Mobile software exits are ramping sharply, on pace for 44% YoY growth in transaction volume. SEG has been closely tracking mobile software M&A for years, giving us exceptional insight into industry trends, deal volume, exit multiples, most active buyers, deal structures, and more. We've summarized some of this intel in our Q2 Mobile Software M&A Report, available at no cost.

1. Brief Mobile Software Market
Update & Ecosystem
2Q132Q13
B d W kBrad Weekes
Vice President

2. Disclaimer
The information contained in this Report is obtained from sources
we believe to be reliable, but no representation or guarantee is , p g
made about the accuracy or completeness of such information, or
the opinions expressed herein. Nothing in this Report is intended
t b d ti f ifi itto 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 to buy or sell, any security. Software Equity Group LLC may y , y y q y p y
have an interest in one or more of the securities or companies
discussed herein. Financial data provided by Capital IQ.

3. Mobile Software Landscape – Select Companies
Marketing & AdvertisingMarketing & Advertising Commerce & PaymentsCommerce & Payments Content & EntertainmentContent & Entertainmentyy
Social & MessagingSocial & Messaging EnterpriseEnterprise HealthHealth
InfrastructureInfrastructure
Development Platforms Security Converged
Communications
AnalyticsLBS
Acquired Public

4. Public Market Performance of Select Mobile Software Providers
14.5x ObservationsObservations
EV/Rev
M lti l
EV/Rev
M lti l
• Majority of high performing mobile
companies have demonstrated an ability
to monetize through advertising and stand
to be major beneficiaries of the forecasted
growth in mobile advertising spend
14.5x
13.7x
9.6x
8.1x
7.1x 6.7x
MultipleMultiple
• Millennial Media’s EV/Revenue (2.9x) has
come down considerably from its IPO
when it hit 17.9x, as competition with
Google and Facebook for mobile ad dollars
intensifies
4.7x
3.9x 3.9x 3.3x 2.9x 2.9x 2.8x
1.5x 1.2x 0.8x 0.6x 0.5x 0.3x 0.1x 0.1x
• Security firms are performing extremely
well, benefiting from enterprise security
concerns as BYOD continues to gain
momentum
122%
TTMTTM
• Opera has succeeded while many of its
peers, who were also already in mobile
before Apple dramatically altered the
mobile ecosystem with the iPhone, failed
miserably. Opera has pivoted its business
d l ff tti d li i it l73% 69% 66%
55%
42%
36% 36% 34%
23% 19% 19% 16% 12% 11%
TTM
Revenue
Growth
TTM
Revenue
Growth
model, offsetting declines in its legacy
business of mobile browsers with rapidly
growing advertising and bandwidth
management revenue
• Game providers are struggling due to
0% 0% 0%
‐3%
‐11%
‐34%
inconsistent performance, lack of
differentiation and difficulty in monetizing
mobile as well as they have historically
done on the web
• Some legacy mobile software providersSome legacy mobile software providers
are struggling to adjust their business
models from carrier centric to app
store/OEM centric

5. TTM
TTM
Revenue
TTM
Gross
TTM
EBITDA EV/ EV/
Forward
EV/
Forward
EV/
YTD
Stock
Public Market Performance of Select Mobile Software Providers
Company Ticker Market Cap EV
TTM
Revenue
Revenue
Growth
Gross
Margin
EBITDA
Margin
EV/
Revenue
EV/
EBITDA
EV/
Revenue
EV/
EBITDA
Stock
Return
Bango BGO $127.9 $124.6 $17.6 -34.4% 19.1% -22.1% 7.1x n/a n/a n/a -7.7%
BSQUARE BSQR $30.6 $11.2 $96.7 0.3% 18.2% 1.5% 0.1x 7.6x n/a n/a -9.5%
Glu Mobile GLUU $151.3 $130.1 $85.1 19.3% 90.2% -10.4% 1.5x n/a 1.4x n/a -6.0%
Google GOOG $292,076.9 $249,354.9 $53,499.0 33.8% 57.7% 31.4% 4.7x 14.8x 4.0x 10.9x 21.7%
Gree TSE:3632 $2 070 0 $1 918 9 $1 648 9 11 5% 85 7% 40 4% 1 2x 2 9x n/a n/a -40 2%Gree TSE:3632 $2,070.0 $1,918.9 $1,648.9 11.5% 85.7% 40.4% 1.2x 2.9x n/a n/a -40.2%
Facebook FB $60,157.5 $52,946.5 $5,489.0 35.9% 72.7% 23.9% 9.6x 40.4x 7.4x 14.2x -11.1%
Millennial Media MM $692.8 $559.3 $194.2 68.7% 40.9% -0.9% 2.9x n/a 1.9x 27.8x -33.2%
Myriad Group MYRN $154.2 $156.6 $54.5 -2.9% 22.7% -11.1% 2.9x n/a n/a n/a -3.9%
NQ Mobile NQ $419.0 $304.3 $109.0 122.4% 69.9% 5.5% 2.8x 51.2x 1.5x 4.9x 34.0%
OpenTable OPEN $1,457.0 $1,360.4 $167.8 15.6% 74.5% 29.2% 8.1x 27.8x 7.0x 15.4x 24.5%
Opera OB:OPERA $942 3 $890 9 $231 1 35 9% 43 9% 27 2% 3 9x 14 2x n/a n/a 34 8%Opera OB:OPERA $942.3 $890.9 $231.1 35.9% 43.9% 27.2% 3.9x 14.2x n/a n/a 34.8%
Qihoo 360 Technology QIHU $5,668.4 $5,367.4 $369.6 72.6% 89.4% 17.9% 14.5x 81.0x 8.1x 29.6x 55.0%
Pandora Media P $3,216.4 $3,140.9 $471.9 55.2% 32.0% -8.2% 6.7x n/a 4.6x 121.3x 93.9%
SmithMicro SMSI $39.5 $11.2 $44.8 -10.5% 80.6% -42.8% 0.3x n/a 0.2x n/a -34.2%
Synchronoss Technologies SNCR $1,184.7 $1,127.4 $287.4 19.4% 58.5% 21.8% 3.9x 18.0x 3.1x 9.2x 42.7%
Tangoe TNGO $575.7 $545.3 $165.2 41.5% 54.2% 8.7% 3.3x 38.1x 2.7x 16.4x 20.0%
TeleCommunication Systems TSYS $137 1 $237 8 $482 1 10 8% 33 5% 7 9% 0 5x 6 3x 0 5x 5 0x 9 7%TeleCommunication Systems TSYS $137.1 $237.8 $482.1 10.8% 33.5% 7.9% 0.5x 6.3x 0.5x 5.0x -9.7%
TeleNav TNAV $207.5 $20.0 $209.2 0.4% 68.9% 11.3% 0.1x 0.8x 0.1x 3.0x -34.5%
Velti Plc VELT $127.0 $157.9 $259.6 22.8% 51.6% -1.9% 0.6x n/a 0.7x 17.2x -70.5%
Yelp YELP $2,240.6 $2,146.1 $156.3 66.0% 92.9% -2.8% 13.7x n/a 8.9x 74.8x 76.5%
Zynga, Inc ZNGA $2,207.0 $1,038.3 $1,223.9 0.5% 72.9% 11.7% 0.8x 7.2x 1.2x 20.9x 16.3%
M $292 076 9 $249 354 9 $53 499 0 122 4% 92 9% 40 4% 14 5x 81 0x 8 9x 121 3x 93 9%Max $292,076.9 $249,354.9 $53,499.0 122.4% 92.9% 40.4% 14.5x 81.0x 8.9x 121.3x 93.9%
Median: $692.8 $559.3 $209.2 19.4% 58.5% 7.9% 2.9x 14.8x 2.3x 15.9x -3.9%
Average $17,804.0 $15,311.9 $3,107.8 27.8% 58.6% 6.6% 4.2x 23.9x 3.3x 26.5x 7.6%
Min $30.6 $11.2 $17.6 -34.4% 18.2% -42.8% 0.1x 0.8x 0.1x 3.0x -70.5%
• Public mobile software median and average EV/Revenue multiples as of 2Q13 were 2.9x and 4.2x, respectably
• Leading firms with strong mobile offerings (Yelp, Facebook, Pandora, Opera, OpenTable, Google) are trading
notably higher, with median and average EV/Revenue multiples of 7.4x and 7.8x, respectably
• YoY revenue growth for leading mobile software firms is in excess of 30%, and in some cases approaching
100%

6. Mobile Software M&A Volume
M&A Volume by YearM&A Volume by Year• Mobile software M&A is hitting another inflection point and M&A Volume by YearM&A Volume by Year
is on pace to reach 338 transactions in 2013, up 44% YoY
• Mobile software M&A is currently driven by:
• The rapidly evolving and fragmented mobile ad‐tech
l d d i b i t ti ith d
338
landscape, driven by experimentation with new ad
formats and the emergence of programmatic buying
• The need for mobile ad‐tech providers to achieve scale
and reach 113
224
235
and reach
• Bring Your Own Device (BYOD) and its impact on the
enterprise
2010 2011 2012 2013 (F)
M&A Volume by Product Category
as a % of Total Mobile Software M&A
M&A Volume by Product Category
as a % of Total Mobile Software M&A
• Exponential increases in mobile data consumption,
driving the need for bandwidth management
• Recognition that mobile is not “just another channel”
d h i li d d i l bil l i
( )
and that specialized and exceptional mobile talent is
needed to fully leverage its potential and navigate its
complexities
• Traditional software providers seeking solutions that
31% 22%
24%
10%
11% 17%
5% 9% 6%
Social & Messaging
Other Apps (including mobile app
developers)
Marketing & Advertising
• Traditional software providers seeking solutions that
complement their existing offerings
• “Mobile first” software providers looking to extend their
leadership position by expanding their software suite 24%
7%
14% 8%
15% 22%
18%
24%
Infrastructure
Enterprise
Content & Entertainment
p p y p g
with complementary product offerings
8% 8% 8%
24%
16% 18%
2011 2012 2013 YTD
Commerce & Payments

7. Mobile Software M&A Exit Multiples
R fl ti th k t i t it d t ti l it lti l f bil ft i• Reflecting the market immaturity and potential, exit multiples for mobile software companies vary
dramatically
• Across the spectrum of deal sizes, multiples ranged from 1.3x to 8.6x TTM revenue
• Generally speaking, transactions in excess of $50M exhibited the strongest, most consistent exit
multiples, ranging from 4.7x – 6.5x TTM revenue
• Note, at the low end, TTM revenue in this segment ranges from approximately $7M ‐ $10M
• In aggregate, 2012 average and median EV/Revenue exit multiples were 4.0x vs. 2.7x, respectably
EV/Revenue Exit Multiples by Transaction SizeEV/Revenue Exit Multiples by Transaction SizeEV/Revenue Exit MultiplesEV/Revenue Exit Multiples
Median Average Median Average
2.9x
2 7x
4.5x
4.0x
3 5X
4.7X 5.0X
5.6X
8.6X
6.4X 6.5X
2.7x
1.3X 1.6X
3.5X
1.6X
EV <= $10 EV > $10
&
EV > $20
&
EV > $50
&
EV > $100
2011 2012
&
EV <= $20
&
EV <= $50
&
EV <= $100
Enterprise Value Range ($ millions)

8. Select Active Mobile Software Buyers (Last 2 Years)
B T t N tBuyer Targets Notes
2Q11 2Q13
2Q11 2Q13
• Primarily talent acquisitions of very small mobile
startups, whose services were often shut down
shortly after acquisition
• A handful of acquisitions, namely Summly and
GhostBird, will directly help enhance existing Yahoo
products
• Most notable is the recent Waze acquisition for a
approximately $1B dollars. Waze enhances Google’s
industry leading mobile maps offering
• Other acquisitions focused on driving local commerce
(Zagat, Zave, TxVia), productivity (QuickOffice, Sparrow,
Wavii) and analytics (Behavio)
• Much like Yahoo Zynga is using acquisitions to quickly
• Most notable was the Instragram acquisition for
$1B i ff i (i h t
• Much like Yahoo, Zynga is using acquisitions to quickly
enhance its mobile capabilities
• OMGPOP, maker of ‘Draw Something’ was the most
expensive acquisition ($183M) but was shutdown after
15 months due to massive losses
• Other acquisitions focused primarily on social gaming
~$1B, serving as an offensive (improve photo
capabilities) and defensive move (remove threat of
Instagram itself and others who may acquire it)
• With the acquisition of Parse, Facebook enters a new
realm of helping developers monetize mobile
• Opera has used acquisitions to enter new markets as
its legacy mobile browser business declines
• Advertising came with the acquisition of 4th screen• Advertising came with the acquisition of 4th screen
and mobile theory, announced on the same day
• Bandwidth management with Skyfire, for a hefty exit
multiple (~>30x)
• Tangoe has used acquisitions to consolidate the
telecom expense management (TEM) market
• After making four acquisitions in a span of nine
th di i A t 2012 T h bmonths ending in August 2012, Tangoe has been
inactive on the M&A front, focused on integrating its
products

9. Top 10 Mobile Software M&A Transactions by Enterprise Value (EV)
StockBuyer TargetDate EV EV/Rev Cash Earnout
5/12/2010 $5,423 4.5x $5,423 ‐ ‐
10/13/2009 $2,420 7.9x $2,420 ‐ ‐
2/04/2013 $1 645 6 0x $1 6452/04/2013 $1,645 6.0x $1,645 ‐ ‐
7/12/2011 $1,301 7.5x $651 $100 $550
6/14/2011 $1,150 1.5x $1,150 ‐ ‐
11/14/2011 $1,050 5.5x $1,050 ‐ ‐
4/09/2012 $1,000 ‐ $300 $700 ‐
6/11/2013 $966 $9666/11/2013 $966 ‐ $966 ‐ ‐
6/24/2008
$790 ‐ $790 ‐ ‐
12/8/2005 $705 10.7x $705

10. Top 10 Mobile Software M&A Transactions by EV/Revenue Multiple
9/20/2010 $42 66.9x $0.5 $16.5 $25
StockBuyer Target EV EV/Rev Cash EarnoutDate
2/15/2013 $147 35.0x $76 $71 ‐
10/13/2010 $70 25.0x $70 ‐ ‐10/13/2010 $70 25.0x $70
1/31/2012 $70 20.0x $70 ‐ ‐
11/09/2009 $674 15.0x ‐ $674 ‐
1/31/2011 $150 11.2x $100 ‐ $50
12/08/2005 $705 10.7x $705 ‐ ‐
$ $6/07/2012 $435 10.0x $435 ‐ ‐
3/26/2012 $144 10.0x ‐ $144 ‐
12/22/2011 $279 8.9x ‐ ‐ ‐
*Note: List excludes transactions where target revenue was withheld or less than $0 (i.e. Facebook/Instagram, Google/Waze)
**Note: Akamai/Cotendo multiple is an estimate

11. For Further Discussion….
To discuss the mobile ecosystem, M&A transactions
and/or your mobile business, please contact me:and/or your mobile business, please contact me:
Brad WeekesBrad Weekes
P: 858.509.2800
C: 858.945.3032C: 858.945.3032

12. Brief Software Equity
Group Overviewp

13. Leaders in Software & Technology Advisory Services
• Twenty­one year, exclusive focus on software
advisory services to lower middle market (i.e., client
revenue $5 ‐ $50M) representing companies seeking:
• Strategic exit
Focus on Advice
• Growth capital
• Buyout
• Inorganic growth via acquisition
• Fairness opinions and valuations
B d d i i
Advisory
• Board advisory services
• Clients span virtually every technology, product
category, delivery model and vertical market
Multi­ Focus on
Advisory
Boutiques
• Global presence providing advice and guidance to
more than 2,000 private and public companies
throughout US, Canada, Europe, Asia‐Pacific, Africa and
Israel
Industry Software
Bulge Bracket Firms IPO Boutiques
• Strong cross­functional team leveraging transaction,
operating, legal and engineering experience
g
• Unparalleled software industry reputation, track
record and industry research
• Highly referenceable base of past clients and buyers /
investors
Multi­service
investors

14. Extensive Global Reach
Current Sell‐side Representation
• SEG currently represents software companies in the
United States, Canada, France, Germany, Australia &
Saudi Arabia
Recent Sell‐side Representation
Saudi Arabia
• In addition to the countries listed above, SEG has recently
represented software companies in the United Kingdom,
France, Netherlands, Israel, and South Africa
SEG Research Distribution
• SEG’s Quarterly and Annual Software Industry Equity
Reports and Monthly Flash Reports are distributed to an
l f 5 bl fopt‐in list of 50,000 public software company CEOs,
software entrepreneurs, private equity managing
directors, VCs, high tech corporate lawyers, public
accountants, etc. in 76 countries.

15. A little about me…
O 15 f ti l d i t t b kiOver 15 years of operational and investment banking
experience in mobile, wireless and software sectors
Nearly 10 years of operational experience in mobile y y p p
specifically, working closely with a number of vendors in
the space
P d t l d f d i i bil i iProduct lead for award winning mobile music service
Strategic consultant for mobile browser and widget
runtime providerp
MBA, UCLA Anderson School of Management
M. Eng, Electrical Engineering, UCSD
B S C t E i i UCSDB.S., Computer Engineering, UCSD

16. To discuss the mobile ecosystem, M&A transactions
and/or your mobile business, please contact me:and/or your mobile business, please contact me:
Brad WeekesBrad Weekes
P: 858.509.2800
C: 858.945.3032C: 858.945.3032