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Software Equity Group Flash Report                             February 2012                Select M&A Transactions       ...
Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
ABOUT OUR FIRMSoftware Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Fo...
List of Commonly Used AcronymsCAD       Computer-aided DesignCAM       Computer-aided ManufacturingCRM       Customer Rela...
Select Software Industry M&A Transactions         Category Performance           Copyright © 2012 by Software Equity Group...
Select January 2012 Software Industry M&A Transactions     Date                                                           ...
SEG Software IndexCategory Performance Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
SEG Software Index: All Categories                                                                                        ...
SEG Software Index Category: Billing and Service Management                                                               ...
SEG Software Index Category: Business Intelligence                                                                        ...
SEG Software Index Category: Content and Document Management                                                              ...
SEG Software Index Category: Data Management and Integration                                                              ...
SEG Software Index Category: Development Tools and Open Source                                                            ...
SEG Software Index Category: Electronic Design Automation                                                                 ...
SEG Software Index Category: Engineering, PLM & CAD/CAM                                                                   ...
SEG Software Index Category: Enterprise Resource Planning                                                                 ...
SEG Software Index Category: Financial Services                                                                           ...
SEG Software Index Category: Healthcare                                                                                   ...
SEG Software Index Category: IT Conglomerates                                                                             ...
SEG Software Index Category: Mobile Solutions/Content                                                                     ...
SEG Software Index Category: Multimedia, Graphics and Digital Media                                                       ...
SEG Software Index Category: Networking/Network Performance Mgmt                                                          ...
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
SEG Feb 2012 Monthly Flash Report February 2012
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Transcript of "SEG Feb 2012 Monthly Flash Report February 2012"

  1. 1. Software Equity Group Flash Report February 2012 Select M&A Transactions and Financial and Stock Market Performance Public Software Companies By Product Category Public SaaS Companies Public Internet Companies By Product Category Software Equity Group, L.L.C. 12220 El Camino Real, #320 San Diego, CA 92130 p: (858) 509-2800 f: (858) 509-2818 info@softwareequity.com Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  2. 2. Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  3. 3. ABOUT OUR FIRMSoftware Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has represented and guided privatecompanies throughout the United States and Canada, as well as Europe, Asia Pacific, Africa and Israel. We have advised public companies listed on theNASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity Group also represents several of the worlds leading private equity firms. We were recentlyranked among the top ten investment banks worldwide for application software mergers and acquisitions.Our value proposition is unique and compelling. We are skilled and accomplished investment bankers with extraordinary software, internet and technology domainexpertise. Our industry knowledge and experience span virtually every software product category, technology, market and delivery model, including Software-as-a Service(Saas), software on-demand and perpetual license. We have profound understanding of software company finances, operations and valuation. We monitor and analyze every publiclydisclosed software M&A transaction, as well as the market, economy and technology trends that impact these deals. Were formidable negotiators and savvy dealmakers who facilitatestrategic combinations that enhance shareholder value.THE SEG SOFTWARE COMPANY MENTORING PROGRAMAs part of our informal mentoring program, we are currently guiding and advising some fifty software companies around the globe that are not yet exit candidates, but aspire to be inthe next few years. We meet with them periodically, invite them to call whenever they’d like our opinion on an operational issue that might have exit implications later on, and we keepthem apprised of M&A activity and financings in their product category. And the best news – we don’t charge for this mentoring advice. It’s complimentary. It’s our way of buildingvalue, and relationships.We’re looking for a few more such relationships. We begin with an introductory phone call with companies interested in being mentored, followed by a more in-depth telephoneconversation. We’ll then invite qualified candidates to meet personally with four or five members of our team at our San Diego office. During this three to four hour sit-down, we’lldiscuss the current market, specifically as it relates to valuations, transactions and trends in your product category. We’ll assess the strengths and weakness of your financialperformance, how that compares to other software companies your size, and how that relates to buyer expectations. We’ll discuss your market strategy, sales strategy, sales teamtrack record, software and maintenance pricing strategies, equity structure, and a wide array of other factors that can materially impact your salability and valuation down the road.We’re a terrific sounding board. We’ll give you an informed, honest and frank opinion – that’s what we’re known for. And we’ll offer informed and insightful observations, ideas andoptions based on 17 years of working with countless software companies worldwide.If you run a profitable software company with revenue in excess of $10 million, and you’re interested in learning more about SEG’s complimentary, no obligation mentoringprogram, please contact Kris Beible at kbeible@softwareequity.com or 858-509-2800.ADDITIONAL RESEARCHFor our complimentary current and archived Quarterly Reports from 1Q03, please visit: http://www.softwareequity.com/research_quarterly_reports.aspxFor our complimentary current and archived Monthly Flash Reports from July 2008, please visit: http://www.softwareequity.com/research_flash_reports.aspxFor our Annual Reports from 2003 through 2010, please visit: http://www.softwareequity.com/research_annual_reports.aspx Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  4. 4. List of Commonly Used AcronymsCAD Computer-aided DesignCAM Computer-aided ManufacturingCRM Customer Relationship ManagementEBITDA Earnings before Interest, Taxes, Depreciation, and AmortizationEV Enterprise ValueFCF Free Cash FlowFORWARD Current EV / Next Four Quarters Consensus Financial EstimatesHR Human ResourcesNASDAQ National Association of Securities Dealers Automated Quotation SystemOS Operating SystemPLM Product Lifecycle ManagementR&D Research and DevelopmentS&P Standard & PoorsSaaS Software-as-a-ServiceSEG Software Equity GroupSG&A Selling, General, & AdministrativeSW SoftwareTTM Trailing Twelve MonthYoY Year-over-YearYTD Year-to-date Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  5. 5. Select Software Industry M&A Transactions Category Performance Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  6. 6. Select January 2012 Software Industry M&A Transactions Date Target TTM Revenue Implied Enterprise EV/ Revenue Announced Acquirer Target ($mm) Value ($mm)01/31/2012 Kenexa Corp. (NYSE:KNXA) OutStart, Inc. - $38.90 -01/31/2012 International Business Machines Corp. (NYSE:IBM) WorkLight Ltd. - $70.00 -01/31/2012 Imaging Spectrum, Inc. Express Digital Graphics, Inc. - - -01/27/2012 BMC Software Inc. (NasdaqGS:BMC) Numara Software, Inc. - $300.00 -01/26/2012 TDC A/S (CPSE:TDC) BluePosition ApS - - -01/25/2012 Waterland Private Equity Investments BV Actuera BV $19.47 - -01/24/2012 Playtech Limited (AIM:PTEC) Geneity Limited $3.59 $23.40 6.5x01/24/2012 Pacific Control Systems LLC Infotility, Inc. - - -01/23/2012 ISIS Equity Partners LLP; Foresight Group Autologic Diagnostics Ltd. $22.60 $71.70 3.2x01/23/2012 KeyedIn Solutions, Inc. Atlantic Global plc (AIM:ATL) - $4.51 2.5x01/23/2012 Cloud XL Network Resource Group Limited - $31.17 -01/23/2012 Meredith Corp. (NYSE:MDP) Allrecipes.com, Inc. - $175.00 -01/23/2012 Synopsys Inc. (NasdaqGS:SNPS) ExpertIO, Inc - - -01/23/2012 Descartes Systems Group Inc. (TSX:DSG) GeoMicro, Inc. - - -01/23/2012 Cornerstone Software, Inc. Makana Solutions, Inc. - - -01/23/2012 Twitter, Inc. Dasient, Inc. - - -01/20/2012 Groupon, Inc. (NasdaqGS:GRPN) Six Times Seven Inc. - - -01/20/2012 CITIC Capital Partners AsiaInfo-Linkage,Inc. (NasdaqGS:ASIA) - - -01/19/2012 Sony Entertainment Television UK Dolphin Television Ltd Ltd. - - -01/19/2012 Hexagon AB (OM:HEXA B) MicroSurvey Software Inc. - - -01/19/2012 Constant Contact, Inc. (NasdaqGS:CTCT) CardStar, Inc. - - -01/19/2012 Twitter, Inc. Context Media Technologies, Inc. - - -01/18/2012 Arrow Electronics, Inc. (NYSE:ARW) TechTurn, Inc. - - -01/17/2012 BasWare Oyj (HLSE:BAS1V) First Businesspost GmbH $3.08 $15.64 5.1x01/17/2012 Everwin SAS STRAT-MIX - - -01/16/2012 Blackbaud Inc. (NasdaqGS:BLKB) Convio, Inc. (NasdaqGS:CNVO) - $276.24 3.6x01/16/2012 SAP AG (DB:SAP) datango AG - - -01/13/2012 VentureBeat, Inc. Bitmob Media, Inc. - - -01/12/2012 GINSMS Inc. (TSXV:GOK) Inphosoft Group Pte. Ltd. - $11.37 -01/12/2012 SAI Global Limited (ASX:SAI) Compliance 360, Inc. - $42.30 -01/12/2012 International Game Technology (NYSE:IGT) Double Down Interactive, LLC - $415.00 -01/12/2012 Thomson Reuters Tax & Accounting, Inc. Dr Tax Software Inc. - - -01/12/2012 Trimble Navigation Limited (NasdaqGS:TRMB) Plancal Holding AG - - -01/11/2012 Combitech CSE AB Sörman Information AB - - -01/10/2012 Investcorp Technology Partners Thought Equity Motion, Inc. $25.00 - -01/10/2012 Tangoe, Inc. (NasdaqGS:TNGO) Anomalous Networks, Inc. - $8.94 -01/09/2012 Brinks Co. (NYSE:BCO) Kheops, SAS - $17.00 -01/09/2012 Symantec Corporation (NasdaqGS:SYMC) LiveOffice LLC - $115.00 -01/09/2012 AuthenTec, Inc. (NasdaqGM:AUTH) Proxure, Inc. - - -01/09/2012 24 Mobile Advertising Solutions AB Liquid Air Lab GmbH - - -01/07/2012 InfoSpace, Inc. (NasdaqGS:INSP) 2nd Story Software, Inc. $78.10 $287.50 3.7x01/06/2012 LogMeIn, Inc. (NasdaqGS:LOGM) Bold Software, LLC - $16.50 -01/05/2012 Synchronoss Technologies, Inc. (NasdaqGS:SNCR) Miyowa Inc. $12.95 $59.00 4.6x01/04/2012 Trinity Mirror plc (LSE:TNI) The Communicator Corporation Limited $5.47 $12.49 2.3x01/04/2012 International Business Machines Corp. (NYSE:IBM) Green Hat Software Limited - - -01/04/2012 @WalmartLabs Small Society - - -01/03/2012 Callidus Software Inc. (NasdaqGM:CALD) LeadFormix Inc. - $9.00 -01/03/2012 Myriad Group AG (SWX:MYRN) Synchronica PLC (AIM:SYNC) - $41.85 2.3x
  7. 7. SEG Software IndexCategory Performance Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  8. 8. SEG Software Index: All Categories TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCategory Name Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnSEG Software Index $1,030.8 $949.5 $373.2 66.4% 20.3% 14.2% 2.5x 11.7x 2.3x 8.9x 3.2% Billing & Service Management $525.2 $600.8 $464.3 50.2% 23.4% 23.6% 1.3x 5.2x 1.2x 6.1x -16.3% Business Intelligence $1,153.9 $1,011.6 $342.3 79.0% 8.3% 22.8% 3.2x 33.8x 2.7x 18.0x 6.0% Content/Document Management $15,283.2 $13,885.8 $4,216.3 65.1% 25.1% 17.6% 2.5x 9.5x 2.3x 8.7x 3.5% Data Management & Integration $4,371.9 $3,951.1 $852.0 75.5% 23.0% 14.3% 2.9x 15.6x 2.7x 11.3x 7.1% Development Tools & Open Source $167.3 $132.6 $108.8 33.8% 9.9% 29.0% 1.2x 9.7x 2.3x 7.3x -16.2% Electronic Design Automation $339.1 $304.0 $105.9 80.4% 9.9% 10.1% 1.9x 26.6x 1.6x 7.5x 9.6% Engineering, PLM & CAD/CAM Software $6,876.4 $6,070.3 $1,405.4 87.0% 25.5% 14.2% 3.5x 13.9x 4.8x 11.7x -2.6% Enterprise Resource Planning $36,336.6 $35,404.6 $9,414.8 66.5% 23.3% 15.5% 2.9x 9.6x 2.7x 8.2x 24.7% Financial Services $1,001.4 $883.3 $374.3 57.1% 21.2% 6.9% 2.1x 8.9x 1.8x 8.3x 8.7% Healthcare $514.2 $604.5 $214.5 65.9% 23.1% 19.1% 2.9x 14.4x 2.5x 9.1x -0.7% IT Conglomerates $141,778.9 $125,891.9 $72,052.0 61.7% 27.1% 7.1% 2.3x 7.0x 2.2x 6.6x -7.1% Mobile Solutions/Content $171.7 $149.6 $115.3 66.3% 6.4% 9.4% 2.1x 11.2x 0.9x 6.4x -32.6% Multimedia, Graphics, Digital Media $562.3 $558.5 $677.9 66.5% 20.8% 11.0% 3.3x 15.2x 3.1x 9.7x -13.3% Networking & Networking Performance Mgmt. $857.6 $755.7 $198.4 79.5% 22.9% 19.8% 4.1x 20.5x 3.6x 14.6x 10.5% Security $890.5 $761.3 $364.2 81.8% 19.4% 12.4% 2.3x 11.3x 2.2x 10.7x 1.9% Storage & Systems Management Software $12,519.9 $11,419.9 $3,767.1 77.9% 25.1% 11.2% 2.3x 9.7x 2.3x 7.2x -2.4% Supply Chain Management & Logistics $499.5 $424.0 $227.3 57.8% 8.2% 13.7% 2.0x 12.9x 2.2x 12.4x 15.4% Vertical - Finance $2,206.8 $2,279.2 $596.4 59.9% 32.3% 15.1% 4.1x 11.6x 3.7x 10.3x -0.5% Vertical - Other $980.3 $1,012.5 $281.0 57.3% 15.7% 14.0% 3.3x 18.0x 3.0x 12.4x 15.7% Video Games $2,502.4 $2,337.5 $2,146.9 47.7% 6.8% 4.4% 1.2x 6.7x 1.0x 5.8x 22.1% Workforce & Service Management $328.4 $281.9 $121.3 62.9% 16.9% 15.7% 2.6x 15.2x 2.3x 10.5x 11.1% Income Statement Analysis (Median) SEG SW Index Software Stock Market Return: Jan 2012TTM Revenue Growth 14.2% 9%TTM EBITDA Growth 16.7%TTM Earnings Growth 29.5% 8%Gross Profit Margin 66.4%EBITDA Margin 20.3%Net Income Margin 10.5% 7%SG&A Expenses as a % of Total Revenue 35.5%R&D Expenses as a % of Total Revenue 13.8% 6% Balance Sheet Analysis (Median) 5%Current Ratio 2.0Quick Ratio 1.8 4%Cash as Percent of Market Cap 16.2%Avg Days Outstanding: Accounts Receivable 64 3%Avg Days Outstanding: Accounts Payable 37Working Capital to TTM Operating Expense Ratio 0.4 2% Cash Flow Statement Analysis (Median) 1%Levered FCF Margin 13.2%Cash from Operations Growth (YoY) 15.6% 0%Cash from Investing Growth (YoY) -2.3%Cash from Financing Growth (YoY) -37.9% DOW S&P NASDAQ SEG SW IndexLevered FCF Growth (YoY) 12.6% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  9. 9. SEG Software Index Category: Billing and Service Management TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnAmdocs Limited DOX $5,071.5 $4,149.5 $3,209.6 35.3% 18.7% 5.8% 1.3x 6.9x 1.2x 6.2x 1.0%AsiaInfo Holdings, Inc. ASIA $842.4 $600.8 $464.3 44.2% 24.8% 72.2% 1.3x 5.2x 1.2x 6.0x -45.4%CSG Systems International, Inc. CSGS $525.2 $698.8 $734.7 50.2% 23.4% 33.7% 1.0x 4.1x 0.9x 3.9x -16.3%Evolving Systems, Inc. EVOL $58.4 $28.8 $33.9 65.4% 17.1% 23.6% 0.8x 5.0x 1.3x 8.8x -35.5%MIND C.T.I. Ltd. MNDO $45.7 $29.5 $19.0 69.0% 28.0% -4.5% 1.6x 5.6x n/a n/a -10.3%Synchronoss Technologies, Inc. SNCR $1,255.3 $1,097.7 $229.1 53.7% 17.8% 38.0% 4.8x 27.0x 4.2x 15.1x 17.4% Median: $525.2 $600.8 $464.3 50.2% 23.4% 23.6% 1.3x 5.2x 1.2x 6.1x -16.3% Income Statement Analysis (Median) Billing and Service Management Software Stock Market Return: Jan 2012TTM Revenue Growth 23.6% 14%TTM EBITDA Growth 10.7%TTM Earnings Growth 65.0% 12%Gross Profit Margin 50.2%EBITDA Margin 23.4%Net Income Margin 14.3% 10%SG&A Expenses as a % of Total Revenue 18.0%R&D Expenses as a % of Total Revenue 13.9% 8% Balance Sheet Analysis (Median) 6%Current Ratio 3.4xQuick Ratio 3.1x 4%Cash as Percent of Market Cap 29.5%Avg Days Outstanding: Accounts Receivable 86.0x 2%Avg Days Outstanding: Accounts Payable 48.1xWorking Capital to TTM Operating Expense Ratio 0.8x 0% Cash Flow Statement Analysis (Median) -2%Levered FCF Margin 10.6%Cash from Operations Growth (YoY) -33.2% -4%Cash from Investing Growth (YoY) -61.3%Cash from Financing Growth (YoY) -126.1% Billing & Service Management S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -22.6% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  10. 10. SEG Software Index Category: Business Intelligence TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnActuate Corporation BIRT $280.5 $213.1 $134.9 83.3% 20.6% 2.6% 1.6x 7.7x 1.5x 5.4x 3.8%Informatica Corporation INFA $4,498.5 $3,896.1 $783.8 84.2% 25.3% 20.6% 5.0x 19.7x 4.3x 14.2x -8.8%MicroStrategy Incorporated MSTR $1,238.9 $1,052.6 $562.2 74.7% 6.0% 23.7% 1.9x 31.4x 1.7x 16.9x 8.2%Pegasystems Inc. PEGA $1,068.9 $970.6 $390.6 59.5% 5.7% 22.0% 2.5x 43.6x 2.1x 31.5x -17.0%PROS Holdings PRO $436.9 $370.5 $96.6 72.6% 10.6% 36.0% 3.8x 36.3x 3.4x 19.0x 62.5%Qlik Technologies QLIK $2,359.6 $2,189.7 $293.9 89.0% 4.6% 42.0% 7.4x 162.9x 5.8x 38.6x 21.6% Median: $1,153.9 $1,011.6 $342.3 79.0% 8.3% 22.8% 3.2x 33.8x 2.7x 18.0x 6.0% Income Statement Analysis (Median) Business IntelligenceSoftware Stock Market Return: Jan 2012TTM Revenue Growth 22.8% 12%TTM EBITDA Growth 9.0%TTM Earnings Growth 24.3% 10%Gross Profit Margin 79.0%EBITDA Margin 8.3%Net Income Margin 4.9% 8%SG&A Expenses as a % of Total Revenue 44.9%R&D Expenses as a % of Total Revenue 16.3% 6% Balance Sheet Analysis (Median) 4%Current Ratio 2.1xQuick Ratio 2.0x 2%Cash as Percent of Market Cap 14.5%Avg Days Outstanding: Accounts Receivable 75.2x 0%Avg Days Outstanding: Accounts Payable 51.0xWorking Capital to TTM Operating Expense Ratio 0.5x -2% Cash Flow Statement Analysis (Median) -4%Levered FCF Margin 4.3%Cash from Operations Growth (YoY) -4.2% -6%Cash from Investing Growth (YoY) -82.2%Cash from Financing Growth (YoY) -30.6% Business Intelligence S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 73.4% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  11. 11. SEG Software Index Category: Content and Document Management TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnAdobe Systems Incorporated ADBE $15,283.2 $13,885.8 $4,216.3 89.6% 34.8% 11.0% 3.3x 9.5x 3.1x 7.3x -6.4%EasyLink Services International ESIC $140.0 $212.3 $189.0 65.1% 23.4% 125.9% 1.1x 4.8x 1.1x n/a 9.7%EMC EMC $52,779.4 $50,853.8 $20,007.6 61.2% 25.1% 17.6% 2.5x 10.1x 2.3x 8.8x 3.5%IBM IBM $223,416.0 $242,911.0 $106,916.0 46.9% 24.5% 7.1% 2.3x 9.3x 2.2x 8.9x 18.9%Open Text Corporation OTEX $2,933.3 $3,158.7 $1,157.9 73.1% 27.5% 23.5% 2.7x 9.9x 2.5x 8.6x 2.6% Median: $15,283.2 $13,885.8 $4,216.3 65.1% 25.1% 17.6% 2.5x 9.5x 2.3x 8.7x 3.5% Income Statement Analysis (Median) Content and Document Management Software Stock Market Return: Jan 2012TTM Revenue Growth 17.6% 12%TTM EBITDA Growth 12.1%TTM Earnings Growth 17.4%Gross Profit Margin 65.1%EBITDA Margin 25.1% 10%Net Income Margin 14.3%SG&A Expenses as a % of Total Revenue 32.4%R&D Expenses as a % of Total Revenue 10.7% 8% Balance Sheet Analysis (Median)Current Ratio 1.3x 6%Quick Ratio 1.2xCash as Percent of Market Cap 14.1%Avg Days Outstanding: Accounts Receivable 50.2x 4%Avg Days Outstanding: Accounts Payable 49.8xWorking Capital to TTM Operating Expense Ratio 0.1x 2% Cash Flow Statement Analysis (Median)Levered FCF Margin 16.1%Cash from Operations Growth (YoY) 24.6% 0%Cash from Investing Growth (YoY) 45.3%Cash from Financing Growth (YoY) -127.7% Content/Document Management S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 8.9% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  12. 12. SEG Software Index Category: Data Management and Integration TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnGuidance Software, Inc. GUID $195.0 $168.5 $104.6 72.8% 3.7% 13.8% 1.6x 43.6x 1.5x 15.6x 9.6%IBM IBM $223,416.0 $242,911.0 $106,916.0 46.9% 24.5% 7.1% 2.3x 9.3x 2.2x 8.9x 18.9%Informatica Corporation INFA $4,498.5 $3,896.1 $783.8 84.2% 25.3% 20.6% 5.0x 19.7x 4.3x 14.2x -8.8%Oracle Corporation ORCL $141,778.9 $125,891.9 $36,704.0 77.9% 42.0% 14.7% 3.4x 8.2x 3.3x 6.7x -11.9%Pervasive Software Inc. PVSW $93.2 $51.9 $49.4 86.0% 9.1% 7.2% 1.1x 11.5x 1.0x 9.1x 4.5%TIBCO Software Inc. TIBX $4,245.3 $4,006.2 $920.2 73.1% 21.5% 22.0% 4.4x 20.3x 3.9x 13.5x 18.6% Median: $4,371.9 $3,951.1 $852.0 75.5% 23.0% 14.3% 2.9x 15.6x 2.7x 11.3x 7.1% Income Statement Analysis (Median) Data Management and Integration Software Stock Market Return: Jan 2012TTM Revenue Growth 14.3% 12%TTM EBITDA Growth 24.4%TTM Earnings Growth 37.1%Gross Profit Margin 75.5% 10%EBITDA Margin 23.0%Net Income Margin 13.5% 8%SG&A Expenses as a % of Total Revenue 40.2%R&D Expenses as a % of Total Revenue 16.2% 6% Balance Sheet Analysis (Median)Current Ratio 1.9x 4%Quick Ratio 1.8xCash as Percent of Market Cap 16.2% 2%Avg Days Outstanding: Accounts Receivable 62.6xAvg Days Outstanding: Accounts Payable 35.6xWorking Capital to TTM Operating Expense Ratio 0.5x 0% Cash Flow Statement Analysis (Median) -2%Levered FCF Margin 17.8%Cash from Operations Growth (YoY) 36.1% -4%Cash from Investing Growth (YoY) 48.0%Cash from Financing Growth (YoY) -23.3% Data Management & Integration S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 35.2% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  13. 13. SEG Software Index Category: Development Tools and Open Source TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnAdobe Systems Incorporated ADBE $15,283.2 $13,885.8 $4,216.3 89.6% 34.8% 11.0% 3.3x 9.5x 3.1x 7.3x -6.4%BSQUARE Corporation BSQR $42.5 $25.8 $101.0 21.5% 3.0% 19.8% 0.3x 8.5x n/a n/a -54.8%GeekNet GKNT $110.0 $86.0 $109.7 26.7% 0.4% 42.0% 0.8x 178.1x n/a n/a -8.8%Magic Software Enterprises Ltd. MGIC $224.7 $179.3 $107.9 41.0% 16.8% 38.2% 1.7x 9.9x 1.4x n/a -23.6%Microsoft Corporation MSFT $247,779.5 $209,891.5 $72,052.0 76.4% 41.6% 8.0% 2.9x 7.0x 2.7x 6.6x 6.5%Oracle Corporation ORCL $141,778.9 $125,891.9 $36,704.0 77.9% 42.0% 14.7% 3.4x 8.2x 3.3x 6.7x -11.9%Progress Software Corporation PRGS $1,446.3 $1,185.3 $533.6 83.6% 25.4% 0.8% 2.2x 8.7x 2.3x 9.0x -18.5%Red Hat, Inc. RHT $8,955.8 $8,147.5 $1,080.9 83.7% 22.4% 25.6% 7.5x 33.7x 6.5x 22.1x 12.2% Median: $167.3 $132.6 $108.8 33.8% 9.9% 29.0% 1.2x 9.7x 2.3x 7.3x -16.2% Income Statement Analysis (Median) Development Tools and Open Source Software Stock Market Return: Jan 2012TTM Revenue Growth 29.0% 14%TTM EBITDA Growth 16.9%TTM Earnings Growth 29.5%Gross Profit Margin 33.8% 12%EBITDA Margin 9.9%Net Income Margin 13.0%SG&A Expenses as a % of Total Revenue 25.9% 10%R&D Expenses as a % of Total Revenue 0.0% Balance Sheet Analysis (Median) 8%Current Ratio 2.9xQuick Ratio 2.7x 6%Cash as Percent of Market Cap 20.6%Avg Days Outstanding: Accounts Receivable 62.0xAvg Days Outstanding: Accounts Payable 38.2x 4%Working Capital to TTM Operating Expense Ratio 0.5x Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 21.7%Cash from Operations Growth (YoY) 31.3%Cash from Investing Growth (YoY) 3.5% 0%Cash from Financing Growth (YoY) -39.4% Development Tools & Open Source S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 13.5% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  14. 14. SEG Software Index Category: Electronic Design Automation TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnCadence Design Systems, Inc. SCIL $50.5 $42.4 $43.1 75.5% -7.4% -12.6% 1.0x n/a 0.9x n/a -19.3%Magma Design Automation, Inc. LAVA $497.6 $471.5 $146.4 87.2% 11.9% 11.7% 3.2x 27.0x 2.7x 9.1x 31.9%Mentor Graphics Corporation MENT $1,517.7 $1,634.8 $1,001.6 85.4% 16.5% 18.6% 1.6x 9.9x 1.6x 7.5x 8.9%PDF Solutions, Inc. PDFS $180.6 $136.5 $65.3 60.4% 7.9% 8.5% 2.1x 26.6x 1.7x 7.0x 10.4%Synopsys, Inc. SNPS $4,206.3 $3,206.4 $1,535.6 81.4% 22.1% 11.2% 2.1x 9.5x 1.9x 6.7x 7.5% Median: $339.1 $304.0 $105.9 80.4% 9.9% 10.1% 1.9x 26.6x 1.6x 7.5x 9.6% Income Statement Analysis (Median) Electronic Design Automation Software Stock Market Return: Jan 2012TTM Revenue Growth 10.1% 12%TTM EBITDA Growth 21.0%TTM Earnings Growth 45.2%Gross Profit Margin 80.4% 10%EBITDA Margin 9.9%Net Income Margin 3.8% 8%SG&A Expenses as a % of Total Revenue 42.9%R&D Expenses as a % of Total Revenue 29.7% 6% Balance Sheet Analysis (Median)Current Ratio 1.6x 4%Quick Ratio 1.4xCash as Percent of Market Cap 15.9% 2%Avg Days Outstanding: Accounts Receivable 69.2xAvg Days Outstanding: Accounts Payable 22.7xWorking Capital to TTM Operating Expense Ratio 0.2x 0% Cash Flow Statement Analysis (Median) -2%Levered FCF Margin 12.0%Cash from Operations Growth (YoY) 320.0%Cash from Investing Growth (YoY) 34.0% -4%Cash from Financing Growth (YoY) -56.7% Electronic Design Automation S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -3.3% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  15. 15. SEG Software Index Category: Engineering, PLM & CAD/CAM TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnANSYS, Inc. ANSS $5,588.1 $5,319.4 $659.8 87.9% 49.0% 17.0% 8.1x 16.5x 6.7x 13.1x 15.3%Autodesk, Inc. ADSK $8,164.8 $6,821.2 $2,150.9 89.8% 20.8% 14.4% 3.2x 15.3x 2.9x 10.2x -11.5%Cimatron Ltd. CIMT $31.7 $20.2 $39.5 86.0% 12.7% 13.4% 0.5x 4.0x n/a n/a -10.7%Dassault Systèmes DSY $10,124.0 $8,787.5 $2,316.3 86.0% 30.3% 14.0% 3.8x 12.5x n/a n/a 5.5%GSE Systems Inc. GVP $32.3 $14.7 $48.5 28.5% 1.9% 5.4% 0.3x 16.1x 0.3x n/a -46.3%Parametric Technology Corporation PMTC $2,941.0 $2,953.7 $1,218.7 69.7% 17.2% 19.7% 2.4x 14.1x 2.2x 9.2x 13.2%Stratasys, Inc. SSYS $779.1 $760.8 $155.9 52.9% 25.0% 27.7% 4.9x 19.5x 4.4x 13.5x 11.3% Median: $6,876.4 $6,070.3 $1,405.4 87.0% 25.5% 14.2% 3.5x 13.9x 4.8x 11.7x -2.6% Income Statement Analysis (Median) Engineering, PLM & CAD/CAM Software Stock Market Return: Jan 2012TTM Revenue Growth 14.2% 12%TTM EBITDA Growth 39.0%TTM Earnings Growth 45.8%Gross Profit Margin 87.0% 10%EBITDA Margin 25.5%Net Income Margin 12.8%SG&A Expenses as a % of Total Revenue 38.3% 8%R&D Expenses as a % of Total Revenue 0.0% Balance Sheet Analysis (Median) 6%Current Ratio 1.9xQuick Ratio 1.8x 4%Cash as Percent of Market Cap 16.5%Avg Days Outstanding: Accounts Receivable 89.0xAvg Days Outstanding: Accounts Payable 95.7x 2%Working Capital to TTM Operating Expense Ratio 0.5x Cash Flow Statement Analysis (Median) 0%Levered FCF Margin 17.5%Cash from Operations Growth (YoY) 17.1%Cash from Investing Growth (YoY) -256.5% -2%Cash from Financing Growth (YoY) -63.2% Enterprise Resource Planning S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -16.3% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  16. 16. SEG Software Index Category: Enterprise Resource Planning TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnDeltek PROJ $672.0 $792.4 $340.5 63.5% 12.3% 21.8% 2.3x 18.9x 2.2x 10.0x 45.0%Oracle Corporation ORCL $141,778.9 $125,891.9 $36,704.0 77.9% 42.0% 14.7% 3.4x 8.2x 3.3x 6.7x -11.9%QAD Inc. QADA $208.0 $149.2 $244.6 56.7% 8.3% 16.3% 0.6x 7.3x 0.6x 5.2x 50.7%SAP SAP $72,001.3 $70,016.8 $18,489.1 69.5% 34.4% 14.2% 3.8x 11.0x 3.4x 9.7x 4.4% Median: $36,336.6 $35,404.6 $9,414.8 66.5% 23.3% 15.5% 2.9x 9.6x 2.7x 8.2x 24.7% Income Statement Analysis (Median) Enterprise Resource Planning Software Stock Market Return: Jan 2012TTM Revenue Growth 15.5% 14%TTM EBITDA Growth 21.7%TTM Earnings Growth 80.4%Gross Profit Margin 66.5% 12%EBITDA Margin 23.3%Net Income Margin 10.4%SG&A Expenses as a % of Total Revenue 31.6% 10%R&D Expenses as a % of Total Revenue 14.2% Balance Sheet Analysis (Median) 8%Current Ratio 1.5xQuick Ratio 1.4x 6%Cash as Percent of Market Cap 17.7%Avg Days Outstanding: Accounts Receivable 83.7xAvg Days Outstanding: Accounts Payable 26.1x 4%Working Capital to TTM Operating Expense Ratio 0.3x Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 14.0%Cash from Operations Growth (YoY) 26.2%Cash from Investing Growth (YoY) 63.0% 0%Cash from Financing Growth (YoY) -145.4% Enterprise Resource Planning S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -18.9% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  17. 17. SEG Software Index Category: Financial Services TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnACI Worldwide, Inc. ACIW $1,017.8 $913.1 $471.3 70.9% 21.9% 16.9% 1.9x 8.8x 1.8x 7.6x 14.7%Bottomline Technologies EPAY $984.9 $853.5 $210.6 54.4% 16.6% 25.6% 4.1x 24.5x 3.7x 15.3x 19.2%DST Systems, Inc. DST $2,152.5 $3,101.2 $2,388.7 16.9% 16.7% 2.6% 1.3x 7.8x 1.5x 7.4x 2.6%EPIQ Systems, Inc. EPIQ $435.3 $616.8 $277.3 59.8% 24.6% 18.6% 2.2x 9.0x 1.8x 6.4x -5.1%Fair Isaac Corporation FICO $1,299.4 $1,579.8 $634.1 70.6% 29.1% 3.9% 2.5x 8.6x 2.5x 8.3x 42.8%Fiserv FISV $8,858.6 $12,198.6 $4,337.0 41.4% 31.0% 4.9% 2.8x 9.1x 2.7x 8.4x 1.8%NetSol Technologies Inc. NTWK $31.0 $50.7 $32.6 61.3% 20.4% -15.4% 1.6x 7.6x n/a n/a -72.7%S1 Corporation SONE $538.7 $450.6 $235.2 46.3% 6.0% 8.8% 1.9x 31.8x 1.8x 12.8x 51.6% Median: $1,001.4 $883.3 $374.3 57.1% 21.2% 6.9% 2.1x 8.9x 1.8x 8.3x 8.7% Income Statement Analysis (Median) Financial Services Software Stock Market Return: Jan 2012TTM Revenue Growth 6.9% 12%TTM EBITDA Growth 19.3%TTM Earnings Growth -4.6%Gross Profit Margin 57.1% 10%EBITDA Margin 21.2%Net Income Margin 7.8%SG&A Expenses as a % of Total Revenue 31.4% 8%R&D Expenses as a % of Total Revenue 11.0% Balance Sheet Analysis (Median) 6%Current Ratio 2.3xQuick Ratio 2.0x 4%Cash as Percent of Market Cap 15.3%Avg Days Outstanding: Accounts Receivable 75.9xAvg Days Outstanding: Accounts Payable 34.1x 2%Working Capital to TTM Operating Expense Ratio 0.4x Cash Flow Statement Analysis (Median) 0%Levered FCF Margin 11.6%Cash from Operations Growth (YoY) 25.4%Cash from Investing Growth (YoY) -135.3% -2%Cash from Financing Growth (YoY) 36.2% Financial Services Software S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 13.5% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  18. 18. SEG Software Index Category: Healthcare TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnAccelrys Inc. ACCL $415.5 $299.0 $141.9 70.9% 1.3% n/a 2.1x 158.8x 2.0x 9.1x -8.9%Allscripts Healthcare Solutions Inc. MDRX $3,624.6 $3,920.3 $1,366.3 46.1% 18.0% n/a 2.9x 15.9x 2.5x 8.5x -9.4%Cerner Corporation CERN $10,315.1 $9,693.9 $2,203.2 80.0% 26.7% 19.1% 4.4x 16.5x 4.1x 12.3x 23.2%Computer Programs and Sys, Inc. CPSI $627.6 $604.5 $173.5 45.8% 25.2% 13.2% 3.5x 13.8x 3.1x 11.9x 10.3%Epocrates, Inc. EPOC $233.8 $149.6 $113.9 66.3% 5.8% 12.7% 1.3x 22.5x 1.3x 15.4x n/aeResearchTechnology, Inc. ERT $272.8 $263.4 $177.5 41.8% 23.1% 48.9% 1.5x 6.4x 1.4x 4.7x -13.8%MedAssets MDAS $617.0 $1,494.3 $528.4 76.5% 26.7% 39.0% 2.8x 10.6x 2.5x 7.5x -46.3%Merge Healthcare MRGE $496.0 $702.1 $214.5 64.3% 22.8% 89.1% 3.3x 14.4x 2.6x 11.1x 28.0%Omnicell, Inc. OMCL $514.2 $314.3 $245.5 55.3% 9.8% 10.4% 1.3x 13.1x 1.2x 7.5x 11.2%Quality Systems, Inc. QSII $2,389.0 $2,258.9 $417.9 65.9% 31.2% 24.8% 5.4x 17.3x 4.6x 13.7x 1.6%Simulations Plus, Inc. SLP $49.2 $36.5 $11.9 76.3% 32.3% 15.4% 3.1x 9.5x 3.7x 6.8x -3.1% Median: $514.2 $604.5 $214.5 65.9% 23.1% 19.1% 2.9x 14.4x 2.5x 9.1x -0.7% Income Statement Analysis (Median) Healthcare Software Stock Market Return: Jan 2012TTM Revenue Growth 19.1% 14%TTM EBITDA Growth 41.0%TTM Earnings Growth 37.9%Gross Profit Margin 65.9% 12%EBITDA Margin 23.1%Net Income Margin 4.9%SG&A Expenses as a % of Total Revenue 36.2% 10%R&D Expenses as a % of Total Revenue 8.6% Balance Sheet Analysis (Median) 8%Current Ratio 2.3xQuick Ratio 2.1x 6%Cash as Percent of Market Cap 8.9%Avg Days Outstanding: Accounts Receivable 69.7xAvg Days Outstanding: Accounts Payable 29.7x 4%Working Capital to TTM Operating Expense Ratio 0.4x Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 7.9%Cash from Operations Growth (YoY) 42.6%Cash from Investing Growth (YoY) 28.5% 0%Cash from Financing Growth (YoY) 5.6% Healthcare S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 31.7% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  19. 19. SEG Software Index Category: IT Conglomerates TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnCisco Systems, Inc. CSCO $105,608.8 $78,099.8 $44,844.0 61.7% 27.1% 5.9% 1.7x 6.4x 1.7x 5.8x -7.1%Hewlett Packard HPQ $55,513.2 $78,453.2 $127,245.0 23.8% 13.3% 1.0% 0.6x 4.6x 0.6x 4.8x -38.8%IBM IBM $223,416.0 $242,911.0 $106,916.0 46.9% 24.5% 7.1% 2.3x 9.3x 2.2x 8.9x 18.9%Microsoft Corporation MSFT $247,779.5 $209,891.5 $72,052.0 76.4% 41.6% 8.0% 2.9x 7.0x 2.7x 6.6x 6.5%Oracle Corporation ORCL $141,778.9 $125,891.9 $36,704.0 77.9% 42.0% 14.7% 3.4x 8.2x 3.3x 6.7x -11.9% Median: $141,778.9 $125,891.9 $72,052.0 61.7% 27.1% 7.1% 2.3x 7.0x 2.2x 6.6x -7.1% Income Statement Analysis (Median) IT Conglomerates Software Stock Market Return: Jan 2012TTM Revenue Growth 7.1% 12%TTM EBITDA Growth 5.7%TTM Earnings Growth 6.9%Gross Profit Margin 61.7% 10%EBITDA Margin 27.1%Net Income Margin 15.6%SG&A Expenses as a % of Total Revenue 22.3%R&D Expenses as a % of Total Revenue 12.1% 8% Balance Sheet Analysis (Median)Current Ratio 2.9x 6%Quick Ratio 2.5xCash as Percent of Market Cap 20.5%Avg Days Outstanding: Accounts Receivable 62.6x 4%Avg Days Outstanding: Accounts Payable 52.3xWorking Capital to TTM Operating Expense Ratio 1.1x 2% Cash Flow Statement Analysis (Median)Levered FCF Margin 21.1%Cash from Operations Growth (YoY) 7.3%Cash from Investing Growth (YoY) 3.5% 0%Cash from Financing Growth (YoY) 44.9% IT Conglomerates S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 21.3% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  20. 20. SEG Software Index Category: Mobile Solutions/Content TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnAccess TSE:4813 $155.5 -$109.1 $223.4 68.9% 20.6% -48.7% n/a n/a n/a n/a -69.1%AutoNavi Holdings AMAP $539.9 $369.7 $115.3 70.8% 34.3% 47.0% 3.2x 9.3x 2.7x 6.4x -32.6%Bitstream Inc. BITS $63.7 $59.6 $27.5 51.4% -13.5% 23.7% 2.2x n/a n/a n/a -19.5%DigitalGlobe, Inc. DGI $726.0 $925.3 $323.7 83.2% 45.7% 3.9% 2.9x 6.3x 2.5x 4.2x -48.9%Epocrates, Inc. EPOC $233.8 $149.6 $113.9 66.3% 5.8% 12.7% 1.3x 22.5x 1.3x 15.4x n/aGlu Mobile, Inc. GLUU $214.0 $177.0 $66.2 80.5% -20.1% 2.9% 2.7x n/a 2.3x n/a 6.7%Gree TSE:3632 $6,697.3 $6,424.3 $1,422.2 92.4% 53.0% 133.2% 4.5x 8.5x n/a n/a 79.6%Myriad Group SWX:MYRN $213.6 $201.2 $78.2 66.9% 3.8% -35.3% 2.6x 68.4x n/a n/a -19.0%Motricity MOTR $35.8 $38.6 $133.2 64.8% 1.3% 8.5% 0.3x 22.3x 0.3x 16.3x -96.0%Openwave Systems Inc. OPWV $171.7 $115.5 $162.4 53.7% -6.6% -1.7% 0.7x n/a 0.9x n/a -1.0%Opera OB:OPERA $587.2 $507.0 $143.3 47.3% 26.0% 30.7% 3.5x 13.6x n/a n/a 10.4%PCTEL, Inc. PCTI $125.9 $64.3 $75.4 46.9% 6.5% 15.1% 0.9x 13.1x 0.8x 6.5x 1.7%Sky-mobi Limited MOBI $119.7 $32.6 $106.2 31.7% 5.9% 5.8% 0.3x 5.2x 0.3x 2.1x -48.4%Smith Micro Software, Inc. SMSI $65.1 $11.0 $81.8 81.6% -27.2% -34.5% 0.1x n/a 0.2x n/a -85.6%TeleCommunication Systems, Inc. TSYS $133.9 $229.8 $425.4 35.6% 9.0% 9.4% 0.5x 6.0x 0.5x 3.9x -42.8%Trunkbow International Holdings TBOW $78.8 $69.2 $33.2 74.5% 51.6% 117.1% 2.1x 4.0x n/a n/a n/aVelti Plc VELT $539.6 $409.6 $159.6 57.5% 6.4% 28.1% 2.6x 39.9x 1.7x 6.7x -38.5% Median: $171.7 $149.6 $115.3 66.3% 6.4% 9.4% 2.1x 11.2x 0.9x 6.4x -32.6% Income Statement Analysis (Median) Mobile Solutions/Content Software Stock Market Return: Jan 2012TTM Revenue Growth 9.4% 12%TTM EBITDA Growth -26.9%TTM Earnings Growth -55.9%Gross Profit Margin 66.3% 10%EBITDA Margin 6.4%Net Income Margin -0.4%SG&A Expenses as a % of Total Revenue 36.4% 8%R&D Expenses as a % of Total Revenue 18.4% Balance Sheet Analysis (Median) 6%Current Ratio 2.6xQuick Ratio 1.9x 4%Cash as Percent of Market Cap 32.3%Avg Days Outstanding: Accounts Receivable 67.4xAvg Days Outstanding: Accounts Payable 42.0x 2%Working Capital to TTM Operating Expense Ratio 0.6x Cash Flow Statement Analysis (Median) 0%Levered FCF Margin -2.4%Cash from Operations Growth (YoY) -14.0%Cash from Investing Growth (YoY) -44.6% -2%Cash from Financing Growth (YoY) 10.3% Mobile Solutions/Content S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -32.6% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  21. 21. SEG Software Index Category: Multimedia, Graphics and Digital Media TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnAdobe Systems Incorporated ADBE $15,283.2 $13,885.8 $4,216.3 89.6% 34.8% 11.0% 3.3x 9.5x 3.1x 7.3x -6.4%Avid Technology, Inc. AVID $374.1 $353.4 $677.9 53.1% 3.0% -0.1% 0.5x 17.1x 0.5x 6.5x -41.8%Monotype Imaging Holdings TYPE $562.3 $558.5 $120.9 92.2% 40.1% 18.1% 4.6x 11.5x 4.2x 9.7x 38.9%Nuance Communications, Inc. NUAN $8,634.4 $9,020.5 $1,375.6 66.5% 20.8% 18.6% 6.6x 31.5x 5.4x 13.3x 40.3%RealNetworks, Inc. RNWK $350.5 $167.4 $353.3 62.7% 0.6% -21.4% 0.5x 77.1x 0.5x 17.4x -32.1%Rovi Corporation ROVI $3,529.8 $4,167.7 $691.2 88.4% 39.8% 28.4% 6.0x 15.2x 5.2x 11.6x -48.0%SeaChange International, Inc. SEAC $232.4 $149.8 $216.9 50.3% 11.0% 4.1% 0.7x 6.3x 0.7x 5.4x -13.3% Median: $562.3 $558.5 $677.9 66.5% 20.8% 11.0% 3.3x 15.2x 3.1x 9.7x -13.3% Income Statement Analysis (Median) Multimedia, Graphics and Digital Media Software Stock Market Return: Jan 2012TTM Revenue Growth 11.0% 14%TTM EBITDA Growth 13.9%TTM Earnings Growth 7.5% 12%Gross Profit Margin 66.5%EBITDA Margin 20.8%Net Income Margin 5.4% 10%SG&A Expenses as a % of Total Revenue 35.7%R&D Expenses as a % of Total Revenue 0.0% 8% Balance Sheet Analysis (Median)Current Ratio 2.4x 6%Quick Ratio 2.1xCash as Percent of Market Cap 11.9% 4%Avg Days Outstanding: Accounts Receivable 51.3xAvg Days Outstanding: Accounts Payable 57.8xWorking Capital to TTM Operating Expense Ratio 0.5x 2% Cash Flow Statement Analysis (Median) 0%Levered FCF Margin 19.3%Cash from Operations Growth (YoY) 30.2% -2%Cash from Investing Growth (YoY) 17.7%Cash from Financing Growth (YoY) 7.8% Multimedia, Graphics & Digital Media S&P NASDAQ SEG SW IndexLevered FCF Growth (YoY) 13.5% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  22. 22. SEG Software Index Category: Networking/Network Performance Mgmt TTM TTM TTM Forward YoY Stock TTM Gross EBITDA Revenue EV/ Forward EV/ MarketCompany Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EBITDA ReturnAllot Communications Ltd. ALLT $471.6 $404.9 $77.8 71.5% 16.1% 36.5% 5.2x 32.3x 4.7x 23.5x 34.8%Cisco Systems, Inc. CSCO $105,608.8 $78,099.8 $44,844.0 61.7% 27.1% 5.9% 1.7x 6.4x 1.7x 5.8x -7.1%F5 Networks, Inc. FFIV $9,479.7 $8,923.2 $1,205.3 82.2% 32.5% 25.6% 7.4x 22.8x 6.1x 15.3x 10.5%NetScout Systems Inc. NTCT $857.6 $755.7 $297.2 78.8% 22.9% 4.5% 2.5x 11.1x 2.3x 8.5x -9.9%OPNET Technologies, Inc. OPNT $797.7 $686.3 $169.3 79.5% 20.3% 19.8% 4.1x 20.0x 3.6x 13.8x 23.7%Radware Ltd. RDWR $661.1 $560.2 $167.0 80.0% 16.4% 15.9% 3.4x 20.5x 3.1x n/a -15.7%SolarWinds, Inc. SWI $2,310.5 $2,147.1 $198.4 94.0% 47.9% 30.2% 10.8x 22.6x 9.3x 20.2x 67.2% Median: $857.6 $755.7 $198.4 79.5% 22.9% 19.8% 4.1x 20.5x 3.6x 14.6x 10.5% Income Statement Analysis (Median) Networking/Network Performance Mgmt Software Stock Market Return: Jan 2012TTM Revenue Growth 19.8% 12%TTM EBITDA Growth 37.6%TTM Earnings Growth 42.1%Gross Profit Margin 79.5% 10%EBITDA Margin 22.9%Net Income Margin 12.8%SG&A Expenses as a % of Total Revenue 40.3% 8%R&D Expenses as a % of Total Revenue 15.8% Balance Sheet Analysis (Median) 6%Current Ratio 2.4xQuick Ratio 2.3x 4%Cash as Percent of Market Cap 17.6%Avg Days Outstanding: Accounts Receivable 53.2xAvg Days Outstanding: Accounts Payable 54.4x 2%Working Capital to TTM Operating Expense Ratio 0.6x Cash Flow Statement Analysis (Median) 0%Levered FCF Margin 19.3%Cash from Operations Growth (YoY) 35.3%Cash from Investing Growth (YoY) -182.6% -2%Cash from Financing Growth (YoY) -25.9% Networking & Network Performance Management S&P NASDAQ SEG SW IndexLevered FCF Growth (YoY) 39.1% February 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
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