Investor Presentation

APRIL 22, 2024

Vista Transaction Delivers Compelling, Risk-Adjusted Value To Model N Shareholders

New and Increasing

Standalone

Execution Risks

Compelling, Risk- Adjusted Value for Shareholders

Robust Transaction Process

  • Over the last 3+ years Model N focused on SaaS Transitions, driving growth in SaaS ARR and Professional Services ("PS") revenue
  • As SaaS Transitions near completion, driving future growth will require significant acceleration in non-SaaS Transition revenue streams
  • Given this dynamic the Board recognized new and increasing execution risks to achieving long-term growth, driven by:
    • Timing of new logo sales that are unpredictable and in a segment of the market in which we have less experience selling
    • Spending fatigue among existing customers that have recently transitioned to SaaS (60%+ of SaaS ARR recently transitioned)
    • Challenges backfilling PS revenue post-SaaS Transitions (~50% of PS revenue over the last ~2 years tied to SaaS Transitions)
  • Transaction offers immediate and compelling cash value to Model N shareholders, not subject to execution risk and challenges of standalone plan
  • 28x Q2'FY24 LTM EBITDA represents an attractive value compared to a broad set of comparable historic software transactions(1)
  • 23% premium to 30-trading day VWAP as of the close on January 10, 2024, the day prior to the Model N Board authorizing Jefferies to contact potential acquirors
  • 16% premium to the 30-trading day VWAP as of April 5, 2024, the trading day prior to the announcement of the acquisition
  • In January 2024, in the context of several inbound indications of interest, the Model N Board authorized Jefferies to contact potentially interested and qualified financial sponsors and strategic acquirors
  • Model N provided interested parties (9 financial sponsors) with extensive information under NDA, conducted management presentations and held multiple follow up meetings prior to soliciting interest
    • 3 strategic acquirors contacted elected not to pursue the opportunity
  • Each sponsor engaged substantively, and many indicated a desire to own the business, albeit at prices which approximated the market value of Model N in mid-February of ~$25-27 per share
  • The Vista offer of $30.00 cash per share represents the highest price proposed, which was the result of extensive negotiations with the Board starting from a preliminary price of $29.50 per share
  1. Based on preliminary results through Q2'FY24 (ended 03/31/24) set forth herein and current estimates.

2

Model N Is At A Critical Juncture

Model N's SaaS Transition

journey

  • Our focus over the past several years has been on transitioning the customer base to the cloud to modernize our business
  • We have executed on our SaaS Transition strategy and drove SaaS ARR to $139M in
    Q2'FY24(1)
  • As of today, SaaS Transitions are 85%+ complete with the end in sight during this fiscal year

What are the challenges

we now face?

  • Risk to bookings growth beginning in FY25 as we pivot entirely off SaaS Transitions to new logo sales and customer base expansion
  • New logo sales motions have produced inconsistent results
  • Customer fatigue in some cases to adopting new products post-SaaS Transition
  • Risk to Professional Services revenue, the majority of which has been historically linked to SaaS Transitions

Each of the challenges above are new, and not ones we have encountered as we transitioned our customer base to SaaS

What needs to be done to drive

long-term growth?

  • Increase non-SaaS Transition bookings by ~7x and backfill SaaS Transition PS
    • Drive consistent new logo growth
    • Expand existing customer base through upsell / cross-sell
    • Backfill Professional Services attached to SaaS Transitions and explore unattached services
  • Potential M&A to expand product offering and to add scale

With SaaS Transitions nearly complete, we face near-term operational and execution risks

as we pivot the company to driving new logo sales and customer base expansion

  1. Based on preliminary results through Q2'FY24 (ended 03/31/24).

3

Transaction Overview

Transaction

Summary

Clear Path to Closing

Timeline

$30.00

$1.25B

5x

0.95x

28x

23%

16%

Cash per Share

Total Enterprise

LTM Revenue

Growth-Adjusted

LTM Adj.

Premium to 30-

Premium to 30-

Value

Multiple(1)

Forward Revenue

EBITDA(1)

Day VWAP(3)

Day VWAP(3)

Multiple(2)

  • Subject to customary closing conditions, including approval by Model N shareholders and clearance under the Hart-Scott- Rodino (HSR) Antitrust Improvements Act of 1976
  • Transaction is fully equity backstopped by Vista, and is not subject to a financing condition
  • Expected to close mid-2024
  • Special Meeting date expected in late June 2024
  1. LTM represents Last Twelve Months results through Q2'FY24 (ended 03/31/24) based on preliminary results for Q2'FY24 set forth herein.
  2. Growth-AdjustedForward Revenue Multiple based on mid-point of FY2024 guidance for revenue and growth.
  3. 23% Premium based on 30-Day VWAP prior to Model N Board authorizing Jefferies to contact parties about interest in a potential transaction on 01/10/24.16% Premium based on 30-Day VWAP as of 04/05/24.

4

Key Factors Considered

By Model N's Board

Model N Sees New Execution And Growth Challenges Post-SaaS Transitions

Completion of Life Sciences SaaS Transitions requires replacement with substantial new revenue streams - through new logo, existing customer base, Professional Services sales and M&A

Pace of new logo sales will need to accelerate to backfill prior SaaS Transition activity

Spend fatigue from cohort of customers recently transitioned increases risk to existing customer bookings needed to accelerate growth

Professional Services revenue at risk as SaaS Transitions conclude

Management increasingly believes that M&A is vital to expand product offerings and add scale, and would be challenging as a small-cap public company

6

Non-SaaS Transition Bookings Will Need To Increase Materially From Historical Levels To Achieve Growth Targets

Gross Software Bookings Summary

• Future growth requires non-SaaS

SaaS Transition

~7x FY26/FY23 Non-

Transition software bookings from new

logos and customer base sales

substantially greater than recent historical

trends

• Timing of new customer (new logo) sales

is unpredictable, with long sales cycles

• 60%+ of SaaS ARR recently migrated /

expanded with customers indicating

challenges in increasing spending

immediately post-SaaS Transition

Non-SaaS Transition SoftwareSaaS Transition

Software Bookings

…

FY20

FY21

FY22

FY23

FY26

New non-SaaS Transition bookings required to grow ~7x from FY23 to reach

management's long-range expectation for Subscription revenue growth

Note: SaaS Transition represents bookings from the transition of customers to SaaS; Non-SaaS Transition Software represents bookings from new logos, customer base, and price changes.

7

Risk To Professional Services Revenue As Transition To SaaS Is Completed

  • A substantial portion of Professional Services revenue over the past few years has been associated with the transition of Life Sciences customers to SaaS
  • SaaS Transition bookings have historically had a much higher attach rate of Professional Services than other bookings
  • Risk to achieving software bookings required for management's long-term plan carry over to the associated Professional Services required to implement new products / features / functionality supporting those Subscription offerings

Q1'FY22 Through Q1'FY24 Cumulative Professional Services Bookings

52%48%

SaaS Transition

Non-SaaS Transition

Sustaining Professional Services revenues at current levels will require substantial growth in non-SaaS Transition bookings

8

Inorganic Growth Through M&A Would Be Challenging

  • Management increasingly believes M&A is vital to expand product offerings and add scale, given execution challenges identified to grow organically
  • Model N's ability to pursue meaningful M&A as a small-cap public company is limited
    • M&A of scale likely will require both debt and equity capital issuances
    • Existing levels of debt constrain our ability to finance acquisitions via incremental long-term debt
    • Debt issuances increase interest expense and change the risk profile of the business for investors
    • Equity issuances are dilutive to existing shareholders and may require a shareholder vote, limiting our competitiveness against other buyers without the same constraints
  • M&A of scale also comes with execution risk that may impact financial performance in the near-term and cause volatility in our share price
  • Well-capitalizedstrategic parties and financial sponsors targeting investments in our sector drive competition and reduce certainty

9

Transaction Delivers Certain Cash Value

At An Attractive Valuation

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Disclaimer

Model N Inc. published this content on 22 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2024 12:43:08 UTC.