SOFTWARE SECTOR REPORT Q1 2019 GCA: A LEADING INDEPENDENT GLOBAL INVESTMENT BANK Global investment bank providing strategic M&A and capital markets advisory services to growth companies and market leaders LEEDS PARIS FRANKFURT MANCHESTER MUNICH ZURICH NAGOYA TOKYO LONDON SHANGHAI NEW YORK MILAN NEW DELHI OSAKA TEL AVIV FUKUOKA SAN FRANCISCO TAIPEI MUMBAI SINGAPORE HO CHI MINH CITY Global platform: Sector expertise: Exceptional cross- 21 offices in key Experienced team: Expansive coverage border capabilities: markets across Over 400 employees and deep Over a third of all America, Asia and across the globe specialization transactions Europe Broad spectrum Diversified Strong reputation of clients: business model: and track record: Leading Geographically High number of conglomerates, top balanced, synergistic repeat clients and private equity firms and complementary referrals and emerging high- focus areas growth companies 2 GCA operates as GCA in America and Asia, and GCA Altium in Europe GCA OVERVIEW The GCA Software Team US Team Paul DiNardo Daniel Avrutsky Rupert Sadler Josh Wepman Managing Director Managing Director Managing Director Managing Director Software HCM Software Software, Travel & Telematics Software & Digital Media [email protected] [email protected] [email protected] [email protected] James Orozco Clark Callander Chris Gough Kevin Walsh Managing Director Managing Director Managing Director Managing Director Financial Sponsors Technology Real Estate Tech Software & Digital Media [email protected] [email protected] [email protected] [email protected] Glen Kruger Saif Malik Director Director Commerce Software Software [email protected] [email protected] Executive Leadership Select Europe Team Select Asia Team Todd Carter Geoff Baldwin *Phil Adams **Sascha Pfeiffer ***Akikazu Ida ***Ryuichi Kanemaki Co-CEO Co-CEO CEO of GCA Altium Co-Head of European Co-Head of Asian Managing Director [email protected] [email protected] [email protected] Technology & Media Technology & Media [email protected] [email protected] [email protected] John Lambros Alex Vitale *Stephen Georgiadis *Adrian Reed Sameer Jindal Tomohiko Kubota President of GCA US Head of San Francisco Office Managing Director Managing Director Managing Director Representative Director at Head of New York Office Auto Tech [email protected] [email protected] Head of Indian Operations GCA Technovation Head of Digital Media [email protected] Co-Head of Asia [email protected] [email protected] [email protected] **Tobias Schultheiss **Raiko Stelten Managing Director Director [email protected] [email protected] *Adrian Reed, Phil Adams and Stephen Georgiadis are Managing Directors at GCA Altium Limited, a wholly-owned subsidiary of GCA Corporation. **Raiko Stelten, Sascha Pfeiffer and Tobias Schultheiss are Managing Directors at GCA Altium AG, a wholly-owned subsidiary of GCA Corporation. 3 ***Akikazu Ida and Ryuichi Kanemaki are Managing Directors at GCA Corporation. GCA OVERVIEW Deep Software Sector Expertise Notes: The above transactions represent a compilation of past and current deals that GCA entities, including GCA Advisors, LLC, GCA Corporation and GCA Altium, have advised on. Generally, GCA Corporation advises Asian-based transactions, while GCA Advisors, LLC advises U.S.-based transactions and GCA Altium advises UK/European-based transactions. At times, multiple GCA 4 entities may be retained to advise on the same transaction. DEAL DASHBOARD Software $14.0 Billion 201 $30.1 Billion 361 2019 Financing Volume (1)(2) 2019 Financing Transactions (1)(2) 2019 M&A Volume 2019 M&A Transactions Select Financing Transactions Quarterly Financing Volume (1)(2) Quarterly M&A Volume Select M&A Transactions (3) Company Amount ($MM) $Bn $Bn Acquirer Target EV ($MM) $23 $82 $500 $17 $10,822 $57 $14 $15 $14 $14 $11 $300 $12 $12 $3,381 $32 $30 $20 $13 $19 $261 $13 $12 $1,100 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 $250 $1,000 Quarterly Financing Deal Count (1)(2) Quarterly M&A Deal Count $245 $767 225 363 375 361 201 289 291 298 343 187 287 268 156 160 159 161 155 167 $200 $619 $179 $516 $150 $560 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Last 12 Months Software Price Performance vs. S&P 500 (4) M&A EV/ NTM Rev. Over Time (5) 35% SPX IGV 8.0x All Buyers Strategic Buyers PE Buyers 7.6x ` Financing Activity by Quarter 30% 7.0x 6.5x 25% 6.0x 5.3x 5.4x 5.5x 20% 27.1% 5.0x 4.9x 4.6x 4.7x 5.0x 4.3x 4.0x 4.2x 4.1x 4.1x 15% 3.9x 3.9x 3.8x 4.0x 3.6x 3.7x 3.7x 10% 3.1x 3.3x 2.9x 2.9x 2.8x 3.0x 2.7x 5% 9.8% 2.2x 0% 2.0x (5%) 1.0x (10%) 0.0x Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 2011 2012 2013 2014 2015 2016 2017 2018 2019 Notes: Sources: Capital IQ, PitchBook, 451 Research and Dow Jones VentureSource. Market Data as of 3/31/2019. 1) Criteria based on software series A and subsequent rounds of global financings greater than or equal to $20MM. 2) Financings include Software Venture and Private Equity Growth / Expansion activity. 3) Software M&A transactions reflect select transactions in 2019 YTD. M&A metrics are based on closed and announced transactions. 5 4) iShares North American Tech-Software ETF (IGV), used as proxy for software landscape. Top holdings in the ETF include ADBE, MSFT, ORCL, CRM, and INTU. 5) Criteria based on global public target software M&A deals. SOFTWARE PUBLIC COMPANY LANDSCAPE Sub Sector Top Players and Key Operating Stats Platform Infrastructure Security Combined Market Cap: $1,693Bn Combined Market Cap: $78Bn Combined Market Cap: $162Bn 19/18 Rev. Growth: 3.5% 19/18 Rev. Growth: 8.2% 19/18 Rev. Growth: 20.5% 19 EBITDA Margin: 30.3% 19 EBITDA Margin: 19.6% 19 EBITDA Margin: 22.2% Content & Storage Management BI & Analytics Financial Applications Combined Market Cap: $200Bn Combined Market Cap: $44Bn Combined Market Cap: $240Bn 19/18 Rev. Growth: 19.0% 19/18 Rev. Growth: 30.0% 19/18 Rev. Growth: 13.9% 19 EBITDA Margin: 20.7% 19 EBITDA Margin: 19.2% 19 EBITDA Margin: 24.9% Notes: Sources: Capital IQ. Market Data as of 4/12/19. 6 Logos shown represent largest players in each sub sector by enterprise value. Operating stats for each sector represent full list of companies shown in public comparable tables. SOFTWARE PUBLIC COMPANY LANDSCAPE Sub Sector Top Players and Key Operating Stats Technical Applications Vertical ERP & General Business Combined Market Cap: $151Bn Combined Market Cap: $210Bn Combined Market Cap: $299Bn 19/18 Rev. Growth: 12.1% 19/18 Rev. Growth: 11.3% 19/18 Rev. Growth: 17.6% 19 EBITDA Margin: 32.5% 19 EBITDA Margin: 22.6% 19 EBITDA Margin: 21.5% Development & Operations Sales & Marketing SaaS Combined Market Cap: $240Bn Combined Market Cap: $14Bn Combined Market Cap: $644Bn 19/18 Rev. Growth: 16.4% 19/18 Rev. Growth: 22.9% 19/18 Rev. Growth: 27.6% 19 EBITDA Margin: 23.7% 19 EBITDA Margin: 11.2% 19 EBITDA Margin: 18.4% Notes: Sources: Capital IQ. Market Data as of 4/12/19. 7 Logos shown represent largest players in each sub sector by enterprise value. Operating stats for each sector represent full list of companies shown in public comparable tables. RECENT STOCK PERFORMANCE Index Performance Last 12 Months 60% 55.8% 50% 42.7% 40.7% 40% 39.8% 39.4% 34.0% 31.3% 30% 26.9% 25.7% 24.6% 20% 17.1% 11.1% 10% 0% (10%) Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 1) Development and 2) ERP & General 3) SaaS 4) Sales & 5) Business 6) Security 7) Financial 8) Technical 9) Vertical 10) Platform 11) Content & 12) Infrastructure Operations Business Marketing Intelligence Applications Applications Storage Management Applications & Analysis Management 55.8% 42.7% 40.7% 39.8% 39.4% 34.0% 31.3% 26.9% 25.7% 24.6% 17.1% 11.1% Notes: Sources: Capital IQ. Market Data as of 3/31/2019. 8 List of companies in each sector can be found in the public comparable tables. TRADING COMPARABLES Valuation and Operational Metrics EV / 2019E Revenue EV / 2019E EBITDA 64.2x 9.0x 8.7x Median: 6.8x Median: 27.5x 7.4x 7.3x 7.3x 7.0x 6.7x 6.2x 6.0x 38.4x 4.7x 34.9x 31.6x 4.2x 27.7x 29.2x 27.2x 25.4x 24.8x 3.6x 24.7x 22.9x 10.7x 2019E / 2018E Revenue Growth 2019E EBITDA Margin 32.5% 30.0% 30.3% 27.6% Median: 17.0% 24.9% Median: 21.8% 22.9% 23.7% 20.5% 22.6% 22.2% 21.5% 20.7% 19.6% 19.2% 18.4% 19.0% 17.6% 16.4% 13.9% 12.1% 11.3% 11.2% 8.2% 3.5% Notes: Sources: Capital IQ. Market Data as of 4/12/19. Figures represent mean values of respective comp groups. 9 List of companies in each sector can be found in the public comparable tables. PUBLIC COMPANY VALUATIONS Software Trading Statistics ($MM, Except Per Share Data) Stock Trading Statistics Operating Metrics Price Equity Net Enterprise EV / Revenue EV / EBITDA Price / EPS CY Rev.