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As filed with the Securities and Exchange Commission on October 25, 2013.

Registration No. 333-184731

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 4
to
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



GFI Software S.A.
(Exact name of registrant as specified in its charter)

Luxembourg
(State or other jurisdiction of
incorporation or organization)
  7372
(Primary Standard Industrial
Classification Code Number)
  98-0631596
(I.R.S. Employer
Identification No.)

7A, rue Robert Stümper
L-2557 Luxembourg
Grand Duchy of Luxembourg
+352 2786-0231
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

GFI USA, Inc.
4309 Emperor Blvd
Suite 400
Durham, NC 27703
(919) 297-1350
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Gordon R. Caplan, Esq.
Gregory B. Astrachan, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
(212) 728-8000

 

William V. Fogg, Esq.
Andrew J. Pitts, Esq.
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, New York 10019
(212) 474-1000

Approximate date of commencement of proposed sale to the public:    As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.    o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o



CALCULATION OF REGISTRATION FEE

       
 
Title of Securities
to Be Registered

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee(3)

 

Common shares, nominal value €0.01

  $100,000,000   $13,640

 

(1)    Estimated solely for purposes of determining the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

(2)    Includes common shares that the underwriters have an option to purchase solely to cover over-allotments.

(3)    Previously paid.



The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

Prospectus (subject to completion)
Issued                            , 2013

GFI Software S.A.

LOGO

Common shares



This is the initial public offering of GFI Software S.A., a joint stock company (société anonyme) existing under the laws of the Grand Duchy of Luxembourg. We are offering                  common shares. This is our initial public offering, and no public market currently exists for our common shares. We anticipate that the initial public offering price will be between $              and $              per common share. After the offering, the market price for our common shares may be outside this range.



We have applied to list our common shares on the New York Stock Exchange under the symbol "GFIS."

We are an "emerging growth company" under applicable federal securities laws.



Investing in our common shares involves a high degree of risk. See "Risk factors" beginning on page 17.



PRICE $     A SHARE



   
 
  Price to
public

  Underwriting
discounts and
commissions(1)

  Proceeds to
GFI Software S.A.

 
   

Per share

  $                  $                  $                 

Total

  $                  $                  $                 
   

(1)    We have agreed to reimburse the underwriters for certain expenses in connection with this offering. See "Underwriters."

We have granted the underwriters an option to purchase up to                  additional common shares to cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the common shares to investors on or about                           , 2013.



J.P. MORGAN   CREDIT SUISSE   JEFFERIES



STIFEL            
            BMO CAPITAL MARKETS    
    NEEDHAM & COMPANY
        OPPENHEIMER & CO.

   

The date of this prospectus is                           , 2013.


Table of contents

 
  Page

Prospectus summary

  1

The offering

  9

Summary consolidated financial and other data

  10

Risk factors

  17

Forward-looking statements and industry data

  49

Use of proceeds

  51

Corporate reorganization

  52

Dividend policy

  53

Capitalization

  54

Dilution

  55

Selected consolidated financial data

  56

Operating and financial review and prospects

  62

Business

  110

Management

  125

Related party transactions

  136

Principal shareholders

  139

Description of share capital

  142

Shares eligible for future sale

  155

Taxation

  157

Underwriters

  166

Service of process and enforceability of civil liabilities

  173

Legal matters

  173

Experts

  173

Changes in registrant's certifying accountant

  174

Where you can find additional information

  176

Expenses related to this offering

  176

Index to GFI Software S.A. financial statements

  F-1

Index to IASO International B.V. financial statements

  F-100

Unaudited pro forma combined financial statements of GFI Software S.A. and IASO International B.V.

  F-143



You should rely only on the information contained in this prospectus and any free writing prospectus prepared by or on behalf of us. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus is accurate as of the date on the front of this prospectus, or other date stated in this prospectus, only. Our business, financial condition, results of operations and prospects may have changed since that date.

Unless the context requires otherwise, references to "GFI," the "Company," "we," "our" and "us" in this prospectus refer to GFI Software S.à r.l. and its subsidiaries on a consolidated basis prior to the completion of our corporate reorganization and to GFI Software S.A. and its subsidiaries on a consolidated basis as of the completion of our corporate reorganization and thereafter. References to the "registrant" refer solely to GFI Software S.à r.l. prior to the completion of the corporate reorganization and to GFI Software S.A. as of the completion of the corporate reorganization and thereafter, and references to the "Board" refer to our board of managers prior to the completion of the corporate reorganization and to our board of directors as of the completion of the corporate reorganization and thereafter. References to "dollar," "dollars," "U.S. dollars," or "$" in this prospectus are to the lawful currency of the United States of America, references to "euro," "euros" or "€" are to the single unified currency of the European Monetary Union, and references to "pound sterling," "pounds sterling" or "£" are to the official currency of the United Kingdom.

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Prospectus summary

This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common shares. You should read the entire prospectus carefully, especially the risks related to our business, our industry and investing in our common shares that we describe under "Risk factors," and our financial statements and the related notes included in this prospectus, before deciding to invest in our common shares.

Our customers are exclusively business customers. We define business customers as customers (other than individual consumers) that have purchased one or more of our products under a unique customer identification number within the past three years. Because the nature of our business involves a large number of small transactions, if we receive orders from multiple subsidiaries of one parent company, we treat each of those subsidiaries as a separate customer. In calculating the number of our customers, we include customers of businesses that we owned during the entire measurement period as well as customers of businesses acquired during the measurement period, assuming that we had owned those businesses throughout the entire measurement period.

The presentation of our financial information is affected by our corporate history. See "—Special note regarding our corporate history and the presentation of our financial information."

GFI Software S.A.

Overview

We are a global provider of collaboration, managed service provider (MSP) and IT infrastructure software solutions designed for small and medium-sized businesses, or "SMBs." Our solutions enable SMBs (defined as organizations with fewer than 1,000 employees) to easily manage, monitor, secure and access their IT infrastructure and business applications. SMBs currently face many challenges, including increasing IT complexity, intensifying security risks and greater workforce mobility. We address these challenges with simple yet powerful software solutions that are easily deployed and deliver significant value to our customers. Our high-volume go-to-market model simplifies the process for SMBs to discover, evaluate, procure and deploy our solutions. Our customer base has grown from over 89,000 customers as of December 31, 2008 to over 280,000 customers in over 180 countries as of June 30, 2013 and is highly diversified, with no single customer accounting for greater than 1% of our total Billings in 2010, 2011 or 2012 or in the first six months of 2013.

Our differentiated business model and global distribution platform enable us to cost-effectively sell to SMBs in every region of the world. We operate a scalable, data-driven online marketing model with a multi-channel sales strategy targeted at our SMB customers. We use highly focused marketing campaigns to drive prospective customers to our websites and to our partners. We track and analyze large volumes of data from our systems to improve the visibility and effectiveness of our sales and marketing activities. In addition, we reach SMBs without dedicated IT staff through our MSP customers. We leverage blogs, social media and custom content sites to create online communities that enable existing and prospective customers to connect directly and share information. Our customers purchase our products through our e-commerce sites, inside sales team, and channel partners. As a result, we are able to cost-effectively achieve high volumes of low price point transactions. We offer full-featured, free versions of our products for a designated trial period, an approach that allows prospective customers to experience the full range of benefits of our solutions prior to making their purchase and distinguishes us from the high-cost, up-front sales approach employed by many enterprise software vendors.

 

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We have developed a broad portfolio of solutions to address the specific needs of SMBs. TeamViewer, our easy-to-use online collaboration product, provides secure remote control and access to virtually any Internet-connected device on which it has been installed along with multi-user web-conferencing, desktop and file sharing. TeamViewer benefits from a powerful network effect, as growth in the number of TeamViewer users drives further adoption of the product. GFI MAX, our cloud-based platform for MSPs, provides MSPs with a comprehensive and affordable portfolio of managed service solutions and enables them to monitor, manage, secure and access their customers' on-premise and distributed IT infrastructure through our integrated cloud-based dashboard. Our IT infrastructure solutions enable SMBs to easily manage and secure their applications, networks and computing systems and are offered through both on-premise and cloud-based deployments. Our GFI Cloud platform, which was launched in 2012, is offered as an integrated framework to deliver these IT infrastructure solutions to SMBs in a unified web browser interface.

Our past financial performance has been characterized by consistent Billings growth and strong operating cash flows. For the years ended December 31, 2011 and 2012 and for the six months ended June 30, 2012 and 2013, our Billings were $163.9 million, $187.3 million, $86.8 million, and $95.5 million, respectively, representing period-over-period growth of 14% and 10%, respectively. We define our methodology for calculating Billings, a non-IFRS financial metric, and provide a reconciliation to the most comparable IFRS metric, revenue, under "Selected consolidated financial data—Supplemental information." We generated cash flows from operations of $59.9 million, $43.2 million and $27.9 million for the years ended December 31, 2011 and 2012 and for the six months ended June 30, 2013, respectively. We incurred net losses of $40.7 million and $51.9 million for the years ended December 31, 2012 and 2011, respectively. We generated net income of $5.0 million (after giving effect to a gain on sale of discontinued operations of $10.5 million) for the six months ended June 30, 2013, compared to a net loss of $30.0 million for the six months ended June 30, 2012. In 2012, approximately 32% of our Billings were derived from the Americas, 60% of our Billings were derived from Europe, the Middle East and Africa, and 8% of our Billings were derived from Asia-Pacific. In the first half of 2013, approximately 34% of our Billings were derived from the Americas, 57% of our Billings were derived from Europe, the Middle East and Africa, and 9% of our Billings were derived from Asia-Pacific.


Our industry

Trends driving our market opportunity

SMBs comprise an increasingly large and important part of the global economy. In a 2010 report, IDC estimated that there were approximately 73 million SMBs (defined as organizations with fewer than 1,000 employees) worldwide, representing over 99% of all businesses. Our solutions target this market segment directly and are designed, developed and delivered in ways that maximize their appeal to SMBs.

Despite their benefits, many existing IT solutions were designed for larger enterprises and are impractical to implement within SMBs. Several key growth drivers are speeding the adoption of SMB-tailored solutions:

Increasingly mobile and connected workforce needs anytime/anywhere collaboration tools.    Workers are spending less time in traditional office environments and more time telecommuting and traveling, which is driving demand for remote connectivity and collaboration solutions. A December 2011 IDC report forecasts the global mobile worker population to increase from 1.1 billion in 2011 to 1.3 billion in 2015, representing approximately 37% of the projected 2015 worldwide workforce.

 

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Proliferation of internet-enabled devices.    A June 2013 IDC report estimates that there were 722 million smartphones shipped globally in 2012, and forecasts that number to increase to 1.6 billion in 2017, representing a compound annual growth rate, or "CAGR," of 17%.

Increasing use of managed service providers.    We believe there are over 200,000 value-added resellers, or "VARs," globally, and that the percentage of VARs who are moving to an MSP business model is growing rapidly.

Increasing adoption of cloud-based solutions.    SMBs continue to expand their use of cloud computing services and software-as-a-service, or "SaaS," solutions to reduce the time and costs associated with installing, configuring and maintaining traditional IT solutions. According to a February 2013 IDC report, U.S. SMB public IT cloud services spending will reach $20.8 billion by 2017.

Consumerization of IT.    Individuals are spending more time interacting with intuitive, web-based software and services that increase productivity and efficiency in their personal lives. These experiences have consequently increased business users' expectations that they should be able to rapidly access, install and interact with powerful, easy-to-use corporate IT solutions.

Increasing IT security threats.    The broad adoption by SMBs of cloud-based applications, wireless networks, portable storage and wireless devices has eroded traditional network boundaries and increased the risk of potential attacks. Malware threats have continued to increase in both number and complexity as hackers have become more sophisticated and motivated by the potential for illegally generated profits or the desire to cause disruption or reputational harm to the organizations they target.

Rapid IT adoption within emerging markets.    According to a Gartner July 2013 report, SMB IT spending in developing regions including Greater China, Emerging Asia-Pacific, Latin America, the Middle East and Africa will grow from $180.6 billion in 2012 to $255.3 billion in 2017.

Limitations of existing solutions

We believe that many competing solutions fail to meet the needs of SMBs due to a number of limitations:

Product complexity.    Traditional enterprise software vendors often try to engage SMB customers with solutions designed for large enterprises that are unduly complex and impractical for smaller customers. These enterprise solutions are not designed to meet the unique needs of the SMB market and typically have many sophisticated features that are not required or desired by SMBs.

High total cost of ownership.    Enterprise software vendors often charge substantial license fees for their solutions and can require significant hardware, training and professional services expenditures for initial deployment and substantial maintenance and additional professional services costs in later years.

Poor customer service and support.    We believe that SMB customers often receive inadequate technical support from enterprise software vendors, including large providers of cloud-based services, due to the smaller size and associated revenue of their software deployments. Conversely, smaller software vendors often lack the resources to meet their customers' support needs.

Lack of product integration.    Many of our competitors in the SMB space have assembled their product ranges through acquisitions but have made limited progress in integrating the acquired products and technologies or in streamlining their product lines, resulting in a fragmented and limited user experience.

 

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Our solutions

We have designed our solutions to enable SMBs to easily and cost-effectively monitor, manage and secure their IT infrastructure and business applications. We believe that the key differentiators of our solutions include:

Purpose-built solutions for SMBs.    By focusing on SMBs, we believe that we understand their requirements better and can more effectively deliver highly differentiated technology to address their needs across multiple product categories.

Highly intuitive software.    The easy-to-use and intuitive interfaces of our solutions not only provide the specific functionality that our customers require, but also accelerate their adoption and realization of value.

Low total cost of ownership.    Our solutions have a low up-front average selling price of just over $700 that decreases procurement risk and reduces the length of the sales cycle. Our solutions can be implemented in a self-service, try-before-you-buy manner and are designed so that they do not require professional services.

SaaS platform approach.    We offer a cloud-based, SaaS platform that allows customers to implement our solutions in a modular fashion, enabling them to rapidly solve immediate business needs.

Flexible deployment and licensing alternatives.    Depending on the solution and market, we support different deployment, usage and licensing arrangements, which we believe increases our potential market opportunity.


Our business model

Our multi-branded business model is designed to accelerate the adoption of our solutions by our customers by reducing the time and cost of implementation for them. At the same time, our sales strategy enables large sales volumes and efficient distribution. Our business model is characterized by the following attributes:

High-velocity global distribution.    We offer all of our products directly from our website to maximize our distribution reach and to reduce sales and marketing expense. We support our Internet-based distribution with an inside sales force and an indirect partner network of over 25,000 channel partners acting as resellers worldwide.

Full-featured, free solutions offered for a designated trial period.    To facilitate the adoption of our solutions, we seek to reduce the time and expense required to evaluate, purchase, and implement our products. We offer full-featured, free and immediately accessible versions of our products for a designated trial period.

Simple product adoption.    Our solutions are designed to address the specific requirements of our customers and provide a clear value proposition to them. In addition, our solutions are easy to install and do not require professional services, allowing our customers to quickly address their particular IT challenges with no dependencies beyond their organization.

Data-driven management.    We have developed systems and processes that enable us to closely monitor and manage the results of our business. We track operational and financial metrics to improve our visibility and execution, and make extensive use of search engine optimization and Internet marketing to attract

 

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potential customers. We continually monitor and analyze customer traffic and purchasing patterns to improve service levels, enhance our marketing strategy and drive better business decisions.

Substantial viral network effects.    TeamViewer benefits from significant viral network effects. As the number of users of TeamViewer has expanded and consumer awareness of the product has grown, the rate of adoption has continued to increase. As of June 30, 2013, TeamViewer has been activated on over 500 million devices. Growth in the number of TeamViewer users increases the value of the network, contributing to viral adoption of the product.

Leveraged technology development.    Wherever possible, we share technologies and best practices throughout our global research and development organization, decreasing our costs of development.


Our growth strategy

Our objective is to extend our position as a leading provider of software solutions to SMBs. To accomplish this, we intend to:

Expand our customer base.    We believe the market for software solutions to SMBs is considerably underserved and, as a result, we have the opportunity to substantially expand our present customer base. We intend to continue the rapid expansion of our customer base through our specialized global distribution model, converting trial users into paying customers, and leveraging our investments in data analytics to more effectively target prospective customers.

Expand our partner ecosystem.    We intend to further develop our existing partner ecosystem, increasing sales of our solutions through our existing channel partners and establishing agreements with new partners to provide broader customer coverage as well as extending the breadth of application coverage through complementary partner offerings. We seek to significantly expand our indirect channel across the globe to maximize our distribution capabilities.

Increase sales to existing customers.    We believe we enjoy a high level of customer satisfaction, which provides us with the opportunity to sell additional solutions to our over 280,000 existing business customers. As of June 30, 2013, only approximately 6% of our customers have purchased two of our products, and only approximately 1% have purchased three or more of our products. We intend to expand our revenue from our existing customers by cross-selling other new and complementary solutions and selling additional licenses and upgrades.

Accelerate our growth in targeted geographies.    We believe that we have a substantial opportunity to accelerate our revenue growth in largely untapped emerging markets such as Asia-Pacific, Latin America and Eastern Europe by increasing our sales, marketing and support operations in these regions. Additionally, we see further growth opportunities in the United States, as our U.S. subsidiaries generated less than 30% of our global revenue in 2011 and 2012.

Develop and extend new software and SaaS products.    We plan to develop new software products and functionality that serve the SMB market and complement our existing collaboration, MSP and IT infrastructure software solutions. To maintain and enhance our strong position in delivering solutions that are purpose-built for SMBs, we have increased our investment in product development and platform enhancements. Recent development initiatives include the addition to TeamViewer of a scalable presentation mode, mobile device management functionality and a significant upgrade to our GFI Cloud products.

 

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Expand our reach through our GFI MAX platform.    GFI MAX is our SaaS platform that enables MSPs to deliver remote IT management, monitoring and security to their SMB customers on an outsourced basis. The GFI MAX platform enables us to easily integrate and deliver additional products as a single, cohesive solution at an attractive, small incremental fee to new and existing devices under management. We continue to see a significant market opportunity for us to utilize the approach and architecture that underlie the GFI MAX platform to deliver a solution directly to SMBs.

Pursue strategic acquisitions.    We continue to selectively evaluate opportunities to acquire businesses and technologies that complement our existing solutions and business model and extend our position among SMBs.


Risks related to our business

Our business is subject to a number of risks that you should understand before making an investment decision. These risks are discussed more fully under the section entitled "Risk factors" and include, but are not limited to, the following:

the markets in which we compete are highly competitive and we could be unable to compete effectively;

if the markets for collaboration, MSP and IT infrastructure software solutions do not grow, our business and operating results will be harmed;

if we are unable to generate significant volumes of sales leads, in particular from Internet search engines and other online marketing campaigns, traffic to our website could decrease and, as a result, our revenue could decrease;

we rely on third-party channel partners acting as resellers to generate a material portion of our revenue and if our partners fail to perform, our ability to sell our solutions will be negatively impacted and our operating results will be harmed;

our majority shareholder, investment funds affiliated with Insight Venture Management, LLC, or "Insight," will beneficially own approximately              of our outstanding common shares following this offering (or              if the underwriters' over-allotment option is exercised in full) thereby allowing Insight to control our management and affairs and matters requiring shareholder approval;

our quarterly operating results could fluctuate significantly, which makes our future results difficult to predict and makes period-to-period comparisons potentially not meaningful;

we have a limited operating history as a combined entity, have experienced rapid growth in recent periods, and may be unable to manage our growth effectively;

we may not be able to reliably predict our Billings, revenue, earnings or cash flow, even in the near term;

the success of our business depends on our ability to protect and enforce our intellectual property rights;

our products, including products obtained through acquisitions, could infringe third-party intellectual property rights, which could result in material litigation costs;

 

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if we fail to develop our brands cost-effectively, or if we fail to maintain the integrity and reputation of our brands, our financial condition and operating results might suffer; and

if we are unsuccessful in developing and selling new products and product enhancements, our business and operating results will be harmed.

In addition, we are subject to risks related to our international operations, our corporate structure and our status as a foreign private issuer. In connection with your investment decision, you should review the section of this prospectus entitled "Risk factors."


Corporate reorganization

Prior to October 24, 2012, we conducted our business through GFI Software S.à r.l., a Luxembourg limited liability company (société à responsabilité limitée) and its direct and indirect subsidiaries. The registrant does not engage in any operations and has only nominal assets, other than a 100% interest in TV GFI Holding Company S.à r.l., a Luxembourg limited liability company (société à responsabilité limitée), which itself does not engage in any operations or own any material assets, other than a 100% direct or indirect interest in our operating subsidiaries. On October 24, 2012, in anticipation of this offering, we completed a corporate reorganization that involved, among other things, the conversion of the registrant into a Luxembourg joint stock company (société anonyme), becoming GFI Software S.A. Investors in this offering will only receive, and this prospectus only describes the offering of, common shares of GFI Software S.A.

On November 14, 2012, in anticipation of this offering and pursuant to a meeting of the shareholders held in accordance with Luxembourg law, the shareholders of the registrant effected a 1-for-3 reverse stock split, or "share merger" under Luxembourg law, pursuant to which the number of issued and outstanding common shares of the registrant at such time was reduced from 110,655,881 to 36,885,288, with each shareholder's respective shares being proportionately reduced. We sometimes refer to the share merger herein as the "split."


Our corporate information

The registrant was incorporated under the name Crystal Indigo S.à r.l. as a limited liability company (société à responsabilité limitée) under the laws of the Grand Duchy of Luxembourg in June 2009 and thereafter changed its name to TV Holding S.à r.l. in July 2009. On July 27, 2011, TV Holding S.à r.l. changed its name to GFI Software S.à r.l. On October 24, 2012, in anticipation of this offering, the registrant was converted into a Luxembourg joint stock company (société anonyme), becoming GFI Software S.A. as part of the corporate reorganization described in further detail under the section entitled "Corporate reorganization" included elsewhere in this prospectus. Our principal executive offices are located at 7A, rue Robert Stümper, L-2557 Luxembourg, Grand Duchy of Luxembourg. Our telephone number is +352 2786-0231. The address of our website is http://www.gfi.com. Information on, or accessible through, our website is not a part of, and is not incorporated into, this prospectus.

All of the activities of the registrant are conducted through various subsidiaries, which are organized and operated according to the laws of their country of incorporation.

"GFI Software," "GFI," "TeamViewer," "GFI MAX," "GFI WebMonitor," "GFI MailSecurity," "GFI Cloud," "FaxMaker," "LanGuard," "IASO" and "GFI MailEssentials," among others, are our trademarks in various jurisdictions. This prospectus may also refer to brand names, trademarks, service marks and trade names of other companies and organizations, and those brand names, trademarks, service marks and trade names are the property of their respective owners.

 

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Special note regarding our corporate history and the presentation of our financial information

Our corporate existence began in 1999 when GFI Software LTD was formed as an international business company in the British Virgin Islands with operations in Malta. In May 2005, GFI Software LTD and its subsidiaries were indirectly acquired by GFI Acquisition Company Ltd., or "GFI Acquisition," an entity controlled by Insight, our majority shareholder.

The registrant was formed in June 2009. In July 2009 certain other investment funds affiliated with Insight indirectly acquired control of the registrant and, through a series of transactions, the registrant became the parent holding company of TeamViewer GmbH and its affiliates. In November 2010, at the direction of Insight, GFI Acquisition was merged with and into the registrant. We refer to this transaction as the "Merger." The Merger resulted in the consolidation of GFI Acquisition and its subsidiaries and the registrant and its subsidiaries under one organizational structure.

Because both GFI Acquisition and the registrant had been under the common control of Insight since July 2009, the Merger is considered for accounting purposes to be a reorganization of entities under common control and the pooling of interest method of accounting has been used in the presentation of our consolidated financial statements. Accordingly, our consolidated financial statements present our results and changes in equity as if the Merger had occurred upon Insight's acquisition of the registrant on July 29, 2009. For periods prior to Insight's acquisition of the registrant, our financial statements present the consolidated results and changes in equity solely of GFI Acquisition and its subsidiaries.

 

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The offering

Common shares offered by us                          shares
Over-allotment option   We have granted the underwriters an option to purchase up to                  additional common shares to cover over-allotments.
Common shares to be outstanding immediately after this offering                           shares (                        shares if the over-allotment option is exercised in full)
Use of proceeds   We presently intend to use approximately $          million of the net proceeds of this offering to repay debt and related interest and the remainder for working capital and general corporate purposes.
    A $1.00 increase (decrease) in the assumed initial offering price of $           per share would increase (decrease) the net proceeds of this offering to be received by us by approximately $        million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. For each $1.00 increase (decrease), we would anticipate increasing (decreasing) our investment in our business accordingly.
    See "Use of proceeds."
Dividend Policy   We do not expect to pay any cash dividends in the foreseeable future. See "Dividend policy."
Risk Factors   You should carefully read the "Risk factors" section of this prospectus for a discussion of factors that you should consider before deciding to invest in our common shares.
Proposed NYSE Symbol   "GFIS"

The number of our common shares to be outstanding after this offering is based on 36,882,081 common shares outstanding as of October 24, 2013 and excludes:

3,961,796 common shares issuable upon exercise of options outstanding as of October 24, 2013, at a weighted average exercise price of $16.25 per share, of which 2,053,764 options are exercisable as of such date;

870,000 common shares issuable upon vesting of restricted share units outstanding as of October 24, 2013; and

3,000,000 common shares authorized for future grants under the GFI Software S.A. 2012 Share Incentive Plan.

Except as otherwise noted, all information in this prospectus:

assumes an initial public offering price of $           per share, the midpoint of the estimated price range set forth on the cover page of this prospectus; and

assumes no exercise of the underwriters' over-allotment option.

 

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Summary consolidated financial and other data

The following tables summarize our consolidated financial and other data. You should read the following summary financial and other data together with our consolidated financial statements and related notes as well as "Operating and financial review and prospects" and the other financial information included elsewhere in this prospectus.

The summary consolidated statement of operations data and the consolidated statement of comprehensive income data for the years ended December 31, 2010, 2011 and 2012 and the consolidated balance sheet data as of December 31, 2011 and 2012 have been derived from our audited consolidated financial statements appearing elsewhere in this prospectus. The summary consolidated statement of operations data and the consolidated statement of comprehensive income data for the six months ended June 30, 2012 and 2013 (as restated) and the consolidated balance sheet data as of June 30, 2013 (as restated) have been derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus. We have prepared the unaudited condensed consolidated quarterly financial information for the quarters presented below on the same basis as our audited consolidated financial statements. The unaudited condensed consolidated financial information includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and results of operations, to be in compliance with IAS 34, for the quarters presented. The historical quarterly results presented below are not necessarily indicative of the results that may be expected for any future quarters or periods. The consolidated balance sheet data as of December 31, 2010 has been derived from our audited consolidated financial statements not included in this prospectus. In March 2013, we sold GFI Software (Florida), Inc. ("GFI Florida"), our security technology business comprising the VIPRE family of antivirus products and high-end antimalware intelligence solutions, in order to increase our focus on our core collaboration, MSP and IT infrastructure businesses. GFI Florida is reflected as discontinued operations in all periods presented herein from its acquisition date in June 2010 through the sale date in March 2013.

 

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Our financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. Historical results are not indicative of the results to be expected in the future.

   
 
   
   
   
  Six months ended
June 30,
 
 
  Year ended December 31,  
(in thousands, except share and per share data)
 
  2010
  2011
  2012
  2012
  2013
 
   
 
   
   
   
   
  (restated)
 
 
   
   
   
                   (unaudited)
 

Consolidated Statement of Operations Data:

                               

Revenue

  $ 66,738   $ 91,997   $ 118,428   $ 54,672   $ 75,546  

Cost of sales(1)

    10,982     13,711     19,617     8,987     12,264  
       

Gross profit

    55,756     78,286     98,811     45,685     63,282  
       

Operating costs:

                               

Research and development(1)

    9,159     16,037     19,559     9,014     12,234  

Sales and marketing(1)

    25,239     39,707     43,552     22,331     24,645  

General and administrative(1)

    12,594     26,227     29,472     15,317     16,737  

Depreciation, amortization and impairment

    16,868     19,583     11,072     8,617     1,574  
       

Total operating costs

    63,860     101,554     103,655     55,279     55,190  
       

Operating (loss) income from continuing operations

    (8,104 )   (23,268 )   (4,844 )   (9,594 )   8,092  

Finance costs, net

    (16,483 )   (10,118 )   (18,916 )   (9,452 )   (7,539 )

Other income / (costs), net

    (3,620 )   (2,984 )   1,811     (3,758 )   (1,627 )
       

Net loss from continuing operations before taxation

    (28,207 )   (36,370 )   (21,949 )   (22,804 )   (1,074 )

Tax benefit / (expense) from continuing operations

    5,146     3,893     (2,140 )   1,217     (10,566 )
       

Net loss from continuing operations

    (23,061 )   (32,477 )   (24,089 )   (21,587 )   (11,640 )

Gain on sale of discontinued operations, net of tax

                    10,531  

Net (loss) income from discontinued operations

    (5,218 )   (19,459 )   (16,571 )   (8,394 )   6,080  
       

Net (loss) income

  $ (28,279 ) $ (51,936 ) $ (40,660 ) $ (29,981 ) $ 4,971  
       

Total (loss) income attributable to owners of GFI Software S.A.

                               

Net loss from continuing operations

  $ (16,660 ) $ (32,477 ) $ (24,089 ) $ (21,587 ) $ (11,640 )
       

Net (loss) income from discontinued operations

  $ (5,218 ) $ (19,459 ) $ (16,571 ) $ (8,394 ) $ 16,611  
       

 

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  Six months ended
June 30,
 
 
  Year ended December 31,  
(in thousands, except share and per share data)
 
  2010
  2011
  2012
  2012
  2013
 
   
 
   
   
   
   
  (restated)
 
 
   
   
   
                   (unaudited)
 

Total comprehensive (loss) income

                               

Continuing operations

  $ (27,175 ) $ (22,427 ) $ (27,620 ) $ (16,458 ) $ (8,854 )
       

Discontinued operations

  $ (5,210 ) $ (19,455 ) $ (16,489 ) $ (8,339 ) $ 16,596  
       

Comprehensive (loss) income attributable to owners of GFI Software S.A.

                               

Continuing operations

  $ (20,774 ) $ (22,427 ) $ (27,620 ) $ (16,458 ) $ (8,854 )
       

Discontinued operations

  $ (5,210 ) $ (19,455 ) $ (16,489 ) $ (8,339 ) $ 16,596  
       

Basic and diluted (loss) income per:

                               

Class A common share

                               

Continuing operations

  $ (1.75 ) $ (35.71 ) $ (0.65 ) $ (0.59 ) $ (0.32 )

Discontinued operations

  $ (0.37 ) $ (0.53 ) $ (0.45 ) $ (0.23 ) $ 0.45  

Class B preferred participating share(2)

                               

Continuing operations

  $ (0.44 ) $ (0.30 ) $   $   $  

Discontinued operations

  $ (0.12 ) $ (0.18 ) $   $   $  

Weighted average shares outstanding

                               

Class A common shares

    9,957,491     14,733,739     36,915,117     36,871,321     36,892,916  

Class B preferred participating shares(2)

    12,658,701     66,377,579              

Pro forma basic and dilutive income / (loss) per: (unaudited)(3)

                               

Class A common share

                               

Continuing operations

        $   $         $  

Discontinued operations

        $   $         $  

Class B preferred participating share(2)

                               

Continuing operations

        $   $         $  

Discontinued operations

        $   $         $  

Pro forma weighted average shares outstanding (unaudited)

                               

Class A common share

                         

Class B preferred participating shares(2)

                         
   

 

   
 
   
   
   
  Six months ended
June 30,
 
 
  Year ended December 31,  
(in thousands, except share and per share data)
 
  2010
  2011
  2012
  2012
  2013
 
   
 
   
   
   
                   (unaudited)
 

Supplemental financial metrics:

                               

Billings(4)

  $ 117,677   $ 163,913   $ 187,301   $ 86,846   $ 95,531  

Unlevered Free Cash Flow (unaudited)(4)

    52,906     57,077     43,844     17,318     25,004  

Adjusted EBITDA(4)

    61,384     77,948     81,883     34,364     36,923  
   

(1)    Includes share-based compensation expense, as follows:

 

Cost of sales

  $ 34   $ 304   $ 110   $ 153   $ 115  
 

Research and development

    63     911     752     323     978  
 

Sales and marketing

    348     1,594     1,348     1,058     598  
 

General and administrative

    442     5,393     4,398     1,711     4,681  
 

Net loss from discontinued operations

    105     2,036     626     804     40  

(2)    See "Description of share capital—Historical development of the share capital of the registrant" for a description of the issuance (including the terms thereof) and subsequent elimination of the class B preferred participating shares.

(3)    Unaudited pro forma basic and diluted loss per class A common share and per class B preferred participating share assumes that the conversion of 77,405,164 class B preferred participating shares into class A common shares had occurred as of January 1, 2011 and gives effect to the impact of the repayment in full of the outstanding principal and accrued interest we owe under nine subordinated promissory notes issued to parties that held our class B preferred participating shares, as if the repayment had occurred at the beginning of the period starting on January 1, 2011 and reflects a reduction in interest expense, net of tax, of $201,000 and $1,598,000 for the years ended December 31, 2011 and 2012, respectively, and $680,000 for the six months ended June 30, 2013. We expect the offering to include the issuance of                  common shares (                  common shares if the underwriters' over-allotment option is exercised in full) at an assumed initial public offering price of $          per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), the proceeds from the issuance of                  of which, after deducting the estimated underwriting discounts and commissions, will be used to repay these promissory notes.

(4)   See "Supplemental information" below for how we define and calculate Billings, Unlevered Free Cash Flow and Adjusted EBITDA, and for a reconciliation of these non-IFRS measures to the most directly comparable IFRS measures, and a discussion about the limitations of these non-IFRS financial measures.

 

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The following table presents our summary consolidated balance sheet data for each of the periods indicated:

   
 
  As of December 31,   As of June 30, 2013  
(in thousands, except share data)
 
  2010
  2011
  2012
  Actual
  As adjusted(1)
 
   
 
   
   
   
  (restated)
   
 
 
   
   
   
                 (unaudited)
 

Consolidated balance sheet data:

                               

Cash at bank and in hand

  $ 22,719   $ 16,524   $ 15,487   $ 11,511   $  

Total assets

  $ 367,995   $ 369,408   $ 395,969   $ 405,130   $  

Working capital(2)

  $ (103,813 ) $ (92,941 ) $ (114,837 ) $ (111,328 ) $  

Deferred revenue, including long-term portion(3)

  $ 117,738   $ 190,154   $ 232,082   $ 248,255   $  

Interest-bearing loans and borrowings

  $ 87,312   $ 213,969   $ 199,312   $ 210,757   $  

Total liabilities

  $ 239,494   $ 446,487   $ 505,660   $ 500,930   $  

Issued capital

  $ 123,946   $ 517   $ 517   $ 517   $  

Total equity (deficit)

  $ 128,501   $ (77,079 ) $ (109,691 ) $ (95,800 ) $  

Shares outstanding:

                               

Class A common shares

    1,105,788,052     36,859,598     36,893,288     36,882,081      

Class B preferred participating shares(4)

    7,740,516,390                  
   

(1)    As adjusted information included above in the consolidated balance sheet data gives effect to the sale of               common shares by us in this offering at an assumed initial public offering price of $          per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), after deducting the underwriting discount and estimated offering expenses payable by us, as well as the impact of the repayment in full of the outstanding principal and accrued interest we owe under nine subordinated promissory notes issued to parties that held our class B preferred participating shares.

(2)    Includes current portion of deferred revenue of $51,281, $78,777, $84,564 and $98,318 as of December 31, 2010, 2011 and 2012, and June 30, 2013, respectively.

(3)    Also includes $23,383 million and $31,629 million of deferred revenue associated with our security business unit as of December 31, 2010 and 2011, respectively. The deferred revenue associated with our security business unit was included in liabilities from discontinued operations on our consolidated statement of financial position as of December 31, 2012. The sale of our security business unit was completed on March 31, 2013.

(4)   See "Description of share capital—Historical development of the share capital of the registrant" for a description of the issuance (including the terms thereof) and subsequent elimination of the class B preferred participating shares.


Supplemental information

Billings

Billings is a non-IFRS financial measure which we calculate by adding revenue from continuing operations recognized during the applicable period to the change in deferred revenue from continuing operations between the start and end of the same period, as presented in our consolidated statement of cash flows. We consider Billings to be a leading indicator of future revenue and operational growth based on our business model of billing total arrangement fees at the time of sale, and we use Billings to evaluate the operating performance of our operating segments. Our use of Billings as a non-IFRS measure has

 

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limitations as an analytical tool, and you should not consider it in isolation or as a substitute for revenue or an analysis of our results as reported under IFRS. Some of these limitations are:

Billings does not predict revenue for a specific future period. Trends in Billings are not directly correlated to trends in revenue except when measured over longer periods; and

Other companies, including companies in our industry, may not use Billings, may calculate Billings differently, or may use other financial measures to evaluate their performance—all of which reduce the usefulness of Billings as a comparative measure.

A significant portion of our Billings relates to solutions for which the corresponding revenue is deferred and subsequently recognized over time. In particular, Billings for maintenance, subscriptions and web-based services are typically invoiced in advance of ratable revenue recognition, which typically ranges over periods of up to 48 months.

The following table reconciles revenue, the most directly comparable IFRS measure, to Billings for each of the periods indicated:

   
 
  Year ended December 31,   Six months ended
June 30,
 
(in thousands)
  2010
  2011
  2012
  2012
  2013
 
   
 
   
   
   
   
  (restated)
 

Reconciliation of revenue from continuing operations to Billings:

                               

Revenue

  $ 66,738   $ 91,997   $ 118,428   $ 54,672   $ 75,546  

Change in deferred revenue

    50,939     71,916     68,873     32,174     19,985  
       

Billings

  $ 117,677   $ 163,913   $ 187,301   $ 86,846   $ 95,531  
   

Unlevered Free Cash Flow

Unlevered Free Cash Flow is a non-IFRS financial measure that we define as net cash flows from operating activities from continuing operations less capital expenditures, net of proceeds from the sales of property and equipment. Our management uses this measure when evaluating the operating performance of our consolidated business. We believe Unlevered Free Cash Flow provides management and investors with a more complete understanding of the underlying liquidity of our core operating business and our ability to meet our current and future financing and investing needs. While we believe that this non-IFRS financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for net cash flows from operating activities presented in accordance with IFRS.

 

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The following table presents a reconciliation of net cash flows from operating activities, the most comparable IFRS financial measure, to Unlevered Free Cash Flow for each of the periods indicated:

   
 
  Year ended December 31,   Six months ended
June 30,
 
(in thousands)
  2010
  2011
  2012
  2012
  2013
 
   

Reconciliation of net cash flows from operating activities from continuing operations to Unlevered Free Cash Flow

                               

Net cash flows from operating activities from continuing operations

  $ 54,003   $ 60,405   $ 46,201   $ 18,602   $ 26,511  

Capital expenditures, net of proceeds from sales of property and equipment

    (1,097 )   (3,328 )   (2,357 )   (1,284 )   (1,507 )
       

Unlevered Free Cash Flow          

  $ 52,906   $ 57,077   $ 43,844   $ 17,318   $ 25,004  
   

Adjusted EBITDA

Adjusted EBITDA is a non-IFRS financial measure that we calculate as profit (loss) from continuing operations, adjusted for tax benefit (expense), unrealized exchange fluctuations, finance costs, finance revenue, gain (loss) on disposals, depreciation, amortization and impairment, share-based compensation, specific extraordinary, non-recurring items, plus the change in deferred revenue between the start and end of the period, as presented in our consolidated statement of cash flows. We believe that Adjusted EBITDA provides useful information to investors and analysts in understanding and evaluating our operating results in the same manner as our management and Board, and we use Adjusted EBITDA to evaluate the operating performance of our operating segments. In addition, our lenders under our senior secured credit facility utilize consolidated EBITDA (as defined in our senior secured credit facility), which we believe to be the same as Adjusted EBITDA, as a key measure of our financial performance in relation to certain of our operating covenants under our senior secured credit facility. See "Operating and financial review and prospects—Liquidity and capital resources—Indebtedness—2011 Senior secured credit facility" for a further discussion of the use of consolidated EBITDA in our senior secured credit facility. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under IFRS.

 

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The following table presents a reconciliation of loss from continuing operations, the most comparable IFRS financial measure, to Adjusted EBITDA for each of the periods indicated:

   
 
  Year ended December 31,   Six months ended
June 30,
 
(in thousands)
  2010
  2011
  2012
  2012
  2013
 
   
 
   
   
   
   
  (restated)
 

Reconciliation of loss from continuing operations to Adjusted EBITDA

                               

Loss from continuing operations

  $ (23,061 ) $ (32,477 ) $ (24,089 ) $ (21,587 ) $ (11,640 )
       

Tax (benefit) expense

    (5,146 )   (3,893 )   2,140     (1,217 )   10,566  

Finance costs

    16,577     10,200     18,991     9,492     7,979  

Finance revenue

    (94 )   (82 )   (75 )   (40 )   (440 )

Depreciation, amortization and impairment

    18,324     20,858     12,716     9,366     2,306  
       

EBITDA

    6,600     (5,394 )   9,683     (3,986 )   8,771  
       

Reconciling items:

                               

Change in deferred revenue

    50,939     71,916     68,873     32,174     19,985  

Share-based compensation

    887     8,202     6,608     3,245     6,372  

Unrealized exchange fluctuations

    2,958     3,319     (3,281 )   2,931     1,795  

Loss on disposals

        (95 )            
       

Adjusted EBITDA

  $ 61,384   $ 77,948   $ 81,883   $ 34,364   $ 36,923  
   

 

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Risk factors

An investment in our common shares involves a high degree of risk. You should consider carefully the risks described below, together with the other information contained in this prospectus, including in our financial statements and the related notes included in this prospectus, before you decide whether to buy our common shares. If any of the following risks actually occur, our business, results of operations and financial condition could suffer significantly. In any of these cases, the market price of our common shares could decline, and you may lose all or part of the money you paid to buy our common shares.


Risks related to our business and industry

We operate in highly competitive markets, which could make it difficult for us to acquire new customers and retain existing customers.

The markets for our solutions are intensely competitive, are subject to rapid change and have relatively low barriers to entry. Competition in our markets is based primarily on: the ability to design, develop and deliver purpose-built software solutions with the specific features and functionality to meet the needs of SMBs; ease of initial setup, deployment and ongoing use; total cost of ownership, including product price and implementation and support costs; ability to deliver rapid time-to-value to customers; distribution channels; high-quality customer service and support; product and brand awareness; and pricing flexibility. We face competition from both traditional, larger software vendors offering enterprise-wide software frameworks and services and smaller software companies offering products and services for specific IT issues. Our principal competitors vary depending on the product we offer and the geographical region in which we are competing. For example, in the MSP software solutions market, we compete against five key competitors: Kaseya, LabTech Software, Level Platforms (acquired by AVG), N-Able (acquired by Solarwinds) and Continuum Managed Services Hosting. Certain of our other competitors and the products against which our products compete include Citrix Systems' online services, including GoToMyPC and GoToMeeting, LogMeIn, WebEx (acquired by Cisco Systems), McAfee (acquired by Intel), Symantec's Norton security solutions, Microsoft, Qualys, Inc., Proofpoint, Inc. and various other vendors. Competition could result in increased pricing pressure, reduced operating margins, increased sales and marketing expenses and failure to increase, or the loss of, market share, any of which would likely seriously harm our business, operating results and financial condition.

Expansion into the collaboration software market by certain of our competitors could adversely affect our revenue growth.

Our larger competitors typically enjoy greater name recognition and substantially greater financial, technical and other resources than we do. In addition, some of our competitors have established marketing relationships, major distribution agreements with consultants, system integrators, manufacturers and resellers, access to larger customer bases, and have made acquisitions or formed strategic partnerships and alliances to create more comprehensive product offerings. In the years ended December 31, 2012, 2011 and 2010, and in the six months ended June 30, 2013, approximately 42%, 33%, 17% and 47%, respectively, of our total consolidated revenue was derived from our Collaboration operating segment (assuming such operating segment had been in existence during these times). If one of our larger competitors expands into the collaboration market, that competitor may leverage its substantial competitive advantages and our revenue and operating results could be harmed.

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Unless we develop better market awareness of our company and our solutions, our revenue may not continue to grow.

We are a relatively new entrant in the collaboration, MSP and IT infrastructure software solutions markets, and we believe we have not yet established broad market awareness of our participation in these markets. Market awareness of our capabilities and solutions is essential to our continued growth and our success in all of our markets. If our marketing programs are not successful in creating market awareness of our company and solutions, our business, financial condition and results of operations will be adversely affected, and we will not be able to achieve sustained growth.

If we are unable to generate significant volumes of sales leads from Internet search engines and other online marketing campaigns, traffic to our website and our revenue may decrease.

We generate approximately half of our sales leads for products other than our TeamViewer product through visits to our websites by customers searching common IT management terms including monitoring, management, security, cloud services or remote management software through Internet search engines, such as Google and Yahoo! A critical factor in attracting potential customers to our websites is how prominently our websites are displayed in response to search inquiries. If we are listed less prominently or fail to appear in search result listings for any reason, visits to our websites by customers and potential customers could decline significantly. We may not be able to replace this traffic and, if we attempt to replace this traffic, we may be required to increase our sales and marketing expenses, which may not be offset by additional revenue and could adversely affect our operating results.

Failure to effectively and efficiently service SMBs would adversely affect our ability to increase our revenue.

We develop the majority of our collaboration, MSP and IT infrastructure software solutions specifically for SMBs, and our success depends on our ability to attract and retain SMB customers. SMBs are challenging to reach, acquire and retain in a cost-effective manner. To grow our revenue, we must add new customers, sell additional products or product enhancements to existing customers and encourage existing customers to renew their subscription or maintenance agreements. Selling to and retaining SMBs is more difficult than selling to and retaining large enterprise customers because SMB customers generally have high failure rates, are price sensitive, are difficult to reach with targeted sales campaigns, have high churn rates and generate less revenue per customer and per transaction. In addition, SMBs frequently have limited budgets and may choose to spend funds on items other than our products. If these organizations experience economic hardship, they may be unwilling or unable to expend resources on technology software and services. If we are unable to market and sell our solutions to SMBs with competitive pricing and in a cost-effective manner, our ability to grow our revenue will be harmed.

If we are unable to enhance existing products, or to develop or acquire new products that respond to rapidly changing customer requirements, technological developments or evolving industry standards, our existing products may be rendered obsolete and our long-term revenue growth will be harmed.

The markets for our products are characterized by rapid technological advances, changes in customer requirements, changes in protocols and evolving industry standards. Our long-term growth depends on our ability to enhance and improve our existing products and to introduce or acquire new products that respond to these demands promptly. If we are unable to add products and develop enhancements to our existing products that are satisfactory to our customers, if our customers purchase or develop their own competing products and technologies or if technical developments render our products or certain features of our products obsolete, demand for our solutions will decrease, and our operating results will be harmed.

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Table of Contents

If we are unable to attract new customers, to monetize evolving sales channels or to sell additional products to our existing customers, our revenue growth will be adversely affected.

To maintain and also to increase our revenue, we must regularly add new customers or sell additional products to existing customers. We expect to incur significant additional expenses in expanding our sales and development personnel and our worldwide operations in order to achieve revenue growth. We may be unable to maintain or increase traffic to our websites and our marketing efforts may be unsuccessful in generating evaluation downloads, resulting in fewer sales leads. We may fail to identify growth opportunities for our current products, and we may misinterpret the market for new products and technologies. Furthermore, sales channels and pricing models for our products may evolve and we may fail to adjust our products and their pricing to these changes in a timely manner. For example, we believe the software services industry as a whole may experience an increased rate of product purchases through so-called app stores and via mobile devices in the near future. Software products sold through app stores and via mobile devices tend to have lower price points than products sold through more traditional sales outlets. In addition, app store operators charge fees at varying levels for sales made through their stores. In the event our customers begin to purchase our products through app stores and via mobile devices, we may experience increased pressure on our operating results from such sales. If we fail to attract new customers, monetize new sales models or our new product introductions or acquisitions are not successful, we may be unable to maintain or increase our revenue and our operating results may be adversely affected.

System security risks, data protection breaches, and cyber-attacks could compromise our proprietary information, disrupt our internal operations and harm public perception of our products, which could cause our business and reputation to suffer and adversely affect the price of our common shares.

In the ordinary course of business, we store sensitive proprietary data, including our source code, other intellectual property and other proprietary business information, on our networks or the networks of third party service providers. The secure maintenance of this information is critical to our operations and business strategy. Increasingly, companies are subject to a wide variety of attacks on their networks on an ongoing basis. Despite our security measures, our information technology and infrastructure or those of our partners may be vulnerable to penetration or attacks by computer programmers and hackers, or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks, creating system disruptions or slowdowns and exploiting security vulnerabilities of our products, and the information stored on our networks or third party information could be accessed, publicly disclosed, lost or stolen.

Although these are industry-wide problems that affect computers and products across all platforms, they may affect our products in particular because hackers tend to focus their efforts on the most popular operating systems and programs and we expect them to continue to do so. If an actual or perceived breach of network security occurs, regardless of whether the breach is attributable to our products, the market perception of our business could be negatively impacted. Because the techniques used by computer programmers and hackers, many of whom are highly sophisticated and well-funded, to access or sabotage networks change frequently and generally are not recognized until after they are used, we may be unable to anticipate or immediately detect these techniques. This could impede our sales, development, distribution or other critical functions. In addition, the economic costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software systems and security vulnerabilities could be significant and may be difficult to anticipate or measure because the damage may differ based on the identity and motive of the programmer or hacker, which are often difficult to identify.

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Our business depends on customers renewing their annual maintenance contracts and subscription agreements and purchasing upgrades. Any decline in maintenance or subscription renewals or upgrade purchases could harm our future operating results.

We sell our products to our customers either pursuant to a license arrangement that may or may not include optionally renewable one, two or three years of maintenance as part of the initial price, pursuant to a perpetual license without maintenance, or on a monthly or annual subscription basis. Our customers have no obligation to renew their maintenance agreements after the expiration of the initial period, and they may decide not to renew maintenance agreements. Furthermore, our customers have no obligation to purchase upgrades and can cancel monthly subscriptions without significant notice or penalty. Our customers' renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our products, the prices of our products, the prices of products and services offered by our competitors or reductions in our customers' spending levels. As such, we are unable to predict future customer renewal rates accurately. In addition, a substantial portion of our quarterly maintenance revenue is attributable to maintenance agreements entered into during previous quarters. As a result, if there is a decline in renewed maintenance agreements in any one quarter, only a small portion of the decline will be reflected in our maintenance revenue recognized in that quarter and the rest will be reflected in our maintenance revenue recognized in the following four quarters or more. If our customers do not renew their maintenance arrangements or if they renew them on less favorable terms, do not purchase upgrades or do not renew subscription agreements, our revenue may decline and our business will suffer.

If we fail to convert our free users into paying customers, our revenue and financial results will be harmed.

Over 80% of our customers have utilized our products free of charge through free trials of our products. We seek to convert trial users into paying customers, and we have enjoyed conversion rates of between 1% and 16% historically for the majority of our products, depending on product type and excluding our TeamViewer product. If our rate of conversion or the growth or size of our free user base suffers for any reason, our revenue may fail to grow and our business may suffer. In addition, we offer our TeamViewer product free of charge for non-commercial use. We maintain controls to ensure these products are being used solely for non-commercial use; however, we cannot guarantee that all non-paying end-users of our TeamViewer product are using the product solely for non-commercial purposes. If we cannot effectively monitor the nature of use of our TeamViewer product by our end-users, our revenue may decline and our business would suffer.

We have a limited operating history as a combined entity and have experienced rapid growth in recent periods. If we are unable to manage our growth effectively, our revenue and operating results could be adversely affected.

Our combined company has been in existence since November 2010, and much of our growth has occurred in recent periods. Sustaining our growth will place significant demands on our management as well as on our administrative, operational and financial resources. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries. Risks that we face include:

training new personnel to become productive and generate revenue;
controlling expenses and investments in anticipation of expanded operations;
implementing and enhancing our administrative infrastructure, systems and processes;
addressing new product markets; and
expanding operations in the countries in which we operate and in new geographic regions.

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To manage our growth, we must continue to improve our operational, financial and management information systems and expand, motivate and manage our workforce. If we are unable to manage our growth successfully without compromising the quality of our solutions and our profit margins, or if new systems that we implement to assist in managing our growth do not produce the expected benefits, our revenue and operating results could be harmed.

If we fail to develop our brands cost-effectively, or if we fail to maintain the integrity and reputation of our brands, our financial condition and operating results might suffer.

We believe that developing and maintaining the awareness and integrity of our brands in a cost-effective manner is important to achieving widespread acceptance of our existing and future solutions and is important in attracting new customers. We believe that the importance of brand recognition will increase as competition in our markets further intensifies. Successful promotion of our brands will depend on the effectiveness of our marketing efforts and on our ability to provide reliable and useful solutions at competitive prices. We intend to increase our expenditures on brand promotion. Brand promotion activities may not yield increased revenue, and even if they do, the increased revenue may not offset the expenses we incur in building our brands. Furthermore, we rely on certain third-party channel partners in the distribution of our products. We have limited or no control over these third parties and actions by these third parties could negatively impact our brand. Our products are also reviewed by industry analysts, bloggers and other commentators who publish reviews of our solutions. Negative feedback regarding our company or our solutions could have a negative effect on our brand. If we fail to promote and maintain our brands successfully or to maintain loyalty among our customers and our end-user community, or if we incur substantial expenses in unsuccessful attempts to promote and maintain our brands, we may fail to attract new customers or retain our existing customers and our financial condition and results of operations could be harmed.

Failure to comply with data protection laws and standards that vary and are contradictory across the multiple jurisdictions in which we operate may expose us to liability and a loss of customers.

Businesses that collect, maintain and analyze personal information are subject to many national, state and international laws and regulations regarding the collection, storage, use, protection and processing of such data. These laws and regulations, as well as their interpretation, in particular in the European Union and the United States, are evolving, expanding and changing, and may be contradictory in their requirements. Compliance with these numerous and contradictory requirements is particularly difficult for an online business such as ours that collects personal information from customers in multiple jurisdictions. Failure to comply with these laws could result in legal liability and/or government sanctions and we may not be successful in avoiding potential liability or disruption of business resulting from the failure to comply with these laws. If we are required to pay any significant amount of money in satisfaction of claims under these laws, or if we are forced to cease our business operations for any length of time as a result of our inability to comply fully with any of these laws, our business, operating results and financial condition could be adversely affected. In addition, such failure or perceived failure or even compliance with or applicability of regulations regarding personal information in certain jurisdictions can lead to reputational harm in other jurisdictions. This may cause difficulty in attracting new customers or retaining existing customers and may harm our financial condition.

If our products are used to commit fraud or other similar intentional or illegal acts, we may incur significant liabilities, our products may be perceived as not secure and customers may curtail or stop using our solutions.

Our TeamViewer product enables direct remote access to computer systems. We do not control the use or content of information accessed by our customers through our products, including our TeamViewer

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product. If our products are used to commit fraud or other nefarious or illegal acts, such as posting, distributing or transmitting any software or other computer files that contain a virus or other harmful component, interfering with or disrupting third-party networks, infringing any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy, transmitting any unlawful, harassing, libelous, abusive, threatening, vulgar or otherwise objectionable material, or accessing unauthorized third-party data, we may become subject to claims for defamation, negligence, intellectual property infringement or other matters. Defending any such claims could be expensive and time-consuming, and we could incur significant liability to our customers and to individuals or businesses that were the targets of such acts. As a result, our business may suffer and our reputation may be damaged.

Evolving regulation of the Internet may adversely affect our data-driven marketing process.

In monitoring our business results, we track, through the remote telemetry built into many of our products, how many customers have installed our products and how many customers are using those products. We also use tracking technologies, including cookies and related technologies, to help us track the activities of the visitors to our websites and to communicate with existing and potential customers. In addition, as part of our product download process and during our sales process, given the choice, most of our customers agree to receive emails and other communications from us. Several jurisdictions have proposed or adopted laws or regulations governing the collection, processing, use, retention, sharing and security of consumers' personal data, including laws that restrict or prohibit the sending of unsolicited bulk electronic messages, or so-called spam, and also including new regulations on the use of cookies. In addition, privacy groups and government bodies have increasingly scrutinized the ways in which companies collect data associated with particular users or devices, and we expect such scrutiny to continue to increase. As a result of such regulation and scrutiny, we may be required to modify or discontinue our existing practices, possibly necessitating significant expenditures and negatively affecting our ability to effectively monitor our business results and market our solutions. Furthermore, any claims or allegations that we have violated laws and regulations relating to privacy could result in negative publicity, and investigating or responding to any such claims or allegations could present a significant cost to us, which in each case would have an adverse effect on our business, operating results and financial condition.

If we or our third-party providers fail to protect confidential information against security breaches, or if our customers or potential customers are reluctant to use our websites because of privacy concerns, we might face additional costs and activity in our websites could decline.

During the purchasing process and in connection with evaluations of certain of our software products, either we or third-party providers collect and use personally identifiable information such as credit card numbers, email addresses and phone numbers. This information could be compromised or accessed as a result of misappropriation or security breaches, and we could be subject to liability as a result. For example, our customers may be subject to phishing attempts, or instances in which third parties posing as representatives of our company unlawfully solicit our customers' private data. In addition, our servers and those of our third-party service providers are vulnerable to computer viruses or physical or electronic break-ins. Under the data protection laws in certain jurisdictions in which we operate, we are required by law to affirmatively disclose to the appropriate regulatory agency or the relevant customer those instances where personal data may have been wrongfully disclosed, lost, stolen or otherwise misappropriated. Failure to comply with such laws may increase the risk of government action and legal claims against us, and cause harm to our reputation.

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Our business is dependent on market demand for, and acceptance of, the SaaS model for the use of software.

We derive, and expect to continue to derive, revenue from the sale of SaaS solutions, a relatively new and rapidly changing market in which software is provided as a third-party service rather than a physical product delivery. As a result, widespread acceptance and use of the SaaS business model is important to our future growth and success. Under the perpetual or periodic license model for software procurement, users of the software typically run applications on their hardware. Because customers are generally predisposed to maintaining control of their IT systems and infrastructure, or may have data privacy concerns, there may be resistance to the concept of accessing the functionality that software provides as a service through a third party. Such scrutiny may increase in light of a heightened public debate on data privacy concerns. If the market for SaaS solutions fails to grow or grows more slowly than we currently anticipate, demand for our services could be negatively affected.

Growth of our business may be adversely affected if businesses, IT support providers or consumers do not adopt remote connectivity and remote support solutions more widely.

Our TeamViewer product employs new and emerging technologies for remote access and remote support. Our target customers may hesitate to accept the risks inherent in applying and relying on new technologies or methodologies to supplant traditional methods of remote connectivity. Our business will not be successful if our target customers do not accept the use of our remote access and remote support technologies.

Expansion of our business into new geographic markets will subject us to additional economic and operational risks that could increase our costs and make it difficult for us to operate profitably.

The continued international expansion of our operations may require significant expenditure of financial and management resources and result in increased administrative and compliance costs. In addition, such expansion will increasingly subject us to the risks inherent in conducting business internationally, including:

currency fluctuations, which could result in reduced revenue and increased operating expenses;

localization of our services, including translation into different languages and adaptation for local practices and regulatory requirements;

the effect of applicable local tax structures, including tax rates that may be higher than our current tax rates or taxes that may be duplicative of those currently imposed on us;

tariffs and trade barriers;

difficulties in managing and staffing larger international operations;

general economic, cultural and political conditions in each country;

inadequate intellectual property protection in certain countries;

dependence on certain third parties, including channel partners with whom we may not have extensive experience;

the difficulties and increased expenses of complying with a variety of different laws, regulations and trade standards, including data protection and privacy laws;

international regulatory environments; and

longer accounts receivable payment cycles and increased difficulty in collecting accounts receivable.

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Markets in which we may materially expand include, among others, Japan and Brazil. Expansion efforts in these markets would likely include use of a distribution model and would not involve material in-country operations. Pursuant to this model, we would anticipate adding additional support staff to manage our channel partners and native language speakers to handle telephone support, and investing funds to incentivize new channel partners to sell our solutions.

If we are unable to effectively manage our expansion into additional geographic markets, our financial condition and results of operations could be harmed.

We rely on third-party channel partners to generate a material portion of our Billings; if our partners fail to perform, our ability to sell our solutions will be negatively impacted and, if we fail to optimize our channel partner model going forward, our operating results will be harmed.

In the year ended December 31, 2012 and in the six months ended June 30, 2013, approximately 28% and 30%, respectively, of our Billings was generated through sales to our channel partners, which include distributors, resellers and OEM partners. We depend on these channel partners to generate sales opportunities and manage the sales process. Our channel partners may be unsuccessful in marketing, selling and supporting our products. In addition, our channel partners generally do not have minimum purchase requirements. They may also market, sell and support products that are competitive with ours, and may devote more resources to the marketing, sales and support of such products. Our channel partners may have incentives to promote our competitors' products to the detriment of our own, and may cease selling our products altogether. We cannot assure you that we will retain channel partners or that we will be able to secure additional or replacement channel partners. The loss of one or more of our significant channel partners or the failure to obtain and deliver a large number of orders each quarter to or through such channel partners could harm our operating results. Our third-party partner sales structure could subject us to lawsuits, potential liability and reputational harm if, for example, any of our partners misrepresents the functionality of our products to end-users or our partners violate laws or our corporate policies. In addition, we may not be able to monitor our third-party partners for regulatory compliance. If our partners fail to comply with applicable regulations in the jurisdictions in which they operate, it could adversely affect our reputation and subject us to litigation and sanctions. If we fail to effectively manage our sales channels, our business will be seriously harmed.

Failure to expand our sales operations effectively could harm our ability to increase our customer base and to achieve broader market acceptance of our solutions.

Increasing our customer base and achieving broader market acceptance of our solutions will depend on our ability to expand our sales operations effectively. We rely on our inside sales force and certain resellers and distributors to obtain a material portion of our new customers. We plan to continue to expand our inside sales force worldwide. Our ability to achieve growth in revenue in the future will depend on our success in recruiting, training and retaining sufficient numbers of inside sales personnel, and on the productivity of those personnel. Our recent and planned personnel additions may not become as productive as we would like, and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do or plan to do business. Our operating results will be harmed if these expansion efforts do not generate a corresponding increase in revenue.

Our ability to sell our solutions is dependent on the quality of our technical support services, and our failure to offer high quality technical support services would have a material adverse effect on our sales and results of operations.

Once our products are deployed within our end-users' systems, our end-users depend on our technical support services, as well as the support of our channel partners, to resolve any issues relating to our

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products. We believe a key differentiator of our solutions and a critical part of our business strategy is our continued focus on providing high-quality customer support. If we or our channel partners do not effectively assist our customers in deploying our products, succeed in helping our customers quickly resolve post-deployment issues and provide effective ongoing support, our ability to sell additional solutions to existing customers would be adversely affected and our reputation with potential customers could be damaged. As a result, our failure to maintain high-quality support services would have a material adverse effect on our business, financial condition and results of operations.

Our products may contain undetected defects, errors or vulnerabilities that could expose us to legal liability and adversely affect our business and brand reputation.

Our products may contain material defects, errors or vulnerabilities that may cause them to fail to perform in accordance with the expectations of our customers. In particular, such defects, errors and vulnerabilities may exist or occur in newly released products or in products that we intend to release in the future, despite our efforts to test these products prior to their release. Detecting, analyzing and remedying such defects, errors and vulnerabilities may prove costly and time-consuming and divert management attention or may prove to be not possible at all. Even if we are able to remedy defects, errors and vulnerabilities in our products, such defects, errors or vulnerabilities can still cause product sale interruptions, loss of existing or potential customers, require us to offer refunds to our customers, damage our reputation and market acceptance and expose us to legal claims, such as claims based on product liability, tort, breach of warranty or other types of claims for damages, which could prove considerable if limitation of liability and/or indemnity provisions in our contracts should not prove to be enforceable in the event of a dispute. This may have a material adverse effect on our financial position. Defending against such claims may be costly and time-consuming and may divert management attention. Our existing product liability insurance coverage may be insufficient, and adequate insurance coverage may be costly to obtain or may not be obtainable at all.

Failure of our security solutions or security solutions we license from third-party vendors to detect viruses or security breaches or to identify spam or spyware could harm our reputation and adversely affect our business.

The antivirus and intrusion prevention functions we develop or license from third-party vendors and use in certain of our products may fail to detect or prevent malware, viruses, worms, botnets or similar threats due to a number of reasons, such as the evolving nature of such threats and the continual emergence of new threats that we may fail to detect in time to protect our customers' networks. We rely on third-party vendors and third-party data center facilities, the operations of which we do not control, to deliver updates of our security products to our end-users. These third parties may also experience technical failures and downtime, and may fail to distribute appropriate updates, or fail to meet the increased requirements of a growing customer base. Any such technical failure, downtime, or failures in general may temporarily or permanently expose our customers' networks, leaving their networks unprotected against the latest security threats. An actual or perceived security breach or infection of the network of one of our customers, regardless of whether the breach is attributable to the failure of our solutions to prevent the security breach, could adversely affect the market's perception of our security products and result in negative publicity, loss of customers and sales, increased costs to remedy any problem, and costly litigation. We may also be forced to license replacement products from other third-party vendors which we may not be able to integrate in a cost- and time-efficient manner.

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False detection of viruses or security breaches or false identification of spam or spyware by our security solutions could adversely affect our business.

The antivirus and intrusion prevention functions we license from third-party vendors and use in certain of our products may falsely detect viruses or other threats that do not actually exist. These false positives may impair the perceived reliability of our solutions and may therefore adversely impact market acceptance of our solutions. Also, our antispam and antispyware services may falsely identify emails or programs as unwanted spam or potentially unwanted programs, or alternatively fail to properly identify unwanted emails or programs, particularly since spam emails and spyware are often designed to circumvent antispam or antispyware products. Parties whose emails or programs are blocked by our products may seek redress against us for labeling them as spammers or spyware, or for interfering with their business. In addition, false identification of emails or programs as unwanted spam or potentially unwanted programs may reduce the adoption of our solutions. If our system restricts important files or applications based on falsely identifying them as malware or some other item that should be restricted, this could adversely affect end-users. Any such false identification of important files or applications could result in negative publicity, loss of customers and sales, increased costs to remedy any problem, and costly litigation.

We will be less effective in managing our business if we fail to timely and accurately track the number and retention rates of our customers.

Our customers are exclusively business customers. We define business customers as customers (other than individual consumers) that have purchased one or more of our products under a unique customer identification number within the past three years. We have implemented systems to accurately monitor the number and the retention rates of these customers as well as their purchase of upgrades and subscriptions, and we are continuously working to improve the effectiveness of these systems to avoid misallocations and double-counting of customers. We believe that these systems are and will continue to be an effective tool for tracking our customers across our business. Should we fail to accurately and timely monitor our key performance indicators, or fail to adjust and amend our systems in the event that we grow, introduce new products or acquire new businesses, we will become less effective in the management of our business and our ability to react to market trends and developments will be impaired. Furthermore, a material miscalculation of our customers and their retention rate could result in the market perceiving that we are under-performing or over-performing, which would have to be adjusted in future periods. As a result, our operating results may be materially and adversely affected.

We rely on our management team and need additional personnel to grow our business, and the loss of one or more key employees or our inability to attract, train and retain qualified personnel could harm our business.

We largely depend on the experience and knowledge of certain key employees, including developers, key sales and marketing personnel and key members of management, including our executive officers, in the development, marketing and distribution of our solutions and in the performance of our business operations. We are facing intense competition in our industry for qualified employees and our future performance is dependent on our ability to retain or timely hire and train key employees. This also applies to members of our executive management who have extensive experience in our industry. If we fail to retain these individuals or to timely hire adequate replacements, our competitive position and our business operations could suffer. Locating, hiring and training new key employees may also prove costly and time-consuming, in particular, because the labor markets in some of the regions we are operating in are small and underdeveloped with respect to our industry. We may be required to pay increased

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compensation to hire new, qualified personnel. Our inability to attract and retain the necessary personnel could adversely affect our business.

We use a number of data centers to deliver our solutions. Any disruption of service at these facilities could harm our business.

We host many of our solutions and serve our customers from third-party data center facilities. We do not control the operation of these facilities. The owners of these data center facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew these agreements on commercially reasonable terms, we may be required to transfer to new data center facilities, and we may incur significant costs and possible service interruption in connection with doing so. In addition, any changes in service levels at our data centers that result in errors, defects, disruptions or other performance problems with our solutions could harm our reputation and may damage our customers' businesses. Performance problems with our solutions might reduce our revenue, cause us to issue credits to customers, subject us to potential liability, cause customers to terminate their subscriptions or harm our renewal rates.

Our data center facilities are also vulnerable to damage or interruption from human error, intentional bad acts, pandemics, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events. The occurrence of a natural disaster or an act of terrorism, or vandalism or other misconduct, a decision to close the facilities without adequate notice or other unanticipated problems could result in lengthy interruptions in our services.

Adverse economic conditions or reduced IT spending may adversely impact our revenue and operating results.

Our business depends on the overall demand for IT and on the economic health of our current and prospective customers. The use of our solutions is often discretionary and may involve a commitment of capital and other resources. Weak economic conditions, or a reduction in IT spending even if economic conditions improve, would likely adversely impact our business, operating results and financial condition in a number of ways, including by lengthening sales cycles, lowering prices for our solutions and reducing sales.

If we are not able to acquire and successfully integrate future acquisitions, our operating results and prospects could be harmed.

We have made several acquisitions in recent years and expect to continue making acquisitions in the future. The success of our acquisition strategy will depend on our ability to identify, negotiate, complete and integrate acquisitions and, if necessary, to obtain satisfactory debt or equity financing to fund those acquisitions. Mergers and acquisitions are inherently risky, and any mergers and acquisitions we complete may not be successful. Any mergers and acquisitions we undertake would involve numerous risks, including the following:

difficulties in integrating and managing the operations, technologies and products of the companies we acquire;

diversion of our management's attention from normal daily operations of our business;

inability to maintain the key business relationships and the reputations of the businesses we acquire;

uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions;

dependence on unfamiliar affiliates and partners of the companies we acquire;

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insufficient revenue to offset our increased expenses associated with acquisitions;

responsibility for the liabilities of the businesses we acquire;

inability to maintain internal standards, controls, procedures and policies; and

potential loss of key employees or termination of key commercial agreements of the companies we acquire.

In addition, we may be unable to secure the equity or debt funding necessary to finance future acquisitions on terms that are acceptable to us. If we finance acquisitions by issuing equity or convertible debt securities, our existing shareholders will likely experience ownership dilution, and if we finance future acquisitions with debt funding, we will incur incremental interest expense and may have to comply with financing covenants or pledge certain of our assets.

Our success depends on our customers' continued high-speed access to the Internet and the continued reliability of the Internet infrastructure.

Because the majority of our solutions are designed to work over the Internet, our revenue growth depends on our customers' high-speed access to the Internet, as well as the continued maintenance and development of the Internet infrastructure. The future delivery of our solutions will depend on third-party Internet service providers to expand high-speed Internet access, to maintain a reliable network with the necessary speed, data capacity and security and to develop complementary products and services, including high-speed modems, for providing reliable and timely Internet access and services. The success of our business depends directly on the continued accessibility, maintenance and improvement of the Internet as a convenient means of customer interaction, as well as an efficient medium for the delivery and distribution of information by businesses to their employees. All of these factors are beyond our control.

Our business is subject to the risks of earthquakes, fire, power outages, floods and other catastrophic events, and to interruption by man-made problems such as terrorism.

A significant natural disaster, such as an earthquake, fire or a flood, or a significant power outage could have a material adverse impact on our business, operating results and financial condition. In addition, acts of terrorism could cause disruptions in our business or the business of our service providers, logistics providers, channel partners, or customers or the economy as a whole. Our existing insurance coverage against these events or the interruption of our business may be insufficient, and adequate insurance coverage may be costly to obtain or may not be obtainable at all. Any disruption in the business of our service providers, logistics providers, channel partners or customers that impacts sales could have a significant adverse impact on our quarterly results. All of the aforementioned risks may be augmented if the disaster recovery plans for us, our service providers, our channel partners or others prove to be inadequate. To the extent that any of the above results in decreased purchases of our products or the delay in the delivery of our products, our business, financial condition and results of operations would be adversely affected.

We generate significant revenue from member countries of the European Union and our business may suffer in case of a prolonged and deepening economic crisis in Europe.

We generate a significant portion of our revenue from member countries of the European Union. Financial markets remain concerned about the continuing economic crisis in the European Union, in particular with respect to the deficits of countries such as Greece, Portugal, Ireland, Spain and Italy. Despite efforts to stabilize the economic conditions of these countries, concerns remain about the ability of these countries to meet future financial obligations, their debt levels, the stability of the euro currency and the stability of the euro economic zone as a whole. In addition, political discussion and conflicting national interests of the

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various member states in connection with the rescue measures have ignited discussions about re-introducing national currencies, which could ultimately lead to abandoning the euro as a single currency. In this event, we would face increased currency risks and would have to value our euro-denominated assets under national currencies. We cannot assess the effects of such a revaluation on our financial position, but our financial position could be materially adversely affected as a result. In addition, the crisis could have a negative effect on finance markets generally and could lead to significantly weakened economies throughout Europe. As a result, our existing and potential future customers may have less cash available to invest in software solutions and may decide not to purchase our products and/or updates, which could have a materially adverse effect on our financial position.


Risks related to intellectual property

The success of our business depends on our ability to protect and enforce our intellectual property rights.

We rely primarily on a combination of copyright, trademark, trade dress, unfair competition and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights. These laws, procedures and restrictions provide only limited protection. In addition, we hold two patents in the United States and have four other filed patent applications. Our existing intellectual property rights protection and filed applications may be denied, challenged, invalidated or circumvented, and may not provide sufficiently broad protection or may not prove to be enforceable in actions against alleged infringers, and additional or more effective protection may be costly to obtain or may not be obtainable at all.

We endeavor to enter into agreements with our employees and contractors and with parties with which we do business in order to limit access to and disclosure of our proprietary information. We cannot be certain that the steps we have taken will prevent unauthorized use or reverse engineering of our technology. Moreover, others may independently develop technologies that are competitive to ours or infringe our intellectual property. The enforcement of our intellectual property rights also depends on our legal actions against these infringers being successful, but these actions may not be successful, even when our rights have been infringed, and such actions may be costly and time-consuming and bind our resources.

Furthermore, effective copyright, trademark, trade dress, patent, unfair competition and trade secret protection may not be available in every country in which our products are available over the Internet. In addition, the applicable legal standards and their interpretation relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and evolving. This includes the protection of our licenses, which may be deemed unenforceable under the laws of some jurisdictions. Challenges to the enforceability of our licenses could expose us to costly and time-consuming litigation and may adversely affect our business and results of operations. Changes in the copyright, trademark, trade dress, patent, unfair competition and trade secret laws we rely on, or changes in their interpretation, may adversely affect the protection of our proprietary rights. Insufficient or ineffective protection of our intellectual property rights may adversely affect our revenue and results of operations.

Our products could infringe third-party intellectual property rights, which could result in material costs.

We are subject to intellectual property infringement claims and may continue to be subject to such claims in the future. These claims may occur for a variety of reasons, including the expansion of our product lines through product development and acquisitions, an increase in patent infringement litigation commenced by non-practicing entities, or so-called patent trolls, increased market exposure as a public company, an increase in the number of competitors in our industry segments and the resulting increase in the number of related products and the overlap in the functionality of those products, and the unauthorized use of a

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third party's code in our product development process. In addition, companies and inventors are more frequently seeking to patent software. As a result, we could receive more patent infringement claims.

Responding to any intellectual property infringement claim, whether such claim is made against us or against our customers, regardless of its validity, could result in litigation costs, monetary damages or injunctive relief or require us to obtain a license to intellectual property rights of those third parties. Licenses may not be available on reasonable terms, on terms compatible with the protection of our proprietary rights, or at all. In addition, attention to these claims could divert our management's time and attention from developing our business. If a successful claim is made against us and we fail to develop or license a substitute technology or negotiate a suitable settlement arrangement, our business, results of operations, financial condition and cash flows could be materially and adversely affected. In particular, a material adverse impact on our financial condition could occur in the period in which the effect of an unfavorable final outcome becomes probable and reasonably estimable.

We use software licensed from third parties, which we may not be able to retain or which could cause errors in our products and harm to our customers.

We rely on software and intellectual property rights licensed from third parties in our internal infrastructure and certain of our products. These include the operating systems used on certain of our servers, as well as various software packages and utilities. Substantially all of these components are used for limited, individual functions; however, in the event we are unable to use any one of these third-party components, our systems and certain of our products may temporarily experience limited functionality and we may have to spend money or divert developer attention to replace these components or re-engineer our products. Such a failure could cause harm to our customers, which could materially affect our reputation and our financial condition and expose us to possible litigation.

Indemnity provisions in various agreements potentially expose us to liability for intellectual property infringement and other losses.

Our agreements with many of our customers and channel partners include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement and, in some cases, for other damages, such as damages caused by us to property or persons. For customers who purchase perpetual licenses, the terms of these indemnity provisions are perpetual. In other agreements, the indemnity provision may survive termination of the agreement. Large indemnity payments could harm our business, operating results and financial condition.

Our use of open source software could negatively impact our ability to sell our solutions and subject us to possible litigation.

The products or technologies acquired, licensed or developed by us may incorporate open source software, and we may incorporate open source software into other products in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses that may include conditions that limit our rights to use them. We monitor our use of open source software in an effort to avoid subjecting our products to conditions we do not intend. Although we believe that we have complied with our obligations under the various applicable licenses for open source software that we use such that we have not triggered any of these conditions, there is little or no legal precedent governing the interpretation of many of the terms of these types of licenses. As a result, the potential impact of these terms on our business may result in unanticipated obligations regarding our products and technologies, such as requirements that we offer our products that use the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software, and/or that we license such modifications or derivative works under the terms of the particular open source license.

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If an author or other third party that distributes open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations. If our defenses were not successful, we could be subject to significant damages, enjoined from the distribution of our products that contained the open source software, and required to comply with the terms of the applicable license, which could disrupt the distribution and sale of some of our solutions. In addition, if we combine our proprietary software with open source software in an unintended manner, under some open source licenses we could be required to release the source code of our proprietary software, which could substantially help our competitors develop products that are similar to or better than ours.

In addition to risks related to license requirements, use of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or assurance of title or controls on the origin of the software.


Risks related to our financial condition

In prior years, our independent registered public accounting firm communicated several material weaknesses in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not have been prevented or detected and corrected on a timely basis and these material weaknesses could impair our ability to comply with the accounting and reporting requirements applicable to public companies. While these weaknesses have been fully remediated as of the end of 2012, certain of the financial information appearing in this prospectus relates to periods prior to remediation.

In connection with the audits of our 2008, 2009 and 2010 financial statements which were completed concurrently, our independent registered public accounting firm communicated several material weaknesses related to our business combination accounting, share-based compensation accounting, accounting for non-routine financing transactions, revenue recognition, accounting for current and deferred taxes, and our financial statement close process. During 2011 we successfully remediated three of these deficiencies. In connection with the audit of our 2011 consolidated financial statements, our independent registered public accounting firm reported to our audit committee that the material weaknesses related to revenue recognition, accounting for current and deferred taxes and our financial statement close process remained. During 2012, the remaining material weaknesses were fully remediated.

Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

We concurred with the findings of our independent registered public accounting firm and worked diligently to fully remediate the material weaknesses by the end of 2012. We continue to diligently monitor the control environment we have established to address the underlying causes of the material weaknesses. We discuss these steps in further detail in "Operating and financial review and prospects—Internal control over financial reporting" included elsewhere in this prospectus. The actions that we have taken to ensure a strong financial control environment are subject to ongoing senior management review, as well as audit committee oversight.

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We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common shares less attractive to investors.

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the "JOBS Act." We will remain an emerging growth company until the earliest to occur of: (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1 billion (subject to adjustment for inflation); (ii) the last day of the fiscal year following the fifth anniversary of this offering; (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; or (iv) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended, or the "Exchange Act." We may take advantage of certain exemptions from various accounting and reporting requirements that are applicable to other public companies but not to emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. As an example, an election to delay the adoption of new or revised accounting standards may make it difficult to compare our financial statements to those of other public companies in our industry to which these exemptions are not available or which have elected not to rely on them. We cannot predict if investors will find our common shares less attractive because we intend to rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

We have incurred net losses for the last three fiscal years and we do not expect to be profitable on an IFRS basis in the immediate future.

We incurred net losses of $40.7 million, $51.9 million and $28.3 million in 2012, 2011 and 2010, respectively. As a direct result of the $10.5 million gain on the sale of GFI Software (Florida) Inc. and its subsidiaries on March 31, 2013, we generated net income of $5.0 million in the six months ended June 30, 2013. We anticipate that our operating expenses will increase in the foreseeable future as we continue to invest to grow our customer base, expand our marketing and distribution channels, increase the number of products in our portfolio, enhance our existing products, expand our operations, hire additional employees and develop our SaaS platform. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. Any failure to increase our revenue could prevent us from attaining profitability. We cannot be certain that we will be able to attain or increase profitability on a quarterly or annual basis. If we are unable to effectively manage these risks and difficulties as we encounter them, our business, financial condition and results of operations may suffer.

Our quarterly revenue and operating results have fluctuated in the past and may fluctuate in the future due to a number of factors. As a result, we may fail to meet or exceed the expectations of securities analysts or investors, which could cause our share price to decline.

We believe our quarterly revenue and operating results may vary significantly in the future. As a result, you should not rely on the results of any one quarter as an indication of future performance, and period-to-period comparisons of our revenue and operating results may not be meaningful.

Our quarterly results of operations may fluctuate as a result of a variety of factors including, but not limited to, those listed below, many of which are outside of our control:

our inability to increase sales to existing customers and to attract new customers;

the timing and success of new product introductions by us or our competitors;

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changes in our pricing policies or those of our competitors;

higher marketing expenditures;

the mix of our direct and indirect sales;

the amount and timing of operating expenses and capital expenditures related to the expansion of our operations and infrastructure;

the timing of revenue and expenses related to the development or acquisition of technologies, products or businesses;

the mix of Billings among offerings that have different revenue recognition characteristics;

potential goodwill and intangible asset impairment charges and amortization associated with acquired businesses;

potential foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity; and

general economic, industry and market conditions that impact expenditures for collaboration, MSP and IT infrastructure software solutions in the countries where we sell our solutions.

Fluctuations in our quarterly operating results might lead analysts to change their models for valuing our common shares. As a result, our share price could decline rapidly and we could face costly securities class action suits or other unanticipated issues.

We rely significantly on revenue from subscriptions and support services which may decline, and, because we recognize revenue from subscriptions and support services over the term of the relevant service period, downturns or upturns in sales are not immediately reflected in full in our operating results.

Sales of new or renewal subscriptions and support services contracts may decline or fluctuate as a result of a number of factors, including customers' level of satisfaction with our solutions, the prices of our solutions, the prices of solutions offered by our competitors or reductions in our customers' spending levels. If our sales of new or renewal subscriptions and support services contracts decline, our revenue and revenue growth may decline and our business will suffer. In addition we recognize subscriptions and support services revenue monthly over the term of the relevant service period, which is typically one year but has been as long as five years. As a result, much of the revenue we report each quarter is the recognition of deferred revenue from subscriptions and support services contracts entered into during previous quarters. Consequently, a decline in new or renewed subscriptions or support services contracts in any one quarter will not be fully reflected in revenue in that quarter, but will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our subscriptions or services are not reflected in full in our results of operations until future periods.

Our debt obligations contain restrictions that impact our business and expose us to risks that could adversely affect our liquidity and financial condition.

At June 30, 2013, we had approximately $200.5 million of principal outstanding under our senior secured credit facility. Our senior secured credit facility contains various covenants that will continue to be

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operative so long as it remains outstanding. The covenants, among other things, limit our and certain of our subsidiaries' ability to:

incur additional indebtedness;

create additional liens on our assets;

pay dividends and make other distributions on our share capital, and redeem and repurchase our outstanding shares;

make investments, including acquisitions;

enter into mergers or consolidations or sell assets;

sell our subsidiaries;

engage in sale and leaseback transactions; and

enter into transactions with affiliates.

Our senior secured credit facility also contains numerous affirmative covenants. In addition, we are required under our senior secured credit facility to continue to comply with a leverage ratio and a fixed charge coverage ratio. See "Operating and financial review and prospects—Liquidity and capital resources—2011 Senior secured credit facility." Further, the obligations under our senior secured credit facility will continue to be subject to mandatory prepayment in certain circumstances in addition to regularly scheduled amortization payments, including upon certain asset sales or receipt of casualty event proceeds, upon certain issuances of equity securities or debt, and annually, with a portion of our excess cash flow. Even if we comply with all of the applicable covenants, the restrictions on the conduct of our business could adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that may be beneficial to the business. Even if our senior secured credit facility is repaid or otherwise terminated, any additional debt that we incur in the future could subject us to similar or additional covenants.

If we are unable to generate sufficient cash flow or otherwise maintain or obtain the funds necessary to make required payments under our senior secured credit facility, or if we fail to comply with the various requirements of our indebtedness, we could default under our senior secured credit facility. Any such default that is not cured or waived could result in an acceleration of the senior secured credit facility, an increase in the applicable interest rates under the credit facility, and a requirement that our subsidiaries which have guaranteed the credit facility pay the obligations in full, and would permit the lenders to exercise remedies with respect to all of the collateral that is securing the credit facility, including substantially all of our and our subsidiary borrower's and guarantors' assets. Thus, any such default could have a material adverse effect on our liquidity and financial condition.

If we are unable to establish fair value for any undelivered component of a customer order, revenue relating to the entire order will be deferred and recognized over future periods. A delay in the recognition of revenue for a significant portion of our sales in a particular quarter may cause our share price to decline.

In the course of our selling efforts, we typically enter into arrangements that require us to deliver a combination of products and services. We refer to each individual product or service as a "component" of the overall arrangement. These arrangements typically require us to deliver particular components in a future period. As we discuss further in "Operating and financial review and prospects—Critical accounting

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policies—Revenue recognition," if we are unable to determine the fair value of any undelivered components, we are required by IFRS to defer revenue from the entire arrangement rather than just the undelivered components. If we are required to defer revenue from the entire arrangement for a significant portion of our product sales, our revenue for that quarter could fall below our expectations or those of securities analysts and investors, resulting in a decline in our share price.

Challenges to our tax structure by tax authorities may adversely affect our financial position.

The registrant is organized under the laws of the Grand Duchy of Luxembourg and as such is subject to Luxembourg tax laws. We believe that the registrant is resident solely in Luxembourg for tax purposes and that we can rely on this position with respect to the applicability of tax treaties formed between the Grand Duchy of Luxembourg and the other jurisdictions in which we operate that have tax treaties with the Grand Duchy of Luxembourg. If our tax position were to be successfully challenged by the relevant tax authorities in these jurisdictions, or if there are any changes in applicable tax laws, treaties or regulations or the interpretation thereof, such tax authorities could determine that the registrant is a tax resident of a jurisdiction other than the Grand Duchy of Luxembourg. Such a determination could have a material adverse effect on our financial position and, in particular, result in unforeseen tax liabilities which may be applied retroactively.

In addition, if the tax authorities of the various jurisdictions in which we operate were to successfully challenge our tax position with respect to certain of our material assets, such as our intellectual property rights, we could be subject to increased tax rates and penalty payments, which could have a material adverse effect on our financial position.

Our effective tax rate could increase, which would increase our income tax expense.

The amount of taxes we are required to pay in the various jurisdictions in which we operate are determined by us based on our interpretation of the applicable tax laws and regulations and our application of the general transfer pricing principles to our cross-border intercompany transactions. If the relevant tax authorities were to determine applicability of a higher tax rate or that a greater portion of our income in their jurisdiction should be subject to income or other taxes in that jurisdiction, our effective tax rate may increase, which could have a material adverse effect on our financial position.

In general, our effective tax rate could be adversely affected by several factors, many of which are outside of our control, including:

changes in the relative proportions of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

changing tax laws, regulations and interpretations in various jurisdictions in which we operate as well as the requirements of certain tax rulings;

determinations by tax authorities that we have established a taxable presence in certain jurisdictions where we do not currently pay taxes;

expiration of tax rulings applicable to us and our subsidiaries;

successful challenges by tax authorities to our transfer pricing policies, including specific transactions; and

tax assessments, or any related interest or penalties, which could significantly affect our income tax expense for the period in which the settlements take place.

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In respect of the U.S. corporate income tax, we believe that the registrant and each of its non-U.S. subsidiaries operate in a manner that would not subject them to such tax because they are not engaged in a trade or business in the United States. Nevertheless, there is a risk that the U.S. Internal Revenue Service, or "IRS," may successfully assert that the registrant or one of our non-U.S. subsidiaries is engaged in a trade or business in the United States, in which case that entity would be subject to U.S. tax at regular corporate rates on income that is effectively connected with the conduct of a U.S. trade or business and an additional "branch profits" tax on the dividend equivalent amount (generally defined as effectively connected income deemed withdrawn from the United States). Any such tax would likely result in a significant increase to our effective tax rate.

However, a legislative proposal pending in the U.S. Congress, if enacted, could result in our being treated as a U.S. corporation for U.S. federal income tax purposes if it is determined that we are managed and controlled, directly or indirectly, primarily within the United States. If we were treated as a U.S. corporation for U.S. federal income tax purposes, we would be subject to U.S. corporate income tax on our worldwide income, which would significantly increase our effective tax rate.

Our business and financial performance could be negatively impacted by changes in tax laws or regulations.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time in any of the jurisdictions in which we operate. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us or our customers. Changes in the taxation of our customers in the jurisdictions in which we have material sales, whether by introduction of new tax laws or application of existing ones, could have a material adverse effect on our business or financial performance, in particular if tax authorities successfully assert that additional transactional taxes should apply prospectively or retroactively.

Any changes to existing tax rules or their interpretation or the introduction of new rules, including with regard to the deductibility of interest expenses, withholding taxes, or resulting from the OECD Guidelines on Base Erosion and Profit Shifting ("BEPS") could adversely affect our worldwide business operations and our business and financial performance. Additionally, these events could require us or our customers to pay additional tax amounts on a prospective or retroactive basis, as well as require us or our customers to pay fines and/or penalties and interest for past amounts deemed to be due. If we raise our product and maintenance prices to offset the costs of these changes, existing customers may elect not to renew their maintenance arrangements and potential customers may elect not to purchase our solutions. Additionally, new, changed, modified or newly interpreted or applied tax rules could increase our and our customers' compliance, operating and other costs, as well as the costs of our solutions. Further, these events could decrease the capital we have available to operate our business. Any or all of these events could have a material adverse effect on our business and financial performance.

Changes in laws or regulations related to the Internet may diminish the demand for our solutions, subject us to additional taxes and could have a negative impact on our business.

We deliver our cloud-based solutions through the Internet. Federal, state or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting data privacy and the use of the Internet. In addition, government agencies or private organizations may begin to impose taxes, fees or other charges for accessing the Internet or on commerce conducted via the Internet. These laws or charges could limit the viability of Internet-based solutions such as ours and reduce the demand for our solutions.

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In addition, we may be subject to income tax audits by many tax jurisdictions throughout the world, many of which have not established clear guidance on the tax treatment of cloud-based companies. Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution of one or more uncertain tax positions in any period could have a material impact on our results of operations for that period.

If we lose our status as a foreign private issuer, we may incur additional legal, accounting or other expenses to transition our financial reporting system to U.S. GAAP, which differs in certain significant respects from IFRS, and to provide additional disclosures required of U.S. public companies.

The registrant is currently a "foreign private issuer," as such term is defined in Rule 3b-4 of the Exchange Act. The registrant can lose its foreign private issuer status if more than 50% of the registrant's shares are held by U.S. persons and any of the following occurs: (1) a majority of its directors and executive officers are U.S. citizens or residents; (2) more than 50% of its assets are located in the United States; or (3) the registrant's business is administered principally in the United States. Under Rule 3b-4 under the Exchange Act, the determination of whether a company is a foreign private issuer is made annually on the last business day of an issuer's most recently completed second fiscal quarter. Accordingly, the first determination as to whether the registrant will continue to be a foreign private issuer after the completion of this offering will be made on June 30, 2014.

Currently we report our financial statements under IFRS. If we were to lose our status as a foreign private issuer, we will be required under current rules of the SEC to report our financial statements under U.S. generally accepted accounting principles, or "U.S. GAAP," in our future SEC filings. The transition from IFRS to U.S. GAAP would require us to invest a substantial amount of resources and time, and we would be required to convert historical financial statements prepared under IFRS from prior fiscal years into U.S. GAAP financial statements included in our SEC filings. We expect that we would incur significant additional legal, accounting and other expenses in connection with this transition, which may negatively impact our results of operations. Furthermore, there is no guarantee that we would be able to complete the timely transition to U.S. GAAP in order to meet our disclosure obligations under the Exchange Act and failure to do so could result in delayed reporting and in delisting, and could otherwise adversely affect our business and operating results.

There have been and there may in the future be certain significant differences between U.S. GAAP and IFRS, including differences related to revenue recognition, share-based compensation expense, income tax and the accounting for preferred shares and earnings per share. As a result, our financial information and reported earnings for future periods within a fiscal year or any interim period could be significantly different if they were prepared in accordance with U.S. GAAP. We do not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable law. Consequently, if we were required to begin reporting in U.S. GAAP, you may not be able to meaningfully compare our financial statements under U.S. GAAP with our historical financial statements under IFRS.

If we lose our status as a foreign private issuer, we will be required to comply with certain more detailed and extensive reporting and other requirements applicable to U.S. domestic issuers and will likely incur significant additional legal, accounting and other expenses associated with such compliance, which may adversely affect our results of operations.

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Our results of operations may be adversely affected by changes in accounting standards or interpretations of accounting standards.

We prepare our financial statements in conformity with IFRS. These principles are subject to interpretation by various bodies formed to interpret and create appropriate accounting standards, and from time to time the International Accounting Standards Board and the SEC issue new financial accounting and reporting guidance or interpretations of those standards. These changes are beyond our control, can be hard to predict and could materially impact how we report our results of operations and financial condition. We could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements in material amounts. Furthermore, future changes in accounting standards or interpretations may require us to divert financial resources and increase managerial oversight to ensure compliance with these changes.

We continuously review our compliance with all new and existing revenue recognition accounting pronouncements. Depending upon the outcome of these ongoing reviews and the potential issuance of further accounting pronouncements, implementation guidelines and interpretations, we may be required to modify our reported results, revenue recognition policies or business practices, which could harm our results of operations.

Currency exchange rate fluctuations may have a negative effect on our financial condition.

We are exposed to fluctuations in currency from sales of our products and purchases of goods, services and equipment and funding denominated in the currencies of several countries. In particular, we are exposed to the fluctuations in the exchange rate between the dollar and the euro. In 2012, based on the functional currency of our subsidiaries, 55% of our revenue was accounted for in euros and 22% of our revenue was accounted for in pounds sterling, while the remainder was largely accounted for in dollars. We anticipate that the majority of revenue from our products will continue to be in euros, dollars and pounds sterling. Fluctuations in currency exchange rates may affect our results of operations and the value of our assets and revenue, and increase our liabilities and costs, which in turn may adversely affect reported earnings and the comparability of period-to-period results of operations. See "Operating and financial review and prospects—Quantitative and qualitative disclosures about market risk—Foreign currency risk."

In addition, due to the constantly changing currency exposures and the potential substantial volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations on our future results and, because we do not currently hedge fully against all currency risks and fluctuations between the dollar and the euro, such fluctuations may result in currency exchange rate losses. Fluctuations in exchange rates could result in our realizing a lower profit margin on sales of our products than we anticipate at the time of entering into commercial agreements. Adverse movements in exchange rates could have a material adverse effect on our financial condition and results of operations.

Pending or future litigation could have a material adverse impact on our results of operation, financial condition and liquidity.

From time to time, we have been, and may be in the future, subject to lawsuits brought against us by our competitors, individuals or other entities. Where we can make a reasonable estimate of the liability relating to pending litigation and determine that an adverse liability resulting from such litigation is probable, we record a related contingent liability. As additional information becomes available, we assess the potential liability and revise estimates as appropriate. This litigation may also generate negative publicity that significantly harms our reputation, which may materially and adversely affect our user base and the number of our customers. In addition to the related cost, managing and defending litigation and related

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indemnity obligations can significantly divert management's and the Board's attention from operating our business. We may also need to pay damages or settle litigation with a substantial amount of cash. All of the foregoing could have a material adverse impact on our business, results of operation and cash flows.

Our failure to raise additional capital or generate the cash flows necessary to expand our operations and invest in our solutions could negatively impact our ability to compete successfully.

We may need to raise additional funds, and we may not be able to obtain additional debt or equity financing under the terms of our senior secured credit facility or on favorable terms, if at all. If we raise additional equity financing, our shareholders may experience significant dilution of their ownership interests, and the per share value of our common shares could decline. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness and force us to maintain specified liquidity or other ratios. If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things:

develop or enhance our products;

continue to expand our development, sales and marketing organizations;

acquire complementary technologies, products or businesses;

expand our operations throughout the world;

hire, train and retain employees; or

respond to competitive pressures or unanticipated working capital requirements.

Goodwill represents a significant amount of our total assets, and a future write-off could result in increased losses and a reduction of our total equity.

As of June 30, 2013, the net value of our goodwill and other intangible assets was $270.0 million, or 67%, of our total assets. We are no longer required or permitted to amortize goodwill reflected on our balance sheet. We are, however, required to evaluate goodwill reflected on our balance sheet when circumstances indicate a potential impairment, or at least annually, under the impairment testing guidelines outlined in the relevant accounting standard. Future changes in the cost of capital, expected cash flows, or other factors may cause our goodwill to be impaired, resulting in a non-cash charge against results of operations to write off goodwill for the amount of impairment. If a future write-off is required, the charge could have a material adverse effect on our reported results of operations and total equity in the period of any such write-off.


Risks related to this offering

Our common share price could be highly volatile and may trade below the initial public offering price.

We will negotiate with the representatives of the underwriters to determine the initial public offering price of our common shares. The realization of any of the risks described in these "Risk factors" or other unforeseen risks could have a dramatic and adverse effect on the market price of our common shares. In particular, and in addition to circumstances described elsewhere in these "Risk factors," the following events or factors can adversely affect the market price of our common shares:

announcements of technological innovations or new products by us or others;

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general market conditions;

changes in government regulations or patent decisions;

developments by our channel partners;

fluctuations in our recorded revenue, even during periods of significant sales order activity;

changes in estimates of our financial results or recommendations by securities analysts;

failure of any of our solutions to achieve or maintain market acceptance;

changes in market valuations of similar companies;

success of competitive products or services;

changes in our capital structure, such as future issuances of securities or the incurrence of debt;

announcements by us or our competitors of significant services, contracts, acquisitions or strategic alliances;

regulatory developments in the countries in which we operate;

litigation involving our company, our general industry or both;

additions or departures of key personnel; and

general perception of the future of the collaboration, MSP and IT infrastructure software solutions markets.

Additionally, market prices for securities of technology companies historically have been very volatile. The market for these securities has from time to time experienced significant price and volume fluctuations for reasons unrelated to the operating performance of any one company. As a result of this volatility, investors may not be able to sell their common shares at or above the initial public offering price. In the past, following periods of market volatility, shareholders have often instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and attention of management from our business.

Our common shares have no prior trading history in the United States or elsewhere, and an active market may not develop.

Prior to this offering there has been no public market for our common shares. The initial public offering price for our common shares will be determined through negotiations with the underwriters and may bear no relationship to the price at which the common shares will trade upon completion of this offering. Although we have applied to have our common shares listed on the New York Stock Exchange, or "NYSE," an active trading market for our common shares may never develop or may not be sustained following this offering. If an active market for our common shares does not develop, it may be difficult to sell your shares at all.

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If the ownership of our common shares continues to be highly concentrated, it may prevent you from influencing significant corporate decisions and the interests of our principal shareholder may conflict with your interests.

Following the completion of this offering, Insight will beneficially own approximately           of our outstanding common shares, or            if the underwriters' over-allotment option is fully exercised. This concentration of share ownership may adversely affect the trading price for our common shares because investors often perceive disadvantages in owning shares in companies with controlling shareholders. Also, Insight will be able to control our management and affairs and matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions, such as mergers, consolidations or the sale of substantially all of our assets. Consequently, this concentration of ownership may have the effect of delaying or preventing a change of control, including a merger, consolidation or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if that change of control would benefit our other shareholders.

Our shareholders have the right to, and have no duty to abstain from exercising such right to, engage or invest in the same or similar businesses as us.

Our shareholders have other business activities in addition to their ownership of us. Our shareholders have the right to, and have no duty to abstain from exercising such right to, engage or invest in the same or similar businesses as us, do business with any of our customers, partners or vendors, or employ or otherwise engage any of our officers, directors or employees. If our shareholders or any of their officers, directors or employees acquire knowledge of a potential transaction that could be a corporate opportunity, they have no duty to offer such corporate opportunity to us, our shareholders or our affiliates.

In the event that any of our directors and officers who is also a director, officer or employee of one of our shareholders acquires knowledge of a corporate opportunity or is offered a corporate opportunity, provided that this knowledge was not acquired solely in such person's capacity as our director or officer and such person acted in good faith, then such person is deemed to have fully satisfied such person's fiduciary duty and is not liable to us if such shareholder pursues or acquires such corporate opportunity or if such person did not present the corporate opportunity to us.

Raising additional capital by issuing securities may cause dilution to existing shares.

We expect the proceeds of this offering to be sufficient to meet our current cash requirements. However, our future capital requirements will depend on many factors, including:

the extent to which we acquire or invest in businesses, products or technologies and other strategic relationships;

the costs of protecting our intellectual property, including preparing, filing and prosecuting intellectual property registrations and defending intellectual property-related claims; and

the costs of financing unanticipated working capital requirements and responding to competitive pressures.

Additional financing may not be available on terms favorable to us, or at all. If adequate funds are not available or are not available on acceptable terms, our ability to fund our expansion, take advantage of unanticipated opportunities, develop or enhance our solutions or otherwise respond to competitive pressures would be significantly limited.

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If we raise additional funds through licensing arrangements with third parties, we may have to relinquish valuable rights to our solutions, or grant licenses on terms that are not favorable to us. If we raise additional funds by issuing equity or convertible debt securities, we will reduce the percentage ownership of our then-existing shareholders, and these securities may have rights, preferences or privileges senior to those of our existing shareholders.

You will experience immediate and substantial dilution.

The initial public offering price is substantially higher than the net tangible book value deficit of each outstanding common share. As a result, purchasers of our common shares in this offering will suffer immediate and substantial dilution. The dilution will be $           per share in the net tangible book value of the common shares from the initial public offering price. If the underwriters sell additional shares following the exercise of their option to purchase additional shares, if option holders exercise outstanding options to purchase common shares, or if restricted share units vest and are settled in shares, further dilution could occur. We describe this dilution in greater detail under "Dilution" in this prospectus.

The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain executive management and qualified Board members.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NYSE and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources, particularly after we are no longer an emerging growth company. As a result, management's attention may be diverted from other business concerns, which could adversely affect our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

We also expect that being a public company subject to new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

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If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.

Section 404 of the Sarbanes-Oxley Act of 2002 requires, among other things, that we establish and maintain effective internal control over financial reporting and disclosure controls and procedures. For the years ended December 31, 2008, 2009, 2010 and 2011, our independent registered public accounting firm communicated several material weaknesses in our internal control over financial reporting. As of December 31, 2012, all material weaknesses had been fully remediated. If this offering becomes effective in 2013, under the SEC's current rules, beginning with the year ending December 31, 2014, we will be required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. This assessment will need to include disclosure of any material weaknesses in our internal control over financial reporting identified by our management. Any weaknesses in our internal control over financial reporting may adversely affect our ability to maintain required disclosure controls and procedures. We are just beginning the costly and challenging process of compiling the system and processing documentation needed to comply with such requirements. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing processes, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to conclude that our internal control over financial reporting is effective. If we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on the price of our common shares.

Our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an "emerging growth company" as defined in the JOBS Act. As a result, a material weakness in internal controls may remain undetected for a longer period because of our extended exemption from the auditor attestation requirement. At such time that an attestation is required, our independent registered public accounting firm may issue a report that is adverse if our controls are not properly designed, operated or evidenced. Our remediation efforts may not enable us to avoid material weaknesses in the future.

Effective internal controls are necessary for us to provide reliable, timely financial reports and prevent fraud. The process of implementing our internal controls and complying with Section 404 will be expensive and time-consuming, and will require significant attention of management, particularly after we are no longer an emerging growth company under the JOBS Act. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Even if we conclude that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement or maintain required new or improved controls, or difficulties encountered in their implementation or operation, could cause us to fail to meet our reporting obligations. If we discover a material weakness, the disclosure of that fact, even if quickly remedied, could reduce the market's confidence in our financial statements and harm our share price.

For the years ended December 31, 2010, 2011 and 2012, our independent registered public accounting firm had not been engaged to perform an audit of our internal control over financial reporting. The financial statement audits performed included consideration of internal control over financial reporting as a basis

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for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of our internal control over financial reporting. Accordingly, when we and our auditors perform tests of control design and operation, additional deficiencies may be identified. Any such additional deficiencies in our internal control over financial reporting may be deemed to be material weaknesses and result in a conclusion that our internal control over financial reporting is ineffective.

In connection with the preparation of our unaudited consolidated interim financial statements for the period ended September 30, 2013, management identified a revenue recognition adjustment resulting from an isolated manual input error without an effective preventive or detective control. As a result, certain amounts previously reported in our unaudited consolidated interim financial statements for the periods ended March 31, 2013 and June 30, 2013 were restated, and management reported to both our audit committee and independent registered public accounting firm that it believed a significant deficiency in our internal control over financial reporting existed at the time of such determination.

The non-cash adjustment identified by management related to our Collaboration operating segment and resulted in an increase of reported revenues of $955,000 and $2,490,000 (with a corresponding decrease in deferred revenue) for the three and six month periods ended June 30, 2013, respectively. The error also resulted in a tax adjustment to increase the Company's income tax expense by $276,000 and $715,000 (with a corresponding decrease in deferred tax assets) for the three and six month periods ended June 30, 2013, respectively.

We have implemented controls intended to address this deficiency, including the implementation of system date range validations as well as data entry reviews by senior finance personnel as part of our procedures for closing financial results each month. We believe we have remediated the significant deficiency we identified; however, in the event a significant deficiency remains our internal control over financial reporting may be impaired. Our failure to achieve and maintain effective internal control over financial reporting could result in the loss of investor confidence in the reliability of our financial statements.

Due to the extent of our international operations, our financial reporting requires substantial international activities, resources and reporting consolidation. We expect to incur substantial accounting and auditing expense and to expend significant management time in complying with the requirements of Section 404. If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our shares could decline and we could be subject to investigations or sanctions by the SEC, the Financial Industry Regulatory Authority, Inc., or "FINRA," or other regulatory authorities. In addition, we could be required to expend significant management time and financial resources to correct any material weaknesses that may be identified or to respond to any regulatory investigations or proceedings.

Holders of our common shares will not be able to trade those shares on any exchange outside the United States.

We have not applied to list our common shares on any exchange other than in the United States on the NYSE, and we are not planning to apply for listing on any other exchange, whether in the United States or in any other jurisdiction. As a result, a holder of our common shares outside the United States may not be able to sell those common shares as readily as such holder would be able to if our common shares were listed on a stock exchange in that holder's home jurisdiction.

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We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common shares. The failure by our management to apply these funds effectively could result in financial losses and cause the price of our common shares to decline. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value, in addition to using a portion of the proceeds to repay certain of our existing indebtedness.

We do not anticipate paying cash dividends on our common shares, which could reduce the return on your investment.

We do not expect to pay cash dividends on our common shares in the foreseeable future. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, under the terms of our senior secured credit facility, we are subject to certain restrictions on our ability to declare or pay dividends, and any future debt agreements may preclude us from paying dividends. Accordingly, any return on your investment must come from appreciation.

Sales of substantial amounts of our common shares following this offering could cause the market price of our common shares to decline significantly and make it more difficult for us to issue common shares in the future at a time and on terms that we deem appropriate.

All of our common shares issued and sold in this offering will be freely tradable, except that any common shares purchased by "affiliates" (as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the "Securities Act")) may be sold publicly only in compliance with the limitations of Rule 144, which is described elsewhere in this prospectus under the section entitled "Shares eligible for future sale." Our remaining outstanding common shares will be deemed to be "restricted securities" (as that term is defined in Rule 144) and may be sold in the public market only if registered or if the holders thereof qualify for an exemption from registration under Rule 144. Furthermore, prior to the effectiveness of this offering, substantially all of the holders of our common shares, and each member of our Board and officer of the Company, subject to certain exceptions described in the section entitled "Underwriters" below, have agreed that they will not sell their shares for a period of 180 days after the date of this prospectus.

In connection with this offering, we intend to enter into a registration rights agreement with certain of our significant shareholders pursuant to which such shareholders will be entitled to rights with respect to the registration under the Securities Act of the common shares held by such shareholders. It is expected that existing holders who beneficially own                       , or            (           if the underwriters over-allotment option is exercised in full), of our common shares will be entitled to the benefits of the registration rights agreement. See "Related party transactions—Registration rights agreement."

In addition, we intend to file a registration statement on Form S-8 under the Securities Act to register an aggregate of approximately                       of our common shares issued or reserved for future issuance under our equity incentive plans. We may issue all of these shares without any action or approval by our shareholders, and these shares, once issued (including upon exercise of outstanding options and settlement of outstanding restricted share units), will be available for sale into the public market, subject to the restrictions described above, if applicable, for affiliate holders.

Although we have no actual knowledge of any plan or intention on the part of any shareholder to sell our common shares following this offering, it is likely that some shareholders, possibly including our significant

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shareholders, will sell shares. The market price of our common shares could decline as a result of sales of a substantial number of our shares in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our common shares, the price of our shares could decline.

We believe that the trading price for our common shares will be affected by research or reports that industry or financial analysts publish about us or our business. If one or more of the analysts who may elect to cover us downgrade their evaluations of our common shares, the price of our common shares could decline. If one or more of these analysts cease coverage of our company, we could lose visibility in the market for our common shares, which in turn could cause our share price to decline.


Risks related to investment in a Luxembourg company

We are organized under the laws of the Grand Duchy of Luxembourg and it may be difficult for you to obtain or enforce judgments against us or our executive officers and directors in the United States.

We are organized under the laws of the Grand Duchy of Luxembourg. The majority of our assets are located outside the United States. Furthermore, the majority of our directors and officers named in this prospectus reside outside the United States and most of their assets are located outside the United States. As a result, investors may find it difficult to effect service of process within the United States upon us or these persons or to enforce outside the United States judgments obtained against us or these persons in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the U.S. federal securities laws. Likewise, it may also be difficult for an investor to enforce in U.S. courts judgments obtained against us or these persons in courts located in jurisdictions outside the United States, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for an investor to bring an original action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal securities laws against us or these persons. Furthermore, Luxembourg law does not recognize a shareholder's right to bring a derivative action on behalf of the company except in limited cases.

As there is no treaty in force on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the United States and the Grand Duchy of Luxembourg, courts in Luxembourg will not automatically recognize and enforce a final judgment rendered by a U.S. court. A valid judgment obtained from a court of competent jurisdiction in the United States may be entered and enforced through a court of competent jurisdiction in Luxembourg, subject to compliance with the enforcement procedures (exequatur). The competent jurisdiction in Luxembourg will authorize the enforcement in Luxembourg of the U.S. judgment if it is satisfied that all of the following conditions are met:

the judgment of the U.S. court is final and enforceable (exécutoire) in the United States;

the U.S. court had jurisdiction over the subject matter leading to the judgment (that is, its jurisdiction was in compliance both with Luxembourg private international law rules and with the applicable domestic U.S. federal or state jurisdictional rules);

the U.S. court has applied to the dispute the substantive law that would have been applied by Luxembourg courts;

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the judgment was granted following proceedings where the counterparty had the opportunity to appear and, if it appeared, to present a defense, and the decision of the foreign court must not have been obtained by fraud, but in compliance with the rights of the defendant;

the U.S. court has acted in accordance with its own procedural laws;

the judgment of the U.S. court does not contravene Luxembourg international public policy; and

the U.S. court proceedings were not of a criminal or tax nature.

Under our articles of association and also pursuant to separate indemnification agreements, we indemnify and hold our directors harmless against all claims and suits brought against them, subject to limited exceptions. Under our articles of association, to the extent allowed by law, the rights and obligations among or between us and any of our current or former directors and officers are governed exclusively by the laws of the Grand Duchy of Luxembourg and subject to the jurisdiction of the Luxembourg courts, unless such rights or obligations do not relate to or arise out of their capacities listed above. Although there is doubt as to whether U.S. courts would enforce such provision in an action brought in the United States under U.S. securities laws, such provision could make enforcing judgments obtained outside Luxembourg more difficult to enforce against our assets in Luxembourg or jurisdictions that would apply Luxembourg law.

Our shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. corporation.

Our corporate affairs are governed by our articles of association and by the laws governing joint stock companies organized under the laws of the Grand Duchy of Luxembourg. The rights of our shareholders and the responsibilities of our directors and officers under Luxembourg law are different from those applicable to a corporation incorporated in the United States. There may be less publicly available information about us than is regularly published by or about U.S. issuers. Also, Luxembourg regulations governing the securities of Luxembourg companies may not be as extensive as those in effect in the United States, and Luxembourg laws and regulations in respect of corporate governance matters might not be as protective of minority shareholders as state corporation laws in the United States. Therefore, our shareholders may have more difficulty in protecting their interests in connection with actions taken by our directors and officers or our principal shareholders than they would as shareholders of a corporation incorporated in the United States.

Neither our articles of association nor Luxembourg law provides for appraisal rights for dissenting shareholders in certain extraordinary corporate transactions that may otherwise be available to shareholders under certain United States state laws. Also, as a foreign private issuer, we will be exempt from certain of the rules and regulations of the Exchange Act, including those with respect to the solicitation of proxy statements, the Section 16 reporting requirements, and insider liability and short swing profit recapture for our directors, officers and at least 10% shareholders. In addition, our filing of annual, quarterly and current reports will also be less extensive, less current and less frequent than those filings of domestic issuers who are subject to the Exchange Act. Furthermore, the fair disclosure requirements of Regulation FD apply only to United States domestic companies. As a result of the differences referenced above, our shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. company.

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Holders of our shares may not be able to exercise their pre-emptive subscription right and may suffer dilution of their shareholding in the event of future share issuances.

Under Luxembourg law, our shareholders benefit from a pre-emptive subscription right on the issuance of shares for cash consideration. However, our controlling shareholders have, in accordance with Luxembourg law, authorized the Board to suppress, waive or limit any pre-emptive subscription rights of shareholders provided by law to the extent the Board deems such suppression, waiver or limitation advisable for any issuance or issuances of shares within the scope of our authorized share capital. Such shares may be issued above, at or below market value as well as by way of incorporation of available reserves (including premium). In addition, shareholders may not be able to exercise their pre-emptive right or to do so on a timely basis, unless they comply with local corporate and/or securities law in Luxembourg and in the jurisdiction in which the shareholder is resident, in particular in the United States. As a result, the shareholding of such shareholders may be materially diluted in the event future shares are issued.

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Forward-looking statements and industry data

This prospectus contains forward-looking statements. The forward-looking statements are contained primarily in the sections entitled "Prospectus summary," "Risk factors," "Operating and financial review and prospects" and "Business." These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms including "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would" and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.

Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

our ability to compete in the collaboration, MSP and IT infrastructure software solutions markets;

our growth strategies;

our ability to develop and sell new products and product enhancements;

the termination of, or changes to, our relationships with our third-party channel partners and other third parties;

our estimates of future performance;

our estimates of market sizes and anticipated uses of our products;

our estimates regarding anticipated net profits or losses, operating profits or losses, future revenue, expenses, capital requirements and our needs for additional financing;

our legal and regulatory compliance efforts;

our ability to adequately protect our intellectual property;

our ability to operate our business without infringing the intellectual property rights of others;

flaws in our internal controls and IT systems;

our geographic expansion plans;

a loss of rights to develop and commercialize our products under our license and sublicense agreements;

a loss of any of our key management personnel; and

worldwide economic conditions and their impact on the demand for our solutions.

We discuss many of the foregoing and other risks in this prospectus in greater detail under the heading "Risk factors." Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions as of the date of this prospectus. You should read this prospectus, and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

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Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

This prospectus also contains estimates and other information concerning our industry, including market size and growth rates, that are based on industry publications, data from research firms and other third-party sources, surveys, estimates and forecasts, including those generated by IDC, Forrester Research, Inc., Gartner, Inc. and comScore, Inc. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Although we believe the information in these industry publications and third-party sources is reliable, we have not independently verified the accuracy or completeness of the information. In addition, projections, assumptions and estimates of our future performance, industry or market conditions and demographics are inherently imprecise, and the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk factors."

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Use of proceeds

We estimate that the net proceeds from the sale of the                     common shares that we are offering will be approximately $            million, after deducting the underwriting discount and commissions and estimated offering expenses of $            million and assuming an initial public offering price of $           per share, the midpoint of the estimated price range set forth on the cover page of this prospectus. Each $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us from the offering by $          million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. For each $1.00 increase (decrease), we would anticipate increasing (decreasing) our investment in our business accordingly.

The primary purposes of this offering are to create a public market for our common shares, facilitate the possibility of our future access to the public equity markets and repay certain of our outstanding indebtedness. We will use approximately $            million of our net proceeds to repay in full the outstanding principal and accrued interest we owe under nine convertible subordinated promissory notes issued to parties that held our class B preferred participating shares, which we refer to as our "class B preferred shares." For additional information about the convertible subordinated promissory notes, see "Operating and financial review and prospects—Liquidity and capital resources—Indebtedness—2011 Convertible subordinated promissory notes."

We expect to use the remaining net proceeds for working capital and other general corporate purposes, including financing our further growth. Expenditures for future growth could include developing new products, expanding our sales force in international markets and hiring additional personnel to enable us to bring products to market sooner. We may use a portion of our net proceeds to acquire or invest in other businesses, technologies or products.

The amounts and timing of our use of proceeds will vary depending on a number of factors, including the amount of cash generated or used by our operations, the success of our product development efforts, competitive and technological developments, and the rate of growth, if any, of our business. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering. Accordingly, our management will have broad discretion in the allocation of the net proceeds of this offering. Pending the uses described above, we may invest the net proceeds of this offering in cash, cash equivalents, money market funds, government securities or short-term interest-bearing, investment grade securities to the extent consistent with applicable regulations. We cannot predict whether the proceeds will be invested to yield a favorable return.

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Corporate reorganization

Prior to October 24, 2012, we conducted our business through the registrant, GFI Software S.A., then a Luxembourg limited liability company (société à responsabilité limitée) and its direct and indirect subsidiaries. The registrant does not engage in any operations and has only nominal assets, other than a 100% interest in TV GFI Holding Company S.à r.l., or "TV GFI," which itself does not engage in any operations and has only nominal assets and a 100% direct and indirect interest in our operating subsidiaries.

In anticipation of this offering, on October 24, 2012, we underwent a corporate reorganization. Pursuant to the corporate reorganization, we held an extraordinary general meeting of our shareholders before a Luxembourg notary at which the shareholders approved, among other things, the following actions:

a change in the corporate form of the registrant to a Luxembourg joint stock company (société anonyme);

the restatement of our registrant's articles of association;

the related conversion of our board of managers into a board of directors; and

the appointment of such directors.

Upon completion of the extraordinary general meeting, the Luxembourg notary filed and arranged for publication of the notarial deed. The corporate reorganization was effective upon the passing of the notarial deed and became enforceable against third parties upon publication of such notarial deed in accordance with Luxembourg law.

The corporate reorganization was necessary to facilitate the offering described in this prospectus. Under Luxembourg law, a Luxembourg limited liability company is not permitted to have more than 40 shareholders, whereas the number of shareholders permitted in a Luxembourg joint stock company is unlimited. Furthermore, under Luxembourg law, a Luxembourg limited liability company may not raise funds by issuing securities to the public, whereas this limitation does not apply to a Luxembourg joint stock company. As this offering constitutes an issuance of securities to the public and it is anticipated that the Company will have more than 40 shareholders upon consummation of this offering, the Company was converted from a Luxembourg limited liability company to a Luxembourg joint stock company to permit the offering to occur.

Our corporate reorganization did not affect our operations, which we continue to conduct through our operating subsidiaries.

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Dividend policy

In October 2011, we distributed €105.0 million (approximately $145.0 million) to the holders of our then-existing class B preferred shares. This distribution reduced the liquidation preference on the class B preferred shares by the same amount. In November 2011, in connection with the elimination of the preference on our then-existing class B preferred shares and the conversion of the class B preferred shares into an equivalent number of class A common shares, we undertook a second distribution of €9.0 million (approximately $12.2 million) and issued convertible subordinated promissory notes to the holders of our class B preferred shares for the balance of the remaining preference on the class B preferred shares. See "Operating and financial review and prospects—Indebtedness—2011 Convertible subordinated promissory notes" for further discussion of the terms of these notes as well as the notes to our financial statements included elsewhere in this prospectus for a discussion of the accounting treatment of the October 2011 and November 2011 transactions.

Currently, we intend to retain future earnings, if any, to finance the expansion of our business and do not expect to pay any cash dividends in the foreseeable future. Any future determination to pay cash dividends will depend on the discretion of our shareholders at their general meeting, or, with respect to interim dividends, of our Board, and will also depend on, among other things, our financial condition, results of operations, capital requirements, general business conditions, and any contractual restrictions and other factors that our shareholders or Board may deem relevant.

Under Luxembourg law, at least 5% of our net profits per year must be allocated to the creation of a legal reserve until such reserve has reached an amount equal to 10% of our issued share capital. If the legal reserve subsequently falls below the 10% threshold, at least 5% of net profits again must be allocated toward the reserve. The legal reserve is not available for distribution.

The registrant is a holding company and has no material assets other than its ownership of shares in TV GFI and its direct and indirect ownership of our operating subsidiaries. TV GFI is a holding entity with no material assets other than its direct and indirect ownership of shares in our operating subsidiaries in both the U.S. and other countries. If we were to distribute a dividend at some point in the future, we would cause the operating subsidiaries to make distributions to TV GFI, which in turn would make distributions to the registrant in an amount sufficient to cover any such dividends.

We are subject to certain restrictions on our ability to declare or pay dividends. For example, our senior secured credit facility prohibits the registrant and certain of our subsidiaries from paying dividends or making other restricted payments unless such payments are made in accordance with the terms of our senior secured credit facility.

If we decide to declare dividends in the future, we must do so either in euros or in-kind. If we declare dividends in euros, the amount of dollars realized by shareholders will vary depending on the rate of exchange between dollars and euros. To the extent we pay dividends in euros, shareholders will bear any costs related to the conversion of euros into dollars or any other currency.

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Capitalization

The following table sets forth our cash and capitalization as of June 30, 2013:

on an actual basis; and

on an as adjusted basis to reflect our issuance and sale of                      common shares in this offering at an assumed initial public offering price of $            per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, as well as the impact of the repayment in full of the outstanding principal and accrued interest we owe under nine promissory notes issued to parties that held our class B preferred participating shares.

You should read this table in conjunction with the discussion under the heading "Operating and financial review and prospects" and our financial statements and related notes included in this prospectus.

The unaudited as adjusted consolidated financial data is presented for informational purposes only and does not purport to represent what our financial position actually would have been had the transactions reflected occurred on the date indicated or our financial position as of any future date.

   
 
  As of June 30, 2013  
(in thousands)
  Actual
  As adjusted
 
   
 
  (restated)
   
 
 
  (unaudited)
 

Cash at bank and in hand(1)

  $ 11,511   $                   
       

Interest-bearing loans and borrowings, short-term

    25,240                       

Interest-bearing loans and borrowings, long-term

    185,517                       
       

Total borrowings

    210,757                       

Issued capital

   
517
   
                
 

Other components of equity

    519,124                       

Accumulated losses

    (620,671 )                     

Foreign currency translation reserve

    5,230                       
       

Total deficit

    (95,800 )                     
       

Total capitalization

  $ 114,957   $                   
   

(1)    A $1.00 increase (decrease) in the assumed offering price of $              per share (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) our cash at bank and in hand by $          million and our total capitalization by $          million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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Dilution

If you invest in our common shares, your ownership interest will be diluted to the extent of the difference between the public offering price per common share and the as adjusted net tangible book value per common share immediately after this offering. Our net tangible book value deficit as of June 30, 2013 was $(365.8) million, or $(9.92) per common share, based on 36,882,081 common shares outstanding as of June 30, 2013. Net tangible book value per common share is determined by dividing our total tangible assets less total liabilities by the number of common shares outstanding, before giving effect to our sale of common shares in this offering.

After giving effect to our sale of                      common shares in this offering at an assumed initial public offering price of $         (the midpoint of the estimated price range set forth on the cover of this prospectus), less the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value deficit as of June 30, 2013 would have been $            million, or $            per common share. This amount represents an immediate decrease in net tangible book value deficit of $          per share to existing shareholders and an immediate dilution in net tangible book value of $            per common share to new investors. Dilution per common share represents the difference between the amount per common share paid by purchasers of our common shares in this offering and the net tangible book value per common share immediately afterwards, after giving effect to the sale of                      common shares in this offering at an assumed initial public offering price of $         (the midpoint of the estimated price range set forth on the cover of this prospectus) per common share and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The following table illustrates this per share dilution (in thousands):

   

Assumed initial public offering price per share

        $              

Net tangible book value per share as of June 30, 2013, before this offering

  $ (9.92 )      
             

As adjusted net tangible book value per share after this offering

        $              
             

Dilution per share to new investors

        $              
   

A $1.00 increase (decrease) in the assumed initial public offering price of $           (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) the as adjusted net tangible book value deficit by $          million, the net tangible book value deficit per share after this offering, by $          per share and the dilution in as adjusted net tangible book value deficit per share to investors in this offering by $          per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The preceding discussion and table assume no exercise of outstanding share options or settlement of outstanding restricted share units as of June 30, 2013. As of June 30, 2013, we had outstanding 770,000 restricted share units and 3,724,948 options to purchase our common shares, and such outstanding options had a weighted average exercise price of $16.22 per share. To the extent that any of these options are exercised or restricted share units are settled, there may be further dilution to new investors.

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Selected consolidated financial data

The following tables set forth our selected consolidated financial and other data. You should read the following selected consolidated financial and other data together with our consolidated financial statements and related notes as well as "Operating and financial review and prospects" and the other financial information included elsewhere in this prospectus.

We derived the consolidated statement of operations data and the consolidated statement of comprehensive income data for the years ended December 31, 2010, 2011 and 2012 and consolidated balance sheet data as of December 31, 2011 and 2012 from our audited consolidated financial statements appearing elsewhere in this prospectus. The summary consolidated statement of operations data and the consolidated statement of comprehensive income data for the six months ended June 30, 2012 and 2013 (as restated) and the consolidated balance sheet data as of June 30, 2013 (as restated) have been derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus. We have prepared the unaudited condensed consolidated quarterly financial information for the quarters presented below on the same basis as our audited consolidated financial statements. The unaudited condensed consolidated financial information includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and results of operations, to be in compliance with IAS 34, for the quarters presented. The historical quarterly results presented below are not necessarily indicative of the results that may be expected for any future quarters or periods. We derived the consolidated statement of operations data and the consolidated statement of comprehensive income data for the years ended December 31, 2008 and 2009 and the consolidated balance sheet data as of December 31, 2009 and 2010 from our consolidated financial statements not included in this prospectus. We derived the consolidated balance sheet data as of December 31, 2008 from our unaudited financial statements. For periods prior to July 29, 2009, the date on which the registrant and GFI Acquisition came under common control, our consolidated financial statements present the consolidated results and changes in equity solely of GFI Acquisition and its subsidiaries. See "Prospectus summary—Special note regarding our corporate history and the presentation of our financial information." In March 2013, we sold GFI Florida, our security technology business comprising the VIPRE family of antivirus products and high-end antimalware intelligence solutions, in order to increase our focus on our core collaboration, MSP and IT infrastructure businesses. GFI Florida is reflected as discontinued operations in all periods presented herein from its acquisition date in June 2010 through the sale date in March 2013.

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Our financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. Historical results are not indicative of the results to be expected in the future.

 
 
  Year ended December 31,   Six months ended June 30,
(in thousands, except share and per share data)
  2008
  2009
  2010
  2011
  2012
  2012
  2013
 
 
   
   
   
   
   
   
  (restated)
 
   
   
   
   
   
                     (unaudited)

Consolidated Statement of Operations Data:

                                       

Revenue

  $ 51,453   $ 50,136   $ 66,738   $ 91,997   $ 118,428   $ 54,672   $75,546

Cost of sales(1)

    8,016     8,955     10,982     13,711     19,617     8,987   12,264
     

Gross profit

    43,437     41,181     55,756     78,286     98,811     45,685   63,282
     

Operating costs:

                                       

Research and development(1)

    4,142     6,495     9,159     16,037     19,559     9,014   12,234

Sales and marketing(1)

    13,341     16,369     25,239     39,707     43,552     22,331   24,645

General and administrative(1)

    6,609     7,783     12,594     26,227     29,472     15,317   16,737

Depreciation, amortization and impairment

    4,950     10,317     16,868     19,583     11,072     8,617   1,574
     

Total operating costs

    29,042     40,964     63,860     101,554     103,655     55,279   55,190
     

Operating (loss) / income from continuing operations

    14,395     217     (8,104 )   (23,268 )   (4,844 )   (9,594 ) 8,092

Finance costs, net

    (10,138 )   (13,618 )   (16,483 )   (10,118 )   (18,916 )   (9,452 ) (7,539)

Other income / (costs), net

    (923 )   755     (3,620 )   (2,984 )   1,811     (3,758 ) (1,627)
     

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  Year ended December 31,   Six months ended June 30,  
(in thousands, except share and per share data)
 
  2008
  2009
  2010
  2011
  2012
  2012
  2013
 
   
 
   
   
   
   
   
   
  (restated)
 
 
   
   
   
   
   
                     (unaudited)
 

Net (loss) income from continuing operations before taxation

    3,334     (12,646 )   (28,207 )   (36,370 )   (21,949 )   (22,804 )   (1,074 )

Tax benefit / (expense) from continuing operations             

    (1,213 )   3,320     5,146     3,893     (2,140 )   1,217     (10,566 )
       

Net (loss) income from continuing operations

    2,121     (9,326 )   (23,061 )   (32,477 )   (24,089 )   (21,587 )   (11,640 )

Gain on sale of discontinued operations, net of tax             

                            10,531  

Net (loss) income from discontinued operations

            (5,218 )   (19,459 )   (16,571 )   (8,394 )   6,080  
       

Net (loss) income for the year

  $ 2,121   $ (9,326 ) $ (28,279 ) $ (51,936 ) $ (40,660 ) $ (29,981 ) $ 4,971  
       

Total (loss) income attributable to owners of GFI Software S.A.

                                           

Net (loss) income from continuing operations

  $ 2,121   $ (5,562 ) $ (16,660 ) $ (32,477 ) $ (24,089 ) $ (21,587 ) $ (11,640 )
       

Net (loss) income from discontinued operations

  $   $   $ (5,218 ) $ (19,459 ) $ (16,571 ) $ (8,394 ) $ 16,611  
       

Total comprehensive (loss) income for the year

                                           

Continuing operations

  $ 1,464   $ (9,499 ) $ (27,175 ) $ (22,427 ) $ (27,620 ) $ (16,458 ) $ (8,854 )
       

Discontinued operations

  $   $   $ (5,210 ) $ (19,455 ) $ (16,489 ) $ (8,339 ) $ 16,596  
       

Comprehensive (loss) income attributable to owners of GFI Software S.A.

                                           

Continuing operations

  $ 1,464   $ (6,005 ) $ (20,774 ) $ (22,427 ) $ (27,620 ) $ (16,458 ) $ (8,854 )
       

Discontinued operations

  $   $   $ (5,210 ) $ (19,455 ) $ (16,489 ) $ (8,339 ) $ 16,596  
       

Basic and diluted (loss) income per:

                                           

Class A common share

                                           

Continuing operations

  $ 0.17   $ (0.93 ) $ (1.75 ) $ (35.71 ) $ (0.65 ) $ (0.59 ) $ (0.32 )

Discontinued operations

  $   $   $ (0.37 ) $ (0.53 ) $ (0.45 ) $ (0.23 ) $ 0.45  

Class B preferred participating share(2)

                                           

Continuing operations

  $   $ (0.31 ) $ (0.44 ) $ (0.30 ) $   $   $  

Discontinued operations

  $   $   $ (0.12 ) $ (0.18 ) $   $   $  

Weighted average shares outstanding

                                           

Class A common shares

    4,255,846     5,986,161     9,957,491     14,733,739     36,915,117     36,871,321     36,892,916  

Class B preferred participating shares (2)

        77,875     12,658,701     66,377,579              

Pro forma basic and dilutive (loss) income per:
(unaudited)(3)

                                           

Class A common share

                                           

Continuing operations

                    $   $         $  

Discontinued operations

                    $   $         $  

Class B preferred participating share(2)

                                           

Continuing operations

                    $   $         $  

Discontinued operations

                    $   $         $  

Pro forma weighted average shares outstanding
(unaudited)

                                           

Class A common shares

                                     

Class B preferred participating shares(2)

                                     
   

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  Year ended December 31,   Six months ended June 30,  
(in thousands, except share and per share data)
 
  2008
  2009
  2010
  2011
  2012
  2012
  2013
 
   
 
   
   
   
   
   
                     (unaudited)
 

Supplemental financial metrics:

                                           

Billings(4)

  $ 50,641   $ 71,470   $ 117,677   $ 163,913   $ 187,301   $ 86,846   $ 95,531  

Unlevered Free Cash Flow (unaudited)(4)

    20,963     17,201     52,906     57,077     43,844     17,318     25,004  

Adjusted EBITDA(4)

    19,895     33,834     61,384     77,948     81,883     34,364     36,923  
   

(1)    Includes share-based compensation expense, as follows:

 

Cost of sales

  $ (7 ) $ 25   $ 34   $ 304   $ 110   $ 153   $ 115  
 

Research and development

    20     55     63     911     752     323     978  
 

Sales and marketing

    18     148     348     1,594     1,348     1,058     598  
 

General and administrative

    (34 )   281     442     5,393     4,398     1,711     4,681  
 

Net loss from discontinued operations

            105     2,036     626     804     40  
         
 

  $ (3 ) $ 509   $ 992   $ 10,238   $ 7,234   $ 4,049   $ 6,412  

(2)    See "Description of share capital—Historical development of the share capital of the registrant" for a description of the issuance (including the terms thereof) and subsequent elimination of the class B preferred participating shares.

(3)    Unaudited pro forma basic and diluted loss per class A common share and per class B preferred participating share assumes that the conversion of 77,405,164 class B preferred participating shares into class A common shares had occurred as of January 1, 2011, and gives effect to the impact of the repayment in full of the outstanding principal and accrued interest we owe under nine subordinated promissory notes issued to parties that held our class B preferred participating shares, as if the repayment had occurred at the beginning of the period starting on January 1, 2011 and reflects a reduction in interest expense, net of tax, of $201,000 and $1,598,000 for the years ended December 31, 2011 and 2012, respectively, and $680,000 for the six months ended June 30, 2013. We expect the offering to include the issuance of              common shares (              common shares if the underwriters' over-allotment option is exercised in full) at an assumed initial public offering price of $           per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), the proceeds from the issuance of              of which, after deducting the estimated underwriting discounts and commissions, will be used to repay these promissory notes.

(4)   See "Supplemental information" below for how we define and calculate Billings, Unlevered Free Cash Flow and Adjusted EBITDA, and a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS measures, and a discussion about the limitations of these non-IFRS financial measures.

The following table presents our summary consolidated balance sheet data as of each date indicated:

   
 
  As of December 31,   As of June 30, 2013  
(in thousands, except share data)
 
  2008
  2009
  2010
  2011
  2012
  Actual
  As adjusted(1)
 
   
 
   
   
   
   
   
  (restated)
(unaudited)

 

Consolidated balance sheet data:

                                           

Cash at bank and in hand

  $ 6,292   $ 9,067   $ 22,719   $ 16,524   $ 15,487   $ 11,511   $  

Total assets

  $ 114,012   $ 315,499   $ 367,995   $ 369,408   $ 395,969   $ 405,130   $  

Working capital(2)

  $ (104,718 ) $ (48,906 ) $ (103,813 ) $ (92,941 ) $ (114,837 ) $ (111,328 ) $  

Deferred revenue, including long-term portion(3)

  $ 17,924   $ 43,418   $ 117,738   $ 190,154   $ 232,082   $ 248,255   $  

Interest-bearing loans and borrowings

  $ 99,068   $ 201,151   $ 87,312   $ 213,969   $ 199,312   $ 210,757   $  

Total liabilities

  $ 123,072   $ 279,046   $ 239,494   $ 446,487   $ 505,660   $ 500,930   $  

Issued capital

  $ 18,083   $ 13,357   $ 123,946   $ 517   $ 517   $ 517   $  

Total equity (deficit)

  $ (9,060 ) $ 36,453   $ 128,501   $ (77,079 ) $ (109,691 ) $ (95,800 ) $  

Shares outstanding:

                                           

Class A common shares

    430,218,067     953,263,614     1,105,788,052     36,859,598     36,893,288     36,882,081      

Class B preferred participating shares(4)

        17,828,100     7,740,516,390                  
   

(1)    As adjusted information included above in the consolidated balance sheet data gives effect to the sale of              common shares by us in this offering at an assumed initial public offering price of $         per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), after deducting the underwriting discount and estimated offering expenses payable by us, as well as the impact of the repayment in full of the outstanding principal and accrued interest we owe under nine subordinated promissory notes issued to parties that held our class B preferred participating shares.

(2)    Includes current portion of deferred revenue of $15,421, $25,629, $51,281, $78,777, and $84,564 and $98,318 as of December 31, 2008, 2009, 2010, 2011 and 2012 and June 30, 2013, respectively.

(3)    Also includes $-0-, $-0-, $23,383 million and $31,629 million of deferred revenue associated with our security business unit as of December 31, 2008, 2009, 2010 and 2011, respectively. The deferred revenue associated with our security business unit was included in liabilities from discontinued operations on our consolidated statement of financial position as of December 31, 2012. The sale of our security business unit was completed on March 31, 2013.

(4)   See "Description of share capital—Historical development of the share capital of the registrant" for a description of the issuance (including the terms thereof) and subsequent elimination of the class B preferred participating shares.

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Supplemental information

Billings

Billings is a non-IFRS financial measure which we calculate by adding revenue recognized during the applicable period to the change in deferred revenue between the start and end of the same period, as presented in our consolidated statement of cash flows. We consider Billings to be a leading indicator of future revenue and operational growth based on our business model of billing total arrangement fees at the time of sale, and we use Billings to evaluate the operating performance of our operating segments. Our use of Billings as a non-IFRS measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for revenue or an analysis of our results as reported under IFRS. Some of these limitations are:

Billings does not predict revenue for a specific future period. Trends in Billings are not directly correlated to trends in revenue except when measured over longer periods; and

Other companies, including companies in our industry, may not use Billings, may calculate Billings differently, or may use other financial measures to evaluate their performance—all of which reduce the usefulness of Billings as a comparative measure.

A significant portion of our Billings relates to solutions for which the corresponding revenue is deferred and subsequently recognized over time. In particular, Billings for maintenance, subscriptions and web-based services are typically invoiced in advance of ratable revenue recognition, which typically ranges over periods of up to 48 months.

The following table reconciles revenue, the most directly comparable IFRS measure, to Billings for the periods indicated:

   
 
  Year ended December 31,   Six months ended June 30,  
(in thousands)
  2008
  2009
  2010
  2011
  2012
  2012
  2013
 

 

 

                                           
 
   
   
   
   
   
   
  (restated)
 

Reconciliation of revenue from continuing operations to Billings:

                                           

Revenue

  $ 51,453   $ 50,136   $ 66,738   $ 91,997   $ 118,428   $ 54,672   $ 75,546  

Change in deferred revenue

    (812 )   21,334     50,939     71,916     68,873     32,174     19,985  
       

Billings

  $ 50,641   $ 71,470   $ 117,677   $ 163,913   $ 187,301   $ 86,846   $ 95,531  
   

Unlevered Free Cash Flow

Unlevered Free Cash Flow is a non-IFRS financial measure that we define as net cash flows from operating activities from continuing operations less capital expenditures, net of proceeds from the sales of property and equipment. Our management uses this measure when evaluating the operating performance of our consolidated business. We believe Unlevered Free Cash Flow provides management and investors with a more complete understanding of the underlying liquidity of our core operating business and our ability to meet our current and future financing and investing needs. While we believe that this non-IFRS financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for net cash flows from continuing operating activities presented in accordance with IFRS.

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The following table presents a reconciliation of net cash flows from operating activities from continuing operations, the most comparable IFRS financial measure, to Unlevered Free Cash Flow for each of the periods indicated:

   
 
  Year ended December 31,   Six months ended
June 30,
 
(in thousands)
  2008
  2009
  2010
  2011
  2012
  2012
  2013
 
   

Reconciliation of net cash flows from operating activities from continuing operations to Unlevered Free Cash Flow

                                           

Net cash flows from operating activities from continuing operations

  $ 21,960   $ 18,069   $ 54,003   $ 60,405   $ 46,201   $ 18,602   $ 26,511  

Capital expenditures, net of proceeds from sales of property and equipment

    (997 )   (868 )   (1,097 )   (3,328 )   (2,357 )   (1,284 )   (1,507 )
       

Unlevered Free Cash Flow

  $ 20,963   $ 17,201   $ 52,906   $ 57,077   $ 43,844   $ 17,318   $ 25,004  
   

Adjusted EBITDA

Adjusted EBITDA is a non-IFRS financial measure that we calculate as profit (loss) from continuing operations, adjusted for tax benefit (expense), unrealized exchange fluctuations, finance costs, finance revenue, gain (loss) on disposals, depreciation, amortization and impairment, share-based compensation, specific extraordinary, non-recurring items, plus the change in deferred revenue between the start and end of the period as presented in our consolidated statement of cash flows. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board, and we use Adjusted EBITDA to evaluate the operating performance of our operating segments. In addition, our lenders under our senior secured credit facility utilize consolidated EBITDA (as defined in our senior secured credit facility), which we believe to be the same as Adjusted EBITDA, as a key measure of our financial performance in relation to certain of our operating covenants under our senior secured credit facility. See "Operating and financial review and prospects—Liquidity and capital resources—Indebtedness—2011 Senior secured credit facility" for a further discussion of the use of consolidated EBITDA in our senior secured credit facility. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under IFRS.

The following table presents a reconciliation of (loss) profit from continuing operations, the most comparable IFRS financial measure, to Adjusted EBITDA for each of the periods indicated:

   
 
  Year ended December 31,   Six months ended
June 30,
 
(in thousands)
  2008
  2009
  2010
  2011
  2012
  2012
  2013
 

 

 

                                           
 
   
   
   
   
   
   
  (restated)
 

Reconciliation of (loss) profit from continuing operations to Adjusted EBITDA

                                           

(Loss) / profit from continuing operations

  $ 2,121   $ (9,326 ) $ (23,061 ) $ (32,477 ) $ (24,089 ) $ (21,587 ) $ (11,640)  
       

Tax (benefit) expense

    1,213     (3,320 )   (5,146 )   (3,893 )   2,140     (1,217 )   10,566  

Finance costs

    10,294     13,659     16,577     10,200     18,991     9,492     7,979  

Finance revenue

    (156 )   (41 )   (94 )   (82 )   (75 )   (40 )   (440)  

Depreciation, amortization and impairment

    6,247     11,533     18,324     20,858     12,716     9,366     2,306  
       

EBITDA

    19,719     12,505     6,600     (5,394 )   9,683     (3,986 )   8,771  
       

Reconciling items:

                                           

Change in deferred revenue

    (812 )   21,334     50,939     71,916     68,873     32,174     19,985  

Share-based compensation

    (3 )   509     887     8,202     6,608     3,245     6,372  

Unrealized exchange fluctuations

    103     (446 )   2,958     3,319     (3,281 )   2,931     1,795  

Gain / (loss) on disposals

    888             (95 )            
       

Adjusted EBITDA

  $ 19,895   $ 33,902   $ 61,384   $ 77,948   $ 81,883   $ 34,364   $ 36,923  
   

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Operating and financial review and prospects

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our "Selected consolidated financial data" and our consolidated financial statements and related notes appearing elsewhere in this prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this prospectus, including those set forth under "Risk factors" and "Forward-looking statements and industry data."


Overview

We are a global provider of collaboration, managed service provider (MSP) and IT infrastructure software solutions that are designed for SMBs. Our solutions enable SMBs to easily manage, monitor, secure and access their IT infrastructure and business applications.

Throughout our history, we have focused on the SMB market by developing and acquiring solutions that address the most prevalent IT problems faced by SMBs. Since our inception in 1999, we have observed a growing shift in the technology preferences of SMBs. In particular, we observed that SMBs have increasingly preferred to purchase easy-to-use, lower-cost products that solve a particular problem and that can be conveniently downloaded from the Internet or purchased from local resellers rather than the large, expensive IT infrastructure product suites offered by many enterprise software vendors through direct-sales organizations. As a result, we have developed a business model that capitalizes on these trends in SMB purchasing behavior and enables us to cost-effectively sell our solutions to SMBs on a global basis. To accelerate the adoption of our solutions and allow our customers to quickly address their IT challenges, our business model simplifies the process for SMBs to discover, evaluate, procure and deploy our solutions.

We operate a scalable, data-driven online marketing model with a multi-channel sales strategy targeted at our SMB customers, using focused marketing campaigns to drive prospective customers to our websites and to our partners. We track and analyze large volumes of data from our systems to improve the visibility and effectiveness of our sales and marketing activities. In addition, we reach SMBs without dedicated IT staff through our MSP customers. We leverage blogs, social media and custom content sites to create online communities that enable our existing and prospective customers to connect directly and share information. We have a try-before-you-buy sales approach in which we offer full-featured, free versions of our products for a designated trial period to enable our SMB customers to experience the benefits of our solutions prior to making a purchase. We believe that increasing the number of downloads and user trials of our products has proven to be one of the best ways to generate new sales. Therefore, our marketing efforts focus on driving traffic to our websites through online marketing. From our inception, we have focused on better understanding customer needs, usage patterns and buying habits so that we can effectively align our marketing offerings. Our understanding of the effectiveness and reach of our marketing and sales expenditures enables us to optimize our marketing mix and generate predictable returns on those expenditures over time.

We have a diversified Internet-based distribution model that consists of direct sales from our websites, our inside sales force and an indirect partner network of over 25,000 channel partners acting as resellers worldwide. Our distribution model allows us to maximize our global reach and has resulted in a high volume of transactions with SMB customers, while reducing our sales and marketing expense. Our customer base has grown from over 89,000 customers as of December 31, 2008 to over 280,000

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customers in over 180 countries as of June 30, 2013. In addition to continuing to attract new customers, we believe we have a significant opportunity to market and cross-sell complementary solutions to our global customer base, and we have recently increased our expenditures to generate additional revenue from existing SMB customers. We intend to continue to invest in sales and marketing initiatives, including our direct sales organization and indirect partner network, to drive long-term growth in Billings and revenue and expand our customer base. Any investments that we make in sales and marketing will occur in advance of our experiencing any benefits from such investments, making it more difficult for us to determine if we are efficiently allocating our resources in these areas. In addition, if our existing customers do not require additional products in our portfolio, it may be difficult for us to cross-sell other solutions and increase our Billings and revenue from existing customers.

Our sales and marketing strategy is geared toward generating a high volume of low-price transactions. Our low up-front average selling price of just over $700 decreases procurement risk and reduces the length of our sales cycle. Our solutions can be downloaded and implemented in a self-service manner and are designed so that they do not require professional services, which accelerates time-to-value and reduces total cost of ownership for our customers. We primarily earn revenue from our customers by offering recurring subscription agreements, connectivity services in connection with our TeamViewer product, and license arrangements that generally include optionally renewable maintenance contracts. In 2012, our revenue was comprised of 90% web-based services, maintenance and subscription revenue and 10% license revenue. For the six months ended June 30, 2013, our revenue was comprised of 93% web-based services, maintenance and subscription revenue and 7% license revenue.

We expect to continue to invest in product development efforts and enhancements to our SaaS platform. We plan to develop new software products that serve the SMB market and add additional features and functionality to existing solutions to enable our customers to derive more value from our products and increase adoption by new customers and existing customers. While we believe we are well positioned to address a significant market opportunity, our markets are evolving, and we expect to face significant competition in the future. We face competition from both traditional, larger software vendors offering enterprise software solutions and services and smaller companies offering individual solutions for specific collaboration, MSP and IT infrastructure issues. We believe the functionality of our solutions, our business model and go-to-market strategy, low total cost of ownership and our ability to deliver rapid-time-to-value to customers have helped us effectively compete in our software markets.

We have incurred net losses from continuing operations for the last three fiscal years and we do not expect to be profitable on an IFRS basis through at least 2013. Although we anticipate that our operating expenses will increase for the foreseeable future as we continue to invest to grow our customer base, increase our sales to existing customers, expand our partner ecosystem, increase the number of products in our portfolio, enhance our existing products, expand our operations, hire additional employees and enhance our SaaS platform, we anticipate that the increase in revenues will exceed the increase in expenses over the next several years, which we expect will result in a reduction in net losses or result in net income in future periods. In addition, we recognize a majority of our revenue on a ratable basis, which typically ranges over time periods up to 48 months, whereas our research and development, sales and marketing, and general and administrative operating expenses are recognized as incurred. In addition, through our past acquisitions in 2009, 2010 and 2011, we have incurred significant non-cash expenses related to amortization of intangible assets. We expect that these non-cash expenses related to past acquisitions will decrease in the future; however, if we acquire other businesses which result in our owning additional intangible assets, our amortization expense may further increase. In the six months ended June 30, 2013, we generated net income of $5.0 million (after giving effect to a gain on sale of

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discontinued operations of $10.5 million) and $25.0 million Unlevered Free Cash Flow. For the years ended December 31, 2012 and 2011, we incurred losses of $40.7 million and $51.9 million, respectively. Despite these IFRS net losses, we generated Unlevered Free Cash Flow of $43.8 million and $57.1 million in the years ended December 31, 2012 and 2011, respectively. We believe Unlevered Free Cash Flow provides management and investors with a more complete understanding of the underlying liquidity of our core operating business and our ability to meet our current and future financing and investing needs. See "Summary consolidated financial and other data—Supplemental information—Unlevered Free Cash Flow" for how we define and calculate Unlevered Free Cash Flow and for a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure.

Corporate history and structure

Our corporate existence began in 1999 when GFI Software LTD was formed as Avonside Technology Corporation, an international business company incorporated in the British Virgin Islands with operations in Malta. In May 2005, GFI Software LTD was indirectly acquired by GFI Acquisition, an entity controlled by certain investment funds affiliated with Insight, our majority shareholder. In the years that followed our acquisition by Insight, we have grown through both organic growth and targeted acquisitions of assets and businesses throughout the world. In July 2009, certain other investment funds affiliated with Insight indirectly acquired control of the registrant and, through a series of transactions, the registrant became the parent holding company of TeamViewer GmbH and its affiliates. See "Prospectus summary—Special note regarding our corporate history and the presentation of our financial information" above for a discussion of the impact of Insight's 2009 acquisition of the registrant on the presentation of our consolidated financial statements. In November 2010, GFI Acquisition was merged with and into the registrant, a transaction which we refer to as the "Merger." The Merger resulted in our present corporate structure.

The following is a description of our key subsidiaries through which we operate our business:

GFI Software LTD.    Our original operating company, GFI Software LTD, and certain of its direct and indirect subsidiaries have developed a broad collection of IT management solutions focused on the needs of SMBs, including: web filtering, systems monitoring, server and asset management, endpoint device control, log management and fax. We generally market our IT management solutions under the "GFI" brand.

GFI MAX Limited.    GFI MAX Limited was formed in 2003 as HoundDog Technology Limited, or "HoundDog," and offers a suite of solutions to MSPs to monitor, maintain, repair and administer the IT infrastructure that they have been hired to manage. We acquired HoundDog in July 2009 and generally market our MSP offerings under the "GFI MAX" or "MAX" brand.

GFI Software (Florida) Inc.    GFI Software (Florida) Inc., or "GFI Florida," was formed in 1994 as Sunbelt Software Distribution, Inc., or "Sunbelt," and offers antivirus and email security solutions to help our customers protect their IT infrastructure from security threats and spam. We acquired Sunbelt in June 2010 and generally marketed our IT infrastructure security solutions under the "VIPRE" brand prior to our sale of GFI Florida. On March 31, 2013, we completed the sale of GFI Florida and its subsidiaries to a related party. See "Related party transactions—Sale of GFI Florida."

TeamViewer GmbH.    TeamViewer GmbH began its operations in 2006 with a focus on controlling computers remotely and, under our ownership, was expanded to offer additional collaboration solutions, including web conferencing and remote presentation capabilities. As discussed above, in July 2009 funds affiliated with Insight acquired control of the registrant, which became the parent holding company of

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TeamViewer GmbH and its affiliates, and the subsequent Merger resulted in the consolidation of the two previously independent businesses under one organizational structure. We generally market our collaboration software solutions under the "TeamViewer" brand.

Certain of our other, smaller operating subsidiaries acquired through acquisitions include:

Techgenix Limited.    In March 2008, we acquired Techgenix Limited to build a closer relationship with the IT professionals we serve. Techgenix Limited provides IT thought leadership and technical content in the form of newsletters and websites to millions of IT professionals every month.

Internet Integration, Inc.    In September 2009, we acquired Internet Integration, Inc. (which conducts business under the name "Katharion"). Katharion offers a hosted email filtering service that we have incorporated into our GFI MAX brand solutions.

Monitis, Inc.    In September 2011, we acquired Monitis, Inc. and its sister company, Monitis GFI CJSC, which we collectively refer to as "Monitis." Monitis offers an integrated suite of web application and cloud services monitoring tools that are delivered as an easy-to-use, easy-to-deploy SaaS solution for SMBs.

IASO International B.V.    In May 2013, we acquired IASO International B.V., or "IASO," an online backup software and storage company headquartered in the Netherlands. IASO provides cloud-based solutions that provide customers with secure and efficient backup and recovery of their critical digital assets across all of the main computing platforms. IASO functionality has been part of the GFI MAX managed service platform since the second quarter of 2012.

Certain of the acquisitions described above have had a material impact on our results of operations for the periods discussed below or may have a material impact on our results of operations for future periods. In response to emerging technology and market trends that impact our customers, we will continue to seek to expand our range of software solutions through internal development, partnerships with other technology providers, and potential strategic acquisitions.

Operating segments

Prior to January 2012, the company was organized into one operating segment. In the first quarter of 2012, we changed our internal organizational reporting structure and identified three reportable operating segments as follows:

 
Operating
segment

  Description
 
Collaboration   Offers collaboration solutions through TeamViewer, our remote collaboration product, which provides multi-user web conferencing, desktop and file sharing, and secure remote control and access to virtually any Internet-enabled device.

GFI MAX

 

Provides SaaS solutions designed specifically for providers of outsourced IT support services, including the ability to configure, monitor, manage and secure their customers' IT infrastructure through the cloud.

IT Infrastructure

 

Offers solutions that enable SMBs to manage, secure and access their IT resources, such as servers and workstations.

 

 

 

 

Each of our operating segments offers different services and technology and is managed separately pursuant to developed marketing strategies. Our Collaboration operating segment derives revenue from developing, selling and supporting computer software for collaboration and remote access over the

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Internet, primarily through our TeamViewer product. Sales of our TeamViewer product are bundled with the right to connectivity services and support and, accordingly, revenue is reported within web-based services, maintenance and subscription revenue in our consolidated income statement. The IT Infrastructure operating segment generally derives its revenue from computer software which is produced and licensed for web and email filtering, archiving, back-up, fax, antivirus and network security solutions. It also offers maintenance and support in these areas. IT Infrastructure revenue is reported within both revenue lines in our consolidated income statement. Our GFI MAX operating segment generates revenue from licensing a hosted SaaS platform to third parties to enable remote IT management, monitoring and security. Our GFI MAX product is sold on a subscription basis and billed monthly in arrears and, accordingly, revenue is reported within web-based services, maintenance and subscription revenue in our consolidated income statement.


Key supplemental financial metrics

We regularly review a number of metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, establish budgets and make strategic decisions. We consider the following key financial metrics to be important measures of the performance of our business:

Billings

Billings is a non-IFRS financial measure which we calculate by adding revenue recognized during the applicable period to the change in deferred revenue between the start and end of the same period, as presented in our consolidated statement of cash flows. Billings growth rates presented on a constant currency basis were determined by translating the Billings from entities reporting in foreign currencies into U.S. dollars using the comparable prior period's average foreign currency exchange rates. We consider Billings to be a leading indicator of future revenue and cash inflows based on our business model of billing total arrangement fees at the time of sale, and we use Billings to evaluate the operating performance of our operating segments. We believe Billings is a useful measure because it removes the impact of timing of associated deferred revenue recognition, thereby providing a basis for evaluating core growth trends. Our use of Billings as a non-IFRS measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for revenue or an analysis of our results as reported under IFRS. Some of these limitations are:

Billings is not a substitute for revenue and does not predict revenue for a specific future period. Trends in Billings are not directly correlated to trends in revenue except when measured over longer periods of time; and

Other companies, including companies in our industry, may not use Billings, may calculate Billings differently, or may use other financial measures to evaluate their performance—all of which reduce the usefulness of Billings as a comparative measure.

A significant portion of our Billings relates to products and services for which the related revenue is deferred and subsequently recognized over time. In particular, Billings for maintenance, sales of our TeamViewer product, and license subscriptions are typically invoiced in advance of ratable revenue recognition, which typically ranges over periods of up to 48 months.

Billings increased by $8.7 million, or 10% (10% on a constant currency basis), from $86.8 million in the six months ended June 30, 2012 to $95.5 million in the six months ended June 30, 2013. Billings increased by $20.9 million, or 41%, from $50.6 million in 2008 to $71.5 million in 2009, by $46.2 million, or 65%

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(71% on a constant currency basis), to $117.7 million in 2010, by $46.2 million, or 39% (34% on a constant currency basis), to $163.9 million in 2011 and by $23.4 million, or 14% (21% on a constant currency basis), to $187.3 million in 2012. The increase in Billings in these periods was primarily driven by historical acquisitions, combined with the impact of new customers and increased up-sell of our products to existing customers.

We provide a reconciliation of Billings to the most comparable IFRS metric, revenue from continuing operations, under "Selected consolidated financial data—Supplemental information."

Unlevered Free Cash Flow

Unlevered Free Cash Flow is a non-IFRS financial measure that we define as net cash flows from operating activities less capital expenditures, net of proceeds from the sales of property and equipment. We use this measure when evaluating the operating performance of our consolidated business. We believe Unlevered Free Cash Flow provides management and investors with a more complete understanding of the underlying liquidity of our core operating business and our ability to meet our current and future financing and investing needs. We believe Unlevered Free Cash Flow is a useful measure because it shows how much cash our business generates to pay for operations before other financial obligations are taken into account. While we believe that this non-IFRS financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for net cash flows from operating activities presented in accordance with IFRS.

Unlevered Free Cash Flow increased by $7.7 million, or 44%, from $17.3 million in the six months ended June 30, 2012 to $25.0 million in the six months ended June 30, 2013. Unlevered Free Cash Flow decreased by $3.8 million, or 18%, from $21.0 million in 2008 to $17.2 million in 2009, increased by $35.7 million, or 208%, to $52.9 million in 2010, increased by $4.2 million, or 8%, to $57.1 million in 2011 and decreased by $13.3 million, or 23%, to $43.8 million in 2012. The increase in Unlevered Free Cash Flow in the first half of 2013 compared to the same period in 2012 was primarily driven by a $6.0 million decrease in tax payments. The decrease in Unlevered Free Cash Flow in 2012 compared to 2011 was primarily driven by a $9.7 million increase in tax payments. The increases in Unlevered Free Cash Flow in 2010 and 2011 were primarily driven by historical acquisitions, combined with the impact of new customers and increased up-sell of our products to existing customers, although the increase in 2011 was partially offset by our increased expenditures in infrastructure (to support the growth in our business and our ability to meet the requirements of being a public company), marketing and product development. The decrease in Unlevered Free Cash Flow from 2008 to 2009 resulted primarily from our year-over-year operating loss and increased tax payments.

We provide a reconciliation of Unlevered Free Cash Flow to the most comparable IFRS metric, net cash flows from operating activities from continuing operations, under "Selected consolidated financial data—Supplemental information."

Adjusted EBITDA

Adjusted EBITDA is a non-IFRS financial measure that we calculate as profit (loss) for the year, adjusted for tax benefit (expense), other non-operating expenses, finance costs, finance revenue, gain (loss) on disposals, depreciation, amortization, share-based compensation, share of loss in associate, specific extraordinary, non-recurring items, plus the change in deferred revenue between the start and end of the period as presented in our consolidated statement of cash flows. We believe that Adjusted EBITDA provides useful information to investors and analysts in understanding and evaluating our operating results in the same manner as our management and Board, and we use Adjusted EBITDA to evaluate the operating

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performance of our operating segments. We believe Adjusted EBITDA is a useful measure because it reflects operating profitability before consideration of non-operating expenses and non-cash expenses, and serves as a basis for comparison against other companies in our industry. In addition, our lenders under our senior secured credit facility utilize consolidated EBITDA (as defined in our senior secured credit facility), which we believe to be the same as Adjusted EBITDA, as a key measure of our financial performance in relation to certain of our operating covenants under our senior secured credit facility. See "Operating and financial review and prospects—Liquidity and capital resources—Indebtedness—2011 Senior secured credit facility" for a further discussion of the use of consolidated EBITDA in our senior secured credit facility. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under IFRS.

Adjusted EBITDA increased by $2.5 million, or 7%, from $34.4 million in the six months ended June 30, 2012 to $36.9 million in the six months ended June 30, 2013. Adjusted EBITDA increased by $13.9 million, or 70%, from $19.9 million in 2008 to $33.8 million in 2009, by $27.6 million, or 81%, to $61.4 million in 2010, by $16.5 million, or 27%, to $77.9 million in 2011 and by $4.0 million, or 5%, to $81.9 million in 2012. The increase in Adjusted EBITDA in 2010, 2011, 2012 and the first half of 2013 was primarily driven by the increase in Billings due to historical acquisitions, combined with the impact of new customers and increased up-sell of our products to existing customers, although this increase in 2011 and 2012 was partially offset by our increased expenditures in infrastructure (to support the growth in our business and our ability to meet the requirements of being a public company), marketing and product development.

We provide a reconciliation of Adjusted EBITDA to the most comparable IFRS metric, loss (profit) from continuing operations, under "Selected consolidated financial data—Supplemental information."


Financial operations overview

Revenue

Web-based services, maintenance and subscription revenue.    Web-based services, maintenance and subscription revenue represents fees earned from connectivity services (which is the remote server hosting function we provide in connection with our TeamViewer product), maintenance services, our SaaS offerings, and software licenses which do not qualify for separation from bundled services, net of returns, applicable discounts and taxes collected from customers and remitted to government authorities. Web-based services, maintenance and subscription revenue does not include revenue from professional services as we do not provide professional services to our customers. TeamViewer software licenses are bundled with connectivity services and support for an unspecified period; revenue for these services is recognized ratably on a daily basis over the estimated technological software life, which is estimated to be 48 months. Updates to TeamViewer are typically released annually and are offered to customers for an incremental fee. License arrangements for some of our products include optionally renewable maintenance agreements for which the related revenue is recognized ratably on a daily basis over the maintenance period. SaaS revenue is comprised of subscription, activation and branding fees from customers who access our hosted software and service offerings. Any related Billings in advance of a subscription period are deferred and recognized ratably on a daily basis over the subscription term. Usage is primarily billed monthly and recognized as the service is provided. Activation fees are recognized ratably over the period during which the servers or workstations of an MSP customer's customer (i.e., end-user) interact with our hosted software, which is estimated to be 12 months. Branding fees, which are charged exclusively to MSP customers in the event such MSP customer elects to re-brand certain of our products offered to MSPs, are recognized ratably over the estimated MSP customer relationship period, or 60 months. We expect web-based services, maintenance and subscription revenue to increase as a percentage of total revenue due to the expected

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growth of our Collaboration operating segment, as well as growth in our GFI MAX operating segment, as more customers choose to purchase SaaS products.

License revenue.    License revenue is comprised primarily of perpetual software license fees and, to a lesser extent, fees generated by sales of certain third-party hardware. We recognize revenue from perpetual licenses when the significant risks and rewards of ownership have passed to the buyer as evidenced by delivery, which typically occurs by electronic transfer of the license key for use of the software, assuming all other revenue recognition criteria have been met. License revenue resulting from arrangements with an inseparable service component is recognized ratably and is presented separately whenever supported by a reasonable, consistently applied methodology. We anticipate that license revenue will decrease as a percentage of total revenue primarily due to more customers purchasing web-based services in the future.

Cost of sales

Cost of web-based services, maintenance and subscription.    Cost of web-based services, maintenance and subscription sales primarily consists of personnel costs related to providing technical support services, royalties, third-party contractor expenses, an allocation of facilities and information technology costs, data center charges and merchant fees. Personnel costs include salaries, employee benefit costs, bonuses, share-based compensation and direct overhead. We allocate share-based compensation expense to personnel costs within cost of sales. We expect cost of sales relative to revenue, and thus gross margins from web-based services, maintenance and subscription, to remain consistent in future years.

Cost of licenses.    Cost of license sales primarily consists of royalties, hardware, third-party software costs and merchant fees. In the long term, gross margins from license sales could fluctuate significantly depending on the competitive marketplace and the product mix.

Amortization of acquired software and patents.    Amortization of acquired software and patents relates to intangible assets acquired in connection with the acquisitions of HoundDog, TeamViewer GmbH and Katharion in 2009 and Monitis in 2011. The acquired software and patents are amortized over the period in which we expect to realize the benefit. Software acquired in connection with these transactions is being amortized over estimated lives ranging from three to eight years. Patents and licenses acquired in connection with these transactions are being amortized over their estimated useful lives of three to five years.

Operating expenses

We classify our operating expenses into four categories: research and development, sales and marketing, general and administrative, and depreciation, amortization and impairment.

Research and development.    Research and development expenses primarily consist of personnel and an allocation of facilities and information technology costs, as well as third-party contractor costs and consulting fees. We have devoted our development efforts primarily to enhancing functionality and expanding and maintaining the capabilities of our software solutions. We expect to expand our research and development operations in 2013 by hiring additional personnel.

Sales and marketing.    Sales and marketing expenses primarily consist of personnel costs for our sales and marketing employees, the cost of marketing programs, commissions earned by our sales personnel and an allocation of facilities and information technology costs. We expect to continue to hire additional sales and marketing personnel and increase our investment in marketing programs in 2013.

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General and administrative.    General and administrative expenses primarily consist of personnel costs for certain of our executives, finance, legal, human resources and administrative personnel, as well as an allocation of facilities and information technology costs, legal, accounting and other professional service fees, acquisition-related expenses, realized currency gains and losses and other corporate expenses. We expect to continue to incur higher costs associated with being a public company, including increased personnel costs from additional hires, legal, corporate insurance and accounting expenses, and the additional costs of achieving and maintaining compliance with Section 404 of the Sarbanes-Oxley Act and related regulation.

Depreciation, amortization and impairment.    Depreciation consists primarily of depreciation expense on computer equipment, computer software and office equipment. Amortization is primarily amortization expense on intangible assets from acquisitions. If we acquire other businesses which result in our owning additional intangible assets, the amortization of any acquired intangible assets could cause our amortization expense to increase as a percentage of net revenue. Impairment of goodwill and other intangible assets is recognized when we determine that the carrying value of goodwill and indefinite-lived intangible assets is greater than the fair value. We assess the carrying value of goodwill and other indefinite-lived intangibles at least annually, and more frequently when circumstances indicate that the carrying value may be impaired. If future circumstances change and the fair value of goodwill or intangible assets is less than the current carrying value, additional impairment charges will be recognized.

Non-operating expenses and income

Non-operating expenses and income primarily consist of finance costs, finance revenue, exchange fluctuations and gain on disposal of product lines. Finance costs primarily consist of interest expense associated with our outstanding debt. Finance revenue is interest income received on our cash and cash equivalents. Monetary assets and liabilities that are denominated in foreign currencies are remeasured at the period-end closing rate with resulting unrealized exchange fluctuation.

From time to time we have elected to dispose of existing product lines that we considered to be inconsistent with our core business strategy. A gain is recorded when we determine that the proceeds from the sale exceed the carrying value of the disposed assets, and a loss is recorded when the carrying value of the disposed assets exceeds the proceeds from the sale.

Income tax expense

Income tax expense consists of the current taxes we pay in several countries on our taxable income, as well as deferred tax with respect to differences in the timing between the reporting of income and expense for financial purposes and taxable income. The timing differences largely relate to deferred revenue, intangible assets and unabsorbed tax losses. For a further breakdown of our income tax components, see the income tax footnote in our consolidated financial statements included elsewhere in this prospectus.

We determine our income tax expense for financial reporting purposes under IAS 12 Income Taxes. Differences exist between the computation of income tax expense for financial reporting purposes and the income tax payable to the various tax authorities. These differences are a result of differences in the computations of income and expense under the tax laws in the various jurisdictions in which we operate and the amounts calculated for financial reporting purposes. These differences may result in a material difference in the income tax expense recorded and the amount of cash taxes paid in the future.

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Impact of foreign currency translation

Although our reporting currency is the dollar, our functional currency is the euro; accordingly, a significant portion of our business is conducted in currencies other than the dollar. While our operating subsidiaries usually conduct their business in their respective functional currencies and thus incur expenses payable in the same currencies in which they generate revenue, our risk of exchange rate fluctuations from ongoing ordinary operations is potentially significant because a significant portion of our corporate expenses are in dollars rather than euros and certain of our subsidiaries incur expenses independently of their generation of revenue. Beginning in 2013, we began using derivative financial instruments, including foreign currency contracts, to hedge our foreign currency risk, specifically with respect to U.S. dollar outgoing cash flows. Our strategy is to enter into foreign currency forward contracts to buy dollars and sell euros in order to mitigate the risks and volatility associated with our foreign currency transactions. This strategy allows us better predictability with our cash flows and reduces foreign currency risk. Our foreign currency forward contracts are generally short-term in duration.

Fluctuations in the value of the currencies in which we do business relative to the dollar may have a material adverse effect on our business, results of operations and financial condition. The depreciation of such other currencies in relation to the dollar decreases the reported dollar value of our assets and liabilities denominated in such other currencies and decreases the dollar value of revenue and expenses denominated in such other currencies. Conversely, the appreciation of any currency in relation to the dollar has the effect of increasing the dollar value of our assets and liabilities and increasing the dollar value of revenue and expenses denominated in other currencies. We expect that our exposure to foreign currency exchange risk will increase as we continue to expand our business internationally, particularly our Collaboration operating segment, in which our Billings are predominantly generated in euros.

Based on the functional currency of our subsidiaries, approximately $91.1 million, or 77%, of our total revenue and $85.4 million, or 69%, of our cost of sales and operating expenses in 2012 were accounted for and recorded in currencies other than the dollar, primarily the euro and the pound sterling. As a result, the associated revenue and expenses had to be translated into dollars for financial reporting purposes.

The following table demonstrates the sensitivity to a 5% change in the euro to dollar exchange rate and pound sterling to dollar exchange rate, with all other variables held constant for 2012:

   
 
   
  2012  
 
  Increase / decrease
in exchange rate

 
(in thousands)
  Revenue
  Cost of sales
  Operating expenses
 
   

Effect on operating results (euro)

  +5%   $ 3,260   $ 316   $ 3,043  

  -5%     (3,260 )   (316 )   (3,043 )

Effect on operating results (pound sterling)

 
+5%
 
$

1,297
 
$

112
 
$

702
 

  -5%     (1,297 )   (112 )   (702 )
   

Revenue growth rates presented on a constant currency basis were determined by translating the revenue from entities reporting in foreign currencies into U.S. dollars using the comparable prior period's average foreign currency exchange rates.

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Operating segments

The following table presents Billings, revenue and Adjusted EBITDA by operating segment for each of the periods indicated, as if such operating segments were in existence during all such periods:

   
 
  Year ended December 31,   Six months ended
June 30,
 
(in thousands)
  2010
  2011
  2012
  2012
  2013
 
   
 
  (restated)
 

Billings

                               

Collaboration

  $ 60,921   $ 99,575   $ 115,781   $ 52,747   $ 54,322  

IT Infrastructure

    47,640     49,825     47,947     23,556     24,569  

GFI MAX

    9,116     14,513     23,573     10,543     16,640  
       

Total Billings

  $ 117,677   $ 163,913   $ 187,301   $ 86,846   $ 95,531  
       

Revenue

                               

Collaboration

  $ 11,221   $ 29,976   $ 49,593   $ 22,171   $ 35,449  

IT Infrastructure

    46,777     48,055     45,864     22,393     23,678  

GFI MAX

    8,740     13,966     22,971     10,108     16,419  
       

Total revenue:

  $ 66,738   $ 91,997   $ 118,428   $ 54,672   $ 75,546  
       

Adjusted EBITDA

                               

Collaboration

  $ 51,265   $ 79,205   $ 90,807   $ 41,106   $ 39,183  

IT Infrastructure

    16,010     14,169     8,548     3,062     5,730  

GFI MAX

    1,362     2,081     3,089     1,273     3,958  

Corporate

    (7,253 )   (17,507 )   (20,561 )   (11,077 )   (11,948 )
       

Total Adjusted EBITDA

  $ 61,384   $ 77,948   $ 81,883   $ 34,364   $ 36,923  
       

Reconciliation of revenue from continuing
operations to Billings:

                               

Revenue

  $ 66,738   $ 91,997   $ 118,428   $ 54,672   $ 75,546  

Change in deferred revenue

    50,939     71,916     68,873     32,174     19,985  
       

Billings

  $ 117,677   $ 163,913   $ 187,301   $ 86,846   $ 95,531  
       

Reconciliation of Adjusted EBITDA to loss
from continuing operations:

                               

Segment results:

                               

Adjusted EBITDA

  $ 61,384   $ 77,948   $ 81,883   $ 34,364   $ 36,923  

Reconciling items:

                               

Change in deferred revenue

    (50,939 )   (71,916 )   (68,873 )   (32,174 )   (19,985 )

Unallocated group managed items:

                               

Depreciation, amortization and impairment

    (18,324 )   (20,858 )   (12,716 )   (9,366 )   (2,306 )

Share-based compensation

    (887 )   (8,202 )   (6,608 )   (3,245 )   (6,372 )

Unrealized exchange fluctuations

    (2,958 )   (3,319 )   3,281     (2,931 )   (1,795 )

Finance cost, net

    (16,483 )   (10,118 )   (18,916 )   (9,452 )   (7,539 )

Gain on disposals

        95              

Tax benefit (expense)

    5,146     3,893     (2,140 )   1,217     (10,566 )
       

Loss from continuing operations

  $ (23,061 ) $ (32,477 ) $ (24,089 ) $ (21,587 ) $ (11,640 )
   

72


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Results of operations

The following tables set forth consolidated income statement information for the periods presented and as a percentage of revenue for those periods:

   
 
  Years ended December 31,   Six months ended
June 30,
 
(in thousands)
  2010
  2011
  2012
  2012
  2013
 
   
 
  (restated)
 

Revenue

                               

Web-based services, maintenance and subscription

  $ 52,598   $ 76,921   $ 106,577   $ 48,625   $ 70,156  

Licenses

    14,140     15,076     11,851     6,047     5,390  
       

Total revenue

    66,738     91,997     118,428     54,672     75,546  

Cost of sales

                               

Web-based services, maintenance and subscription

    8,170     10,316     16,047     7,209     10,616  

Licenses

    1,356     2,120     1,926     1,029     916  

Amortization of acquired software and patents

    1,456     1,275     1,644     749     732  
       

Total cost of sales(1)

    10,982     13,711     19,617     8,987     12,264  

Gross profit

   
55,756
   
78,286
   
98,811
   
45,685
   
63,282
 

Research and development(1)

   
9,159
   
16,037
   
19,559
   
9,014
   
12,234
 

Sales and marketing(1)

    25,239     39,707     43,552     22,331     24,645  

General and administrative(1)

    12,594     26,227     29,472     15,317     16,737  

Depreciation, amortization and impairment

    16,868     19,583     11,072     8,617     1,574  
       

Operating (loss) / profit from continuing operations

    (8,104 )   (23,268 )   (4,844 )   (9,594 )   8,092  

Gain on disposals

   
   
95
   
   
   
 

Exchange fluctuations

    (3,620 )   (3,079 )   1,811     (3,758 )   (1,627 )

Finance revenue

    94     82     75     40     440  

Finance costs

    (16,577 )   (10,200 )   (18,991 )   (9,492 )   (7,979 )
       

Net loss from continuing operations before taxation

    (28,207 )   (36,370 )   (21,949 )   (22,804 )   (1,074 )

Tax charge / (benefit) from continuing operations

   
5,146
   
3,893
   
(2,140

)
 
1,217
   
(10,566

)
       

Net loss from continuing operations

    (23,061 )   (32,477 )   (24,089 )   (21,587 )   (11,640 )

Gain on sale of discontinued operations, net of tax

                    10,531  

Net (loss) / income from discontinued operations(1)

    (5,218 )   (19,459 )   (16,571 )   (8,394 )   6,080  
       

Net (loss) / income

  $ (28,279 ) $ (51,936 ) $ (40,660 ) $ (29,981 ) $ 4,971  
   

(1)    Includes share-based compensation expense, as follows:

 

Cost of sales

  $ 34   $ 304   $ 110   $ 153   $ 115  
 

Research and development

    63     911     752     323     978  
 

Sales and marketing

    348     1,594     1,348     1,058     598  
 

General and administrative

    442     5,393     4,398     1,711     4,681  
 

Net (loss) / income from discontinued operations

    105     2,036     626     804     40  
         
 

  $ 992   $ 10,238   $ 7,234   $ 4,049   $ 6,412  

73


Table of Contents


   
 
  Years ended December 31,   Six months ended
June 30,
 
 
  2010
  2011
  2012
  2012
  2013
 
   
 
  (restated)
 

Revenue

                               

Web-based services, maintenance and subscription

    78.8%     83.6%     90.0%     88.9%     92.9%  

Licenses

    21.2%     16.4%     10.0%     11.1%     7.1%  
       

Total revenue

    100.0%     100.0%     100.0%     100.0%     100.0%  

Cost of sales

                               

Web-based services, maintenance and subscription

    12.2%     11.2%     13.6%     13.2%     14.1%  

Licenses

    2.0%     2.3%     1.6%     1.9%     1.2%  

Amortization of acquired software and patents

    2.2%     1.4%     1.4%     1.4%     1.0%  
       

Total cost of sales

    16.5%     14.9%     16.6%     16.4%     16.2%  

Gross profit

    83.5%     85.1%     83.4%     83.6%     83.8%  

Research and development

    13.7%     17.4%     16.5%     16.5%     16.2%  

Sales and marketing

    37.8%     43.2%     36.8%     40.8%     32.6%  

General and administrative

    18.9%     28.5%     24.9%     28.0%     22.2%  

Depreciation, amortization and impairment

    25.3%     21.3%     9.3%     15.8%     2.1%  
       

Operating (loss) / profit from continuing operations

    (12.1)%     (25.3)%     (4.1)%     (17.5)%     10.7%  

Gain on disposals

    0.0%     0.1%     0.0%     0.0%     0.0%  

Exchange fluctuations

    (5.4)%     (3.3)%     1.5%     (6.9)%     (2.2)%  

Finance revenue

    0.1%     0.1%     0.1%     0.1%     0.6%  

Finance costs

    (24.8)%     (11.1)%     (16.0)%     (17.4)%     (10.6)%  
       

Net loss from continuing operations before taxation

    (42.3)%     (39.5)%     (18.5)%     (41.7)%     (1.4)%  

Tax charge / (benefit) from continuing operations

    7.7%     4.2%     (1.8)%     2.2%     (14.0)%  
       

Net loss from continuing operations

    (34.6)%     (35.3)%     (20.3)%     (39.5)%     (15.4)%  

Gain on sale of discontinued operations, net of tax

    0.0%     0.0%     0.0%     0.0%     13.9%  

Net (loss) / income from discontinued operations(1)

    (7.8)%     (21.2)%     (14.0)%     (15.4)%     8.0%  
       

Net (loss) / income

    (42.4)%     (56.5)%     (34.3)%     (54.8)%     6.6%  
   

74


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Comparison of the six months ended June 30, 2013 and 2012

Revenue

   
 
  Six months ended June 30,    
   
 
 
  2013   2012    
   
 
 
  Period to period change  
(in thousands, except percentages)
   
  % of
revenue

   
  % of
revenue

 
  Amount
  Amount
  Amount
  Percentage
 
   
 
  (restated)
   
   
   
   
   
 

Revenue:

                                     

Web-based services, maintenance and subscription

  $ 70,156     93%   $ 48,625     89%   $ 21,531     44%  

Licenses

    5,390     7%