also read
