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Could you please update investors on the trends in your dollar-based net expansion rate (“DBNE”)?

March 16, 2018

As of December 31, 2017, our annual DBNE was 112% for our property manager customers, and 113% for our law firm customers. This compares to 113% and 99%, respectively, as of December 31, 2016.

Our ability to maintain and grow relationships with our existing customers can be measured by our annual DBNE for a given fiscal year, which compares the revenue generated from the sale of our core solutions and Value+ services in that year (e.g., 2017) and the preceding year, or base year (e.g., 2016), from our base customers. For this purpose, we establish our base customers by determining the customers from which we generated revenues during the month of December in the year preceding the base year (e.g., December 2015). We then calculate our annual DBNE for a given fiscal year by dividing (x) revenue generated from the sale of our core solutions and Value+ services in the given fiscal year (e.g., 2017) from our base customers by (y) revenue generated from the sale of our core solutions and Value+ services in the base year (e.g., 2016) from our base customers.

Investors are cautioned that our historical annual DBNE results are not necessarily indicative of the results we expect in the future. Investors are further cautioned that our annual DBNE from year to year may be subject to significant fluctuation as a result of a number of factors, including, without limitation:

• our ability to retain our existing customers, and to expand adoption and utilization of our core solutions and Value+ services by our existing customers;
• the scope of, and potential revenue opportunity associated with, the Value+ services that are available to our property manager customers and law firm customers during any given year, and the timing and rate of adoption of those Value+ services;
• the mix of our core solutions and Value+ services sold to our property manager customers and law firm customers during any given year;
• variations in the timing of sales of our core solutions and Value+ services as a result of trends impacting the verticals in which we sell our software solutions;
• the timing and market acceptance of new core functionality, Value+ services and other products introduced by us and our competitors; and
• changes in our pricing policies or those of our competitors.

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