Operating Scenario 1

Tax Rate 19%

WACC 9%
Terminal P/E Multiple 15x

Income Statement
2011 2012 2013
Revenue 11,652 14,072 16,047
Growth 20.8% 14.0%

Cost of Net Revenues 3,461 4,216 5,036

Margin 29.7% 30.0% 31.4%

Gross Profit 8,191 9,856 11,011

% of Rev 70.3% 70.0% 68.6%

Operating Expenses
Sales and Marketing 2435 2913 3,060
% of Rev 20.9% 20.7% 19.1%

Product Development 1235 1,573 1,768

% of Rev 10.6% 11.2% 11.0%

General and Administrative 1364 1,567 1,703

% of Rev 11.7% 11.1% 10.6%

Provision for Transaction and Loan Losses 517 580 791

% of Rev 4.4% 4.1% 4.9%

Amortization of Acquired Intangible Assets 267 335 318

% of Rev 2.3% 2.4% 2.0%

Total Operating Expenses 5818 6968 7,640

Margin 49.9% 49.5% 47.6%

Income from Operations 2,373 2,888 3,371

Margin 20.4% 20.5% 21.0%

Interest and other, net 1537 196 95

Income before income Taxes 3,910 3,084 3,466

Margin 33.6% 21.9% 21.6%

Provision for Income Taxes -681 (475) (610)

Net Income 3,229 2,609 2,856

Margin 27.7% 18.5% 17.8%

Balance Sheet
DCF
2011 2012 2013
Revenue 11,652 14,072 16,047
Growth 20.8% 14.0%

Cost of Net Revenues 3,461 4,216 5,036

Margin 29.7% 30.0% 31.4%

Gross Profit 8,191 9,856 11,011

% of Rev 70.3% 70.0% 68.6%

Operating Expenses
Sales and Marketing 2435 2913 3,060
% of Rev 20.9% 20.7% 19.1%

Product Development 1235 1,573 1,768

% of Rev 10.6% 11.2% 11.0%

General and Administrative 1364 1,567 1,703

% of Rev 11.7% 11.1% 10.6%

Provision for Transaction and Loan Losses 517 580 791

% of Rev 4.4% 4.1% 4.9%

Amortization of Acquired Intangible Assets 267 335 318

% of Rev 2.3% 2.4% 2.0%

Total Operating Expenses 5818 6968 7,640

Margin 49.9% 49.5% 47.6%

EBIT 3,910 3,084 3,466

Less Taxes (681) (475) (610)
Plus DD&A 940 1,200 1,400
NWC 786 75 (229)
CAPEX (963) (1,257) (1,250)
FCF 4,017 2,690 2,877
Terminal Value 119,936

DCF Summary
Implied Enterprise Value 92,316
Less Net Debt (4,900)
Implied Equity Value 97,216
Current Market Cap 69,550
Implied Premium 39.78%

Revenue Growth
Upside
Base
Downside
COGS % Sales
Upside
Base
Downside

Sales and Marketing

Upside
Base
Downside

Product Development
Upside
Base
Downside

Sales and Marketing

Upside
Base
Downside

Product Development
Upside
Base
Downside

General and Administrative

Upside
Base
Downside

Provision for Transaction and Loan Losses

Upside
Base
Downside

Amortization of Acquired Intangible Assets

Upside
Base
Downside

Interest Income
Upside
Base
Downside

Depreciation
Upside
Base
Downside

NWC
Upside
Base
Downside

CAPEX
Upside
Base
Downside
2014 2015 2016 2017 2018 2019 2020 2021 2022
18,294 21,221 21,252 24,228 27,135 29,849 32,236 34,493 36,563
14.0% 16.0% 0.2% 14.0% 12.0% 10.0% 8.0% 7.0% 6.0%

5,854 6,769 6,758 7,680 8,575 9,402 10,122 10,796 11,408

32.0% 31.9% 31.8% 31.7% 31.6% 31.5% 31.4% 31.3% 31.2%

12,440 14,451 14,494 16,548 18,560 20,446 22,114 23,697 25,155

68.0% 68.1% 68.2% 68.3% 68.4% 68.5% 68.6% 68.7% 68.8%

3,293 3,820 3,825 4,361 4,884 5,373 5,803 6,209 6,581

18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0%

1,829 2,122 2,125 2,423 2,714 2,985 3,224 3,449 3,656

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

1,829 2,122 2,125 2,423 2,714 2,985 3,224 3,449 3,656

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

732 849 850 969 1,085 1,194 1,289 1,380 1,463

4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

274.40 318.31 318.79 363.42 407.03 447.73 483.55 517.39 548.44

1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%

7,958 9,231 9,245 10,539 11,804 12,984 14,023 15,004 15,905

43.5% 43.5% 43.5% 43.5% 43.5% 43.5% 43.5% 43.5% 43.5%

4,482 5,220 5,249 6,008 6,757 7,462 8,091 8,692 9,250

24.5% 24.6% 24.7% 24.8% 24.9% 25.0% 25.1% 25.2% 25.3%

120 120 120 120 120 120 120 120 120

4,602 5,340 5,369 6,128 6,877 7,582 8,211 8,812 9,370

25.2% 25.2% 25.3% 25.3% 25.3% 25.4% 25.5% 25.5% 25.6%

(874) (1,015) (1,020) (1,164) (1,307) (1,441) (1,560) (1,674) (1,780)

3,728 4,326 4,349 4,964 5,570 6,142 6,651 7,138 7,590

20.4% 20.4% 20.5% 20.5% 20.5% 20.6% 20.6% 20.7% 20.8%
2014 2015 2016 2017 2018 2019 2020 2021 2022
18,294 21,221 21,252 24,228 27,135 29,849 32,236 34,493 36,563
14.0% 16.0% 0.2% 14.0% 12.0% 10.0% 8.0% 7.0% 6.0%

5,854 6,769 6,758 7,680 8,575 9,402 10,122 10,796 11,408

32.0% 31.9% 31.8% 31.7% 31.6% 31.5% 31.4% 31.3% 31.2%

12,440 14,451 14,494 16,548 18,560 20,446 22,114 23,697 25,155

68.0% 68.1% 68.2% 68.3% 68.4% 68.5% 68.6% 68.7% 68.8%

3,293 3,820 3,825 4,361 4,884 5,373 5,803 6,209 6,581

18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0%

1,829 2,122 2,125 2,423 2,714 2,985 3,224 3,449 3,656

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

1,829 2,122 2,125 2,423 2,714 2,985 3,224 3,449 3,656

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

732 849 850 969 1,085 1,194 1,289 1,380 1,463

4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

274.40 318.31 318.79 363.42 407.03 447.73 483.55 517.39 548.44

1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%

7,958 9,231 9,245 10,539 11,804 12,984 14,023 15,004 15,905

43.5% 43.5% 43.5% 43.5% 43.5% 43.5% 43.5% 43.5% 43.5%

4,602 5,340 5,369 6,128 6,877 7,582 8,211 8,812 9,370

(874) (1,015) (1,020) (1,164) (1,307) (1,441) (1,560) (1,674) (1,780)
1,600 1,712 1,832 1,960 2,097 2,244 2,401 2,569 2,749
(300) (270) (243) (219) (197) (177) (159) (143) (129)
(1,300) (1,170) (1,053) (948) (853) (768) (691) (622) (560)
3,728 4,598 4,885 5,758 6,618 7,441 8,202 8,942 9,650

14.0% 16.0% 0.2% 14.0% 12.0% 10.0% 8.0% 7.0% 6.0%

14.0% 16.0% 0.15% 14.0% 12.0% 10.0% 8.0% 7.0% 6.0%
13.0% 14.0% 13.0% 11.0% 9.0% 8.0% 7.0% 6.0% 5.0%
11.0% 13.0% 12.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0%
32.0% 31.9% 31.8% 31.7% 31.6% 31.5% 31.4% 31.3% 31.2%
32.0% 31.9% 31.8% 31.7% 31.6% 31.5% 31.4% 31.3% 31.2%
30.0% 29.9% 29.8% 29.7% 29.6% 29.5% 29.4% 29.3% 29.2%
28.0% 27.9% 27.8% 27.7% 27.6% 27.5% 27.4% 27.3% 27.2%

28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0%

28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0%
29.0% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0%
30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0%
13.0% 13.0% 13.0% 13.0% 13.0% 13.0% 13.0% 13.0% 13.0%

18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0%

18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0%
19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0%
17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0%

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0%
12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0%

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
10.5% 10.5% 10.5% 10.5% 10.5% 10.5% 10.5% 10.5% 10.5%
11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0%

4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
5.5% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5%

1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%

1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%

120 120 120 120 120 120 120 120 120

120 120 120 120 120 120 120 120 120
100 100 100 100 100 100 100 100 100
80 80 80 80 80 80 80 80 80

1,600 1,712 1,832 1,960 2,097 2,244 2,401 2,569 2,749

1,600 1,712 1,832 1,960 2,097 2,244 2,401 2,569 2,749
1,500 1,605 1,717 1,838 1,966 2,104 2,251 2,409 2,577
1,400 1,498 1,603 1,715 1,835 1,964 2,101 2,248 2,405

(300) (270) (243) (219) (197) (177) (159) (143) (129)

(300) (270) (243) (219) (197) (177) (159) (143) (129)
 (500) (450) (405) (365) (328) (295) (266) (239) (215)
(700) (630) (567) (510) (459) (413) (372) (335) (301)

(1,300) (1,170) (1,053) (948) (853) (768) (691) (622) (560)

(1,300) (1,170) (1,053) (948) (853) (768) (691) (622) (560)
(1,500) (1,350) (1,215) (1,094) (984) (886) (797) (717) (646)
(1,700) (1,530) (1,377) (1,239) (1,115) (1,004) (903) (813) (732)
2023
38,391
5.0%

11,940
31.1%

26,451
68.9%

`
6,910
18.0%

3,839
10.0%

3,839
10.0%

1,536
4.0%

575.86
1.5%

16,700
43.5%

9,751
25.4%

120

9,871
25.7%

(1,876)

7,996
20.8%
2023
38,391
5.0%

11,940
31.1%

26,451
68.9%

6,910
18.0%

3,839
10.0%

3,839
10.0%

1,536
4.0%

575.86
1.5%

16,700
43.5%

9,871
(1,876)
2,942
(116)
(504)
10,317

5.0%
5.0%
4.0%
4.0%
31.1%
31.1%
29.1%
27.1%

28.0%
28.0%
29.0%
30.0%

10.0%
10.0%
11.0%
13.0%

18.0%
18.0%
19.0%
17.0%

10.0%
10.0%
11.0%
12.0%

10.0%
10.0%
10.5%
11.0%

4.0%
4.0%
5.0%
5.5%

1.5%
1.5%
2.0%
2.5%

120
120
100
80

2,942
2,942
2,758
2,574

(116) 13.0x
(116) 14.0x
 (194) 15.0x
(271) 16.0x
17.0x
(504)
(504)
(581)
(659)
P/E Exit Multiple vs WACC on Equity Value
13.0x 14.0x 15.0x 16.0x 17.0x
0.13 $ 69,604 $ 71,960 $ 74,315 $ 76,671 $ 79,026
0.12 $ 74,145 $ 76,720 $ 79,294 $ 81,868 $ 84,443
0.11 $ 79,104 $ 81,920 $ 84,736 $ 87,552 $ 90,368
0.1 $ 84,526 $ 87,609 $ 90,692 $ 93,774 $ 96,857
0.09 $ 90,461 $ 93,839 $ 97,216 $ 100,594 $ 103,971
P/E Exit Multiple vs WACC on Equity Value
Downside Base Upside
$ 77,112 $ 81,432 $ 90,461
$ 80,096 $ 84,493 $ 93,839
$ 83,080 $ 87,554 $ 97,216
$ 86,064 $ 90,615 $ 100,594
$ 89,048 $ 93,676 $ 103,971