Matrix Partners Northzone Pacific Crest SaaS Survey 2015

1
2015 Pacific Crest
Private SaaS Company
Survey Results
October 16, 2015

2
Pacific Crest 2015 Private SaaS Company Survey:
Summary of Results
 This report provides an analysis of the results of a survey of private SaaS companies
which Pacific Crest’s software investment banking team conducted in June-July 2015
– Represents the sixth such survey Pacific Crest has completed
– The survey results include responses from senior executives of 305 companies. Special thanks
to our partners at Matrix Partners, who helped solicit participants through the forEntrepeneurs
blog
 Broad diversity of SaaS companies participated. Representative statistics on the
participant pool:
– $4MM median revenues, with 133 companies >$5MM and 57 >$25MM
– 47 median full-time employees (range of 2 to 1,200)
– Median customer count of approximately 300; 28% of respondents have >1,000 customers
– 70% of participants headquartered in the U.S.
– $21K median annual contract value (ACV), with 21% of participants below $5K and 17% above
$100K. Good mix of field sales (41% use as predominant mode), inside sales (21%), as well as
Internet, channel, and mixed modes
Our goal is to provide useful operational and financial benchmarking
data to executives and investors in SaaS companies

3
Survey Participant Geography (HQ)
U.S. Regions
Northern California – Silicon Valley 48
Southern California 14
Boston / New England 35
Pacific Northwest 13
New York Metropolitan Area 19
Washington DC 11
Southeast U.S. 26
Midwest / Chicago 23
Colorado / Utah 6
Texas 10
Other U.S. 6
TOTAL U.S. : 211
Other Locations
Canada 19
Europe 40
Middle East / Africa 3
Latin America 6
Australia / New Zealand 13
Asia 13
TOTAL Non-U.S. : 94
13
13
6
211
40
3
19
305 respondents
Comparison with
Previous Surveys
31% international, up from
21% last year.

4
62
40
28 30
24
19
26 25 26
22
0
10
20
30
40
50
60
70
<15 15-25 25-35 35-50 50-75 75-100 100-150 150-250 250-500 500+
NumberofCompanies
Full-Time Equivalent Employees
74
59
35 32
18
26
17 14 12 12
0
10
20
30
40
50
60
70
80
<$750k $750k-
$2.5MM
$2.5MM-
$5MM
$5MM-
$10MM
$10MM-
$15MM
$15MM-
$25MM
$25MM-
$40MM
$40MM-
$60MM
$60MM-
$100MM
Greater
than
$100MM
NumberofCompanies
2014 Revenue
Survey Participant Size Distribution
299 and 302 respondents, respectively
Median ≈ $4MM
Median ≈ 47
Revenue
FTEs

5
Less than
$100k
$125k $125k $129k
$164k
$143k $143k
$188k
$230k
$0k
$50k
$100k
$150k
$200k
$250k
<$2.5MM $2.5MM-
$5MM
$5MM-
$10MM
$10MM-
$15MM
$15MM-
$25MM
$25MM-
$40MM
$40MM-
$60MM
$60MM-
$100MM
Greater
than
$100MM
Median2014GAAPRevenueperFTE
Sized Company (2014 Revenue)
Revenue per FTE Efficiency
Respondents: <$750k: 74; $750k-$2.5MM: 59; $2.5MM-$5MM: 35; $5MM-$10MM: 32; $10MM-$15MM: 17; $15MM-$25MM:
26; $25MM-$40MM: 17; $40MM-$60MM: 13; $60MM-$100MM: 12; >$100MM: 12
Median ≈ $112K
(Excl. <$2.5MM)
Median ≈ $142K

7
2
17
44 45
32
18
13
30
23
69
3
10
35
48
36
20
23 23
19
72
0
10
20
30
40
50
60
70
80
<0% 0%-10% 10%-20% 20%-30% 30%-40% 40%-50% 50%-60% 60%-80% 80%-100% >100%
NumberofCompanies
2014 GAAP Revenue Growth 2015E GAAP Revenue Growth
How Fast Did / Will You Grow GAAP Revenues?
Median 2014 GAAP Rev Growth ≈ 44%
Median 2015E GAAP Rev Growth ≈ 46%
Comparison with
Previous Surveys
These results are
markedly up from medians
of 37% and 42% growth
for 2013 and 2014E,
respectively, reported in
last year’s survey, and
closer to the 2013 survey
results (41% and 47% for
2012 and 2013E growth,
respectively).
The median
revenue growth
achieved by
survey
respondents in
2014 was 44%,
while the median
projected growth
for 2015 is 46%.

8
0
10
27
34
23
12
10
24
8
21
1
7
23
36
28
12
17
14
9
19
0
5
10
15
20
25
30
35
40
<0% 0%-10% 10%-20% 20%-30% 30%-40% 40%-50% 50%-60% 60%-80% 80%-100% >100%
NumberofCompanies
2014 GAAP Revenue Growth 2015E GAAP Revenue Growth
How Fast Did / Will You Grow GAAP Revenues?
(Excluding Companies <$2.5MM in Revenue)
Median 2014 GAAP Rev Growth ≈ 36%
Median 2015E GAAP Rev Growth ≈ 36%
As expected,
many of the
fastest growers
are among the
smallest
companies.
Eliminating them
brings median
growth rates
down
approximately
10% points.

9
43%
70%
36%
29%
31%
36%
35%
31%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$2.5MM-
$5MM
$5MM-
$7.5MM
$7.5MM-
$10MM
$10MM-
$15MM
$15MM-
$25MM
$25MM-
$40MM
$40MM-
$75MM
>$75MM
2014RevenueGrowthRate
2014 GAAP Revenue
Median Growth Rate as a Function of Size of Company
Respondents: $2.5MM-$5MM: 35, $5MM-$7.5MM: 18, $7.5MM-$10MM: 14, $10MM-$15MM: 17, $15MM-25MM: 26, $25MM-
$40MM: 18, $40MM-$75MM: 19, >$75MM: 20
Median ≈ 36%
The results indicate
that companies in the
$5-$7.5MM range
are among the
fastest growers –
with the median
much greater than
the median of
companies half their
size.
Comparison with
Previous Surveys
We saw a similar
phenomenon of a bump-
up last year for companies
at this size, although our
data was not as finely
segregated (the bump-up
group was $5-$10MM).

10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$2.5MM -
$5MM
$5MM-
$7.5MM
$7.5MM-
$10MM
$10MM-
$15MM
$15MM-
$25MM
$25MM-
$40MM
$40MM-
$75MM
>$75MM
2014 GAAP Revenue
Median Growth Rate as a Function of Size of
Company – Middle Third Group
87%
84%
38% 38%
52%
43%
27%
61%
23% 24%
26%
21%
Highlighted range represents the 33rd-67th percentile of data
Respondents: $2.5MM-$5MM: 35, $5MM-$7.5MM: 18, $7.5MM-$10MM: 14, $10MM-$15MM: 17, $15MM-25MM: 26, $25MM-
$40MM: 18, $40MM-$75MM: 19, >$75MM: 20
Median ≈ 36%
Looking at the
middle third of
respondents in
each size group
suggests that the
$2.5-$5MM
companies are
also among the
fastest growers.
73%
23%
46%
27%

11
33%
36%
33% 33%
38%
62%
37%
0%
10%
20%
30%
40%
50%
60%
70%
<$5K $5K-$15K $15K-$25K $25K-$50K $50K-$100K $100K-$250K >$250K
2014RevenueGrowth
Median Contract Size (ACV)(1)
Median Growth Rate as a Function of Contract Size
(1): Annual Contract Value (ACV) is defined as annualized monthly run rate in recurring SaaS revenues, excluding professional services,
perpetual licenses and related maintenance
(2): Discrepancy from 35% median on slide 7; smaller set of respondents who answered both questions
Respondents: <$5K: 20, $5K-$25K: 24, $25K-$100K: 44, $100K-$250K: 14, >$250K: 16
Median ≈ 36%(2)
There appears to be
no relationship
between median
contract size and
growth other than a
bump-up for the
$100K- $250K group
(though this could be
skewed by sparse
data in that group).
Comparison with
Previous Surveys
Last year, the bump-up
occurred for companies in
the ranges encompassing
$5K-$100K ACV.

12
31%
37%
23%
65%
43%
0%
10%
20%
30%
40%
50%
60%
70%
Field sales Inside sales Internet sales Channel Sales
(VARs, OEMs, etc)
Mixed
2014GrowthRate
Primary Mode of Distribution(1)
Median Growth Rate as a Function of Sales Strategy
(1): Primary Mode of Distribution – At least 50% of new ACV bookings from new customers in 2015E come from designated distribution
channel; “Mixed” defined as respondents who didn’t select at least 50% for any designated distribution channel
Respondents: Field: 66, Inside:35, Internet: 8, Channel: 8, Mixed: 46
Median ≈ 35%
We found that median
growth among field
sales dominated
companies slightly
lagged inside sales
dominated companies
(by 6% points), but led
internet sales by 8%
points. Channel sales
dominated companies
grew significantly
faster, though the data
is sparse. Mixed also
performed well.
Comparison with Previous
Surveys
Field sales lagged inside
sales by a greater amount
this year (6% in 2015 vs. an
insignificant 2% difference in
2014).

13
63%
43%
38%
57%
28%
33% 33%
48%
0%
10%
20%
30%
40%
50%
60%
70%
VSB SMB Enterprise Mixed
2014GrowthRate
All Companies Excluding Companies <$2.5MM in Revenue
Median Growth Rate as a Function of Target Customer(1)
(1): Target Customer – At least 50% of revenues come from designated customer base; “Mixed” defined as respondents who didn’t select at
least 50% for any designated customer base
VSB customers defined as <20 employees, SMB as ~100-1,000 employees, and enterprise as >1,000
Respondents: VSB: 18 and 7, SMB: 67 and 36, Enterprise: 97 and 68, Mixed: 105 and 53, respondents, respectively
Median Revenue Growth ≈ 44%
Median Revenue Growth (excl. <$2.5MM Revenue) ≈ 36%
Companies with
mixed/balanced
target customer
strategies are
growing the
fastest.
Otherwise, at
least for
companies
>$2.5MM in
revenues, there
aren’t significant
differences.
Comparison with
Previous Surveys
A big change for the
“mixed” group. Last year’s
survey showed no
advantage for mixed /
balanced target customer
companies.

15
Primary Mode of Distribution
Primary Mode of Distribution – At least 50% of new ACV bookings from new customers in 2015E come from designated distribution channel;
“Mixed” defined as respondents who didn’t select at least 50% for any designated distribution channel
Comparison with
Previous Surveys
Results were very similar
to last year, with a slight
shift away from inside
sales strategies towards
mixed distribution models.
All Companies Excluding Companies
<$2.5MM in Revenue
Field sales
remains the most
popular way to
sell, with 41% of
participants
employing it as
their primary
mode of
distribution (32%
if we exclude
companies with
<$2.5MM in
revenues).
Field Sales
32%
Inside Sales
22%
Internet
Sales
10%
Channel
6%
Mixed
30%
Field Sales
41%
Inside Sales
21%
Internet
Sales
5%
Channel
5%
Mixed
28%

16
8% 11% 13%
17%
45%
52%
77%
62%
15%
27%
45% 34%
24% 7%
46% 19%
10%
3%
3%
4%
8%
8%
10%
3%
5%
5%
8%
23%
35%
23%
41%
24%
37%
18%
31%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
<$1k $1k-$5k $5k-$15k $15k-$25k $25k-$50k $50k-$100k $100k-$250k >$250k
Median Contract Size (ACV)
Field Inside Internet Channel Mixed
Primary Mode of Distribution as a Function of Median
Initial Contract Size
Note: Initial ACV of a contract
2015 Respondents: <$1K: 13, $1K-$5K: 37, $5K-$15K: 40, $15K-$25K: 29, $25K-$50K: 38, $50K-$100K: 27, $100K-$250K: 22,
>$250K: 13
Comparison with
Previous Surveys
Results are very similar to
last year, except for
companies with median
ACVs over $250K, where
in this year’s results, we
see noticeably more
companies using inside
sales.
Analyzed by
contract value,
field sales
dominates for
companies with
median deals
over $50K and
more or less
disappears when
median deal
sizes are below
$15K. There’s
meaningful
bifurcation
among the $15K-
$25K and $25K-
$50K groups.

17
$15K-$50K Median Contract Size
Field-Dominated Inside-Dominated
Revenue $20MM $11MM
Growth Rate 28% 29%
Revenue per FTE $117K $131K
Annual Gross Dollar Churn(1)
7% 12%
Net Dollar Retention Rate(1)
106% 115%
CAC(1)
$1.09 $1.04
S&M % of Revenue 41% 41%
Distribution Strategy – Analysis of Field vs. Inside Sales in
Key Crossover Deal Size Tiers
(1) See definitions described later in this presentation
Respondents: Field-Dominated: 11; Inside-Dominated: 9
Among companies
selling $15K-$50K
ACV, we compared
those favoring field
vs. inside and
found: (1) larger
companies tended
to favor field; (2)
inside sales driven
companies had
slightly higher
efficiency, as
reflected in $/FTE,
however CAC,
S&M expense
ratios and growth
were virtually
identical; and (3)
gross churn was
higher for inside,
but net dollar
retention was also
higher, suggesting
more success with
“land-and-expand”.

18
6
15
19
14
23
24
17
15
9
0 5 10 15 20 25 30
Less than $0.25
$0.25-$0.50
$0.50-$0.75
$0.75-$1.00
$1.00-$1.25
$1.25-$1.50
$1.50-$2.00
$2.00-$3.00
Over $3.00
CAC(1): How Much Do You Spend for $1 of New ACV from a
New Customer?
(Excluding Companies <$2.5MM in Revenues)
“How much do you spend on a fully-loaded sales & marketing cost basis to acquire $1 of
new ACV from a new customer?”
Median ≈ $1.18
(1): Includes the fully-loaded amount spent on sales & marketing for the win, over multiple periods, if necessary.
142 respondents
Respondents
(excluding the
smallest
companies)
spent a median
of $1.18 to
acquire each
dollar of new
ACV from a new
customer. The
result drops to
$1.06 if we
include
companies with
<$2.5MM in
revenues.
Comparison with
Previous Surveys
The median result is
notably higher than the
$1.07 and $0.92 reported
in the 2014 and 2013
surveys, respectively.

19
$0.68
$0.11 $0.07
$0.55
$0.33
$1.18
$0.28
$0.13
$0.00
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
New ACV from New
Customer
Upsell to Existing
Customer
Renewals
CAC on New Customers vs. Upsells vs. Renewals
(Excluding Companies <$2.5MM in Revenues)
Respondents: New ACV from New Customer: 142, Upsell to Existing Customer: 102, Renewals: 97
The median CAC
per $1 of upsells
is $0.28, or about
24% of CAC to
acquire each
new customer
dollar. The CAC
for renewals is
$0.13, or 11% of
the CAC to
acquire each
new customer
dollar.
Comparison with
Previous Surveys
The cost of upsells ($.28)
has increased from the
$.18 reported in 2014,
while the cost of renewals
remains almost identical.
25th percentile
75th percentile
Median

20
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Field Sales Inside Sales Channel Internet Sales
<$0.25 $0.25 - $0.50 $0.50 - $0.75 $0.75 - $1.00 $1.00 - $1.25
$1.25 - $1.50 $1.50 - $2.00 $2.00 - 3.00 >$3.00
CAC Spend by Primary Mode of Distribution
Respondents: Field sales: 63, Inside sales: 56, Channel sales: 12, Internet sales: 20 (includes Companies <$2.5MM in revenue)
Comparison with
Previous Surveys
All modes have shown
increases except Internet,
which is down from $0.54
to $0.42.
As expected,
field sales has
the most
expensive CAC
at $1.14, followed
by inside sales at
$0.90. Channel
and online
distribution have
significantly
lower CACs at
$0.66 and $0.42,
respectively.
Median ≈ $0.66 Median ≈ $0.42Median ≈ $1.14 Median ≈ $0.90

21
75%
62%
35%
25%
38%
65%
Field Sales Inside Sales Internet Sales
69%
31%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Overall
%ofCACSales&MarketingSpend
CAC Composition: Sales vs. Marketing Cost % of CAC
Overall, the
median company
devotes 31% of
their CAC to
Marketing
expenses, with
the remaining
69% allocated to
Sales. However,
Inside Sales- and
Internet Sales-
driven
companies have
a much greater
reliance on
Marketing, with
38% and 65% of
their CAC
budgets devoted
to Marketing,
respectively.
Respondents: 290; Field Sales: 93; Inside Sales: 64; Internet Sales: 28
Note: Overall group also includes Channel Sales and Mixed Strategy dominated companies not shown on graph
75%
62%
35%
25%
38%
65%
Field sales Inside sales Internet sales
Sales Marketing

22
20
39
26
23
16
43
24
10
19
8
6
16
9
7
5
0
5
10
15
20
25
30
35
40
45
50
<3 mos. 3-5 mos. Approx.
6 mos.
7-9 mos. 9-11
mos.
Approx.
1 year
13-15
mos.
15-17
mos.
Approx.
18 mos.
19-21
mos.
21-23
mos.
Approx.
2 years
2.0 - 2.5
years
2.5-3.0
years
>3 years
#ofRespondents
CAC Payback Period
CAC Payback Period (Gross Margin Basis)
271 respondents
For the first time
we asked about
CAC payback
period (defined
as # of months of
subscription
gross profit it
takes to recover
the fully loaded
cost of acquiring
the customer).
Respondents
reported a
median CAC
payback of ~12
months, though
we note a wide
distribution of
responses.
Median ≈ 12 months

23
Median CAC Payback Period by Primary Mode of Distribution
Respondents: All Companies: Field sales: 84, Inside sales: 61, Channel sales: 15, Internet sales: 24, Mixed: 83 (includes Companies <$2.5MM
in revenue)
Respondents (>$2.5MM Revenue): Field sales: 60, Inside sales: 33, Internet sales: 7, Channel sales: 7, Mixed: 44
13.4
12.0
7.3
8.0
12.0
14.5
12.0
10.0
14.0
12.0
0
2
4
6
8
10
12
14
16
Field sales Inside sales Internet sales Channel Mixed
CACPaybackPeriod(months)
Distribution Type
All Companies Excluding Companies <$2.5MM in Revenue
Field Sales-
dominated
companies have
20% longer CAC
payback periods
than those
primarily using
Inside Sales,
which in turn
have
approximately
20% longer CAC
payback periods
than those
relying primarily
on Internet Sales.

24
11%
15%
14%
17%
21%
16%
32%
28%
0%
5%
10%
15%
20%
25%
30%
35%
<$1.25M $1.25MM -
$2.5MM
$2.5MM -
$5MM
$5MM -
$15MM
$15MM -
$25MM
$25MM -
$40MM
$40MM -
$75MM
>$75MM
%NewACVfromUpsells
2014 GAAP Revenue
What Percentage of New ACV is from Upsells to Existing
Customers?
Respondents: <$1.25MM: 71, $1.25MM-$2.5MM: 19, $2.5MM-$5MM: 23, $5MM-$15MM: 35, $15MM-25MM: 22, $25MM-$40M: 15,
$40MM-$75M: 17, >75MM: 15
Median ≈ 16%
Comparison with
Previous Surveys
Largely consistent with
prior years’ results.
The median
respondent gets 16%
of new ACV sales
from upsells; larger
companies rely more
heavily on upsells.

25
9%
8%
18%
15%
16%
13%
27%
13%
18%
17%
23% 23%
25%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
<$2.5MM $2.5MM to
$5MM
$5MM to
$10MM
$10MM to
$15MM
$15MM to
$25MM
$25MM to
$40MM
>$40MM
%NewACVfromUpsells
2014 GAAP Revenue
Bottom 50% Growers Top 50% Growers
Are the Fastest Growing Companies Relying More on
Upsells?… Yes
Median ≈ 16%
Almost across
the board, the
fastest growers
tended to have
noticeably more
reliance on
upsells.
Respondents: <$2.5MM: 86, $2.5MM-$5MM: 23, $5MM-$10MM: 23, $10MM-$15MM: 12, $15MM-25MM: 22 $25MM-$40M: 15, >$40MM: 32
Comparison with
Previous Surveys
2014 showed a similar
result for companies
above $10MM but not
below. Now the fastest
growing smaller
companies are also
focusing on upsells.
What Percentage of New ACV is from Upsells to Existing Customers?

26
7
5
7
3
16
15
10
16
8
7
16
18
0 10 20
< (25%)
(15%)-(25%)
(5%)-(15%)
(1%)-(5%)
0%
0-10%
10-20%
20-25%
25-30%
30-40%
40-50%
>50%
45
35
21
12
5
5
1
2
0 10 20 30 40 50
0-10%
10-25%
25-50%
50-75%
75-100%
100-150%
150-200%
>200%
Professional Services Impact on Go-to-Market
Professional Services
(as % of 1st year ACV)
Professional Services Margin
Median ≈ 20%
Professional
services play a
minor role for
most, with the
median company
booking P.S.
revenues on new
deals equivalent
to 18% of first
year subscription
contract value.
Median P.S.
margins are
approx. 20%.
Comparison with
Previous Surveys
Median attach rates are
up, from 13% in the 2014
survey to 18% this year.
Margins are unchanged.
Median ≈ 18%

27
26%
18% 18%
11%
0%
5%
10%
15%
20%
25%
30%
Enterprise SMB VSB Mixed
ProfessionalServices%of1stYearACV
Target Customer
Professional Services (% of 1st Year ACV) as a Function of
Target Customer
Median ≈ 18%
Respondents: Enterprise: 52, SMB: 27, VSB: 3, Mixed: 40
As expected,
companies
which are
focused mainly
on enterprise
sales have
higher levels of
professional
services.
Comparison with
Previous Surveys
Attach rates ticked up
significantly across the
board (2014 survey:
Enterprise 18%, SMB 8%,
VSB 6%, Mixed 9%).

28
15
5
11
16
18
29
39
42
29
32
0 5 10 15 20 25 30 35 40 45
<50%
50-55%
55-60%
60-65%
65-70%
70-75%
75-80%
80-85%
85-90%
>90%
Subscription Gross Margins
“What is your gross profit margin on just subscription/SaaS revenues?”
236 respondents
Median
subscription
gross margins
are 78% (nearly
identical when
removing the
smallest
companies from
the group).
Median ≈ 78%
>90%
<50%
Comparison with
Previous Surveys
Virtually unchanged from
the 2014, 2013 and 2012
results.

29
None
0-10%
10-25%
> 25%
73%
13%
5%
9%
None
0-10%
10-50%
> 50%
Freemium / “Try Before You Buy”
“Freemium”
Expected New ACV in 2014 from
“Freemium” Leads
“Try Before You Buy”
Expected New ACV in 2014 from
“Try Before You Buy” Leads
Comparison with
Previous Surveys
Very consistent results
with previous years.
Approximately
30% of
companies
derive some
amount of new
ACV from
“freemium”
strategies,
though virtually
no one drives
their business on
it. “Try Before
You Buy” is
much more
commonly used:
60% derive
revenues through
this strategy, and
30% derive the
majority of their
new ACV
through “Try
Before You Buy”.
New ACV
New ACV
New ACV
New ACV
New ACV
New ACV
New ACV
39%
13%
19%
30%
New ACV

30
6 5
20
16
9
25
30
49
28
12
6
20
6
23
0
10
20
30
40
50
60
0-1% 1-3% 3-5% 5-6% 6-7% 7-8% 8-9% 9-10% 10-11% 11-12% 12-13% 13-15% 15-17% 17+%
NumberofRespondents
Sales Commission (As % of ACV)
Sales Commissions
255 Respondents
Median Commission Paid ≈ 9%
Comparison with
Previous Surveys
Overall consistent with
2014, 2013 and 2012
results, though granular
bucketing of potential
survey responses this
year resulted in additional
detail.
The median
reported sales
commission rate
for the group is
approx. 9% of
ACV.

31
0
1
12
8
3
6
13
24
13
7
3
10
1
10
1
2
5 5
3
9
12 12
7
1
2
7
3 3
0
5
10
15
20
25
30
0-1% 1-3% 3-5% 5-6% 6-7% 7-8% 8-9% 9-10% 10-11% 11-12% 12-13% 13-15% 15-17% 17+%
NumberofRespondents
Sales Commission (As % of ACV)
Field Inside
Sales Commissions by Sales Strategy
Respondents: Field : 111, Inside: 72
Median Inside Commission Paid ≈ 8.9%The survey
results indicate
that median
sales
commission rates
are only slightly
higher for Field
Sales versus
Inside Sales.
Median Field Commission Paid ≈ 9.5%
Comparison with
Previous Surveys
Similar to 2014 survey
results, though granular
bucketing of potential
survey responses this
year resulted in
additional detail.

32
8%
9%
10% 10% 9.5% 9.5%
0%
2%
4%
6%
8%
10%
12%
<$1K $1K-$5K $5K-$25K $25K-$100K $100K-$250K >$250k
MedianSalesCommission
Sales Commissions as a Function of Median
Contract Size
Respondents: <$1K: 8, $1K-$5K: 34, $5K-$25K: 64, $25K-$100K: 59, $100K-$250K: 21, >$250K: 13
Median ≈ 9%
Comparison with
Previous Surveys
In 2014, “Elephant
hunters” (>$250k median
ACV) had materially lower
commission rates (7%).
We note that the 2015
results are consistent with
results from two years
ago.
There was a high
degree of
consistency in
commission rates
across contract
sizes.

33
Additional Commission for
Extra Years on Initial Contract

No Additional
Commission
32%
 Nominal Kicker 26%
 Full Commission 20%
% of Respondents Paying:
Upsells
8%
% of Respondents
Paying Full
Commission(1)
45%
Median
Commission Rate
on Upsells
Renewals
2%
% of Respondents
Paying 0-1%
on Renewals
42%
Median
Commission Rate
on Renewals
Commissions for Renewals, Upsells and Multi-Year Deals
(1) Same rate (or higher) than new sales commissions
Respondents: Renewals: 224, Upsells: 233, Extra Years on Initial Contract: 216
Comparison with
Previous Surveys
The most significant
changes this year include:
1) Upsells: this year just
45% paid full commission
rates on upsells, vs. 58%
in last year’s group;
2) This year just 32% paid
no additional commission
on longer term contracts
vs. 42% in last year’s
group.
Not surprisingly,
commissions on
renewals are
typically deeply
discounted, with
a median rate of
2%. Upsells
command a
median rate of
8%, and nearly
half of the
companies pay
full commissions
on upsells.

34
6%
3%
8%
6%
8%
7%
0%
1%
2%
3%
4%
5%
6%
7%
8%
0-1% 1-3% 3-5% 5-7% 7-9% >9%
GrossDollarChurn%
Commissions on Renewals
Effect of Renewal Commission Rates on Gross Dollar
Churn
(1) The difference in medians compared to pg. 52 is due to different samples.
Respondents: 0-1%: 35, 1-3%: 35, 3-5%: 13, 5-7%: 10, 7-9%: 5, >9%: 8
Median ≈ 6%(1)
One natural
question to ask is
whether
companies which
pay higher
commissions on
renewals
experience lower
churn. The
following chart
suggests that
there is little
correlation
between
commissions on
renewals and
gross churn.

35
33%
38%
27%
33%
57%
0%
10%
20%
30%
40%
50%
60%
70%
0-1% 1-3% 3-5% 5-7% >7%
2014RevenueGrowth
Commissions on Renewals
Median Growth Rate as a Function of Commissions
on Renewals
Median ≈ 35%
Respondents: 0-1%: 52, 1-3%: 43, 3-5%: 15, 5-7%: 11, >7%: 15
Companies
offering 7% or
greater
commissions on
renewals have
experienced the
highest growth
rate.

37
Self-
Managed
Servers
37%
Amazon
Web
Services
(AWS)
40%
Salesforce1
5%
Azure
3%
Other Third
Party
16%
Self-
Managed
Servers
35%
Amazon
Web
Services
(AWS)
44%
Salesforce1
4%
Azure
6%
Other Third
Party
11%
How is Your SaaS Application Delivered?
Respondents: Now: 282 respondents, 3 Years from Now: 280 respondents
Now 3 Years from Now
We asked
participants to
provide information
on their primary
application delivery
method (in-house
or third-party) and
how they expect
that to change over
the next three
years. Over 60%
already use 3rd
parties
predominantly (two-
thirds of which is
AWS); expectations
for the future show
little change.
Comparison with
Previous Surveys
The trend toward using 3rd
party public cloud is huge
– self-managed is down
from 52% last year to 37%
this year!

38
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Less than
$1.25MM
$1.25MM to
$2.5MM
$2.5MM to
$5MM
$5MM to
$10MM
$10MM to
$15MM
$15MM to
$25MM
$25MM to
$40MM
Greater than
$40MM
Self-Managed Servers Amazon Web Services (AWS) Salesforce1 Microsoft Azure Other Third Party
SaaS Application Delivery Method(1) as a Function
of Size of Company
(1): Defined as “predominant” mode of delivery
Respondents: Less than $1.25MM: 96, $1.25MM-$2.5MM: 27, $2.5MM-$5MM: 34, $5MM-$10MM: 30, $10MM-$15MM: 14,
$15MM-$25MM: 25, $25MM-$40MM: 17, Greater than $40MM: 36, respectively
When filtered by
company size,
smaller
respondents
reported more
frequent use of
third-party
providers as their
primary
application
delivery method,
while the largest
companies were
more likely to use
self-managed
servers.
Comparison with
Previous Surveys
We see a shift away from
self-managed at every
level.

39
60%
23%
38%
31% 32%
43%
33%
82%
67%
68%
36%
28%
33%
52%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
<$2.5MM $2.5MM to
$5MM
$5MM to
$10MM
$10MM to
$15MM
$15MM to
$25MM
$25MM to
$40MM
>$40MM
2014 GAAP Revenue
Self Managed Third-Party
Comparison of Growth Rates for Companies Managing
Their Own Servers vs. Using 3rd Parties
Respondents: <$2.5MM: 24 and 92, $2.5MM-$5MM: 11 and 23, $5MM-$10MM: 14 and 16, $10MM-$15MM: 6 and 8, $15MM-$25MM: 13 and
12, $25MM-$40MM: 8 and 9, >$40MM: 26 and 10, respectively
Companies that
delivered their
applications
through third -
party managed
servers generally
experienced
faster growth
rates (in some
cases
considerably
faster)
Self-Managed
Median ≈ 32%
Third-Party
Median ≈ 47%

40
6% 6%
16%
4%
5%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Self-Managed
Servers
Amazon Web
Services (AWS)
Salesforce1 Microsoft Azure Other Third Party
2014ApplicationDeliveryCostas%ofRevenue
What Are Your Operational Costs to Deliver the SaaS
Application?
Respondents: Self-Managed: 86, AWS: 101, Salesforce1: 10, Microsoft Azure: 8, Others: 38
Median ≈ 6%
Respondents
relying primarily
on self-managed
servers reported
a median
delivery cost of
6% of sales,
comparable to
those primarily
using AWS. The
median cost of
delivery for
respondents on
Salesforce1 was
considerably
higher at 16%.
Comparison with
Previous Surveys
2014 results.
Significantly more expensive, but
see following analysis suggesting
comparable overall costs

41
77% 78%
83%
90%
79%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Self-Managed
Servers
Amazon Web
Services (AWS)
Salesforce1 Microsoft Azure Other Third Party
2014SubscriptionGrossMargin
Subscription Gross Margin as a Function of SaaS
Application Delivery Method
Respondents: Self-Managed: 90, AWS: 87, Salesforce1: 12, Microsoft Azure: 5, Others: 35
Median ≈ 78%
Interestingly,
despite the
aforementioned
differences in
estimated
operational
costs, median
subscription
gross margins
were much more
closely aligned
when filtered by
SaaS application
delivery method.
(Azure aberration
is likely due to
sparse data).

42
8%
11%
7%
5%
9%
11%
6%
10%
4%
10%
6% 6%
8%
11%
0%
2%
4%
6%
8%
10%
12%
<$2.5MM $2.5MM to
$5MM
$5MM to
$10MM
$10MM to
$15MM
$15MM to
$25MM
$25MM to
$40MM
>$40MM
2014ApplicationDeliveryCostasa%ofRevenue
2014 GAAP Revenue
Self-Managed Third-Party
Operational Costs as a Function of SaaS Application
Delivery, Grouped by Size Tiers
Somewhat
surprisingly,
among
respondents, a
company’s size
has little impact
on delivery costs
as a percentage
of revenues.
Third-Party
Median ≈ 9%
Respondents: <$2.5MM: 22 and 56, $2.5MM-$5MM: 8 and 19, $5MM-$10MM: 10 and 14, $10MM-$15MM: 5 and 5, $15MM-$25MM: 13 and 11,
$25MM-$40MM: 5 and 9, >$40MM: 20 and 8, respectively
Self-
Managed
Median ≈ 7%
Comparison with
Previous Surveys
In 2014, companies
deploying self-managed
servers generally faced
greater operational
costs.

44
2015E Median "At Scale"(1)
Median
Gross Margin 74% 79%
Operating Expense Margins:
Sales & Marketing 32% 27%
R&D 24% 19%
G&A 16% 13%
EBITDA 1% 17%
FCF 3% 17%
YoY Growth Rate 31% 25%
Cost Structure and Future Expected Operating Leverage
(1): Note – Survey describes scale as “$100 million in revenues or higher.”
Respondents: 2015E Median: 134, “At Scale” Median: 130, <$2.5MM Median: 95
Comparison with
Previous Surveys
Very similar results to last
year’s survey.
The median numbers
reflect respondents’
beliefs that the most
operating leverage will
come from
improvements in gross
margin, S&M and R&D.

45
Median Cost Structure by Size
(Includes Only Companies with >$2.5MM in ACV)
Note that numbers do not add due to the fact that medians were calculated for each metric separately and independently
(1): Annual Contract Value (ACV) is defined as total annualized recurring SaaS revenues, excluding professional services, perpetual licenses
and related maintenance
Respondents: $2.5MM-$5MM: 21, $5MM-$10MM: 26, $10MM-$15MM: 16, $15MM-25MM: 21, $25MM-$40MM: 12, >$40MM: 52
All Size of Company (ACV)
(1)
2014 Respondents $2.5-$5M $5-$10M $10-$15M $15-$25M $25-$40M >$40M
Total Gross Margin 71% 81% 83% 64% 69% 61% 70%
Subscription 79% 83% 83% 74% 76% 77% 76%
Professional Services 15% 32% 17% 23% 14% 0% 15%
Operating Expense Margins:
Sales & Marketing 33% 23% 31% 37% 46% 36% 36%
R&D 25% 28% 26% 31% 29% 26% 22%
G&A 16% 17% 16% 22% 17% 14% 16%
EBITDA Margin (5%) 5% 4% (23%) (13%) (20%) (3%)

46
Total Revenue Run-Rate
~$25MM ~$50MM ~$100MM
Median Values
Gross Margin 63% 64% 67%
Sales & Marketing 47% 44% 44%
Research & Development 23% 19% 19%
G & A 17% 16% 15%
EBIT Margin (29%) (17%) (6%)
FCF Margin (10%) (5%) (2%)
YoY Revenue Growth Rate
(1)
120% 67% 44%
For Comparison: Historical Results of Selected
Public SaaS Companies
(1): YoY Revenue Growth compares against previous year’s revenue of the companies at the time
Note: Excludes stock-based compensation (SBC)
Median includes ALRM, AMBR, APPF, ATHN, BCOV, BNFT, BOX, BV, CNVO, COVS, CRM, CSOD, CTCT, CVT, DMAN, DWRE, ECOM,
EOPN, ET, FLTX, HUBS, LOGM, MB, MKTG, MKTO, MRIN, N, NEWR, NOW, OPWR, PAYC, PCTY, PFPT, QLYS, RNG, RNOW, RP, SFSF,
SHOP, SPSC, SQI, TLEO, TXTR, VEEV, VOCS, WDAY, WK, XTLY, YDLE and ZEN
~$25M median excludes BNFT, COVS, CVT, FLTX, PAYC, PCTY, QLYS, RNG, RP, VEEV and WDAY
~$50M median excludes RP and TXTR
~$100M median excludes AMBR, APPF, BCOV, DMAN, DWRE, ECOM, EOPN, MB, MKTO, MRIN, PCTY, QLYS, SPSC, SQI, TXTR and
XTLY

47
33%
24%
28%
27%
28%
26%
41%
38%
41% 42%
43%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
<10% 10-15% 15-20% 20-25% 25-30% 30-35% 35-40% 40-50% 50-60% 60-80% >80%
Median2014Sales&MarketingSpendas%ofRevenue
2014 Growth Rate
Sales & Marketing Spend vs. Growth Rate
Median ≈ 32%
Respondents: <10%: 9, 10-15%: 9, 15-20% : 9, 20-25%: 14, 25-30%: 15, 30-35%: 10, 35-40%: 8, 40-50%: 11, 50-60%: 10,
60-80%: 19, >80%: 19
Comparison with
Previous Surveys
Very similar results to last
year’s survey.
Not surprisingly,
companies which
spend more on sales
& marketing (as a %
of revenue) grew at a
faster rate than those
which spend less. It
is interesting to see a
step function at 35%
growth, and not much
increase in sales &
marketing spend
required for higher
growth rates.

49
12
36
50
24
40
27
18
18
2
0 20 40 60
Less than $1,000
$1k-$5k
$5k-$15k
$15k-$25k
$25k-$50k
$50k-$100k
$100k-$250k
$250k-$1MM
Greater than $1MM
Median Annual Contract Size (ACV) of a Customer
227 respondents
Median ≈ $21K
Comparison with
Previous Surveys
These results are in-line
with previous survey
medians of $21K, $20K
and $24K in 2014, 2013
and 2012, respectively.
The median
initial annual
contract size
(subscription
component only)
for the group was
$21K per year.

50
Monthly
36%
Quarterly
11%
Quarterly
to <1 Year
9%
1 Year
43%
1-2+ Years
1%
Month to
month
11%
Less than
1 year
10%
1 to 2
years
51%
2 to 3
years
16%
3 years or
more
12%
Median / Typical Contract Terms for the Group
Respondents: Average Contract Length: 240, Average Billing Period: 239
Median ≈ 1.5 years Median ≈ 6 months
Average Contract Length Average Billing Period
Comparison with
Previous Surveys
Essentially the same
median contract length as
in the 2014 survey, while
the group has shown
slightly more aggressive
(longer forward) billing
(median of 6 months vs. 3
months last year).
The median
average contract
length is 1.5
years; and the
median billing
term is six
months in
advance.

51
Contract Length as a Function of Contract Size
Comparison with
Previous Surveys
Companies in the
"elephant hunter" group
are booking longer term
contracts. Respondents
with >$250K ACV book
35% of their contracts at 3
years or longer (compared
to only 5% in the 2014
group).
The phenomenon
of longer contract
terms for larger
contracts is
pretty clear.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
<$1k $1k-$5k $5k-$25k $25k-$100k $100k-$250k >$250k
AverageContractLength
Median Contract Value (ACV)
Month to month Less than 1 year 1 to 2 years 2 to 3 years 3 years or more

52
Seats
34%
Usage or
transactions
24%
Sites
8%
Total
employees
6%
Database
size
5%
Other
23%
What is Your Primary Pricing Metric?
“Other” includes: Data usage, number of apps being tested, email volume, customer devices and amount of content
240 respondents
Comparison with
Previous Surveys
These results are largely
in-line with 2014, 2013
and 2012 results.

53
26
19
15
36
39
0 10 20 30 40
1-3%
4-6%
7-9%
10-15%
> 15%
AnnualUnitChurn
Annual Unit Churn(1)
Median ≈ 10%
(1): Percentage churn of # of paid customers at year-end 2013 that were still customers at year-end 2014
135 respondents
Comparison with
Previous Surveys
This result is slightly
higher than the 2014 and
2013 results of 8%.
Reported median
annual unit churn
(by customer
count) is 10% for
the group.

54
52
39
13
11
13
0 10 20 30 40 50 60
<5%
5-10%
10-15%
15-20%
>20%
AnnualGrossDollarChurn
Annual Gross Dollar Churn
“What percentage of total ACV on a dollar basis churns in a given year?”(1)
(1): Excluding the benefit of upsells
128 respondents
Median ≈ 7%
Comparison with
Previous Surveys
This result is in the same
range as earlier results
(6% in 2014, 8% in 2013,
5% in 2012).
Median annual
gross dollar
churn (without
the benefit of
upsells) is 7%.
The results were
virtually the same
when including
companies
<$2.5MM in
revenues.

55
8%
12%
7%
4%
3%
3%
0%
2%
4%
6%
8%
10%
12%
14%
Month to month 1 year or less 1 to 2 years 2 years 3 years 4+ years
Average Contract Length
Annual Gross Dollar Churn as a Function of
Contract Length
Respondents: Month to Month: 5, Less than 1 year: 30, 1 to 2 years: 49, 2 years: 15, 3 years: 19; 4+ years: 10
Median ≈ 7%
Comparison with
Previous Surveys
Results are consistent
with those from last year;
the exception being
companies using month to
month contracts, which
show significantly lower
churn rates in this year’s
survey (8% vs. 13% in the
2014 survey).
Not surprisingly,
companies with
very long term
contracts (2+
years) have the
lowest annual
dollar churn. As
expected,
companies with
short-term
contracts (<1
year) tend to
experience
higher churn.

56
8.8%
9.2%
6.3%
10.8%
7.4%
4.4%
3.1%
3.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
1 to 2 years 2 years 3 years 4+ years
Contract Length
Non-Renewals Annualized Gross Churn
Close-Up: Annual Non-Renewal Rates(1) vs. Gross Churn
for Companies with Long-Term Contracts
(1) Annual non-renewal rate is based on only contracts up for renewal in a particular year
Respondents: 1 to 2 years: 49, 2 years: 15, 3 years: 19; 4+ years: 10
Non-Renewal
Median for the
LT Contract
Group ≈ 8.3%
The respondent
data would
suggest that
companies with
contract lengths
of greater than
one year actually
experience
equivalent, if not
greater, non-
renewal rates
when only
considering
dollars up for
renewal
compared to its
peers preferring
sub-annual
contracts

57
13%
8%
8%
5%
4%
5%
0%
2%
4%
6%
8%
10%
12%
14%
<$1K $1K-$5K $5K-$25K $25K-$100K $100K-$250K >$250K
GrossDollarChurn
Annual Gross Dollar Churn as a Function of
Contract Size
Comparison with
Previous Surveys
Very similar to previous
results.
As contract sizes
increase, gross
dollar churn
generally trended
downwards
(mostly related to
longer term
contracts,
presumably).

58
5%
11%
8%
4%
8%
0%
5%
10%
15%
Field Sales Inside Sales Internet Sales Channel Mixed
AnnualGrossDollarChurn
Annual Gross Dollar Churn as a Function of Primary
Distribution Mode
Respondents: Field Sales: 55, Inside Sales: 24, Internet Sales: 4, Channel Sales: 7, Mixed: 38
Median ≈ 7%
Comparison with
Previous Surveys
previous survey results.
Those
companies
employing
primarily field
sales had lower
churn rates than
those employing
primarily inside
sales or mixed
distribution.

59
11
9
8
19
39
30
37
38
29
0 20 40 60
<80%
80-90%
90-95%
95-100%
~100%
100-105%
105-110%
110-120%
>120%
Annual Net Dollar Retention from Existing Customers
Median ≈ 104%
“How much do you expect your ACV from existing customers to change,
including the effect of both churn and upsells?”(1)
100%+NetRetention
(Upsellsgreater
thanchurn)
NetChurn
(Churngreater
thanupsells)
(1): We define this as the “net dollar retention rate”
220 respondents
Comparison with
Previous Surveys
Nominally higher than
2014 (103%) and 2013
(101%) and 2 percentage
points lower than 2012
(106%).
The median
annual net dollar
retention rates,
including churn,
but also including
the benefit of
upsells, is 104%.
The result does
not change
materially when
removing the
smallest
companies
(<$2.5MM in
revenue) from
the group (likely
due to longer
contracting).

60
Unit Economic
Leaders
( Subscription GM > 80%; CAC All
< $1.50; and Net $ Retention > 100%) Others
Business and HQ
Vertical 44% 25%
End Customer 44% Enterprise 50% Enterprise
Revenue
Median 2014 Revenue $9MM $23MM
% of Companies >$25MM 17% 47%
Median Growth Rate 31% 35%
Revenue per FTE $138K $151K
Primary Distribution Mode
- Field Sales Dominated 71% 53%
- Inside Sales Dominated 18% 22%
Application Delivery
- 3rd Party Managed (e.g. AWS, Salesforce, etc.) 53% 48%
Median ACV Per Customer $28K $30K
Billing
- % Companies Billing 1 Year or More in Advance 47% 44%
% New ACV from Upsells 26% 19%
Comparison of Unit Economic Leaders to All Other
Companies
(Excluding Companies <$5MM in Revenue)
Respondents: Unit Economic Leaders: 18, All Others: 114
Superior unit
economics – high
lifetime value of
customer (LTV)
and low CAC –
are critical
success factors.
We compared
companies with
the strongest
metrics used to
derive LTV and
CAC with
everyone else,
and found some
interesting
patterns.
Comparison with
Previous Surveys
Among the Unit Economic
Leaders we see: smaller
companies, more field
dominated selling, more
vertical market SaaS
companies; smaller
component Enterprise end
customers; and higher
component of upsells.

62
39
17
18
22
29
10 15 20 25 30 35 40 45
Less than $5MM
$5MM to $15MM
$15MM to $25MM
$25MM to $50MM
Greater than $50MM
Equity Capital Raised So Far
Median ≈ $19MM
Respondents; Everybody: 125; >$2.5M: 91
Comparison with
Previous Surveys
Well above the 2014 and
2013 results of $8MM in
raised capital. However,
these results are similar to
the $23MM in capital
raised by participants in
the 2012 and survey.
Companies in the
survey group
have raised a
median of
roughly $19MM
in primary equity
capital so far
(excluding
secondary stock
sales). If we
exclude
companies
<$2.5MM, the
median jumps up
to $32MM.
Median ≈ $32MM
(excluding <$2.5MM)

63
Median
Amount No. of 2014 GAAP 2015E
Raised to Date Respondents Revenue Growth
Less than $5MM 35 $2MM 55%
$5MM to $15MM 16 $11MM 31%
$15MM to $25MM 18 $19MM 33%
$25MM to $50MM 22 $20MM 31%
Greater than $50MM 29 $40MM 33%
Analysis of Companies by Equity Capital Raised
120 respondents
Comparison with
Previous Surveys
The 2015 respondents
have much greater
revenue traction per
dollars raised than
previous years’ groups.

64
All Participants Excluding Companies <$2.5MM in Revenue
Years Investment Years Investment
Target Required Required Required Required
$1MM ACV 2 $3MM 2 $3MM
$5MM ACV 3 $6MM 4 $6MM
$15MM ACV 5 $10MM 6 $13MM
$40MM ACV 7 $17MM 8 $24MM
Capital Efficiency Expectations – Median Levels for the
Group
Actual/expected time and investment required to reach:
Comparison with
Previous Surveys
Very similar to 2014 and
2013 survey results.

65
% Using Median Debt Median Debt-to-MRR
2014 Revenue Range Debt(1)
Level(2)
Ratio
Less than $5MM 15% $1MM 2.0x MRR
$5MM to $10MM 58% $4MM 2.5x MRR
$10MM to $15MM 88% $4MM 3.2x MRR
$15MM to $25MM 90% $8MM 2.9x MRR
$25MM to $40MM 92% $9MM 2.8x MRR
Greater than $40MM 100% $20MM 3.6x MRR
Use of Debt Capital Among Private SaaS Companies
(1) % of companies with at least $1MM of debt
(2) Median among companies with at least $1MM of debt; includes debt outstanding plus availability under existing lines
Respondents: Less than $5MM: 43; $5MM to $10MM: 9; $10MM to $15MM: 8; $15MM to $25MM: 20; $25MM to $40MM: 13; Greater than
$40MM: 22

67
55%
46% 48%
60%
28%
32%
33%
20%
17%
21% 19% 20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Whole Group 0-25% 25-75% >75%
Professional Services Attach Rate
Within a week or two of signing Within a month of signing A few months or more after signing
Subscription Revenue Recognition Policies
“When do you typically begin recognizing subscription revenues on a new contract
with a new customer?”
Respondents: 0-25%: 108, 25-75%: 42, >75%: 15
Approximately 55% of
the respondents
indicated that they
begin recognition very
soon (within a week or
two) after signing new
contracts. It’s
interesting to see that
many companies with
significant services
were still able to start
subscription revenue
recognition quickly.
Comparison with
Previous Surveys
Largely unchanged from
previous years’ results.

68
As the
services are
provided
68%
Deferred over
the expected
life of the
customer
6%
Deferred over
the term of the
contract
26%
Professional Services Revenue Recognition Policies
203 respondents
“What is the predominant mode for recognizing professional services revenues?”
The clear
majority of
respondents
offering
professional
services
indicated that
they recognize
that revenue as
the services are
provided.

69
Deferred
recognition
28%
Recognized
upfront
72%
Sales Commission Cost Recognition Policies
214 respondents
“How do you recognize sales commission costs (deferred or recognized upfront)?”
We also inquired
as to the
recognition of
sales
commission
costs. We found
two-thirds of
respondents
indicating that
they recognize
commission
costs up-front.
Comparison with
Previous Surveys
5% increase in
“recognized upfront” from
last year’s 67%.

70
Subscription Revenue Recognition Professional Services Recognition Sales Commission Recognition
Auditor
Within a week or
two of signing
Within a month
of signing
A few months or
more after signing
As the service
is provided
Deferred over
life of customer
Deferred over
contract term
Deferred
recognition
Recognized
upfront
Deloitte 57% 36% 7% 62% 15% 23% 31% 69%
E&Y 59% 27% 14% 68% 0% 32% 15% 85%
KPMG 59% 27% 14% 57% 0% 43% 30% 70%
PWC 53% 24% 24% 75% 8% 17% 44% 56%
BDO 64% 18% 18% 63% 13% 25% 30% 70%
Other 52% 30% 18% 67% 7% 27% 25% 75%
Total 55% 29% 17% 66% 6% 28% 27% 73%
Accounting Policies Across Selected Accounting Firms
Respondents: Deloitte: 14, E&Y: 24, KPMG: 25, PWC: 18, BDO: 11, Other: 117

71
2011-2015 YTD Software and SaaS IPOs
Rank Firm Deals Value ($MM)
1 Pacific Crest Securities 38 $5,809.5
2 Morgan Stanley 30 5,787.4
3 J.P. Morgan 23 4,316.7
4 Goldman Sachs 21 3,830.4
5 Credit Suisse 21 2,930.4
6 Cannaccord 19 3,135.3
7 Raymond James 18 2,493.2
8 Deutsche Bank 17 2,757.7
9 JMP Securities 17 2,624.8
10 Stifel Nicolaus Weisel 17 2,155.4
11 UBS 14 2,956.2
12 William Blair & Co 14 1,400.5
13 Needham & Co 12 1,183.4
14 Barclays 10 1,733.2
15 RBC Capital Markets 10 1,206.7
16 Bank of America 9 1,270.3
17 Wells Fargo 7 1,856.3
18 Allen & Co 6 1,442.5
19 Piper Jaffray & Co 6 792.3
20 Oppenheimer & Co 6 591.9
21 Cowen & Co 5 1,376.4
22 BMO 5 879.4
23 Citi 4 834.2
24 Lazard Capital Markets 4 446.2
25 First Analysis 3 299.7
has been acquired by
PCS Leadership in SaaS and Software – Selected Recent
Transaction Experience
Corporate Finance Advisory
$100,100,000
MINDBODY
(MB)
Initial Public Offering
$150,535,000
Shopify
(SHOP)
$201,250,000
Box
(BOX)
$115,000,000
Hortonw orks
(HDP)
$143,750,000
HubSpot
(HUBS)
$114,999,993
Zendesk
(ZEN)
$114,626,250
Paycom Softw are
(PAYC)
$133,073,876
2U
(TWOU)
$110,503,887
Amber Road
(AMBR)
$300,035,000
Veeva Systems
(VEEV)
$135,240,000
Cvent
(CVT)
$732,550,000
Workday
(WDAY)
$104,535,000
Qualys
(QLYS)
$241,155,000
ServiceNow
(NOW)
has been acquired by has been acquired by
has been acquired by has been acquired by has been acquired by
has received an
investment from
has received an
investment from
has divested the
Progress Apama Solution to
has received an
investment from
has been acquired byhas been recapitalized by
$85,560,000
AppFolio
(APPF)

72
Disclosures
Important Disclosures:
This report has been prepared by Pacific Crest Securities, a division of KeyBanc Capital Markets Inc., herein known as “PCS”. The
material contained herein is based on data from sources considered to be reliable; however, PCS does not guarantee or warrant the
accuracy or completeness of the information. It is published for informational purposes only and should not be used as the primary basis
of investment decisions. Neither the information nor any opinion expressed constitutes an offer, or the solicitation of an offer, to buy or
sell any security. The opinions and estimates expressed reflect the current judgment of PCS and are subject to change without notice.
This report may contain forward-looking statements, which involve risk and uncertainty. Actual results may differ significantly from the
forward-looking statements. This report is not intended to provide personal investment advice and it does not take into account the
specific investment objectives, financial situation and the specific needs of any person or entity.
Pacific Crest’s specific disclosures can be seen here: http://www.pacific-crest.com/disclosures/
Pacific Crest’s privacy policy can be seen here: http://www.pacific-crest.com/privacy-policy/
Survey respondents participated anonymously and confidentially. Responses were received through online surveys taken in June-July
2015. Pacific Crest cannot verify accuracy of responses. Observations and commentary contained herein relate solely to the survey
results and cannot necessarily be applied elsewhere.
About Pacific Crest:
Pacific Crest Securities provides premier investment banking services for technology, operating at the leading edge, where global
connectivity is fueling an unprecedented expansion cycle. We apply our knowledge of the drivers of value creation and global network of
relationships to technology — high-growth sectors, such as Cloud and big data, SaaS, global internet, mobility, next-gen infrastructure
and communications, and industrial and energy technology. As a result, our clients — technology’s foremost institutional investors and
market leading companies — rely on us to achieve superior returns and gain competitive advantage from the seismic shifts occurring in
technology. Pacific Crest Securities is the technology specialist division of KeyBanc Capital Markets Inc., a FINRA registered broker-
dealer. Our sector bankers and transactional specialists collaborate to help clients identify and implement the right course of action,
whether a financing, M&A or alternative event. Our software clients include Box, Cvent, Eloqua, ExactTarget, FireEye, Fleetmatics,
Guidewire Software, Hortonworks, MindBody, Plex, Proofpoint, ServiceNow, SevOne, Splunk, Tableau Software, Veeva Systems,
Workday and Zendesk, among others. Pacific Crest Securities has offices in Boston, Charlotte, New York, Portland, San Francisco,
Seattle, Stamford, as well as the Beijing Representative Office and Pacific Crest Securities UK, Ltd, London.
If you have questions or comments, please contact David Spitz, Managing Director:
dspitz@pacific-crest.com; Twitter @dspitz

Matrix Partners Northzone Pacific Crest SaaS Survey 2015

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