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  1. Enterprise Software Samad Samana Senior Research Analyst 212-891-1789 samad.samana@stephens.com June 2017 Priced as of June 22nd The analyst primarily responsible for the preparation of the content of this presentation certifies that (i) all views expressed in this presentation accurately reflect the analyst’s personal views about the subject company and securities, and (ii) no part of the analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the analyst in this presentation. See important disclosures and analyst certification on page 46 of this presentation. This presentation constitutes a compendium report (covers six or more subject companies). As such, Stephens Inc. chooses to provide specific disclosures for the companies mentioned by reference. To access current disclosures for the companies in this presentation, clients should refer to https://stephens2.bluematrix.com/sellside/Disclosures action or contact your Stephens Inc. representative for additional information. © 2017 Stephens Inc. 111 Center Street   Little Rock, AR 72201    501-377-2000   800-643-9691    stephens.com    Member NYSE, SIPC

  2. Biography • Samad is a senior research analyst covering the enterprise software sector, with a particular focus on software-as-a-service (SaaS) companies.  Prior to joining Stephens in May 2016, Samad covered the enterprise software sector at FBR Capital Markets for five years with a focus on SaaS companies.  Prior to FBR, Samad worked as an associate analyst at Morgan Keegan for three years with a focus on the infrastructure and security software sectors. • Samad received a B.A. in International Studies from Rhodes College and is a Level III CFA Candidate. 2

  3. Coverage Universe *Stephens non-GAAP estimates for covered companies; all others courtesy of FactSet Research Systems Inc. **NM reflects a valuation over 200x or negative FCF Source: FactSet Research Systems and Stephens. 3

  4. SaaS Comp Table *Stephens non-GAAP estimates for covered companies; all others courtesy of FactSet Research Systems Inc.; NOW and NEWR covered by Jonathan Ruykhaver **NM reflects a valuation over 200x or negative FCF Source: FactSet Research Systems and Stephens. 4

  5. Corporate Access and Event Calendar Source: FactSet Research Systems and Stephens. 5

  6. SaaS Indexed Performance Price is relative to weighted Market Cap of the following companies as of 12/31/2014; NOW, PAYC, VEEV, TEAM, SHOP, WAGE, PCTY, NEWR, INST, RNG, BOX, TYL, BNFT, SPSC, MB, WK, WDAY, ADBE, CSOD, CRM, WIX, ULTI, SNCR, HUBS, ZEN, CALD Source: FactSet Research Systems and Stephens. 6

  7. SaaS Coverage Rankings – 2017E *Ratings and Estimates suspended for SNCR Source: Company filings and Stephens estimates. 7

  8. SaaS Coverage Rankings – 2017E HUBS *Ratings and Estimates suspended for SNCR Source: Company filings and Stephens estimates. 8

  9. SaaS ERG Graph Stephens SaaS coverage No SaaS coverage Source: FactSet Research Systems and Stephens. 9

  10. Industry Outlook – Recent M&A Transactions Source: FactSet Research Systems and Stephens. 10

  11. Company Highlights 11

  12. Adobe Systems (ADBE) – Overweight (Vol) – $159 PT • Investment Thesis: F2Q results beat consensus for revenue, ARR, margins, and EPS. For the Digital Media, the strength was attributed to healthy unit growth, high retention rates, and ARPU growth. We found the ARPU growth commentary to be most positive, which we believe is being driven by adoption of CCE and add-ons (like Sign and Stock). Creative Cloud revenue drove the majority of the upside relative to our model. Experience Cloud beat modestly, where partner-aided deals in particular were highlighted. Guidance for EC suggests a deceleration in F3Q and F4Q (attributed largely to a tough comp on perpetual revenue in 2H16). While slightly disappointing, we note the company did not change its prior guidance for 25%+ growth in FY17, so the business appears to be tracking as expected. • Price Target / Valuation. ADBE currently trades at a 17x EV/FCF multiple using our CY19 estimates. Our price target of $159 implies a 19x EV/FCF multiple, which we believe appropriately factors ADBE's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 12

  13. Adobe Systems (ADBE) – Key Points • F2Q by the numbers. Revenue of $1.77 bil beat consensus of $1.73 bil with Digital Media revenue of $1.21 bil (consensus: $1.17 bil) and Digital Marketing revenue of $516.7 mil (consensus: $514.3 mil) both contributing to the upside. Within Digital Media, Creative Cloud revenue was $1.01 bil (Stephens: $973.9 mil) and Document Services revenue was $199.9 mil (Stephens: $200.2 mil). Experience Cloud revenue of $495.4 mil beat Stephens estimate of $491.4 mil and benefited from increasing involvement of the partner ecosystem, which was involved in ~50% of bookings in the quarter. Operating margin of 37.2% and EPS of $1.02 both beat consensus for 35.2% and $0.95, respectively. • Clearing up the confusion around Experience Cloud revenue guidance. ADBE provided formal guidance for F3Q EC revenue growth expectations (+25% YoY). However, we believe there was some confusion around what this implied for F4Q. As a reminder, the company provided guidance for >25% YoY EC revenue growth on the January 2017 investor update call. Using this, plus the F3Q guidance, implies ~21% YoY growth for EC revenue in F4Q. While we think a deceleration is a little surprising given the TUBE acquisition, the company attributed this to higher perpetual license revenue in F4Q16, which creates a difficult comp. • Solid 3Q guidance; FY17 revenue growth guidance raised. For F3Q, management guided for revenue of ~$1.815 bil (consensus: $1.80 bil), EPS of ~$1.00 (consensus: $0.97), and new Digital Media ARR of ~$300 mil (Stephens: ~$295 mil). Digital Media revenue is expected to grow ~26% YoY (implied revenue of $1.25 bil vs consensus of $1.23 bil) and Experience Cloud revenue is expected to grow ~25% YoY (implied revenue of $505 mil vs Stephens $517 mil). For FY17, management now expects revenue growth of ~23% YoY (implied revenue of ~$7.20 bil vs previous guidance of ~$7.09 bil). • ARR growth points to sustainability of subscription model. Adobe added $312 mil of new Digital Media ARR, above guidance of ~$290 mil, and ended 2Q with ARR of ~$4.56 bil (consensus: $4.54 bil). The company is well ahead of plan for reaching its ~$5 billion target for FY17. Creative ARR grew to $4.04 bil (consensus: $4.01 bil). The company noted solid subscription adoption and retention trends, ARPU growth across key offerings, record Adobe Stock revenue, strength in Adobe.com and the Education vertical and improving international momentum as key drivers of growth. Document Cloud ARR grew to $520 mil, below consensus of $531 mil, but benefited from accelerating Acrobat growth (double digit unit growth in F2Q) and new products such as Adobe Scan. • Microsoft partnership could provide a slight tailwind to gross margins as well. Adobe and Microsoft extended their technology partnership earlier this year at Digital Marketing Summit. As part of this, Adobe's AEM will be able to run on Microsoft Azure. We think the Azure pricing is more favorable for Adobe than its AWS pricing, which could provide another incremental tailwind (albeit very modest) to gross margins as the usage of Azure ramps. We think this contribution can be among the many contributing factors that can help drive overall gross margin back to the ~90% level. • Stable demand across geographies. In F2Q, revenue in the Americas came in at $1.03 bil (+25% YoY), EMEA at $475.9 mil (+25% YoY) and Asia at $269.6 mil (+36% YoY). Adobe highlighted solid contributions across geographies and continues to view international growth as a significant opportunity going forward. In particular, the company noted strength in Japan and Germany, two of the higher ARPU international markets, and the weakening impact of piracy due to fewer licenses becoming available online and higher perceived value of the CC suite at its current price point. • Balance Sheet. The company ended F2Q with $4.93 bil in cash and marketable securities and $1.89 bil in total debt. Total DR came in at $2.07 bil, up 23% YoY, while billings increased 21% YoY to $1.79 bil (consensus: $1.78 bil). Operating cash flow was $644.8 mil and free cash flow was $589.5 mil, beating consensus of $483.6 mil but falling short of our estimate. The company repurchased ~2 mil shares in the quarter at a cost of ~$266 mil and will begin utilizing its $2.5 bil repurchase plan in 3Q (authorized in January). Source: Company presentations, filings and Stephens estimates. 13

  14. Adobe Systems (ADBE) – Earnings Model 14

  15. Cornerstone OnDemand (CSOD) – Equal-Weight (Vol) – $42 PT • Investment Thesis: CSOD beat consensus expectations across the board for 1Q, which the company attributed to a strong performance in Europe, good overall end market demand, and improved execution/productivity. We found two things notably positive--1) net customer additions grew YoY for the first time since 2Q15, suggesting demand has stabilized and mid-market churn has finally washed out; and 2) the religion on margin expansion is here to stay. The company issued mixed guidance, but we believe this is likely a continuation of the recent trend of issuing conservative guidance. The company did address the delay in filing the proxy, as it is in the final stages of a director search, which we view as a positive. While we are encouraged by the 1Q results, our long-term concerns around market size and competition have not gone away. • Price Target / Valuation: CSOD is currently trading at a 4.2x EV/revenue valuation multiple using our 2018 estimate. Our $42 price target uses a 4.5x EV/revenue multiple, which we believe appropriately factors in CSOD's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 15

  16. Cornerstone OnDemand (CSOD) – Key Points • Solid 1Q results. Revenue of $111.6 mil (+17% YoY in CC) beat consensus of $110.5 mil and billings of $89.7 mil (+6% YoY in CC) beat consensus of $81.8 mil. The mix of subscription and PS revenue was 83%/17% which differed slightly from CSOD’s historical mix of 80%/20% in part due to the timing of service revenue recognition. Higher subscription revenue and less outsourcing to third parties helped gross margins improve ~90 bps YoY to 72.6%. Operating margin of 4.4% beat consensus for 0.3% largely due to an increased focus on driving S&M efficiencies through the optimization of sales head count and commission plan changes made in early 2016. CSOD achieved 1Q profitability for the first time in company history as EPS of $0.08 came in above consensus of ($0.01). • Updated Guidance. For 2Q, management guided for revenue of $115 mil to $118 mil (consensus: $118.7 mil, +13% YoY in CC). For FY17, management raised its revenue guidance by ~$2 mil to $477 mil - $487 mil (consensus: $481.2 mil) to account for changes in the GBP/USD exchange rate. Management raised its guidance for operating margin from 5%-6% to ~6% (implied operating income of $28.9 mil; consensus: $26.3 mil) and maintained free cash flow margin guidance of ~6%-7% (implied FCF of $31.3 mil; consensus: $36.8 mil). Management reiterated its expectation for low to mid-teens billings growth with ~21% of FY17 billings expected in 2Q and committed to achieving its LT margin targets of 10% operating margin by 2018 and 16% FCF margin by 2019. • Net customer adds grows for first time since 2015. CSOD added 80 net new customers vs. 75 in 1Q16 (+12% YoY) which represents the first YoY growth in customer adds since 2Q15. The company ended 1Q with total customers of 2,998 (consensus: 3,038) and total users of 31.0 mil (+24% YoY). • Delayed Proxy filing. During the call, the company provided additional details on the delay in filing its proxy statement. Management announced that the Board of Directors has been working with an executive search firm to find a new director. The Board is in the final stages of the search and expects to file the proxy statement in the coming days once a candidate has been selected. • Positive commentary on EMEA and U.S. mid-market. After experiencing a slowdown in Europe in 2H16, CSOD attempted to stabilize its operations by committing to build two new data centers in Paris and Frankfurt by 2018. Early results appear positive as the company had the largest volume of 1Q new European client wins in its history with particular strength in France. The company also made strides in the U.S. mid-market, another area of weakness, which saw the highest percentage of teams hitting quotas that the company has seen in the past two years. Management attributed this to revised packaging and pricing, improved structure in the sales organization and more tenured reps. While this success is encouraging, we note that it comes amid reduced mid-market growth expectations for 2017 (which the company did not raise despite the strong start to the year). • Balance Sheet. The company ended 1Q with $330.6 mil in cash and marketable securities, down $12.6 mil sequentially, and total debt of $240.8 mil. Total DR came in at $260.5 mil, down $21.8 mil sequentially and +10% YoY (+12% YoY in 4Q). Operating cash flow of ($7.2 mil) and free cash flow of ($15.7 mil) both missed consensus expectations for ($5.5 mil) and ($10.4 mil), respectively. The company added 36 employees in the quarter and ended with 1,859 employees (+11% YoY). Source: Company presentations, filings and Stephens estimates. 16

  17. Cornerstone OnDemand (CSOD) – Earnings Model 17

  18. HubSpot (HUBS) – Overweight (Vol) – $76 PT • Investment Thesis: HUBS's results beat consensus across the board. The 2Q and 2017 guidance were also above the Street, although more on profitability than revenue. HUBS attributed the strength to selling the growth stack (Marketing+Sales Pro), demand for the individual products, and revenue retention increasing. We think partners being incentivized to sell Sales Pro for a full quarter also likely helped. Marketing customer growth held steady at 28% YoY, while ASRPC growth decelerated to 10% YoY. The Starter package continued to benefit the former and hurt the latter, but both trends should normalize in 4Q. To us, the results and guidance are an early indicator that durable demand for Marketing plus the ramp of Sales Pro can allow HUBS to deliver around 30% or better subscription revenue growth and 300-400bps of annual margin expansion at least through 2018. • Price Target / Valuation: Shares are on the verge of setting an all-time high and have increased 42% YTD, which could limit the near-term ceiling. With that said, our well-above consensus 2018 estimates reflect our confidence in the fundamentals and should help sustain upward momentum over the next 12 months. Our $76 target uses a 6x EV/rev multiple on our 2018 estimates. Source: FactSet Research Systems , company filings and Stephens estimates. 18

  19. HubSpot (HUBS) – Key Points • 1Q by the numbers. Revenue of $82.3 mil beat consensus of $79.3 mil with subscription revenue of $77.5 mil (consensus of $74.9 mil) and PS revenue of $4.7 mil (consensus: $4.4 mil) both contributing to the upside. The company reached profitability sooner than expected as operating margin of 1.6% and EPS of $0.03 both easily beat consensus estimates for (3.7%) and ($0.08), respectively. The better than expected margins were driven by leverage across all line items, but specifically in gross margin relative to our model. • 2017 guidance. For FY17, management raised guidance across the board and now expects revenue of $355.5 mil to $359.5 mil (consensus: $352.7 mil), an operating loss of $5 mil to $3 mil (consensus: $8.6 mil loss) and net loss per share of $0.10 to $0.04 (consensus: $0.24 loss). Free cash flow is expected to be $13 mil to $14 mil vs. mid single digit millions previously. • 2Q guidance. For 2Q, management guided for revenue of $85 mil to $86 mil (consensus: $84.7 mil), operating loss of $1 mil to breakeven (consensus: $1.9 mil loss) and net loss per share of $0.02 to breakeven (consensus: $0.05 loss). • Marketing KPIs remain strong. On the marketing side, the company added 1,549 net new customers (Stephens estimate: 1,450) to end the quarter with 24,775 (+28% YoY) and increased ASRPC to $12,598 (+10% YoY; Stephens estimate: $12,643). HUBS is seeing strong growth from its $50 Marketing Starter product, which is benefiting total subscriber growth while weighing on ASRPC growth. While this hurts the ASRPC optics in 2017, we think it will provide a meaningful upsell opportunity over time as customers upgrade to higher tiers and expand their usage of HUBS. • KPIs to include Sales Pro customers going forward. To better capture the shift to a multi-product strategy, HUBS started providing metrics inclusive of both sales and marketing customers in addition to the marketing customer metrics that it has historically provided. The company ended 1Q with 31,262 total customers (+40% YoY) and ASRPC of $10,357. The inclusion of ~6,500 Sales Pro only customers lowers the overall ASRPC and could impact churn (whether positive or negative is TBD). However, given the lower CAC, we believe the incremental margin will be a net benefit to the operating model. The inclusion of Sales Pro customers also boosted dollar revenue retention above 100% (traditionally high 90s). • Strong international growth. International revenue grew 30% YoY and now represents ~30% of total revenue (up from ~26% in 1Q16). Americas revenues grew to $64.4 mil (+32% YoY), Europe revenues grew to $13.8 mil (+63% YoY) and APAC revenues grew to $4.1 mil (+141% YoY). • Balance Sheet. The company ended 1Q with $160.6 mil in cash and marketable securities, up $10.6 mil sequentially, and $1.1 mil in total debt. Total DR came in at $105.6 mil, up $9 mil sequentially and +43% YoY (+48% YoY in 4Q). Operating cash flow of $19.1 mil and free cash flow of $11.6 mil both beat consensus expectations for $9.1 mil and $1.6 mil, respectively. HUBS ended the quarter with 1,663 employees, up 27% YoY. Source: Company presentations, filings and Stephens estimates. 19

  20. HubSpot (HUBS) – Earnings Model 20

  21. RingCentral (RNG) – Overweight (Vol) – $44 PT • Investment Thesis: We are resuming coverage of RingCentral with an Overweight (Vol.) rating and a $44 price target. Unified communications-as-a-service (UCaaS) is a large, well-defined market that is still in the early days of transitioning from legacy, on-premise systems to the cloud. We believe RingCentral's products and go-to-market strategy position it well to ride the wave of companies modernizing their communications infrastructure and to take share from legacy business communications solution providers. RingCentral's flagship Office solution has already made significant inroads with SMBs, and now the demonstrated quality of the product and years of R&D investments to enhance functionality are allowing it to successfully push upstream into the mid-market and enterprise. We believe RingCentral can deliver 25% or better subscription revenue growth through 2018 while also expanding margins. This, combined with a reasonable valuation (~4.6x EV/2018 rev), should allow shares to grind higher even after a strong YTD performance (+79% YTD). • Price Target / Valuation: RNG currently trades at a ~4.5x EV/revenue multiple using our 2018 estimates. Our price target of $44 implies a ~5.5x EV/revenue multiple, which we believe appropriately factors RNG's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 21

  22. RingCentral (RNG) – Key Points • New Estimates. For F2Q, we are introducing revenue and non-GAAP EPS estimates of $119.0 mil and $0.04, respectively. For FY17, we are introducing revenue and EPS estimates of $492.3 mil and $0.17. For FY18, we are introducing revenue and EPS estimates of $612.2 mil and $0.36. Please see the table to the left for our GAAP estimates. • RNG's F2Q and FY17 guidance (as of April 25). For 2Q, the company expects revenue of $117 mil to $119 mil (consensus: $118.1 mil), software revenue of $108.5 mil to $109.5 mil (consensus: $109.1 mil), operating margin of 2.0% to 2.5% (implied operating income of $2.7 mil at midpoint vs consensus of $2.6 mil) and EPS of $0.02 to $0.04 (consensus: $0.03). For FY17, the company expects revenue of $486 mil to $494 mil (consensus: $489.9 mil), software revenue of $450 mil to $456 mil (consensus: $452.8 mil), operating margin of 2.5% to 3.0% (implied operating income of $13.5 mil at midpoint, in line with consensus) and EPS of $0.14 to $0.18 (consensus: $0.16). • Striking the balance between healthy growth and ramping profitability. RNG has reliably delivered >30% revenue growth and improving margins even as the business has more than doubled from 2013 to 2016. In our opinion, the more balanced approach should be appealing to investors and we think RNG can continue to deliver healthy subscription revenue growth (28% in 2017, 25% in 2018) while driving additional margin expansion. We believe the large TAM (~$25 billion in North America alone), further share gains with SMB customers, moving upmarket into mid-market and enterprise customers (better unit economics), more channel-driven deals, and expanding globally should allow RNG to reach its ~$1 billion revenue target over the next 4-5 years and with an attractive margin profile. • Moving up market to serve mid-market and enterprise customers. While SMBs were earlier to move to cloud-based communications, we believe mid-market and enterprise customers are earlier in the transition. In our opinion, the timing works out well for RNG, as the company's product, channel strategy, and go-to-market model are more capable of serving this segment of the market now than in previous years. RNG estimates the mid-market (~$7 billion) and enterprise (~$8 billion) represent a ~$15 billion revenue opportunity in the U.S. alone. RNG's mid-market and enterprise ARR of ~$115 million was up 86% YoY as of 1Q17, significantly outpacing overall ARR growth of 32%. We expect the push upstream to be the biggest driver of subscription revenue growth over the next few years. • Avaya bankruptcy should continue to be a tailwind. In January 2017, Avaya, one of RNG's biggest legacy competitors, filed for chapter 11 bankruptcy. In an April 2017 8-K, Avaya forecasted >$500 million of product revenue churning off over the next five years from its Unified Communications business segment. We think RNG stands to benefit significantly from customers leaving Avaya. RNG noted on its 1Q17 conference call that this disruption had a positive impact on results and we expect Avaya's struggles to be the gift that keeps on giving. RNG has been able to bolster its own talent pool by hiring executives away from Avaya (including two executives in June 2016 and another one more recently in May 2017). We think the disruption at Avaya, the concern it is likely to drive for its customers, and having seasoned talent with experience targeting larger customers should all provide a tailwind for RNG's overall business and particularly its push into the mid-market and enterprise. Source: Company presentations, filings and Stephens estimates. 22

  23. RingCentral (RNG) – Earnings Model 23

  24. salesforce.com (CRM) – Overweight (Vol) – $100 PT • Investment Thesis: F1Q results beat consensus expectations across the board (see below). Salesforce noted that some of the company’s largest transactions ever closed in F1Q, which combined with healthy overall demand, helped drive the performance. Relative to our model, Sales and Platform revenue was better than expected, but Service Cloud revenue came in slightly lower. While FX helped, we were particularly encouraged by the continued acceleration of Sales Cloud revenue growth, as this remains Saleforce’s biggest business. The F2Q rev/EPS outlook and the FY18 revenue guidance were also above consensus, suggesting business momentum remains healthy. We were somewhat surprised the margin outlook was not increased given the F1Q upside and FX moving in a favorable direction, but we think this was Salesforce choosing to save dry powder for re-investing or delivering better margins later this year. • Price Target / Valuation: CRM currently trades at a 23x EV/FCF multiple using our CY18 estimates. Our $100 price target uses a 27x EV/FCF valuation multiple, which we believe appropriately factors in CRM's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 24

  25. salesforce.com (CRM) – Key Points • Solid F1Q results. Revenue of $2.39 bil beat consensus of $2.35 bil and billings of $1.89 bil beat consensus of $1.75 bil. Subscription revenue of $2.20 bil (consensus: $2.17 bil) led to the upside with PS revenue of $186.7 mil also beating consensus of $183.4 mil. Gross margin of 75.9% beat our estimate of 75.2% as PS costs came in well below our estimate. Operating margin of 13.3% and PF EPS of $0.28 both beat consensus of 12.7% and $0.26, respectively. • Updated Guidance. For F2Q, the company guided for revenue of $2.51 bil to $2.52 bil (consensus: $2.48 bil), EPS of $0.31 to $0.32 (consensus: $0.31) and implied billings of ~$2.14 bil at the midpoint based on DR growth of ~22% (consensus: $2.23 bil). While the implied billings guidance for F2Q was below consensus, we note this is primarily a function of the F1Q upside, as the expected DR growth rate for F2Q was in line with our estimate (same story as last quarter). For FY18, management raised its guidance for revenue and EPS and now expects revenue of $10.25 bil to $10.30 bil (consensus: $10.18 bil; prior guidance: $10.15-$10.20 bil) and EPS of $1.28 to $1.30 (consensus: $1.29; prior guidance: $1.27-$1.29). Guidance for operating cash flow growth of 20% to 21% and OM expansion of 125-150 bps was unchanged. FY revenue guidance now assumes a $50-$100 mil FX headwind (previously $125-$150 mil). • Growth across clouds. CRM continues to see solid contributions across its Clouds with particular strength from Sales Cloud ($829.6 mil; +14% YoY), which had growth accelerate from F4Q due to strong adoption of CPQ (Steelbrick) and large core SFA deals (notably: an expanded relationship at Visa). Service Cloud growth slowed faster than our expectations as revenue came in at $651.2 mil (+21% YoY). Platform Cloud and Other grew 32% YoY to $431.1 mil and Marketing Cloud grew to $289.0 mil (+32% YoY ex-Demandware). Commerce Cloud contributed $57 mil in total revenue and $46 mil in subscription and support revenue, and processed over $4 bil in GMV during the quarter (+31% YoY). • International momentum remains strong. Strong contributions from EMEA (+29% CC, +25% YoY) and APAC (+26% CC, +27% YOY) helped drive revenue upside during F1Q. Notable international wins include Softbank and Mizuno in Japan, where CRM recently built a second data center, and an expansion at AMP Wealth Management in Australia where CRM is now leveraging AWS. In the Americas, revenue grew 24% YoY as CRM expanded relationships with several large US companies including 21st Century Fox (20K seat deployment of Quip) and saw particular strength in the public sector with expansions by the U.S. Army and U.S. Air Force and a win with the state of Florida. The company also noted a win with an iconic tech brand which it expects to announce in the coming weeks. • Balance Sheet. The company ended F1Q with $3.22 bil in cash and marketable securities and $1.82 bil in debt. Total DR came in at $5.04 bil (+27% CC, +26% YoY) while unbilled DR grew to $9.6 bil (including $450 mil from DWRE). Operating cash flow of $1.23 bil and free cash flow of $1.07 bil both beat our estimates despite higher than expected capital expenditures. Source: Company presentations, filings and Stephens estimates. 25

  26. salesforce.com (CRM) – Earnings Model 26

  27. Shopify (SHOP) – Equal-Weight (Vol) – $97 PT • Investment Thesis: We are initiating coverage of Shopify Inc. with an Equal-Weight (Vol.) rating and an $97 PT. SHOP has established itself as the go-to e-commerce platform for SMBs and mid-sized merchants, which positions it well to take share in a $12.5 billion addressable market and post strong growth. We expect SHOP to rapidly grow its merchant base and the GMV processed on its platform, cross-sell services to its existing base and increase the overall take rate, which should result in healthy Subscription and Merchant Solutions revenue growth. As the business scales, profitability and cash flow should expand as well. While we believe SHOP can scale revenue and margins faster than expected, shares already reflect a deserved premium. A pullback could make us more constructive. • Price Target / Valuation: SHOP currently trades at an 8.5x EV/revenue multiple based on our 2018 estimate. Our $97 price target uses an 9.0x multiple, which we believe appropriately factors in SHOP's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 27

  28. Shopify (SHOP) – Key Points • SHOP established as the go-to e-commerce platform for SMBs. SHOP’s e-commerce platform reduces the time and investment to launch an online store and makes it easier for merchants to focus on growing their business, which has led 400,000-plus merchants to adopt SHOP. We believe SHOP will continue to rapidly grow its merchant base and the GMV processed on its platform, as the high-end functionality, ease of use, the portfolio of Merchant Solutions, the expanding ecosystem of partners, and the pricing model all make SHOP the go-to solution for SMBs and mid-market merchants. Macro trends should also be tailwinds—e-commerce dramatically outgrowing brick-and-mortar sales and merchants wanting to deliver a consistent experience to customers across multiple channels. We estimate revenue will grow 63% in 2017 and 46% in 2018 to $633.4 million and $924.2 million, respectively. • Large TAM should support robust growth. SHOP estimates that its core geographies include ~10 million merchants. Using an average annual revenue per merchant of $1,250 would suggest SHOP's core TAM would be about $12.5 billion. Including the estimated ~47 million merchants globally would expand the TAM to ~$59 billion. The large market opportunity has supported robust revenue growth for SHOP--a 98% CAGR from 2013-2016 to reach $389 million in 2016. We believe SHOP gaining market share and the TAM expanding will fuel many more years of top-line growth. • SHOP Plus gaining traction with larger merchants. SHOP Plus was launched in early 2014 as a platform that could meet the needs of high-volume merchants and larger businesses. While the ~2,500 Plus merchants only represent a small fraction of the overall base, merchants on Advanced or Plus plans account for more than 50% of the overall gross merchandise volume (GMV) transacted on the platform. We believe product enhancements and the launch of a dedicated partner program for Plus led to accelerating adoption in 2016 and we expect further gains with larger merchants. We believe success here will play a key role in sustaining healthy GMV growth and in ensuring customers do not "outgrow" SHOP and move to a new platform as they scale. • Merchant Solutions add value for customers, increase revenue opportunity for SHOP. SHOP offers a range of Merchant Solutions (Capital, Payments, P.O.S., Shipping) that merchants need to run their business. For merchants, using these services can lower costs, reduce the number of vendors to deal with, better streamline workflows, and drive more value from the overall platform. SHOP benefits by better monetizing its customer base (reflected in the increases of the take rate) and by driving retention higher (the more entrenched customers are, the less likely they are to leave). Merchants have most widely adopted Payments (launched in 2013), which has been the biggest driver of Merchant Solutions revenue growth and overall revenue growth, but we expect the others to layer on additional revenue. Source: Company presentations, filings and Stephens estimates. 28

  29. Shopify (SHOP) – Earnings Model 29

  30. Synchronoss Technologies (SNCR) – Suspended • Investment Thesis: We are suspending our Overweight (Vol.) rating, estimates and price target for Synchronoss given the lack of visibility into 1Q financials, 2017 guidance, and the strategic direction. Earlier this morning, SNCR announced that 1Q results would come in below its previous guidance (details below). SNCR will provide full 1Q results, 2017 guidance and a strategic update on May 9th. The company also announced founder and Chairman of the Board, Steven Waldis, will return to the role of CEO while SNCR's former CFO, Lawrence Irving (2001-2014), will return to the company in that role. Ron Hovsepian, CEO, and John Frederick, CFO, will both be leaving SNCR. Given Mr. Hovsepian joined SNCR in Jan 2017 as part of the IntraLinks acquisition and was supposed to lead “Synchronoss 3.0”, we were very surprised by today's announcements and have limited confidence in the company's financials and ability to execute in the near term. • Price Target / Valuation: Suspended Source: FactSet Research Systems , company filings and Stephens estimates. 30

  31. Synchronoss Technologies (SNCR) – Key Points • SNCR expects revenue, operating margin to be below guidance. The company expects revenue to fall $13 mil. to $14 mil. short of its prior guidance and operating margin to be in the 8% to 10% range. For 1Q, the company previously guided for revenue of $173 mil. to $178 mil., operating margin of 18% to 20% and PF EPS of $0.39 to $0.43. The company noted that the final numbers for 1Q are still under review. • 2017 guidance likely to be reduced. The company also stated in the release that the 1Q shortfall would impact 2017 guidance, but did not provide additional details. For 2017, the company previously guided for revenue of $810 mil. to $820 mil., operating margin of 25% to 27% and PF EPS of $2.45 to $2.60. In our opinion, it is fair to assume that the outlook for all of these metrics will be lowered. SNCR stated it expects to generate strong cash flow, as it will manage expenses in line with revenue. • May 9th conference call could provide more clarity. Over the last five months, SNCR has divested its primary legacy business (Activation Services), bet the farm on another large business (IntraLinks), re-classified revenue without making it clear to investors and then providing some details well after the fact, flip flopped CEOs, lost/fired two CFOs, and underperformed against implied expectations and consensus estimates. All of these actions have resulted in significantly more questions than answers about the future of the business. We hope to get more clarity when the leadership team reports final 1Q results on May 9th around the strategic direction of the company, the different buckets of revenue, the operating model, additional changes to management, and the integration of IntraLinks. Until at least then, we cannot provide reasonable forward estimates or a value to the business beyond a speculative sum of the parts based on uncertain assumptions. Source: Company presentations, filings and Stephens estimates. 31

  32. Synchronoss Technologies (SNCR) – Earnings Model Model Currently Unavailable 32

  33. Ultimate Software (ULTI) – Equal-Weight (Vol) – $215 PT • Investment Thesis: ULTI reported solid F1Q results, as recurring revenue, margins, and EPS modestly beat consensus expectations (more details below). The company highlighted high customer interest in new and existing products, a healthy pipeline, a strong performance by sales, and high customer retention as factors that positively contributed to 1Q and that provides confidence for the year. ULTI reiterated its prior 2017 guidance too. Despite this, we have concerns due to the underwhelming 2Q recurring revenue guidance (requires an aggressive 2H acceleration to hit FY17 #'s), the operating cost trends, the rare dip in the customer retention rate (attributed to a mix shift favoring strategic/mid-market customers), and a tougher competitive environment. We think the slowing recurring revenue growth profile and limited margin expansion will lead shares to be range-bound near current levels. • Price Target / Valuation: ULTI currently trades at ~5.4x EV/revenue multiple (based on our 2018 estimates). Our $215 price target uses a ~5.5x multiple, which we believe appropriately factors in ULTI's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 33

  34. Ultimate Software (ULTI) – Key Points • Solid 1Q results. Total revenue of $228.5 mil slightly missed consensus of $228.9 mil due to services revenue of $38.5 mil missing consensus of $39.9 mil, but recurring revenue of $190.0 mil beat consensus of $189.0 mil. The lower than expected mix of service revenue positively impacted gross margin, which came in slightly above consensus. Operating margin of 16.5% beat consensus of 16.1% due to lower than expected labor costs and benefits-related expenses. Non-GAAP EPS of $0.75 also beat consensus of $0.73. Operating margin when adjusting for capitalized software development costs and related amortization decreased to 11.8% from 15.6% in 1Q16. • Retention ticking down a yellow flag, but likely explained by push down stream. The company's annualized, rolling 12-month customer retention rate ticked down to 96% from 97% in 4Q16 and 1Q16. Management attributed this to a greater proportion of revenues coming from mid-market and strategic customers (~60% of client base), which tend to have lower retention rates than enterprise customers. Customer retention has historically been ~96% and the company noted enterprise customer retention was in the high-90s (97%-98%), which is very solid in our opinion. We believe retention will be important to keep an eye on, as erosion could pressure growth and margins. • 2Q guidance disappointing, FY17 unchanged. Management guided for 2Q total revenue of $228 mil (consensus: $231.5 mil), recurring revenue of $196 mil (consensus: $197.6 mil) and operating margin of ~20%. For FY17, the company maintained its prior guidance for revenue growth of ~24%, recurring revenue growth in excess of 25% and operating margin of ~21%. While ULTI has a strong track record of delivering on guidance and has high visibility into recurring revenue guidance, we would note hitting the targets requires significant acceleration on the top line and meaningful margin leverage. The company attributed the seasonality to the timing of customer go-lives and headcount investments. • No plans to add to sales capacity in 2017. The company ended 1Q with "around 120" quota-carrying reps, similar to the end of 2016. As previously stated, ULTI does not plan to add more reps in 2017 but will increase rep headcount by 15%-20% in January 2018. While ULTI has always had a very productive sales force, we are concerned that an expanded product portfolio and a wider target market of customers could strain the existing sales organization. The capacity increase plans for 2018 do give us more confidence for next year's targets. • Balance Sheet. The company ended 1Q with $88.2 mil in cash and marketable securities, down $9.7 mil sequentially. Operating cash flow of $46.3 mil and free cash flow of $23.6 mil both beat consensus expectations for $38.1 mil and $21.7 mil, respectively. ULTI ended 1Q with 3,872 employees and over 33 million people records in its cloud. Source: Company presentations, filings and Stephens estimates. 34

  35. Ultimate Software (ULTI) – Earnings Model 35

  36. Wix.com (WIX) – Equal-Weight (Vol) – $84 PT • Investment Thesis: WIX reported strong 1Q results, as revenue and collections beat estimates and 2017 guidance was raised well above consensus. (in-depth recap: Strong Revenue, Collections, & FCF Upside Paired With A Rare Profitability Miss). In this note, we focus on our takeaways from WIX's investor Q&A held earlier today and our revised estimates (increased revenue and collections estimates for 2017 and 2018, trimmed EPS a hair). Two items were worth highlighting in particular to us: 1) WIX's implied ACPS for forecasting future collections appears to have increased; and 2) how collections upside in any given period can weigh on short-term profitability. We maintain our Equal-Weight (Vol.) rating and we are raising our price target to $84 (25x EV/2019 FCF using a 58 million share count). • Price Target / Valuation: WIX currently trades at a 22x EV/FCF multiple (based on 2019 estimates). Our $84 price target uses a 25x multiple, which we believe appropriately factors in WIX's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 36

  37. Wix.com (WIX) – Key Points • Strong 1Q top-line results; rare EPS miss likely due to seasonality of fixed expenses. Both revenue (+50% YoY) and collections growth (+51% YoY) accelerated in 1Q. We believe the formula for success was similar to the past few quarters—enhancements to the core editor, ADI, and branding and marketing activities drove solid YoY premium subscription growth while higher adoption of vertical applications, renewal activity, and app store purchases drove healthy ACPS growth. Operating margin and EPS missed consensus, but FCF beat ($14.8 mil-A; $7.3 mil-consensus). 1Q17 was only the second time WIX has missed EPS expectations since becoming a public company (14 quarters). Higher hosting and domain registration costs than we expected pressured gross margin (84.5%-A; 85.5%-Stephens). WIX also increased headcount much more in 1Q than in the past and had some additional overhead costs, which drove G&A ($7.4 mil-A; $6.0 mil-Stephens) well above our estimate. On the whole, we see the costs above our expectations in 1Q as the price of growing the company and the user and subscription base faster than expected over the last few years. We are confident that WIX can drive leverage on these fixed costs and still drive significant margin expansion. To that end, S&M as a % of collections was in line with our forecast, while R&D as a % of collections was much lower, both reflecting good cost discipline. • Total registered user growth impressive. WIX added ~5.9 mil registered users (vs. ~5.5 mil-Stephens) to bring total users to 103.2 mil, up 25% YoY. Premium subscriptions increased by 208k (vs. 229k-Stephens) and now totals 2.7 mil, up 38% YoY. We believe the month-to-month mix-shift (65%-annual, 35%-MTM vs. 70%-30% mix in 4Q) led to higher churn than we modeled, which led to the shortfall relative to our estimate. The conversion rate for new subscriptions from new registered users (~3.0%) was slightly lower than we expected (~3.2%), but up nicely YoY (~2.4% in 1Q16). We believe the upside in registered users likely resulted in the difference in the conversion rate relative to our model, as the number of gross new premium subscriptions from the 1Q cohort (+178.7k) beat our estimate (+176.0k). • 2Q guided above consensus; FY guidance raised. For 2Q, management guided for revenue of $101 mil to $102 mil (consensus: $99.7 mil) and collections of $116 mil to $117 mil (consensus: $111.6 mil). For FY17, management guided for revenue of $421 mil to $423 mil (prior guidance: $417-$419 mil; consensus: $416.3 mil), free cash flow of $67 mil to $68 mil (prior guidance: $63-$64 mil; consensus: $66.8 mil) and collections of $473 mil to $477 mil (prior guidance: $461-$467 mil; consensus: $464.3 mil). The company expects to invest ~$8 mil into DeviantArt in 2017 (as previously guided) and as much as $20 mil over the next few years with expected breakeven in 2019. • ACPS posts double-digit YoY growth. While WIX does not guide to average collection per subscription (ACPS) or disclose the metric for the full base, we estimate it grew 21% YoY in 1Q based on our methodology vs. our prior 10% estimate. For new annual subscriptions in U.S. only, WIX reported ACPS growth of 11% YoY in 1Q to $156. Part of the difference between our calculation for ACPS versus the metric provided by WIX is that we account for monthly contracts and the impact of annual renewals. The company noted that the percentage of new users adopting a vertical application doubled over 1Q16, led by e-commerce, which increased to 357k subs (+25k in 1Q) and represented 12% of net new premium subscriptions, as well as Wix Bookings. We attribute the solid ACPS growth to vertical app adoption, renewals, less discounting and a mix-shift favoring monthly contracts. • Strong growth across geographies. North America saw CC revenue growth accelerate for the 4th consecutive quarter, representing >50% of total revenue and +53% CC YoY. Europe (+48% CC YoY) and Latin America (+37% CC YoY) also saw growth accelerate from 4Q while Asia & Other grew at an impressive +53% CC YoY. • Balance Sheet. The company ended 1Q with $164.7 mil in cash and marketable securities, down $7.6 mil sequentially, and $1.2 mil of LT debt. Total DR grew to $181.7 mil, up $25 mil sequentially and +53% YoY. Operating cash flow of $16.4 mil and free cash flow of $14.8 mil ($17.5 mil if excluding DeviantArt acquisition costs) were both above consensus expectations. Source: Company presentations, filings and Stephens estimates. 37

  38. Wix.com (WIX) – Earnings Model 38

  39. Workday (WDAY) – Equal-Weight (Vol) – $100 PT • Investment Thesis: Workday reported F1Q results on 6/1, beating consensus expectations for revenue, billings, margins and EPS (see below for details). To account for the strong results and the better-than-expected guidance, we are raising our estimates for FY18 and FY19. Beyond the financial metrics, we found a couple of things worth highlighting from the quarter and the 10-Q filed on 6/2 after the close: 1) adoption of Learning has taken off and 2) the company has made having one or more customers in production on AWS and five or more customers in production on Workday Prism Analytics an official objective in its performance RSU award agreement. Overall, we found Workday’s F1Q impressive and believe the stock reflects a well-deserved premium valuation. • Price Target / Valuation: WDAY currently trades at an 8.4x EV/revenue multiple using our CY18 estimates. Our price target of $100 uses an 8.0x EV/revenue multiple, which we believe appropriately factors WDAY's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 39

  40. Workday (WDAY) – Key Points • Solid F1Q results. Revenue of $479.9 mil beat consensus of $468.0 mil and billings of $458.6 mil beat consensus of $456.6 mil. Subscription and support revenue of $399.7 mil (consensus: $392.7 mil) and PS revenue of $80.1 mil (consensus: $75.3 mil) both contributed to the upside with subscription revenue posting its third consecutive quarter of accelerating growth and its largest quarterly beat (on % basis) since F2Q15. F1Q also had the strongest growth in net new ACV in the past three years driven by strong sales execution and continued international expansion (+58% YoY revenue growth). Gross margin of 74.7% beat our estimate of 74.3% and increased from 71.8% in F1Q17. Operating margin of 12.7% (consensus: 8.1%) and EPS of $0.29 (consensus: $0.16) were both above consensus expectations and benefited from improvements in gross margin and lower than expected overall spend. • Adoption improving across non-core HR offerings; Learning particularly strong. WDAY noted more than 165 customers are now using Learning. We find this impressive, as it went from 19 customers as of September 2016 (data provided at Rising 2016), or ~1% of the installed base, to almost ~10% of the installed base as of April 2017 (based on Stephens estimate of ~1,650 total customers). WDAY also added 29 core financials customers in F1Q, up from 25 net adds in F1Q17. The company noted the majority of customers were net new to WDAY. The company pointed to the expanded set of offerings, improved sales execution and CFOs' increasing comfort with financials in the cloud as helping to drive platform adoption, especially at the mid-enterprise level. The company also saw strong adoption of Planning, which now has over 140 customers (vs. ~50 around Rising). • Prism - this time analytics seems to matter more. While the company's first foray into analytics with its Insight Applications was of mixed success, we think the company views Prism as a game-changer and is making a much bigger bet on the new analytics platform. To that end, the company made having one or more customers in production on AWS and five or more customers in production on Prism Analytics an official objective in its performance RSU award agreement (included in the 6/2 10-Q filing). Prism analytics will be available this fall in WDAY 29. • F2Q guidance. The company guided for revenue of $505 mil to $508 mil (consensus: $491.3 mil), subscription revenue of $420 mil to $423 mil (consensus: $411.5 mil) and PS revenue of ~$85 mil (consensus: $79.4 mil). Operating margin is expected to be 6-7% (consensus: 4.9%), declining sequentially due to seasonality related to the annual employee compensation cycle. OCF is expected to be negative in F2Q which is the company’s weakest quarter in terms of cash collection. • Raised FY18 outlook. The company guided for subscription revenue of $1.705 bil to $1.720 bil, (previous: $1.68-$1.70 bil; consensus: $1.70 bil), total revenue of $2.038 bil to $2.053 bil (previous: $2.005-$2.025 bil; consensus: $2.022 bil) and PS revenue of ~$333 mil (consensus: $325.1 mil). Subscription revenue is expected to grow ~3% sequentially in F3Q and ~5% in F4Q, reflecting the increasing seasonality of the business. OCF guidance was left unchanged at ~$420 mil (consensus: $425.6 mil) and operating margin is now expected to be 6-7% (previous: 5-6%; consensus: 5.7%). Management expects operating margin to be weakest in F3Q (~4% OM) due to headcount growth and seasonal marketing spend with sequential improvement in F4Q. GAAP margins should be ~25-27% lower in each remaining quarter and for the FY18. • New Metrics. Management provided investors two new metrics to help evaluate its business under the new ASC 606 guidelines: 1) subscription revenue backlog (all future revenue from existing subscription contracts regardless of billing terms) and 2) subscription revenue from unearned backlog (subscription revenue related to the prior quarter’s unearned subscription revenue balance). WDAY ended F1Q with subscription revenue backlog of ~$4.0 bil (~$3.8 bil in F4Q) with ~two-thirds of that backlog recognizable within the next two years. Subscription revenue from the balance sheet was $361 mil (~90% of sub revenue) and increased from $251 in F1Q17. • *Published model, forward estimates reflect WDAY's adoption of ASC 606 and restatements for FY16 and FY17. This may not match the reported financials in this note for F4Q, as we compare to pre-ASC 606 adoption for an accurate comparison relative to consensus and WDAY's guidance. Pre-FY16 financials in our model do not reflect the adoption of ASC 606. • ** Represents Stephens Research estimates Source: Company presentations, filings and Stephens estimates. 40

  41. Workday (WDAY) – Earnings Model Pre-FY16 financials in our model do not reflect the adoption of ASC 606 and as a result YoY growth rates have been removed 41

  42. Zendesk (ZEN) – Equal-Weight (Vol) – $27 PT • Investment Thesis: ZEN’s 1Q financial results beat consensus expectations across the board, albeit modestly. We found the margin and FCF upside the most positive. The KPIs were underwhelming, as Support customer net adds were down YoY and both enterprise MRR and DBNE were flat QoQ. The company also guided below consensus for 2Q revenue, but raised the lower bound of its 2017 guidance, which suggests we (and the Street) may have underestimated the increasing seasonality favoring the back half of the year. We believe the good, but not great, start to the year also likely factored into the outlook. While we have concerns around ZEN’s ability to hit the 2020 $1 billion revenue target (the valuation suggests we may not be alone), we will use the updates ZEN provides at its May 15th analyst day to re-asses our long-term outlook. • Price Target / Valuation: ZEN currently trades at a 5.0x EV/revenue multiple (based on 2018 estimate). Our $27 price target uses a 4.5x multiple, which we believe appropriately factors in ZEN's growth, profitability, market opportunity, customer base profile, and risk factors. Source: FactSet Research Systems , company filings and Stephens estimates. 42

  43. Zendesk (ZEN) – Key Points • Solid 1Q results. Revenue of $93.0 mil slightly beat consensus of $92.5 mil due to strong SMB interest and a pickup in transactional business towards the end of the quarter. Gross margin ticked lower in 1Q to 73.6% (down from 74.8% in 4Q) as ZEN has been investing in its cloud infrastructure. Operating margin of (5.6%) and EPS of ($0.05) both beat consensus for (6.8%) and ($0.06), respectively. • 2Q guidance below consensus; FY17 revenue guide increased at lower range. For 2Q, management guided for total revenue of $98 mil to $100 mil (consensus: $99.8 mil) and non-GAAP operating loss of $5 mil to $7 mil (consensus: $5.1 mil loss). For FY17, management raised the lower bound of revenue guidance and now expects $417 mil to $425 mil (consensus: $420.1 mil; prior guidance: $415-$425 mil), and maintained its guidance for an operating loss of $16 mil to $20 mil (consensus: $17.7 mil loss). Operating and free cash flow are still expected to be positive for the year. • KPIs underwhelming, but stable. The company ended 1Q with 34% of MRR from 100+ seat accounts and a 115% DBNE, both unchanged from 4Q. The number of deals with >$50,000 in ACV grew 35%+ (vs. 50%+ growth in 1Q16). Management attributed the slower enterprise momentum in 1Q to increased business seasonality, which makes sense given the upstream push. We think competition upstream is stiffer as well. The company expects the investments in the cloud architecture and new product launches this year to help increase enterprise penetration. • Disappointing customer growth. The company added 7,500 paid accounts in the quarter, bringing total customer accounts to 101,800 (+33% YoY). This consists of 54,900 Support accounts (+38% YoY), 44,000 Chat accounts (+23% YoY) and 2,900 accounts using other products (+700 net new). Overall, we found customer growth disappointing, as ZEN added just 4,100 net new Support accounts, down 2% YoY, and 7,500 net new paid total customer accounts, up just 3% YoY. We think the comp could have been tougher in 1Q16 for Support accounts due to the introduction of the Essential plan in late 2015, hence we will wait to see if this normalizes going forward. • Acquisition of Outbound. Zendesk announced that it acquired Outbound, an automated messaging company, at the end April. The company plans to integrate Outbound with its Zendesk Connect product (currently in an EAP) and does not expect the acquisition to materially impact 2017 revenue or non-GAAP operating loss. • Balance Sheet. The company ended 1Q with $316 mil in cash and marketable securities, up $16 mil sequentially. Operating cash flow of $7.1 mil and free cash flow of $0.5 mil both beat consensus expectations of $6.3 mil and a loss of $0.8 mil, respectively. • Zendesk will host an Investor Day in San Francisco on 5/15. We expect more details on: 1) timeline for upcoming product releases, 2) ZEN’s multi-product strategy and cross-sell potential, 3) Outbound acquisition, and 4) update on LT model and TAM. Source: Company presentations, filings and Stephens estimates. 43

  44. Zendesk (ZEN) – Earnings Model 44

  45. Companies Mentioned Public Companies: Private & Foreign Companies: Other than those in the valuation table on page 4 Accel Partners Avaya Cvent ESW Capital Genesys Halogen Software Hrchitect Infoblox Jive Software Qlik Technologies Saba Software Sequential Technology International Square 2 Marketing Thoma Bravo Vista Equity Source: FactSet Research Systems. 45

  46. Disclosures REQUIRED DISCLOSURES The research analyst principally responsible for preparation of this presentation has received compensation that is based on the firm’s overall revenue which includes investment banking revenue. Rating Definitions: Company Stock Ratings: OVERWEIGHT (O) – The stock’s total return is expected to be greater than the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. EQUAL-WEIGHT (E) – The stock’s total return is expected to be equivalent to the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. UNDERWEIGHT (U) – The stock’s total return is expected to be less than the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. VOLATILE (V) – The stock’s price volatility is potentially higher than that of the company’s industry sector. The company stock ratings may reflect the analyst’s subjective assessment of risk factors that could impact the company’s business. Distribution of Stephens Inc.'s Ratings (as of 3/31/17) % Investment Banking Clients Rating %(Past 12 Months) BUY 54 28 HOLD 44 14 SELL 2 0 _____________________________________________________________________________________________________________________________________________________ OTHER DISCLOSURES Certain investment programs offered by Stephens to clients sometimes engage in purchases or sales of securities that are consistent or inconsistent with Research Analyst recommendations. These programs are managed on a discretionary basis, or provide investment recommendations, by program managers in the exercise of their independent judgment and analysis. Stephens’ directors, officers and employees are allowed to participate in these programs subject to established account minimums and applicable compliance restrictions. This presentation has been prepared solely for informative purposes as of its stated date and is not a solicitation, or an offer, to buy or sell any security. It does not purport to be a complete description of the securities, markets or developments referred to in the material. Information included in the presentation was obtained from internal and external sources which we consider reliable, but we have not independently verified such information and do not guarantee that it is accurate or complete. Such information is believed to be accurate on the date of issuance of the presentation, and all expressions of opinion apply on the date of issuance of the presentation. No subsequent publication or distribution of this presentation shall mean or imply that any such information or opinion remains current at any time after the stated date of the presentation. We do not undertake to advise you of any changes in any such information or opinion. Prices, yields, and availability are subject to change with the market. Nothing in this presentation is intended, or should be construed, as legal, accounting, regulatory or tax advice. Any discussion of tax attributes is provided for informational purposes only, and each investor should consult his/her/its own tax advisors regarding any and all tax implications or tax consequences of any investment in securities discussed in this presentation. Please note that we provide supplemental news and analysis in Quick Takes blogs available to clients on our website. If applicable, when reading research on Business Development Companies, you should consider carefully the investment objectives, charges, risks, fees and expenses of the investment company before investing. The prospectus, and, if available, the summary prospectus, contain this and other information about the investment company. You can obtain a current prospectus, and, if available, a summary prospectus, by calling your financial consultant. Please read the prospectus, and, if available, the summary prospectus, carefully before investing as it contains information about the previous referenced factors and other important information. Also, please note other reports filed with the Securities and Exchange Commission by the relevant investment company at www.sec.gov . Please also note that the presentation may include one or more links to external or third-party websites. Stephens Inc. has not independently verified the information contained on such websites and can provide no assurance as to the reliability of such information, and there can be no assurance that any opinions expressed on such websites reflect the opinions of Stephens Inc. or its management. Additional information available upon request. © 2017 Stephens Inc. 111 Center Street        Little Rock, AR 72201       501-377-2000       800-643 9691        stephens.com        Member NYSE, SIPC  46

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