Robert Koven Leonis Partners 4th Quarter 2017 SAAS Analysis

LEONIS PARTNERS: 4TH QUARTER 2017 SAAS ANALYSIS
ANALY SIS OF SAAS VALUATIONS & KEY DRIVERS IN PUBLIC AND PRIVATE MARKETS

LEONIS PARTNERS
EXPERIENCED SAAS ADVISORS
▪ Leonis solely focuses on providing M&A and Growth
Capital advisory services to both high-growth and well-
established software and technology companies
▪ Leonis core areas of focus include:
▪ Sell-side M&A: represent companies looking to be
acquired by a strategic or go through a fulsome liquidity
event with a financial sponsor
▪ Capital Raises:
• Majority Equity Raises: Recapitalizations from private
equity & growth equity firms who understand the
sector and will be able to partner with management to
inject capital and provide expertise to maximize the
company’s growth
• Minority Equity Raises: Equity investments from
private equity and strategic partners who bring capital
and market expertise to bear
▪ Retained Advisory Services: strategic guidance to assist
management in maximizing firm value ahead of a
potential liquidity event, as well as manage inbound
offers and solicitations
For more information or inquiries, please contact us at
info@leonispartners.com
2
SAAS TOMBSTONES
FIRM OVERVIEW
▪ Bankers with over 50 years of combined experience in bulge bracket
Wall Street firms and Middle Market
▪ Team has executed over 105 M&A, restructuring and capital raising deals
with cumulative transaction values over $170 billion
▪ Team executed eight deals in the last twelve months with an 85% close
rate
▪ Deep knowledge of strategic and financial buyers with a proprietary
database of more than 4,200 private equity investors and 1,800 strategic
acquirers
▪ Team with experience advising, operating and investing in businesses
within the firm’s core areas provides an unbiased view of how “the other
side” will look at a deal
Has Acquired
$100,000,000
Has Acquired
Has Been Recapitalized
Equity Capital Raise
$20,000,000
Equity Capital Raise
Debt Capital Raise
Has Acquired
LEONIS CREDENTIALS & SERVICES
Has Been Acquired By

LEONIS SAAS INDEX
Q4 2017 INDEX SUMMARY
▪ Leonis’s proprietary SaaS index is comprised of 72
publicly traded software companies that offer their
services through a subscription-based pricing model
▪ The Leonis SaaS Index is an equally-weighted index
▪ In 4Q17, EV / Revenue valuations eased slightly but
remain near all-time-highs
▪ Interestingly, this corresponded to a bit of a deterioration
in top-line growth rates. This is a trend Leonis will be
monitoring as we move through 2018
▪ Multiple expansion was largely driven by overall market
gains, with the Nasdaq rising 6.3% for the quarter and
27.2% for the year
▪ Despite a steep sell-off in early 2016, SaaS companies
have significantly and consistently outperformed the
broader tech market over the past two years
▪ 17 of the 72 companies in the index have gone public
within the last 24 months; to avoid overstating
performance, the index excludes a stock’s performance
on the day of its IPO
▪ Industry multiples have evolved since low point in 2016
to be driven by a combination of growth and profitability
3
SAAS INDEX PERFORMANCE
MULTIPLES & GROWTH RATES OVER TIMETHE LEONIS SAAS INDEX
Source: Pitchbook, Leonis Proprietary Transaction Database, Federal Reserve Economic Data.
Note: Market Data as of 12/31/2017.
(25.0%)
(5.0%)
15.0%
35.0%
55.0%
75.0%
Leonis SaaS Index Nasdaq Index
4.97x
5.51x
6.45x
5.28x
6.10x
6.72x 6.81x 6.67x
35%
32% 31% 30%
32%
34% 34%
31%
20%
30%
40%
50%
60%
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Avg. EV/Rev Multiple Avg. YoY Growth Rate

LEONIS SAAS INDEX
SUMMARY METRICS
4
SAAS SUB-VERTICALSSUMMARY METRICS
Source: Pitchbook and Leonis Proprietary Transaction Database.
Index Averages
4Q16 1Q17 2Q17 3Q17 4Q17
EV / LTM Revenue 5.28x 6.10x 6.72x 6.81x 6.67x
EV / NTM Revenue 3.97x 4.93x 5.71x 5.33x 5.32x
LTM Revenue Growth 30.2% 32.3% 34.4% 34.2% 31.3%
Gross Profit Margin 68.4% 68.8% 68.8% 69.0% 69.0%
EV / LTM CFO 241.5x 79.6x 114.6x 103.7x 104.0x
CFO Margin -0.1% 2.0% 3.9% 5.1% 5.1%
CFO $46.3 $56.3 $65.0 $70.4 $74.3
EV / LTM EBITDA 129.0x 420.7x 476.1x 176.9x 156.0x
EBITDA Margin (10.2%) (8.3%) (7.9%) (7.1%) (6.2%)
EBITDA ($11.3) ($5.9) ($5.3) ($2.4) $1.7
Total Revenue $426.9 $456.5 $486.4 $515.6 $549.3
METRIC
EV / LTM Rev. Averages
4Q16 1Q17 2Q17 3Q17 4Q17
Back-Office 5.95x 6.54x 7.54x 7.63x 7.01x
Comm. & Collaboration 6.06x 7.33x 7.49x 7.69x 7.89x
Customer Relations 5.59x 6.74x 7.34x 7.42x 7.49x
Data & Analytics 4.73x 5.74x 6.50x 6.90x 7.28x
FinTech & E-Commerce 5.72x 6.56x 7.11x 7.24x 6.37x
HCM 6.41x 7.25x 7.93x 8.07x 7.93x
HealthTech 4.93x 5.04x 5.81x 5.43x 4.89x
IT 4.35x 6.49x 6.55x 6.28x 7.20x
SCM / ERP 4.37x 4.88x 5.81x 6.06x 5.98x
Security 4.25x 4.76x 5.40x 5.45x 5.26x
Vertically-Focused 5.88x 6.52x 7.12x 6.99x 6.73x
SECTOR

VALUATION
RULE OF 40 & THE IMPACT ON VALUATION
5
SAAS INDEX VALUATIONS COMPARED TO RULE OF 40RULE OF 40 EXPLAINED
CFO MARGINS + GROWTH RATE DISTRIBUTIONS
▪ The Rule of 40 states that if a company’s revenue growth (%) plus its
cash flow from operations (CFO) (%) is > 40, then the company is
operating efficiently and deserves a premium valuation multiple
▪ As shown on the following page, growth is the key driver of SaaS
multiples, but typically growth comes at a high cost
▪ The Rule of 40 serves as a rule of thumb to identify which
companies are overpaying for top line growth at the cost of excessive
bottom-line damage, and which are growing ‘efficiently’
4.84x
4.32x
4.95x
7.05x
7.99x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
<10% 10-20% 20-30% 30-40% >40%
EV/Revenue
CFO Margin + Revenue Growth Rate
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
(40%) (30%) (20%) (10%) 0% 10% 20% 30% 40%
RevenueGrowth(%)
CFO Margin (%)
7x
11x
3x
Scale(EV/Rev.):

▪ As shown below, valuations are highly correlated to
growth rates
▪ The distribution of EV/Rev multiples is relatively
normal and centered at 6-8x EV/ Revenue with average
growth rates centered around 29% at this multiple range
alongside their respective avg. YoY growth rates
▪ Regression of bucketed average growth rates exhibits
direct correlation, with an R-squared of .79, high for
financial statistics
6
KEY SAAS REVENUE KPIS
THE IMPORTANCE OF GROWTH IN SAAS VALUATIONS
VALUATION
EV / REVENUE VALUATIONS AS A FUNCTION OF GROWTH
▪ SaaS Valuations are driven by the following key characteristics
• Revenue Retention Rate
• Customer Retention Rates
• Recurring (ARR or MRR) Growth Rates
• Gross Margin
• Total Addressable Market
• Customer Acquisition Cost (CAC) relative to the Long-term
value (LTV) of a customer
▪ SaaS companies receive high valuations due to their combination of
high gross profit margins and the recurring aspect of their existing
revenue base
▪ Large number of SaaS companies operate at negative margins for
extensive periods to fund sales growth
▪ Given the recurring, high retention-rate nature of the business, each
customer acquired is often a multi-year customer
▪ Investors look past current year’s cash burn, and instead focus on
how the company’s future will benefit from current growth initiatives
as they scale past their fixed costs
EV / REV MULTIPLE VS. TOP- LINE GROWTH
3
12
18
19
9
8
3
5%
15%
41%
29%
36% 36%
56%
y = 0.2166ln(x) + 0.0472
R² = 0.794
0%
10%
20%
30%
40%
50%
60%
0
4
8
12
16
20
<2x 2-4x 4-6x 6-8x 8-10x 10-12x >12x
Median Rev YoY Growth Log. (YoY Growth)

VALUATIONS AROUND BREAKEVEN
▪ Of the 72 companies in the Leonis SaaS Index, only 49
produced positive CFO (cash from operations) in 4Q17
▪ The median EV / Rev multiple of companies with
positive CFO is 6.57x vs. the those with negative CFO,
which trade at a median multiple of 6.11x EV/REV
• Despite significantly outpacing the growth rates of their
positive CFO peers, negative CFO companies still trade
at a discount due to concerns over their ability to
produce adequate cash flow
7
KEY PROFITABILITY KPIS
CFO VS. EBITDA
VALUATION
EV / REVENUE VALUATIONS DEPENDENT ON CASH FLOW
▪ In tracking profitability of rapidly growing younger SaaS businesses,
CFO (cash from operations) is often a preferable indication of where
profitability stands relative to EBITDA
• Primary functional difference is its inclusion of deferred
revenue, which a GAAP based EBITDA won’t fully account
for
• CFO is more akin to a “cash” EBITDA figure and will turn
positive ahead of GAAP EBITDA
▪ CFO – often turns positive ahead of EBITDA
• Preferred measure of bottom line cash profitability
▪ Gross Margin – Key indicator of how scalable the SaaS platform will
ultimately be (provides a notion of a high watermark and of the
quality of the revenue base).
▪ EBITDA – For earlier stage SaaS platforms, EBITDA is often highly
negative and irrelevant if growth is exceedingly fast at the top-line
level
6.57x
6.11x
27.3%
38.2%
0%
10%
20%
30%
40%
50%
0.00x
2.00x
4.00x
6.00x
8.00x
+ CFO + CFO (-) CFO (-) CFO
Median EV/Rev Multiple Median Growth Rate

9
KEY OBSERVATIONS
RELEVANT TRANSACTIONS
BACK-OFFICE
TRADING & PRECEDENT MULTIPLES
Back-Office SaaS includes the following company tickers: WK, WIX, NTNX, BL, OKTA, WDAY, MODN.
▪ Currently, the Back-Office SaaS businesses in the index are trading at
7.0x EV/Revenue, growing at an average of 41% year-over-year
(YoY) and averaging a gross margin of 69%
▪ Workday continues to be one of the best performing SaaS companies
and continues to trade at a market leading level
▪ Both transaction and trading multiples remain at near all-time highs
▪ The ability to easily grow back-office software companies organically
through increased customer acquisition investment, as well as
inorganically through add-on acquisitions, makes high-growth
achievable and sustainable even at scale
BACK-OFFICE SAAS
Date
Announced Target Acquirer Deal Size
EV / Rev
Multiple
12/05/17 TSheets.com Intuit $340.0 8.50x
11/17/17 Qvidian Upland Software $50.0 2.56x
08/03/17 Intacct Sage Group $850.0 12.69x
07/26/17 Evidon Crownpeak Tech, K1 Capital $50.0 2.44x
Average EV/Rev Multiple over last five years: 6.10x
5.1x
5.4x
6.3x
5.9x
6.5x
7.5x 7.6x
7.0x
66% 67% 67% 68% 68% 69% 68% 69%
34% 32%
30%
33%
36%
50%
48%
41%
20%
30%
40%
50%
60%
70%
80%
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
EV/Rev Gross Margin YoY Growth

10
COMMUNICATION & COLLABORATION
Communications & Collaboration SaaS include the following company tickers: JCOM, RNG, EVBG, TWLO, BOX, APPN, TEAM.
▪ Currently, the Communication & Collaboration SaaS businesses in
the index are trading at a 7.9x EV/Revenue, growing revenue at an
average of 51% YoY and averaging a gross margin of 67%
▪ Following its IPO, Twilio’s share price nearly tripled within its first
three months as a public company; the peak was followed by a
correction to near-IPO levels
▪ Groups like LogMeIn continue to show extreme 100% YoY growth
and are correspondingly trading at 11.00x revenue at the publication
of this report
COMMUNICATION & COLLABORATION SAAS
Date
EV / Rev
Multiple
04/17/17 Eliza Hms Holdings $172.0 2.87x
01/19/17 IntraLinks Synchronoss Technologies $773.1 2.66x
11/14/16 Apptix Fusion Telecomm. $25.3 1.13x
08/08/16 Quip Salesforce $750.0 25.00x
KEY OBSERVATIONS
5.4x
5.6x
6.6x
6.1x
7.3x 7.5x
7.7x
7.9x
66% 66% 66% 66% 66% 66% 67% 67%
40% 33%
44%
33%
36%
41%
49%
51%
20%
30%
40%
50%
60%
70%
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

11
CUSTOMER RELATIONS
Customer Relations SaaS include the following company tickers: CRM, ZEN, LPSN, HUBS, FIVN, BLKB, YEXT, MB, VEEV.
▪ Currently, the Customer Relations SaaS businesses in the index are
trading at a 7.5x EV/Revenue, growing revenue at an average of 26%
YoY and averaging a gross margin of 71%
▪ One of the more mature sectors in SaaS, Customer Relations is
seeing a slowdown from peak growth rates
- Corresponding to this maturation, companies are focusing
on bottom-line, resulting in margin expansion
▪ Within the vertical, top-line growth remains important and many of
the smaller players are expanding rapidly to try to compete with the
entrenched players like Salesforce
CUSTOMER RELATIONS SAAS
KEY OBSERVATIONS
Date
EV / Rev
Multiple
10/02/17 Velocify Ellie Mae $128.0 2.83x
07/12/17 The Experience Engine Accesso Technology $81.0 6.38x
04/25/17 TeleSign BICS $230.0 2.30x
01/09/17 Avention Dun & Bradstreet $150.0 2.50x
5.3x
6.0x
6.8x
5.6x
6.7x
7.3x 7.4x 7.5x
67% 67% 68% 69% 70% 70% 70% 71%
33% 32% 31% 29% 29% 28% 29%
26%
20%
30%
40%
50%
60%
70%
80%
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

12
DATA & ANALYTICS
Data & Analytics SaaS include the following company tickers: NEWR, CLDR, TLND, SPLK, AYX, DATA, MDSO, RP, BV, TTD, MDB.
▪ Currently, the Data & Analytics SaaS businesses in the index are
▪ Data & Analytics has matured more than a number of other SaaS
verticals and tends to exhibit mid 30s% YoY growth rates common
to larger, more mature SaaS offerings
▪ Over the last couple years, this vertical has been highly volatile:
- Key drivers include Tableau substantially missing top-line
growth numbers in early 2016, triggering investors to grow
more focused on profitability trends as opposed to
previously using growth to drive valuation
DATA & ANALYTICS SAAS
KEY OBSERVATIONS
Date
EV / Rev
Multiple
12/26/17 Clavis Insight Ascential $139.6 8.83x
11/30/17 Power Advocate Verisk Analytics $280.0 7.78x
10/02/17 Velocify Ellie Mae $128.0 2.83x
02/24/17 Digitalglobe (DGI) MacDonald, Dettwiler $4,692.7 5.79x
4.7x
5.0x
5.9x
4.7x
5.7x
6.5x
6.9x
7.3x
73% 72% 72% 74% 74% 73% 73% 73%
33% 31%
29% 38%
43% 42% 42%
36%
20%
30%
40%
50%
60%
70%
80%
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

13
FINTECH, E-COMMERCE & MARKETPLACE
FinTech, E-Commerce & Marketplace SaaS include the following company tickers: ECOM, SHOP, TRUE, BV, EBIX, QTWO, COUP, ELLI.
▪ Currently, the FinTech, E-Commerce & Marketplace SaaS businesses
in the index are trading at a 6.4x EV/Revenue, growing revenue at an
average of 25% YoY and averaging a gross margin of 67%
▪ Despite flat growth rates over the LTM, public FinTech companies
experienced valuation expansion as a result of recent FinTech
acquisitions occurring at high multiples
▪ SaaS FinTech companies have a different look than the broader
ecosystem; the SaaS model works best for E-Commerce, marketplace
and financial enterprise software companies and not for the
payments, P2P loans, wealth-advisor and neobank applications that
tend to dominate FinTech discussions
FINTECH, E-COMMERCE & MARKETPLACE SAAS
KEY OBSERVATIONS
5.1x
5.4x
6.0x
5.7x
6.6x
7.1x 7.2x
6.4x
66% 66% 66% 67% 67% 67% 67% 67%
35% 32%
30% 29%
32% 33%
27%
25%
20%
30%
40%
50%
60%
70%
80%
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Date
EV / Rev
Multiple
12/21/17 Ensenta Jack Henry and Associates $130.0 4.81x
12/18/17 Planet Payment Eurazeo, Fintrax Group $247.2 4.67x
12/05/17 TSheets.com Intuit $340.0 8.50x
10/10/17 GoSwiff Paynear Solutions $100.0 4.66x

14
HCM
HCM SaaS include the following company tickers: WDAY, ULTI, PAYC, CSOD, INST, PCTY, NOW, CALD.
(1) Hamerman, Paul D. "The Forrester Wave™: SaaS Human Resource Management Systems, Q3 2017." Forrester. Forrester, 22 Aug. 2017. Web.
▪ Currently, the HCM SaaS businesses in the index are trading at a 7.9x
EV/Revenue, growing revenue at an average of 28% YoY and
averaging a gross margin of 69%
▪ HCM SaaS companies are among the highest valued companies in all
of SaaS
▪ They’ve experienced extraordinary traction, with Forrester(1)
concluding that 56% of installed HCM systems run on SaaS
▪ Valuation premium also reflects strong value proposition offered by
HCM as a cloud service
- Provide interface similar to social-media and supplies the
data storage and processing power capacity needed for
advanced HR ML and AI to run effectively
- Immense strategic and private equity interest adds a
premium to multiples by providing an apparent price floor
HUMAN CAPITAL MANAGEMENT SAAS
Date
EV / Rev
Multiple
07/31/17 CareerBuilder Apollo $500.0 3.09x
07/31/17 Xactly Vista Equity Partners $522.5 5.47x
05/26/17 Evolution HCM Asure Software $55.0 3.93x
05/26/15 HealthcareSource HR Francisco Partners $330.0 6.20x
KEY OBSERVATIONS
7.3x
7.7x
8.2x
6.4x
7.2x
7.9x 8.1x 7.9x
67% 68% 68% 68% 68% 68% 69% 69%
39%
41%
39%
36%
32%
30% 29% 28%
20%
30%
40%
50%
60%
70%
80%
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

15
HEALTHTECH
HealthTech SaaS include the following company tickers: BNFT, VEEV, HSTM, ATHN, MDSO, TRHC, WAGE, CSLT.
▪ Currently, the HealthTech SaaS businesses in the index are trading at
a 4.9x EV/Revenue, growing revenue at an average of 22% YoY and
▪ Lower growth rates and gross margins have left HealthTech as one
of the lowest-valued sectors in SaaS
▪ Low growth rates are a result of a complex combination of factors
including longer sales cycles, heavy regulation and slow adoption
rates
▪ Public markets have attributed the highest valuations to HealthTech
companies that deal with the collection and consolidation of
information/data
▪ However, the highest transaction multiples have been seen in
emerging HealthTech trends, including diagnostics, patient
monitoring and telehealth
HEALTHCARE TECHNOLOGY SAAS
Date
EV / Rev
Multiple
04/17/17 Eliza Hms Holdings $172.0 2.87x
04/14/17 Entrada NextGen Healthcare $34.0 2.83x
08/08/16 Morrisey Associates Echo $48.0 3.75x
06/28/16 Change Healthcare McKesson $6,264.7 3.98x
KEY OBSERVATIONS
4.6x
5.4x 5.4x
4.9x 5.0x
5.8x
5.4x
4.9x
55% 56% 56% 58% 58% 58% 58% 58%
27%
24% 23% 23% 23% 24% 24%
22%
20%
30%
40%
50%
60%
70%
80%
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

16
IT
IT SaaS include the following company tickers: MULE, HDP, APTI, SPLK.
▪ IT SaaS encompasses companies with SaaS products for connecting
and monitoring applications, data and devices
▪ The number of public IT SaaS companies has been increasing in the
public and private markets, as legacy IT companies spin-off in-house
software solutions into standalone products
▪ This trend has been increasingly popular as IT consulting companies
look to separate the one-time, project-based revenue lines and higher
value recurring revenue lines in order to take advantage of embedded
value/multiple arbitrage
▪ Few pureplay SaaS IT companies exist and their valuations are
volatile, with companies like Apptio and Mulesoft gaining more than
40% the day of their IPOs, only to decline significantly thereafter
INFORMATION TECHNOLOGY SAAS
KEY OBSERVATIONS
Date
EV / Rev
Multiple
12/12/17 Black Duck Synopsys $547.0 7.29x
11/27/16 Appirio Wipro $500.0 2.50x
01/06/16 KrolLDiscovery Revolution, Carlyle $150.0 1.63x
04/24/15 Riverbed Technology Thoma Bravo $3,171.8 2.91x
5.9x 5.9x
5.3x
4.4x
6.5x 6.6x
6.3x
7.2x
68% 69% 70% 70% 71% 71% 72% 72%
40%
51%
53%
47%
35%
20%
30%
40%
50%
60%
70%
80%
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

17
SCM / ERP
SCM / ERP SaaS include the following company tickers: KXS, AMBR, SPSC, APPN, UPLD, MODN.
▪ Currently, the SCM/ERP SaaS businesses in the index are trading at
a 6.0x EV/Revenue, growing revenue at an average of 20% YoY and
▪ The SCM / ERP space has been particularly active for private
transactions within the past few quarters
▪ Workforce management solutions have been acquired by larger
strategics who are able to leverage the product offering to cross-sell
existing e-commerce, BI and CRM solutions
▪ Vertically-focused SCM and ERP companies have gained the most
traction, as legacy industries like manufacturing and transportation
have begun to aggressively incorporate software
▪ As one of the most mature sub-vertical in SaaS, the level of
profitability has become more important as average top-line growth
rates have fallen into the mid teens
SCM & ENTERPRISE RESOURCE PLANNING SAAS
KEY OBSERVATIONS
3.4x
4.3x
5.0x
4.4x
4.9x
5.8x
6.1x 6.0x
59% 59% 60% 60% 61% 61% 62% 61%
17%
16% 15% 16% 17%
19%
24%
20%
10%
20%
30%
40%
50%
60%
70%
80%
3.0x
3.5x
4.0x
4.5x
5.0x
5.5x
6.0x
6.5x
7.0x
7.5x
8.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Date
EV / Rev
Multiple
12/28/17 BravoSolution Accel-KKR, Jaggaer $215.9 2.30x
11/30/17 Power Advocate Verisk Analytics $280.0 7.78x
08/14/17 MacroPoint Descartes Systems Group $110.0 8.80x
01/27/17 PlanView Thoma Bravo $800.0 5.33x

18
SECURITY
Security SaaS include the following company tickers: ALRM, VRNS, ZIXI, PFPT, FEYE, QLYS, MIME, MOBL.
▪ Currently, the Security SaaS businesses in the index are trading at a
5.3x EV/Revenue, growing revenue at an average of 21% YoY and
▪ Security software companies are often divided into two categories:
companies with legacy products and companies with disruptive
solutions
▪ Legacy products have lower growth rates and significantly lower
valuations than companies with disruptive solutions
▪ This trend holds for acquisitions; companies with legacy products like
Sotera, which provides SaaS-based security solutions for law-
enforcement, transact at low single-digit multiple, while companies like
Cloudlock transact at double-digit multiples as legacy players like Cisco
seek to acquire disruptive technologies that expand and enhance their
product offerings
SECURITY SAAS
Date
EV / Rev
Multiple
04/04/17 Sotera Defense KeyW $235.0 1.04x
03/22/17 Invincea Sophos $120.0 12.24x
09/30/16 AVG Technologies AVAST Software $1,338.4 3.11x
08/01/16 CloudLock Cisco $293.0 22.20x
KEY OBSERVATIONS
3.9x 4.0x
4.8x
4.2x
4.8x
5.4x 5.5x
5.3x
75% 75% 75% 75% 75% 76% 76% 76%
24% 24% 24% 22% 22% 22% 21% 21%
20%
30%
40%
50%
60%
70%
80%
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

19
VERTICALLY-FOCUSED
Vertically-Focused SaaS include the following company tickers: VEEV, MDSO, ATHN, TWOU, APPF, RP, ELLI, WAGE, HSTM, CSLT, EBIX, MB.
▪ Currently, the vertically-focused SaaS businesses in the index are
▪ Vertically-focused SaaS companies trade at a wide range of multiples,
usually based on the size of their total addressable market (TAM),
sales cycle, customer acquisition costs and ACV
▪ Growth rates for vertically-focused SaaS are usually lower given a
limited TAM, but high retention rates lift multiples to in-line with
SaaS Index averages
▪ Of the transactions analyzed by Leonis, vertically-focused
marketplace and reservation companies transacted at the highest
multiples of all vertically-focused SaaS sub-sectors in 2017
VERTICALLY-FOCUSED SAAS
KEY OBSERVATIONS
Date
EV / Rev
Multiple
11/17/17 Exa Dassault Systemes $347.5 4.79x
08/29/17 Ari Network Services True Wind Capital $140.0 2.65x
10/31/16 File & ServeXpress Strait Lane CP $55.0 3.06x
09/11/16 Exocad Carlyle $128.8 10.16x
5.2x
6.0x
6.4x
5.9x
6.5x
7.1x 7.0x
6.7x
61% 62% 62% 63% 63% 63% 63% 63%
32%
28% 27% 27% 27% 27% 26%
25%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

APPENDIX
20
I. SAAS INDEX TRADING INFORMATION

TRADING METRICS - SAAS
21
Net Debt /
Share Price Market (Cash) /LTM EV/Revenue EV / Rev / Growth P/E
Company 12/31/2017 Cap EBITDA CY2017E CY2018E CY2017E CY2018E CY2017E CY2018E PEG
Salesforce $102.23 $73,840.7 0.1x 7.05x 5.87x 0.28x 0.23x NM NM NA
ServiceNow $130.39 $22,518.4 (7.7x) 11.45x 8.76x 0.31x 0.23x NM NM NA
Workday $101.74 $21,365.4 (0.7x) 9.41x 7.51x 0.26x 0.20x NM NM NA
Splunk $82.84 $11,718.4 1.5x 8.77x 6.99x 0.26x 0.21x NM NM NA
Atlassian $45.52 $10,474.3 37.6x 13.46x 10.22x 0.36x 0.27x NM NM NA
Shopify $101.00 $10,028.4 4.3x 13.82x 9.51x 0.18x 0.12x NM NM NA
Veeva Systems $55.28 $7,813.5 (1.9x) 10.55x 8.88x 0.38x 0.32x NM 64.3x 2.29x
Ultimate Software Group $218.23 $6,519.8 (1.6x) 6.84x 5.75x 0.32x 0.27x NM NM NA
LogMeIn $114.50 $6,032.0 (1.9x) 5.63x 5.04x 0.04x 0.03x NM 70.7x 0.48x
Nutanix $35.28 $5,659.8 0.4x 5.81x 4.42x 0.10x 0.07x NM NM NA
Tableau Software $69.20 $5,518.3 7.6x 5.27x 4.85x 0.41x 0.38x NM NM NA
Athenahealth $133.04 $5,324.0 0.8x 4.52x 4.09x 0.37x 0.34x NM 77.3x 6.40x
Paycom Software $80.33 $4,680.4 (0.4x) 10.76x 8.59x 0.33x 0.26x NM 65.8x 2.01x
Blackbaud $94.49 $4,544.0 2.3x 6.16x 5.55x 0.71x 0.64x NM 75.6x 8.74x
Proofpoint $88.81 $3,981.8 1.1x 7.66x 5.84x 0.20x 0.15x NM NM NA
RingCentral $48.40 $3,743.8 16.2x 7.17x 5.78x 0.24x 0.19x NM NM NA
Medidata Solutions $63.37 $3,704.7 1.7x 6.57x 5.58x 0.32x 0.27x NM 83.4x 4.01x
RealPage $44.30 $3,671.6 3.1x 5.90x 4.75x 0.35x 0.28x NM 88.6x 5.23x
j2 Global $75.03 $3,632.1 1.5x 3.78x 3.66x 0.14x 0.13x 24.0x 19.3x 0.71x
Zendesk $33.84 $3,435.0 1.2x 7.52x 5.82x 0.20x 0.15x NM NM NA
2U $64.51 $3,368.9 11.6x 11.10x 8.01x 0.32x 0.23x NM NM NA
HubSpot $88.40 $3,303.6 (3.8x) 8.38x 6.57x 0.21x 0.17x NM NM NA
New Relic $57.77 $3,181.0 2.9x 9.01x 7.06x 0.24x 0.19x NM NM NA
Ellie Mae $89.40 $3,087.5 (2.7x) 6.60x 5.51x 0.30x 0.25x 77.7x NM NA

TRADING METRICS – SAAS (CONTINUED)
22
Net Debt /
MuleSoft $23.26 $3,022.9 0.9x 9.77x 7.22x 0.10x 0.07x NM NM NA
Box $21.12 $2,875.3 0.7x 5.61x 4.56x 0.20x 0.16x NM NM NA
FireEye $14.20 $2,621.1 (4.4x) 3.38x 3.14x 1.25x 1.16x NM NM NA
Okta $25.61 $2,610.3 1.4x 10.28x 7.27x 0.15x 0.11x NM NM NA
Wix.com $57.55 $2,580.5 3.0x 5.80x 4.40x 0.12x 0.09x NM NM NA
Ebix $79.25 $2,492.9 2.0x 7.80x 6.67x 0.44x 0.38x 27.7x 22.0x 1.25x
Paylocity $47.16 $2,476.7 (3.3x) 7.12x 5.79x 0.27x 0.22x NM NM NA
WageWorks $62.00 $2,457.5 (5.4x) 3.77x 3.42x 0.11x 0.10x NM 58.8x 1.77x
Cloudera $16.52 $2,333.2 0.2x 5.84x 4.29x 0.07x 0.05x NM NM NA
Qualys $59.35 $2,250.5 (1.6x) 8.47x 7.27x 0.54x 0.46x NM 78.1x 4.95x
Twilio $23.60 $2,195.5 2.3x 4.94x 3.97x 0.10x 0.08x NM NM NA
Cornerstone OnDemand $35.33 $2,045.7 (7.4x) 4.10x 3.97x 0.34x 0.33x NM NM NA
CallidusCloud $28.65 $1,951.5 33.7x 7.13x 5.93x 0.33x 0.28x NM NM NA
Appian $31.48 $1,898.3 3.0x 5.70x 9.67x 0.37x 0.63x NM NM NA
The Trade Desk $45.73 $1,878.3 (1.6x) 5.77x 4.51x 0.10x 0.07x NM 39.8x 0.66x
Alarm.com $37.75 $1,779.6 (0.3x) 5.29x 4.63x 0.18x 0.16x NM 59.9x 2.07x
BlackLine $32.80 $1,736.3 0.9x 9.33x 7.23x 0.21x 0.16x NM NM NA
Coupa Software $31.22 $1,718.6 6.4x 8.44x 6.80x 0.21x 0.17x NM NM NA
Mimecast $28.67 $1,643.3 (7.2x) 6.57x 5.26x 0.17x 0.14x NM NM NA
Kinaxis $61.10 $1,554.6 (5.9x) 10.51x 8.68x 0.60x 0.49x NM 76.4x 4.35x
Q2 Holdings $36.85 $1,535.6 2.9x 7.46x 6.04x 0.22x 0.18x NM NM NA
MongoDB $29.68 $1,501.3 0.8x 13.66x 8.80x 0.25x 0.16x NM NM NA
Alteryx $25.27 $1,495.1 4.9x 10.39x 7.59x 0.11x 0.08x NM NM NA
Mindbody $30.45 $1,422.1 33.6x 6.66x 5.31x 0.20x 0.16x NM NM NA

TRADING METRICS – SAAS (CONTINUED)
23
Net Debt /
Hortonworks $20.11 $1,418.4 0.3x 5.28x 4.18x 0.13x 0.10x NM NM NA
AppFolio $41.50 $1,408.8 (0.8x) 9.63x 7.56x 0.26x 0.21x NM NM NA
Five9 $24.88 $1,384.6 (4.7x) 6.94x 5.93x 0.30x 0.26x NM NM NA
Varonis Systems $48.55 $1,351.6 3.9x 5.81x 4.89x 0.20x 0.17x NM NM NA
TrueCar $11.20 $1,119.8 24.1x 2.96x 2.60x 0.17x 0.15x NM NM NA
Yext $12.03 $1,097.5 0.5x 7.03x 4.96x NM NM NM NM NA
Talend $37.48 $1,092.2 4.7x 6.71x 5.17x 0.16x 0.12x NM NM NA
Instructure $33.10 $1,002.2 1.3x 5.98x 4.68x 0.13x 0.10x NM NM NA
Apptio $23.52 $949.9 1.4x 4.38x 3.80x 0.23x 0.20x NM NM NA
Workiva $21.40 $897.3 1.3x 4.06x 3.57x 0.25x 0.22x NM NM NA
Benefitfocus $27.00 $844.4 159.8x 3.55x 3.24x 0.29x 0.26x NM NM NA
Everbridge $29.72 $839.7 3.3x 7.64x 6.06x 0.22x 0.18x NM NM NA
SPS Commerce $48.59 $836.9 (5.7x) 3.06x 2.76x 0.20x 0.18x NM 93.4x 5.98x
HealthStream $23.16 $738.7 (1.8x) 2.49x 2.32x 0.27x 0.25x NM 79.9x 8.68x
LivePerson $11.50 $684.5 18.1x 2.89x 2.70x NM NM NM NM NA
Castlight Health $3.75 $501.5 0.7x 3.21x 2.58x 0.10x 0.08x NM NM NA
Tabula Rasa Healthcare $28.05 $500.7 (15.5x) 4.11x 2.94x 0.11x 0.08x NM 72.9x 2.01x
BazaarVoice $5.45 $469.2 (7.7x) 1.95x 1.86x 0.81x 0.77x NM NM NA
Model N $15.75 $461.9 0.0x 3.41x 3.01x 0.15x 0.13x NM NM NA
Upland Software $21.66 $450.0 31.3x 5.03x 4.02x 0.22x 0.18x NM NM NA
MobileIron $3.90 $374.6 1.5x 1.68x 1.57x 0.23x 0.22x NM NM NA
Zix $4.38 $244.2 (2.3x) 3.22x 2.99x 0.34x 0.32x 39.8x 25.8x 2.73x
ChannelAdvisor $9.00 $239.1 6.0x 1.51x 1.38x 0.18x 0.16x NM NM NA
Amber Road $7.34 $199.7 (1.8x) 2.71x 2.47x 0.30x 0.27x NM NM NA
Average $4,171.3 4.9x 6.46x 5.29x 0.27x 0.23x 42.3x 64.0x 3.57x
Median $1,998.6 0.9x 6.16x 5.17x 0.23x 0.19x 33.8x 71.8x 2.51x

OPERATING STATISTICS – SAAS
24
Market Enterprise Debt / LTM Revenue Growth 2017E Margin (%)
Company Cap Cash Debt Value Total Cap Revenue Y-o-Y 3-yr CAGR Gross CFO
Salesforce $73,840.7 $2,071.8 $2,167.5 $72,379.5 2.9% $9,923.0 25.5% 25.1% 60.0% 19.7%
ServiceNow $22,518.4 $1,104.9 $1,156.6 $22,003.1 4.9% $1,772.3 37.3% 42.7% 51.6% 3.3%
Workday $21,365.4 $1,337.0 $1,473.4 $19,627.7 6.5% $1,995.1 36.8% 41.6% 52.0% 7.0%
Splunk $11,718.4 $393.3 $0.0 $10,660.0 0.0% $1,157.5 34.0% 42.1% 62.4% 5.4%
Atlassian $10,474.3 $305.9 $0.0 $9,860.8 0.0% $677.0 37.6% 42.3% 68.4% 18.0%
Shopify $10,028.4 $119.8 $0.0 $9,101.8 0.0% $580.9 76.5% 102.6% 31.8% 0.1%
Veeva Systems $7,813.5 $310.8 $0.0 $7,055.4 0.0% $650.8 28.1% 31.1% 55.4% 18.0%
Ultimate Software Group $6,519.8 $125.7 $9.4 $6,391.2 0.1% $899.8 21.4% 23.1% 51.5% 19.9%
LogMeIn $6,032.0 $262.1 $0.0 $5,756.0 0.0% $801.7 147.3% 57.0% 28.4% 5.2%
Nutanix $5,659.8 $132.5 $0.0 $5,293.9 0.0% $875.6 60.4% 82.0% 48.3% (17.7%)
Tableau Software $5,518.3 $790.9 $0.0 $4,575.0 0.0% $878.4 12.7% 35.7% 83.8% 9.6%
Athenahealth $5,324.0 $122.7 $276.4 $5,477.7 4.9% $1,179.3 12.1% 18.4% 45.3% 17.4%
Paycom Software $4,680.4 $66.6 $34.4 $4,648.1 0.7% $406.8 32.8% 43.7% 63.7% 18.1%
Blackbaud $4,544.0 $17.1 $338.0 $4,864.9 6.9% $769.6 8.6% 12.1% 49.6% 19.2%
Proofpoint $3,981.8 $416.0 $381.2 $3,903.4 8.7% $476.7 38.7% 38.3% 52.4% 4.0%
RingCentral $3,743.8 $172.3 $0.0 $3,571.5 0.0% $465.5 29.8% 31.8% 57.7% 4.0%
Medidata Solutions $3,704.7 $128.4 $274.3 $3,581.2 6.9% $528.8 20.8% 18.2% 64.4% 20.0%
RealPage $3,671.6 $109.3 $397.7 $3,959.9 9.8% $632.4 16.9% 16.9% 48.5% 16.5%
j2 Global $3,632.1 $402.5 $999.2 $4,228.8 21.6% $1,053.3 27.3% 22.7% 64.9% 25.8%
Zendesk $3,435.0 $92.6 $0.0 $3,208.4 0.0% $395.7 38.3% 52.8% 51.1% 0.1%
2U $3,368.9 $202.4 $0.0 $3,166.4 0.0% $257.4 34.2% 35.1% 57.8% 1.7%
HubSpot $3,303.6 $176.7 $293.6 $3,105.3 8.2% $345.5 39.5% 49.2% 56.4% 0.8%
New Relic $3,181.0 $110.7 $0.0 $2,953.5 0.0% $306.2 37.8% 53.3% 65.1% (2.8%)
Ellie Mae $3,087.5 $246.8 $0.0 $2,721.4 0.0% $400.3 21.7% 40.2% 58.2% 22.7%

OPERATING STATISTICS – SAAS (CONTINUED)
25
MuleSoft $3,022.9 $56.2 $0.0 $2,841.4 0.0% $263.1 98.7% 80.3% 47.7% (10.4%)
Box $2,875.3 $172.9 $84.7 $2,787.2 2.9% $479.4 28.3% 35.5% 57.6% (3.0%)
FireEye $2,621.1 $160.8 $770.0 $2,512.4 22.7% $733.5 2.7% 29.2% 59.6% (16.9%)
Okta $2,610.3 $137.6 $0.0 $2,386.7 0.0% $231.1 66.7% 66.7% 44.9% (20.4%)
Wix.com $2,580.5 $123.9 $1.2 $2,457.8 0.0% $391.3 48.9% 46.2% 57.8% (3.3%)
Ebix $2,492.9 $96.7 $343.0 $2,774.7 12.1% $339.3 17.6% 18.4% 59.9% 28.7%
Paylocity $2,476.7 $97.4 $0.0 $2,379.3 0.0% $312.0 25.9% 39.1% 51.6% 16.5%
WageWorks $2,457.5 $798.3 $244.8 $1,809.9 9.1% $461.7 33.1% 23.6% 48.8% 14.7%
Cloudera $2,333.2 $62.8 $0.0 $1,943.7 0.0% $336.8 79.0% 54.8% 56.2% (39.4%)
Qualys $2,250.5 $90.5 $0.0 $1,947.8 0.0% $220.1 15.8% 20.4% 67.6% 21.1%
Twilio $2,195.5 $91.9 $0.0 $1,911.6 0.0% $365.7 48.2% 50.0% 40.5% (1.8%)
Cornerstone OnDemand $2,045.7 $76.4 $245.6 $1,982.5 10.7% $459.1 12.0% 23.8% 59.5% 6.0%
CallidusCloud $1,951.5 $101.0 $0.0 $1,775.1 0.0% $239.7 21.4% 23.0% 51.6% 10.7%
Appian $1,898.3 $72.3 $0.0 $1,898.3 0.0% $153.3 15.3% 19.9% 64.6% (4.8%)
The Trade Desk $1,878.3 $132.8 $27.0 $1,772.5 1.4% $278.0 60.5% 80.0% 66.1% 13.4%
Alarm.com $1,779.6 $84.6 $72.0 $1,766.9 3.9% $319.9 28.9% 38.0% 48.5% 5.8%
BlackLine $1,736.3 $24.6 $0.4 $1,627.0 0.0% $162.1 44.4% 54.2% 53.3% (10.5%)
Coupa Software $1,718.6 $219.3 $0.0 $1,499.3 0.0% $171.0 40.1% 40.1% 49.3% (10.5%)
Mimecast $1,643.3 $76.9 $31.0 $1,554.8 1.9% $222.0 38.9% 41.0% 57.6% 4.4%
Kinaxis $1,554.6 $151.4 $0.0 $1,403.2 0.0% $129.2 17.5% 24.1% 60.1% 20.8%
Q2 Holdings $1,535.6 $40.1 $0.0 $1,446.8 0.0% $184.4 33.2% 36.4% 37.5% (1.9%)
MongoDB $1,501.3 $69.3 $0.0 $1,384.8 0.0% $101.4 55.3% 30.1% 70.5% (61.1%)
Alteryx $1,495.1 $95.8 $0.0 $1,338.5 0.0% $118.0 94.0% 49.9% 54.2% (14.6%)
Mindbody $1,422.1 $225.3 $15.1 $1,211.8 1.0% $171.1 32.6% 50.9% 52.7% (3.4%)

OPERATING STATISTICS – SAAS (CONTINUED)
26
Hortonworks $1,418.4 $53.9 $0.0 $1,355.2 0.0% $238.8 40.5% 40.5% 43.7% (54.9%)
AppFolio $1,408.8 $14.8 $0.0 $1,365.6 0.0% $133.9 36.7% 57.2% 43.0% 4.6%
Five9 $1,384.6 $63.4 $46.0 $1,367.2 3.2% $189.0 22.8% 24.3% 48.3% 2.2%
Varonis Systems $1,351.6 $53.5 $0.0 $1,223.1 0.0% $198.6 29.0% 28.6% 70.6% (1.2%)
TrueCar $1,119.8 $196.4 $29.1 $952.5 2.5% $314.1 17.6% 18.0% 78.4% 2.8%
Yext $1,097.5 $21.1 $0.0 $1,097.5 0.0% $113.5 (0.7%) 25.3% 55.9% (18.0%)
Talend $1,092.2 $94.6 $0.0 $997.6 0.0% $137.5 42.6% 58.7% 54.1% (15.0%)
Instructure $1,002.2 $58.7 $0.1 $935.6 0.0% $146.5 44.9% 50.0% 49.9% (24.6%)
Apptio $949.9 $29.3 $0.1 $814.5 0.0% $180.5 19.4% 22.6% 57.2% (7.3%)
Workiva $897.3 $62.7 $19.9 $839.4 2.2% $199.7 16.0% 23.5% 61.5% (13.0%)
Benefitfocus $844.4 $54.6 $119.8 $909.6 12.4% $252.6 12.3% 25.6% 43.9% (0.5%)
Everbridge $839.7 $23.6 $0.0 $792.1 0.0% $96.5 34.4% 34.4% 51.2% (0.1%)
SPS Commerce $836.9 $129.0 $0.0 $673.1 0.0% $213.4 15.6% 21.0% 58.7% 10.8%
HealthStream $738.7 $60.5 $0.0 $615.3 0.0% $243.6 9.2% 14.5% 52.3% 12.6%
LivePerson $684.5 $54.4 $0.0 $630.2 0.0% $217.6 (3.6%) 3.1% 73.2% 4.0%
Castlight Health $501.5 $45.0 $5.4 $419.9 1.1% $124.3 33.5% 50.8% 51.4% (21.3%)
Tabula Rasa Healthcare $500.7 $5.9 $36.9 $531.7 6.9% $117.9 36.3% 39.6% 22.3% 5.0%
BazaarVoice $469.2 $52.0 $0.0 $404.0 0.0% $206.3 2.4% 4.7% 60.3% 7.2%
Model N $461.9 $57.6 $57.2 $461.6 11.0% $131.2 22.6% 17.1% 51.8% (17.6%)
Upland Software $450.0 $53.0 $91.7 $488.7 16.9% $89.5 22.6% 14.1% 48.5% 2.5%
MobileIron $374.6 $79.6 $0.0 $292.4 0.0% $173.1 7.2% 12.2% 76.4% (16.4%)
Zix $244.2 $32.8 $0.0 $211.4 0.0% $64.4 9.4% 9.0% 75.6% 20.0%
ChannelAdvisor $239.1 $54.2 $0.9 $185.8 0.4% $120.2 8.4% 13.8% 69.7% 5.8%
Amber Road $199.7 $8.3 $22.7 $214.1 10.2% $77.6 9.1% 7.3% 47.4% (5.9%)
Average $192.2 $139.8 $3,976.2 3.0% $531.3 32.3% 35.4% 55.4% 0.8%
Median $95.2 $0.0 $1,854.1 0.0% $260.3 29.0% 34.8% 54.8% 3.1%

Robert Koven Leonis Partners 4th Quarter 2017 SAAS Analysis

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Robert Koven Leonis Partners 4th Quarter 2017 SAAS Analysis