PRISM … Progress Report for Internet and Social Media

April 15, 2013

Michael Pachter Yoni Yadgaran (213) 688-4474 (212) 938-9924 [email protected] [email protected]

In This Issue: SugarCRM, Tableau

SugarCRM

 SugarCRM’s customer relationship management (CRM) application is a subscription service that allows customers to host on their own servers (on-premise), in a public cloud (on-demand), or in a hybrid private cloud.  We attended a presentation by SugarCRM’s CEO Larry Augustin in New York this week, hosted by the company as part of its annual conference, where SugarCRM previewed its latest platform iteration, Sugar 7.

 In Q4:12 and FY:12, SugarCRM increased ARR by 40% and 60% y-o-y, respectively, while the number of paying subscribers

doubled in 2012.

Tableau

 Tableau is a stand-alone vendor of business intelligence applications that makes it easy for business users to visualize and analyze data without needing a large amount of technical knowledge.  Earlier this month, Tableau publicly filed an S-1, and believe that the earliest the company’s shares will begin trading is in May.

GIES GIES GROUP  Tableau will trade on the NYSE under the ticker DATA, after a $150 million offering to be led by Goldman and Morgan Stanley.

 The company doubled revenues in 2012 to $127.7 million, and has been moderately profitable for the last three years.

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WEDBUSHPRIVATE COMPANY STRATE Wedbush Securities does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Please see page 8 of this report for analyst certification and important disclosure information.

SugarCRM

We attended a presentation by SugarCRM’s CEO Larry Augustin in New York this week, hosted by the company as part of its annual conference for customers, developers, and partners. The company previewed its latest platform iteration, Sugar 7, which will launch this summer, and provided details on the company’s market traction. We published an earlier report covering SugarCRM in August 2012 (available here: http://goo.gl/clVgR). SugarCRM has grown to over 400 employees, and its platform has grown to include over 30,000 registered developers and 1,300 integrations. In the aggregate, the company’s Community Edition (free) and four paid editions have been downloaded over 12.5 million times, with over 6,500 organizations paying subscription fees to enable over 1.2 million end-users. SugarCRM’s management noted that they have often been told that they are underpricing their product, which is priced between $420 – 1,200 annually per subscriber (vs. $60 – 3,000 charged for Salesforce.com’s five tiers).

SugarCRM: List Price / User / Month Community Edition Professional Corporate Enterprise Ultimate Free $35 $45 $60 $100 Salesforce.com: List Price / User / Month Contact Manager Group Professional Enterprise Unlimited $5 $25 $65 $125 $250

Source: Wedbush Securities, Company Data

SugarCRM’s customer relationship management (CRM) application is a subscription service that allows customers to host on their own servers (on-premise), in a public cloud (on-demand), or in a hybrid private cloud. The updated Sugar 7 iteration will utilize HTML5 to increase platform speeds, and a social stream will show relevant client activity on social networks in the context of a customer’s account, within a single dashboard. Sugar 7 was designed to ensure that the service was appealing to end-users (i.e., a company’s sales team), in addition to management’s using the platform to track activity across an organization. The company wants to offer more than just a place to input data, and is trying to figure out how to turn inputs into useful analysis. The new release will include tools for pipeline management, including operating forecasting by line-item, which is meant to helps sales meet their quotas by improving their understanding of a customer’s needs.

In 2012, the company took a more vertical-specific approach, with the Education Services and Consumer Goods verticals performing particularly well. Manufacturing and Healthcare also grew share of Sugar’s annual recurring revenue (ARR) in 2012, and SugarCRM anticipates Transportation will be a very strong vertical in 2013. The anticipated strength within Transportation is likely a derivative of a broader growth in IT spend among Transportation and Logistics companies this year. The chart below illustrates IT spend growth projections that were published by Gartner earlier this year.

SugarCRM’s platform is used primarily by small and mid-sized businesses, although the company has successfully competed for several larger enterprise accounts as well. Large customer wins in 2012 include NY Life, Samsung, Lueg, Sennheiser, RussMedia, Wilson, IronFx, City Sprint, SMC, and AHS. Macquarie University, which was Sugar’s largest deployment in Australia, deployed the company’s platform to enable faculty to resolve issues and interact with about 50,000 students. While Sugar remains primarily a B2B service, customer support deals like Macquarie University incorporate B2C functionality that Sugar has been building out over the last year. We also thought it was interesting that between 10 – 25% of customers use Sugar’s service for customer support only (including Macquarie University), with many accounting for Sugar’s largest accounts. The company estimates that 48% of customers use Sugar primarily for sales force automation (SFA), while another 43% and 9% use the service primarily for customer support and marketing, respectively. The company observed that it is displacing Siebel on customer support account wins, in addition to significant green field wins (an estimated 60% of total new deployments) by replacing homegrown systems.

In Q4:12 and FY:12, SugarCRM increased ARR by 40% and 60% y-o-y, respectively, while the number of paying subscribers doubled in 2012. SugarCRM has seen significant traction around the 100- seat deal size cohort in 2012, and has grown ARR for its small (less than 50 people), medium (50 –- 250), and large (250+) sized account cohorts by 30%, 90%, and 270% y-o-y, respectively. The company’s largest markets are (in order of size) the U.S., UK, Australia, Germany, and France. North America was the company’s strongest market in 2012, accounting for 72% of new ARR (vs. 63% in 2011), while share of new ARR from EMEA fell from 29% in 2011 to 24% in 2012 due to the European crisis.

Tableau

Tableau is a stand-alone vendor of business intelligence applications that makes it easy for business users to visualize and analyze data without needing a large amount of technical knowledge. The company’s data discovery tool represents the next generation of business intelligence applications that are replacing traditional ad hoc query tools. Earlier this month, Tableau publicly filed an S-1, after having already filed a confidential draft with the SEC under the Jumpstart Our Business Startup (JOBS) Act, which went into effect one year ago. Under the JOBS Act, Tableau has to wait a minimum of three weeks after publicly filing an S-1 to start its roadshow, and we therefore believe that the earliest the company’s shares will begin trading is in May. Tableau will trade on the NYSE under the ticker DATA, after a $150 million offering to be led by Goldman and Morgan Stanley. In September 2008, Tableau received $10 million in funding, in a Series B venture round from New Enterprise Associates (NEA), which followed a $5 million Series A investment from NEA in 2004. In September 2010, Tableau agreed not to exercise its right of first refusal (ROFR) when NEA and Meritech Capital made a tender offer for a little over 5.9 million Class B shares of Tableau at $5.90 per share. Employees sold a total of 5.4 million shares for $32 million, effectively filling 91% of the tender offer. At the time, Tableau had ≈32 million shares outstanding, which at $5.90 per share implies a $190 million valuation. NEA and Meritech Capital hold 38% and 6% of outstanding Class B shares, respectively, while the company’s three co-founders (who continue to hold chief executive positions at Tableau) together own about half of outstanding shares.

Platform

Tableau’s software visualizes data in order to make it easier for users to analyze trends and patterns in both large and small data sets. The company’s products are used by individuals, SMBs and larger enterprise customers, and can be utilized in a broad range of use cases. Tableau’s products both replace and complement existing core on-premise business intelligence software. Tableau’s platform utilizes two technologies developed by the company to compete with other business intelligence offerings on ease-of-use and performance:

1) VizQL, a visual query programming language that Tableau created to enable a seamless translation of data queries into a visual interface and vice versa. The program enables the drag-and-drop user interface that makes Tableau’s offering easy to use for customers, who normally would have to first perform a data query from their database and then separately use the gathered data to create visuals.

2) Tableau’s hybrid data architecture, which enables customers to both export data to Tableau’s database and access their own on- premise databases. The hybrid architecture utilizes Tableau’s query engine for quickly accessing local data, while an in-memory data engine is used to simultaneously answer data queries with Tableau’s own in-memory database.

The company’s platform can be used by most industries, with potential verticals for healthcare, retail, banking, CPG (Consumer Goods), game development (Entertainment), communications (Telecom), and oil and gas (Energy). The platform enables analysis of big data, time series, and surveys, in addition to mapping and data discovery capabilities.

Source: Company Data

Tableau Public, which was launched in 2010, is the company’s freemium cloud-based offering, allowing website developers to create charts that site visitors can interact with. Users looking for technical support, larger data storage limits, and the ability to protect the data

of published web visuals, can upgrade to Tableau Public Premium, which is a subscription service. Tableau Desktop is the company’s business analytics offering for individual users who seek to use Tableau’s complete set of features for data analytics. Tableau Desktop is sold as either a personal or professional license for $1,000 and or $2,000, respectively, with the former license only including capabilities for data inputs from Excel, MS Access, and text files. Tableau Server is the company’s enterprise offering that includes collaborative tools and security features for organizations looking for broader implementation than just a single desktop, and Tableau negotiates pricing on an individual basis.

Business Model and Market Traction

The company’s products are generally adopted by only a single department or team within a larger organization, often incentivized by low initial deployment costs or a free trial, at which point Tableau attempts to expand adoption throughout the organization. Over the last three years, sales of licenses have accounted for 70% of annual revenues, with the balance coming from maintenance and services revenue. The company continues to sell services to existing license holders following deployment, which Tableau’s believes will more than eclipse the initial license fee paid by the customer at deployment, and provides some degree of revenue visibility.

Different groups within an organization that are separately buying the Tableau’s services are considered separate accounts, while “customers” encompasses all accounts within an organization. As of December 2012, Tableau had grown to over 10,000 customers and 11,000 accounts, up from 7,700 accounts and 5,300 accounts at the end of 2011 and 2010, respectively. In 2011 and 2012, both licensing and services revenue per average customer accounts increased materially, with total annual revenue per average account increasing from an estimated $8,990 in 2010 to $13,661 in 2012.

Revenue Per Average Customer Account FY:10 FY:11 FY:12 Accounts (Year-end) 5,300 7,700 11,000 Accounts (Avg.) 3,800 6,500 9,350 Licensing $6,374 $6,833 $9,613 Services $2,615 $2,761 $4,048 Total $8,990 $9,594 $13,661 Source: Wedbush Securities Estimates, Company Data

Market

According to estimates published by IDC, the amount of data created globally will grow from less than 1 trillion gigabytes (GB) in 2010 to over 40 trillion GB in 2020. As a result, businesses are forced to implement tools that can effectively sort through a quickly growing store of internal data, which Tableau estimates doubles every two years for many businesses. In 2012, the $12.8 billion global business intelligence market accounted for about 37% of the broader $35.1 billion global analytics software market, according to estimates published by IDC. We estimate the data discovery segment of the business intelligence platform market will grow by 39% in 2013, with Tableau growing its share within data discovery from 21% to 31%, at the expense of QlikTech and TIBCO.

Global Business Intelligence (BI) Market 2012 2013E Y-o-Y ∆ BI Market $12.8B $13.8B 8% BI Platform Market $8.2B $8.7B 6% TIBCO Spotfire $123M $150M 22% QlikTech $359M $436M 21% Tableau $128M $262M 105% Data Discovery Market $610M $848M 39% Source: Wedbush Securities Estimates, Gartner, Company Data

Financials

Tableau doubled revenues in 2012 to $127.7 million, and has been moderately profitable for the last three years. The company notes that over the last three years, no single customer represented over 5% of its annual revenue. U.S. customers generated 85%, 84%, and 83% of revenue in 2010, 2011, and 2012, respectively. The company notes that about 90% of license revenue came from perpetual licenses in 2012, and only 36% of perpetual licenses in 2012 came from new accounts.

Tableau: Revenue ($Millions)

$140 120% Y-o-Y Growth $128

$120 100%

$100 80%

$80 $62 60% $60

40% $40 $34

$18 $20 $13 20%

$ 0% FY:08 FY:09 FY:10 FY:11 FY:12

Source: Wedbush Securities Estimates, Company Data

Note that while Tableau enjoys 100% gross margin from its licensing revenue, a sequential decline of maintenance and services gross margin over the last two years, from 86% in Q1:11 to 72% in Q4:12, has reduced overall gross margin from 96% to 92% over the same period. Tableau: Segment Gross Margins

100%

95%

90%

85%

80%

75%

70% Licensing Maintenance & Services Total 65%

60% Q1:11 Q2:11 Q3:11 Q4:11 Q1:12 Q2:12 Q3:12 Q4:12

Source: Wedbush Securities, Company Data

Competition

The company counts large software vendors (Oracle, IBM, SAP), spread-sheet software providers (Microsoft, Google), and business analytics software vendors (Qlik Technologies, TIBCO), as existing and potential competitors. The company believes that its focus on the data visualization market within the broader business intelligence market has managed to differentiate its product enough to prevent larger software vendors from significantly harming its business.

According to a report published by Gartner, Tableau’s platform is best known for its ease-of-use for both end users and an organization’s developers, in addition to the company’s reputation for maintaining a relatively fast software implementation schedule for new deployments. While the company currently maintains distribution partnerships with several of its potential competitors (including IBM, Microsoft, and Oracle) as a bundled license for another vendor’s business intelligence software, it is inevitable that larger vendors will begin offering their own versions of a software that provides functionality that mirrors Tableau’s. If larger vendors bundle their own software with new enterprise deployments, it will be harder for potential accounts to justify paying for functionality that their existing system already provides.

Source: Gartner

Tableau (DATA) - Income Statement FY:08 FY:09 FY:10 Q1:11 Q2:11 Q3:11 Q4:11 FY:11 Q1:12 Q2:12 Q3:12 Q4:12 FY:12

License $8.8 $11.7 $24.2 $7.3 $9.6 $10.3 $17.3 $44.4 $17.5 $20.2 $22.1 $30.1 $89.9 Maintenance and services 4.4 6.4 9.9 3.3 4.1 4.7 5.9 17.9 7.2 8.9 10.0 11.7 37.9 Total revenues $13.2 $18.1 $34.2 $10.6 $13.7 $15.0 $23.2 $62.4 $24.7 $29.1 $32.1 $41.8 $127.7

License 0.0 0.1 0.1 0.0 0.1 0.0 0.1 0.2 0.1 0.1 0.0 0.1 0.3 Maintenance and services 0.8 1.1 1.3 0.5 0.6 0.8 0.9 2.8 1.6 2.4 2.8 3.2 10.1 Total cost of revenues 0.8 1.2 1.3 0.5 0.7 0.8 1.0 3.0 1.7 2.5 2.8 3.4 10.4

License 8.7 11.6 24.2 7.3 9.5 10.2 17.2 44.2 17.4 20.1 22.1 29.9 89.6 Maintenance and services 3.6 5.4 8.7 2.8 3.5 3.9 4.9 15.1 5.6 6.5 7.2 8.5 27.8 Gross profit 12.4 17.0 32.8 10.1 12.9 14.2 22.1 59.3 23.0 26.6 29.3 38.4 117.4

Sales and marketing 5.7 7.9 16.4 5.0 6.3 7.5 11.6 30.4 10.6 13.0 15.6 23.2 62.3 Research and development 3.5 4.0 9.7 3.7 4.4 5.0 5.4 18.4 6.7 7.5 8.5 10.3 33.0 General and administrative 4.3 5.6 3.8 1.4 1.4 1.8 2.1 6.7 2.9 3.3 4.3 6.9 17.5 Total operating expenses 13.4 17.6 30.0 10.1 12.1 14.3 19.0 55.4 20.2 23.8 28.3 40.5 112.8

Operating income -1.0 -0.6 2.8 0.0 0.9 -0.1 3.2 3.9 2.8 2.8 1.0 -2.1 4.5 Other income (expense), net 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1

Net income before provision for income taxes -0.9 -0.6 2.8 0.0 0.9 -0.1 3.2 3.9 2.8 2.8 1.0 -2.1 4.48 Provision for income taxes 0.0 0.0 0.1 0.0 0.0 0.0 0.4 0.5 1.7 1.7 0.6 -1.2 2.9 Net income -0.9 -0.6 2.7 0.0 0.8 -0.2 2.7 3.4 1.1 1.1 0.4 -0.9 1.6

% of Revenue License revenues 66% 64% 71% 69% 70% 69% 75% 71% 71% 70% 69% 72% 70% Maintenance and services revenues 34% 36% 29% 31% 30% 31% 25% 29% 29% 30% 31% 28% 30%

License costs (% of license revenue) 0% 1% 0% 0% 1% 0% 0% 0% 0% 0% 0% 0% 0% Maintenance and services costs (% of service revenue) 18% 17% 13% 14% 15% 16% 16% 16% 22% 27% 28% 28% 27% Total cost of revenues 6% 6% 4% 4% 5% 5% 4% 5% 7% 9% 9% 8% 8%

Licensing gross margins 100% 99% 100% 100% 99% 100% 100% 100% 100% 100% 100% 100% 100% Maintenance and services gross margins 82% 83% 87% 86% 85% 84% 84% 84% 78% 73% 72% 72% 73% Gross Margins 94% 94% 96% 96% 95% 95% 96% 95% 93% 91% 91% 92% 92%

Sales and marketing 43% 44% 48% 48% 46% 50% 50% 49% 43% 45% 48% 55% 49% Research and development 26% 22% 28% 35% 32% 33% 23% 29% 27% 26% 26% 25% 26% General and administrative 32% 31% 11% 13% 11% 12% 9% 11% 12% 11% 13% 17% 14% Total operating expenses 101% 97% 88% 95% 88% 96% 82% 89% 82% 82% 88% 97% 88%

Operating Margins -8% -3% 8% 0% 6% -1% 14% 6% 11% 10% 3% -5% 4% Net Margins -7% -3% 8% 0% 6% -1% 12% 5% 4% 4% 1% -2% 1%

Source: Wedbush Securities, Company Data

Private Company News

Note that the following is a compilation of Private Company Daily Briefings that were published last week:

Aereo (NWSA, CBS, CMSA, DIS): New Threat to Aereo TV: The company streams broadcast TV over the Internet for $8 per month or $80 per year, and offers 40 hours of cloud-based DVR storage. Aereo’s service was sued by the major broadcast networks for copyright infringement, but two suits attempting to close the service have been thrown out of court. However, a copycat version of Aereo called Aereokiller recently launched in California (as opposed to Aereo, which launched last year in NY), where the courts are more favorably disposede towards the broadcast networks, and therefore any ruling against the copycat service would have a negative impacts on Aereo’s attempts to expand into other states. Note that the president of News Corp threatened to convert its Fox network into a pay channel if Aereo wasn’t shut down, as fees paid by cable and satellite companies to broadcast networks are now being threatened. Despite the litigation, Aereo plans to expand its service to 22 cities this year. The company has raised a little under $70 million venture funding to-date, including a $38 million round in January, which was led by Highland Capital and IAC. The capital is primarily used to launch localized warehouses where the company stores a dime-sized TV antenna for each new subscriber. http://goo.gl/fvC3Q

Tumblr reinvents its Android app, bringing back the fun. The social network launched a re-designed Android app that makes it easier to share practically any form of content to the company’s platform. According to a report published earlier this month by Business Insider, Tumblr is looking to raise another round of funding, having already received over $125 million in venture funding. The company’s latest round in September 2011 ($85 million raised), reportedly valued the company at $800 million. Note that Tumblr only generated $13 million in revenues in 2012, with a loss of about $12 million, although the company has recently increased its focus on monetizing its platform, and expects to reach profitability this year. http://goo.gl/pggAM

Gilt Groupe (TRIP, OWW, PCLN, EXPE, KYAK, TZOO): TripAdvisor Buys Luxury Travel Site Jetsetter From Gilt. Jetsetter was Gilt Groupe’s vertical for flash-sales on vacation packages, at discounts of up to 50% off normal prices. Jetsetter curates its inventory by employing over 200 “correspondents”, who are tasked with finding the best hotels and travel destinations for potential deals for Jetsetter members. Gilt launched its travel vertical in January 2011, under the leadership of the former founder of Kayak. Jetsetter’s acquisition by TripAdvisor, a travel research company, follows the recent acquisition of Kayak (travel research) by Priceline (travel bookings) for $1.8 billion. As of Q3:11, Jetsetter contributed about 25% of Gilt’s revenue, with a run rate of $80 –- 90 million, and employed 85 people. Note that Gilt recently restructured its business to reach profitability (on an EBITDA basis), off of revenues of $600 million in 2012 (up 20% y-o-y). http://goo.gl/8KMfu

Boxee (AAPL) TV is now Cloud DVR in an inevitable (and sneaky) rebranding. The company is rebranding its set-top box, which retails for $99, as “Cloud DVR”, and will begin offering five hours of free cloud-based DVR playback for up to three months. Until now, users of Boxee’s set-top box, which streams content from the Internet, had to pay $10 per month to enable unlimited cloud-storage of DVR recordings. The company competes with Roku and Apple TV, and has raised a little over $25 million in venture funding from SoftBank Capital, Spark Capital, Union Square Ventures, and General Catalyst Partners. http://goo.gl/uEpcJ

Twitter's (FB, AAPL) Music App Is Real, Beta Testing Confirmed Along With “We Are Hunted” Acquisition. Twitter confirmed existing reports that it would be launching its own music app, which was developed by a team of engineers belonging to a startup that Twitter recently acquired. Twitter’s Music app will integrate with a number of content providers, including Vevo, SoundCloud, and iTunes, and will serve content from artists that are currently trending on Twitter (most likely measured by volume of retweets, followers, and hashtags). Note that Twitter Music is expected to integrate with Twitter Cards, which will allow sharing of titles among users, and can potentially become a significant revenue stream for the company in the form of referral fees collected when a user chooses to purchase a shared song directly within their Twitter account from a content partner (e.g. iTunes). http://goo.gl/ixqnM http://goo.gl/ixqnM

Dropbox (CRM, GOOG, MSFT) for Teams Gets Dropped in Re-Branding to Reflect “Business” Focus. The file-sharing cloud- based service will now call its corporate offering “Dropbox for Business”, which is part of a larger effort by the company to expand its presence within the enterprise. The company’s focus until now has been almost entirely on the consumer market, where the company has amassed well over 100 million members. The re-branding is indicative of an attempt by the company to compete with Box, which has managed to penetrate over 92% of the Fortune 500, despite having a much smaller user base (15 million members). Dropbox claims to have penetrated over 95% of the Fortune 500, but we believe that the reported statistic is misleading, as Dropbox’s definition of a customer encompasses any business with three or more employees using its service. To appeal to corporate IT departments, Dropbox will have to implement data access controls and authentication protocols that Box has been including in its service since launch. Furthermore, to effectively grow within the enterprise market, we believe Dropbox would have to substantially build out a direct sales team that would expand its relatively lean employee base (250 employees vs. Box’s 740) and negatively impact margins. http://goo.gl/T8Bnz

About The Wedbush Private Company Strategies Group

The Private Company Strategies Group of Wedbush Securities is a leader in providing research and trading to the rapidly growing industry of privately traded securities, with an emphasis on companies in the social media space. We assist companies in raising growth capital through traditional private placements and provide liquidity options for existing and former employees through tailored selling programs. We also work with venture capital, private equity and hedge fund investors to help them adjust their holdings in some of the most dynamic companies. We endeavor to understand the underlying industries of the private companies we trade, in order to help our clients make informed decisions about their investments. We provide discreet customized solutions for our institutional and accredited private clients through a team of professionals located in New York, Los Angeles and San Francisco.

Contact Wedbush Securities Private Company Strategies Group:

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Covered Companies Mentioned in this Report (priced at market close Aril 12, 2013)

COMPANY TICKER RATING PRICE PRICE TARGET NEWS CORP NWSA OUTPERFORM $31.54 $26.00 GOOGLE GOOG NEUTRAL $790.05 $770.00 SALESFORCE CRM OUTPERFORM $169.52 $206.00 ORACLE ORCL NEUTRAL $33.46 $36.00 TIBCO TIBX OUTPERFORM $20.15 $25.00

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The information contained herein is intended for accredited investors as defined in Rule 501 of Regulation D under the Securities Act of 1933 or institutional investors.

Wedbush Securities Wedbush does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The analysts receive compensation that is based upon various factors including WS’ total revenues, a portion of which are generated by WS’ investment banking activities.

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Investment Rating System: Outperform: Expect the total return of the stock to outperform relative to the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months. Neutral: Expect the total return of the stock to perform in-line with the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months. Underperform: Expect the total return of the stock to underperform relative to the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months.

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Rating Distribution Investment Banking Relationships (as of March 31, 2013) (as of March 31, 2013) Outperform:51% Outperform:18% Neutral: 44% Neutral: 2% Underperform: 5% Underperform: 0%

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Wedbush Equity Research Disclosures as of April 15, 2013

Company Disclosure NEWS CORP 1 GOOGLE 1 SALESFORCE 1 ORACLE 1 TIBCO 1

Research Disclosure Legend 1. WS makes a market in the securities of the subject company. 2. WS managed a public offering of securities within the last 12 months. 3. WS co-managed a public offering of securities within the last 12 months. 4. WS has received compensation for investment banking services within the last 12 months. 5. WS provided investment banking services within the last 12 months. 6. WS is acting as financial advisor. 7. WS expects to receive compensation for investment banking services within the next 3 months. 8. WS provided non-investment banking securities-related services within the past 12 months. 9. WS has received compensation for products and services other than investment banking services within the past 12 months. 10. The research analyst, a member of the research analyst’s household, any associate of the research analyst, or any individual directly involved in the preparation of this report has a long position in the common stocks. 11. WS or one of its affiliates beneficially own 1% or more of the common equity securities. 12. The analyst maintains Contingent Value Rights that enables him/her to receive payments of cash upon the company’s meeting certain clinical and regulatory milestones.

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The herein mentioned securities may be sold to or bought from customers on a principal basis by this firm.

Any reference to past performance is not a guarantee of future results.

Supporting documentation will be furnished upon request for any claims, comparisons, recommendation, statistics or other technical data. Additional information with respect to the information contained herein may be obtained upon request.

Applicable disclosure information is also available upon request by contacting the Business Conduct Department at (213) 688-8090. You may also submit a written request to the following: Business Conduct Department, 1000 Wilshire Blvd., Los Angeles, CA 90017.

RESEARCH DEPT. • (213) 688-4505 • www.wedbush.com EQUITY TRADING Los Angeles (213) 688-4470 / (800) 421-0178 * EQUITY SALES Los Angeles (800) 444-8076 CORPORATE HEADQUARTERS (213) 688-8000