Internet & Digital Media Monthly August 2018 BOB LOCKWOOD JERRY DARKO Managing Director Senior Vice President +1.617.624.7010 +1.415.616.8002 [email protected] [email protected] BOSTON SAN FRANCISCO HARALD MAEHRLE LAURA MADDISON Managing Director Senior Vice President +49.892.323.7720 +44.203.798.5600 [email protected] [email protected] MUNICH LONDON INVESTMENT BANKING Raymond James & Associates, Inc. member New York Stock Exchange/SIPC. Internet & Digital Media Monthly TECHNOLOGY & SERVICES INVESTMENT BANKING GROUP OVERVIEW Deep & Experienced Tech Team Business Model Coverage Internet / Digital Media + More Than 75 Investment Banking Professionals Globally Software / SaaS + 11 Senior Equity Research Technology-Enabled Solutions Analysts Transaction Processing + 7 Equity Capital Markets Professionals Data / Information Services Systems | Semiconductors | Hardware + 8 Global Offices BPO / IT Services Extensive Transaction Experience Domain Coverage Vertical Coverage Accounting / Financial B2B + More than 160 M&A and private placement transactions with an Digital Media Communications aggregate deal value of exceeding $25 billion since 2012 E-Commerce Consumer HCM Education / Non-Profit + More than 100 public equities transactions raising more than Marketing Tech / Services Financial $10 billion since 2012 Supply Chain Real Estate . Internet Equity Research: Top-Ranked Research Team Covering 25+ Companies . Software / Other Equity Research: 4 Analysts Covering 40+ Companies RAYMOND JAMES / INVESTMENT BANKING OVERVIEW . Full-service firm with investment banking, equity research, institutional sales & trading and asset management – Founded in 1962; public since 1983 (NYSE: RJF) – $6.4 billion in FY 2017 revenue; equity market capitalization of approximately $14.0 billion – Stable and well-capitalized platform; over 110 consecutive quarters of profitability . Over 600 Equity Capital Markets professionals: over 350 investment bankers across 15 offices and over 200 institutional sales and sales traders in the U.S. and Europe . Over 6,600 financial advisors managing over $500 billion of assets for 2.6 million accounts; offices in all 50 states . Raymond James Bank operates with over $13.7 billion in total assets for lending and depository services . 2017 M&A Advisor Awards “Cross-Border M&A Deal of the Year” for the Sale of November 2017 November 2017 BISAM Technologies to FactSet Research Systems . 2017 M&A Advisor Awards “Private Equity Deal of the Year” for the Sale of Paysimple to Providence Equity Cross-Border M&A Private Equity Deal of the Year Deal of the Year M&A Advisor Awards M&A Advisor Awards INVESTMENT BANKING Criteria for the awards can be found at https://www.raymondjames.com/about-us/accolades 1 Internet & Digital Media Monthly RECENT INTERNET AND SOFTWARE INVESTMENT BANKING TRANSACTIONS July 2018 June 2018 May 2018 May 2018 April 2018 March 2018 Has received debt Has received an (Media Properties) Has been acquired by Has been acquired by Has been acquired by financing from Has been acquired by investment from Undisclosed Undisclosed Undisclosed $1,680,000,000 $150,000,000 February 2018 February 2018 February 2018 October 2017 September 2017 August 2017 Has received an Sale to Has merged with investment from Has been acquired by $70,200,000 $150,400,000 Initial Public Offering Initial Public Offering Co-Manager Undisclosed Co-Manager $75,000,000 $40,200,000 July 2017 July 2017 July 2017 June 2017 May 2017 April 2017 / September 2016 February 2017 / September 2016 Has acquired Subsidiary of $224,460,000 Has been acquired by Follow-on Offering $224,785,680 $111,280,000 from Follow-on Offering Has been acquired by $300,000,000 Follow-on Offering $84,000,006 $133,200,000 Initial Public Offering Initial Public Offering Initial Public Offering Co-Manager €400,000,000 Undisclosed Undisclosed Co-Manager Co-Manager March 2017 February 2017 February 2017 August 2016 / May 2015 March 2016 / November 2015 March 2016 Has received an Sale to: Sale to: Investment from Has been acquired by Has been acquired by $329,906,250 Follow-on Offering (CRM Division) $150,535,000 Initial Public Offering (Studio Division) $15,400,000,000 $250,000,000 $233,000,000 Co-Manager Undisclosed $6,200,000 February 2016 February 2016 January 2016 November 2015 September 2015 August 2015 Sale to: Has received an (Baker Hill Business) Has been acquired by Has been acquired by Investment from Has Acquired: Has been acquired by (SEA Business) (India Business) Undisclosed $1,110,270,453 $100,000,000 $925,000,000 $100,000,000 Undisclosed March 2015 / October 2014 March 2015 January 2015 October 2014 July 2014 April 2013 A subsidiary of Sale to: Sale to: Sale to: $176,538,160 (Groups Business) Follow-on Offering $201,250,000 $366,850,000 $143,750,000 Initial Public Offering Initial Public Offering Initial Public Offering (Art Business) Co-Manager Undisclosed Co-Manager Co-Manager $350,000,000 Undisclosed INVESTMENT BANKING 2 INTERNET & DIGITAL MEDIA Internet & Digital Media Monthly SUMMARY METRICS BY SECTOR EV / 2019E Revenue EV / 2019E EBITDA 24.5x 7.0x 25.0x 6.4x 6.0x 20.0x 5.0x 16.9x 15.0x 4.0x 3.2x 11.9x 3.0x 2.9x 10.5x 10.8x 3.0x 9.7x 2.4x 10.0x 2.0x 1.6x 5.0x 1.0x 0.0x 0.0x Digital E-Commerce Travel Digital Media Gaming SaaS Digital E-Commerce Travel Digital Media Gaming SaaS Marketing Technology Marketing Technology Summary Operating / Trading Statistics Digital Travel Digital E-Commerce Gaming SaaS Marketing Technology Media 2018E Revenue Growth 19.5% 19.7% 11.5% 24.1% 7.0% 23.5% 2019E Revenue Growth 17.0% 17.3% 10.3% 16.7% 11.6% 20.2% 2018E Gross Margin 67.9% 44.7% 81.2% 77.8% 62.5% 73.5% 2019E Gross Margin 68.2% 45.6% 81.9% 76.3% 63.6% 74.3% 2018E EBITDA Margin 14.9% 5.4% 22.0% 18.7% 23.8% 8.4% 2019E EBITDA Margin 22.6% 7.4% 22.6% 18.7% 27.4% 10.8% % of 52-Week High 80.8% 84.9% 82.0% 77.5% 78.0% 85.9% % Above 52-Week Low 53.0% 59.1% 42.3% 35.2% 29.0% 63.3% LTM Stock Performance* Digital Marketing 53.0% E-Commerce 91.0% 120.0% Travel Technology 21.4% Digital Media 54.8% 100.0% Gaming 50.4% SaaS 60.4% 80.0% NASDAQ 30.8% 60.0% 40.0% 20.0% 0.0% 07/17 09/17 11/17 01/18 03/18 05/18 07/18 * Indices are marked cap weighted. INVESTMENT BANKING 3 Travel Digital Marketing E-Commerce Digital Media Gaming SaaS Technology Internet & Digital Media Monthly Internet & Digital Media Monthly SUMMARY VALUATION METRICS Historical EV / LTM Revenue Historical EV / LTM EBITDA 4-Yr Quarterly Average: 5.9x 4-Yr Quarterly Average: 16.5x 8.0x 25.0x 7.0x 20.0x 6.0x 5.0x 15.0x 4.0x 3.0x 10.0x 2.0x 5.0x 1.0x 0.0x 0.0x 6/14 3/15 12/15 9/16 6/17 3/18 6/14 3/15 12/15 9/16 6/17 3/18 *Quarterly summary bars are market cap weighted. *Quarterly summary bars are market cap weighted. EV / 2018E Revenue Search Advertising Technology Marketing Technology Web Hosting 8.0x 15.0x Median 12.0x 6.0x 5.4x Median 8.9x 9.0x 4.0x 6.0x Median Median 2.0x 0.8x 3.4x 3.0x 0.0x 0.0x TTD TAP PERI BIDU RUBI TLRA CDLX WIX IOM YNDX TCX EIGI CRTO RTHM MTMY CRM WEB VERI UTDI YEXT ADBE HUBS VRSN SHOP SCOR GDDY ECOM OTELLO GOOG.L Note: Excludes multiples that are NA or NM. EV / 2018E EBITDA Search Advertising Technology Marketing Tech Web Hosting 50.0x Median 40.0x 33.0x 30.0x Median 17.1x 20.0x Median Median 11.8x 6.3x 10.0x 0.0x WIX IOM TTD TAP TCX EIGI CRM WEB PERI UTDI BIDU TLRA ADBE YNDX VRSN CRTO RTHM GDDY MTMY ECOM GOOG.L OTELLO Note: Excludes multiples that are NA or NM. INVESTMENT BANKING 4 Travel Digital Marketing E-Commerce Digital Media Gaming SaaS Technology Internet & Digital Media Monthly Internet & Digital Media Monthly SUMMARY VALUATION METRICS (CONT’D) LTM Stock Performance* Advertising Technology 58.1% Marketing Technology 87.3% 150.0% Search 43.5% 120.0% Web Hosting 64.0% 90.0% NASDAQ 30.8% 60.0% 30.0% 0.0% (30.0%) 07/17 09/17 11/17 01/18 03/18 05/18 07/18 Advertising & Marketing Technology Composite: ADBE, BIDU, AIM:BLNX (Blinkx), BV, CDLX, CRTO, CRM, ECOM, EIGI, FUEL, GDDY, GOOG, HUBS, AIM:IOM, LSE:MTMY (Matomy Media), OB:OTELLO (AdColony), PERI, RUBI, SCOR, SHOP, TAP, TLRA, NasdaqCM:TCX, TTD, DB:UTDI, VERI NasdaqGS:VRSN, WEB, WIX, YNDX. * Indices are market cap weighted. PUBLIC MARKET ACTIVITY Detailed Valuation Multiples and Metrics ($ in millions, except per share data) Enterprise Value / Price on LTM Price Market Enterprise Revenue Revenue Growth Gross Margin EBITDA Margin Revenue EBITDA 07/31/18 Chg. %(1) Cap. Value 2018E 2019E 2018E 2019E 2018E 2019E 2018E 2019E 2018E 2019E 2018E 2019E Search Google $1,227.22 29.8% $850,265 $751,992 $137,079 $160,675 24.4% 17.2% 58.3% 57.4% 36.7% 38.0% 5.5x 4.7x 14.9x 12.3x Baidu (China) 247.18 9.2% 86,199 75,126 15,645 19,070 20.7% 21.9% 51.5% 51.3% 28.1% 27.8% 4.8 3.9 17.1 14.2 Yandex (Russia) 35.96 24.1% 11,784 10,568 1,964 2,469 21.0% 25.7% 74.8% 77.3% 29.9% 34.2% 5.4 4.3 18.0 12.5 Mean 21.0% 22.0% 21.6% 61.5% 62.0% 31.6% 33.3% 5.2x 4.3x 16.7x 13.0x Median 24.1% 21.0% 21.9% 58.3% 57.4% 29.9% 34.2% 5.4x 4.3x 17.1x 12.5x Advertising Technology The Trade Desk $84.32 58.2% $3,552 $3,410 $434 $557 41.2% 28.3% 77.7% 77.5% 31.0% 31.3% 7.9x 6.1x 25.3x 19.6x Criteo (France) 32.13 (36.5%) 2,132 1,654 1,016 1,132 9.7% 11.4% 87.1% 87.8% 30.4% 31.4% 1.6 1.5 5.4 4.6 Cardlytics 18.82 71.1% 381 350 155 242 19.3% 56.3% 37.7% 41.1% (10.1%) 4.0% 2.3 1.4 NM 36.2 Otello (Norway) 2.38 (42.1%) 333 253 324 396 (23.3%) 22.4% 40.5% 41.1% 5.8% 11.7% 0.8 0.6 13.4 5.4 Taptica (Israel) 4.25 (15.7%) 288 292 329 363 56.2% 10.5% 35.5% 35.5% 12.2% 12.3% 0.9 0.8 7.3 6.6 RhythmOne 2.67 (43.2%) 209 222 381 445 61.8% 17.0% NA NA