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Software and Internet Industry Valuation Data, March 2012
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Software and Internet Industry Valuation Data, March 2012

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Software and Internet Industry Valuation Data, March 2012

Software and Internet Industry Valuation Data, March 2012

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  • 1. Software Equity Group Flash Report March 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. Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $10 million, and you’re interested in learning more about SEG’s complimentary, no obligation mentoringprogram, please contact Kris Beible at kbeible@softwareequity.com or 858-509-2800.ADDITIONAL RESEARCHFor our complimentary current and archived Quarterly Reports from 1Q03, please visit: http://www.softwareequity.com/research_quarterly_reports.aspxFor our complimentary current and archived Monthly Flash Reports from July 2008, please visit: http://www.softwareequity.com/research_flash_reports.aspxFor our Annual Reports from 2003 through 2010, please visit: http://www.softwareequity.com/research_annual_reports.aspx Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 4. List of Commonly Used AcronymsCAD Computer-aided DesignCAM Computer-aided ManufacturingCRM Customer Relationship ManagementEBITDA Earnings before Interest, Taxes, Depreciation, and AmortizationEV Enterprise ValueFCF Free Cash FlowFORWARD Current EV / Next Four Quarters Consensus Financial EstimatesHR Human ResourcesNASDAQ National Association of Securities Dealers Automated Quotation SystemOS Operating SystemPLM Product Lifecycle ManagementR&D Research and DevelopmentS&P Standard & PoorsSaaS Software-as-a-ServiceSEG Software Equity GroupSG&A Selling, General, & AdministrativeSW SoftwareTTM Trailing Twelve MonthYoY Year-over-YearYTD Year-to-date Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 5. Select Software Industry M&A Transactions February 2012 Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 6. Select February 2012 Software Industry M&A Transactions Date Target TTM Revenue Implied Enterprise EV/ Revenue Announced Acquirer Target ($mm) Value ($mm)02/29/2012 SS&C Technologies Holdings, Inc. (NasdaqGS:SSNC) Thomson Reuters Corporation, Portia - $170.00 -02/29/2012 Integrated Bank Technology, Inc. Beacon Software, Inc. - - -02/28/2012 VanceInfo Technologies Inc. (NYSE:VIT) Beijing Sunwin Corporation Limited - $3.50 -02/28/2012 Groupon, Inc. (NasdaqGS:GRPN) UpTake Networks, Inc. - - -02/28/2012 Presidio Networked Solutions, Inc. Total Convergence Solutions LLC - - -02/28/2012 Oberthur Technologies MoreMagic Solutions, Inc. - - -02/28/2012 MEDL Mobile Holdings, Inc. (OTCBB:MEDL) inedible software, llc - - -02/28/2012 Haufe-Lexware GmbH & Co. KG umantis AG - - -02/27/2012 TeleTech Holdings Inc. (NasdaqGS:TTEC) Iknowtion, LLC - $6.05 -02/27/2012 Arrow Electronics, Inc. (NYSE:ARW) Asset Recovery Corp. - - -02/27/2012 Buddy Media, Inc. Brighter Option Ltd. - - -02/27/2012 ManTech International Corporation (NasdaqGS:MANT) HBGary, Inc. - - -02/24/2012 SoundBite Communications, Inc. (NasdaqGM:SDBT) 2ergo Americas Inc. - $3.80 -02/24/2012 Vocus Inc. (NasdaqGS:VOCS) iContact Corporation - $168.66 -02/24/2012 Dell Inc. (NasdaqGS:DELL) AppAssure Software, Inc. - - -02/23/2012 Critical Path, Inc. Laszlo Systems, Inc. - - -02/23/2012 Apple Inc. (NasdaqGS:AAPL) Chomp Inc. - - -02/23/2012 Bally Technologies, Inc. (NYSE:BYI) The Chiligaming Network, Business-to- - - -02/23/2012 Cognicase Management Consulting S L Consulting, S.L. Galeon Software S L Software, S.L. - - -02/22/2012 Alert Logic, Inc. Armorlogic - - -02/22/2012 Fusion-Q Corporation Seventh Knight Incorporated - - -02/22/2012 LinkedIn Corporation (NYSE:LNKD) Rapportive, Inc. - - -02/21/2012 Tangoe, Inc. (NasdaqGS:TNGO) ttMobiles Limited - $8.69 -02/21/2012 SAS Institute, Inc. aiMatch, Inc. - - -02/18/2012 Groupon, Inc. (NasdaqGS:GRPN) Kima Labs, Inc. - - -02/17/2012 Groupon, Inc. (NasdaqGS:GRPN) Hyperpublic - - -02/16/2012 SEI Investments Co. (NasdaqGS:SEIC) NorthStar Systems International, Inc. - $10.00 -02/16/2012 Opera Software ASA (OB:OPERA) 4th Screen Advertising Ltd. - $14.50 -02/16/2012 Opera Software ASA (OB:OPERA) Mobile Theory, Inc. - $50.00 -02/16/2012 Envestnet, Inc. (NYSE:ENV) Tamarac, Inc. - $54.00 4.5x02/16/2012 Rackspace Hosting, Inc. (NYSE:RAX) Young CS Technologies LLC - - -02/15/2012 Quest Software Inc. (NasdaqGS:QSFT) BlueFolder, Inc. - - -02/14/2012 NCSoft (KOSE:A036570) Ntreev Soft Co., Ltd. $48.58 $126.18 2.6x02/13/2012 Juniper Networks, Inc. (NYSE:JNPR) Mykonos Software, Inc. - $80.00 -02/13/2012 Thomson Reuters Corporation (TSX:TRI) RedEgg Solutions, Inc. - - -02/13/2012 SanDisk Corp. (NasdaqGS:SNDK) FlashSoft Corporation - - -02/09/2012 Symphony Teleca Corporation Teleca AB - - -02/09/2012 S&P Capital IQ R2 Financial Technologies Inc. - - -02/09/2012 Appcelerator, Inc. Cocoafish, Inc. - - -02/08/2012 Oracle Corporation (NasdaqGS:ORCL) Taleo Corp. (NasdaqGS:TLEO) $315.40 $1,805.47 5.7x02/08/2012 Akamai Technologies, Inc. (NasdaqGS:AKAM) Blaze Software Inc. - - -02/07/2012 Misys plc (LSE:MSY) Temenos Group AG (SWX:TEMN) $473.47 $1,569.85 3.3x02/07/2012 Brady plc (AIM:BRY) Navita Systems AS - $27.26 -02/07/2012 Guidance Software, Inc. (NasdaqGM:GUID) CaseCentral, Inc. - $54.00 -02/06/2012 Groupon, Inc. (NasdaqGS:GRPN) Adku, Inc. - $10.00 -02/01/2012 McAfee, Inc. Insightix Ltd. - - -
  • 7. SEG Software IndexCategory Performance Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $1,068.2 $1,155.9 $370.9 66.3% 20.6% 13.8% 2.6x 12.2x 2.4x 9.0x 0.8% Billing & Service Management $516.8 $627.2 $481.0 50.2% 21.9% 23.6% 1.3x 5.9x 1.2x 6.7x -25.9% Business Intelligence $1,260.6 $1,105.0 $368.6 79.0% 8.9% 23.7% 3.2x 37.4x 2.7x 19.9x 14.9% Content/Document Management $16,241.2 $14,843.8 $4,216.3 65.1% 24.9% 17.6% 2.7x 10.1x 2.5x 9.3x 3.7% Data Management & Integration $4,998.0 $4,577.2 $852.0 75.5% 22.1% 14.3% 2.9x 17.5x 2.8x 10.0x 11.1% Development Tools & Open Source $170.6 $136.3 $116.4 33.4% 9.2% 18.6% 1.2x 21.4x 2.5x 7.9x -29.5% Electronic Design Automation $942.9 $965.9 $540.7 77.9% 12.8% 9.6% 1.9x 9.9x 1.8x 7.4x 2.6% Engineering, PLM & CAD/CAM Software $7,206.1 $6,328.0 $1,453.5 87.2% 25.8% 13.8% 3.5x 13.8x 4.8x 11.4x -0.7% Enterprise Resource Planning $40,762.9 $39,816.1 $9,414.8 66.5% 23.3% 15.5% 3.0x 10.5x 2.9x 8.5x 31.5% Financial Services $1,458.6 $1,358.9 $465.1 61.3% 21.8% 4.9% 2.7x 9.4x 2.3x 8.4x 4.8% Healthcare $544.7 $605.4 $208.7 64.5% 22.7% 24.8% 3.2x 15.1x 2.8x 9.9x 7.4% IT Conglomerates $147,030.9 $131,143.9 $72,052.0 61.5% 27.1% 7.1% 2.3x 7.6x 2.3x 7.0x 7.1% Mobile Solutions/Content $206.8 $144.2 $121.7 63.2% 6.6% 9.0% 2.0x 9.6x 1.2x 5.9x -26.9% Multimedia, Graphics, Digital Media $505.4 $488.9 $677.9 66.5% 20.9% 11.0% 3.5x 14.4x 3.4x 8.0x -27.2% Networking & Networking Performance Mgmt. $882.2 $780.2 $198.4 79.5% 22.9% 19.8% 3.5x 21.3x 3.1x 13.9x 5.9% Security $1,060.9 $947.5 $266.1 81.8% 22.0% 20.2% 2.1x 9.3x 2.0x 10.6x -1.1% Storage & Systems Management Software $13,127.0 $12,086.0 $3,767.1 77.9% 24.9% 11.8% 2.4x 10.5x 2.3x 8.5x -1.1% Supply Chain Management & Logistics $512.0 $435.1 $236.0 57.8% 8.2% 13.8% 1.6x 15.0x 2.3x 10.4x 19.9% Vertical - Finance $1,603.5 $1,663.2 $370.8 69.2% 36.7% 13.9% 3.8x 11.9x 3.7x 10.7x 2.7% Vertical - Other $1,119.7 $1,152.0 $288.9 56.9% 16.0% 13.6% 3.4x 18.6x 3.1x 12.8x 9.0% Video Games $2,602.3 $2,385.3 $2,146.9 47.7% 6.8% 5.6% 1.1x 6.1x 0.9x 5.7x 1.8% Workforce & Service Management $349.1 $334.9 $121.3 62.9% 17.4% 15.1% 2.8x 14.0x 2.4x 10.5x 25.0% Income Statement Analysis (Median) SEG SW Index Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 13.8% 16%TTM EBITDA Growth 15.8%TTM Earnings Growth 26.9% 15%Gross Profit Margin 66.3% 14%EBITDA Margin 20.6% 13%Net Income Margin 10.6% 12%SG&A Expenses as a % of Total Revenue 35.5% 11%R&D Expenses as a % of Total Revenue 13.6% 10% Balance Sheet Analysis (Median) 9%Current Ratio 2.0 8%Quick Ratio 1.8 7%Cash as Percent of Market Cap 15.1% 6%Avg Days Outstanding: Accounts Receivable 64 5%Avg Days Outstanding: Accounts Payable 37Working Capital to TTM Operating Expense Ratio 0.4 4% 3% Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 13.7% 1%Cash from Operations Growth (YoY) 13.5% 0%Cash from Investing Growth (YoY) 1.3%Cash from Financing Growth (YoY) -62.3% DOW S&P NASDAQ SEG SW IndexLevered FCF Growth (YoY) 8.9% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $5,249.1 $4,324.1 $3,209.6 35.3% 18.7% 5.8% 1.3x 7.2x 1.3x 6.2x 2.8%AsiaInfo Holdings, Inc. ASIA $926.5 $627.2 $481.0 43.2% 21.9% 40.1% 1.3x 6.0x 1.2x 7.2x -37.2%CSG Systems International, Inc. CSGS $516.8 $667.7 $734.7 50.2% 23.4% 33.7% 0.9x 3.9x 0.9x 4.1x -18.1%Evolving Systems, Inc. EVOL $59.8 $30.2 $33.9 65.4% 17.1% 23.6% 0.9x 5.2x 1.3x 9.2x -32.5%MIND C.T.I. Ltd. MNDO $43.4 $24.9 $19.2 66.3% 22.0% -3.2% 1.3x 5.9x n/a n/a -25.9%Synchronoss Technologies, Inc. SNCR $1,267.6 $1,155.9 $229.1 53.5% 15.5% 38.0% 5.0x 32.6x 4.0x 14.2x -2.3% Median: $516.8 $627.2 $481.0 50.2% 21.9% 23.6% 1.3x 5.9x 1.2x 6.7x -25.9% Income Statement Analysis (Median) Billing and Service Management Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 23.6% 18%TTM EBITDA Growth 9.3%TTM Earnings Growth 60.6% 16%Gross Profit Margin 50.2%EBITDA Margin 21.9% 14%Net Income Margin 13.5%SG&A Expenses as a % of Total Revenue 19.7% 12%R&D Expenses as a % of Total Revenue 13.9% 10% Balance Sheet Analysis (Median) 8%Current Ratio 3.4xQuick Ratio 3.1x 6%Cash as Percent of Market Cap 31.6% 4%Avg Days Outstanding: Accounts Receivable 86.0xAvg Days Outstanding: Accounts Payable 26.2x 2%Working Capital to TTM Operating Expense Ratio 0.8x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 10.7% -2%Cash from Operations Growth (YoY) -25.2% -4%Cash from Investing Growth (YoY) -26.4%Cash from Financing Growth (YoY) -126.1% Billing & Service Management S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -22.6% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $294.6 $227.2 $134.9 83.3% 20.6% 2.6% 1.7x 8.2x 1.6x 5.8x 26.8%Informatica Corporation INFA $5,278.4 $4,675.9 $783.8 84.2% 22.8% 20.6% 6.0x 26.2x 5.2x 17.0x 4.6%MicroStrategy Incorporated MSTR $1,462.0 $1,262.4 $562.2 74.7% 4.6% 23.7% 2.2x 49.2x 2.0x 20.2x 14.1%Pegasystems Inc. PEGA $1,059.1 $947.7 $416.7 60.4% 6.5% 23.8% 2.3x 35.0x 1.9x 19.7x -30.3%PROS Holdings PRO $475.3 $406.9 $96.6 72.6% 10.6% 36.0% 4.2x 39.9x 3.5x 20.1x 53.1%Qlik Technologies QLIK $2,557.1 $2,380.1 $320.6 89.3% 7.2% 41.5% 7.4x 103.8x 5.8x 41.2x 15.7% Median: $1,260.6 $1,105.0 $368.6 79.0% 8.9% 23.7% 3.2x 37.4x 2.7x 19.9x 14.9% Income Statement Analysis (Median) Business IntelligenceSoftware Stock Market Return: Jan - Feb 2012TTM Revenue Growth 23.7% 30%TTM EBITDA Growth 17.2%TTM Earnings Growth 24.3%Gross Profit Margin 79.0% 25%EBITDA Margin 8.9%Net Income Margin 4.9% 20%SG&A Expenses as a % of Total Revenue 44.9%R&D Expenses as a % of Total Revenue 16.3% 15% Balance Sheet Analysis (Median)Current Ratio 2.1x 10%Quick Ratio 1.9xCash as Percent of Market Cap 12.5% 5%Avg Days Outstanding: Accounts Receivable 76.7xAvg Days Outstanding: Accounts Payable 36.9xWorking Capital to TTM Operating Expense Ratio 0.5x 0% Cash Flow Statement Analysis (Median) -5%Levered FCF Margin 8.5%Cash from Operations Growth (YoY) -4.2% -10%Cash from Investing Growth (YoY) -82.2%Cash from Financing Growth (YoY) -17.2% Business Intelligence S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 22.5% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $16,241.2 $14,843.8 $4,216.3 89.6% 34.8% 11.0% 3.5x 10.1x 3.4x 7.9x -4.7%EasyLink Services International ESIC $149.0 $221.2 $189.0 65.1% 23.4% 125.9% 1.2x 5.0x 1.2x n/a 12.0%EMC EMC $56,849.9 $54,924.3 $20,007.6 61.2% 23.2% 17.6% 2.7x 11.8x 2.5x 9.5x 1.8%IBM IBM $227,943.6 $247,388.6 $106,916.0 46.9% 24.9% 7.1% 2.3x 9.3x 2.3x 9.0x 21.5%Open Text Corporation OTEX $3,536.9 $3,734.6 $1,157.9 73.1% 27.5% 23.5% 3.2x 11.7x 2.9x 9.6x 3.7% Median: $16,241.2 $14,843.8 $4,216.3 65.1% 24.9% 17.6% 2.7x 10.1x 2.5x 9.3x 3.7% Income Statement Analysis (Median) Content and Document Management Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 17.6% 25%TTM EBITDA Growth 12.1%TTM Earnings Growth 17.4%Gross Profit Margin 65.1%EBITDA Margin 24.9% 20%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% 15% Balance Sheet Analysis (Median)Current Ratio 1.3xQuick Ratio 1.2xCash as Percent of Market Cap 11.7% 10%Avg Days Outstanding: Accounts Receivable 50.2xAvg Days Outstanding: Accounts Payable 49.8xWorking Capital to TTM Operating Expense Ratio 0.1x 5% 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% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $268.8 $231.9 $104.6 72.8% 3.7% 13.8% 2.2x 59.9x 1.8x 10.1x 49.2%IBM IBM $227,943.6 $247,388.6 $106,916.0 46.9% 24.9% 7.1% 2.3x 9.3x 2.3x 9.0x 21.5%Informatica Corporation INFA $5,278.4 $4,675.9 $783.8 84.2% 22.8% 20.6% 6.0x 26.2x 5.2x 17.0x 4.6%Oracle Corporation ORCL $147,030.9 $131,143.9 $36,704.0 77.9% 42.0% 14.7% 3.6x 8.5x 3.4x 7.0x -11.1%Pervasive Software Inc. PVSW $97.2 $55.9 $49.4 86.0% 9.1% 7.2% 1.1x 12.4x 1.1x 9.9x 4.5%TIBCO Software Inc. TIBX $4,717.6 $4,478.4 $920.2 73.1% 21.5% 22.0% 4.9x 22.7x 4.3x 15.1x 17.7% Median: $4,998.0 $4,577.2 $852.0 75.5% 22.1% 14.3% 2.9x 17.5x 2.8x 10.0x 11.1% Income Statement Analysis (Median) Data Management and Integration Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 14.3% 20%TTM EBITDA Growth 14.7%TTM Earnings Growth 28.0%Gross Profit Margin 75.5%EBITDA Margin 22.1% 15%Net Income Margin 13.5%SG&A Expenses as a % of Total Revenue 40.2%R&D Expenses as a % of Total Revenue 16.2% 10% Balance Sheet Analysis (Median)Current Ratio 1.9xQuick Ratio 1.8xCash as Percent of Market Cap 12.6% 5%Avg Days Outstanding: Accounts Receivable 62.6xAvg Days Outstanding: Accounts Payable 31.3xWorking Capital to TTM Operating Expense Ratio 0.5x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 17.7%Cash from Operations Growth (YoY) 36.1% -5%Cash from Investing Growth (YoY) 30.9%Cash from Financing Growth (YoY) -23.3% Data Management & Integration S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 35.2% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $16,241.2 $14,843.8 $4,216.3 89.6% 34.8% 11.0% 3.5x 10.1x 3.4x 7.9x -4.7%BSQUARE Corporation BSQR $36.4 $18.2 $96.8 20.6% 0.6% 0.1% 0.2x 31.6x n/a n/a -72.2%GeekNet GKNT $93.9 $57.0 $119.5 26.2% 1.3% 26.3% 0.5x 35.7x n/a n/a -48.2%Magic Software Enterprises Ltd. MGIC $247.3 $215.7 $113.3 40.7% 17.0% 27.9% 1.9x 11.2x 1.7x n/a -10.8%Microsoft Corporation MSFT $266,323.1 $228,435.1 $72,052.0 76.4% 41.6% 8.0% 3.2x 7.6x 3.0x 7.2x 19.4%Oracle Corporation ORCL $147,030.9 $131,143.9 $36,704.0 77.9% 42.0% 14.7% 3.6x 8.5x 3.4x 7.0x -11.1%Progress Software Corporation PRGS $1,439.5 $1,178.5 $533.6 83.6% 25.4% 0.8% 2.2x 8.7x 2.3x 8.9x -20.9%Red Hat, Inc. RHT $9,552.6 $8,744.2 $1,080.9 83.7% 22.4% 25.6% 8.1x 36.2x 7.0x 23.7x 19.8% Median: $170.6 $136.3 $116.4 33.4% 9.2% 18.6% 1.2x 21.4x 2.5x 7.9x -29.5% Income Statement Analysis (Median) Development Tools and Open Source Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 18.6% 25%TTM EBITDA Growth 12.4%TTM Earnings Growth 17.8%Gross Profit Margin 33.4%EBITDA Margin 9.2% 20%Net Income Margin 13.3%SG&A Expenses as a % of Total Revenue 25.6%R&D Expenses as a % of Total Revenue 0.0% 15% Balance Sheet Analysis (Median)Current Ratio 2.7xQuick Ratio 2.5xCash as Percent of Market Cap 18.6% 10%Avg Days Outstanding: Accounts Receivable 63.8xAvg Days Outstanding: Accounts Payable 42.5xWorking Capital to TTM Operating Expense Ratio 0.4x 5% Cash Flow Statement Analysis (Median)Levered FCF Margin 21.7%Cash from Operations Growth (YoY) 31.2%Cash from Investing Growth (YoY) 3.5% 0%Cash from Financing Growth (YoY) -155.7% Development Tools & Open Source S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 7.5% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $38.9 $33.1 $41.1 74.0% -10.5% -5.3% 0.8x n/a 0.7x n/a -39.4%Mentor Graphics Corporation MENT $1,658.8 $1,750.8 $1,014.6 83.9% 17.5% 10.9% 1.7x 9.9x 1.6x 7.4x -4.7%PDF Solutions, Inc. PDFS $227.0 $181.0 $66.7 55.9% 8.2% 8.2% 2.7x 33.3x 2.2x 7.6x 16.0%Synopsys, Inc. SNPS $4,389.3 $3,445.8 $1,596.5 81.8% 22.7% 12.8% 2.2x 9.5x 2.1x 7.3x 9.9% Median: $942.9 $965.9 $540.7 77.9% 12.8% 9.6% 1.9x 9.9x 1.8x 7.4x 2.6% Income Statement Analysis (Median) Electronic Design Automation Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 9.6% 20%TTM EBITDA Growth 20.0%TTM Earnings Growth 122.1%Gross Profit Margin 77.9%EBITDA Margin 12.8% 15%Net Income Margin 5.5%SG&A Expenses as a % of Total Revenue 35.3%R&D Expenses as a % of Total Revenue 27.8% 10% Balance Sheet Analysis (Median)Current Ratio 1.5xQuick Ratio 1.3xCash as Percent of Market Cap 17.7% 5%Avg Days Outstanding: Accounts Receivable 83.4xAvg Days Outstanding: Accounts Payable 75.0xWorking Capital to TTM Operating Expense Ratio 0.3x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 12.2%Cash from Operations Growth (YoY) 26.7%Cash from Investing Growth (YoY) 70.6% -5%Cash from Financing Growth (YoY) -234.6% Electronic Design Automation S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 133.8% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $5,861.9 $5,517.1 $691.4 87.7% 48.1% 19.2% 8.0x 16.6x 6.8x 12.5x 12.2%Autodesk, Inc. ADSK $8,550.3 $7,139.0 $2,215.6 89.7% 21.2% 13.5% 3.2x 15.2x 2.9x 10.2x -10.0%Cimatron Ltd. CIMT $36.3 $24.4 $40.7 86.8% 13.5% 12.9% 0.6x 4.4x n/a n/a -15.9%Dassault Systèmes DSY $10,162.1 $8,687.6 $2,316.3 86.0% 30.3% 14.0% 3.8x 12.4x n/a n/a 8.6%GSE Systems Inc. GVP $34.7 $17.1 $48.5 28.5% 1.9% 5.4% 0.4x 18.7x 0.3x n/a -45.7%Parametric Technology Corporation PMTC $3,164.9 $3,177.6 $1,218.7 69.7% 17.2% 19.7% 2.6x 15.1x 2.4x 9.8x 12.7%Stratasys, Inc. SSYS $781.0 $746.3 $155.9 52.9% 25.0% 27.7% 4.8x 19.1x 4.1x 13.5x -18.8% Median: $7,206.1 $6,328.0 $1,453.5 87.2% 25.8% 13.8% 3.5x 13.8x 4.8x 11.4x -0.7% Income Statement Analysis (Median) Engineering, PLM & CAD/CAM Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 13.8% 18%TTM EBITDA Growth 40.5%TTM Earnings Growth 60.3% 16%Gross Profit Margin 87.2%EBITDA Margin 25.8% 14%Net Income Margin 12.9%SG&A Expenses as a % of Total Revenue 38.3% 12%R&D Expenses as a % of Total Revenue 0.0% 10% Balance Sheet Analysis (Median)Current Ratio 1.8x 8%Quick Ratio 1.7xCash as Percent of Market Cap 16.5% 6%Avg Days Outstanding: Accounts Receivable 89.0xAvg Days Outstanding: Accounts Payable 70.7x 4%Working Capital to TTM Operating Expense Ratio 0.5x 2% Cash Flow Statement Analysis (Median)Levered FCF Margin 15.9% 0%Cash from Operations Growth (YoY) 10.4%Cash from Investing Growth (YoY) -293.1% -2%Cash from Financing Growth (YoY) -67.5% Enterprise Resource Planning S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -3.8% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $718.9 $851.1 $340.5 63.5% 12.3% 21.8% 2.5x 20.3x 2.3x 10.0x 51.3%Oracle Corporation ORCL $147,030.9 $131,143.9 $36,704.0 77.9% 42.0% 14.7% 3.6x 8.5x 3.4x 7.0x -11.1%QAD Inc. QADA $219.3 $160.5 $244.6 56.7% 8.3% 16.3% 0.7x 7.9x 0.6x 5.6x 50.2%SAP SAP $80,806.8 $78,781.0 $18,489.1 69.5% 34.4% 14.2% 4.3x 12.4x 3.7x 10.7x 12.8% Median: $40,762.9 $39,816.1 $9,414.8 66.5% 23.3% 15.5% 3.0x 10.5x 2.9x 8.5x 31.5% Income Statement Analysis (Median) Enterprise Resource Planning Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 15.5% 18%TTM EBITDA Growth 16.5%TTM Earnings Growth 68.6% 16%Gross Profit Margin 66.5%EBITDA Margin 23.3%Net Income Margin 9.9% 14%SG&A Expenses as a % of Total Revenue 31.3%R&D Expenses as a % of Total Revenue 14.2% 12% Balance Sheet Analysis (Median) 10%Current Ratio 1.5xQuick Ratio 1.3x 8%Cash as Percent of Market Cap 13.3%Avg Days Outstanding: Accounts Receivable 73.5x 6%Avg Days Outstanding: Accounts Payable 31.8xWorking Capital to TTM Operating Expense Ratio 0.3x 4% Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 15.7%Cash from Operations Growth (YoY) 26.2%Cash from Investing Growth (YoY) 14.1% 0%Cash from Financing Growth (YoY) -145.4% Enterprise Resource Planning S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -2.5% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $1,480.1 $1,358.9 $465.1 71.1% 21.8% 11.2% 2.9x 13.4x 1.9x 8.4x 20.7%Bottomline Technologies EPAY $1,018.1 $886.7 $210.6 54.4% 16.6% 25.6% 4.2x 25.4x 3.8x 16.4x 27.1%DST Systems, Inc. DST $2,273.7 $3,356.2 $1,744.0 -11.5% 21.5% 1.8% 1.9x 9.0x 1.7x 7.9x 3.9%EPIQ Systems, Inc. EPIQ $410.3 $671.0 $261.3 65.2% 25.1% 20.1% 2.6x 10.2x 1.8x 6.6x -16.8%Fair Isaac Corporation FICO $1,458.6 $1,739.0 $634.1 70.6% 29.1% 3.9% 2.7x 9.4x 2.7x 9.4x 44.8%Fiserv FISV $9,188.5 $12,344.5 $4,337.0 41.4% 30.2% 4.9% 2.8x 9.4x 2.7x 8.4x 4.8%NetSol Technologies Inc. NTWK $30.9 $51.9 $32.6 61.3% 20.4% -15.4% 1.6x 7.8x n/a n/a -70.2% Median: $1,458.6 $1,358.9 $465.1 61.3% 21.8% 4.9% 2.7x 9.4x 2.3x 8.4x 4.8% Income Statement Analysis (Median) Financial Services Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 4.9% 20%TTM EBITDA Growth 8.1%TTM Earnings Growth -9.1%Gross Profit Margin 61.3%EBITDA Margin 21.8% 15%Net Income Margin 10.7%SG&A Expenses as a % of Total Revenue 32.1%R&D Expenses as a % of Total Revenue 10.0% 10% Balance Sheet Analysis (Median)Current Ratio 2.1xQuick Ratio 1.8xCash as Percent of Market Cap 13.3% 5%Avg Days Outstanding: Accounts Receivable 71.5xAvg Days Outstanding: Accounts Payable 27.1xWorking Capital to TTM Operating Expense Ratio 0.4x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 9.5%Cash from Operations Growth (YoY) 25.4%Cash from Investing Growth (YoY) -146.2% -5%Cash from Financing Growth (YoY) 29.9% Financial Services Software S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -19.4% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $440.4 $324.0 $144.3 75.0% 8.9% 35.0% 2.2x 25.3x 2.1x 9.9x -8.3%Allscripts Healthcare Solutions Inc. MDRX $3,678.2 $3,891.7 $1,444.1 46.1% 17.6% 56.4% 2.7x 15.3x 2.4x 9.1x -9.5%Cerner Corporation CERN $12,527.7 $11,879.6 $2,203.2 80.0% 26.9% 19.1% 5.4x 20.0x 4.7x 14.4x 47.0%Computer Programs and Sys, Inc. CPSI $667.0 $643.8 $173.5 45.8% 25.2% 13.2% 3.7x 14.7x 3.3x 12.7x 12.6%Epocrates, Inc. EPOC $224.4 $139.2 $113.3 63.2% 3.2% 9.0% 1.2x 37.8x 1.3x 11.7x -57.1%eResearchTechnology, Inc. ERT $314.2 $295.8 $184.9 41.0% 22.1% 31.2% 1.6x 7.2x 1.5x 5.1x 0.5%Greenway Medical Technologies, Inc GWAY $412.1 $567.0 $99.0 54.7% 6.6% n/a 5.7x 86.9x n/a n/a n/aMedAssets MDAS $825.6 $1,682.3 $578.3 78.9% 29.4% 47.8% 2.9x 9.9x 2.8x 8.5x 0.8%Merge Healthcare MRGE $593.9 $805.7 $232.4 65.9% 23.3% 65.6% 3.5x 14.9x 2.8x 12.0x 30.2%Omnicell, Inc. OMCL $495.6 $295.7 $245.5 55.3% 9.8% 10.4% 1.2x 12.3x 1.1x 7.3x 11.0%Quality Systems, Inc. QSII $2,531.1 $2,401.0 $417.9 65.9% 31.2% 24.8% 5.7x 18.4x 4.9x 14.5x 7.4%Simulations Plus, Inc. SLP $62.6 $49.9 $11.9 76.3% 32.3% 15.4% 4.2x 13.0x 5.0x 9.2x 21.9% Median: $544.7 $605.4 $208.7 64.5% 22.7% 24.8% 3.2x 15.1x 2.8x 9.9x 7.4% Income Statement Analysis (Median) Healthcare Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 24.8% 25%TTM EBITDA Growth 45.5%TTM Earnings Growth 46.4%Gross Profit Margin 64.5%EBITDA Margin 22.7% 20%Net Income Margin 6.3%SG&A Expenses as a % of Total Revenue 38.0%R&D Expenses as a % of Total Revenue 9.0% 15% Balance Sheet Analysis (Median)Current Ratio 2.5xQuick Ratio 2.1xCash as Percent of Market Cap 7.1% 10%Avg Days Outstanding: Accounts Receivable 74.2xAvg Days Outstanding: Accounts Payable 30.3xWorking Capital to TTM Operating Expense Ratio 0.4x 5% Cash Flow Statement Analysis (Median)Levered FCF Margin 10.8%Cash from Operations Growth (YoY) 17.8%Cash from Investing Growth (YoY) 64.3% 0%Cash from Financing Growth (YoY) 11.3% Healthcare S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -22.5% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $107,072.4 $77,253.4 $44,844.0 61.5% 27.1% 5.9% 1.7x 6.4x 1.6x 5.2x 7.1%Hewlett Packard HPQ $50,020.8 $73,217.8 $124,979.0 23.3% 12.4% -1.7% 0.6x 4.7x 0.6x 4.5x -42.0%IBM IBM $227,943.6 $247,388.6 $106,916.0 46.9% 24.9% 7.1% 2.3x 9.3x 2.3x 9.0x 21.5%Microsoft Corporation MSFT $266,323.1 $228,435.1 $72,052.0 76.4% 41.6% 8.0% 3.2x 7.6x 3.0x 7.2x 19.4%Oracle Corporation ORCL $147,030.9 $131,143.9 $36,704.0 77.9% 42.0% 14.7% 3.6x 8.5x 3.4x 7.0x -11.1% Median: $147,030.9 $131,143.9 $72,052.0 61.5% 27.1% 7.1% 2.3x 7.6x 2.3x 7.0x 7.1% Income Statement Analysis (Median) IT Conglomerates Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 7.1% 18%TTM EBITDA Growth 7.5%TTM Earnings Growth 6.9% 16%Gross Profit Margin 61.5%EBITDA Margin 27.1%Net Income Margin 15.6% 14%SG&A Expenses as a % of Total Revenue 22.3%R&D Expenses as a % of Total Revenue 12.1% 12% Balance Sheet Analysis (Median) 10%Current Ratio 2.9xQuick Ratio 2.5x 8%Cash as Percent of Market Cap 19.0%Avg Days Outstanding: Accounts Receivable 62.6x 6%Avg Days Outstanding: Accounts Payable 49.0xWorking Capital to TTM Operating Expense Ratio 1.1x 4% Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 20.9%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) -7.0% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $176.5 -$72.5 $223.4 68.9% 20.6% -48.7% n/a n/a n/a n/a -68.1%AutoNavi Holdings AMAP $587.4 $392.7 $127.0 72.4% 32.3% 48.0% 3.1x 9.6x 2.5x 6.4x -24.5%Bitstream Inc. BITS $58.8 $54.8 $27.5 51.4% -13.5% 23.7% 2.0x n/a n/a n/a -17.8%DigitalGlobe, Inc. DGI $712.4 $1,000.5 $339.5 80.9% 43.9% 5.3% 2.9x 6.7x 2.6x 4.5x -52.4%Epocrates, Inc. EPOC $224.4 $139.2 $113.3 63.2% 3.2% 9.0% 1.2x 37.8x 1.3x 11.7x -57.1%Glu Mobile, Inc. GLUU $240.8 $208.6 $66.2 80.5% -18.2% 2.9% 3.2x n/a 2.5x n/a -16.6%Gree TSE:3632 $7,298.4 $6,909.6 $1,422.2 92.4% 53.0% 133.2% 4.9x 9.2x n/a n/a 93.3%Myriad Group SWX:MYRN $241.2 $228.5 $78.2 66.9% 3.8% -35.3% 2.9x 77.7x n/a n/a -8.8%Motricity MOTR $62.6 $65.4 $121.7 62.3% -7.3% -8.8% 0.5x n/a 0.6x n/a -91.2%Openwave Systems Inc. OPWV $206.8 $144.2 $162.4 53.9% -6.4% -1.7% 0.9x n/a 1.2x n/a 9.0%Opera OB:OPERA $750.7 $661.4 $150.5 50.3% 28.5% 29.6% 4.4x 15.4x n/a n/a 26.9%PCTEL, Inc. PCTI $125.6 $64.5 $76.8 46.7% 6.6% 11.0% 0.8x 12.7x 0.8x 5.9x -1.9%Sky-mobi Limited MOBI $134.8 $46.6 $108.5 32.0% 8.3% 6.1% 0.4x 5.2x 0.4x 3.1x -61.5%Smith Micro Software, Inc. SMSI $90.4 $44.4 $57.8 76.2% -68.2% -55.7% 0.8x n/a 0.8x n/a -72.9%TeleCommunication Systems, Inc. TSYS $153.4 $243.5 $425.4 35.6% 9.1% 9.4% 0.6x 6.3x 0.5x 4.1x -37.2%Trunkbow International Holdings TBOW $73.6 $64.1 $33.2 74.5% 51.6% 117.1% 1.9x 3.7x n/a n/a -56.8%Velti Plc VELT $611.2 $481.1 $159.6 57.5% 6.4% 28.1% 3.0x 46.9x 2.0x 7.9x -26.9% Median: $206.8 $144.2 $121.7 63.2% 6.6% 9.0% 2.0x 9.6x 1.2x 5.9x -26.9% Income Statement Analysis (Median) Mobile Solutions/Content Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 9.0% 25%TTM EBITDA Growth -34.7%TTM Earnings Growth -57.2%Gross Profit Margin 63.2% 20%EBITDA Margin 6.6%Net Income Margin -3.2%SG&A Expenses as a % of Total Revenue 37.8%R&D Expenses as a % of Total Revenue 19.4% 15% Balance Sheet Analysis (Median)Current Ratio 2.5x 10%Quick Ratio 2.5xCash as Percent of Market Cap 27.9%Avg Days Outstanding: Accounts Receivable 70.6x 5%Avg Days Outstanding: Accounts Payable 49.6xWorking Capital to TTM Operating Expense Ratio 0.6x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin -2.4%Cash from Operations Growth (YoY) -31.9%Cash from Investing Growth (YoY) -37.4% -5%Cash from Financing Growth (YoY) 19.1% Mobile Solutions/Content S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 33.8% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $16,241.2 $14,843.8 $4,216.3 89.6% 34.8% 11.0% 3.5x 10.1x 3.4x 7.9x -4.7%Avid Technology, Inc. AVID $411.1 $378.3 $677.9 53.1% 2.9% -0.1% 0.6x 19.4x 0.5x 7.1x -51.7%Monotype Imaging Holdings TYPE $505.4 $488.9 $123.2 91.8% 38.6% 15.5% 4.0x 10.3x 3.6x 8.2x 4.9%Nuance Communications, Inc. NUAN $7,988.7 $8,507.5 $1,375.6 66.5% 20.9% 18.6% 6.2x 29.7x 4.9x 12.5x 38.9%RealNetworks, Inc. RNWK $348.5 $163.4 $335.7 56.3% -5.5% -16.4% 0.5x n/a 0.6x n/a -33.9%Rovi Corporation ROVI $3,806.3 $4,381.2 $690.8 84.4% 34.3% 27.6% 6.3x 18.5x 5.7x 11.8x -36.0%SeaChange International, Inc. SEAC $222.3 $139.8 $216.9 50.3% 11.0% 4.1% 0.6x 5.8x 0.6x 5.1x -27.2% Median: $505.4 $488.9 $677.9 66.5% 20.9% 11.0% 3.5x 14.4x 3.4x 8.0x -27.2% Income Statement Analysis (Median) Multimedia, Graphics and Digital Media Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 11.0% 25%TTM EBITDA Growth 7.3%TTM Earnings Growth 7.5%Gross Profit Margin 66.5% 20%EBITDA Margin 20.9%Net Income Margin 3.5%SG&A Expenses as a % of Total Revenue 35.7% 15%R&D Expenses as a % of Total Revenue 0.0% Balance Sheet Analysis (Median)Current Ratio 2.8x 10%Quick Ratio 2.4xCash as Percent of Market Cap 11.1%Avg Days Outstanding: Accounts Receivable 54.3x 5%Avg Days Outstanding: Accounts Payable 51.0xWorking Capital to TTM Operating Expense Ratio 0.5x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 19.2%Cash from Operations Growth (YoY) 30.2% -5%Cash from Investing Growth (YoY) 34.7%Cash from Financing Growth (YoY) -5.5% Multimedia, Graphics & Digital Media S&P NASDAQ SEG SW IndexLevered FCF Growth (YoY) 13.5% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 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 $534.1 $374.7 $77.8 71.5% 16.1% 36.5% 4.8x 29.9x 4.0x 17.9x 12.0%Cisco Systems, Inc. CSCO $107,072.4 $77,253.4 $44,844.0 61.5% 27.1% 5.9% 1.7x 6.4x 1.6x 5.2x 7.1%F5 Networks, Inc. FFIV $9,895.8 $9,339.3 $1,205.3 82.2% 32.5% 25.6% 7.7x 23.8x 6.4x 16.0x 5.9%NetScout Systems Inc. NTCT $882.2 $780.2 $297.2 78.8% 22.9% 4.5% 2.6x 11.5x 2.3x 8.8x -15.0%OPNET Technologies, Inc. OPNT $644.2 $546.4 $169.3 79.5% 20.3% 19.8% 3.2x 15.9x 2.8x 11.8x -16.2%Radware Ltd. RDWR $699.3 $582.8 $167.0 80.0% 16.4% 15.9% 3.5x 21.3x 3.1x n/a -11.6%SolarWinds, Inc. SWI $2,698.6 $2,546.2 $198.4 94.0% 47.7% 30.2% 12.8x 26.9x 10.1x 20.6x 66.0% Median: $882.2 $780.2 $198.4 79.5% 22.9% 19.8% 3.5x 21.3x 3.1x 13.9x 5.9% Income Statement Analysis (Median) Networking/Network Performance Mgmt Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 19.8% 25%TTM EBITDA Growth 36.5%TTM Earnings Growth 42.1%Gross Profit Margin 79.5% 20%EBITDA Margin 22.9%Net Income Margin 12.8%SG&A Expenses as a % of Total Revenue 40.5%R&D Expenses as a % of Total Revenue 15.8% 15% Balance Sheet Analysis (Median)Current Ratio 2.4x 10%Quick Ratio 2.3xCash as Percent of Market Cap 16.7%Avg Days Outstanding: Accounts Receivable 53.2x 5%Avg Days Outstanding: Accounts Payable 54.4xWorking Capital to TTM Operating Expense Ratio 0.6x Cash Flow Statement Analysis (Median) 0%Levered FCF Margin 19.2%Cash from Operations Growth (YoY) 35.3%Cash from Investing Growth (YoY) -182.6% -5%Cash from Financing Growth (YoY) -25.9% Networking & Network Performance Management S&P NASDAQ SEG SW IndexLevered FCF Growth (YoY) 27.3% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 23. SEG Software Index Category: Security 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 ReturnCheck Point Software Tech Ltd. CHKP $12,073.4 $10,713.8 $1,247.0 88.4% 55.6% 13.6% 8.6x 15.4x 7.8x 13.3x 16.7%Commtouch Software Ltd. CTCH $73.5 $52.6 $23.0 82.2% 24.5% 26.7% 2.3x 9.3x 2.0x n/a -16.9%Imperva IMPV $818.9 $720.5 $78.3 79.2% -11.4% 41.4% 9.2x n/a 7.4x n/a n/aSourcefire, Inc. FIRE $1,302.9 $1,174.6 $165.6 77.5% 7.5% 26.9% 7.1x 94.4x 5.8x 30.4x 66.1%Symantec Corporation SYMC $13,013.3 $12,744.3 $6,722.0 85.5% 27.5% 11.1% 1.9x 6.9x 1.8x 5.5x -1.1%Trend Micro TSE:4704 $3,852.8 $2,501.1 $1,252.8 81.4% 35.0% 1.0% 2.0x 5.7x n/a n/a -5.3%VASCO Data Security International VDSI $341.2 $256.7 $168.1 64.3% 17.0% 55.7% 1.5x 9.0x 1.5x n/a 0.8%Websense, Inc. WBSN $678.8 $677.2 $364.2 83.6% 19.4% 9.4% 1.9x 9.6x 1.8x 7.9x -15.9% Median: $1,060.9 $947.5 $266.1 81.8% 22.0% 20.2% 2.1x 9.3x 2.0x 10.6x -1.1% Income Statement Analysis (Median) SecuritySoftware Stock Market Return: Jan - Feb 2012TTM Revenue Growth 20.2% 18%TTM EBITDA Growth 16.7%TTM Earnings Growth 20.1% 16%Gross Profit Margin 81.8%EBITDA Margin 22.0% 14%Net Income Margin 10.8%SG&A Expenses as a % of Total Revenue 47.8% 12%R&D Expenses as a % of Total Revenue 16.0% 10% Balance Sheet Analysis (Median) 8%Current Ratio 2.6xQuick Ratio 2.5x 6%Cash as Percent of Market Cap 11.9% 4%Avg Days Outstanding: Accounts Receivable 81.3xAvg Days Outstanding: Accounts Payable 49.1x 2%Working Capital to TTM Operating Expense Ratio 0.8x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 20.5% -2%Cash from Operations Growth (YoY) 3.8% -4%Cash from Investing Growth (YoY) 61.4%Cash from Financing Growth (YoY) -11.2% Security S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -3.8% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 24. SEG Software Index Category: Storage and Systems 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 ReturnBMC Software, Inc. BMC $6,148.7 $5,140.8 $2,169.5 75.1% 33.6% 8.8% 2.4x 7.0x 2.3x 5.4x -24.4%CA, Inc. CA $13,127.0 $12,086.0 $4,754.0 86.9% 36.5% 10.7% 2.5x 7.0x 2.4x 6.6x 9.1%Citrix Systems CTXS $13,870.0 $13,130.3 $2,206.4 89.7% 26.4% 17.7% 6.0x 22.5x 5.2x 16.8x 6.5%CommVault Systems, Inc. CVLT $2,279.5 $2,022.3 $382.2 86.8% 13.6% 28.0% 5.3x 38.8x 4.6x 23.6x 41.2%Compuware Corporation CPWR $1,969.3 $1,997.1 $993.3 66.2% 18.9% 9.2% 2.0x 10.6x 1.9x 8.6x -20.0%EMC EMC $56,849.9 $54,924.3 $20,007.6 61.2% 23.2% 17.6% 2.7x 11.8x 2.5x 9.5x 1.8%FalconStor Software, Inc. FALC $133.6 $97.0 $83.9 73.3% -7.6% 6.5% 1.2x n/a 1.1x n/a -41.5%IBM IBM $227,943.6 $247,388.6 $106,916.0 46.9% 24.9% 7.1% 2.3x 9.3x 2.3x 9.0x 21.5%Network Appliance, Inc. NTAP $15,420.1 $11,742.8 $5,959.0 61.2% 15.7% 22.5% 2.0x 12.5x 1.7x 8.5x -16.8%Oracle Corporation ORCL $147,030.9 $131,143.9 $36,704.0 77.9% 42.0% 14.7% 3.6x 8.5x 3.4x 7.0x -11.1%Quest Software, Inc. QSFT $1,670.3 $1,600.1 $857.4 88.6% 17.9% 11.8% 1.9x 10.4x 1.7x 5.7x -25.3%Symantec Corporation SYMC $13,013.3 $12,744.3 $6,722.0 85.5% 27.5% 11.1% 1.9x 6.9x 1.8x 5.5x -1.1%VMWare VMW $42,037.4 $37,975.2 $3,767.1 83.5% 25.7% 31.8% 10.1x 39.3x 8.3x 24.1x 18.2% Median: $13,127.0 $12,086.0 $3,767.1 77.9% 24.9% 11.8% 2.4x 10.5x 2.3x 8.5x -1.1% Income Statement Analysis (Median) Storage and Systems Management Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 11.8% 20%TTM EBITDA Growth 15.7%TTM Earnings Growth 22.5% 18%Gross Profit Margin 77.9%EBITDA Margin 24.9% 16%Net Income Margin 12.3%SG&A Expenses as a % of Total Revenue 42.6% 14%R&D Expenses as a % of Total Revenue 12.1% 12% Balance Sheet Analysis (Median)Current Ratio 1.2x 10%Quick Ratio 1.0xCash as Percent of Market Cap 13.7% 8%Avg Days Outstanding: Accounts Receivable 71.4xAvg Days Outstanding: Accounts Payable 31.9x 6%Working Capital to TTM Operating Expense Ratio 0.1x 4% Cash Flow Statement Analysis (Median)Levered FCF Margin 20.3% 2%Cash from Operations Growth (YoY) 11.5%Cash from Investing Growth (YoY) 14.1% 0% Storage and Systems Management S&P NASDAQ SEG SW IndexCash from Financing Growth (YoY) -162.4%Levered FCF Growth (YoY) 12.0% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 25. SEG Software Index Category: Supply Chain Management & Logistics 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 ReturnAmerican Software, Inc. AMSW.A $218.9 $164.6 $99.9 55.3% 17.1% 25.9% 1.6x 9.6x 1.4x n/a 23.7%Ariba, Inc. ARBA $2,999.4 $2,835.0 $479.1 65.7% 7.4% 42.7% 5.9x 80.4x 5.2x 22.4x 1.7%Aspen Technology, Inc. AZPN $1,926.5 $1,818.8 $223.0 76.6% -13.8% 26.2% 8.2x n/a 6.9x n/a 35.0%JDA Software Group JDAS $1,066.3 $1,054.0 $671.8 60.4% 24.5% 8.8% 1.6x 6.4x 1.5x 5.4x -15.1%Manhattan Associates, Inc. MANH $953.0 $854.7 $329.3 57.8% 20.1% 10.8% 2.6x 12.9x 2.3x 9.8x 44.0%ModusLink Global Solutions, Inc. MLNK $240.5 $129.0 $790.7 10.0% 0.8% -13.3% 0.2x 19.8x n/a n/a -19.4%Retalix Ltd. RTLX $428.2 $297.2 $236.0 41.2% 8.2% 13.8% 1.3x 15.3x 1.1x 10.4x 19.9%The Descartes Systems Group Inc. TSX:DSG $512.0 $435.1 $114.0 66.4% 26.0% 14.9% 3.8x 14.7x 3.5x 12.1x 22.1%XATA Corporation XATA $14.0 $50.2 $65.7 48.7% 2.8% -2.2% 0.8x 27.0x n/a n/a -46.7% Median: $512.0 $435.1 $236.0 57.8% 8.2% 13.8% 1.6x 15.0x 2.3x 10.4x 19.9% Income Statement Analysis (Median) Supply Chain Management & Logistics Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 13.8% 18%TTM EBITDA Growth 15.8%TTM Earnings Growth 60.0% 16%Gross Profit Margin 57.8%EBITDA Margin 8.2% 14%Net Income Margin 10.6%SG&A Expenses as a % of Total Revenue 26.4% 12%R&D Expenses as a % of Total Revenue 13.5% 10% Balance Sheet Analysis (Median)Current Ratio 2.0x 8%Quick Ratio 1.8xCash as Percent of Market Cap 24.8% 6%Avg Days Outstanding: Accounts Receivable 61.1xAvg Days Outstanding: Accounts Payable 25.9x 4%Working Capital to TTM Operating Expense Ratio 0.3x 2% Cash Flow Statement Analysis (Median)Levered FCF Margin 11.7% 0%Cash from Operations Growth (YoY) 11.7% -2%Cash from Investing Growth (YoY) -3.7%Cash from Financing Growth (YoY) -123.4% Supply Chain Management and Logistics S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 35.5% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 26. SEG Software Index Category: Vertical - Finance 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 ReturnAdvent Software, Inc. ADVS $1,312.6 $1,227.1 $326.2 80.9% 31.5% 15.1% 3.8x 11.9x 3.4x 11.0x -11.3%FX Alliance Inc FX $383.1 $329.1 $114.2 100.0% 38.7% n/a 2.9x 7.4x n/a n/a n/aJack Henry & Associates, Inc. JKHY $2,927.7 $2,978.5 $993.6 41.4% 32.2% 7.9% 3.0x 9.3x 2.8x 8.6x 5.7%MSCI, Inc. MSCI $4,297.2 $4,983.7 $900.9 69.2% 45.6% 29.7% 5.5x 12.1x 5.2x 11.2x -0.3%SS&C Corporation SSNC $1,603.5 $1,663.2 $370.8 50.3% 36.7% 12.7% 4.5x 12.2x 4.1x 10.3x 5.8% Median: $1,603.5 $1,663.2 $370.8 69.2% 36.7% 13.9% 3.8x 11.9x 3.7x 10.7x 2.7% Income Statement Analysis (Median) Vertical - Finance Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 13.9%TTM EBITDA Growth 13.8% 18%TTM Earnings Growth 24.9% 16%Gross Profit Margin 69.2%EBITDA Margin 36.7% 14%Net Income Margin 14.6%SG&A Expenses as a % of Total Revenue 23.6% 12%R&D Expenses as a % of Total Revenue 7.9% 10% Balance Sheet Analysis (Median) 8%Current Ratio 1.1x 6%Quick Ratio 1.0xCash as Percent of Market Cap 9.1% 4%Avg Days Outstanding: Accounts Receivable 62.7xAvg Days Outstanding: Accounts Payable 6.4x 2%Working Capital to TTM Operating Expense Ratio 0.0x 0% Cash Flow Statement Analysis (Median) -2%Levered FCF Margin 27.8% -4%Cash from Operations Growth (YoY) 10.8%Cash from Investing Growth (YoY) 42.6% Vertical - Finance S&P NASDAQ SEG SW IndexCash from Financing Growth (YoY) -123.4%Levered FCF Growth (YoY) 35.5% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 27. SEG Software Index Category: Vertical - Other 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 ReturnBlackbaud, Inc. BLKB $1,383.8 $1,331.3 $370.9 57.6% 19.3% 13.6% 3.6x 18.6x 3.2x 13.5x 18.6%Constellation TSX:CSU $2,125.0 $2,068.7 $773.3 33.6% 22.9% 22.0% 2.7x 11.7x 2.4x 11.0x 81.5%Ebix, Inc. EBIX $862.1 $873.7 $160.0 80.7% 43.9% 24.6% 5.5x 12.4x 4.9x n/a -11.5%Guidewire Software, Inc. GWRE $1,106.0 $1,111.3 $190.2 61.8% 13.6% n/a 5.8x 42.9x n/a n/a n/aItron, Inc. ITRI $1,770.7 $2,090.1 $2,434.1 30.5% 13.3% 7.7% 0.9x 6.5x 0.9x 7.1x -21.6%Micros Systems MCRS $4,150.7 $3,417.2 $1,054.3 56.2% 22.9% 10.1% 3.2x 14.2x 2.9x 12.2x 9.0%PROS Holdings PRO $475.3 $406.9 $96.6 72.6% 10.6% 36.0% 4.2x 39.9x 3.5x 20.1x 53.1%Rosetta Stone, Inc. RST $192.0 $75.7 $268.4 81.7% -7.3% 3.7% 0.3x n/a 0.3x n/a -39.6%Sapiens International SPNS $158.4 $145.8 $69.9 42.7% 10.8% 33.9% 2.1x 19.4x n/a n/a -3.6%Tyler Technologies, Inc. TYL $1,133.4 $1,192.8 $309.4 45.9% 18.4% 7.2% 3.9x 20.9x 3.4x 17.3x 70.8% Median: $1,119.7 $1,152.0 $288.9 56.9% 16.0% 13.6% 3.4x 18.6x 3.1x 12.8x 9.0% Income Statement Analysis (Median) Vertical - Other Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 13.6% 25%TTM EBITDA Growth 14.9%TTM Earnings Growth 16.2%Gross Profit Margin 56.9%EBITDA Margin 16.0% 20%Net Income Margin 8.9%SG&A Expenses as a % of Total Revenue 27.4%R&D Expenses as a % of Total Revenue 9.0% 15% Balance Sheet Analysis (Median)Current Ratio 1.2xQuick Ratio 1.0xCash as Percent of Market Cap 5.7% 10%Avg Days Outstanding: Accounts Receivable 61.0xAvg Days Outstanding: Accounts Payable 48.6xWorking Capital to TTM Operating Expense Ratio 0.1x 5% Cash Flow Statement Analysis (Median)Levered FCF Margin 14.5%Cash from Operations Growth (YoY) 28.2% 0%Cash from Investing Growth (YoY) -39.9%Cash from Financing Growth (YoY) -74.1% Vertical - Other S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 30.2% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 28. SEG Software Index Category: Video Games 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 ReturnActivision Blizzard ATVI $13,418.3 $9,893.3 $4,755.0 63.1% 31.8% 6.9% 2.1x 6.5x 2.2x 5.7x 7.5%Electronic Arts Inc. EA $5,413.2 $4,156.2 $3,865.0 59.8% 0.8% 11.1% 1.1x 134.1x 1.0x 6.2x -13.1%Konami Corporation TSE: 9766 $3,820.6 $3,528.0 $3,433.9 32.9% 18.1% 1.8% 1.0x 5.7x 1.0x 5.2x 31.2%Majesco Entertainment Company COOL $98.8 $86.4 $125.3 38.5% 12.8% 65.6% 0.7x 5.4x 0.6x 3.3x 54.7%TakeTwo Interactive TTWO $1,384.0 $1,242.6 $860.0 38.1% -3.2% -29.5% 1.4x n/a 0.8x 5.8x -3.9%THQ Inc. THQI $36.9 $89.2 $770.8 56.9% -16.9% 4.4% 0.1x n/a 0.2x n/a -90.6% Median: $2,602.3 $2,385.3 $2,146.9 47.7% 6.8% 5.6% 1.1x 6.1x 0.9x 5.7x 1.8% Income Statement Analysis (Median) Video Game Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 5.6% 20%TTM EBITDA Growth 52.4%TTM Earnings Growth 65.4%Gross Profit Margin 47.7% 15%EBITDA Margin 6.8%Net Income Margin 0.5%SG&A Expenses as a % of Total Revenue 25.4% 10%R&D Expenses as a % of Total Revenue 12.2% 5% Balance Sheet Analysis (Median)Current Ratio 2.0xQuick Ratio 1.2x 0%Cash as Percent of Market Cap 29.5%Avg Days Outstanding: Accounts Receivable 34.5x -5%Avg Days Outstanding: Accounts Payable 34.2xWorking Capital to TTM Operating Expense Ratio 0.3x -10% Cash Flow Statement Analysis (Median)Levered FCF Margin 11.4%Cash from Operations Growth (YoY) -10.3% -15%Cash from Investing Growth (YoY) -119.9% Video Games S&P NASDAQ SEG SW IndexCash from Financing Growth (YoY) 59.0%Levered FCF Growth (YoY) 39.5% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 29. SEG Software Index Category: Workforce 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 ReturnClickSoftware Technologies Ltd. CKSW $336.1 $282.2 $87.1 63.6% 20.6% 22.6% 3.2x 15.8x 2.8x 12.1x 35.3%Callidus Software, Inc. CALD $241.6 $250.1 $83.8 41.1% -7.0% 18.2% 3.0x n/a 2.6x 42.2x 25.0%NICE Systems Ltd. NICE $2,169.5 $1,817.7 $793.8 61.5% 17.5% 15.1% 2.3x 13.1x 1.9x 8.0x -0.8%Saba Software SABA $349.1 $334.9 $121.3 62.9% -8.0% 7.7% 2.8x n/a 2.4x n/a 65.8%Verint VRNT $1,068.2 $1,844.4 $757.5 67.7% 17.4% 6.3% 2.4x 14.0x 2.2x 9.0x -20.0% Median: $349.1 $334.9 $121.3 62.9% 17.4% 15.1% 2.8x 14.0x 2.4x 10.5x 25.0% Income Statement Analysis (Median) Workforce and Service Mgmt Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 15.1% 18%TTM EBITDA Growth 14.6%TTM Earnings Growth 17.6% 16%Gross Profit Margin 62.9%EBITDA Margin 17.4% 14%Net Income Margin 4.4%SG&A Expenses as a % of Total Revenue 37.9% 12%R&D Expenses as a % of Total Revenue 13.9% 10% Balance Sheet Analysis (Median) 8%Current Ratio 1.5xQuick Ratio 1.4x 6%Cash as Percent of Market Cap 16.0% 4%Avg Days Outstanding: Accounts Receivable 78.9xAvg Days Outstanding: Accounts Payable 36.5x 2%Working Capital to TTM Operating Expense Ratio 0.2x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 11.4% -2%Cash from Operations Growth (YoY) -10.3% -4%Cash from Investing Growth (YoY) -133.4%Cash from Financing Growth (YoY) -48.6% Workforce & Service Management S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -20.4% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 30. SEG SaaS IndexCategory Performance Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 31. SEG SaaS Index TTM TTM TTM YoY Stock TTM Gross EBITDA Revenue EV/ Forward Forward Market Company Name Ticker Market Cap EV Revenue Margin Margin Growth EV/ Revenue EBITDA EV/ Revenue EV/ EBITDA Return Athenahealth ATHN $2,505.7 $2,385.8 $324.1 62.1% 15.0% 32.0% 7.4x 49.1x 5.6x 28.2x 55.9% Bazaarvoice Inc BV $943.8 $955.2 $94.0 64.5% -20.4% n/a 10.2x n/a n/a n/a n/a Concur CNQR $3,213.9 $2,988.2 $369.6 71.6% 11.4% 21.0% 8.1x 70.9x 6.4x 27.7x 13.3% Constant Contact CTCT $914.0 $773.9 $214.4 71.3% 10.2% 23.1% 3.6x 35.3x 3.1x 16.7x 4.5% Convio CNVO $294.9 $243.0 $80.4 61.2% 9.0% 15.2% 3.0x 33.5x 2.6x 18.0x 53.1% Cornerstone OnDemand CSOD $1,005.2 $923.2 $73.0 70.9% -24.0% 67.0% 12.6x n/a 8.1x n/a n/a DealerTrack TRAK $1,168.2 $1,089.8 $353.3 43.8% 15.3% 44.9% 3.1x 20.1x 2.9x 11.6x 38.0% Ellie Mae ELLI $175.5 $149.9 $55.5 71.6% 8.2% 28.4% 2.7x 32.8x 2.2x n/a n/a IntraLinks Holdings IL $317.8 $326.2 $213.5 73.6% 26.9% 15.8% 1.5x 5.7x 1.6x 6.3x -79.1% Kenexa KNXA $753.8 $670.0 $282.9 60.4% 11.8% 44.1% 2.4x 20.1x 1.9x 11.8x 19.8% LivePerson LPSN $803.1 $709.9 $133.1 75.1% 20.6% 21.1% 5.3x 25.8x 4.4x 17.5x 50.3% Medidata Solutions MDSO $494.1 $391.6 $184.5 71.4% 19.9% 10.8% 2.1x 10.7x 2.0x 8.0x -23.0% Netsuite N $3,313.5 $3,177.9 $236.3 70.0% -7.4% 22.4% 13.4x n/a 10.6x 112.0x 58.9% RealPage RP $1,442.4 $1,441.5 $258.0 59.0% 11.3% 37.0% 5.6x 49.4x 4.5x 19.3x -20.0% Responsys MKTG $572.6 $479.9 $134.9 52.1% 16.0% 43.4% 3.6x 22.2x 3.0x 19.1x n/a Salesforce.com CRM $19,469.8 $19,236.7 $2,266.5 78.4% 5.4% 36.8% 8.5x 157.4x 6.5x 34.0x 8.2% SciQuest SQI $332.1 $272.5 $53.4 75.0% 13.5% 25.8% 5.1x 37.8x 4.3x 22.7x 5.5% SoundBite Communications SDBT $49.7 $21.0 $41.7 59.1% -0.5% 5.5% 0.5x n/a 0.4x 12.5x 15.2% SPS Commerce SPSC $301.7 $269.7 $58.0 73.5% 6.5% 30.0% 4.7x 71.3x 3.8x 30.4x 60.3% Taleo TLEO $1,913.9 $1,798.0 $315.4 67.2% 9.4% 32.9% 5.7x 60.7x 4.7x 22.3x 41.9% The Ultimate Software Group, Inc. Th Ulti t S ft G I ULTI $1,842.0 $1 842 0 $1,793.1 $1 793 1 $269.2 $269 2 56.8% 56 8% 9.9% 9 9% 18.2% 18 2% 6.7x 67 67.2x 67 2 5.4x 54 29.1x 29 1 30.7% 30 7% Vocus VOCS $270.2 $163.1 $114.9 81.0% 1.0% 18.7% 1.4x 147.5x 1.0x 12.8x -44.3% Zix Corporation ZIXI $193.4 $172.7 $38.1 81.1% 31.3% 15.4% 4.5x 14.5x 4.2x 12.2x -20.6% Median: $858.6 $741.9 $199.0 70.4% 10.1% 25.8% 4.9x 36.6x 3.8x 19.1x 17.5% Income Statement Analysis (Median) SEG SaaS Index Software Stock Market Return: Jan - Feb 2012 TTM Revenue Growth 25.8% 16% TTM EBITDA Growth 12.9% TTM Earnings Growth 30.0% 14% Gross Profit Margin 70.4% EBITDA Margin 10.1% 12% Net Income Margin 1.6% SG&A Expenses as a % of Total Revenue 45.1% 10% R&D Expenses as a % of Total Revenue 13.7% 8% Balance Sheet Analysis (Median) Current Ratio 0.6x 6% Quick Ratio 1.8x Cash as Percent of Market Cap 11.6% 4% Avg Days Outstanding: Accounts Receivable 56.6x Avg Days Outstanding: Accounts Payable 27.0x 2% Working Capital to TTM Operating Expense Ratio 0.4x 0%Cash Flow Statement Analysis (Median) Levered FCF Margin 12.1% -2% Cash from Operations Growth (YoY) 71.0% Cash from Investing Growth (YoY) -52.8% -4% Cash from Financing Growth (YoY) 5.6% SEG SaaS S&P NASDAQ SEG SW Index Levered FCF Growth (YoY) 82.2% Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved March 2012 Monthly Flash Report
  • 32. SEG Internet IndexCategory Performance Copyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 33. SEG Internet 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 Internet Index $851.1 $773.8 $337.8 65.8% 13.8% 29.0% 2.3x 11.9x 1.9x 8.6x -17.4% Ad Tech & Lead Generation $471.8 $673.7 $324.3 55.4% 8.4% 30.0% 2.1x 13.4x 2.0x 6.9x -36.1% Infastructure $393.0 $383.9 $209.5 66.8% 15.2% 21.8% 2.2x 13.1x 1.9x 10.1x 3.0% Media $1,384.8 $1,063.5 $324.9 52.0% 13.4% 13.8% 1.7x 9.1x 1.5x 7.6x -39.6% Retail $403.17 $343.6 $353.0 36.9% 8.6% 26.1% 1.1x 11.8x 1.1x 8.4x -9.3% Search $1,879.26 $1,317.6 $624.1 63.0% 13.9% 28.6% 1.5x 11.1x 1.2x 7.6x -9.5% Services $928.48 $804.8 $145.6 73.0% 13.4% 40.9% 4.9x 18.6x 4.1x 13.0x -17.5% Travel $2,133.81 $1,949.9 $554.9 77.9% 18.7% 31.5% 4.3x 17.7x 4.7x 14.7x -13.6% Video Games $4,912.11 $4,396.0 $532.5 78.7% 48.1% 34.5% 4.1x 6.1x 2.2x 3.6x -15.4% Income Statement Analysis (Median) SEG Internet Index Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 29.0% 18%TTM EBITDA Growth 19.3%TTM Earnings Growth 12.8% 16%Gross Profit Margin 65.8%EBITDA Margin 13.8%Net Income Margin 4.5% 14%SG&A Expenses as a % of Total Revenue 36.4%R&D Expenses as a % of Total Revenue 11.3% 12% Balance Sheet Analysis (Median) 10%Current Ratio 2.3Quick Ratio 2.0 8%Cash as Percent of Market Cap 18.0%Avg Days Outstanding: Accounts Receivable 33 6%Avg Days Outstanding: Accounts Payable 42Working Capital to TTM Operating Expense Ratio 0.4 4% Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 10.0%Cash from Operations Growth (YoY) 18.6% 0%Cash from Investing Growth (YoY) -46.6%Cash from Financing Growth (YoY) 8.9% SEG Internet Index S&P NASDAQ SEG SW IndexLevered FCF Growth (YoY) 12.6% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 34. SEG Internet Index Category: Ad Tech and Lead Generation 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 ReturncomScore Inc. SCOR $745.8 $720.7 $232.4 67.7% 4.5% 32.8% 3.1x 68.7x 2.6x 12.3x -20.1%DG FastChannel, Inc. DGIT $273.7 $673.7 $324.3 67.7% 37.8% 34.4% 2.1x 5.5x 1.6x 4.6x -69.8%Groupon GRPN $12,574.3 $11,453.6 $1,624.7 84.6% -10.9% 419.2% 7.0x n/a 4.9x 30.9x n/aInuvo, Inc. INUV $9.0 $11.0 $43.2 44.5% 0.4% -3.1% 0.3x 69.5x n/a n/a -67.9%LookSmart, Ltd. LOOK $24.4 $3.2 $32.3 43.5% 8.4% -35.9% 0.1x 1.2x 0.1x 1.0x -19.9%Marchex Inc. MCHX $159.9 $122.4 $146.7 44.2% 5.2% 50.4% 0.8x 16.2x 0.8x 6.0x -52.3%QuinStreet QNST $471.8 $441.4 $393.6 26.1% 17.8% 3.4% 1.1x 6.3x 1.1x 5.2x -52.0%SINA Corporation SINA $4,482.9 $3,818.3 $482.8 55.4% 10.8% 19.9% 7.9x 73.2x 6.7x 64.5x -16.7%ValueClick, Inc. VCLK $1,671.0 $1,721.8 $560.2 56.8% 28.7% 30.0% 3.1x 10.7x 2.4x 7.8x 39.3% Median: $471.8 $673.7 $324.3 55.4% 8.4% 30.0% 2.1x 13.4x 2.0x 6.9x -36.1% Income Statement Analysis (Median) Internet Ad Tech and Lead Generation Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 30.0% 18%TTM EBITDA Growth 0.6%TTM Earnings Growth -12.9% 16%Gross Profit Margin 55.4%EBITDA Margin 8.4%Net Income Margin -1.7% 14%SG&A Expenses as a % of Total Revenue 26.0%R&D Expenses as a % of Total Revenue 13.6% 12% Balance Sheet Analysis (Median) 10%Current Ratio 2.0xQuick Ratio 1.9x 8%Cash as Percent of Market Cap 15.0%Avg Days Outstanding: Accounts Receivable 63.2x 6%Avg Days Outstanding: Accounts Payable 42.0xWorking Capital to TTM Operating Expense Ratio 0.3x 4% Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 16.0%Cash from Operations Growth (YoY) 5.3% 0%Cash from Investing Growth (YoY) -196.0%Cash from Financing Growth (YoY) 101.0% Internet Ad Tech & Lead Generation S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 7.8% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 35. SEG Internet Index Category: Infrastructure 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 Return8x8, Inc. EGHT $298.3 $276.4 $79.8 67.2% 11.2% 17.6% 3.5x 30.9x 2.7x 17.8x 57.7%Akamai Technologies, Inc. AKAM $6,400.8 $5,551.6 $1,158.5 73.0% 42.8% 13.2% 4.8x 11.2x 4.2x 9.6x -4.1%Brightcove Inc BCOV $393.0 $383.9 $63.6 68.2% -22.1% 45.4% 6.0x n/a n/a n/a n/aBroadSoft, Inc. BSFT $989.3 $885.5 $138.1 82.8% 22.4% 44.4% 6.4x 28.6x 5.4x 19.1x 3.0%Cbeyond, Inc. CBEY $233.3 $224.8 $485.4 66.8% 13.7% 7.4% 0.5x 3.4x 0.5x 2.7x -45.0%ChinaCache International CCIH $193.2 $128.7 $98.1 30.0% 12.3% 53.3% 1.3x 10.7x 1.0x 5.4x -62.3%Digital River Inc. DRIV $627.9 $261.2 $398.1 83.7% 15.2% 9.6% 0.7x 4.3x 0.6x 3.0x -47.4%EarthLink Inc. ELNK $794.5 $1,209.6 $1,314.1 55.1% 24.1% 111.2% 0.9x 3.8x 0.9x 4.1x -9.1%Equinix, Inc. EQIX $6,540.3 $8,792.5 $1,606.8 46.0% 41.5% 31.7% 5.5x 13.2x 4.7x 10.1x 62.2%Interactive Intelligence, Inc. ININ $527.0 $458.0 $209.5 68.8% 13.6% 26.0% 2.2x 16.0x 1.9x 15.3x -18.6%Internap Network Services Corp. INAP $384.0 $453.6 $244.6 42.1% 16.1% 0.2% 1.9x 11.5x 1.6x 8.5x 10.4%Keynote Systems Inc. KEYN $345.6 $305.6 $111.3 53.7% 20.9% 32.5% 2.7x 13.2x 2.3x 12.1x 13.1%Limelight Networks, Inc. LLNW $392.9 $256.5 $171.3 52.4% 1.3% 11.1% 1.5x 118.7x 1.3x 11.3x -45.8%Rackspace Hosting RAX $6,893.6 $6,872.9 $1,025.1 69.8% 28.6% 31.3% 6.7x 23.5x 5.2x 15.2x 41.5%Synacor Inc SYNC $124.8 $120.6 $80.3 46.9% 5.7% n/a 1.5x 26.5x n/a n/a n/aTucows Inc. TCX $49.9 $44.3 $97.1 24.9% 5.9% 14.8% 0.5x 7.7x 0.4x 5.5x 14.8%VeriSign, Inc. VRSN $5,894.2 $5,238.1 $772.0 78.6% 51.9% 13.4% 6.8x 13.1x 6.0x 10.3x 4.7% Median: $393.0 $383.9 $209.5 66.8% 15.2% 21.8% 2.2x 13.1x 1.9x 10.1x 3.0% Income Statement Analysis (Median) Internet Infrastructure Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 21.8% 25%TTM EBITDA Growth 34.5%TTM Earnings Growth 31.8%Gross Profit Margin 66.8%EBITDA Margin 15.2% 20%Net Income Margin 5.9%SG&A Expenses as a % of Total Revenue 38.1%R&D Expenses as a % of Total Revenue 10.0% 15% Balance Sheet Analysis (Median)Current Ratio 1.8xQuick Ratio 1.5xCash as Percent of Market Cap 13.1% 10%Avg Days Outstanding: Accounts Receivable 42.2xAvg Days Outstanding: Accounts Payable 39.0xWorking Capital to TTM Operating Expense Ratio 0.3x 5% Cash Flow Statement Analysis (Median)Levered FCF Margin 4.8%Cash from Operations Growth (YoY) 12.4% 0%Cash from Investing Growth (YoY) -18.0%Cash from Financing Growth (YoY) 4.8% Internet Infrastructure S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 20.3% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 36. SEG Internet Index Category: 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 ReturnAOL, Inc. AOL $1,702.2 $1,405.5 $2,202.1 28.4% 16.1% -8.9% 0.6x 4.0x 0.7x 4.6x -13.9%DemandMedia DMD $548.8 $462.8 $324.9 52.0% 18.2% 28.4% 1.4x 7.8x 1.3x 4.9x -69.5%eHealth, Inc. EHTH $301.3 $177.7 $151.6 80.2% 11.6% -5.5% 1.2x 10.1x 1.2x 7.9x 19.9%Google, Inc. GOOG $201,015.5 $163,900.5 $37,905.0 65.2% 37.2% 29.3% 4.3x 11.6x 3.6x 8.6x 0.8%Local.com Corp. LOCM $52.8 $50.4 $78.8 37.4% -10.0% -6.4% 0.6x n/a 0.5x 7.6x -39.8%Monster Worldwide, Inc. MWW $854.3 $792.8 $1,040.1 50.4% 13.4% 13.8% 0.8x 5.7x 0.8x 5.2x -59.5%Netflix NFLX $6,136.5 $5,772.8 $3,204.6 36.3% 13.4% 48.2% 1.8x 13.5x 1.6x 45.3x -46.4%Pandora P $2,107.5 $2,016.7 $274.3 37.5% -2.4% 99.1% 7.4x n/a 5.2x n/a n/aSohu.com Inc. SOHU $1,879.3 $1,317.6 $852.1 72.2% 41.4% 39.1% 1.5x 3.7x 1.3x 4.4x -39.5%TheStreet.com, Inc. TST $58.9 -$3.3 $57.8 54.1% -2.1% 1.0% n/a 2.7x n/a n/a -44.6%Tudou Holdings Limited TUDO $453.9 $328.8 $81.2 16.5% -67.8% 78.9% 4.0x n/a 2.2x n/a n/aWebMD Health Corp. WBMD $1,384.8 $1,063.5 $558.8 63.9% 23.3% 4.5% 1.9x 8.2x 2.1x 9.9x -57.2%XO Group XOXO $247.3 $170.5 $124.3 79.8% 12.4% 10.1% 1.4x 11.1x 1.3x 7.6x -9.9%Yahoo! Inc. YHOO $17,999.9 $16,025.6 $4,984.2 69.9% 27.3% -21.2% 3.2x 11.8x 3.6x 12.1x -9.6%Youku YOKU $2,868.1 $2,277.1 $116.1 34.9% 3.5% 156.8% 19.6x 560.3x 10.0x n/a -39.6% Median: $1,384.8 $1,063.5 $324.9 52.0% 13.4% 13.8% 1.7x 9.1x 1.5x 7.6x -39.6% Income Statement Analysis (Median) Internet Media Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 13.8% 18%TTM EBITDA Growth 16.0%TTM Earnings Growth 9.5% 16%Gross Profit Margin 52.0%EBITDA Margin 13.4%Net Income Margin 4.4% 14%SG&A Expenses as a % of Total Revenue 36.6%R&D Expenses as a % of Total Revenue 11.6% 12% Balance Sheet Analysis (Median) 10%Current Ratio 2.7xQuick Ratio 2.5x 8%Cash as Percent of Market Cap 23.9%Avg Days Outstanding: Accounts Receivable 56.1x 6%Avg Days Outstanding: Accounts Payable 34.5xWorking Capital to TTM Operating Expense Ratio 0.7x 4% Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 8.0%Cash from Operations Growth (YoY) 14.9%Cash from Investing Growth (YoY) -69.3% 0%Cash from Financing Growth (YoY) 34.1% Internet Media S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -0.6% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 37. SEG Internet Index Category: Retail 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 Return1-800-FLOWERS.COM, Inc. FLWS $177.6 $184.9 $716.2 40.1% 4.8% 9.9% 0.3x 5.4x 0.3x 4.3x -0.4%Amazon.com, Inc. AMZN $81,771.2 $74,005.2 $48,077.0 22.4% 3.6% 40.6% 1.5x 43.3x 1.2x 26.7x 3.7%Bitauto Holdings Limited BITA $202.1 $115.1 $106.3 68.1% 12.1% 46.2% 1.1x 8.9x 0.9x 5.2x -53.1%Bluefly, Inc. BFLY $52.7 $48.6 $95.5 33.3% -2.2% 13.2% 0.5x n/a n/a n/a -42.8%BlueNile NILE $495.2 $406.5 $348.0 20.7% 5.3% 4.5% 1.2x 22.1x 1.1x 17.0x -37.7%DangDang DANG $531.2 $334.2 $574.1 13.8% -7.3% 58.6% 0.6x n/a 0.4x n/a -73.7%eBay Inc. EBAY $45,994.3 $42,154.6 $11,651.7 70.3% 28.4% 27.3% 3.6x 12.7x 3.1x 9.5x 6.7%IAC/InterActiveCorp IACI $3,706.0 $3,037.4 $2,059.4 63.0% 13.9% 25.8% 1.5x 10.6x 1.2x 6.7x 46.8%Liquidity Services, Inc. LQDT $1,325.5 $1,297.2 $358.0 45.7% 16.8% 26.4% 3.6x 21.6x 2.8x 14.3x 169.1%Mecox Lane Limited MCOX $72.9 $12.3 $217.9 33.6% -13.9% -4.2% 0.1x n/a 0.1x n/a -76.5%Mercadolibre, Inc. MELI $4,295.5 $4,157.4 $298.9 75.9% 35.8% 37.9% 13.9x 38.8x 10.4x 28.6x 47.9%Overstock.com, Inc. OSTK $148.1 $106.4 $1,054.3 17.0% -0.1% -3.3% 0.1x n/a 0.1x n/a -58.3%PetMed Express, Inc. PETS $239.3 $187.0 $233.2 33.7% 11.8% 1.0% 0.8x 6.8x 0.8x 7.4x -18.2%ZAGG, Inc. ZAGG $311.2 $353.1 $179.1 45.7% 18.3% 135.3% 2.0x 10.8x 1.4x 6.2x 16.3% Median: $403.2 $343.6 $353.0 36.9% 8.6% 26.1% 1.1x 11.8x 1.1x 8.4x -9.3% Income Statement Analysis (Median) Internet Retail Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 26.1% 25%TTM EBITDA Growth 2.9%TTM Earnings Growth 12.3%Gross Profit Margin 36.9%EBITDA Margin 8.6% 20%Net Income Margin 3.9%SG&A Expenses as a % of Total Revenue 31.2%R&D Expenses as a % of Total Revenue 5.8% 15% Balance Sheet Analysis (Median)Current Ratio 1.8xQuick Ratio 1.3xCash as Percent of Market Cap 17.5% 10%Avg Days Outstanding: Accounts Receivable 9.1xAvg Days Outstanding: Accounts Payable 53.8xWorking Capital to TTM Operating Expense Ratio 0.3x 5% Cash Flow Statement Analysis (Median)Levered FCF Margin 4.1%Cash from Operations Growth (YoY) 19.2% 0%Cash from Investing Growth (YoY) -29.3%Cash from Financing Growth (YoY) -120.5% Internet Retail S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) -5.2% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 38. SEG Internet Index Category: Search 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 ReturnBaidu.com, Inc. BIDU $47,727.6 $46,042.2 $2,300.2 80.2% 55.2% 83.2% 20.0x 36.2x 12.9x 22.9x 12.8%Google Inc. GOOG $201,015.5 $163,900.5 $37,905.0 65.2% 37.2% 29.3% 4.3x 11.6x 3.6x 8.6x 0.8%IAC/InterActiveCorp IACI $3,706.0 $3,037.4 $2,059.4 63.0% 13.9% 25.8% 1.5x 10.6x 1.2x 6.7x 46.8%InfoSpace, Inc. INSP $457.8 $164.2 $228.8 32.3% 12.6% 6.8% 0.7x 5.7x 0.5x 2.3x 44.0%Local.com Corp. LOCM $52.8 $50.4 $78.8 37.4% -10.0% -6.4% 0.6x n/a 0.5x 7.6x -39.8%LookSmart, Ltd. LOOK $24.4 $3.2 $32.3 43.5% 8.4% -35.9% 0.1x 1.2x 0.1x 1.0x -19.9%ReachLocal, Inc. RLOC $229.3 $144.1 $375.2 49.5% 2.6% 28.6% 0.4x 14.6x 0.3x 7.6x -59.0%Sohu.com Inc. SOHU $1,879.3 $1,317.6 $852.1 72.2% 41.4% 39.1% 1.5x 3.7x 1.3x 4.4x -39.5%Yandex YNDX $6,897.8 $6,539.8 $624.1 76.5% 44.5% 60.3% 10.5x 23.6x 6.9x 15.4x n/a Median: $1,879.3 $1,317.6 $624.1 63.0% 13.9% 28.6% 1.5x 11.1x 1.2x 7.6x -9.5% Income Statement Analysis (Median) Internet Search Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 28.6% 18%TTM EBITDA Growth 37.3%TTM Earnings Growth 14.5% 16%Gross Profit Margin 63.0%EBITDA Margin 13.9%Net Income Margin 9.8% 14%SG&A Expenses as a % of Total Revenue 19.3%R&D Expenses as a % of Total Revenue 9.2% 12% Balance Sheet Analysis (Median) 10%Current Ratio 3.1xQuick Ratio 2.8x 8%Cash as Percent of Market Cap 23.5%Avg Days Outstanding: Accounts Receivable 27.9x 6%Avg Days Outstanding: Accounts Payable 42.0xWorking Capital to TTM Operating Expense Ratio 0.8x 4% Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 8.6%Cash from Operations Growth (YoY) 9.2%Cash from Investing Growth (YoY) -55.7% 0%Cash from Financing Growth (YoY) 31.4% Internet Search S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 1.0% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 39. SEG Internet Index Category: 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 ReturnActive Networks ACTV $903.1 $804.4 $337.4 55.3% 5.2% 20.7% 2.4x 45.7x 1.9x 16.9x n/aAncestory.com ACOM $976.4 $937.4 $399.7 83.4% 33.7% 32.8% 2.3x 7.0x 2.0x 6.0x -30.7%Archipelago Learning, Inc. ARCL $240.7 $272.8 $70.9 91.0% 29.6% 32.3% 3.8x 13.0x 3.5x 13.0x -14.4%Angies List ANGI $785.7 $711.9 $90.0 71.7% -47.3% 52.5% 7.9x n/a 4.9x n/a n/aBankrate RATE $2,383.8 $2,521.2 $424.2 66.1% 30.6% 92.3% 5.9x 19.4x 4.7x 14.8x n/aeHealth, Inc. EHTH $301.3 $177.7 $151.6 80.2% 11.6% -5.5% 1.2x 10.1x 1.2x 7.9x 19.9%FriendFinder FFN $63.7 $508.6 $338.1 68.8% 30.5% -0.8% 1.5x 4.9x 1.5x 5.5x n/aJiayuan.com International DATE $217.3 $124.0 $52.5 68.4% 13.2% 97.7% 2.4x 17.9x 1.8x 8.8x n/aJive Software, Inc. JIVE $1,337.1 $1,169.6 $77.3 55.6% -49.3% 67.0% 15.1x n/a 10.5x n/a n/aLinkedIn LNKD $8,474.7 $7,897.2 $522.2 84.4% 12.2% 114.8% 15.1x 124.3x 9.3x 46.3x n/aLoopNet, Inc. LOOP $785.4 $674.3 $86.7 85.2% 17.3% 11.1% 7.8x 45.0x 7.0x 24.2x 54.6%OpenTable OPEN $1,093.7 $1,043.8 $139.5 71.8% 30.2% 40.9% 7.5x 24.8x 6.2x 15.2x -45.4%Qihoo QIHU $2,441.2 $2,097.8 $167.9 88.7% 13.3% 191.1% 12.5x 93.8x 6.8x 23.8x n/aRenren RENN $2,136.5 $941.9 $83.1 79.4% 13.4% n/a 11.3x 84.7x 5.9x n/a n/aStamps.com STMP $388.0 $318.6 $101.6 74.2% 17.8% 18.8% 3.1x 17.6x 2.8x 12.6x 92.3%Shutterfly SFLY $953.9 $774.0 $473.3 53.6% 9.9% 53.8% 1.6x 16.6x 1.4x 8.3x -35.9%VistaPrint VPRT $1,501.3 $1,580.3 $924.7 65.0% 14.4% 25.8% 1.7x 11.9x 1.4x 11.4x -20.6%Zillow Z $882.1 $805.3 $66.1 84.0% 9.3% 116.8% 12.2x 131.5x 7.8x 36.4x n/a Median: $928.5 $804.8 $145.6 73.0% 13.4% 40.9% 4.9x 18.6x 4.1x 13.0x -17.5% Income Statement Analysis (Median) Internet Services Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 40.9% 25%TTM EBITDA Growth 22.1%TTM Earnings Growth 26.0%Gross Profit Margin 73.0% 20%EBITDA Margin 13.4%Net Income Margin 2.7%SG&A Expenses as a % of Total Revenue 45.1%R&D Expenses as a % of Total Revenue 14.2% 15% Balance Sheet Analysis (Median)Current Ratio 2.6x 10%Quick Ratio 2.5xCash as Percent of Market Cap 13.8%Avg Days Outstanding: Accounts Receivable 27.3x 5%Avg Days Outstanding: Accounts Payable 36.3xWorking Capital to TTM Operating Expense Ratio 0.6x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 13.4%Cash from Operations Growth (YoY) 16.4% -5%Cash from Investing Growth (YoY) -304.0%Cash from Financing Growth (YoY) 17.1% Internet Services S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 10.9% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 40. SEG Internet Index Category: Travel 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 ReturnCtrip CTRP $3,930.8 $3,187.0 $554.9 77.0% 32.5% 21.4% 5.7x 17.7x 4.7x 17.4x -29.4%Expedia EXPE $4,550.7 $4,567.3 $3,449.0 77.9% 16.9% 13.7% 1.3x 7.8x 1.2x 6.3x -14.3%HomeAway AWAY $2,133.8 $1,949.9 $230.2 85.0% 18.7% 37.1% 8.5x 45.3x 7.0x 24.9x n/aMakeMyTrip MMYT $848.0 $773.7 $181.0 33.0% 3.7% 58.1% 4.3x 114.1x 7.1x 39.8x -13.0%Orbitz OWW $372.7 $708.7 $766.8 81.8% 14.5% 1.2% 0.9x 6.4x 0.9x 5.2x 1.7%Pricelilne PCLN $31,225.0 $29,269.4 $4,355.6 70.7% 33.4% 41.2% 6.7x 20.1x 5.3x 14.7x 38.1%Travelzoo TZOO $405.4 $366.4 $148.3 91.0% 25.2% 31.5% 2.5x 9.8x 2.2x 8.7x -35.6% Median: $2,133.8 $1,949.9 $554.9 77.9% 18.7% 31.5% 4.3x 17.7x 4.7x 14.7x -13.6% Income Statement Analysis (Median) Internet Travel Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 31.5% 18%TTM EBITDA Growth 44.7%TTM Earnings Growth 12.1% 16%Gross Profit Margin 77.9%EBITDA Margin 18.7% 14%Net Income Margin 2.7%SG&A Expenses as a % of Total Revenue 51.7%R&D Expenses as a % of Total Revenue 14.2% 12% Balance Sheet Analysis (Median) 10%Current Ratio 2.0xQuick Ratio 1.8x 8%Cash as Percent of Market Cap 9.6%Avg Days Outstanding: Accounts Receivable 32.6x 6%Avg Days Outstanding: Accounts Payable 191.6xWorking Capital to TTM Operating Expense Ratio 0.3x 4% Cash Flow Statement Analysis (Median) 2%Levered FCF Margin 18.8%Cash from Operations Growth (YoY) 24.4%Cash from Investing Growth (YoY) 0.9% 0%Cash from Financing Growth (YoY) -101.8% Internet Travel S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 31.1% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 41. SEG Internet Index Category: Video Games 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 ReturnChangeYou CYOU $1,398.9 $1,122.3 $484.6 86.1% 65.0% 36.8% 2.3x 3.6x 2.0x 3.6x -29.2%Giant Interactive GA $995.7 $695.9 $284.3 85.6% 65.0% 34.5% 2.4x 3.8x 2.2x 3.6x -44.7%Netease NTES $6,844.1 $4,791.3 $1,156.5 67.5% 49.6% 32.4% 4.1x 8.4x 3.4x 7.0x 12.4%NCSoft KOSE:A036 $4,912.1 $4,396.0 $532.5 78.7% 28.3% -8.6% 8.3x 29.2x n/a n/a 23.5%Perfect World PWRD $565.7 $344.1 $451.4 82.4% 36.8% 19.7% 0.8x 2.1x 0.7x 2.2x -42.0%Tencent Holdings SEHK:700 $47,546.5 $45,604.1 $4,088.6 65.4% 48.1% 46.5% 11.2x 23.2x n/a n/a -1.5%Zynga, Inc. ZNGA $9,570.7 $7,763.2 $1,140.1 71.1% -27.4% 90.8% 6.8x n/a 5.7x 19.2x n/a Median: $4,912.1 $4,396.0 $532.5 78.7% 48.1% 34.5% 4.1x 6.1x 2.2x 3.6x -15.4% Income Statement Analysis (Median) Internet Video Games Software Stock Market Return: Jan - Feb 2012TTM Revenue Growth 34.5% 20%TTM EBITDA Growth 25.0%TTM Earnings Growth 13.5%Gross Profit Margin 78.7%EBITDA Margin 48.1% 15%Net Income Margin 37.8%SG&A Expenses as a % of Total Revenue 23.0%R&D Expenses as a % of Total Revenue 12.9% 10% Balance Sheet Analysis (Median)Current Ratio 2.4xQuick Ratio 2.4xCash as Percent of Market Cap 25.0% 5%Avg Days Outstanding: Accounts Receivable 18.3xAvg Days Outstanding: Accounts Payable 62.1xWorking Capital to TTM Operating Expense Ratio 1.0x 0% Cash Flow Statement Analysis (Median)Levered FCF Margin 27.4%Cash from Operations Growth (YoY) 26.3%Cash from Investing Growth (YoY) -29.8% -5%Cash from Financing Growth (YoY) 204.1% Internet Video Games S&P NASDAQ SEG Internet IndexLevered FCF Growth (YoY) 26.8% March 2012 Monthly Flash ReportCopyright © 2012 by Software Equity Group, L.L.C., All Rights Reserved
  • 42. Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has guided and advised companies on fivecontinents, including privately-held software and technology companies in the United States, Canada, Europe, Asia Pacific, Africa and Israel. We have represented public companieslisted on the NASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity Group also advises several of the worlds leading private equity firms. We areranked 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 domain expertise. Ourindustry 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 publicly disclosed softwareM&A transaction, as well as the market, economy and technology trends that impact these deals. Were formidable negotiators and savvy dealmakers who facilitate strategiccombinations that enhance shareholder value.Perhaps most important are the relationships weve built and the industry reputation we enjoy. Software Equity Group is known and respected by publicly traded and privately ownedsoftware and technology companies worldwide, and we speak with them often. Our Quarterly and Annual Software Industry Equity Reports are read and relied upon by more thaneighteen thousand industry executives, entrepreneurs and equity investors in sixty-one countries, and we have been quoted widely in such leading publications as The Wall StreetJournal, Barrons, Information Week, The Daily Deal, The Street.com, U.S. News & World Report, Reuters, Mergers & Acquisitions, USA Today, Arizona Republic, Detroit FreePress, Entrepreneur Magazine, Softletter, Software Success, Software CEO Online and Software Business Magazine.P E t M i S ftl tt S ft S S ft O li d S ft B i M iTo keep your finger on the pulse of the software equity markets, subscribe to our Annual and Quarterly Research Reports.Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. For a confidential consultation without obligation, please contact KrisBeible, Director, Business Development (858 509-2800, kbeible@softwareequity.com).CONTACT INFORMATION:Software Equity Group, L.L.C.12220 El Camino Real, Suite 320San Diego, CA 92130www.softwareequity.comp: (858) 509-2800f: (858) 509-2818The information contained in this Report is obtained from sources we believe to be reliable, but no representation or guarantee is made about the accuracy or completeness of such information, or theopinions expressed herein. Nothing in this Report is intended to be a recommendation of a specific security or company or intended to constitute an offer to buy or sell, or the solicitation of an offer tobuy or sell, any security. Software Equity Group LLC may have an interest in one or more of the securities or companies discussed herein.Financial data provided by Capital IQ.This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C.Software Equity Group registers each Report with the U.S. Copyright Office and vigorously enforces its intellectual property rights. Copyright © 2011 by Software Equity Group, L.L.C., All Rights Reserved