SEG：2023年第三季度SaaS并購(gòu)和公開市場(chǎng)報(bào)告

3Q23

SaaSM&Aand

PublicMarket

Report

TheAuthors

TrackingtheSoftwareIndustry’sJourney

“Thankyoufortakingthetimetoexploreourlatestresearchreport.Aswe'vedonesince2002,wearecommittedtotrackingtheever-evolvingsoftwareindustry.Wearehonoredtohave

softwareexecutivesandindustryprofessionalslikeyouasourvaluedreaders.

Ashasbeenthestoryinrecentyears,thereisatremendousamountofinformationforfounders,operators,investors,andstrategicbuyersaliketoconsiderintoday’smarket.

Betweenmacroeconomicdatalikeinflationandinterestrates,stockmarketperformanceandpubliccompanylayoffs,geopoliticalinstability,andanupcomingUSelection,thereisa

dizzyingamountofinformationtoconsume.

ThevolumeoffactorstoconsidermakesitharddeterminewhatishappeningwithinsoftwareandSaaSmarkets.Ourgoalissimple:tomakethatprocesseasierforeveryone.Theoutputofthatgoalisourresearchreports,thelatestiterationbeingthisreporton3Q23.Onceagain,wehavestrivedtomakeitaseasyaspossibletodigestthekeytrendsanddynamicsimpacting

theindustrywearesopassionateabout.

WelookforwardtodelvingdeeperintotheytrendsimpactingsoftwareandSaaSthroughoutthereport.Thankyouonceagainforbeingpartofthisjourneywithus.”

-AustinHammer,VicePresident,SoftwareEquityGroup

AustinHammer

VicePresident

LamsonVu

Associate

GabrielleAvantino

Analyst

2

MacroeconomicOutlookOverview(1)

●Themacroeconomicoutlookremainsheavilydependentoninflationandinterestrates,bothofwhichareunderthemicroscope.In

September,theCPIincreasedby3.7%YOY,aligningwitheconomists'expected3.6%rise.Italsoroseby0.4%MOM,downfromAugust's

0.6%.ThecoreCPI,whichexcludesvolatilefoodandenergy,stoodat4.1%forthe12monthsendinginSeptember,itssixthstraightmonthofcooling.

●TheothersideofthecoinistheFederalReserveanditsongoingefforttoutilizeinterestratestomitigateinflation.TheFedraisedratesinQ3,increasingtheFederalFundsratefrom5.25%to5.50%inJuly.ItheldoffraisingratesinitsSeptember20thmeeting,citingexpectationsofweakenedconsumerspendingandacoolingjobmarket.However,U.S.jobgrowthsmashedexpectationsinSeptember(payrollsincreasedby

336,000,nearlydoubletheprojectedamount),raisingthepossibilityofanadditionalratehikethisyear.

●U.S.economicdatashowcasesaresilientandstableeconomyindependentofinflationandinterestrates.Inadditiontotheblowoutjobs

report,Septembersawunemploymentstaylowat3.8%.Thetradedeficitshrankto9.9%,itslowestinthreeyears.ThedecreaseinthetradedeficitwasbolsteredbyasurgeinU.S.exports,whichincreased1.6%inSeptember,signalingstrongglobaldemandforU.S.goodsandservices.This

performancehasre-ignitedhopefora“soft”landingversusaprolongedrecession.

●GeopoliticaleventssuchastheongoingRussia-UkraineandIsrael-Palestineconflicts,aswellastenserelationsbetweenChinaandTaiwan,loomlargeaspotentialcatalystsforeconomicdisruption.

(1)Sources:BureauofLaborStatistics(BLS),

/cpi/

,Forbes-"FedFundsRateHistory,"

/advisor/investing/fed

-funds-rate-history/,BureauofLaborStatistics(BLS)-"CivilianUnemploymentRate,"

/charts/employment

-situation/civilian-unemployment-rate.htm,MSN-"LowWeeklyJoblessClaims,ShrinkingTradeDeficitBoostU.S.EconomicPicture,"

/en

-

us/money/markets/low-weekly-jobless-claims-shrinking-trade-deficit-boost-us-economic-picture/ar-AA1hKjEk

3

GlobalIT&SoftwareSpendSummary(1)

GlobalITSpendandGrowth($B)

$6,000$5,000$4,000$3,000$2,000

$1,000

$-

TotalGlobalITSpendingGrowth

$4,380

$5,044

$4,402

$3,872

$3,394

$4,644

$3,714

$3,538

20172018201920202021202220232024

14.0%12.0%10.0%8.0%6.0%4.0%2.0%

0.0%

GlobalEnterpriseSoftwareSpend&Growth($B)

$1,200$1,000 $800 $600$400

$200

$-

TotalGlobalEnterpriseSoftwareSpendingGrowth

$1,008

$732

$794

$477

$369

$891

$419

$529

20172018201920202021202220232024

50.0%45.0%40.0%35.0%30.0%25.0%20.0%15.0%10.0%5.0%0.0%

●GlobalITandEnterpriseSoftwaregrowthandspendingarepoisedtocontinuestronggrowth.In2021,bothcategoriesexperiencedunprecedentedgrowthduetorapiddigitizationdrivenbyCOVID.However,2022markedaregressionfrompeakgrowth.

●Bothcategoriesareexpectedtocrossimpressivethresholdsin2024,withGlobalITspendsurpassing$5Tandenterprisesoftwarespend

surpassing$1Tforthefirsttime.Enterprisesoftware,thefastest-growingITsegment,isprojectedtoexpandby12.3%in2023and13.1%in2024,outpacingthebroaderITcategory'sgrowthof5.5%and8.6%,respectively.Withsoftwarespendingmaintaininga13%averagegrowthrateinthefouryearsbefore2021,itisexpectedtogrowatahealthypre-COVIDclipasglobalenterprisescontinuetoadoptsoftware.

(1)Source:Gartner-"WorldwideITSpendingtoGrow5Percentin2023,"

/en/newsroom/press

-releases/2023-04-06-gartner-forecasts-worldwide-it-spending-to-grow-5-percent-in-2023

4

OurteamofexperiencedM&A

advisorsunderstandvaluedrivers.

30+

YEARSEXPERIENCE

SEGprovidesinsightonhowtomakeyourcompanymoreattractiveto

buyerslongbeforeyou’rereadytosell.Thenwe’llbringthebestpartiesto

thetable,handlenegotiations,andmanageduediligencesoyouachieve

thebestpossibleoutcome.

Billions

OurServicesInclude:

INAGGREGATE

TRANSACTIONVALUE

Westrivetocreatethecompetition

necessarytoobtainahigher

StrategicM&A

valuationandbetterdealterms.

●MajorityCapitalizations

●Divestitures

●BoardAdvisory

Thousands

OFBUYERRELATIONSHIPS

Ourteamadvisesbootstrapped&

financiallybackedsoftwareentrepreneurs

whowanttosellall,oramajorityinterest,

toastrategicbuyerorprivateequity

CONTACTUS

investor.Ourhigh-touchprocesssupports

youateverystageoftheM&Aprocess.

SEG's10Dealsin2023

SelectTransactionsBelow

Asafounderwhopreviouslyexploredatransactionwithoutanadvisor,whenIdecidedtopursueselling

CallPotential,IknewIneededtobringanexpertintotheprocess.IchoseSoftwareEquityGroup

becauseoftheirstellarindustryreputationandstrongteam,bothofwhichwerecriticalindrivingasuccessfuldeal.Tobefrank,M&Atransactionsareoverwhelming,andSEG’scontributionwaspivotal.

Withouttheirinvolvement,theexperienceofourdealwouldhavebeenentirelydifferent.Thankyou,SEG.”

PhilMurphy,CEO,CallPotential

VIEWALLTRANSACTIONS

6

SEG’sStateofSaaSM&A:Buyers'

PerspectivesReportUnveilsWhat

BuyersarePrioritizinginToday’sMarket

Thereisanoticeabledisparitybetweenthe

preferencesofprivateequityinvestorsandstrategic

buyersandtheperceptionsheldbySaaSCEOs.

ThestudyencapsulatescurrenttrendsandmovementswithinSaaSM&Aand

pivotalshiftsinbuyers’priorities.Keyfindingsincludeapreferenceformorehigh-

qualitytargets,aspecificprofilethatiscommandingpremiumvaluations,andwhat

companiescandotopositionthemselvesgoingforward.

Thereportuncoveredfourmajortakeawaysthatarecontributingtotoday’s

competitivedeal-makingenvironment.

VIEWTHEFULLREPORT

7

operatorsmaximizevalueandM&Aoutcomes.

IntroducingTwointeractivetoolstohelpsoftware

Real-timemetricsforStockMarket

Indices,SaaSMultiples,SaaS

Companies,RevenueMultiplebySize,

RevenueMultiplebyCategory

VIEWPAGE

SortbyDate,Vertical,CompanyName

VIEWPAGE

8

9

3Q23

SaaSM&AReport

3Q23SaaSM&ASummary

●Aggregatesoftwareindustry(1)M&Adealvolumehassettledintoasteadystatethatremainsstrongrelativetohistoricalstandards,reaching873totaldealsin3Q23,inlinewithrecentandpre-COVIDquarterlyperformanceandup9%over3Q22.

●DealactivityforSaaSM&Aremainshighrelativetohistoricalperiods(539in3Q23).WhileaggregatesoftwareM&Ahassettledintopre-COVIDlevels,SaaSM&Avolumeistremendouslyhigher,up36%onaverageovertheactivitypriortothemarketpeakinthesecondhalfof21’andfirsthalfof22’.WithastrongQ3(up10%YOY),2023SaaSM&Avolumeisnowonpacetosurpass2022volumewith2,178transactions,representinganotherrecordyear.SaaSdealsareexpectedtocomprise58%ofallaggregatesoftwaredeals,secondonlyto2022(59%).

●TheaverageEV/TTMRevenuemultiplefor3Q23was5.8x.Therehasbeenagrowinggapbetweentheaverageandmedianmultiple,withthemedian

decliningto4.2xinQ3.Thisincreasingspreadpointstoadynamicofahighvolumeoflowvaluationspairedwithenoughhigh-valuemultiplestoholduptheaverage.Thisdynamicisdrivenbyhigh-qualityassetscontinuingtoreceivestrongvaluationsbutalsoasmanycompaniesbeingforcedtoexit,foramyriadofreasons,atsub-optimalmultiples.

●VerticalSaaScomprised48%ofallSaaSM&Adealsin3Q23.Healthcare,FinancialServices,andGovernmentrepresentedthethreemostactive

verticals.Governmentmorethandoubleditspercentageofdealsin3Q23(9.2%versus4.2%in3Q22),underliningthecontinuedM&Aactivityinrecession-resistantandessentialverticals.

●PrivateequityappetiteforSaaSM&Aremainshighasitrepresentedthemajority(60.3%)ofSaaSdealsin3Q23.PE-backedstrategicshavecontinuedtoseizetheopportunitypresentedbyrecordlevelsofdrypowderandstrategicsynergies,representing50%ofalldeals.

(1)BothtotalsoftwareM&AandSaaSM&Aaretrackedandreportedoninthisreport.SaaSM&AisasubsetoftotalsoftwareM&A.whichisasubsetoftotalaggregatesoftwareM&A.

10

OverallSoftwareIndustryM&A:DealVolume

TheaggregatesoftwareindustryM&Avolumeremainsstrong,with873softwaretransactionsinQ323.Thisrepresentsa7%decreaseQOQanda9%increase

YOY.Thebackhalfof21’andfirsthalfof22’sawunprecedentedtransactionvolumeduetosupportivemonetaryandfiscalpolicy,potentialchangestothetax

code,andrapidsoftwareadoption/digitization.Inthefourquartersprior,therewasanaverageof829softwaretransactions(consideredtobehistoricallystrongactivity).Comparatively,thelastfourquartershaveseenanaverageof844aggregatesoftwaretransactions(2%increase).Thisvolumerepresentsahealthy,

stablestateforsoftwareM&A,demonstratingthecurrentmarket'sstrength.Thisisfurthersupportedbythefactthat2023isexpectedtosee3,525softwaretransactions,whichrepresentsanincreaseof33%over2018.

SoftwareIndustryM&ADealVolume-Quarterly

COVID-DrivenPeakVolume

1120

1014

966

925

884

836

805

726

686

599

934

845

873

780

799

746

734

(1)SEGEstimateofannualdealvolumefor2023.

SoftwareIndsutryM&ADealVolume-Annual

3,667

(1)3,525

3,476

SEG

Estimate

3,054

2,795

2,642

2,475

2,243

2,352

1,970

1,7271,724

201220132014201520162017201820192020202120222023

11

45%

23%

43%

SEG

Estimate

469

1,786

37%

34%

32%

27%

492

1,305

539

1,248

23%

17%

11%

984

831

580

743

538

604

457

389

299

197

616

567

114

SaaSM&AHighlights:DealVolume

WhilecurrentaggregatesoftwareM&Avolumealignswithpre-2021levels,SaaSM&Asignificantlysurpassestheprevioussteadystate.The539SaaS

transactionsrepresentsimilaractivitytothepriorquarter(538).Comparedtothefourquartersbefore3Q21,whichaveraged389transactionsperquarter,thelastfourquartersaveraged528transactionseach—markinga36%increaseandsetting2023onpaceforarecordyear.Thispacepointsto2023witnessing58%oftotalsoftwaretransactionsfromSaaS,markingthesecondconsecutiveyearSaaScomprisesnearly60%ofaggregatesoftwaretransactions.OverallincreasesinSaaSM&Aactivityhaveproventobemorethanapandemic-driventrend,withmorebusinessesgloballyturningtowardscloud-based,modern

technology.

Q1Q2Q3Q4%ofSaaSM&Aasa%ofTotalSoftwareM&A59%58%

2,172(1)

51%

2,157

6%

20102011201220132014201520162017201820192020202120222023

(1)SEGEstimateofannualdealvolumefor2023.

12

SaaSM&AHighlights

EV/TTMRevenueMultiples(1)

3Q22’s5.8xaverageEV/TTMrevenuemultiplerepresentsa4%increaseQOQandan18%decreaseYOY,whilethemediandecreasedbothQOQandYOY(11%and19%respectively).Onthesurface,multiplesshowasofteningmarket,butthereismoretothestory.

2023SaaSM&Aisthe“TaleofTwoDeals”:transactionswithhigh

multiplesandlowmultiples.Inpreviousmarkets,therewasamoreevendistributionofmultiples.In2023,thereareseveraloutliersonthehigh

andlowend.

Theincreasinggapbetweenthemedianandaveragemultiplessupportsthisdynamic.Inthefourquarterspriorto3Q23,theaverageSaaS

EV/TTMrevenuemultiplewas26%higherthanthemedian.In3Q23,itwas41%higher.Whiletheaveragemultiplehasstabilized,themedianhasdecreased.

Thedecreasingmedianandconsistentaveragemultipleconfirm

thereisahighvolumeoflowmultipledealsoccurring,whileatthesametime,thereareenoughhigh-qualitycompaniesachieving

strongmultiplestomaintaintheaverage.AprimeM&Atargetin2023

consistsofprofitablegrowthandstrongretention.ThisisexactlywhatwehaveseeninourexperienceatSEG,whichcanbeseenindetailinour

2023StateofSaaSM&A:Buyers’Perspectives

report.

AverageEV/TTMRevenueMultiple–Quarterly

7.1x

6.8x

5.6x

5.9x

5.8x

3Q224Q221Q232Q233Q23

MedianEV/TTMRevenueMultiple–Quarterly

5.2x

4.7x

4.2x

4.9x

5.3x

3Q224Q221Q232Q233Q23

(1)ValuesareonamedianoraverageTTMbasis,indicatingeachquarterincludes12monthsofdatatoobtainalargerdataset.

13

SaaSM&AHighlightsTargetMarketFocus

Verticallyfocusedbusinessescomprised48%ofallSaaSdealsin3Q23,upYOY(42%ofdealsin3Q22)andQOQ(46%in2Q23).Asbuyersandinvestorshaveadaptedtothecurrentmacroeconomicoutlook,theyhaveprioritizeddurableandsustainableM&Atargets.Qualitative

indicatorsofthesetypesofbusinessesincludeverticallyfocused

businessesofferingmission-criticalsolutionsthatserverecession-resistantendmarkets.

ThemostactiveverticalslastquarterwereHealthcare,Financial

Services,andGovernment.Healthcarehasremainedthemostactivevertical(18%),drivenbytheessentialnatureofhealthcareoperations.OtherverticalsthatincreasedYOYincludeEnergy,Manufacturing,andLegal.RealEstatesawaslightdecline,likelydrivenbyconcernsinthecommercialrealestatemarketandheadwindscausedbyhighinterestrates.

Onthehorizontalside,productcategorieswiththehighestvolumeincludeSales&Marketing(17%ofhorizontalSaaS),Security(13%),andHumanCapitalManagement(10%).

(1)Targetmarketfocusreferstothecompany’smarketfocusaseitherhorizontalandservingmultipleindustriesorservingaspecificverticalmarket.

(2)TopverticaldealsasapercentofallverticalSaaSdealsin3Q23.

3Q23TargetMarketFocus(1)

58%

52%

3Q223Q23

42%

48%

HorizontalVertical

Top10M&AVerticalsby%ofVerticalDeals(2)

Healthcare

FinancialServices

Government

Retail RealEstate Energy EducationManufacturingHospitality

Legal

18%

19%

12%

11%

9%

4%

7%

5%

10%

12%

5%

4%

6%

7%

5%

3%

4%

7%

3%

0%

3Q233Q22

14

SaaSM&AHighlights:BuyerBacking

Privateequity(1)investorscontinuedtodrivethemajorityofSaaSM&A,comprising60%ofdealsin3Q23,upYOYfrom58%in3Q22andinlinewiththe61%in

thepriorquarter.ThisisbrokendownfurtherintoPE-backedstrategics(50%)andplatforminvestments(10%).Privateequityhasarecordamountofdry

powder($3.7Tatendof22’)(2).PE-backedstrategicsbringauniqueperspective,focusingonproductoverlapandsynergieswithoutreal-timevaluation

pressurefacedbypublicstrategics.Publiclytradedbuyersmustvalidateacquisitionstothemarketinrealtime,creatinganintrinsicconnectionbetweentheirvaluationsandhowtheyvalueacquisitions.Thisplacesaparticularmicroscopeonpubliccompaniesduringbearmarkets,amicroscopewhichPE-backed

strategicsdon’thave.

3Q23SaaSM&AActivitybyBuyerType

HistoricalSaaSM&AActivitybyBuyerType

PubliclyTradedStrategic,24%

PrivateStrategic,

15%

PrivateEquity

Platform,10%

PrivateEquityBacked

Strategic,50%

(1)PrivateequitydrivendealsincludePrivateEquityPlatformandPrivateEquityBackedStrategic.PrivateEquityPlatformincludesprivateequityfirmsmakingplatformacquisitions,whilePrivateEquityBackedStrategicincludesallstrategicbuyersbackedbyaprivateequityfirm.

(2)Source:

/resources/private

-equity-dry-powder-hits-new-highs-and-brings-old-challenges/

StrategicBuyersPrivateEquityBuyers

60%

58%

41%

39%

42%

40%

39%

61%

61%

59%

3Q224Q221Q232Q233Q23

15

SelectMostActiveBuyersofSaaS(TTM):StrategicBuyers(1)

Buyer

Deal

Count

SaaSSellers

33

(certainassets)

少ensite

optimabue

caseLcad

winTech

wennsoft

(certainassets)

(certainassets)

31

18

ACOSQuaderno

Aaptean

10

.impulswistralDRINK-IT

10

smarkArmorbloxNCCEDINNSamknows

oaccess

6

classForkidsSGuestlineOResDiary

bany

5

fyb

5

fenestraeREVEGY"8oo

5

stepzenahanaAPPO

*snowiloke

4

(1)Transactionslistedmaynotincludealldealsbythebuyer.Thetransactionslistedwereannouncedinthelast12months.

16

SelectMostActiveBuyersofSaaS(TTM):PrivateEquityInvestors(1)

Buyer

Deal

Count

SaaSSellers

11

timeplan

weFact:

xential

8

bswiftsumoIogic

ITHOMABRAVO

8

5

Loftware三symfonia

4

CASPECOU

STG

4

Battery

3

=AVRIOS

GTCR

3

3

stellex

3

FINTELLIX

(1)Transactionslistedmaynotincludealldealsbythebuyer.Thetransactionslistedwereannouncedinthelast12months.

17

3Q23SelectNotableSaaSDeals:MegaDeals(1)

Buyer

SaaSSeller

EV(M)

EV/TTM

Revenue

SellerPC/

Vertical

SellerDescription

splunk>

$29,005,642

7.5x

Network&SystemsMgmt./Horizontal

Providesmachine-to-machine(M2M)ITsystems,

cybersecurity,andapplicationperformancemanagementSaaS.

$2,352,941

N/A

BusinessMgmt./

Agriculture

TheAgassetsandtechnologiesofTrimble,whichprovidesfarminghardware,SaaS,relatedmobileapplication,and

servicesforbusinessintheagriculturesector.

ITHOMABRAVO

$1,574,610

2.3x

BusinessMgmt./

Healthcare

ProvidesEMRandpracticemanagementSaaS,openAPIsandSDKs,andrelatedmobileapplicationforbusinessesinthehealthcaresector.

$1,400,000

N/A

Analytics&DataMgmt./Horizontal

ProvidesdatascienceandAI-basedenterpriseperformancemanagement(EPM)anddataintelligenceSaaSandrelatedAPIsforbusinessesinthehealthcare,highereducation,andfinancialsectors.

$1,395,544

3.3x

Content&WorkflowMgmt./Other

ProvidesdigitalmediaSaaS,hardware,relatedAPIs,andmobileapplicationforbusinessesinthemediaand

entertainmentindustry.

(1)IncludesM&Adealsestimatedtobegreaterthan$1BinEnterpriseValue.

18

3Q23SelectNotableSaaSDeals:Mid-Market(1)

Buyer

SaaSSeller

EV(M)

EV/TTM

Revenue

SellerPC/

Vertical

SellerDescription

MSCI

$697,000

N/A

Analytics&DataMgmt./FinancialServices

ProvidesdataandanalyticsSaaS,andrelatedAPIsforbusinessesintheinvestmentsector.

Rapyd

payu

$610,000

N/A

FinancialApplications/Horizontal

ThePayUGlobalPaymentOrganisationofPayUPayments,whichprovidesAI-poweredonlinepaymentsprocessing

SaaS.

chain

$574,200

N/A

Analytics&DataMgmt./Horizontal

ProvidesblockchainandWeb3-enableddigitalassetmanagementandtraceabilitySaaS.

perimeter81

$490,000

N/A

Security/

Horizontal

Providescloud-nativesecureaccessserviceedge(SASE)

managementSaaS,includingfeaturesforcloud

cybersecurity,cloudinfrastructures,andmonitoringdashboards.

◎tenable

$265,000

26.5x

Security/

Horizontal

Providescloud-nativeapplicationprotection(CNAPP)andidentitycentricunifiedsecuritySaaS.

(1)IncludesM&Adealsestimatedtobegreaterthan$250Mandlessthan$1BinEnterpriseValue.

19

3Q23SelectNotableSaaSDeals:Lower-MidMarket(1)

Buyer

SaaSSeller

EV(M)

EV/TTM

Revenue

SellerPC/

Vertical

SellerDescription

ARCHIMED

$225,051

N/A

Analytics&DataMgmt./LifeSciences

ProvidesdatamanagementandanalyticsSaaSforbusinessesinthepharmaceutical,governmentresearch,chemical,

medicaldevice,agrochemical,andacademicresearchsectors.

$207,367

N/A

Security/

Horizontal

ProvidesdataerasureandmobilelifecyclesoftwareandSaaSforbusinessesandgovernmentagencies.

$150,000

N/A

Network&SystemsMgmt./Telecom

Providescloud-nativemobilecorenetworkmanagementSaaS,andrelatedAPIsforbusinessesinthetelecom

industryinNorway.

$140,000

N/A

Sales&Marketing/Horizontal

ProvidesinfluencermarketingandsocialintelligenceSaaSandrelatedmobileapplicationforbusinesses.

$82,000

N/A

Sales&Marketing/Horizontal

ProvidescustomerexperienceanalyticsanddataintegrationSaaSandrelatedAPIsforbusinesses.

$52,000

N/A

Analytics&DataMgmt./Healthcare

ProvidesAI-basedhealthcaredataanalyticsSaaSandrelatedAPIsforbusinessesinthehealthcareindustry.

(1)IncludesM&Adealsestimatedtobelessthan$250MinEnterpriseValue.

20

Exploreourinteractivedatabaseforalistof

selectSaaSM&AdealsfromQ3.

Effortlesslysortthrough15+verticalsby

date,targetcompany,andacquiring

companytoaccessvitalinsights.

VISITTHEDATABASE

21

3Q23

SaaSPublic

MarketReport

3Q23SaaSPublicMarketSummary

●Overall,theSEGSaaSIndexhasincreased19.5%YTD,butwhencomparingindiceswithMayasastartingpoint,theIndexhasoutperformedeventheNASDAQby39%.ThemedianEV/TTMRevenuemultiplefortheIndexin3Q23was5.9x,onparwithQ1andQ22023(5.8xand6.0x,

respectively).

●WhiledeclininggrowthratesdominatedthenarrativearoundSaaSbusinessperformance,theSaaSIndexaddedover$37MofrevenueinQ3,morethandoubletherevenueaddedinQ2.Whiletherearenotasmanyhigh-growthbusinessesintheIndexcomparedto3Q22,52%aregrowing10-30%and18%aregrowinggreaterthan40%.

●Operatingmarginshaverapidlyimproved,with3Q23representingthefirstprofitablequarter(1.7%EBITDAmargin)fortheIndexsince4Q18.CashflowmarginsfortheIndexweregreaterthan10%forthe3rdstraightquarterasbusinesseshavecutdownondiscretionaryspending.Still,notably,R&Dexpensehasheld,signalingthatbusinessescontinueinvestinginproductforfuturegrowth.

●ThetopquartileEV/TTMRevenuebusinessesintheIndexarereceivingapremiumof58%overtheIndexmedian(9.3xvs.5.9x).Thecompanies

thatcomprisethiscohortdepictwhatismostvaluedacrossbothM&Aandpublicmarketstoday:profitablegrowth.ThemedianTTMgrowthratefortheupperquartileis27%,versus18%atthemedian.AnevenstarkercontrastexistsintheTTMcashflowmargin,whichis24%fortheupperquartileagainst11%forthemedian.

●TheSEGSaaSIndexcontinuestogrowatanimpressivescale,postingatotalmarketcapofover$2.1TandtotalTTMrevenuesofover$273Bin3Q23.

Please

reachout

withanyquestionsortodiscussourrelevantmarketinsights.

23

SEGSaaSIndexUpdates

ADDITIONS

Includescompaniesthathavebeen

addedtotheIndexduetoIPO,SPACacquisition,ortransitionedfroma

license-basedmodeltoSaaS

(1)

UPCOMINGINDEXADDITIONS

IncludescompaniesthathaverecentlygonepublicbutareexcludedfromtheIndexthisquarterduetoalackof

publiclyavailablefinancialdata

klaviy

REMOVALS

IncludescompaniesthathavebeenremovedfromtheIndexdueto

acquisition

(1)SEGtrackspubliccloudsoftwarecompaniesintheprocessoftransitioningtoSaaS.SAPwasaddedtotheIndexduetoitsongoingtransitiontoacloud-basedSaaSmodelwhichnowcomprisesamajorityofitsrevenue.

24

SEGSaaSIndexOverview

OurQ3SEGSaaSIndexcomprises121publiclytradedcompaniesthatprimarilyoffersolutionsviathecloud(1).TheIndexisupdatedeveryquarter

dependingonacquisitions,IPOs,readilyavailablefinancialdata,andchangesinbusinessmodels.IfacompanyisaddedorremovedfromtheIndex,were-runhistoricaldatatoincludeitsfinancialsandanalyzehowitchangesthemetrics.

SEGSaaSIndexMedianMetrics(2)

Measure

3Q22

4Q22

1Q23

2Q23

3Q23

MarketCapitalization(M)

$3,818

$3,399

$3,669

$3,777

$4,039

EV/NTMRevenue

5.7x

5.0x

5.2x

5.4x

5.6x

EV/TTMRevenue

6.4x

5.4x

5.8x

6.0x

5.9x

EV/TTMGrossProfit

8.7x

7.4x

8.7x

8.2x

8.4x

EV/TTMEBITDA

42.9x

42.5x

40.6x

44.9x

42.2x

EV/TTMCFO

25.1x

22.9x

24.5x

25.7x

29.6x

GrossProfitMargin

70.9%

71.1%

72.0%

71.1%

71.4%

EBITDAMargin

-9.7%

-5.2%

-2.1%

-2.7%

1.7%

NetIncomeMargin

-19.8%

-13.9%

-8.8%

-12.5%

-8.7%

CFOMargin

5.0%

7.1%

11.5%

14.6%

12.2%

TTMTotalRevenue(M)

$558

$591

$631

$647

$684

TTMTotalEBITDA(M)

-$39

-$40

-$41

-$39

-$24

YOYRevenueGrowth

27.4%

25.7%

22.8%

20.2%

18.0%

YOYEBITDAGrowth

11.2%

20.2%

13.1%

16.6%

33.4%

Cash&Eq(M)

$257

$262

$223

$246

$267

(1)CompaniesintheSEGSaaSIndexmayhaveasubscriptionortransaction-basedpricingmodel.

(2)Statsaremeasuredusingquarterlymetricsunlessnotedotherwise.

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