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Qlik Technologies (QLIK)

December 10, 2014

Initiate at OUTPERFORM and $37 PT; Room For Another


Data Discovery Innovator to Thrive
We are initiating coverage of QLIK with an OUTPERFORM rating and 12-month
target price of $37. QLIK is a pioneer in data discovery analytics and has a major
head start over legacy business intelligence (BI) vendors in the transition to selfservice and visual analytics as data volumes grow exponentially. We think the
rapidly-growing market for data discovery tools will be big enough to support good
performance from both Tableau (DATA, OUTPERFORM) and QLIK. Spending on
data discovery software is still only around 5% of total BI spending of $14B+, giving
this category ample room to grow its share of enterprise spending on analytics.
We expect QLIKs new products and roadmap can stabilize and then
accelerate license growth by late next year. QLIK has responded to DATAs
success by creating a next-generation toolset that takes QLIK beyond guided
analytics curated by IT into the self-service visualization space. We dont think
Sense will dent DATAs momentum in self-service visualization, but it can help
improve QLIKs growth trajectory, as a simpler and more attractive interface
improves QLIKs lead generation and its ability to win deals against BI majors. In
addition, Senses open application programming interfaces (APIs) could open the
data discovery category to a population of roughly 10M web developers at partners
and end customers.
Given our outlook for revenue acceleration from new products by late next
year, we expect share price appreciation based on expanding EV/ revenue
multiples and a growing top line. In our experience, a forward EV/ revenue
multiple of 4X is relatively inexpensive for a software company with several years or
more of robust new business growth potential. In addition, QLIKs popular QlikView
technology for guided analytics, coupled with its modern Qlik Sense architecture
could make the company an attractive acquisition target, should it choose to sell
itself. Although QLIK looks expensive on a P/E basis at 90x our CY15 estimates of
$0.34, we think this fairly reflects QLIKs margin expansion potential as it rights its
execution.
Our target price is based on a relative EV/ revenue valuation and a DCF
analysis. Investment risks include competition from DATA, potential lack of market
traction for Qlik Sense, the potential for improved products from BI majors, and the
possibility of poor execution by QLIK.
FYE Dec

2013A

REV (M)

ACTUAL

CURR.

2014E

Q1 Mar
Q2 Jun
Q3 Sep
Q4 Dec
Year*
Change

$97A
108A
104A
162A
$470A
21.1%

$111A
132A
131A
183E
$557E
18.3%

Enterprise Software

2013A

PREV.

ACTUAL

CURR.

Q1 Mar
Q2 Jun
Q3 Sep
Q4 Dec
Year*
P/E
Change

($0.09)A
(0.02)A
0.05A
0.31A
$0.26A
120.3x
(2.4%)

($0.12)A
0.02A
0.01A
0.30E
$0.22E
142.3x
(15.5%)

PREV.

$30.13
Rating

OUTPERFORM
12-Month Price Target

$37
Steve Koenig
(415) 274-6801
steve.koenig@wedbush.com

Company Information
Shares Outst (M)
Market Cap (M)
52-Wk Range
Book Value/sh
Cash/sh
Enterprise Value (M)
LT Debt/Cap

90.1
$2,713.6
$20.17 - $31.55
$2.93
$2.69
$2,471.7
0%

Company Description
Qlik Technologies provides data discovery
solutions that allow users to make more
informed and quicker business decisions.
QlikView provides guided data analytics and
Qlik
Sense
provides
self-service
visualizations in a browser-based interface.

2015E
CONS.

CURR.

---$180E
$554E

$129E
149E
151E
215E
$645E
15.8%

CONS.

CURR.

---0.28E
$0.20E

($0.10)E
0.02E
0.05E
0.37E
$0.34E
90.2x
57.8%

2014E

EPS

Price

PREV.

CONS.

$128E
$148E
$149E
$212E
$638E
2015E
PREV.

CONS.

($0.10)E
0.02E
0.04E
0.38E
$0.34E

Source: Thomson Reuters

Consensus estimates are from Thomson First Call.


* Numbers may not add up due to rounding.

Wedbush Securities does and seeks to do business with companies covered in its research reports. Thus, investors
should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors
should consider this report as only a single factor in making their investment decision. Please see page 33 of this
report for analyst certification and important disclosure information.

Investment Thesis
We are initiating coverage of QLIK with an OUTPERFORM rating and 12-month target price of $37. Our target price is based on
average of our EV/ revenue valuation ($38 based on a 5x EV/ revenue multiple applied to our FY15 estimate) and our 10-year DCF
valuation ($35). Risks to the attainment of our price target include competition from DATA, lack of market adoption of Qlik Sense, the
potential for improved products from BI majors, and poor execution by QLIK.
QLIK is a pioneer in data discovery analytics and has a major head start over legacy business intelligence (BI) vendors in the
transition to self-service and visual BI as data volumes grow exponentially. These data discovery solutions offer significant
functional and technical improvements over legacy BI solutions, including rich visualizations, on-the-fly analysis, flexible manipulation of
data, and rapid performance, all of which allow users to uncover insights previously inaccessible from legacy BI solutions.
We think the rapidly-growing market for data discovery tools will be big enough to support good performance from both
Tableau (DATA, OUTPERFORM) and QLIK. Spending on data discovery software is still only around 5% of total BI spending of
$14B+, giving this category ample room to grow its share of enterprise spending on analytics. The combined license revenue from the
top three data discovery vendors (Tableau, Qlik, and TIBCO) was $553M for CY13 and is expected by Gartner to grow at over 20% per
year through FY18; we believe this segment will see substantial upside to Gartner estimates. In 2013, the sub-segment grew at 33%
Y/Y versus 8% Y/Y for the overall BI market.
We expect QLIKs new products and roadmap can stabilize and then accelerate license growth by late next year. DATA has
blunted QLIKs momentum through its product advantages including ease-of-use and appealing interface and excellent marketing
execution. We believe competition from DATA is the primary factor behind QLIKs license deceleration (from 41% Y/Y growth in FY11
to 13% in FY13), although competitive issues have likely been exacerbated by execution issues as QLIK has transitioned towards more
direct selling without market awareness and lead generation programs on par with DATAs. QLIK has responded to DATAs success in
moving from self-service visualizations into mainstream BI competitions by creating a next-generation toolset that takes QLIK beyond
guided analytics into the self-service visualization space.
We dont think Sense will dent DATAs momentum, as it doesnt look to us to be on par with Tableaus ease-of-use, given its
reliance on scripting and wizards and more limited ability to analyze data sources directly, without importing them into
memory. However, Qlik Sense can help to stabilize QLIKs growth rate, as a free desktop product provides more effective lead
generation, and a simpler and more attractive interface improves QLIKs ability to win deals. We believe Senses JavaScript APIs and
browser-based interface are very differentiated, and could open the data discovery category to a population of roughly 10M web
developers at end customers and QLIK partners; this population is likely larger than the number of analysts and developers creating
applications with traditional BI tools. Early reviews of the product from industry analysts have been favorable, and our customer
conversations at the first Qlik World customer conference in early November indicated good interest in the product from customers.
We see a good probability that QLIKs product renewal could lead to better execution. Although investors have been
understandably concerned that QLIKs introduction of Sense and two-product strategy could cause its base to be reluctant to make
further investments in QlikView, the companys good 3Q execution QLIK saw license revenue grow 24% Y/Y suggests this risk can
be managed, although the evidence is admittedly inconclusive yet. With a differentiated browser-based product in Qlik Sense and an
improved QlikView 12 on the way next year, we dont think its a stretch to expect QLIK to be able to stabilize its license growth at the
low double-digit level and accelerate by at least several points into the mid-teens, as it accelerates its share gains against BI
incumbents.
Given our outlook for revenue acceleration due to Qlik Sense by late FY15 or FY16, we expect QLIK share price appreciation
based on expanding EV/ revenue multiples and a growing top line. In our experience, a forward EV/ revenue multiple of 4X is
relatively inexpensive for a software company with several years or more of good growth potential for new business intake. In addition,
we think QLIKs popular technology for guided analytics, coupled with its modern, web-based Qlik Sense architecture would make the
company an attractive acquisition target, should it choose to sell itself. Although QLIK looks expensive on a P/E basis, we think this
fairly reflects QLIKs margin expansion potential as it rights its execution.

Steve Koenig (415) 274-6801

Qlik Technologies | 2

Bull Case
QLIK Has Upset Incumbent BI Vendors and Looks Poised for Continuing Share Gains
The surge in data volumes and the evolution of BI are helping to drive adoption of guided analytics and self-service
visualization tools. These data discovery solutions offer significant functional and technical improvements over legacy BI solutions,
including rich visualizations, on-the-fly analysis, flexible manipulation of data, and rapid performance, all of which allow users to uncover
insights previously inaccessible from legacy BI solutions. These next-generation solutions seamlessly integrate with essentially all
widely-used data sources, allowing for more access to varying data types as well as correlation of data in diverse formats (including
Hadoop, machine data, and weblogs). More intuitive user interfaces and extensive self-service capabilities allow rapid adoption by
business and technical users. Their modern architectures facilitate easier and less costly deployments, although line-of-business (LoB)
data discovery requirements sometimes dont involve the same level of governance and IT manageability as IT-led BI standardizations,
making the comparison between legacy vendor and next-generation vendor deployments perhaps unfair.
QLIK has grown to be the largest pure-play data discovery vendor by building a better mousetrap than the BI incumbents and
creating a broad partner ecosystem. Although DATA is on the brink of surpassing QLIK in license revenues with its self-service
visualization product, QLIK has made significant inroads in the BI market by providing guided, visual analytics capabilities against large
amounts of data. QLIK has augmented its appeal to enterprises looking to develop custom BI applications by developing a large
ecosystem of 1700 application partners, resellers, and integrators. QLIKs growth has decelerated as DATA has grabbed mindshare
with its direct-connect, self-service tool for end users. However, we think this deceleration may be subsiding as the company rolls out
its innovative web-oriented Sense products, which we believe appeal to web developers and provide end users with better self-service
abilities than does QlikView. Our outlook is for QLIK to stabilize its revenue growth in the high-teens at constant-currency possibly
with some acceleration as soon as FY15 and then for QLIK to continue to outpace the overall BI market (8-9% growth) by a significant
amount.

Qlik Sense is a Potential Catalyst for Revenue Acceleration


Qlik Sense opens up the web developer market to QLIK and puts QLIK on a better competitive footing in the line-of-business
(LoB) market, in our view. QLIK has responded to DATAs success in self-service visualizations by creating a next-generation toolset
that takes QLIK beyond guided analytics into DATAs self-service visualization space. Qlik Sense provides easy-to-use, dynamic
visualizations, browser-based operation (using Qlik Sense Server), and open APIs for web developers. The personal desktop version
of Qlik Sense was made available early in the third quarter as a free download, and the server edition was officially launched on Sept.
17, 2014. Although they share a common in-memory engine, Qlik Sense Server and Qlik Sense Desktop are best understood as two
separate products.

Qlik Sense Desktop is an end-user-oriented tool (not really a developer tool) designed to enable better self-service visualization
capabilities than QlikView. The new product is an improvement over QlikView in terms of out-of-the-box usability, but we dont
think it will be sufficient to blunt DATAs momentum in self-service visualization, due to lack of parity in terms of supporting direct
connections to external data sources and overall simplicity and beauty of the user interface. Also, the product wont likely be
suitable for LoB or enterprise projects of any complexity due to its lack of security, data governance, and mobility support. Given
its zero-cost availability, Qlik Senses simple drag-and-drop features, improved visualizations, and relatively rapid time-to-use may
be sufficient to attract a wide range of trial users, generate awareness, and drive upsell activity to Qlik Sense Server. Also, the
product may help QLIK to protect its base by providing a self-service option from QLIK.

Were fairly optimistic about Qlik Sense Server, which we believe is the first major BI tool to be delivered via a browser. We believe
the product is appealing to JavaScript developers for web projects, a relatively untapped market for BI tools and distinct from the
classic power analyst/ BI developer market. Whereas enterprise BI departments are typically more comfortable with providing
analysts with a protected environment and simple scripting tools, we think many LoBs will be receptive to a tool with open APIs
targeted at JavaScript developers, but still providing enterprise-grade security and manageability. Also, QLIKs move to offer a
consumption-based pricing model in which developers utilize tokens eliminates the misalignment inherent in traditional CPUbased licensing models, which forces customers to make a trade-off between their desire to keep costs down and their need to
deploy it on sufficiently powerful servers. Given the relatively differentiated nature of this product, we think it is likely to see good
uptake in medium-size businesses and larger enterprises for web-based projects.

We think Qlik Sense can stabilize QLIKs growth rate, as a free desktop product provides more effective lead generation, and a simpler
and more attractive interface improves QLIKs ability to win deals. In addition, Senses JavaScript APIs should appeal to a large
population of web developers who need data visualization, including those at end customers and in QLIKs partner ecosystem. We
believe there are roughly 10M web developers globally, including perhaps 5M JavaScript developers, likely higher than the number of
analysts and developers creating applications with traditional BI tools. Early reviews of the product from industry analysts have been
Steve Koenig (415) 274-6801

Qlik Technologies | 3

favorable, and our customer conversations at the first Qlik World customer conference in early November indicated high interest in the
product from customers. Also, we are seeing activity in the web development community to exploit the growing popularity of D3.js, an
open-source JavaScript data visualization library, in conjunction with Qlik Sense, which we view as a promising sign.
We expect QLIKs new products and roadmap can stabilize and then accelerate license growth by late next year. Although
management is reluctant to disclose Qlik Sense sales results understandably so, since the product has only just been released we
believe the company is already seeing some wins with the product, including announced wins at AmerisourceBergen and Colliers
International. Although investors have been understandably concerned that QLIKs introduction of Sense and two-product strategy
could cause its base to be reluctant to make further investments in QlikView, the companys good 3Q execution QLIK saw license
revenue grow 24% Y/Y suggests this risk can be managed, although the evidence is admittedly inconclusive yet. In QlikView 12
(and probably in future versions of Qlik Sense too), QLIK is moving to address one of its primary competitive weaknesses against
Tableau, direct data discovery without having to keep data in memory. We believe its too early to tell how good QLIKs direct
connection functionality will be, but if QLIK can remedy its deficiencies, we think it can help to open up the self-service market for QLIK.
We estimate the market for self-service analytics for the 365M knowledge workers who use only spreadsheets as their analytics tool
could be worth $14B, the same order of magnitude as the traditional BI market. With a differentiated browser-based product (Qlik
Sense Server) and QlikView 12 on the way next year, we dont think its a stretch to expect QLIK to be able to stabilize its license
growth at the low double-digit level and accelerate by at least several points, into the mid-teens.

QLIK Has Many Avenues to Market


QLIK has built out a global sales and marketing infrastructure. QLIK has a broad global footprint: in FY13, QLIK generated 37%
of total revenue from the Americas, 53% from Europe, and 10% from the rest of world. In comparison, close competitor DATA
generated 80% of its total FY13 revenue from North America and 20% from the rest of world. QLIKs global geographic reach and
expansion strategy relies heavily on channel partners to grow sales in new geographic regions. The indirect channel generated 55% of
license and first year maintenance in FY13. The company targets large enterprise with its direct sales force, which serves diamond
accounts with $1B+ in revenue, and 5,000 additional named and territory (mid-market) accounts. The company serves the SMB market
through a low-touch inside sales channel and through 17,000 partners, including solution providers (resellers), original equipment
manufacturers (OEMs), and system integrators. QLIK and its channel partners serve over 33,000 customers in approximately 100
countries from the consumer goods, financial services, pharmaceuticals, retail, manufacturing, technology and healthcare industry
verticals. We think QLIK is relatively well positioned to leverage its global infrastructure
QLIK is improving its ability to execute its land and expand strategy. QLIK targets initial sales at business units and non-IT
teams, and then works to expand deployments, address additional use cases, and proliferate to other business units and geographies
within customer organizations. Ultimately, QLIKs goal is enterprise-wide deployments. Opportunities with the existing customer base
represent approximately 60% to 75% of license and first-year maintenance sales each quarter, and the majority of large deals (>$250K)
come from existing customers. We think QLIK has been fairly successful at engaging and converting prospects, but DATA has
upstaged QLIK through word-of-mouth and a more effective marketing funnel, particularly in attracting new prospects. QLIKs
freemium approach with Qlik Sense (in which the desktop product is offered for free), coupled with product-oriented outbound
campaigns, should help improve the companys marketing funnel. Also, we expect QLIK will see greater success in the enterprise
market through a heavier emphasis on marketing solutions for specific functions (finance, marketing, supply chain, sales, operations,
HR) and industries, which should support a continued uptick in deal sizes.

QLIK Looks Poised to Improve its Profitability


QLIKs profitability has suffered as revenue has decelerated and the company invests in product renewal. From a high of
$13.5% in FY10, QLIKs non-GAAP operating margin declined to 7.4% last year and looks poised to decline 100-200 bps further in
FY14. QLIKs R&D investment has been the biggest source of margin pressure, as R&D has climbed from 6% of revenue in FY10 to
over 12% last year and estimated for this year.
We see several factors that should drive solid margin expansion by late FY15, if not sooner. In FY14, management has focused
on improving QLIKs execution capabilities in conjunction with expanded investments in sales and marketing and R&D, resulting in
margin contraction leading into the launch of Qlik Sense. We dont expect R&D to decline from 12-13% of revenue, as QLIK will likely
reinvest at a level commensurate with revenue growth. However, QLIKs heavy investments in Qlik Sense (now in production) and
QlikView 12 (expected late next year) should boost the companys sales effectiveness, creating operating leverage. If QLIK can
reaccelerate (or even merely stabilize) its revenue growth, we think the margins will benefit from significant operating leverage, as QLIK
already has a stable global SG&A infrastructure that should be able to handle additional capacity. Also, the companys investments in
deploying NetSuite for back-office ERP appear to be mostly done, and the system should boost QLIKs operational efficiency.

QLIKs Valuation Looks Attractive, Despite a High P/E


In the near to medium-term, we expect QLIK price action to be driven by the companys ability to reaccelerate its top-line
growth. As DATA has risen to dominate customers mindshare in data discovery, QLIKs license growth has decelerated from 41% in
FY11 to 13% last year and 12% YTD. This deceleration has pressured QLIK shares, causing choppy price action over the last three
Steve Koenig (415) 274-6801

Qlik Technologies | 4

years and keeping QLIK range-bound between $18 and $37. If QLIK can stabilize its license growth and achieve modest acceleration
beginning later next year, we think investors will reward QLIK with a modestly higher EV/ revenue multiple (on higher revenue).
QLIK trades at a relatively attractive EV/ revenue multiple.
perspectives:

QLIKs EV/ revenue multiple looks attractive from a variety of

Relative to peers, QLIKs 3.9x EV/ revenue on our FY15 estimate ($645M) is below all companies in our comparisons analysis,
except for the challenged TIBCO, which is being acquired by private equity firm Vista Equity Partners. Our peer comparisons are
shown in Figure 19.
Relative to QLIKs historical trading multiples, the companys current forward EV/ revenue multiple of 4.5x is in the lower part of its
3-year range of 2.9x 6.8x since its IPO (see Figure 1).
Relative to other high-growth software companies, QLIK trades at a significant discount (see Figures 1 and 2) on an EV/ revenue
basis. Although QLIK is the slowest-growing company in our 12-company software growth index, QLIK trades below the growthadjusted EV/revenue line defined by the 12 companies.

Given our outlook for revenue acceleration due to Qlik Sense by late FY15 or FY16, we expect QLIK share price appreciation
based on expanding EV/ revenue multiples and a growing top line. In our experience, 4x EV/ revenue is a relatively inexpensive
valuation for a software company with several years or more of good growth potential for new business intake. In addition, we think
QLIKs popular technology for guided analytics, coupled with its modern, web-based Qlik Sense architecture would make the company
an attractive acquisition target, should it choose to sell itself. Although QLIK looks expensive on a P/E basis (90x our FY15 estimate of
$0.34), this multiple fairly reflects QLIKs margin expansion potential as it rights its execution, in our view.

Figure 1: QLIK Forward EV/ Revenue Has Lagged High-Growth Software


16x
14x
12x

Forward EV/ Revenue

10x
8x
6x
4x
2x
0x

QLIK

High Growth Software Ave.

Source: Thomson Reuters, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 5

Figure 2: QLIKs EV/ Revenue is Currently Well Below High-Growth Software Peers, Even on a Growth-Adjusted Basis

EV/Rev. Multiple vs Revenue Growth Rate CY13 - CY14E


20.0 x
18.0 x

WDAY

EV/Revenue CY14E

16.0 x

SPLK
PANW

14.0 x

DATA

12.0 x
PFPT

10.0 x

FEYE

MKTO
ULTI

8.0 x

CRM

6.0 x

CSOD

QLIK

4.0 x

INFA

2.0 x
0.0 x
0%

10%

20%

30%

40%

50%

60%

70%

80%

Revenue Growth Rate (CY13 - CY14E)

Source: Thomson Reuters, Wedbush Securities, Inc.

Bear Case
Tableau is Pressuring QLIKs Growth
While DATA is smaller than QLIK at the moment, it has been growing much faster than QLIK. DATAs revenue CAGR from FY09
is 72%, much higher than QLIKs CAGR during the same time period of 26%. Going forward, we expect DATAs growth trajectory to
be much steeper than QLIKs, with DATA expected to grow revenue at 71% and 46% Y/Y in FY14 and FY15, compared to expected
revenue growth at QLIK of 18% and 16% Y/Y, respectively. DATAs license revenue run rate is now about on par with QLIKs; although
DATA tends to have more 4Q seasonality than QLIK, DATA should easily surpass QLIK in license revenue for the full FY15.
QLIK is playing catchup to DATA in terms of ease-of-use, visual appeal, and marketing execution. QLIKs scripting and wizarddriven interface is fine for BI developers and power analysts, but until now, QLIKs value proposition to general business users has
been primarily that pre-defined guided visualizations are more powerful than those offered by traditional BI dashboards. Lacking
DATAs direct connection capabilities, QLIK requires a fair bit of curation by BI developers to be really useful, and is generally not
ready to be run by business people straight out of the box. In addition, DATA has trumped QLIK in creating an attractive visual
interface and also in developing a marketing engine with highly effective lead generation. We think Qlik Sense can stabilize QLIKs
growth rate, as a free desktop product provides more effective lead generation, and a simpler and more attractive interface improves
QLIKs ability to win deals. However, we dont think Sense will dent DATAs momentum, as it doesnt look to us to be on par with
Tableaus ease-of-use, given its reliance on scripting and wizards, more limited direct connect functionality (i.e., data must be imported
into QLIKs in-memory data engine), and variety of v1.0 limitations in areas such as crosstabs and printing.
QLIKs competitive issues have likely been exacerbated by execution issues. QLIK has had choppy execution over the last few
years, missing its revenue guidance in 3Q12 and 3Q13. We believe QLIKs execution has suffered not only from competition with
DATA, but also from insufficiently developed capabilities in its marketing and direct sales functions. As QLIK has shifted away from a
heavy reliance on its indirect channel, we believe direct sales execution has been somewhat inconsistent. In addition, QLIKs
marketing funnel has been less effective in attracting prospects than in later phases of the funnel (including converting opportunities
and expanding at existing customers), an issue that management is focused on remedying.

More Vendors May Become Credible Data Discovery Providers


The large BI incumbents have been developing visualization capabilities for their BI stacks. Our checks confirm the notion that
BI incumbents such as SAP, IBM, Oracle (ORCL, NEUTRAL), Microsoft, Microstrategy, and SAS lag behind QLIKs and DATAs
visualization capabilities. However, the incumbents have been adding visualization functionality on top of their existing BI platforms
through both acquisitions and internal development. These vendors have achieved a high degree of stickiness by having
comprehensive BI capabilities and deep BI stacks; in many cases, customers have standardized on particular incumbents for the
Steve Koenig (415) 274-6801

Qlik Technologies | 6

majority of their BI needs. We expect the incumbents to invest heavily to develop visualization and data discovery capabilities that can
compete with the likes of QLIK and DATA.
Price competition in the visualization market is likely to intensify going forward. We dont expect the incumbents to reach parity
with QLIK or DATA in data discovery any time soon, as their BI R&D initiatives suffer from the weight of requirements imposed by a
wide range of product groups inside each company, and their top managements attention is not highly focused on BI. However, we
think improvements to existing platforms may make their offerings good enough for some use cases, and aggressive price discounting
by incumbents could lead to growing price pressure in the data discovery market.

Macroeconomic, Geopolitical, and Exchange Rate Risks Could Negatively Impact QLIK
QLIK typically generates over 50% of its total revenues in Europe. Although QLIK has been growing its revenue fastest in the Americas
and other non-European geographies in recent years, Europe still accounted for 53% of revenues in FY13. Europes stagnant demand
conditions and strength in the U.S. dollar since September could pressure QLIKs optics, if not fundamentals. If current FX rates remain
unchanged, we estimate QLIK will experience about a 2% headwind to its as-reported revenue growth over the next several quarters.
In addition, geopolitical risks, such as tensions between the European Union and Russia, could perpetuate or increase cautiousness on
the part of customers.

Company Overview
QLIK offers guided analytics and self-service data visualization. QLIK is currently the largest vendor in the emerging data discovery
segment of the business intelligence (BI) market. The company serves more than 33,000 customers in approximately 100 countries,
including large global enterprises and small and mid-market organizations. The companys solution platform allows users to explore
live data in order to uncover insights and solve critical business problems through an easy to use and flexible BI solution. QLIKs
current flagship product, QlikView, offers a more technical-oriented solution to convert big data into relevant information, while also
creating and sharing insights across organizations. Its next-generation product offering, Qlik Sense, is targeted at business users and
offers more self-service with enhanced visualizations. The platforms in-memory engine enables faster analysis of data and offers
significant improvements in usability, flexibility, and performance at lower costs than traditional BI solutions. Since the companys U.S
initial public offering in July 2012, QLIK has been expanding its operations in North America as well as Asia and Latin America through
the support of its large global network of partners. QLIK was founded in Sweden 20 years ago and has a very large presence in
Europe. Its global headquarters is Radnor, Pennsylvania.

Figure 3: Revenue CAGR of 32% Between FY09 and FY13


$500

$470M

$450
$389M

Revenue ($, M)

$400
$350

$321M

$300
$227M

$250
$200
$157M
$150
$100
$50
$0
FY09
Licenses

FY10

FY11

Maintenance and Services

FY12

FY13

Professional Services

Source: Company data, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 7

Market and Competitive Analysis


In the last several years, the proliferation of network-enabled devices, advances in cloud computing and social media, and increasing
usage of business and consumer technologies have helped to sustain the long-term trend of high growth in data volumes. According to
70
IDC, 1.8 Zettabytes (1.8 x 2 bytes, i.e., 1.8 trillion gigabytes) of data were created and stored worldwide in 2011, up 8x since 2005
(see Figure 4). IDC predicts data volumes will grow 45% annually from 3.8 trillion gigabytes in 2013 to 8.0 trillion gigabytes in 2015 and
to 40 trillion gigabytes in 2020. Many organizations are expected to double their volume of data every two years, with more data
coming from more sources and in different formats. Organizations currently store their data in a wide range of platforms, including
traditional relational databases (Oracle, SQL Server, MySQL, IBM DB2), emerging platforms (EMC Greenplum, Teradata Aster,
Cloudera), applications (salesforce.com (CRM, NEUTRAL), Netsuite, Google (GOOGL, NEUTRAL) Analytics), and cloud platforms
(Amazon (AMZN, NEUTRAL) Web Services, Microsoft Azure).

Figure 4: Explosion of Worldwide Data Volumes


Data Set Sizes -- Multiples of Bytes
Name

Number of
bytes

Binary value

Byte

Kilobyte (kB)

12

15

18

21

24

10

Megabyte (MB)

10

Gigabyte (GB)

10

Terabyte (TB)

10

Petabyte (PB)

10

Exabyte (EB)
Zettabyte (ZB)
Yottabyte (YB)

10
10
10

10
20

1 GB

1 TB

1 PB

1 EB

1 ZB

1 YB

30
40
50
60
70
80

Thumb drive (today)


PC hard drive (today)
Walmart data warehouse, 1996
Google consolidated databases, 2013
Internet, 2011
Total worldwide data, 2013

Source: Wikipedia, IDC, Teradata, Wedbush Securities, Inc.

The Business Intelligence Market


Business Intelligence (BI) software enables organizations to analyze their data in order to measure business results, support
decision-making, and improve operational performance. The ability to collect and analyze data through BI tools enables
organizations to have a more complete view of their businesses and can enable better decision-making. The BI market includes
solutions for ad hoc queries, reporting, complex-event processing, statistical pattern discovery, unstructured text file search, and
multidimensional database analytics. Through the use of BI software, organizations can analyze specific inputs and outputs of their
business related to customers, suppliers, products, and employees. BI software enables users to analyze data and report on important
business metrics such as sales, profits, costs, quality defects, customer satisfaction, shipping times, etc. Users access the data via
reports from applications or BI platforms, and based on the resulting analysis, managers can make informed decisions to improve
business performance. For example, product management can uncover new sales trends at the SKU level, marketers can have better
insight into customer groups more apt to churn, HR managers can identify attributes of top performers, and supply chain managers can
maintain inventory levels that minimize costs without crimping sales.
Gartner estimates that spending in the BI software market was $14.4B in 2013 and grew approximately 8% Y/Y, with sales
momentum shifting away from IT departments to business-led tactical purchasing, including purchases of data discovery and
visualization products. Gartner estimates that annual growth in software spending for BI tools will be between 8% - 9% per year
through 2018, by which time the broader BI market should grow to approximately $22B. In 2012, the BI market saw deceleration from
2011 in year-over-year spending growth, which we attribute to a tougher demand environment, particularly in Europe; however, it also
saw rapid adoption of emerging product offerings in BI submarkets, including specialized tools for Big Data and data discovery.

Steve Koenig (415) 274-6801

Qlik Technologies | 8

Figure 5: Business Intelligence Market and Projected Growth

2013 Market Size - $14.4B


14.0%

Market Size in Millions

12.0%
20,000
10.0%
15,000

8.0%
6.0%

10,000

4.0%
5,000
2.0%
0

Year-Over-Year Market Growth (%)

25,000

0.0%
2011

2012

2013

2014E 2015E 2016E 2017E 2018E

Source: Gartner, Wedbush Securities, Inc.


QLIK is a pure-play vendor of data discovery tools, a new product class that has disrupted the BI market in the last several
years. These new and intuitive visualization-focused solutions have created new uses cases and appealed to a broader range of
users, beyond traditional technical or power users generating reports or performing data mining. With rapidly growing volumes of data
and technological improvements in analytics, we believe that there is a large market opportunity for QLIK due to the limitations of
traditional BI platforms and the demand for productivity-enhancing business analytics tools that are superior to Excel.
The data visualization market has emerged over the past several years to fill a void in the traditional BI software market by
offering rich visualizations, on-the-fly analysis, and direct access to external data sources. Data discovery tools employ intuitive
user interfaces and drill-down capabilities to generate visualizations (e.g., figures, charts, and graphs) that provide users with dynamic
perspectives on data that are conducive to discovering new insights. Data discovery tools tend to be easier to learn than traditional BI
solutions, facilitating broader adoption by business users. The tools are designed to avoid dependence on predefined drill paths and
dimensional hierarchies, enabling high flexibility for ad-hoc queries and dynamic reports. Data discovery tools such as QlikView and
Qlik Sense can access data from many types of data sources, including big data sets from Hadoop, and embedded storage and
computing layers (typically in-memory/columnar) that eliminate the need for aggregates, summaries, and pre-calculations. In addition,
they can provide a persistent, in-memory database to facilitate fast computations and avoid querying data repeatedly.
We believe data discovery tools are simpler and less costly to implement and maintain than traditional BI solutions. We
believe a majority of QLIKs sales are not replacements of BI tools, rather they are for uses in which no BI tool is being deployed, either
because users have been trying to make do with Excel or because the high costs and effort required by legacy BI solutions have
created too big a hurdle. In the enterprise, data discovery tools are not necessarily a replacement for lower levels of the BI stack (e.g.,
ROLAP technology is useful for disorganized data, cubes with pre-calculations are useful for sparse data), but they are increasingly
popular as a front-end to enterprise data (e.g., data warehouses) and external data. Whereas traditional BI solutions can take up to
several months to deploy, data discovery tools can be deployed in days or hours, and we believe Qlik users can begin almost
immediately to use the desktop product for simpler use cases. Also, IT supports costs are lower for data discovery tools, as users no
longer need to rely on central BI teams to gather requirements, prioritize configurations, and build out metadata models. The data
discovery platforms also have low minimum hardware requirements, thus reducing related capital costs. For small and midsized
business with smaller IT budgets, data discovery solutions offer a stronger value proposition with their lower capital investments and
more flexible and self-serviceable features.
Data discovery tools utilizing in-memory processing can perform better than traditional BI tools. QLIK has advanced the stateof-the art of data discovery by supporting both direct access to data to avoid RAM limitations when analyzing very large data sets -and the use of a persistent, in-memory database that loads queried data into memory for repeated use. The latter option reduces the
latency of query processing and disk-based data access required by traditional BI tools, enabling rapid, on-the-fly analysis of data. The
in-memory technology also means less dependence on developers and IT to pre-build aggregates and cubes.
Steve Koenig (415) 274-6801

Qlik Technologies | 9

The emergence of the data discovery market beginning in the mid-2000s was primarily driven by three upstart vendors:
Spotfire, Qlik, and Tableau. While stack vendors focused their BI efforts on digesting the large acquisitions of BI incumbents (SAP/
Business Objects, IBM/ Cognos, Oracle/ Hyperion), these agile new companies innovated in visualization, in-memory technology, and
user-friendly interfaces. Now, sales of these products are displacing incumbent license streams, as organizations look to leverage
existing BI back-end infrastructure with newer intuitive tools for business users. With this fast-developing trend BI usage has the
potential to expand from a niche market of IT users and data specialists into a much broader population. We believe adoption is
occurring across the spectrum of organizations in terms of size, ranging from large enterprises with diverse datasets to small
organizations of Excel users without significant back-end infrastructure. For many larger enterprises, a data discovery solution may be
the enterprises first truly self-service BI application, and for many SMBs, it will be the companys very first BI application.
We estimate the data discovery market is only about 5% of the broader $14B+ BI market, but the subset is growing rapidly.
The combined license revenue from the top three data discovery vendors (Tableau, Qlik, and TIBCO) was $553M for CY13 and is
expected by Gartner to grow at over 20% per year through FY18; we believe this segment will see substantial upside to Gartner
estimates. In 2013, the sub-segment grew at 33% Y/Y versus 8% Y/Y for the overall BI market. Spending on data discovery software is
still only around 5% of total BI spending, giving this category ample room to grow its share of enterprise spending on analytics. While
QLIK is not aiming to replace infrastructure lower in the BI stack such as data warehouses, pre-calculated cubes, master data
management, and ETL tools, we believe the company is poised to capture a significant share of IT spending on BI as it enhances its
products to meet enterprise requirements for security, API support, Linux support, query processing, and performing analytics at scale.
We believe that the potential TAM for data discovery could ultimately be much larger than the market for traditional business
analytics software. Gartner estimates that there are approximately 105M information workers that use traditional BI software. While
QLIK is seeing success in selling to these users by complementing existing BI infrastructure and/or replacing existing front-end tools,
the most important market opportunity for QLIK isnt necessarily existing BI users. Instead, it could be the 365M information workers
that utilize spreadsheets such as Microsoft Excel as their only analysis tool, and more generally the global count of 600M+ information
workers. A 4Q12 Forrester survey indicated that only 17% of information workers use a dashboard or other BI tool, and 59% of
information workers use spreadsheets. Spreadsheets are easier to use than traditional BI platforms, but they are limited in terms of
scalability for large data sets, connectivity to data sources, multi-user access to analysis and data, query and reporting capability,
visualizations, and performance. We estimate that these 365M information workers represent an approximate $14B annual market
opportunity, using a 15% penetration rate of the 365M workers and hypothetical annual revenue of $250 per user, which is 19% of the
$1,350 perpetual price for QlikView, and 17% of the $1,500 token price for QlikSense.

Data Discovery Competitors


We believe QLIKs primary competition is traditional BI vendors (IBM, Oracle, SAP, and Microsoft); Microsoft Excel; and rival data
discovery vendors. We examine QLIKs competition with BI incumbents and other data discovery vendors below, starting with the
latter.
When in competition with another data discovery tool, QLIK competes with Tableau Software and occasionally with Spotfire
from TIBCO. Collectively, we estimate the top three data discovery products (Tableau, Qlik, and Spotfire) generated approximately
$553M in license revenue and about $825M in total software (license plus maintenance) revenue in 2013. The sub-segment grew at
27% Y/Y versus 7% Y/Y for the overall BI market in 2013, driven mostly by growth from DATA (+78% Y/Y), with QLIK reporting 13%
software revenue growth and TIBX seeing an estimated 12% software revenue growth from Spotfire.

Steve Koenig (415) 274-6801

Qlik Technologies | 10

Figure 6: License Revenue for Data Discovery Vendors


$120

$112
$103

$100
$87

In millions

$80
$70 $67

$67
$61
$60

$58

$54

$53

$60
$48

$42
$40

$40

$34
$26

$54

$35

$32

$24

$27

$23

$22

$16

$20

$0
Q1

Q2

Q3

Q4

Q1

Q2

Q3

FY13

Q4 E

FY14
Tableau

Qlik

TIBCO Spotfire

Source: Company data, Wedbush Securities, Inc.


DATA is the fastest-growing data discovery vendor. With its comprehensive product set and broad go-to-market strategy, DATA is
the fastest growing data discovery vendor, with an 89% CAGR between CY09 and CY13. QLIK, with its large global presence, is
currently the largest data discovery vendor, with FY13 license sales of $271M, which equals the combined license sales of DATA and
TIBCO Spotfire, but it appears to be losing ground to DATA, which is now roughly even with QLIK in license revenue run rate.
Historically, DATA was relatively stronger in the SMB market, QLIK targeted mid-sized enterprises, and TIBX Spotfire targeted large
enterprises. However, as product awareness increases and competition intensifies, each vendor is expanding its sales and marketing
efforts into one anothers end of the market. Of the three vendors, we think DATA has had the most success expanding into all market
segments, while QLIK has seen some success at moving into the enterprise market and TIBX has not been able to move Spotfire
down-market. Our checks indicate that DATAs success in seeding individuals and departments in large enterprises is making
competition in large enterprises more difficult for the other two vendors.

Figure 7: Revenue and Growth of Leading Data Discovery Vendors


Tableau Software
Qlik Technologies
TIBCO Spotfire
Total License

2008
9
58
67

Tableau Software
Qlik Technologies
TIBCO Spotfire
Total License Y/Y Growth (%)
Tableau Software
Qlik Technologies
TIBCO Spotfire
Total Revenue
Tableau Software
Qlik Technologies
TIBCO Spotfire
Total Revenue Y/Y Growth (%)

13
58
72

2009
12
100
41
153

2010
24
145
55
224

2011
44
204
83
332

2012
90
239
106
434

2013
160
271
118
549

2014E
266
301
100
666

2015E
366
334
105
805

CAGR
('09-'15)

33%
-29%
128%

107%
45%
33%
47%

83%
41%
51%
48%

102%
17%
27%
31%

78%
13%
12%
26%

66%
11%
-16%
21%

38%
11%
5%
21%

77.5%
22.3%
16.8%
31.9%

18
157
41
217

34
227
55
316

62
321
83
466

128
389
106
622

232
470
118
821

37%

88%
44%
33%
46%

83%
42%
51%
48%

105%
21%
27%
33%

82%
21%
12%
32%

-29%
203%

398
557
100
1,054
71%
18%
-16%
28%

580
645
105
1,330
46%
16%
5%
26%

78.2%
26.5%
16.8%
35.3%

Source: Company data, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 11

Qlik Technologies (QLIK) is the largest visualization vendor in terms of overall license sales.

QLIK led the pure-play data discovery market in 2013 with $271M in license revenue and over 33,000 customers.
Although QLIK recorded a 32% CAGR between FY09 and FY13, the company has slowed markedly in recent quarters, which
we attribute primarily to competition with DATA. QLIK has a much larger presence outside of the U.S., especially in Europe
where it has its origins and former global headquarters in Sweden. QlikView, the companys main data discovery product,
features visual-based interactive exploration and analysis capabilities similar to Tableau and Spotfire. Similar to Tableau and
Spotfire, QlikView users are able to freely explore and find connections, patterns, and outliers in the data without having to
associate these data relationships in advance. The solution offers comprehensive integrations with all major external data
sources.

QlikView is a more IT-centric platform compared to Tableau, with a governed and curated solution. QlikView is a
guided analytics solution that provides governed data sources to BI developers for creating rich visualizations and dashboards
for end users. QLIKs product strength is its persistent in-memory data store and its applications partner ecosystem, which
have helped QLIK gain traction as a platform for custom or packaged visualization solutions. As a result, QLIKs sales process
and customer relationships tend to be more IT-oriented than DATA, which has a sharper focus on the business user. Our
checks suggest QlikView is better suited for various IT use cases that require custom development for analytic applications.
Also, QLIK sells a larger percentage of its licenses (55%) through the indirect channel, compared to DATA, which sells less
than 25% of its licenses through the indirect channel.

Qlik Sense is QLIKs most recent product release for its solution platform. Qlik Sense became generally available in
3Q14, with the launch of its token-based server version to complement the free desktop tool. Qlik Sense features a much
improved user-interface with more dynamic visualizations and a greater level of self-service. Qlik Sense features a wizardcentric user interface that addresses the enterprise offering gap between simple visualization solutions and complex BI reportcentric platforms. The new solution also contains enhanced features over QlikView.11 for associating data relationships and
comparing contrasting data sets. The product is browser-based and features an open API that enables web developers to
customize visualizations and applications using JavaScript and to use Sense as an analytics development platform.

Figure 8: QLIK Revenue by Region

Figure 9: DATA Revenue by Region


$250M

$300M
$249M, 53%
$250M

$200M

$217M, 56%

$187M, 80%

$188M, 59%

$200M

$175M, 37%
$150M

$150M

$135M, 35%

$138M, 61%

$106M, 83%

$105M, 33%

$100M

$100M
$71M, 31%
$37M, 10%

$50M

$47M, 10%

$27M, 9%

$17M, 8%

$52M, 84%

$50M
$29M, 85%

$0M
FY10

FY11

FY12

$5M, 15%

FY13

$10M, 16%

$46M, 20%
$22M, 17%

$0M
Americas

Europe

Rest of World

FY10

FY11
United States and Canada

Source: Company data, Wedbush Securities, Inc.

FY12

FY13

Rest of World

Source: Company data, Wedbush Securities, Inc.

TIBX entered the data analytics market with its 2006 acquisition of Spotfire. Like Qlik and Tableau, TIBCO Spotfire features
standardized reporting with ad-hoc analysis, and rich data visualizations that guide users to relevant queries. Its visualization-based
interactive exploration and analysis capabilities are perceived to be superior to traditional BI vendors legacy platforms.
We believe Spotfire has better statistical analysis functionality than its pure-play competitors, and often sells into use cases requiring
predictive or Big Data analytics. TIBX has primarily focused on selling Spotfire into larger enterprises, but it has recently begun a more
concerted effort to sell into the SMB market. We believe TIBX has also had some success selling Spotfire to enterprises that have
already deployed TIBXs other integration and real-time event processing solutions. Starting in TIBXs 2Q13, Spotfire growth began to
slow down, and in its 1Q14, we believe license growth declined Y/Y, which we attribute to organizational challenges in scaling Spotfires
sales operation as well as competition from Tableau as DATAs enterprise land-and-expand strategy gains momentum. We are
skeptical of a quick turnaround in license growth in Spotfire, but with the right steps we think TIBX can return Spotfire to high single-digit
or low double-digit growth sometime in 2015.
Steve Koenig (415) 274-6801

Qlik Technologies | 12

th

On Dec. 5 2014, Vista Equity Partners completed its acquisition of TIBX. TIBX will continue to operate as TIBCO Software under the
leadership of the newly appointed CEO, Murray Rode, the former COO of the company. We expect Mr. Rode to work on expanding
margins in the core infrastructure business and stabilizing execution in Spotfire, while working to pivot TIBCO further into analytics.

Figure 10: Data Discovery Vendors License Growth


License Revenue by Vendor
$400
$366M
$350

$334M
$301M

$300
$271M

In millions

$266M

$239M

$250
$204M
$200

$160M
$145M

$150
$100M

$90M

$100

$118M

$106M

$100M

$105M

$83M
$55M
$41M

$50
$12M

$44M
$24M

$0
2009

2010

2011

Tableau Software

2012

Qlik Technologies

2013

2014E

2015E

TIBCO Spotfire

Source: Company data, Wedbush Securities, Inc.

Competition with Traditional BI Vendors and Data Integrators


Our checks indicate the rise of the data discovery vendors has pressured license revenues of traditional BI vendors. While
data discovery solutions are often complementary to existing BI infrastructure, we believe they are driving a shift in BI spending
priorities, and winning deals against incumbents front-end BI tools (e.g., for dashboards). Although incumbents have been adding
visualization functionality on top of their platforms through acquisitions and internal development, our checks indicate that their
capabilities are significantly behind those of the next-generation vendors.
BI offerings from larger vendors include the following:

Microsoft lags other majors with just 10% share of the BI market in 2013, but we think Microsoft is QLIKs biggest long-term
threat, due to its ubiquity and large market footprint in the SMB and enterprise markets. Microsofts BI strategy has been to
incorporate its BI capabilities into its mostly widely used products to drive adoption. To this end, Microsoft has embedded BI
capabilities throughout its stack, including services in SQL Server, SharePoint, and Office. Microsofts Power BI is a collection
of services for SQL Server, SharePoint, Office 365, and Office (including add-ins for Excel and PowerPoint), including Power
View, Power Pivot, and SQL Server Analysis Services (SSAS). While the current product set has superior data modeling,
pivoting, and multi-dimensional capabilities to Qlik products, we believe its visual analytic and dashboard capabilities are much
less developed. Microsofts ETL capabilities are more developed than QLIKs although its functionality is SQL Server-centric
but QLIK excels in data connectivity due to its investment in developing a large library of drivers for diverse vendor data
sources. Also, we hear that on-premise setups for Microsoft BI are complicated, requiring knowledgeable BI, SharePoint, and
network admin resources, unlike QLIKs business user-friendly setups. Pricing for Power BI varies depending on what
components are used, from about $250/year per user (for basic Excel capabilities) to over $600 for Office 365 with Power BI.
Adding SharePoint and SQL Server upcharges required to use Power BI or cloud solutions can run deployments to $200,000
and above. We think Microsoft is working to improve the visualization capabilities of Power BI, which could make it more
competitive with QLIK over the next few years. However, connectivity to non-Microsoft data sources is likely to remain
Microsofts Achilles heel in data discovery. Outside of its traditional BI stack, Microsoft is developing machine learning
capabilities for data in the Azure cloud platform. Called Azure Machine Learning, the initial offering lets power users and data

Steve Koenig (415) 274-6801

Qlik Technologies | 13

scientists to mine data and build predictive models using ML Studio, an integrated development environment that supports the
R programming language for statistical analysis.

SAP leads the $14B traditional BI market with a 21% market share in 2013. Its enterprise BI tool, Business Objects, is deeply
entrenched at customers and is often viewed as an enterprise standard. SAP has a large global sales, support, channel, and
system integrator ecosystem for Business Objects. The company has invested in several emerging technologies, including
cloud, predictive, and in-memory analytics with its Hana database. SAP Visual Intelligence, introduced in May 2012, is a
desktop data analysis tool that connects to Hana and external data sources, and is available as a stand-alone offering or addon to Business Objects Explorer.

Oracle has the second largest BI market share (14%) in 2013 and is the leader in CPM suites. Oracle Business Intelligence
Enterprise Edition (which originated with its acquisition of Siebel in 2005) is primarily used as a system of record for static and
parameterized reporting. Its Hyperion product line targets enterprise performance management, analytic applications
including KPIs and dashboards, as well as multi-dimensional query and reporting typically required by the office of finance in
large enterprises. With the acquisition of Endeca in 2011, ORCL enhanced its capabilities in text search and analysis of
unstructured data.

IBM had 13% of the BI market in 2013. IBM has a broad range of BI products, led by IBM Cognos, which is designed to
analyze financial and operational data at large and midsized businesses. Cognos has solutions for reporting, ad hoc query,
and enterprise performance management. With SPSS, IBM also addresses the market for predictive analytics, which employs
statistical modeling to help with forecasting and the automation of real-time decision processes such as insurance
underwriting. While IBM released a data visualization product called Cognos Insight in 2012, we havent seen much evidence
of market traction. While we think IBM is interested in using M&A to close the competitive gap in data discovery, our checks
suggest potential deals have been scuttled by the weight of requirements demanded by diverse product groups inside the
company that wish to integrate with any acquired technology. Now, IBM appears more focused on commercializing its naturallanguage query and machine learning capabilities developed in its Watson project to enable non-technical users to perform
smart data discovery using a cloud-based tool. Although the company has made a few marketing announcements, this
initiative appears to be mostly in the research phase and is not broadly commercialized.

SAS controlled 12% share of the overall BI market in 2013 with a broad suite of analytics products. SAS rose to prominence
with its tools for data mining and statistical analysis, e.g., for time series analysis in data warehouses. SAS has become a
leader in a variety of market-specific solutions for predictive analytics, advanced analytic scenarios, and use cases for fraud,
risk, supply chain, and retail analytics.

Figure 11: Business Intelligence Competitor Market Share for 2013

2013 Total Market Size = $14.4B


Tibco Software,
$171M, 1%

Other Vendors,
$3,172M, 22%

Microsoft,
$1,379M, 10%
IBM, $1,820M,
13%

Tableau, $227M,
1%
MicroStrategy,
$420M, 3%
Qliktech, $431M,
3%
Oracle, $1,994M,
14%

SAS, $1,696M,
12%
SAP, $3,057M,
21%

Source: Gartner, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 14

QLIK Product Offerings and Roadmap


QLIK offers two enterprise-ready data discovery products: Qlik Sense and QlikView. Qlik Sense is targeted at business users
desiring self-service features, while QlikView is a guided analytics solution targeted at more technical users who desire a more
traditional and controlled solution with customizable technical requirements. Both products offer easy-to-maneuver user-interfaces that
allow users to interactively explore data in a manner that is fluid and coincides with their own thought process. As users analyze the
data, they are able to manipulate and reassemble the data on the fly through dynamic views, enabling for better data discovery and
insights. Additionally, users can share data and reports to facilitate collaboration.
QlikView is a disruptive BI solution that aims to revolutionize how people perceive data. QlikView is the main solution for users
who want to present a controlled user experience to the end-users that consume the data. Developers and IT personnel create
prepared reports and dashboards designed to answer specific business questions, and the end-users have complete control to
navigate and interact with the data in the application. The end-users have the freedom to filter and drill down on any objects to access
the data in dynamic ways, but cannot create new visualizations. The solution utilizes QLIKs proprietary indexing technology to find all
associations in the data, and help users uncover new business insights.
Key benefits of QlikView include:

Multi-source Data Integration: QlikView transforms and combines multiple data sources including Excel spreadsheets,
ODBC databases, operational systems, web sources, and custom connectors without the need for external data repositories. It
also connects to Big Data sources in real time for users analyzing large data sets that cannot be stored in memory.

Visual Overview of Data Association: Users can visually discover data associations instantly though the interactive
dashboard. User selections are highlighted in green, whereas all the related objects on the dashboard are highlighted in white.
Data not associated with the selection is highlighted in gray, offering live feedback that can lead to unexpected business
insights.

Smart Search: Users can discover new associations and insights in data sets using keywords. Search provides direct results
of the keywords as well as their associations with other data in the application.

Qlik Sense is the companys most recent product release for its solution platform. Qlik Sense was officially launched on Sept.
17, 2014. Qlik Sense uses dynamic charts and figures to visualize and provide the data while also allowing users to easily manipulate
the data by size, shape, color, brightness, and motion of visual objects. Qlik Sense features a wizard-centric user interface that
addresses the enterprise offering gap between simple visualization solutions and complex BI report-centric platforms. The solution is
based on the same data architecture as QlikView, with enhanced features over QlikView for associating data relationships and
comparing contrasting data sets. Qlik Sense utilizes principles of natural analytics that should help it to expand its addressable market.
TM
The solution taps into QLIKs Natural Analytics approach, which utilizes the natural human ability to process complex information. It
allows users to process information more intuitively by making it easier to sort and categorize items into groups in order to reveal
meaning, recognize patterns and outliers, and ultimately anticipate what is going to happen next based on what has happened.
Additional features of Qlik Sense include:

Smart Visualization: Reports and dashboards can be created in minutes using a simple drag-and-drop interface. Reports
and dashboards are flexible and can be modified on the fly to achieve user objectives. Visualizations are integrated with the
QIX engine, and live queries are automatically generated based on user actions.

Data Storytelling: Qlik Sense provides a dynamic data presentation module that allows users to create guided stories by
adding narrative, graphics, and snapshots of data to presentation slides. Snapshots can be taken on any object in the
dashboard at the desired point in time, and can be drilled down further to reveal the underlying data in Qlik Sense.

Mobility: Qlik Sense is built as a mobile-first solution. It is based on a touch-based HTML5 language, which provides a
uniform user experience across multiple devices.

We expect Qlik Sense to feature improved back-end data integration functionality that should make the product simpler to use
and more enterprise-ready. While the front-end visualization has yet to be tested against Tableau, the back-end functionality
improvements should close the gaps, making QLIK more competitive against legacy BI vendors, such as SAP, IBM, and Oracle. Qlik
Sense will have open interfaces through all the widely-used APIs, making the new product very easy to embed in other environments
and with other applications. With Qlik Sense, developers will have greater flexibility at the complex end of the use case range.
Qlik Sense and QlikView can share the same data model are converging to use the same data engine. A common data layer
allows new developments to be integrated more efficiently and evokes confidence in users adopting the products. Qlik Sense and the
Steve Koenig (415) 274-6801

Qlik Technologies | 15

upcoming QlikView 12 (expected next year) are powered by the enhanced QIX Associative Data Indexing engine, which reveals the
relationships among all the data in the application that are typically hidden in traditional BI solutions. As a result, users are not bound
by predetermined configurations and have the freedom to analyze the data in new ways. QLIKs solution platform in-memory engine
enables rapid analysis of data and large improvements in usability, flexibility, and performance over legacy BI tools. The platform holds
data needed for immediate analysis in memory, allowing for instant access and responsive visualizations, and the most commonly
called calculations and results are cached. The solutions architecture is based on a multi-user, distributed environment that stores
common calculations and enables sharing of the calculations amongst users. The solution can be clustered to provide load balancing
and fail over capabilities for large enterprise deployments. In QlikView 12, QLIK is moving to address one of its primary competitive
weaknesses against Tableau, direct data discovery without having to keep data in memory. Since QLIK hasnt unveiled its functionality
yet, its too early to tell how good QLIKs direct connection functionality will be, but if QLIK can remedy its deficiencies, we think it can
help to open up the self-service market for QLIK.

Figure 12: Data Association in Traditional BI vs. Qlik Solutions

Source: Qlik Technologies


Use cases for QLIKs solutions are most relevant for business users in sales, marketing, HR, and finance roles, as well as
data analysts and other IT service professionals. QLIK has been broadening the appeal of its platform outside of traditional BI use
cases and promoting usage in areas where data-driven decisions are critical, such as web site navigation, content search and
information management, external data communication, product configuration and e-commerce applications. The solution was
designed to allow business users with limited technical experience to immediately begin using the solution after deployment. Minimal
training is required to use the platform, resulting in much quicker realization of ROI and value. Use cases are diverse and vary across
industries, but common ones include the following:

A retail store manager analyzing which products are selling best


An operations planner preparing inventory forecasts
A supply chain manager in need of a 360 degree supplier view combining procurement, quality, and product information
A telecom customer service agent analyzing call center statistics, customer satisfaction, and retention
A sales representative accessing current industry sales trends while out in the field
A chief information officer analyzing IT spending and budget information to identify cost savings opportunities and service level
improvement

For the near term, QLIK will be taking a two-product strategic approach. While Qlik Sense is likely to account for the majority of
new license growth, we expect QLIK to continue to invest in QlikView and support existing QlikView customers for at least the next
several years or as long as there is sufficient customer demand, i.e., a minimal hurdle level for maintenance fees and renewals. FY14
revenue guidance is based solely on contribution from QlikView, given the 5-6 month sales cycle and pipeline build for the product, with
minimal cannibalization from Qlik Sense. Beginning in 2Q14, management held full-year revenue guidance steady, despite quarterly
revenue outperformance to account for the potential purchasing delays of QlikView by customers in anticipation of an upcoming new
product introduction for Qlik Sense. For FY15, we expect QLIK to fully take a two-product strategic approach, leading with QlikView for
Steve Koenig (415) 274-6801

Qlik Technologies | 16

upselling to existing customers and leading with Qlik Sense to sell to new customers. In the near term, ratably recognized revenues
from Qlik Sense will cause revenue growth rates to appear to ramp slower than if they were recognized under the traditional perpetual
approach, in which license revenues are recognized upfront. However, in the longer term, we expect QLIK to benefit from moving
towards a consumption-based model because it will ultimately smooth revenues over time.
We expect QLIK to promote Qlik Cloud as the third piece of the solution platform once development for Qlik Sense matures.
Qlik Cloud is still in beta development, and QLIK has yet to market this product to the public. Qlik Cloud is expected to provide a free
cloud service for users that want to share apps and analysis developed with the Qlik Sense Desktop product.

Product Versions and Deployment


Qlik Sense and QlikView are available at a server or single-user deployment levels. Server-based deployments for QlikView are
offered at two license levels: Enterprise Edition and Small Business Edition. The Enterprise Edition is suitable for all larger and more
technically complex implementations, while the Small Business Edition is targeted at small and medium-size businesses with up to 25
users. Both server editions support authentication for secure and simultaneous user access by large user groups. The enterprise
editions also feature Publisher, which is an administrative interface that offers reloading of data, connection to directory servers,
security role administration, and an option for distributable PDF reports.
QLIK offers a QlikView Desktop version, which is used by small workgroup deployments that use multiple iterations of Desktop
applications on stand-alone machines without a centralized server. In order to share data with others in the workgroup, each user must
have an individual license. QlikView Personal Edition is a downloadable, full-featured version of Desktop targeted at small businesses
and individuals. The Personal Edition is downloadable for free and can be used for an unlimited period of time. Users of the Personal
Edition are restricted from sharing user-created analyses with others and sharing apps with others. Otherwise, all of the same features
and functionality are available to the Personal Edition as in the full Desktop edition.
Qlik Sense Server edition supports cloud deployment, and is suitable for organizations of all-sizes that desire self-service analytics
capabilities. Qlik Sense is based on a token model, and requires no additional costs for the Server edition. QLIK also offers a free, fullfeatured Desktop version of Qlik Sense. It provides more flexibility than QlikView Personal Edition by allowing users to share apps
without licenses. However, this benefit might be short-lived as the management hinted at the possibility of monetizing the sharing
function in the near future.
The solution platform can be quickly deployed on-premise or in the cloud, accelerating time to value for customers.
Deployment for QlikView can be as short as a couple weeks, and they are almost always much shorter than traditional BI software
deployments, which often take 9 months to a year. Major software updates are released every 12 to 18 months and often feature
updates based on direct customer feedback. Smaller service releases occur every two to four months between major releases.
Following the release of Qlik Sense in 4Q14, the company has committed to extending support for at least three years. Deployment for
Qlik Sense is even shorter than that of QlikView since Qlik Sense is built on a simple web platform, which requires minimal provisioning.
Qlik Sense is updated three times per year. Major software updates are released in September, while interim service updates are
provided in February and June. QLIK offers mobile and social features that allow users to access its solutions through mobile devices,
tablets, and on social media.
QLIK acquired Expressor, a private data integration and metadata management vendor, in June 2012. The acquisition
enhanced QLIKs product portfolio with a graphical data integration solution capable of scaling up for large enterprise deployments.
Expressor provides a graphical studio for designing and managing the integration for QlikView apps. With Expressor, developers no
longer need to manually build a semantic model or write scripts. Users can create reusable metadata components for new
development. The company has integrated Expressor with the Governance Dashboard to form a data governance tool that allows
users to identify, manage, and reuse multiple definitions of metadata deployed across the solution platform. Expressor allows
designers and developers to manage data definitions, transformations, and other design artifacts in common business terms for users
so that the solution is insulated from changes made to the underlying data systems. Business users are able to build applications
based off a robust data governance approach, while maintaining development flexibility and defining metadata.

Pricing and Revenue Recognition


QlikView is sold under a perpetual license model. QlikView costs $1,350 per user plus $35,000 for server access. We believe that
QLIK offers customer discounts, at times up to 50% and more for 1,000 and more named users. Perpetual licenses are recognized
upfront and generally include one year of maintenance as part of the initial purchase price of the product. Customers typically renew
their maintenance agreements for approximately 20%-25% of the initial license fee paid, and options to renew maintenance
agreements occur annually. Maintenance agreements entitle customers to receive support, upgrades, and enhancements during the
maintenance period. The standard maintenance contract covers one year, and revenue is recognized ratably over the period.
Qlik Sense is sold under a flexible consumption model using tokens priced at $1,500 each, with discounts at higher volumes; there is no
cost for deploying Qlik Sense Server, which allows customers to run on any CPUs as necessary to ensure optimal performance.
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Tokens provide greater financial flexibility, as the users can manage product usage and avoid committing to high upfront license cost if
user demand is uncertain. QLIKs approach is based on a Client Access Licenses (CAL) using two types of access passes. User
Access Pass is a unique identifier for a named user that grants unlimited access to Qlik Sense resources. Each token corresponds to
one User Access Pass. Login Access Pass is a 60-minute session that refreshes every 28-day period; additional passes are used if a
user is logged in for more than 60 minutes. One token corresponds to 10 Login Access Passes (a.k.a. an Access Pool). Customers
can reallocate tokens between access passes and access pools as needed.

Integration, Development, and Services


QLIKs solution platform integrates with all major databases and other external data sources, such as flat files, SAP, Salesforce.com,
XML, and other web services. For large data sets that cannot fit in memory, the platform has Big Data integration capabilities with
Hadoop, and partnerships and direct connectors with Google BigQuery and Cloudera, as well as large data warehouses, such as
Teradata.
The solution platform provides developers with a flexible application development platform that allows users (and not just developers) to
create custom-built applications that fulfill non-core solution functionality. These purpose-built applications can be easily shared,
modified, and discarded when no longer needed. They are often geared towards vertical specific applications. They help encourage
innovation, broader based adoption, and more intensive use of the solution. The apps are available on QlikMarket.
QLIK offers a range of services from training to deployment services. Educational services offer various training options for customers
and partners that span functional use, technical deployment, and administration. Maintenance and support services are offered to
customers as part of their initial license of QlikView. Most deployments require limited professional services from QLIK since the
majority of implementation projects are done by QLIK partners. However, for large enterprise with complex IT environments, QLIK uses
its own internal professional services department for deployments.

Sales and Go-to-Market Strategy


As a Swedish-based company, QLIK has a much more established presence in Europe although it has been focusing its
expansion efforts in North American. Given the size of the U.S. market and the relatively low level of penetration, we believe that
the U.S. is QLIKs largest current market opportunity to capture, and we expect it to be the biggest contributor to revenue growth. QLIK
also has been investing recently in Asia-Pacific, Latin America, Eastern Europe, and the Middle East/Africa. As of October 31, 2014,
QLIK had over 1,700 channel partners in its network in over 100 countries, and over 33,000 customers in approximately 100 countries
from the consumer goods, financial services, pharmaceuticals, retail, manufacturing, technology and healthcare industry verticals.
QLIK utilizes a land and expand strategy aimed at expanding deployments. QLIKs sales teams target their initial land sale at
business units and non-IT teams. After landing an initial sale at a business unit and demonstrating the value of Qlik, the sales teams
seek to expand deployments and use cases to other business units and geographies within the organizations. For named accounts,
QLIK uses the solutions approach, offering solutions to address specific customer needs. Once the initial solution has been
implemented, QLIK sells adjacent solutions in the natural expansion path to the customer. QLIKs recent focus on building solutions by
function (finance, marketing, supply chain, sales, operations, HR, etc.) resulted in an uptick in deal sizes. For all other accounts, QLIK
uses the product-oriented transaction approach.
Eventually, QLIK strives to have the platform deployed across multiple departments, including both business and IT departments, and
ultimately have larger enterprise-wide deployments. As a result, opportunities with the existing customer base represent approximately
60% to 75% of license and first year maintenance sales each quarter, and the majority of large deals (>$250K) come from existing
customers.
QLIK initially targets its sales and marketing efforts at business users at medium-size companies and larger enterprises in a
variety of industry verticals. Historically, QLIK has focused on the financial services, healthcare, and government verticals, but has
also recently targeted automotive and retail. Beginning in FY14, management emphasized that it will be increasing its investment in
vertical-specific subject matter experts and solution consultants to enhance its go-to-market strategy. The sales teams emphasize the
solutions proven ROI and value proposition to customers early in the sales cycle by highlighting its easy-to-use platform that can be
installed and used with limited training and services. The solution was designed with ease-of-use in mind to target an addressable
market with a wide range of users and business units, e.g., sales, finance operations, and IT. QLIK also offers the free Qlik Sense
Desktop and QlikView Personal edition to customers in order to test and try the solution in hopes of eventually selling a future license to
customers once their business requirements or use cases increase.
QLIK often utilizes its sales teams, consulting, and education services when pursuing larger deals. QLIK often realizes
significant increases in deal size when engaging its services organization throughout the selling process. The QLIK sales and service
teams engage with potential customers IT purchasing, finance, and operations teams. The professional services team demonstrates
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Qlik Technologies | 18

how to streamline QlikView deployment, improve response times, and expand deployments to new use cases, and the education
services team provides a clear path to customer success and faster user adoption.
QLIK utilizes a direct sales force and an indirect partner channel. Compared to its peers, the company relies more heavily on its
channel partner network (55% of total revenue in FY13) than direct sales (45% of total revenue in FY13). The direct sales force is
aligned by vertical and geography. We believe it takes internal sales reps 3 to 6 months to become fully productive and enterprise
sales reps 9 to 12 months to become fully productive. The company heavily relies on its large partner network (over 1,700 partners) of
solution providers (resellers), original equipment manufacturers (OEMs), and system integrators, especially when expanding into new
territories and geographies where it does not have a direct sales presence. QLIK utilizes its distribution partnerships and agreements
with solution providers to enter new markets before adding its own direct sales force in the region. QLIKs global partner network
includes different tiers of resellers: master, elite, and basic. Master resellers oversee sales for an entire geography or region where
QLIK has no direct sales force present, and designation between elite resellers versus basic reseller is determined by sales volume.
The company also licenses its solution toolset to its partners for the creation of applications for industry vertical and business line
specific problems. OEM and technology partners, which often include software, data management, and analytics companies, also use
QlikView to bundle with their own products or as an add-on feature for their products and services. OEMs typically account between
5%-10% of total billings in a given year. OEMs accounted for 8% of total billings in FY13.
QlikCommunity is a user-driven collaborative community that drives the QLIK brand and promotes the use of the companys software.
The community offers low-cost support and features discussion forums, user groups, blogs, feedback and review of QLIK products.
QLIKs product management team can obtain valuable insights from feedback and discussions for product development and
enhancements.

Financial Analysis

QLIK Financial Performance


QLIK has grown revenue at a 31% CAGR from $157M in FY09 to $470M in FY13. We estimate total revenue will grow to $560M in
FY14E or 19% Y/Y. License revenue has grown from $100M in FY09 to $271M in FY13, or at a 28% CAGR. We expect license
revenue to grow to $300M in FY14E or 27% Y/Y. License revenue contributed 63% to total revenue in FY09 and has steadily declined
to 58% of total revenue in FY13. The existing customer base accounts for a larger portion of overall license growth each quarter as
QLIK expands sales at its existing customer base due to its land and expand sales strategy. We believe QLIK typically derives 60%
to 75% of its license sales from existing customers. The addition of new customers should also drive future revenues, although not as
significantly. Direct sales accounted for 48% of total revenue in FY13, and the indirect channel accounted for 52% of total revenue.

Figure 13: QLIK Annual Revenue, Historical and Estimates


700

$645M

600

$557M

Revenue ($, M)

500

$470M
$389M

400
$321M
300
$227M
200

$157M

100
0
FY09

FY10
Licenses

FY11
FY12
Maintenance

FY13
FY14E
Professional Services

FY15E

Source: Company data, Wedbush Securities, Inc.

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Qlik Technologies | 19

Maintenance and services revenue has grown from $41M in FY09 to $161M in FY13, or at a 40% CAGR. We expect maintenance and
service revenue to grow to $207M in FY14 or 29% Y/Y. QLIK has increased its share of maintenance and services revenue as a
percentage of total revenue from 26% in FY09 to 34% in FY13, as rapid license growth drove higher maintenance streams and larger
deployments in more complex IT environments required more extensive use of professional services. We estimate that maintenance
and service revenues will comprise approximately 37% of total revenue in FY14.
QLIK generates revenue from three geographic regions: Americas, Europe, and the Rest of World, which mostly consists of revenue
from the Asia-Pacific region. QLIK started its operations in Europe and has a strong market presence in the region; 53% of total
revenues in FY13 were from Europe, although this is down from 61% in FY10. The Americas region has grown its share of total
revenue from 31% in FY10 to 37% in FY13. Given the size of the U.S. market and the relatively low level of penetration, we expect that
QLIK to focus its growth efforts in the U.S. as it presents a large market opportunity and a big contributor to future revenue growth.
However, competition in the U.S. will remain intense as QLIK competes in a crowded visualization against DATA, TIBCO Spotfire, and
other legacy BI vendors. The Rest of World region has grown its share of total revenue from 8% in FY10 to 10% in FY13.

Figure 14: Geographic Region Information


$300M
$249M, 53%
$250M
$217M, 56%
$188M, 59%

$200M

$175M, 37%
$150M

$135M, 35%

$138M, 61%
$105M, 33%

$100M
$71M, 31%
$37M, 10%

$50M

$47M, 10%

$27M, 9%

$17M, 8%
$0M
FY10

FY11
Americas

FY12
Europe

FY13

Rest of World

Source: Company data, Wedbush Securities, Inc.


Margins have been on the decline, but FY15 can be the inflection point. Gross margin has decreased slightly from 89.2% in FY09
to 87.5% in FY13, and operating margin has declined from 9.3% in FY09 to 7.4% in FY13. Beginning in FY15, management expressed
its focus on expanding non-GAAP operating margins through continued investment in innovation and leveraging prior investments to
accelerate revenue growth. We believe QLIKs prior investments in improving global pipelines and sales management will be key
drivers for the growth. We believe that gross margin will expand to 86.8% by FY15. We also expect operating margin to shrink further
in FY14 to 5.5% as the company continues to invest in its product and sales and marketing organizations to support further growth, but
expect it will turn around in FY15 to 7.5%. Management targets long-term operating margin of 20%, and over time, we believe that
QLIK can achieve non-GAAP operating margins similar to other software companies in the range of 20%-25%. QLIK usually sees
seasonality in its operating expenses, with 1Q sequentially higher than 4Q due to costs typically related to hiring impacts from the prior
fiscal year, expected 1Q employee additions (which typically are front end-loaded), the companys annual employee summit held in
January, and seasonal increases in employer payroll taxes and benefit expenses. A partner summit is also usually held in 2Q that
provides partners with the opportunity to find solutions that fit their needs based on industry, function, or solution type. The partner
summit seasonally increases 2Q expenses, but not as significantly as the employee summit in 1Q.

Steve Koenig (415) 274-6801

Qlik Technologies | 20

Figure 15: Gross and Operating Margin Between FY10 FY13


100.0%
$34

Operating Profit ($, in Millions)

35
$31

$35

90.0%
80.0%

$30

30
70.0%
25

60.0%

20
15

50.0%
$15

40.0%
30.0%

10
20.0%
5

10.0%

Gross margin and Operating Margin (%)

40

0.0%
FY09

FY10

Operating Income

FY11
Gross Margin

FY12

FY13
Operating Margin

Source: Company data, Wedbush Securities, Inc.


Sales and marketing expenses were 59% of sales in FY09 and have declined to 51% of sales in FY13. We believe QLIK will increase
its investment in sales and marketing to 52% in FY14 and FY15 to promote Qlik Sense. R&D expenses were 6% in FY09 and have
increased to 12% of sales in FY13. The company spends most of its R&D expenses on product development and innovation. QLIK
incorporates customer feedback when designing new features, and it works closely with a select set of customers and partners to
provide feedback on new functionality. The company had 275 people in its R&D organization as of the end of FY13, the majority of
which are based in Lund, Sweden with a smaller percentage in Boston, MA. G&A expenses have remained relatively constant and were
16% of sales in FY09 and 17% FY13. We believe QLIK will maintain its R&D expenses at around 11%-12% through FY14-FY15. Total
headcount was at 1,987 at the end of 3Q14, which is up 3% from the previous year. The majority of incremental headcount is allocated
towards the sales and marketing and R&D organizations.

Steve Koenig (415) 274-6801

Qlik Technologies | 21

Figure 16: Operating Expenses Consistently Are 80% of Sales


90%

Operating Expenses as a % of Revenue

80%
70%
60%
50%
40%
30%
20%
10%
0%
FY09

FY10

FY11

FY12

Research and development

Sales and marketing

General and administrative

Total operating expenses

FY13

Source: Company data, Wedbush Securities, Inc.

3Q14 Results
QLIK reported 3Q14 revenues of $131.3M (+6% Y/Y), above consensus of $124.2M, and non-GAAP EPS of $0.01, above consensus
of $0.00. Revenue for the quarter was driven by larger commitments from existing enterprise and SMB customers, and to a small
degree, the launch of the companys self-service visualization tool, Qlik Sense. Direct channel accounted for 48% of licenses and first
year maintenance in 3Q14, up from 41% in 3Q13, and the indirect channel accounted for 52% of licenses and first year maintenance in
2Q14, down from 59% in 3Q13

License revenue grew 24% Y/Y, driven by strong large deal activity and new customer additions. License revenue was
$68M, up 24% Y/Y from $55M last year, and accounted for 51% of the total revenue mix, down from 52% in 3Q13. QLIK closed
108 deals over $100K and 23 deals over $250K, down from 111 and 27, respectively in the prior year. Although the number of
such deals fell for the quarter, the average value of the deals was much larger, raising revenue significantly. QLIK also recorded
seven deals over $1M, up from three in 3Q13 (+133% Y/Y). During the quarter QLIK also added a significant new customer
account, Canadian Pacific Railway, which will deploy QlikView to scale and manage Canadian Pacifics large data volumes.

Maintenance and professional services revenues benefited from continued commitments from existing customers.
Maintenance and service revenue was $52M and $12M, respectively, up from $41M and $9M in 3Q13. Total maintenance was
39% of the total revenue mix, remaining relatively flat year-over-year. Professional services revenue accounted for 9.2% of the
total revenue mix, up from 8.5% in 3Q13.

All geographic regions grew by double-digit percentages in constant currency year-over-year. Americas reported $52M in
revenue, up 27% Y/Y, and contributed 40% of total revenue, flat from the prior year. Europe generated $63M in revenue, up 21%
Y/Y. Europe contributed 48% of total revenue in 3Q14, down from 50% in 3Q13. Sales for the rest of the world were $16M, up
48% Y/Y and 50% in constant currency. This region accounted for 12% of revenue in 3Q14, up from 23% in 3Q13. The strong
growth in revenue was driven by strong expansion in the Asia-Pacific region.

Gross margin remained flat, but operating margin declined year-over-year. Gross margin was 87% in 3Q14, flat from 3Q13.
Non-GAAP operating income was $2.6M, down from $6.0M in 3Q13, and non-GAAP operating margin decreased to 2.0%, down
from 5.7% in 3Q13. Operating margins were below expectations due to further investments in innovation and QLIKs focus in
developing pipelines and sales management. Sales and marketing expenses increased to 53% of revenue, up from 51% the prior
year. R&D expenses increased to 15% of revenue, up from 12% in 3Q13, and G&A expense fell slightly to 17% of revenue, down
from 18% in 3Q13.

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Qlik Technologies | 22

Starting in 3Q14, QLIK adopted a two-product strategy to meet broader analytics needs. Management views QlikView and
Qlik Sense as complementary products that combine to satisfy a full breadth of analytical needs, and expects minimal cannibalism
between the products. The demand for self-service analytics from the 600M+ knowledge workers are met with Qlik Sense by
allowing users to hypothesize the data, and these hypothesized data can be translated into guided analytics using QlikView. 3Q
results seem to support managements strategy. During the quarter, sales of QlikView improved following the evaluation period of
Qlik Sense in July, and Qlik Sense also generated better than expected sales. We expect QLIK to maintain its two-product
approach for the foreseeable future as it ramps up development for Qlik Sense.

2Q14 Results
QLIK reported 2Q14 revenues of $131.6M (+22% Y/Y), above consensus of $125.3M, and non-GAAP EPS of $0.02, above
consensus of $0.03). Total revenues increased to $131.6M from $108.0M in 2Q13, or up 22% Y/Y. License revenues increased to
$66.9M from $60.5M in 2Q13, or up 11% Y/Y. License revenues made up 51% of total revenues, down from 56% of total revenue in
th
2Q13. QLIK booked 109 deals over $100K in 2Q14, which is up from 104 deals in 2Q13. 2Q14 was the 12 quarter in a row, back
from 3Q11, where existing customers represented more than 70% of the quarters license bookings, which is a reflection on the higher
incremental value associated with higher indexing limits. Software bookings in 2Q14 were $131M, up 23% Y/Y from $107M in 2Q13.
Total deferred revenue was $113M at the end of 2Q14, up from $88M in 2Q13 and down slightly from $114M in 1Q14. The Americas
generated revenue of $47M in 2Q14, up 23% Y/Y, and it accounted for 35% of total revenue in 2Q14, flat from 35% of total revenue in
2Q13. Europe generated revenue of $70M in 2Q14, up 21% Y/Y, and it accounted for 53% of total revenue in 2Q14, down from 54% of
total revenue in 2Q13. The Rest of World generated revenue of $15M in 2Q14, up 20% Y/Y, and it accounted for 11% of total revenue
in 2Q14, flat from 11% of total revenue in 2Q13.
The direct channel accounted for 48% of licenses and first year maintenance in 2Q14, up from 43% in 2Q13, and the indirect channel
accounted for 52% of licenses and first year maintenance in 2Q14, down from 57% in 2Q13. Non-GAAP operating income increased to
$2M, up from a loss of -$2M in 2Q13. Non-GAAP operating margin increased to 1.8% from -1.8% in 2Q13. Cash and cash equivalents
were $255M at the end of 2Q14, compared to $253M at the end of 1Q14. Cash flows from operating activities were $23M in 1H14,
compared to $24M in 1H13. QLIK ended 2Q14 with over 33,000 customers and 1,928 employees, up from 29,000 customers and
1,568 employees in 2Q13.

Guidance and Our Outlook


Managements Guidance

For 4Q14, management provided revenue guidance of $176M - $181M and non-GAAP EPS of $0.26 $0.30. Non-GAAP
operating income is expected to be $35M to $39M. 4Q14 guidance incorporates negative currency impacts on revenue of
$7.4M. The company expects to have 92M diluted shares outstanding and a non-GAAP tax rate of 30%.

For FY14, management provided revenue guidance of $550M - $555M and non-GAAP EPS of $0.18 - $0.22. Non-GAAP
operating income is expected to be $26M to $30M. Full-year guidance incorporates negative currency impacts on revenue of
$9.6M since guidance from July. The company expects to have 91M diluted shares outstanding and a non-GAAP tax rate of
30%.

At its Financial Analyst Meeting on Nov. 11, 2014, management announced financial objectives for FY15. Management
expects to accelerate revenue growth above the FY14 guidance of 17% - 18% and anticipates currency headwinds of 2% 3%. Detailed FY15 guidance will be provided in its 4Q earnings report in February.

Our Estimates

For 4Q14, our total revenue/EPS estimates of $183M / $0.30 are slightly above consensus revenue estimates of $180M and
above consensus EPS estimates of $0.28. We estimate license revenues will be $112M.

For FY14, our total revenue/EPS estimates of $557M / $0.22 are above consensus revenue estimates of $554M and above
consensus EPS estimates $0.20. We estimate license revenues will be $301M.

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Qlik Technologies | 23

Company Management

Lars Bjork is currently President and Chief Executive Officer. He has been a member of the Board since October 2004.
From August 2006 to October 2007, Mr. Sullivan served as Chief Financial Officer and Chief Operating Officer, and from
August 2000 to August 2006, he served as Chief Financial Officer. Prior to QLIK, Mr. Bjork served as Chief Financial Officer
at ScandStick, a manufacturer of adhesive material. Mr. Bjork received an M.B.A. from the University of Lund and an
Engineering Degree from the Technical College in Helsingborg, Sweden.

Tim MacCarrick has served as Chief Financial Officer since July 2013. Between June 2010 and June 2013, Mr. MacCarrick
served as Chief Operating Officer at De Lage Landen, and from July 2008 to May 2010, he served as the Corporate Vice
President and Chief Financial Officer for Crane Co. Mr. MacCarrick received an M.B.A. in Finance and a B.S. in Accounting
from Clarkson University.

Leslie Bonney has served as Chief Operating Officer since March 2011. Between March 2010 and March 2011, Mr. Bonney
served as Executive Vice President of Global Field Operations, and between October 2007 and March 2010, he was Senior
Vice President of Worldwide Sales. He has held other managerial positions at QLIK since January 2004. Mr. Bonney
received a B.S. in Marine Biology from James Cook University.

Anthony Deighton has served as Chief Technology Officer and Senior Vice President since September 2001. He served as
Senior Vice President, Products between January 2005 and September 2011. Previously, he was the General Manager of
Siebel Systems Employee Relationship Management business unit among other product marketing roles at Siebel Systems
from October 1999 to January 2005. Mr. Deighton received an M.B.A. from Harvard Business School and a B.A. in
Economics from Northwestern University.

Valuation
QLIK shares are currently trading at an EV/revenue multiple of 4.5x CY14E and 3.9x CY15E, below the peer group median of 13.5x
CY14E and 9.5x CY15E. These multiples are also lower than other similarly-sized, fast growing peers with large TAMs, such as
Tableau, which is trading at 12.6x CY14E and 8.7x CY15E, and Splunk (SPLK, OUTPERFORM), which is trading at 15.7x CY14E and
11.6x CY15E. QLIK shares are currently trading at an EV/FCF multiple of 89.7x CY14E and 57.1x CY15E, below the CY14E peer
group median of 195.2x CY14E and 82.7 CY15E. On a 12-month forward basis, QLIK shares are trading at an EV/revenue multiple of
4.1x, about 51% below our high-growth software indexs multiple of 8.4x. This discount is in line with QLIKs three-year historical
median discount of 55%.
Our 12-month target price of $37 is an average of our EV/revenue and DCF approaches. We apply a 5x EV/revenue multiple to our
CY15 revenue estimate of $6.96/share and add back $3.21/share in cash to produce a $38 valuation. Our long-term DCF valuation of
$35 is based on a WACC of 12.7%, beta of 1.7 and terminal value EV/FCF multiple of 30x in CY24E. Our valuation uses operating
margin and revenue growth assumptions that we regard as conservative.

Steve Koenig (415) 274-6801

Qlik Technologies | 24

Figure 17: Forward EV/Rev vs. High Growth Software Average Figure 18: EV/Rev Discount to High-Growth Software Average
10%

16x

0%

14x

-10%

12x

-20%

10x
Forward EV/ Revenue

-30%

8x

-40%

6x

-50%

4x

-60%

2x

-70%

0x

-80%

QLIK

High Growth Software Ave.

Source: Thomson Reuters, Wedbush Securities, Inc.

QLIK Discount

3-yr Hist. Ave. Discount

Source: Thomson Reuters, Wedbush Securities, Inc.

Risks
Risks to the attainment of our price target include:

QLIKs rich valuation carries high growth expectations. Deceleration or an earnings hiccup could cause multiples to
contract. Macroeconomic concerns, including any slower than anticipated recovery in employment could also pressure
shares.

Increased competition from legacy BI vendors. Competitors with stronger distribution channels could improve their product
capabilities enough to pressure QLIKs pricing power and revenue growth.

Steve Koenig (415) 274-6801

Qlik Technologies | 25

Figure 19: QLIK Peer Comparisons


Market Capitalization

Earnings

Net
Market Shares
Cash Cap ($ Out.
per sh. MM)
(MM)

Rating

Price
Target

Price

Name
Wedbush Securities Estimates
Qlik Technologies
QLIK

OUTPERFORM

$37

$30.78

$2.69

2,772

90

Peer Group Estimates


Splunk
Tableau Software
Workday
Palo Alto Networks
ServiceNow
NetSuite
Callidus Software

OUTPERFORM $78
OUTPERFORM $98
OUTPERFORM $104
Not Covered
NC
Not Covered
NC
Not Covered
NC
Not Covered
NC

$62.61
$82.20
$83.65
$118.84
$62.03
$106.35
$15.94

$7.55
$9.35
$7.30
$3.72
$1.41
$2.07
$0.58

7,943
5,669
15,418
9,572
9,199
8,161
775

127
69
184
81
148
77
49

Ticker

SPLK
DATA
WDAY
PANW
NOW
N
CALD

Peer Group Median Values


Industry Median Values

LT EPS
EPS
growth
CY 14
(%)

EPS
CY 15

Revenues

PE
PE
CY 14E CY 15E

PE/G

Free Cash Flow

Rev.
Rev.
EV/rev EV/rev
CY14E CY15E
CY14E CY15E
($mm) ($mm)

FCF
CY14E
/share

FCF
EV/FCF EV/FCF
CY15E
CY14E CY15E
/share

%
Shares
Short

90.0 x

7.1

557

645

4.5 x

3.9 x

$0.31

$0.49

57.1 x

1%

10%

$0.11 1056.9 x 572.1 x


20% $0.06
$0.37 317.8 x 221.5 x
20% $0.26
20% ($0.30) ($0.16) -278.7 x -532.0 x
$1.04 220.4 x 114.3 x
46% $0.54
49% ($0.09) $0.20 -729.8 x 314.9 x
$0.47 327.2 x 227.7 x
24% $0.33
$0.25 107.7 x
63.0 x
28% $0.15

52.8
15.9 x
-13.9 x
4.8 x
-14.8
13.8
3.8

446
398
789
693
664
550
130

601
580
1,152
974
942
723
162

15.7 x
12.6 x
17.8 x
13.4 x
13.5 x
14.6 x
5.8 x

11.6 x
8.7 x
12.2 x
9.5 x
9.5 x
11.1 x
4.6 x

$0.67
$0.37
$0.34
$0.81
$0.06
$0.45
$0.32

$0.98
82.1 x
56.2 x
$0.38 195.2 x 192.6 x
$0.43 224.5 x 179.2 x
$2.44 142.3 x
47.2 x
$0.73 1029.1 x
82.7 x
$0.97 231.6 x 107.1 x
$0.43
48.6 x
35.3 x

1%
1%
NM
1%
1%
1%
1%

7%
6%
5%
4%
3%
4%
3%

13.5 x
4.4 x

9.5 x
4.1 x

1%
4%

4%
4%

20%

24%
15%

$0.22

$0.34

142.1 x

220.4 x 221.5 x
22.1 x
19.9 x

4.8
1.8

Source: Thomson Reuters, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Short int.
TTM
FCF
Yield

Qlik Technologies | 26

89.7 x

195.2 x
23.4 x

82.7 x
25.8 x

Figure 20: QLIK Wedbush Model, Guidance, and Consensus Estimates


($ millions, unless specified)
Non-GAAP:
Model non-GAAP Total Revenue
Guidance 7-26-12
Guidance 10-25-12
Guidance 2-14-13
Guidance 4-25-13
Guidance 7-25-13
Guidance 10-24-13
Guidance 2-20-14
Guidance 4-24-14
Guidance 7-24-14
Guidance 10-23-14
Consensus
Model non-GAAP EPS
Guidance 7-26-12
Guidance 10-25-12
Guidance 2-14-13
Guidance 4-25-13
Guidance 7-25-13
Guidance 10-24-13
Guidance 2-20-14
Guidance 4-24-14
Guidance 7-24-14
Guidance 10-23-14
Consensus

3/13

FY13
6/13
9/13

12/13

3/14

96.5

108.0

161.8

111.1

104.1

FY14E
6/14
9/14
131.6

131.3

12/14E

3/15E

FY15E
6/15E
9/15E

182.7

129.2

149.3

150.9

12/15E

FY11

FY12

FY13

FY14E

FY15E

FY16E

215.5

320.6

388.5
376-386

470.5

556.8

644.9

752.0

545-555
545-555
545-555
550-555
554.1
$0.22

638.2
$0.34

737.3
$0.51

.23-.27
.23-.27
.23-.27
.18-.22
$0.20

$0.34

$0.53

87-91

465-475
471-481
473-481
465-470

104-108
105-109
156-161
110-114
124-128
122-126
91.3
($0.09)

106.6
($0.02)

107.9
$0.05

158.2
$0.31

113.2
($0.12)

125.3
$0.02

124.2
$0.01

176-181
128.2
179.7
($0.10)
$0.30

147.6
$0.02

149.0
$0.05

211.8
$0.37

319.9
$0.27

377.9
$0.26
.31-.35

(.15)-(.12)

467.0
$0.26

.39-.42
.41-.44
.37-.41
.23-.26

(.02)-0
.02-.04
.28-.31
(.14)-(.12)
(.04)-(.02)
(.02)-.01
($0.12)

($0.01)

$0.04

$0.30

($0.05)

($0.03)

$0.00

.26-.30
$0.28 ($0.10)

$0.02

$0.04

$0.38

($0.03)

$0.24

$0.25

Source: Thomson Reuters, Company data, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 27

Figure 21: QLIK Income Statement


($ millions, unless specified)

FY13
6/13

FY15E
6/15E
9/15E

FY14E

FY15E

FY16E

54.5
40.7
8.9
104.1

103.1
45.7
13.0
161.8

53.9
45.8
11.4
111.1

66.9
50.9
13.8
131.6

67.5
51.8
12.1
131.3

112.4
54.1
16.3
182.7

58.2
56.4
14.6
129.2

72.6
60.8
15.8
149.3

72.9
62.5
15.5
150.9

130.4
64.9
20.1
215.5

204.4
89.1
27.1
320.6

238.7
120.5
29.4
388.5

270.8
160.6
39.1
470.5

300.7
202.6
53.5
556.8

334.1
244.7
66.1
644.9

379.4
290.8
81.9
752.0

Licenses cost
Maintenance cost
Professional Services cost
Total cost of Revenue
Gross profit

1.6
2.9
9.8
13.7
82.8

1.5
2.5
10.5
13.9
94.1

1.5
2.5
11.0
14.0
90.1

2.7
2.7
12.5
17.3
144.5

1.5
3.1
13.5
17.5
93.6

1.8
2.8
14.3
18.2
113.4

2.2
2.7
13.1
17.2
114.0

2.2
3.0
15.6
20.8
161.9

1.2
3.7
14.4
19.2
110.1

1.5
3.7
15.0
20.1
129.2

1.5
3.8
15.5
20.7
130.2

2.0
3.6
19.3
24.9
190.6

3.5
6.8
24.0
33.6
287.0

5.1
8.5
29.7
41.6
346.9

7.3
10.6
43.9
59.0
411.5

7.7
11.5
56.5
73.7
483.0

6.0
14.6
64.2
84.9
560.0

6.8
17.4
79.5
103.7
648.3

Research and development


Sales and marketing
General and administrative
Less: amortization of intangible assets
Total operating expenses

14.7
58.0
20.8
(0.4)
93.2

15.2
61.2
19.6
96.0

12.6
52.8
18.7
84.1

14.4
69.6
20.0
(0.8)
103.2

16.2
68.7
24.4
(0.8)
108.1

16.6
71.5
23.0
111.0

19.9
69.4
22.1
111.4

19.2
80.8
21.9
121.9

19.4
77.5
25.2
122.1

20.2
81.4
24.6
126.2

20.1
79.5
23.8
123.5

21.5
94.8
23.7
140.1

24.2
172.8
60.2
257.1

37.9
201.0
74.0
(0.3)
312.6

57.0
241.6
79.1
(1.1)
376.5

71.9
290.3
91.4
(0.8)
452.4

81.2
333.3
97.4
511.8

93.2
382.4
101.5
577.1

(10.4)
(8.7)

(1.9)
1.1

6.0
9.0

41.3
44.3

(14.5)
(14.5)

2.4
2.4

2.6
3.7

40.0
41.7

(12.1)
(9.1)

3.0
8.3

6.8
15.0

50.5
61.9

29.9
32.8

34.3
39.5

35.0
45.7

30.6
33.4

48.2
76.0

71.2
95.2

0.0
(1.3)

0.0
(0.2)

0.0
0.8

0.1
(0.8)

0.0
(0.4)

0.0
0.1

0.0
(1.7)

(0.8)

(0.8)

(0.8)

(0.8)

(0.8)

0.26
3.81

0.3
(0.8)

0.2
(1.5)

0.1
(2.7)

(3.0)

(3.0)

(11.7)
(3.5)
30%
(8.2)
($0.09)

(2.1)
(0.6)
30%
(1.5)
($0.02)

6.8
2.1
30%
4.8
$0.05

40.7
12.2
30%
28.5
$0.31

(14.8)
(4.4)
30%
(10.4)
($0.12)

2.6
0.8
30%
1.8
$0.02

0.9
0.3
30%
0.7
$0.01

39.3
11.8
30%
27.5
$0.30

(12.8)
(3.8)
30%
(9.0)
($0.10)

2.3
0.7
30%
1.6
$0.02

6.0
1.8
30%
4.2
$0.05

49.8
14.9
30%
34.9
$0.37

33.9
10.9
32%
23.1
$0.27

33.7
10.8
32%
22.9
$0.26

33.7
10.1
30%
23.6
$0.26

28.0
8.4
30%
19.6
$0.22

45.2
13.6
30%
31.7
$0.34

68.2
20.5
30%
47.7
$0.51

8.6
0.8
0.8

7.8
0.8
0.1

8.7
0.7
0.2

9.7
0.7
0.8

10.2
0.7
0.8

10.7
0.7
0.8

11.3
0.7
0.8

11.8
0.7
0.8

12.4
0.7
0.8

10.2
-

19.3
0.3

28.9
2.5
1.4

36.5
3.0
2.2

46.2
2.8
3.4

56.2
2.8
3.4

(10.9)
(13.7)
23.0
-168%
(36.7)
($0.41)

(4.2)
(7.2)
(2.2)
30%
(5.0)
($0.05)

8.8
5.8
1.7
30%
4.1
$0.04

Non-GAAP to GAAP Reconciliation


FAS 123R expense
Amortization of intangible assets
Other Losses (Gains)

6.0
0.4
0.2

6.6
0.6
0.3

3/14

3/15E

60.5
38.4
9.1
108.0

Pre-tax income
Provision for income tax
Tax rate
Net income (Loss)
Non-GAAP Diluted EPS

12/13

12/14E

52.7
35.7
8.2
96.5

Interest income (expense), net


Other income, net

9/13

FY14E
6/14
9/14

Licenses
Maintenance
Professional Services
Total revenues

Operating income
EBITDA

3/13

7.8
0.8
0.4

12/15E

FY11

FY12

FY13

(16.8)
(18.2)
(5.0)
27%
(13.2)
($0.15)

(9.1)
(9.6)
(1.5)
16%
(8.0)
($0.09)

(3.4)
(3.3)
(6.3)
190%
3.0
$0.03

32.7
32.0
23.7
74%
8.3
$0.09

(23.5)
(23.8)
2.1
-9%
(25.9)
($0.29)

(7.0)
(7.0)
3.2
-46%
(10.2)
($0.11)

(8.6)
(10.3)
4.0
-39%
(14.4)
($0.16)

28.2
27.5
13.7
50%
13.7
$0.15

(24.3)
(25.1)
(7.5)
30%
(17.6)
($0.19)

(9.8)
(10.5)
(3.2)
30%
(7.4)
($0.08)

(6.6)
(7.4)
(2.2)
30%
(5.2)
($0.06)

36.6
35.8
10.7
30%
25.1
$0.27

19.7
18.9
9.3
49%
9.5
$0.11

14.6
11.7
7.9
67%
3.8
$0.04

86.5
86.5

87.3
87.3

88.2
90.3

90.4
90.4

89.2
89.2

89.8
90.9

90.1
90.1

91.5
91.5

92.0
92.0

92.4
92.4

92.9
92.9

93.3
93.3

84.0
85.3

86.6
87.3

88.1
88.6

90.1
90.4

92.6
92.6

94.4
94.4

Non-GAAP Margin Analysis


Licenses margin
Maintenance and services margin
Professional services margin
Gross margin
Operating margin
EBITDA margin
Net margin

96.9%
92.0%
-20.3%
85.8%
-10.8%
-9.0%
-8.5%

97.5%
93.4%
-15.8%
87.1%
-1.8%
1.0%
-1.4%

97.3%
94.0%
-24.1%
86.5%
5.7%
8.6%
4.6%

97.4%
94.1%
3.7%
89.3%
25.5%
27.4%
17.6%

97.2%
93.3%
-18.4%
84.3%
-13.0%
-13.0%
-9.3%

97.3%
94.6%
-3.4%
86.2%
1.8%
1.8%
1.4%

96.8%
94.7%
-8.8%
86.9%
2.0%
2.9%
0.5%

98.0%
94.5%
4.0%
88.6%
21.9%
22.8%
15.0%

98.0%
93.5%
2.0%
85.2%
-9.3%
-7.0%
-6.9%

98.0%
94.0%
5.0%
86.5%
2.0%
5.5%
1.1%

98.0%
94.0%
0.0%
86.3%
4.5%
9.9%
2.8%

98.5%
94.5%
4.0%
88.5%
23.5%
28.7%
16.2%

98.3%
92.4%
11.3%
89.5%
9.3%
10.2%
7.2%

97.9%
92.9%
-1.1%
89.3%
8.8%
10.2%
5.9%

97.3%
93.4%
-12.2%
87.5%
7.4%
9.7%
5.0%

97.4%
94.3%
-5.6%
86.8%
5.5%
6.0%
3.5%

98.2%
94.0%
2.9%
86.8%
7.5%
11.8%
4.9%

98.2%
94.0%
2.9%
86.2%
9.5%
12.7%
6.3%

Non-GAAP Expense ratios (% of revenue)


Research and development
Sales and marketing
General and administrative
Total operating expenses

15.3%
60.1%
21.6%
96.6%

14.1%
56.6%
18.2%
88.9%

12.1%
50.7%
18.0%
80.8%

8.9%
43.0%
12.4%
63.8%

14.6%
61.8%
22.0%
97.3%

12.6%
54.3%
17.5%
84.4%

15.2%
52.8%
16.9%
84.9%

10.5%
44.2%
12.0%
66.7%

15.0%
60.0%
19.5%
94.5%

13.5%
54.5%
16.5%
84.5%

13.3%
52.7%
15.8%
81.8%

10.0%
44.0%
11.0%
65.0%

7.5%
53.9%
18.8%
80.2%

9.8%
51.7%
19.1%
80.5%

12.1%
51.4%
16.8%
80.0%

12.9%
52.1%
16.4%
81.3%

12.6%
51.7%
15.1%
79.4%

12.4%
50.8%
13.5%
76.7%

Y/Y Growth (Non-GAAP)


Licenses
Maintenance
Professional Services
Total revenues
Total cost of revenue
Research and development
Sales and marketing
General and administrative
Total operating expenses
Operating income
Net income
Diluted EPS

13.7%
20.9%
35.1%
34.5%
27.9%
26.3%
22.0%
25.9%
53.5%
49.8%
103.2% 102.5%
23.4%
26.4%
5.8%
5.9%
26.1%
29.0%
-177.5% -192.5%
-215.4% -186.1%
-208.5% -187.0%

11.7%
33.1%
32.5%
20.9%
44.1%
36.9%
17.8%
0.7%
15.8%
59.5%
172.4%
165.8%

10.3%
30.9%
42.9%
17.7%
26.6%
3.4%
14.7%
15.7%
12.6%
28.3%
29.3%
26.1%

2.3%
28.4%
39.2%
15.1%
27.2%
10.1%
18.3%
17.2%
16.0%
-39.0%
-27.0%
-23.2%

10.6%
32.5%
51.7%
21.9%
30.7%
8.7%
16.9%
17.2%
15.6%
226.1%
222.3%
217.4%

23.8%
27.1%
35.7%
26.1%
23.0%
57.8%
31.3%
18.4%
32.4%
-55.8%
-86.3%
-86.3%

9.0%
18.3%
25.3%
12.9%
20.5%
33.1%
16.0%
9.7%
18.1%
-3.2%
-3.4%
-4.5%

8.0%
23.0%
28.6%
16.3%
9.7%
19.4%
12.9%
3.3%
13.0%
16.7%
13.4%
16.0%

8.5%
19.6%
14.7%
13.4%
10.8%
21.7%
13.8%
7.2%
13.6%
24.7%
-12.9%
-14.3%

8.0%
20.9%
28.6%
15.0%
20.1%
0.8%
14.7%
7.7%
10.8%
156.0%
540.1%
520.9%

16.0%
20.1%
23.8%
17.9%
19.3%
12.3%
17.4%
8.1%
14.9%
26.3%
26.8%
24.4%

40.8%
48.9%
26.2%
41.5%
40.8%
76.3%
39.9%
72.6%
49.4%
-2.4%
30.5%
29.8%

16.8%
35.2%
8.5%
21.2%
23.8%
57.0%
16.3%
23.1%
21.6%
14.8%
-0.7%
-3.0%

13.4%
33.2%
33.2%
21.1%
41.6%
50.3%
20.2%
6.9%
20.4%
2.0%
3.0%
-2.4%

11.1%
26.2%
36.7%
18.3%
25.0%
26.1%
20.1%
15.6%
20.2%
-12.5%
-17.0%
-15.5%

11.1%
20.8%
23.6%
15.8%
15.1%
12.9%
14.8%
6.5%
13.1%
57.8%
61.7%
57.8%

13.6%
18.8%
23.8%
16.6%
22.2%
14.8%
14.7%
4.2%
12.8%
47.5%
50.7%
47.8%

Q/Q Growth (Non-GAAP)


Licenses
Maintenance
Professional Services
Total revenues
Total cost of revenue
Research and development
Sales and marketing
General and administrative
Total operating expenses
Operating income
Net income
Diluted EPS

-43.7%
2.3%
-9.9%
-29.8%
0.6%
5.7%
-4.4%
20.5%
1.8%
-132.4%
-137.1%
-137.8%

-9.9%
6.0%
-2.2%
-3.6%
0.8%
-17.2%
-13.7%
-4.7%
-12.4%
411.7%
422.7%
411.8%

89.2% -47.7%
12.2%
0.3%
46.1% -12.3%
55.4% -31.3%
23.5%
1.0%
14.3%
12.6%
31.9%
-1.4%
7.0%
22.0%
22.7%
4.8%
591.9% -135.1%
493.5% -136.4%
492.8% -136.9%

24.2%
11.0%
21.1%
18.5%
3.9%
2.0%
4.1%
-5.8%
2.7%
116.7%
117.5%
117.2%

0.8%
66.6% -48.2%
1.7%
4.5%
4.3%
-12.6%
35.0% -10.0%
-0.3%
39.2% -29.3%
-5.1%
20.9%
-8.0%
20.2%
-3.7%
1.0%
-3.0%
16.5%
-4.0%
-3.7%
-0.9%
14.9%
0.3%
9.4%
0.2%
9.3% 1415.5% -130.2%
-63.8% 4083.0% -132.7%
-63.5% 4017.4% -132.5%

24.8%
7.9%
8.0%
15.5%
4.9%
4.0%
4.9%
-2.3%
3.3%
124.9%
117.6%
117.6%

0.3%
2.8%
-2.0%
1.1%
2.9%
-0.4%
-2.2%
-3.2%
-2.1%
124.4%
165.6%
164.4%

78.9%
3.8%
30.0%
42.8%
20.1%
7.3%
19.2%
-0.6%
13.4%
647.9%
728.8%
724.8%

GAAP
GAAP
GAAP
GAAP
GAAP
GAAP

operating income
pre-tax Income
provision for income tax
Tax rate
net income
diluted EPS

GAAP Fully diluted shares


Non-GAAP Fully diluted shares

14.9%
7.6%
11.1%
11.9%
1.1%
3.4%
5.5%
-5.8%
3.0%
81.6%
81.8%
82.0%

3.4
0.9
10.9
1209%
(10.0)
($0.11)

Source: Company data, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 28

Figure 22: QLIK Revenue Model


($ millions, unless specified)

3/13

FY13
6/13

9/13

12/13

3/14

FY14E
6/14

9/14

12/14E

3/15E

FY15E
6/15E
9/15E

FY11

FY12

FY14E

FY15E

FY16E

130.4
64.9
20.1
215.5

204.4
89.1
27.1
320.6

238.7
120.5
29.4
388.5

270.8
160.6
39.1
470.5

300.7
202.6
53.5
556.8

334.1
244.7
66.1
644.9

379.4
290.8
81.9
752.0

48.3%
41.4%
10.3%

60.5%
30.1%
9.4%

63.8%
27.8%
8.4%

61.4%
31.0%
7.6%

57.6%
34.1%
8.3%

54.0%
36.4%
9.6%

51.8%
37.9%
10.3%

50.4%
38.7%
10.9%

8.5%
19.6%
14.7%
13.4%

8.0%
20.9%
28.6%
15.0%

16.0%
20.1%
23.8%
17.9%

40.8%
48.9%
26.2%
41.5%

16.8%
35.2%
8.5%
21.2%

13.4%
33.2%
33.2%
21.1%

11.1%
26.2%
36.7%
18.3%

11.1%
20.8%
23.6%
15.8%

13.6%
18.8%
23.8%
16.6%

9.9%
25.0%
30.6%
18.3%

10.5%
21.5%
16.7%
15.4%

8.9%
21.8%
29.5%
15.9%

16.0%
20.1%
23.8%
17.9%

36%

21%
41%
13%
26%

13%
32%
32%
21%

11%
26%
37%
19%

11%
22%
25%
17%

13%
19%
24%
16%

66.6%
4.5%
35.0%
39.2%

-48.2%
4.3%
-10.0%
-29.3%

24.8%
7.9%
8.0%
15.5%

0.3%
2.8%
-2.0%
1.1%

78.9%
3.8%
30.0%
42.8%

1.26
-1.8%
14.7%

1.26
-1.9%
18.3%

1.26
-2.0%
15.4%

1.26
-0.9%
15.9%

1.26
0.0%
17.9%

1.39
4.9%
36.6%

1.29
-7.7%
28.8%

1.33
3.3%
17.8%

1.34
0.6%
17.7%

52.3
63.2
15.9

105
188
27

135
217
37

175
249
47

35%
53%
11%

40%
48%
12%

33%
59%
9%

35%
56%
10%

37%
53%
10%

10%
17%
21%

23%
21%
20%

27%
21%
48%

48%
36%
59%

28%
15%
35%

29%
15%
27%

26%
9%
29%

12%
12%
29%

24%
16%
24%

27%
21%
50%

30%
21%
38%

30%
12%
34%

41%
59%

53%
47%

43%
57%

48%
52%

48%
52%

47%
53%

45%
55%

45%
55%

104
27

111
27

208
55

101
28

109
25

108
23

450
85

458
114

511
141

29,000
1,568

30,000
1,661

31,000
1,721

32,000
1,809

33,000
1,928

33,000
1,987

24,000
1,044

27,000
1,425

1,721

161.8
102.3
18.0
179.8
15%
79%

111.1
113.6
11.3
122.4
23%
-32%

320.6
229.7
67.1
387.7

388.5
291.8
18.8
407.4
5%

470.5
364.0
16.4
486.8
20%

644.9
519.5
24.9
669.9
18%

752.0
604.9
26.1
778.1
16%

Revenue
Licenses
Maintenance
Professional Services
Total Revenue

52.7
35.7
8.2
96.5

60.5
38.4
9.1
108.0

54.5
40.7
8.9
104.1

103.1
45.7
13.0
161.8

53.9
45.8
11.4
111.1

66.9
50.9
13.8
131.6

67.5
51.8
12.1
131.3

112.4
54.1
16.3
182.7

58.2
56.4
14.6
129.2

72.6
60.8
15.8
149.3

72.9
62.5
15.5
150.9

Revenue mix
Licenses
Maintenance
Professional Services

54.53%
37.0%
8.5%

56.0%
35.6%
8.4%

52.3%
39.1%
8.5%

63.7%
28.2%
8.0%

48.49%
41.3%
10.2%

50.9%
38.7%
10.5%

51.4%
39.4%
9.2%

61.5%
29.6%
8.9%

45.0%
43.6%
11.3%

48.7%
40.8%
10.6%

YoY Growth
Licenses
Maintenance
Professional Services
Total Revenue

13.7%
35.1%
27.9%
22.0%

20.9%
34.5%
26.3%
25.9%

11.7%
33.1%
32.5%
20.9%

10.3%
30.9%
42.9%
17.7%

2.3%
28.4%
39.2%
15.1%

10.6%
32.5%
51.7%
21.9%

23.8%
27.1%
35.7%
26.1%

9.0%
18.3%
25.3%
12.9%

8.0%
23.0%
28.6%
16.3%

14%
34%
28%
22%

20%
33%
26%
25%

12%
32%
31%
21%

10%
30%
41%
17%

1%
27%
37%
14%

9%
30%
48%
20%

25%
28%
35%
27%

10.8%
20.1%
27.1%
14.7%

Sequential Growth
Licenses
Maintenance
Professional Services
Total Revenue

-43.7%
2.3%
-9.9%
-29.8%

14.9%
7.6%
11.1%
11.9%

-9.9%
6.0%
-2.2%
-3.6%

89.2%
12.2%
46.1%
55.4%

-47.7%
0.3%
-12.3%
-31.3%

24.2%
11.0%
21.1%
18.5%

0.8%
1.7%
-12.6%
-0.3%

Currency Impact
$/ Euro, average over quarter
FX impact on total revenue, Y/Y Growth
Est. Total revenue growth, organic cc

1.32
0.2%
21.8%

1.31
0.4%
25.5%

1.33
1.7%
19.3%

1.36
1.2%
16.4%

1.37
0.9%
14.1%

1.37
1.3%
20.6%

1.31
-1.0%
27.1%

Revenues by Geography
Americas
Europe
Rest of World

33.4
53.7
9.5

37.9
58.0
12.2

41.3
52.1
10.7

62.0
85.7
14.4

36.9
62.8
11.5

46.6
70.4
14.6

Revenue Share By Geography


Americas
Europe
Rest of World

35%
56%
10%

35%
54%
11%

40%
50%
10%

38%
53%
9%

33%
56%
10%

YoY Growth
Americas
Europe
Rest of World

29%
17%
32%

31%
19%
48%

35%
13%
13%

25%
13%
20%

YoY Revenue Growth, Constant Currency


Americas
Europe
Rest of World

29%
16%
37%

31%
17%
53%

36%
9%
23%

Direct Channel, License and 1st Year Maint.


Indirect Channel,License and 1st Year Maint.

37%
63%

43%
57%

88
32
28,000
1,484

YoY Growth, constant currency


Licenses
Maintenance
Professional Services
Total Revenue

# Deals over $100K


# Deals over $250K
Customers
Headcount

Software Bookings Analysis (On-Balance Sheet)


Revenue Recognized (recurring + license)
96.5
Deferred Revenue
89.2
Change in Deferred Revenue (Q/Q)
3.3
Total Software Bookings
99.8
YoY Growth
19%
Sequential Growth
-36%

108.0
88.2
(1.1)
106.9
31%
7%

104.1
84.3
(3.9)
100.2
18%
-6%

131.6
113.1
(0.5)
131.2
23%
7%

131.3
96.9
(16.3)
115.0
15%
-12%

182.7
115.1
18.3
201.0
12%
75%

129.2
131.8
16.7
145.9
19%
-27%

149.3
128.4
(3.4)
145.9
11%
0%

150.9
119.2
(9.2)
141.8
23%
-3%

12/15E

215.5
140.1
20.8
236.3
18%
67%

FY13

556.8
438.7
12.8
569.6
17%

Source: Company data, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 29

Figure 23: QLIK Balance Sheet


($ millions, unless specified)

FY10
12/10

FY11
12/11

FY12
12/12

214.8
101.4
16.1
1.0
11.5
344.9

3/13

FY13
6/13

FY14E
6/14

9/13

12/13

3/14

223.5
94.3
12.0
0.8
19.2
349.8

235.2
89.3
14.4
0.2
31.9
370.9

227.7
162.0
16.3
1.9
407.9

253.3
123.9
19.1
1.9
0.6
398.8

255.0
126.1
15.4
1.9
398.4

12/14E

3/15E

FY15E
6/15E
9/15E

242.0
129.1
13.5
1.9
386.4

264.4
152.2
18.3
1.9
436.8

278.7
141.6
22.0
1.9
444.2

301.4
129.2
16.4
1.9
448.9

9/14

12/15E

3/16E

FY16E
6/16E
9/16E

298.4
129.0
21.1
1.9
450.5

315.9
177.1
21.5
1.9
516.5

330.0
163.8
25.4
1.9
521.1

358.2
150.4
19.1
1.9
529.6

357.3
148.1
24.2
1.9
531.5

384.1
210.1
25.6
1.9
621.7

12/16E

Current Assets
Cash and Cash Equivalents
Accounts Receivables, net
Prepaid Expenses and Other Current Assets
Deferred Income Taxes
Other Current Assets
Total Current Assets

158.7
85.4
7.1
0.5

177.4
111.7
10.2
0.8

251.7

300.1

195.8
144.5
14.5
1.2
355.9

Property and Equipment, net


Intangible Assets, net
Goodwill
Deferred Income Taxes
Deposits and Other Assets, net
Total Assets

4.4
0.4
2.7
4.2
1.6
265.1

10.8
0.2
2.8
2.3
1.6
317.7

17.0
5.6
7.4
1.8
2.6
390.4

18.3
5.3
7.2
0.9
2.7
379.3

18.5
11.7
12.1
2.6
394.7

20.1
11.4
12.4
2.6
417.3

21.5
12.7
21.2
2.1
2.5
467.9

24.2
11.9
21.3
2.2
3.2
461.5

26.8
10.8
21.1
2.4
3.1
462.6

27.0
9.3
20.0
2.6
3.0
448.2

27.3
9.0
20.0
2.6
3.0
498.7

28.3
8.7
20.0
2.6
3.0
506.8

29.3
8.4
20.0
2.6
3.0
512.2

30.3
8.1
20.0
2.6
3.0
514.4

31.3
7.8
20.0
2.6
3.0
581.2

32.3
7.5
20.0
2.6
3.0
586.5

33.3
7.2
20.0
2.6
3.0
595.7

34.3
6.9
20.0
2.6
3.0
598.3

35.3
6.6
20.0
2.6
3.0
689.2

8.4
5.6
47.9
25.3
13.0

0.3
1.6
4.8
63.9
30.6
16.8

4.2
7.1
84.2
37.0
26.1

0.2
5.8
87.6
32.0
21.3

0.3
100.5

118.1

0.2
158.7

0.1
147.1

6.4
86.3
33.7
23.4
0.1
150.1

5.5
81.8
34.2
24.0
0.1
145.7

2.6
5.3
98.7
46.8
29.5
0.5
183.4

6.3
110.2
39.5
29.0
0.5
185.5

0.3
4.7
109.4
42.2
27.7
0.5
184.8

0.8
7.4
92.5
42.1
30.7
0.5
174.0

7.3
111.5
47.5
32.9
1.8
201.0

9.0
128.0
42.7
33.6
1.3
214.5

9.0
123.9
44.8
35.8
1.5
215.0

9.1
116.2
46.8
37.7
1.5
211.3

8.6
135.7
51.7
40.9
2.2
239.2

10.5
148.0
49.3
38.9
1.5
248.1

10.4
144.2
52.1
41.7
1.7
250.2

10.4
133.4
53.7
43.3
1.7
242.5

10.2
161.0
61.3
48.6
2.6
283.7

2.1
0.0
3.2
5.3

3.2
6.9
10.1

1.7
0.5
3.9
6.1

1.6
0.5
4.3
6.4

1.8
2.4
8.6
12.8

2.5
6.9
6.9
16.2

3.6
0.9
7.8
12.4

3.4
0.9
8.0
12.3

3.7
0.9
8.0
12.6

4.4
0.4
5.6
10.3

3.7
0.4
5.6
9.6

3.9
0.4
5.6
9.8

4.5
0.4
5.6
10.4

3.0
0.4
5.6
9.0

4.3
0.4
5.6
10.2

4.5
0.4
5.6
10.4

5.2
0.4
5.6
11.1

3.5
0.4
5.6
9.4

5.1
0.4
5.6
11.0

0.0
157.9
1.1
0.1
159.2
265.1

0.0
180.1
0.3
9.2
189.5
317.7

0.0
209.6
2.9
13.0
225.6
390.4

0.0
223.8
2.1
(0.2)
225.7
379.3

0.0
238.6
1.4
(8.2)
231.8
394.7

0.0
257.8
2.9
(5.2)
255.4
417.3

0.0
265.7
3.4
3.0
272.2
467.9

0.0
283.0
(22.8)
3.7
263.8
461.5

0.0
294.5
(33.0)
3.7
265.2
462.6

0.0
309.4
1.9
(47.4)
263.9
448.2

0.0
309.4
12.3
(33.7)
288.1
498.7

0.0
309.4
24.3
(51.2)
282.5
506.8

0.0
309.4
36.0
(58.6)
286.9
512.2

0.0
309.4
48.5
(63.8)
294.2
514.5

0.0
309.4
61.0
(38.7)
331.8
581.2

0.0
309.4
75.4
(56.9)
327.9
586.5

0.0
309.4
89.6
(64.7)
334.3
595.7

0.0
309.4
104.6
(67.7)
346.4
598.3

0.0
309.4
119.6
(34.6)
394.4
689.2

Current Liabilities
Line of Credit
Income Taxes Payable
Accounts Payable
Deferred Revenue, Current Portion
Accrued payroll and other related costs
Accrued expenses
Stock warrant liability
Deferred Income Taxes
Total Current Liabilities
Noncurrent Liabilities
Long Term Debt
Deferred Revenue, non current
Deferred Income Taxes
Other liabilities, non current
Stock Warrant Liability
Total Non Current Liabilities
Convertible preferred stock
Common Stock, $.001 par value
Additional Paid in Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings/Accumulated Deficit
Total Shareholders Equity
Total Liabilities & Shareholders Equity
Liquidity & Leverage
Current Ratio
Debt to Capital
Long Term Debt to Capital

2.5
0.0
0.0

2.2
0.0
0.0

2.3
0.0
0.0

2.3
0.0
0.0

2.5
0.0
0.0

2.2
0.00
0.00

2.2
0.0
0.0

2.2
0.00
0.00

2.2
0.00
0.00

2.2
0.00
0.00

2.1
0.00
0.00

2.1
0.00
0.00

2.1
0.00
0.00

2.2
0.00
0.00

2.1
0.00
0.00

2.1
0.00
0.00

2.2
0.00
0.00

2.2
0.00
0.00

Management & Profitability


DSO
Return on Assets
Return on Capital
Return on Equity

94
6.4%
10.8%
10.8%

96
5.6%
9.8%
9.8%

96
-2.2%
-3.6%
-3.6%

80
-0.4%
-0.6%
-0.6%

78
1.1%
1.9%
1.9%

91
6.1%
10.5%
10.5%

102
-2.2%
-3.9%
-3.9%

87
0.4%
0.7%
0.7%

90
0.1%
0.2%
0.2%

76
5.5%
9.5%
9.5%

100
-1.8%
-3.2%
-3.2%

79
0.3%
0.6%
0.6%

78
0.8%
1.4%
1.4%

75
6.0%
10.5%
10.5%

100
-1.4%
-2.4%
-2.4%

79
0.5%
0.9%
0.9%

78
1.4%
2.3%
2.3%

75
6.5%
11.3%
11.3%

Per Share Data


Book Value
Free Cash Flow
Net Cash
Earnings

$2.17
$0.05
$2.02
$0.18

$2.56
($0.01)
$2.22
$0.15

$2.61
$0.15
$2.48
($0.15)

$2.66
$0.09
$2.56
($0.09)

$2.83
($0.03)
$2.60
$0.03

$3.01
$0.03
$2.52
$0.09

$2.96
$0.18
$2.84
($0.29)

$2.92
($0.01)
$2.80
($0.11)

$2.93
($0.09)
$2.69
($0.16)

$3.15
$0.23
$2.89
$0.15

$3.07
$0.14
$3.03
($0.19)

$3.10
$0.23
$3.26
($0.08)

$3.17
($0.05)
$3.21
($0.06)

$3.56
$0.17
$3.39
$0.27

$3.50
$0.13
$3.52
($0.19)

$3.55
$0.28
$3.80
($0.08)

$3.66
($0.02)
$3.77
($0.03)

$4.15
$0.27
$4.04
$0.35

Source: Company data, Wedbush Securities, Inc.


Steve Koenig (415) 274-6801

Qlik Technologies | 30

Figure 24: QLIK Statement of Cash Flows


($ millions, unless specified)
Operating Activities
Net Income
Depreciation, Amortization, and Other Non-Cash Items
Stock Based Compensation Expense
Deferred Income Taxes
Excess tax benefits from employee stock plan
Other Non Cash Items
Change in Current Accounts
Cash Flow from Operating Activities
Investing Activities
Acquisitions
Investment in Property and Equipment
Cash Flow from Investing Activities
Financing Activities
Proceeds from equity offerings and options
Excess tax benefits from stock based comp
Other financing activities
Net Borrowings on line of credit
Repayments of term debt
Contingent consideration
Other financing activities
Cash Flow from Financing Activities
Foreign Exchange Rate Effect on Cash and Cash Equivalents

FY13
6/13

9/13

12/13

3/14

(13.2)
1.7
6.0
(4.2)
1.7

(8.0)
2.0
6.6
(2.3)
4.3

3.0
2.2
8.6
0.7
3.8

8.3
2.3
7.8
1.7
(9.3)

(25.9)
2.6
7.8
(3.4)
0.6

22.7

6.6

(17.6)

(5.7)

14.7

9.1

0.8

(2.8)
(2.8)

(4.4)
(1.8)
(6.1)

4.0
4.2
0.2
0.2
8.4

3/13

(1.3)

FY14E
6/14

FY15E
6/15E
9/15E

9/14

12/14E

3/15E

12/15E

FY11

FY12

FY13

FY14E

FY15E

FY16E

(10.2)
2.6
8.7
(0.7)
1.0

(14.4)
3.2
9.7
(1.0)
4.4

13.7
3.0
10.2
(1.0)
-

(17.6)
3.0
10.7
(1.0)
-

(7.4)
3.0
11.3
(1.0)
-

(5.2)
3.0
11.8
(1.0)
-

25.1
3.0
12.4
(1.0)
-

9.0
3.0
10.2
(2.4)
4.2

3.8
5.3
19.3
(4.8)
2.0

(10.0)
8.2
28.9
(4.0)
0.5

(36.7)
11.3
36.5
(6.2)
6.0

(5.0)
12.0
46.2
(4.1)
-

4.1
12.0
56.2
(4.1)
-

37.7

2.8

(8.1)

(2.2)

21.2

18.8

(9.6)

(20.0)

(7.3)

2.1

6.1

30.1

10.3

8.0

5.1

19.4

4.1

(6.2)

23.8

16.3

24.6

(1.0)

19.5

16.7

27.7

29.7

41.1

59.5

76.1

(2.6)
(2.6)

(9.0)
(2.5)
(11.5)

(3.4)
(3.4)

(4.5)
(4.5)

(3.4)
(3.4)

(3.4)
(3.4)

(4.0)
(4.0)

(4.0)
(4.0)

(4.0)
(4.0)

(4.0)
(4.0)

(7.8)
(7.8)

(10.3)
(21.1)

(13.4)
(9.6)
(23.0)

(14.6)
(14.6)

(16.0)
(16.0)

(16.0)
(16.0)

6.0
2.3
(0.4)
(0.2)
(0.2)
-

11.3
(0.7)
-

1.9
(1.7)
(1.2)
(1.2)
-

6.0
3.4
-

2.1
0.7
-

4.2
1.0
(2.0)
(2.0)
-

1.0
1.0
-

1.0
1.0
-

1.0
1.0
-

1.0
1.0
-

1.0
1.0
-

9.5
2.4
0.4
(0.2)
-

5.5
4.8
(0.6)
(0.4)
(0.2)
-

23.1
4.0
(1.5)
(0.0)
(1.5)
-

13.3
6.2
(2.0)
(2.0)
-

4.0
4.1
-

4.0
4.1
-

7.8
.
(2.1)

10.6

(1.0)

9.4

2.9

3.2

2.0

2.0

2.0

2.0

2.0

11.9

9.7

25.7

17.5

8.1

8.1

(0.8)

2.9

(0.1)

0.2

Net increase (decrease) in cash and equivalents


Cash and Equivalents, beginning of period
Cash and Equivalents, end of period

19.0
195.8
214.8

8.7
214.8
223.5

11.6
223.5
235.2

(7.5)
235.2
227.7

25.6
227.7
253.3

1.8
253.3
255.0

(13.1)
255.0
242.0

(6.8)

22.4
242.0
264.4

14.3
264.4
278.7

22.7
278.7
301.4

(3.0)
301.4
298.4

17.5
298.4
315.9

18.5
158.7
177.4

(2.3)

18.4
177.4
195.8

2.1

31.9
195.8
227.7

36.7
227.7
264.4

51.5
264.4
315.9

68.2
315.9
384.1

Free Cash Flow


per share
Net cash and Investments, end of period
per share

12.8
$0.15
214.7
$2.48

7.5
$0.09
223.5
$2.56

(2.5)
($0.03)
235.2
$2.60

3.1
$0.03
227.7
$2.52

16.2
$0.18
253.3
$2.84

(0.5)
($0.01)
255.0
$2.80

(8.3)
($0.09)
242.0
$2.69

21.0
$0.23
264.4
$2.89

12.8
$0.14
278.7
$3.03

21.2
$0.23
301.4
$3.26

(4.4)
($0.05)
298.4
$3.21

16.0
$0.17
315.9
$3.39

6.2
$0.07
177.1
$2.02

17.7
$0.20
195.8
$2.22

21.0
$0.24
227.7
$2.52

28.3
$0.31
264.4
$2.89

45.6
$0.49
315.9
$3.39

62.2
$0.66
384.1
$4.04

Source: Company data, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 31

(0.6)

(7.3)

Figure 25: QLIK Valuation


($ millions, unless specified)
Valuation Summary
12-month target price (average of EV/Rev, DCF)
Current share price
Upside (downside) %

$37
$30.78
19%

EV/Revenue Method
Forward EV/ revenue
CY15 revenue per share
CY14 EV per share
Cash less net debt per share, 12 months forward
12-month target price

5
$6.96
$34.81
$3.21
$38

DCF
Beta
Risk Free Rate (10-Yr T Bond)
Risk Premium
WACC (assumes no LTD)
NPV of FCF
EV/FCF - terminal value multiple
Terminal value
NPV of terminal value
Cash less net debt per share, 12 months forward
12-month target price

1.7
2.60%
6.00%
12.7%
$6.27
30
$80.86
$26.01
$3.21
$35

DCF Assumptions
Revenue
Operating income
EBITDA
Net income
FCF

CY09
157.4
14.6
15.8
7.3
14.2

CY10
226.5
30.6
32.3
17.7
27.2

CY11
320.6
29.9
32.8
23.1
6.2

CY12
388.5
34.3
39.5
22.9
17.7

CY13
470.5
35.0
45.7
23.6
21.0

CY14E
556.8
30.6
33.4
19.6
28.3

CY15E
644.9
48.2
76.0
31.7
45.6

CY16E
752.0
71.2
95.2
47.7
62.2

CY17E
894.9
62.6
80.5
40.3
71.6

CY18E
1,073.9
85.9
107.4
59.1
96.7

CY19E
1,288.7
103.1
128.9
70.9
116.0

CY20E
1,533.5
138.0
168.7
99.7
153.4

CY21E
1,794.2
161.5
197.4
116.6
179.4

CY22E
2,063.4
206.3
247.6
154.8
227.0

CY23E
2,352.2
235.2
282.3
176.4
258.7

CY24E
2,658.0
265.8
319.0
199.4
292.4

Margins (%)
Operating margin
EBITDA margin
Net margin
FCF margin

9%
10%
5%
9%

14%
14%
8%
12%

9%
10%
7%
2%

9%
10%
6%
5%

7%
10%
5%
4%

5%
6%
4%
5%

7%
12%
5%
7%

9%
13%
6%
8%

7%
9%
5%
8%

8%
10%
6%
9%

8%
10%
6%
9%

9%
11%
7%
10%

9%
11%
7%
10%

10%
12%
8%
11%

10%
12%
8%
11%

10%
12%
8%
11%

44%
109%
105%
143%
91%

42%
-2%
2%
30%
-77%

21%
15%
20%
-1%
188%

21%
2%
16%
3%
18%

18%
-13%
-27%
-17%
35%

16%
58%
128%
62%
61%

17%
48%
25%
51%
37%

19%
-12%
-15%
-16%
15%

20%
37%
33%
47%
35%

20%
20%
20%
20%
20%

19%
34%
31%
41%
32%

17%
17%
17%
17%
17%

15%
28%
25%
33%
27%

14%
14%
14%
14%
14%

13%
13%
13%
13%
13%

158.7
84.8
10.1%

177.1
85.3
0.5%

195.8
87.3
2.3%

227.7
88.6
1.6%

264.4
90.4
2.0%

315.9
92.6
2.4%

384.1
94.4
1.9%

455.7
96.1
1.8%

552.4
97.8
1.8%

668.4
99.5
1.8%

821.7
101.2
1.8%

1,001.2
103.0
1.8%

1,228.1
104.8
1.8%

1,486.9
106.6
1.8%

1,779.3
108.5
1.8%

Y/Y Growth (%)


Revenue
Operating income
EBITDA
Net income
FCF
Debt
Net Cash and investments
Fully diluted shares
Y/Y growth (%), diluted shares

77.0

Source: Thomson Reuters, Company data, Wedbush Securities, Inc.

Steve Koenig (415) 274-6801

Qlik Technologies | 32

Analyst Biography
Steve joined Wedbush in May 2012 to cover enterprise software. Previously, he led the software coverage at Longbow Research and
KeyBanc Capital Markets, as well as working on the Jefferies software team. Steve has worked in sell-side research since 2004,
following ten years in the software and internet sectors and seven years in strategy consulting. Previously, he has worked at Oracle,
Viant, Strategic Decisions Group, and IBM. Steve holds a B.S. with distinction in mathematical sciences and a M.S. in engineeringeconomic systems from Stanford University, and a MBA from the Harvard Business School.

Covered Public Companies Mentioned in this Report (priced as of 12/9/14 close):


COMPANY
Amazon.com
Google
Oracle
Salesforce.com
Splunk
Tableau

TICKER
AMZN
GOOGL
ORCL
CRM
SPLK
DATA

RATING
NEUTRAL
NEUTRAL
NEUTRAL
NEUTRAL
OUTPERFORM
OUTPERFORM

PRICE
$312.50
$536.11
$41.87
$56.14
$62.61
$82.20

PRICE
TARGET
$330
$530
$38
$61
$78
$98

Analyst Certification
I, Steve Koenig, certify that the views expressed in this report accurately reflect my personal opinion and that I have not and will not, directly or
indirectly, receive compensation or other payments in connection with my specific recommendations or views contained in this report.
Disclosure information regarding historical ratings and price targets is available at http://www.wedbush.com/ResearchDisclosure/DisclosureQ314.pdf

Investment Rating System:


Outperform: Expect the total return of the stock to outperform relative to the median total return of the analysts (or the analysts team) coverage
universe over the next 6-12 months.
Neutral: Expect the total return of the stock to perform in-line with the median total return of the analysts (or the analysts team) coverage
universe over the next 6-12 months.
Underperform: Expect the total return of the stock to underperform relative to the median total return of the analysts (or the analysts team)
coverage universe over the next 6-12 months.
The Investment Ratings are based on the expected performance of a stock (based on anticipated total return to price target) relative to the
other stocks in the analysts coverage universe (or the analysts team coverage).*
Rating Distribution
(as of September 30, 2014)
Outperform:54%
Neutral: 43%
Underperform: 3%

Investment Banking Relationships


(as of September 30, 2014)
Outperform:23%
Neutral: 1%
Underperform: 0%

The Distribution of Ratings is required by FINRA rules; however, WS stock ratings of Outperform, Neutral, and Underperform most closely
conform to Buy, Hold, and Sell, respectively. Please note, however, the definitions are not the same as WS stock ratings are on a relative
basis.
The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The
analysts receive compensation that is based upon various factors including WS total revenues, a portion of which are generated by WS
investment banking activities.
Wedbush Equity Research Disclosures as of December 10, 2014
Company

Disclosure

Qlik Technologies
Amazon.com
Google
Oracle
Salesforce.com
Splunk Inc.
Tableau Software

1
1
1
1
1
1
1

Research Disclosure Legend


1.
WS makes a market in the securities of the subject company.
2.
WS managed a public offering of securities within the last 12 months.
3.
WS co-managed a public offering of securities within the last 12 months.
Steve Koenig (415) 274-6801

Qlik Technologies | 33

4.
5.
6.
7.
8.
9.
10.
11.
12.

WS has received compensation for investment banking services within the last 12 months.
WS provided investment banking services within the last 12 months.
WS is acting as financial advisor.
WS expects to receive compensation for investment banking services within the next 3 months.
WS provided non-investment banking securities-related services within the past 12 months.
WS has received compensation for products and services other than investment banking services within the past 12 months.
The research analyst, a member of the research analysts household, any associate of the research analyst, or any individual
directly involved in the preparation of this report has a long position in the common stocks.
WS or one of its affiliates beneficially own 1% or more of the common equity securities.
The analyst maintains Contingent Value Rights that enables him/her to receive payments of cash upon the companys meeting
certain clinical and regulatory milestones.

Price Charts
Wedbush disclosure price charts are updated within the first fifteen days of each new calendar quarter per FINRA regulations. Price charts for
companies initiated upon in the current quarter, and rating and target price changes occurring in the current quarter, will not be displayed until
the following quarter. Additional information on recommended securities is available on request.

* WS changed its rating system from (Strong Buy/Buy/Hold/Sell) to (Outperform/ Neutral/Underperform) on July 14, 2009.
Please access the attached hyperlink for WS Coverage Universe: http://www.wedbush.com/services/cmg/equities-division/research/equityresearch Applicable disclosure information is also available upon request by contacting Ellen Kang in the Research Department at (213) 6884529, by email to ellen.kang@wedbush.com, or the Business Conduct Department at (213) 688-8090. You may also submit a written request
to the following: Business Conduct Department, 1000 Wilshire Blvd., Los Angeles, CA 90017.

OTHER DISCLOSURES
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CORPORATE HEADQUARTERS (213) 688-8000
The information herein is based on sources that we consider reliable, but its accuracy is not guaranteed. The information contained herein is not a
representation by this corporation, nor is any recommendation made herein based on any privileged information. This information is not intended to be
nor should it be relied upon as a complete record or analysis; neither is it an offer nor a solicitation of an offer to sell or buy any security mentioned
herein. This firm, Wedbush Securities, its officers, employees, and members of their families, or any one or more of them, and its discretionary and
advisory accounts, may have a position in any security discussed herein or in related securities and may make, from time to time, purchases or sales
thereof in the open market or otherwise. The information and expressions of opinion contained herein are subject to change without further notice. The
herein mentioned securities may be sold to or bought from customers on a principal basis by this firm. Additional information with respect to the
information contained herein may be obtained upon request.

Steve Koenig (415) 274-6801

Qlik Technologies | 34

EQUITY RESEARCH DEPARTMENT


(213) 688-4529

DIRECTOR OF RESEARCH
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Taryn Kuida

LIFE SCIENCES AND HEALTH CARE

Communications and Application Software


Shyam Patil, CFA
(213) 688-8062
(213) 688-4548
Andy Cheng

Specialty Retail: Hardlines


Joan L. Storms, CFA
(213) 688-4537
John Garrett, CFA
(213) 688-4523
Seth Basham, CFA

TECHNOLOGY, INTERNET, MEDIA & SOCIAL MEDIA

(505) 417-5427

(415) 274-6801

Entertainment: Retail
Michael Pachter
Alicia Reese
Nick McKay

(213) 688-4474
(212) 938-9927
(213) 688-4343

Entertainment: Software
Michael Pachter
Nick McKay

(213) 688-4474
(213) 688-4343

Internet: Media and Gaming


Michael Pachter
Nick McKay
Alicia Reese

(213) 688-4474
(213) 688-4343
(212) 938-9927

Heather Behanna, Ph.D.

(415) 274-6874

Emerging Pharmaceuticals
Liana Moussatos, Ph.D.

(415) 263-6626

Healthcare Services - Managed Care


Sarah James
(213) 688-4503
Medical Devices
Tao Levy

Medical Diagnostics and Life Sciences Tools


Zarak Khurshid
(415) 274-6823

INDUSTRIAL GROWTH TECHNOLOGY


Environmental Services / Building Products
Al Kaschalk
(213) 688-4539
Water and Renewable Energy Solutions
David Rose, CFA
(213) 688-4319
James Kim
(213) 688-4380

Internet: Social Media, Advertising & Technology


Shyam Patil, CFA
(213) 688-8062
(213) 688-4548
Andy Cheng

EQUITY SALES
Los Angeles
San Francisco
New York
Boston
Minneapolis
Chicago

Media
James Dix, CFA

(213) 688-4315

Movies and Entertainment


Michael Pachter
Alicia Reese
Nick McKay

(213) 688-4474
(212) 938-9927
(213) 688-4343

Semiconductors
Betsy Van Hees
Ryan Jue, CFA

(415) 274-6869
(415) 263-6669

(213) 688-4470 / (800) 444-8076


(415) 274-6800
(212) 938-9931
(617) 832-3700
(213) 688-6671
(213) 688-4418

EQUITY TRADING
Los Angeles
San Francisco
New York
Boston
Milwaukee

CORPORATE HEADQUARTERS
1000 Wilshire Blvd., Los Angeles, CA 90017-2465
Tel: (213) 688-8000 www.wedbush.com

(212) 938-9948

(213) 688-4470 / (800) 421-0178


(415) 274-6811
(212) 344-2382
(617) 832-3700
(213) 688-4475