IT Services Sector Update More steam left for growth

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1 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 IT Services Sector Update More steam left for growth IT Services stock have done well in last five months on the back of strong rerating especially of companies having robust revenue growth. We believe the rerating would sustain for large-caps and there is room for expansion of P/E ratio for companies such as Wipro and Infosys. Demand environment remains strong and scope for FY16E revenue upgrade do exist. Our preference is for large-caps stocks within the sector and more so Wipro, Tech Mahindra and Infosys. Demand environment continues to be strong: Lead indicators such as CEO confidence / Tech Pulse Index in US are indicating strong improvement in last six months. In their recent analyst call Accenture highlighted strong demand in US across most verticals and in EU especially for outsourcing services. The improving confidence levels could boost discretionary spend in US, however EU would be dominated by cost take outs deals. The adoption of offshoring in continental Europe is on the rise and could sustain over the medium term. We note that EU though similar to US in overall market, offshoring in 1/3 rd. Revenues of European vendors such as Capgemini, Atos and Tieto are under substantial pressure. Rebid deal a large opportunity: Indian IT Companies have benefitted from rebid market and we expect the trend to continue. CY 09 &10 saw large number of deal signings and we expect a number of them to come up for renewal in the next 18 months. Further ever increasing restructuring of existing contracts also provide adequate room for strong growth. Digital and IMS would offset weakness in ADM and ERP: Adoption of SaaS is on the rise with a number of fortune 500 companies too implementing SaaS. Over the medium term, we expect SaaS to disrupt the traditional ADM market too, as more vertical specific providers increase. Both implementation and maintenance revenues from ERP would grow lower than company average. Adoption of digital and offshore penetration of IMS would be the two key growth drivers. FY16E revenue growth could be similar to FY15E: FY15E Industry growth would be ~15% and we believe FY16E could also have similar revenue growth. Our current forecast factor in slightly lover industry revenue growth and would be revising our forecast post 2Q results. FY16E revenue growth would be tightly knit than FY15E with TCS and Mindtree leading the sector in revenue growth. Rerating the key driver of stock performance in last 6 months:. One forward P/E have expanded by 20-45% for all stocks under our coverage with mid-cap stocks seeing the maximum expansion. The expansion is due to: i) Expansion of market wide P/E ratio ii) Rupee has depreciated by 5% over the same period and forward premia have expanded owing to strengthening US$. Prefer Large cap over mid-caps: Large-cap stocks have a more favourable risk reward and would benefit from the broad changes in the industry. Moreover they are better positioned to manage client specific issues and manage costs. HCL Tech is the only large-cap stock we are negative on owing to high exposure to ERP implementation and potential for margin downgrade. With in mid-caps we remain sellers of Mindtree and Persistent. Infosys, Wipro, TCS, Tech Mahindra and Cyient are our top picks in the sector Date Oct 07, 2014 Market Data SENSEX Nifty 7945 CNX IT Relative performance 40% 30% 20% 10% 0% -10% Sensex Performance (%) CNXIT 1m 3m 12m CNXIT Sensex Srivathsan Ramachandran, CFA srivathsan@sparkcapital.in Aishwariya KPL aishwariya@sparkcapital.in Find Spark research on Bloomberg (SPAK <go>), Thomson First Call, Reuters Knowledge and Factset 1

2 Sector Valuation * EPS numbers are adjusted for treasury shares ** Hexaware December year end *** HCL Tech June year end P/E EV/EBITDA EV/sales Company CMP Rs. TP Rs. Rating FY14 FY15E FY16E FY17E FY14 FY15E FY16E FY17E FY14 FY15E FY16E FY17E Cyient Add eclerx 1,398 1,250 Sell Firstsource Buy HCL Tech*** 1,740 1,675 Reduce Hexaware** Reduce Infosys 3,849 4,045 Buy KPIT Reduce Mindtree 1, Sell Mphasis Sell NM NM NM NIIT Tech Reduce Persistent 1,490 1,200 Sell Polaris Buy TCS 2,775 2,750 Add Tech Mahindra* 2,519 2,720 Add Wipro Buy

3 Summary Financials Sales (Rs. Mn) EBITDA (Rs. Mn) PAT (Rs. Mn) Company FY14 FY15E FY16E FY17E FY14 FY15E FY16E FY17E FY14 FY15E FY16E FY17E Cyient 22,064 26,006 28,743 32,836 4,101 4,638 5,164 5,820 2,661 3,529 4,000 4,628 eclerx 8,410 9,375 10,677 12,325 3,535 3,713 4,116 4,682 2,556 2,643 3,026 3,478 Firstsource 31,079 33,105 37,132 40,895 3,641 4,423 5,279 6,070 1,930 2,898 3,892 4,426 HCL Tech*** 329, , , ,271 86,680 92,553 94, ,898 63,700 69,307 71,450 82,980 Hexaware** 24,756 27,451 30,951 34,325 4,361 5,053 5,817 6,791 3,172 3,891 4,516 5,282 Infosys 501, , , , , , , , , , , ,456 KPIT 26,940 29,644 32,244 36,215 4,233 4,228 4,832 5,607 2,489 2,573 3,030 3,768 Mindtree 30,295 35,387 39,801 44,961 6,071 7,030 7,844 8,745 4,425 5,081 5,511 6,226 Mphasis 26,326 58,901 59,992 65,267 4,483 9,667 10,603 11,870 3,027 7,320 8,149 9,112 NIIT Tech 23,050 23,666 25,329 28,038 3,760 3,497 3,854 4,425 2,307 2,206 2,594 3,096 Persistent 16,692 19,024 21,353 24,613 4,199 4,469 5,014 5,798 2,493 2,945 3,391 4,094 Polaris 24,991 24,544 25,670 27,994 3,497 2,521 3,130 3,835 1,993 1,776 2,165 2,738 TCS 818, ,864 1,081,275 1,226, , , , , , , , ,916 Tech Mahindra* 186, , , ,308 40,228 42,077 48,129 53,938 29,087 28,993 33,887 39,743 Wipro 437, , , ,484 99, , , ,820 77,456 87,561 95, ,400 * EPS numbers are adjusted for treasury shares ** Hexaware December year end *** HCL Tech June year end 3

4 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 IT Services Sector Update Improving US macro would drive FY16 revenue growth Broad macro economic indicators and anecdotal evidence suggest a strengthening of macro-economic fundamentals for the technology sector. Two of key lead indicators namely: Tech Pulse Index and CEO confidence index have been inching up steadily in the last few months Tech Pulse Index maintained by San Francisco Fed has been steadily increasing. The increase in CEO confidence could boost sentiment and drive increased spending on discretionary projects. Anecdotal evidence suggests demand from US continues to improve for discretionary spend as evidenced by result Accenture results US Tech Pulse Index continues to improve steadily Confidence indicators in both Eurozone and Germany have been declining on the back of weak macro-indicators. However, we believe this trend will increase pressure on cost optimisation there by driving cost take out deals. Offshoring in Continental Europe would continue to increase led by cost pressures Source: Spark Capital Research US CEO Confidence Index Eurozone confidence indicators are in the decline Germany Eurozone Source: Bloomberg, Spark Capital Research Source: Bloomberg, Spark Capital Research 4

5 US$ bn IT Services Sector Update Rebid contracting activity would continue to be strong According to ISG 1HCY14 was a strong period for contracting. The strong activity was across the board and was helped by number of mega-deals signed in coming up for renewal. Analysis of contracts database indicate that contracting activity could continue to be robust. CY09-10 cumulatively saw TCV of US$ 270bn worth of deals signed Further the increase in restructuring is aiding Indian heritage vendors in gaining more deals A recent survey by an analyst firm indicates that only ~50% of clients are happy with their existing vendors. High dissatisfaction combined with increasing trend of restructuring would offer substantial opportunities for India heritage services providers to garner market share ACV of deals signed TCV of deals signed Source: Spark Capital Research, Bloomberg Restructuring continues to increase Contracts signed in would come up for renewal in next 18 months US$ BN H2014 Source: Spark Capital Research, ISG Source: Spark Capital Research 5

6 $ mn Eur Mn US$ Mn IT Services Sector Update Western service providers continue to loos market share According to ISG 1HCY14 was a strong period for contracting. The strong activity was across the board and was helped by number of mega-deals signed in coming up for renewal. Analysis of contracts database indicate that contracting activity could continue to be robust. CY09-10 cumulatively saw TCV of US$ 270bn worth of deals signed Further the increase in restructuring is aiding Indian heritage vendors in gaining more deals A recent survey by an analyst firm indicates that only ~50% of clients are happy with their existing vendors. High dissatisfaction combined with increasing trend of restructuring would offer substantial opportunities for India heritage services providers to garner market share European revenues on the rise 7,000 6,000 5,000 4,000 3,000 2,000 1, H2011 2H2011 1H2012 2H2012 1H2013 2H2013 1H2014 Infosys TCS CTS Wipro HCL Tech Source: Spark Capital Research, Bloomberg ACV of deals signed European services providers are losing share in home market , , , Q Q Q Q Q Q Q Q2 3,000 2,000 1, H2011 2H2011 1H2012 2H2012 1H2013 2H2013 1H2014 Lost revenues Tier 1 vendors Atos CAP Source: Spark Capital Research, ISG Source: Spark Capital Research 6

7 US$' 000K IT Services Sector Update SaaS could result in lower revenues from ERP Adoption of Software as a Service has gone well beyond the SME enterprises to large corporate. In some of our previous notes we had highlighted the risks from the changing landscape and the resultant impact on IT services vendors. Industry Analyst white paper indicates reduction in scope of services engagement from 50-70%. We note that this includes up front customisation & implementation work and maintenance We believe significant efforts are underway to capture share in the cloud / SaaS ecosystem by Indian vendors If I take good old SAP ERP (enterprise resource planning) system, for every dollar of license bought, it might generate $5 to $6 of services for me. So if a company spends $10 million for SAP licenses, it means $60 million revenue for us. In SaaS product and system engagement services, every dollar spent might be $3 of revenue for me. -Steve Cardell, HCL Technologies Revenues from Enterprise application Mindtree KPIT Hexaware TCS HCL Tech Infosys 0% 10% 20% 30% 40% 50% Source: Spark Capital Research Onpremise vs. SaaS TCO comparison 1,600 1,400 1,200 1, Source: Spark Capital Research Scope for Services reduce by 70% in SaaS 0 On-premise SaaS Application Software IT Resources Consulting Training Hardware Infrastructure Software Traditional software firms continue to acquire SaaS firms at rich valuation Acquirer Target US$ Mn EV / Sales Segment SAP Success Factors SAP Concur 8, , Talent Management Travel and Expense management SAP Ariba 4, Procurement Management Oracle Taleo 1, Talent Acquisition Oracle Responsys 1,500 7 Cross Channel Marketing Oracle Eloqua Sales and Marketing effectiveness IBM Kenexa 1,300 4 Talent Acquisition Source: Spark Capital Research, Media Reports 7

8 Midcap client concentration have not reduced Customer concentration is double edged sword for mid-cap firms. Top- 10 customer on an average account for ~50% of revenues and broadly determine the growth trajectory of mid-cap firms Over the last 5 years most companies have increased revenue by 50-70% however the concentration of top-10 clients have not reduced. Companies that have growth faster revenue growth have predominantly been driven by growth in top-10 clients. Mindtree and Persistent are cases in point as evident from the graph below Though increasing revenues from top-10 clients benefit the company over the long-term, any client specific issues can reduce revenue growth dramatically in the short-term. Hexaware: Case Study Post a super CY11 Hexaware had guided for strong CY12 US$ revenue growth of 20%. In Nov-12 Hexaware management downgraded growth from 20% to 18% and guided for a weak revenue in the ensuing six months. The downgrade was due to their top client delaying implementation of certain key projects. Guidance downgrade resulted in Hexaware stock price declining by 25% post announcement and 35% from 6 month high Cyient: Case Study In Sep-12 couple of Cyient s top-10 customer were involved in M&A activities. This resulted in some of the projects getting shelved or stalled. This resulted in Cyient posting low revenue growth over the next four quarters and resulting in a P/E derating. Client concentration risks have not abated in the last 5 years 70% 60% Top-5 Top-10 50% 40% 30% 20% 10% Mindtree Hexaware NIIT Tech Cyient Wipro Infosys HCL Tech KPIT Persistent Source: Spark Capital Research, KPIT did not disclose Revenues from Top-5 clients in FY09 8

9 FY13-16E US$ Revenue CAGR IT Services Sector Update Midcap valuations are at 5 year high IT stocks have done very well over the last six months on the back predominantly P/E expansion, than earnings led. With market wide P/E ratio increasing IT sector has kept pace with large-cap stocks trading closer to market multiples We are surprised by the expansion in certain select mid-cap stocks under our coverage especially Mindtree and Persistent. Though revenue growth is expected to be slightly ahead of peer group, we believe the risks that emanate from unforeseen events or client specific issues have not reduced to warrant a sharp increase in P/E Market is favouring firms with higher revenue growth over and this aspect can lead to sustained P/E improvement for Infosys, Wipro, Cyient and Tech Mahindra. We would be sellers of Mindtree and Persistent given unfavourable risk reward P/E multiples are driven by revenue growth 20% MTCL TechM TCS 15% ECLX PSYS CYL HCLT 10% KPIT INFO HEXW WPRO 5% NITEC MPHL POL 0% FY16E P/E Source: Spark Capital Research Across companies One year forward P/E are well above 5 year median year Median One year forward P/E One year forward P/E TCS Infosys Wipro MindTree Cyient MphasiS Polaris Hexaware NIIT Tech Tech M HCL Tech Persistent Eclerx KPIT Source: Spark Capital Research, Bloomberg 9

10 Sep-14 preview snapshot All numbers in Rs. mn except per share data Quarter Change Jun-14 Mar-14 Jun-13 YoY QoQ Comments / Watch out for Cyient (Consolidated) US$ Revenues % 3% US$ revenue grow th of 2.9% qoq Revenues 6,482 6,217 5, % 4% Expect margin to expand ~140 bps ow ing to absence of visa costs and EBITDA 1, , % 15% currency PAT % 23% Forex hedge gain of Rs. 140mn EPS % 23% Scope for sustained margin improvement eclerx (Consolidated) US$ Revenues % 5.0% Expect US$ revenues to grow 5% qoq mainly led by Cable Revenues 2,307 2,174 2, % 6.1% EBIT margins w ould increase ~210 bps primarily led by low er travel cost and EBITDA % 12.1% currency tailw ind PAT % 28.1% Gains from forex hedges and debtor restatement of Rs. 60mn EPS % 28.1% Firstsource (Consolidated) Revenues 7,766 7,556 7, % 2.8% Expect rupee revenue grow th of 3% yoy. Notably, 1Q is seasonally w eak EBITDA 1, % 9.1% quarter Margins w ould be up 125 bps yoy & flat qoq PAT % 20.6% Watchout for commentary on large deal w ins and update on vendor EPS % 20.6% consolidation in existing clients HCL Tech (Consolidated) US$ Revenues 1,445 1,407 1, % 2.7% Revenue grow th w ould be more broad based w ith CC headw ind of 50bps Revenues 87,714 84,240 79, % 4.1% Margins to decline ~ 60 bps qoq w ith w age hikes EBITDA 22,732 22,170 20, % 2.5% Deal w ins, non IMS traction and dividend payout w ould be key commentary to PAT 17,058 18,340 14, % -7.0% w atch for EPS % -7.0% Hexaware (Consolidated) US$ Revenues % 2.7% Expect US$ revenue grow th of 2.7% qoq after a strong quarter Revenues 6,357 6,104 6, % 4.2% Margins w ould be flat as w age hikes offset visa cost EBITDA 1,054 1,017 1, % 3.7% Forex losses w ould continue at Rs. 20mn PAT % 4.0% Watch for new CEO strategy and grow th roadmap EPS % 4.0% Info Edge (Standalone) Net sales 1,511 1,449 1, % 4.2% Revenues w ould grow 22% yoy led by traction in recruitment vertical EBITDA % -2.6% Margins w ould decline given high investments in 99acres.com EBITDA Margin 32% 34% 36% Other income w ould be high due to inflow from QIP of Rs. 7.5bn PAT % 4.9% Deferred Sales Revenue grow th w ould cross 20% EPS % 1.8% Recommendation Add Sell Buy Reduce Reduce Reduce 10

11 Sep-14 preview snapshot All numbers in Rs. mn except per share data Quarter Change Jun-14 Mar-14 Jun-13 YoY QoQ Comments / Watch out for Recommendation Infosys (Consolidated) US$ Revenues 2,184 2,133 2, % 2.4% 2.4% qoq US$ revenue grow th w ith 50 bps CC headw ind Revenues 132, , , % 3.8% EBIT Margins w ould improve 40bps mainly from currency tailw ind EBIT 34,029 32,110 28, % 6.0% Expect revenue guidance of US$ to be maintained at 7-9% Buy PAT 29,256 28,860 24, % 1.4% Watchout for: Articulation of new CEO's strategy and cash utilisation EPS % 1.4% KPIT Cummins (Consolidated) US$ Revenues % 5% US$ revenue grow th of 5% qoq on the back of ramp up in telematics deals Revenues 7,351 6,897 7, % 7% EBITDA margins w ould expand due to currency and benefits from SAP EBITDA , % 20% business Forex gains restructuring of ~Rs.40 mn led by restatement and hedge gains Reduce PAT % 23% Watch out for commentary on Auto grow th and margin recovery on a sequential EPS % 23% basis MCX (Standalone) Net sales % 2.1% Volume decline of 40% yoy w ould result in revenue decline EBITDA % -12.1% High fixed cost w ould result in sharp margin decline EBITDA Margin 19% 22% 36% Watch out for outline of Strategy post Kotak Mahindra Bank becoming a large Sell PAT % -17.7% shareholder EPS % -17.7% Mindtree (Consolidated) US$ Revenues % 3.6% Expect strong US$ revenue grow th of 3.6% Revenues 8,838 8,402 7, % 5.2% Margins w ould decline ~30 bps led by w age hikes offset by currency and visa EBITDA 1,674 1,608 1, % 4.1% cost Sell PAT 1,234 1,268 1, % -2.7% Forex gains of Rs.100 mn w ith debtor restatement and hedge gains EPS % -2.7% Mphasis (Consolidated) US$ Revenues NM -2% Expect US$ revenue to decline 1% qoq w ith decline in both HP and Digital Risk Revenues 14,913 14,902 NM 0% revenues EBITDA 2,453 2,514 NM -2% Margins w ould decline 40 bps qoq w ith revenue decline offsetting operational Sell PAT 1,890 1,748 NM 8% efficiencies and favorable currency EPS NM 8% Visibility on HP and Digital Risk business NIIT Tech (Consolidated) US$ Revenues % -0.4% Expect US$ revenue grow th of 1% qoq for services business w ith reported Revenues 5,828 5,777 5, % 0.9% revenues declining due to reduction in hardw are business EBITDA % 1.9% Adjusted margins w ould be up 30bps due to low er hardw are business and visa Reduce PAT % 21.7% costs EPS % 22.8% Forex gain of Rs. 40 mn from debtor restatement 11

12 Sep-14 preview snapshot All numbers in Rs. mn except per share data Quarter Change Jun-14 Mar-14 Jun-13 YoY QoQ Comments / Watch out for Recommendation Persistent (Consolidated) US$ Revenues % 6.3% Expect US$ revenue grow th of 6% Revenues 4,688 4,350 4, % 7.8% Wage hikes w ould offset improvement in visa costs, currency & product mix EBITDA 1, , % 8.1% Forex gain of Rs. 120 mn from hedges Sell PAT % 5.8% Update on margin and revenue guidance EPS % 5.8% Polaris (Consolidated) US$ Revenues % 1.3% Expect US$ revenue grow th to be flat qoq in services business Revenues 6,176 6,000 6, % 2.9% Products w ould grow 3% qoq EBITDA % 7.9% Margins to improve 40 bps qoq due to currency and utilisation Buy PAT % -5.5% Key commentary - Update on listing of products business, senior management EPS % -5.5% of Products business and restructuring efforts of services business Redington India (Consolidated) Net sales 72,800 71,559 66, % 1.7% Revenues grow th w ould be led by strong Non apple India business. Apple EBITDA 1,492 1,281 1, % 16.5% business w ould be w eak given launch of iphone6 in 3Q EBITDA Margin 2.0% 1.8% 2.4% Margins to improve on the back of higher non apple business Buy PAT % 6.5% YoY numbers not comparable due to sale of Easy Access EPS % 6.5% TCS (Consolidated) US$ Revenues 3,961 3,694 3, % 7.2% Expect US$ revenues grow th of 7.2% w ith CC headw ind of 70 bps Revenues 240, , , % 8.7% Mitsubishi JV integration w ould contribute 2.7% of grow th EBITDA 69,120 63,670 66, % 8.6% Margins w ould be stable due to integration of low er margin business Add PAT 52,146 50,578 47, % 3.1% EPS % 3.1% Tech Mahindra (Consolidated) US$ Adj Revenues % 3.1% Adjusted US$ revenue grow th w ould be3.52% w ith CC headw ind of ~70 bps Adj Revenues 53,533 51,201 47, % 4.6% Margins up ~100 bps w ith tailw ind from rupee and visa costs Adj EBITDA 10,245 9,270 6, % 10.5% Watchout for Update on MES merger, Large deal w ins and scope for sustaining Add Adj PAT 6,997 6,293 6, % 11.2% and improving margins Adj EPS % 11.2% Wipro (Consolidated) US$ Revenues IT Services 1,783 1,740 1, % 2.4% Constant currency w ould be in mid-point of revenue guidance Revenues 115, , , % 3.5% IT services EBIT margin w ould decline by 40bps w ith a tw o month w age hike EBIT 23,115 22,673 22, % 1.9% impact offset my favourable currency to a large extent Buy PAT 20,624 21,032 19, % -1.9% We expect 3QFY15 US$ revenue guidance to be in the range of 2.5%-4.5% qoq EPS % -1.9% 12

13 Absolute Rating Interpretation Buy Stock expected to provide positive returns of >15% over a 1-year horizon Add Stock expected to provide positive returns of >5% <15% over a 1-year horizon Reduce Stock expected to provide returns of <5% -10% over a 1-year horizon Sell Stock expected to fall >10% over a 1-year horizon Spark Disclaimer Spark Capital Advisors (India) Private Limited (Spark Capital) and its affiliates are engaged in investment banking, investment advisory and institutional equities. Spark Capital is registered with SEBI as a Stock Broker and Category 1 Merchant Banker. This document does not constitute or form part of any offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Nothing in this document should be construed as investment or financial advice, and nothing in this document should be construed as an advice to buy or sell or solicitation to buy or sell the securities of companies referred to in this document. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Spark Capital and/or its affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such applicable restrictions. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. Spark Capital makes no representation or warranty, express or implied, as to the accuracy, completeness or fairness of the information and opinions contained in this document. Spark Capital, its affiliates, and the employees of Spark Capital and its affiliates may, from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. This report has been prepared on the basis of information, which is already available in publicly accessible media or developed through an independent analysis by Spark Capital. While we would endeavour to update the information herein on a reasonable basis, Spark Capital and its affiliates are under no obligation to update the information. Also, there may be regulatory, compliance or other reasons that prevent Spark Capital and its affiliates from doing so. Neither Spark Capital nor its affiliates or their respective directors, employees, agents or representatives shall be responsible or liable in any manner, directly or indirectly, for views or opinions expressed in this report or the contents or any errors or discrepancies herein or for any decisions or actions taken in reliance on the report or the inability to use or access our service in this report or for any loss or damages whether direct or indirect, incidental, special or consequential including without limitation loss of revenue or profits that may arise from or in connection with the use of or reliance on this report. Spark Capital and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, Spark Capital has incorporated a disclosure of interest statement in this document. This should however not be treated as endorsement of views expressed in this report:

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