GP Bullhound-2021年第1季度软件洞察（英文）-2021.4正式版

Q12021

Softwaresectorupdate

QualitativeinsightsintobroaderSoftwaretrendsandpublicandprivatevaluationsacrossthetransactionspectrum,andinterviewswithtoday’sleaderstransformingthesector.

Importantdisclosuresappearattheendofthisreport

GPBullhoundLLPisauthorizedandregulatedbytheFinancialConductAuthority

GPBullhoundIncisamemberofFINRA

THEVIEW

Q1SoftwareperspectivesfromGPBullhound

Takeaways

BEACON

▪Businessesacrossallindustrieshaveadoptedbeacontechnology

TECHNOLOGY

▪

Usecasesprevalentinretail,education,transportation,andmore

GROWING

Marketforbeacontechnologylikelytogrowsignificantly

▪

▪Organisationsarelookingforwaystomanagetheircomplextechstacks

SAASBLOATGETS

▪

EnterprisesnowrecognisetheimportanceofeffectiveSaaSmanagement

BULLDOZED

▪Softwareisthemodern-dayconveyorbeltforenterprises

▪CoreHRsoftwareimplementationisacceleratinginSMEs

SMEDIGITISATION

▪

AlotofSMEscurrentlydonothaveanyHRsoftwaresolutionsinplace

VIAHRSAAS

▪CompaniesarelookingtodigitisetraditionalHRandrecruitingprocesses

▪Increasedcompetitionmeansfocusonfindingnewavenuesfordifferentiation

ONBOARDING

▪

Anewcropofcompaniesaimingtoprovidefull-stackonboardingexperience

DIFFERENTIATION

▪High-qualityonboardinghelpscompaniesachievehighercustomerretention

▪‘Micro-SaaS’businesseshavenarrowfocuses,leanteams,andlowcosts

MICRO-SAAS

▪

Developersofferingsinglespecialisedplatformsorsmallsetofspecialisedtools

▪Customersreducecostandincreasecustomisation,developerskeepcostslow

▪WaveoflargetransactionsintheMarTechspace

MARTECH

▪

Customerengagement/experiencecompaniestocontinuetobeacquisitive

CONSOLIDATION

▪

CustomerDataPlatforms(CDPs)havebecomecriticalpartofMarTechstack

2

ALEADINGTECHNOLOGYADVISORYANDINVESTMENTFIRM,PROVIDINGTRANSACTIONADVICEANDCAPITAL.

GPBullhound’srecentSoftwareactivity

SOLDTO SOLDTO SOLDTO INVESTMENTBY INVESTMENTBY SOLDTO

Investment

Banking

INVESTMENTIN SOLDTO SOLDTO INVESTMENTBY INVESTMENTBY INVESTMENTBY

INVESTMENTBY

INVESTMENTBY

INVESTMENTBY

INVESTMENTBY

INVESTMENTBY

FundIV

FundV

FundIII

FundIV

FundIV

Investment

Management

INVESTMENTBY

INVESTMENTBY

INVESTMENTBY

INVESTMENTBY

FundIII

FundIV

FundIV

FundIV

3

Takeaways

GPBULLHOUND’SSECTORTAKEAWAYS

Q1SoftwareperspectivesfromGPBullhound

Rapidlygrowingbeacontechnologymarketdespiteconsumer-firstpolicies

Businessesacrossallindustrieshaveadoptedbeacontechnology,leveragingitforadvancedmobileappfunctionality.

Beacontechnology’susecaseshavebecomeincrediblyprevalentintheretail,education,transportation,healthcare,andhospitalitysectors.

Usecasesprimarilyinvolveleveraginguserlocationdatatocreateahighlypersonalisedcustomer-centricapproach.

Themarketforbeacontechnologyissettogrowsignificantlyascompaniesarelookingtocontinuouslyimprovetheircustomerinsightsandexperiences.

SaaSbloatgetsbulldozed

AsSaaS,amarketthatgenerated$104bnofrevenuein2020andisprojectedtogrowmorethan15%in2021,accordingtoGarner,continuestoinherittheworld,organisationshavebeguntolookforwaystoaggregate,controlandmanagetheirSaaSsubscriptionandinternalsoftwareecosystems.

ApproachestoSaaSmanagementhavevariedgreatly,fromintegrationasaserviceplatformconnectingallsoftwareapplicationsinanenterprisetoothersolutionsfocusingonsolvingaspecifictaskandleveragingvariousplatformsasneeded.Regardlessoftheapproach,allenterprisesnowrecognisetheimportanceofSaaSeffectivemanagement.

Enterprisesarenowdetermininghowtooptimiseandproperlyintegratetheirsoftwareandtorealisesynergiesandcreateaconsolidated,simplified,andseamlesstechstack.

Sources:Buildfire(asof24February2021),Beaconstack(asof28December2020),P(asof25November2020);Zylo(asof24February2021),TechCrunch(asof16February2021),onboard.io(asof24February2021),InsideIndianaBusiness(asof29October2019),andCleanshelf(asof18September2020)

Selecttransactions

inQ12021

SOLDTO

DEALDATE:MAR-21

TTV:$20M

EV/REV:N/A

INVESTMENTBY

FundV

DEALDATE:MAR-21

TTV:$275M

INVESTMENTBY

DEALDATE:APR-21

TTV:$68M

EV/REV:10.6X

4

Takeaways Takeaways

GPBULLHOUND’SSECTORTAKEAWAYS

Q1SoftwareperspectivesfromGPBullhound

StrongaccelerationofdigitisationinSMEs,withHRsoftwareatthecoreinaworldofremoteworking

CoreHRsoftwareimplementationacceleratinginSMEsdrivenbytheneedtoincreaseefficiencies,competitionforgoodtalentandtheriseofremoteworkforces.

AlotofSMB’sdon’thaveHRsoftwaresolutionsinplace-implementingcoreHRsoftwareplatformsallowsthemtodigitisedailyHRprocesses,driveefficienciesandfreeupHRstafftofocusonstrategicandvalue-addtasks.

HistoricallySMBsfocusedonoptimisingsales&marketingthroughsoftware,butcompanieshaverealisedthatHRandtalentisatthecoreandnowplaceparticularemphasisonoptimisingthisfunction.

COVIDhasonlyacceleratedthefocusonHRsoftwareaboveandbeyondcoreHRprocesses,asproductivityandemployeeengagementhavebecomemoreimportantthanever.

OnboardingbecomesapointofdifferentiationforSaaScompanies

TheSaaSmarkethasbecomeincreasinglycompetitiveoverthepastfewyearsassoftwaretakescontrolofvirtuallyeveryworkflowinmodernenterprises.Thishasledtoanincreasedfocusonfindingnewavenuesfordifferentiation.

Currently,manycompaniesusediscretesoftwareplatformsforonboardingactivitiessuchasproducttours,customermessaging,andhelpdeskservices.

Thoughthesesolutionsarehelpful,theyoftenarenotsufficient.Thishasledtoanewcropofcompaniesaimingtoprovideafull-stackonboardingexperiencethatleadsnewcustomersfromnovicetopro.

High-qualityonboardinghelpscompaniesunderstandtheircustomersbetter,whichcanleadtoimprovedcustomersatisfactionandultimatelyhighercustomerretention.

Sources:UserGuiding(asof6April2021)andRecur(asof27April2020)

Select

investmentmanagement

transactions

INVESTMENTBY

FundV

DEALDATE:MAR-21

TTV:$275M

INVESTMENTBY

FundIV

DEALDATE:MAY-18

TTV:$427M

INVESTMENTBY

FundIII

DEALDATE:FEB-14

TTV:N/A

5

Takeaways

GPBULLHOUND’SSECTORTAKEAWAYS

Q1SoftwareperspectivesfromGPBullhound

Micro-SaaSmakingwaves

Weareseeing‘micro-SaaS’businesses,definedasSaaSbusinesseswithnarrowfocuses,leanteamsandlowcosts,startingtoreceiveattentionfromdevelopersandendusers.

Micro-SaaSdevelopersareofferingasinglespecialisedplatformorsmallsetofspecialisedtoolswithanAPIforintegrationwithotherexternalplatforms/services.

Whilethismayincreaseoverallcomplexityofone'stechstack,customersareabletobuildouttechstacksthatarehighlyspecialised,costeffectiveanddecentralisedwhiledevelopersareabletokeepcostslowandavoiddistraction.

MassconsolidationacrosstheMarTechlandscape

Q42020andQ12021sawawaveoflargetransactionsintheMarTechspaceascompaniesandconsumersrapidlysearchedformoreseamlesswaystocommunicate,co-ordinateandcollaborateacrossachangingdigitallandscape.

Withpeopleworkingremotely,therehasbeenanincreaseddemandandstrainputondigitalchannelsthatpeopleusetocommunicatewithorganisationswhentheyhavequestionsorproblems.

Softwarecompaniesincustomerengagement(e.g.,Sinchraising$690m)anddigitalexperiencemanagement(e.g.,Sitecoreraising$1.2bn)havebenefitedfromthesetailwindsandmaycontinuetobehighlyacquisitivethrough2021.

CustomerDataPlatforms(CDPs)havebecomeacriticalpartoftheMarTechstackbytakingindatafromcustomerservice,CRMande-commerceapplications,andfeedingintomarketingautomationtoolsandothersystemsthatneedreal-timeviewsofcustomeractivity.

Q12021sawseveralacquisitionsofCDPsbycontactcentreanddigitalexperiencemanagementvendors,seekingtogaina360-degreeviewoftheircustomersanddeliverpersonalisedexperiencesacrossallchannels.

Select

investmentbanking

transactions

INVESTMENTBY

DEALDATE:DEC-19

TTV:$45M

EV/REV:N/A

INVESTMENTBY

DEALDATE:JUL-19

TTV:£157M

EV/REV:N/A

SOLDTO

DEALDATE:JAN-20

TTV:$30M

EV/REV:N/A

Sources:Trends.vcandTylerTringas(asof22February2021),Koombea(asof15December2020),andUpland,Sitecore,

6

mparticle,Techcrunch,andTechtarget(asof29March2021)

Transactiontrends

CEOcommentary

NOTABLESOFTWAREM&ADEALS&PRIVATEFINANCINGS

TheusualsuspectscontinuedmakingdealsinQ12021

SelectedM&Atransactions

Date

Buyer

Target

Targetdescription

Value($m)

EV/LTMRev

Providerofcloud-based

Mar-31

unifiedcommunications

560

7.0x

servicestosmall-and

mid-sizedbusinesses

Mar-23

Providesacustomer

1,000

-

experienceand

intelligenceplatform

Developerofacare

Mar-23

coordinationplatform

500

-

designedtoconnect

healthcareproviders

Mar-11

Developerofcloud-

350

10.3x

basedPOSandretail

managementsoftware

Integratesdataand

Mar-10

applicationsinrealtime

2,838

9.0x

acrossmodernbigdata

andcloudenvironments

Specialisesinemployee

Mar-04

schedulingtoprovide

221

-

optimalforecastingand

costmanagement

Feb-18

Providesadataplatform

392

-

fortime-serieslogging

andeventanalysis

Feb-10

Developerofashowing

500

20.0x

managementand

platformforrealestate

Developerofacloud-

Feb-09

basedsocial

1,725

8.2x

communicationand

entertainmentplatform

Selectedprivatefinancings

Date

Leadinvestor

Issuer

Issuerdescription

Value($m)

Mar-30

ProvidesanAIplatformforpredicting

125

companiesinthemarketlookingto

purchasesolutions

Mar-29

Developerofsoftwareforthetrades

500

industryfocusingonSMB

Mar-17

Providerofasoftwaredevelopment

140

programmethatallowsprocessesto

bedistributedacrossanetwork

Mar-15

Providerofcloud-basedno-code

270

spreadsheetsandrelational

databasesforproductivity

Mar-03

Developerofrevenueoutcome

150

predictionsoftware

Feb-16

Specialisesinclouddataintegration

100

andwarehousingfordata

managementandtranslation

Jan-17

Providesanend-to-endHRplatform

125

focusedonSMBclients

Jan-27

Providerofsubscription-based

350

schedulingsoftwarethateliminates

back-and-forthemails

Jan-22

Providesenterprise-gradeAIfor

700

platformsandapplicationsto

acceleratethedigitaltransformation

Sources:CapitalIQandPitchbook(asof31March2021),andGPBullhoundintelligence 7

Transactiontrends

GLOBALSOFTWARETRANSACTIONTRENDS

GlobalM&Aandprivateplacementscontinueuptrend

ContinuedmomentuminglobalM&A/buyouts

$140bn

$120bn

$100bn

$80bn

$60bn

$40bn

$20bn

$0m

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

M&A

Buyout

M&Adeals

Buyoutdeals

Sharpuptickinglobalprivateplacementvolume

800

$50bn

$45bn

700

$40bn

600

$35bn

500

$30bn

400

$25bn

300

$20bn

200

$15bn

100

$10bn

$5bn

0

$0m

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

Capitalinvested($bn)

Volume

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

EuropeanM&A/buyoutscontinuestronggrowth

US&CanadaclawbacksharefromAsia

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

U.S.&Canada

Europe

Asia

Other

U.S.&Canada

Europe

Asia

Other

Sources:Pitchbook(asof31March2021);Note:DataincludesallSaaSM&Aandprivateplacementdealsasdefinedby

8

Pitchbookregardlessofgeographyortransactionsize

Transactiontrends

SOFTWAREIPOLANDSCAPE

NewGPBullhoundSaaSindexconstituents

Listed–Q12021

Description(NYSE:SEMR):Providerofanonlinevisibilityplatformthatenablessubscriberstoimprovetheironlinevisibilityanddrivetraffictowebsitesandsocialmediaaccounts

Founded:2008

Listingdate:29March2021

Offeringamount:$140mraised

Enterprisevalue1:$1.6bn

Offeringprice/share:$14.00

LTM3/31/21netrevenue:$125m

Selectedmetrics:

–50%+RevenueCAGRfrom2016to2020

–114%dollar-basedretention

–67k+currentcustomers

–$2,1232020ARRpercustomer

Description(NASDAQ:BMBL):Providerofaconsumersubscriptionsoftwareplatformfordatingandmeetingnewpeople

Founded:2014

Listingdate:11February2021

Offeringamount:$2.1bnraised

Enterprisevalue1:$7.9bn

Offeringprice/share:$43.00

LTM3/31/21netrevenue:$582m

Selectedmetrics:

–42mmonthlyactiveusers2

–2.4mpayingusers2

–36.1bnmessagessent2

–$26.84BumbleappARPPU3

Description(NYSE:OLO):Digitalorderingsoftwareforrestaurantbrandsanddeliveryprogrammesviathird-partymarketplaces

Founded:2005

Listingdate:17March2021

Offeringamount:$450mraised

Enterprisevalue1:$3.9bn

Offeringprice/share:$25.00

LTM3/31/21netrevenue:$98m

Selectedmetrics:

–1.8mordersperday

–94%2020YoYrevenuegrowth

–120%netrevenueretention

–2020GMVof$14.6bnpaidthroughplatform

▪ Description(NASDAQ:XM):Providerofa ▪

softwareplatformtohelporganisationscollect▪dataforemployeecustomerexperience

▪

Founded:2002

Listingdate:28January2021

Offeringamount:$1.5bnraised

Enterprisevalue1:$16.9bn

Offeringprice/share:$30.00

LTM3/31/21netrevenue:$764m

Selectedmetrics:

–34%YoYsubscriptionrev.growth2

–120%netrevenueretention

–1,200+customerswith$100k+inARR

Description(NYSE:RBLX):EntertainmentplatformandSDKwhereuserscaninteractanddevelopimmersive3Dexperiences

Founded:2004

Listingdate:10March2021

Offeringamount:Directlisting

Enterprisevalue1:$35.1bn

Offeringprice/share:$45.00

LTM3/31/21netrevenue:$924m

Selectedmetrics:

–31.1mdailyactiveusers2

–22.1mhoursengaged2

–$39.93averagebookingsperDAU2

–170%bookingsgrowthfortheninemonthsended30September2020

ListingstolookforinQ22021

Company Overview

Providesacustomerexperiencemanagementplatformforenterprises

Developerofaroboticprocessautomationplatformtohelporganisationsautomatebusinessprocesses

Developerofanapplicationforon-demanddelivery

Sources:CompanySECfilingsfromEdgarandCapitalIQ(asof31March2021);Note:1)Asof31March2021;2)Figures

9

representativeasofninemonthsending30September2020;and3)Averagerevenueperpayinguser

Publiccompanyanalyses

REVENUEMULTIPLETRENDS–LAST5YEARS

GPBullhoundSaaSindexvaluations

CurrentSaaSvaluationsremainstrongagainstthe5-yearmean

Asof31March,theSaaSIndexistradingat16.3xtrailing12-monthrevenues,whichis53%greaterthanthe5-yearaverageAsof31March,theSaaSIndexistradingat13.0xnext12-monthrevenues,whichis47%greaterthanthe5-yearaverage

21x

March2020:Afterabriefinitial

sell-off,SaaSstocksenjoyed

significantappreciationthanksto

theforceddigitisationoftheworld

causedbyCOVID-19

16x

11x

Mean:10.7x

Mean:8.8x

6x

February/March2021:ThoughSaaSvaluationsarestill

December2018:Trade

significantlyabovehistoricallevels,anewUS

warwithChinaleadsto

presidentialadministration,inflationconcerns,and

sell-offofSaaSstocks

risinginterestratescontributedtoamodestpullback

1x

oftheSaaSIndex

3/31/2016

3/31/2017

3/31/2018

3/31/2019

3/31/2020

3/31/2021

GPBSaaSIndex-EV/LTMRevenues

GPBSaaSIndex-EV/NTMRevenues

Sources:WallStreetJournalandCapitalIQ(asof31March2021) 10

Publiccompanyanalyses

GPBULLHOUNDSAASINDEXPERFORMANCE

Recentsectorsell-offshaveimpactedshort-termperformance

L1M

L3M

110%

115%

105%

101.8%

110%

100%

97.5%

105%

95%

100%

90%

87.8%

95%

85%

90%

80%

85%

1-Mar

6-Mar

11-Mar

16-Mar

21-Mar

26-Mar

31-Mar

31-Dec-20

GPBSaaSIndex-IndexValue

S&P500

NASDAQComposite

L6M

L12M

240%

130%

220%

118.6%

200%

120%

180%

118.1%

110%

160%

104.6%

140%

100%

120%

100%

90%

80%

Sep-20

Oct-20

Nov-20

Dec-20

Jan-21

Feb-21

Mar-21

Mar-20

GPBSaaSIndex-IndexValue

S&P500

NASDAQComposite

105.8%

102.8%

92.3%

31-Jan-21

28-Feb-21

31-Mar-21

GPBSaaSIndex-IndexValue

S&P500

NASDAQComposite

197.4%

172.0%

153.7%

Jun-20

Sep-20

Dec-20

Mar-21

GPBSaaSIndex-IndexValue

S&P500

NASDAQComposite

Sources:CapitalIQasof31March2021 11

Publiccompanyanalyses

PUBLICSAASMETRICBENCHMARKING

KeymetricsforSaaSinvestors

RevenueYoYgrowth(1)

Paybackperiod(2)

90%

85%

Inmonths,lowerisbetter

80%

35

30.8

70%

30

60%

25

22.2

22.2

22.5

22.8

22.8

23.8

24.2

50%

20

18.2

19.7

20.5

40%

38%

38%

38%

37%

17.2

17.3

40%

36%

34%

32%

15

13.6

30%

30%

29%

29%

29%

30%

27%

25%

23%

10.5

11.7

21%

8.8

9.3

20%

20%

10

7.4

7.9

20%

10%

5

0%

0

Freecashflowmargin(3)

50%

45%

40%

40%

38%

31%

30%

23%

20%

18%

15%

20%

15%

15%

10%

8%

10%

3%

2%

0%

Netdollarretention(4)

180%

165%

160%

142%

137%

140%

130%

125%

124%

120%

120%

119%

115%

120%

102%

97%

100%

-10%

-20%

-30%

-40%

-50%

-4%

80%

-7%-8%

60%

-23%

40%

-27%

20%

-41%

0%

Sources:CapitalIQ,companySECfilings,andGPBullhoundestimates(asof31March2021);Note:1)CY21E/CY20A;2)

12

(S&MLTMDec.2019/((LTMDec.2020rev.–LTMSep.2019rev.)*GM%))/12;3)LTMDec.2020operatingcashflow/LTM

Dec.2020revenue;and4)asstatedincompanyfilings&earningsreleases

Publiccompanyanalyses

PUBLICSAASMETRICBENCHMARKING

GPBullhoundSaaSindex–netdollarretention

Netdollarretention

ExceptionalBest-in-classVerygoodGood

180%

165%

160%

142%

140%

137%

130%

125%

124%

120%

120%

119%

120%

115%

Median:122%

102%

100%

97%

80%

60%

40%

20%

0%

Snowflake Unity Twilio DataDog Slack Veeva Okta Docusign Cloudflare Asana Hubspot ServiceNow

Sources:CompanySECfilingsandGPBullhoundestimates 13

Publiccompanyanalyses

PUBLICSAASMETRICBENCHMARKING

Retentionisthemostimportantdeterminantofvaluation

Weexaminedtheimpactofretentiononvaluationbycreatinga‘GPBSaaSScore’,definedasrevenuegrowth+FCFmargin+netdollarretention.

Weareobservingthatthesecompanieswithhigherretentionsaretradingatmoreattractivevaluationsinpublicmarkets.

EV/NTMrevenue

60x

Snowflake

55x

50x

45x

40x

Cloudflare

35x

DataDog

Trendline(expectedvaluation)

Unity

30x

Okta

25x

Twilio

Veeva

Hubspot

Slack

20x

Asana

Docusign

15x

ServiceNow

10x

100%

120%

140%

160%

180%

200%

220%

240%

GPBullhoundSaaSScore

Sources:CapitalIQandcompanySECfilings(asof31March2021) 14

TakeawaysPubliccompanyanalyses

REVENUEGROWTHVS.PROFITABILITYOFGPBULLHOUNDSAASINDEXCONSTITUENTS

Ruleof40%–PublicSaaS

2020unleveredFCFmargin

50.0%

NOW

40.0%

MCFE

COUP

ZS

CLDR

BOX

DOCU

WDAY

CRM

30.0%SUMO

QLYS

DT

VEEV

SPTQTWO

MIME

ZEN

CSOD

UPLD

OKTA

PLTR

TENBPS

PLAN

BL

PD

ESTC

FROG

MDLA

20.0%

FIVN

EVBG

AYX

PCTY

RP

TWLO

WK

LPSN

APPN

NEWR

WIX

RNG

DDOG

TLND

PAYC

MSP

DBX

HUBS

MDB

SHOP

ZUO

SPSC

TWOU

10.0%

RXT

ECOM

JCOM

SINCH

BCOV

PING

SCWX

U

0.0%

NET

SPLK

Ruleof40%line

(10.0%)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

2020revenuegrowth

Sources:CapitalIQ(asof31March2021) 15

Publiccompanyanalyses

COMPANIESHIGHERONTHERULEOF40%SCALEAREGENERALLYVALUEDHIGHERBYINVESTORS

Ruleof40%–PublicSaaS(cont’d)

MarketunderperformersMarketperformersMarketoutperformers

2020EV/revenue

20x

18x

16x

14x

AYX

12x

10x

PING

MSP

8x

YEXT

TLND

6x

ZUO

BCOV

ECOM

4x

RXT

SCWX

2x

0x

PCTY

QTWO

ZEN

WK

SUMO

MDLA

SPSC

TENB

EGHTRPPS

NEWR

JCOM

DBX

WIX

PD

Trendline(expectedvaluation)

WDAY

LPSN

QLYS

CRM

MIME

UPLD

CSOD

CLDR

MCFE

TWOU

BOX

Ruleof40%line

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

2020revenuegrowth+unleveredFCFmargin

Sources:CapitalIQ(asof31March2021) 16

Publiccompanyanalyses

CAPITALALLOCATION

Techgiants–showmethemoney

▪

▪

▪

▪

Techcompaniesareallocatingcapitaltowardsdebtpaydowntodeleverageandfreeupfuturecashflowinpreparationfortheimpendingeconomicrecovery

Capexspendisdownascompanieshaverealisedthattheydonotneedtoinvestinphysicalspaceduetohybrid/fullyremoteworkpolicies

Record-highvaluationshavecausedconsolidatorstobemoreselectivewiththeiropportunities,leadingtoacontractioninacquisitionspending

R&D,whileslightlybelowthepreviousperiod,isstillstrong,signalingthatcompaniesarestillfocusedondevelopingnewproductsandservices

LTM(Q12021)%ofoperatingcashflow$m(1)

LTM-1(Q12020)%ofoperatingcashflow$m(1)

$32,602

$36,334

$1,387

$1,061

$1,701

$982

$5,616

$10,562

$2,212

$2,267

$137,052

$135,740

$103,630

$71,888

$88,598

$77,589

$3,687

$1,592

$83,841

$80,384

$5,716

$4,454

$304

$663

350%

300%

250%

200%

150%

100%

50%

0%

0%

50%

100%

150%

200%

250%

300%

350%

▪R&D

▪Capex

▪Debtpaydown

▪Sharebuybacks

▪Dividends

▪Acquisitions

Sources:CapitalIQ(asof31March2021);Note:Existingcashbalancesallowcompaniestospendover100%of

17

operatingcashflow;and1)DollaramountsrepresenttotalcashuseduringtheLTMperiod

CEOcommentary CEOcommentary

LEADINGCOMPANIESANDCEOSTRANSFORMINGTHESECTOR

StefanvonLieven,CEOofartegic

STEFANVONLIEVEN CEO,ARTEGIC

“Customer-centriccommunicationiscomplexandoperationallydemanding.Everynewchannel,everydatasourceandeverypersonalisationrefinementjustincreasesthecomplexityofthejob.Wealsoseethehandlingofhighvolumesoffragmentedcontentatspeedbecominganimportantissueincustomercentriccommunication.

Ourtechnologyenablesenterprisemarketerstodriveresultsincustomer-centriccampaignsandallowsenterprisestoleveragecustomerinteractionintherightcontextandtherightmoment,automateandoptimise

content,andimproveresultsbyupto574%.”

Investors

artegicprovideshighlyindividualisedandfullyGDPRcompliantreal-timeSaaSmarketingautomationsolutionsandmarketingcampaignmanagementtools.artegic’sELAINEtechnologyseamlesslyintegratesintodifferentITlandscapesviaflexibleAPIs.

artegiccountsone-thirdofallDAXcompanies,suchasBMW,DHL,andDeutscheTelekom,asclients,powering2.7bne-mailsandmobilemessagespermonthin141countries.

18

CEOcomm