#1INVESTOR PRESENTATION Responding to Avalara's Misleading Claims Avalara's Investor Presentation Reinforces Our View That the Transaction Is Flawed Altair US, LLC September 2022 AVALARA, INC. (NYSE: AVLR)#22 Disclaimer CERTAIN INFORMATION CONCERNING THE PARTICIPANTS In connection with the proposed acquisition of Avalara, Inc. (the "Company") (NYSE: AVLR) by affiliates of Vista Equity Partners Management, LLC (the "Merger"), the Company entered into an Agreement and Plan of Merger, dated as of August 8, 2022, with Lava Intermediate, Inc., a Delaware corporation (“Parent”), and Lava Merger Sub, Inc., a Washington corporation and wholly owned subsidiary of Parent (the "Merger Agreement"). The Participants (as defined below) intend to file a definitive proxy statement and accompanying proxy card with the SEC to be used to solicit proxies for votes (the "Proxy Solicitation") opposing the adoption of the Merger Agreement at the special meeting of shareholders (the "Special Meeting") and regarding other proposals that may come before the Special Meeting. The Participants in the Proxy Solicitation are anticipated to be Altair US, LLC, a Delaware limited liability company ("Altair US"), and Richard Bailey (collectively, the "Participants"), the Manager of Altair US. As of the date hereof, each of the Participants may be deemed to beneficially own, in the aggregate, 850,892 shares of common stock of the Company. THE PARTICIPANTS STRONGLY ADVISE ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO [email protected]. DISCLAIMER This presentation does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in any state to any person. In addition, the discussions and opinions in this press release and the material contained herein are for general information only and are not intended to provide investment advice. All statements contained in this presentation that are not clearly historical in nature or that necessarily depend on future events are "forward-looking statements," which are not guarantees of future performance or results, and the words "anticipate,” “believe,” “expect,” “potential,” “could,” “opportunity,” “estimate,” and similar expressions are generally intended to identify forward-looking statements. The projected results and statements contained in this presentation and the material contained herein that are not historical facts are based on current expectations, speak only as of the date of this presentation and involve risks that may cause the actual results to be materially different. Altair US, LLC disclaims any obligation to update the information herein and reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. ALTAIR US, LLC HAS NEITHER SOUGHT NOR OBTAINED THE CONSENT FROM ANY THIRD PARTY TO USE ANY STATEMENTS OR INFORMATION CONTAINED HEREIN THAT HAVE BEEN OBTAINED OR DERIVED FROM STATEMENTS MADE OR PUBLISHED BY SUCH THIRD PARTIES. EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, ANY SUCH STATEMENTS OR INFORMATION SHOULD NOT BE VIEWED AS INDICATING THE SUPPORT OF SUCH THIRD PARTIES FOR THE VIEWS EXPRESSED HEREIN. Altair US, LLC#33 Executive Summary ■ Avalara's September 23, 2022 investor presentation reinforces our belief that the Board chose the wrong time to sell, oversaw a flawed sale process and endorsed an inadequate price ■ The tone of the investor presentation is in stark contrast to the optimism of the Company's Analyst Day presentation just three months ago - - We believe the Company is intentionally taking a pessimistic tone to justify the sale to Vista at what we think is less than full and fair value for the Company Avalara appears to be manipulating data to manufacture an argument that the transaction offers an attractive premium when it does not ■ Notably, the Company's presentation fails to address some of the most concerning issues and facts about the transaction We believe if the transaction were voted down, Avalara's stock price would soon be exceed the offer price ■ The Company's presentation is, in our view, disheartening evidence that this Board is not interested in helping Avalara reach its full potential and is instead seeking a sale of the Company as a means to avoid the hard work of adjusting to transient headwinds ■ We intend to vote AGAINST the suboptimal transaction with Vista Altair US, LLC#4Avalara's Presentation Is a Dramatic Change of Tone from Analyst Day What Avalara Said Three Months Ago What Avalara Is Claiming Now Why Avalara is a special company Avalara Clear, unified vision to be part of every transaction in the world 2 Unrivaled leader in large global market with low penetration and low churn 3 Partner-based company with three powerful competitive moats Expansion to multi-product platform enlarges market opportunity 5 Resilient business model that performs well in good and challenging times 6 Focus on sustaining high growth while driving operating leverage D Avalara / Vista transaction represents the best outcome for shareholders in our view Avalara Avalara / Vista Transaction Standalone Path $93.50 per share x International rebuild - y/y decline through 2023 ANAR ANALYST DAY VIRTUAL 6 Certain cash value, no risk, attractive valuation Required U.S. GTM transformation to reaccelerate anemic demand generation × High sales and marketing attrition contributing to 2022 sales divot × Required evolution of the executive team to resolve execution challenges and transform operations × Q2 earnings revenue miss and would need to guide down 2022 revenue expectations x Challenging and uncertain macroeconomic backdrop $?? per share "[A]fter 19 years of doing this, we believe transactional tax automation in the US is still roughly 10% penetrated, and even less so globally, leaving many years of runway to compound growth at high rates. And Avalara is a leader in this space, and we believe, is well-positioned to capture more than the fair share of the market opportunity."1 "Now is the right time to sell considering expected degradation of performance and further operating challenges anticipated as a standalone public company resulting in significant downside risk."2 We find it dubious that Avalara went from being a “special company" to a company requiring a “multi-year rebuild” and "evolution of the leadership team" in just three months 1 Source: Avalara Analyst Day, June 28, 2022. 2 Source: Avalara Investor Presentation, filed with the SEC on September 23, 2022. Altair US, LLC#5We Believe Avalara Is Misrepresenting the Strength of Customer Demand What Avalara Said Three Months Ago Strong core customer growth What Avalara Is Claiming Now Avalara requires a go-to-market transformation that we believe will increase volatility and weigh on growth Avalara 8,000 7,000 Core Customers by Segment 7,194 6,000 5,000 4,744 4.474 4.000 3,000 2,000 1,000 477 Core Customer TTM Revenue 1022 ($millions) Average TTM Revenue per Core Customer $80 $8 Other $71 ESB Thousands $70 $60 $172 UMM- Enterprise $50 $40 2,272 $178 SMB-M $30 $24 $20 $17 $15 $170 SMB-S $10 0 Other ESB SMB-S SMB-M UMM- Enterprise 1019 1020 #1021 ■1022 ESB Other SMB-M SMB-S UMM+ Enterprise $40 $76 $- Other ESB SMB-S SMB-M UMM+ Enterprise 1019 #1020 #1021 #1022 ANLAR ANGLEST DAY VIRTUAL | 15 Rebuilding U.S. GTM operations required to efficiently support growth and execute multi-product, multi-segment, and multi-geo strategy Current GTM operations requires a rebuild to support demand generation growth Execution challenges and high attrition have left a divot in 2022 new and upsell bookings Tax-related searches and AVLR website organic clicks down 20% y/y 10% decline in won deals in 1H22 2H22 plan would need 33% y/y increase in leads after a 9% decline in 1H22 Transformation will take time and require leadership and team changes "[W]e have had meaningful growth seen across our core customers across all size segments and have grown our total core customer count by 22% in each of 2021 and Q1 of 2022... [O]ur average trailing 12-month revenue per core customer has increased meaningfully by segment."1 "Current [go-to-market] operations requires a rebuild to support demand generation growth."2 Avalara is now claiming that it requires a dramatic "go-to-market transformation to reaccelerate anemic demand" when just three months ago it was touting strong customer growth 5 1 Source: Avalara Analyst Day, June 28, 2022. 2 Source: Avalara Investor Presentation, filed with the SEC on September 23, 2022. Altair US, LLC#6Avalara Has Touted the Resilience of Its Business to Macro Factors What Avalara Said Three Months Ago What Avalara Is Claiming Now Avalara expects the challenging macroenvironment and high interest rates to continue to weigh on its valuation for a protracted period NTM Time-Weighted Revenue Multiple Since Avalara's IPO to Last Trading Day Prior to Deal Announcement (05-Aug-2022) High growth software valuation multiples typically exhibit an inverse relationship with interest rates Avalara Q2 Earnings Represented Avalara's First Miss and Would Likely Have Required Avalara to Lower Its Forward Guidance Q2'22 Revenue Prior to Q2'22, Avalara has beat top-line consensus estimates 15 out of 16 quarters, with median beat of 7% 60% Of U.S. subscriptions and returns revenue is from tax calculation products 40% Of U.S. subscriptions and returns revenue is from tax returns and compliance management products > Most compliance products fluctuate minimally with economic activity > Calculation products are insulated from economic activity because of our wide tiered pricing bands jotur Source Down Fanting AVALARA ANALYST DAY VIRTUAL "Our business model has proven to be resilient, historically showing low volatility in good and challenging times because our customers must always calculate taxes and file returns. And, our pricing model is designed to absorb downside shocks and upside bounces amid changes in economic activity. All this continues to reinforce our belief that we can compound growth organically in the 20% to 25% range for years to come...' "1 35x 30x 25x 20x 15x 10x 5x 6-Jul-2022 Avalara Undisturbed Multiple 6.0 % 5.0% 4.0% 3.3% 3.0 % 2.0 % 8.8 x 8.1 x 1.0 % Prior to Leak: 6.8 Ox 0.0 % Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Avalara Peer Median ---20Y Treasury Yield $ 209.1 (03) Consensus Estimates FY2022E Revenue $ 208.6 Actual Lower expected 2022 performance and major execution challenges would likely have required Avalara to modify public guidance previously disclosed in Q1 earnings Source: FactSet Bloomberg, Avalora merger proxy, Public filings, Capital IQ, IBES Note: S in milions Avalare peers include Alteryx, BigCommerce, Blackline, Coupe, Dotadog, Flestir, Hubspot, MongeDR, Okto, PagerDuty, Paylocity, Shopify, Smartsheet, Zscaler. $904 $869 May Projections July Projections "Avalara expects the challenging macroenvironment [sic] and high interest rates to continue to weigh on its valuation for a protracted period." We agree with the Company's remarks at its Analyst Day and believe it is insulated from economic challenges and remains positioned to grow in the current environment 6 1 Source: Avalara Analyst Day, June 28, 2022. 2 Source: Avalara Investor Presentation, filed with the SEC on September 23, 2022. Altair US, LLC#77 Avalara Remains a Fundamentally Strong Business We do not believe a $500,000 revenue "miss" in one quarter has any bearing on Avalara's ability to realize long-term value Avalara expects the challenging macroenvironment and high interest rates to continue to weigh on its valuation for a protracted period NTM Time-Weighted Revenue Multiple Since Avalara's IPO to Last Trading Day Prior to Deal Announcement (05-Aug-2022) Avalara Q2 Earnings Represented Avalara's First Miss and Would Likely Have Required Avalara to Lower Its Forward Guidance ③ Avalara Revenue Projections¹ Q2'22 Revenue $2,000 High growth software valuation multiples typically exhibit an inverse relationship with interest rates +27% CAGR $1,855 $1,793 Prior to Q2'22, Avalara has beat top-line consensus estimates 16 out of 16 quarters, with median beat of 7% $1,800 35x 6.0% $1,600 $1,475 $ 209.1 (63) $ 208.6 30x 5.0% $1,400 25x 1 $1,160 $1,200 $1,106 4.0% 20x 3.3% 3.0% Consensus Estimates FY2022E Revenue Actual $1,000 $904 $869 15x $800 Lower expected 2022 performance and major execution challenges would likely have required Avalara to modify public guidance previously disclosed in Q1 earnings 10x 2.0% 8.8 x 8.1 x 1.0 % $600 -4% $904 $ 869 $400 5x 6-Jul-2022 Avalara Undisturbed Multiple $200 Avalara Prior to Leak: 6.8 x 0x 0.0 % Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Peer Median' -20Y Treasury Yield $0 2022E 2023E HHH $1,405 -5% -5% -3% 2024E 2025E May Projections July Projections Source: FactSet, Bloomberg, Avelara merger proxy, Public filings, Capital 10, 1BES Note: $ in millions 1 Avalore peers include Alteryx, BigCommerce, Blackline, Coupo, Dotadog, Elastic, HubSpot, MongoDB, Okto, PagerDuty, Paylocity, Shopify, Smartsheet, Zscaler ■May Projections ■■July Projections 1 Avalara's Q2 2022 revenue "miss" was $500,000; we do not believe this is material, let alone that it portends a deterioration in the Company's prospects 2 3 This "downward revision" in guidance still implies 24% YoY revenue growth, which is consistent with the Company's long-term goal of compounding revenue at 20-25%2 - The Company's July Projections – which reflect the Company's greater pessimism – still imply revenue growing at a CAGR of 27.1% through 2025; this is essentially unchanged from the May Projections, which implied a CAGR of 27.3%³ 1 Source: Avalara Definitive Proxy Statement, filed with the SEC on September 12, 2022, at pages 63-64. 2 Source: Avalara Analyst Day, June 28, 2022 ("[We believe] that we can compound growth organically in the 20% to 25% range for years to come..."). Altair US, LLC 3 Source: Avalara Definitive Proxy Statement, filed with the SEC on September 12, 2022, at pages 63-64.#8Avalara Appears to Be Manipulating the Data to Manufacture a "Premium" We believe the "premium multiple" touted by Avalara's Board is illusory and based on a fundamentally flawed analysis The Vista transaction represents a premium multiple compared to public software long-term and current trading multiples Avalara ①Illustrative EV/NTM Revenue Multiples with an Appropriate Control Premium1 14.0x 12.1x 8.8 x Transaction multiple following downward guidance revision absent a deal would likely have been higher 12.0x 8.3 x 10.0x 10.0x 9.2x 8.8x 6.8 x 6.8 x 8.0x 6.2 x 1 1 6.0x 2 2 4.0x 3 2.0x Avalara @ Vista Transaction Avalara @Undisturbed (06-Jul-2022) Peer Median as of 22-Sep-22 S&P 500 Software" Bessemer Cloud Long Term Avg. Long Term Avg. 0.0x Source: Avalara merger proxy, public filings, Capital IQ, IBES Thomson Reuters; Market data as of 22-Sep-2022 Note: Avalara's NTM revenue multiple @Visto transaction based on next four quarters Street consensus estimates. Other multiples NTM Revenue based on time weighted Street consensus estimates. Avalara peers include Alteryx, BigCommerce, Blackline, Coupa, Datadog, Elastic. HubSpot. MongoDB, Okta, PagerDuty, Paylocity, Shopify, Smartsheet, Zscaler 25&P 500 Software long term average since 2012. 'Based on 75 companies from Bessemer Venture Partner's Nasdeg Emerging Cloud Index (EMCLOUD). Long term average since 2013 due to the lock of e meaningful number of constituents in 2012 2 At Transaction Date ■Avalara ■Bessemer Cloud Index Comparable Public Companies S&P 500 Software Index Using comparable trading valuations rather than comparable precedent transactions fails to account for an appropriate control premium; we estimate that these multiples should each be ~26% higher (as shown in the chart at right)1 Avalara is using a 10-year multiple; in our view, this is unusual and flawed because it does not reflect the state of the markets when Avalara's deal was signed or today; Goldman Sachs did not use this methodology in any of the other transactions in its Selected Transactions Analysis for which it provided a fairness opinion Neither of these two indices were included as part of Goldman's fairness opinion analysis that was approved by Goldman's Fairness Committee 8 1 Source: FactSet. Data as of August 5, 2022 ("Transaction Date"). Index / peer data represents median with a 26% premium applied, which reflects the median one-day premium for the companies used in Goldman Sachs' Selected Transactions Analysis, as Avalara's Definitive Proxy Statement, filed with the SEC on September 12, 2022, at page 56. Altair US, LLC#9Avalara Appears to Present an Inaccurate Revenue Multiple The Vista transaction represents a top decile revenue multiple compared to the broad set of historical software transactions U.S. Public Software All-Cash Transaction >$1bn Since 2012 (2) Median Transaction NTM EV/ Revenue Avalara 90th percentile 8.6 x 75th Percentile 50th Percentile 7.4x 5.1 x 2.5 x 2012 5.4 x 2013 3.7 x 2014 5.0 x 4.5 x 3.5 x 6.2 x 5.7 x Vista Transaction implied Multiple (Prior to the effect of 02 earnings and likely downward guidance revision): 8.8x 8.0 x 5.2 x 7.2 x 2015 2016 2017 2018 2019 2020 2021 2022YTD Source: FactSet, Avalora employee FAQ filed as a DEFA 14A as of 20-Sep-2022 Note: Precedent software NTM revenue multiples compiled from FactSet. Avalora transcction implied multiple as disclosed in the employee FAQ fled os o DEFAIJA. Total Transaction Value / NTM EBITDA1 Per Share Consideration x Common Shares Outstanding Total Equity Value Plus: Total Debt Less: Cash Total Transaction Value Divided by: Analyst consensus NTM Revenue (as of July 31) TTV/NTM Revenue: 1 2 $93.50 88,557,882 $8,280 3 $1,019 $1,461 $7,838 $957.5 8.2x Avalara appears to be using an inaccurate revenue multiple. Based on our calculations (shown below), the Total Transaction Value / NTM EBITDA is 8.2x,1 not 8.8x, as Avalara optimistically states. (If the deal were truly at 8.8x, the value to shareholders would be $100 per share.) We find it curious that Avalara would cite as its source for this data an employee FAQ, rather than analyst consensus estimates, as it uses for comparable transactions Again, Avalara appears to be using a 10-year look-back period, which is inconsistent with the methodology used by its financial advisor in its fairness opinion² - The universe of comparable transactions - all U.S. software companies – is, in our view, far too broad and likely contains dozens of irrelevant deals In its fairness opinion, Goldman selected 23 precedent transactions,³ most of which involved high-growth, SaaS-based businesses like Avalara's It is worth noting that the median multiples for these selected transactions were 8.9x NTM Revenue, 4 which is substantially higher than the 8.2x NTM Revenue multiple for Avalara 1 Source: FactSet and Company filings. Data as of August 5, 2022 ("Transaction Date"). 2 Source: Avalara's Definitive Proxy Statement, filed with the SEC on September 12, 2022, at page 56 ("Goldman Sachs calculated and compared the implied EV/NTM revenue multiple... at the time each such transaction was announced."). 9 3 ld. 4 ld. Altair US, LLC#1010 Avalara Appears to Be Applying the Wrong Price to Its Post-Earnings Premium Analysis Even if Avalara's stock had declined 10% after Q2 earnings, the Vista premium would still have been underwhelming, in our view Transaction multiple and premium would be even higher if potential effects of post-Q2 trading and estimate revision are considered Avalara Illustrative Transaction Premium Given Theoretical Post-Earnings Stock Movement¹ We believe undisturbed price and consensus estimates would likely have been lower given Q2 earnings and likely downward guidance revision illustrative implied Deal Premia 90% Illustrative Impiled Deal Multiples 80% Illustrative Offer Price: $93.50 Undisturbed Price Implied Deal Premium lustrative Implied Deal 70% Transaction EV 58.4bn NTM Revenue Multiple 60% 0% $73.54 27% 0% 5957 8.8 x 50% (10) 66.19 41 (2) 938 9.0 trative Post- Blustrative Post- Earnings Stock Earnings Consensus Movement Revenue Revision 1201 58.83 59 (4) 919 92 40% 27% 30% 41% 26% 20% 13% 130) $1,48 82 9000 94 10% U.S. Publie Software All-Cach Transactions >51bn Since 2012: 24% Median Source Fixibe Avc 3 0% Post-Earnings Stock Movement 0% -10% Avalara's Flawed Analysis 59% 42% 82% 62% 4 -20% -30% 2 4 ■Premium Using Avalara Price at Earnings Announcement Avalara is assuming that its stock price would have remained unchanged from July 6 to August 5; we believe Avalara's stock price would have traded in a manner consistent with its peers (i.e., increasing by approximately 12% from July 6 to August 5, in-line with the peer median); therefore, any "post-earnings stock movement" calculations should be applied to an implied price of $82.55 per share, not $73.54 Avalara is again using a new comparator that was not included in Goldman's fairness opinion ("All US public software all-cash transactions >$1bn since 2012") Avalara seems to be basing its EV/NTM revenue multiple on its employee FAQ as of September 20, 2022, rather than Street estimates, unlike the measure it uses for the peers Given that Avalara's stock price has moved up or down by more than 20% on just 1 trading day out of over 1,000 since its IPO, 2 we view these outcomes as less likely 1 Source: Avalara Investor Presentation, filed with the SEC on September 23, 2022 and FactSet. "Median 1-Day Premium of Precedent Transactions" based on comparable transactions in the "Selected Transactions Analysis" of the Company's financial advisor. See Avalara's Definitive Proxy Statement, filed with the SEC on September 12, 2022, at page 56. 2 Source: FactSet. Data as of August 5, 2022, the last trading day prior to the announcement of the transaction. Altair US, LLC#11In Our View, Avalara Overstates the Independence of Its Board Avalara has strong board oversight, with experienced independents and robust M&A transaction experience Avalara 82% Independent Board 1 Bruce Crawford Robin Foote Edward Gilhuly SVP of Jacobs, Former CIO of US Army Partner of Novantas Founder of Sageview Capital Bill Ingram Marcela Martin Scott McFarlane 2 3+ Month Former CFO of Avalara President of BuzzFeed Cofounder and CEO of Avalore Review Process Tami Reller Brian Sharples Rajeev Singh 2 CEO of Duly Health and Care Cofounder and former CEO of HomeAway 11 CEO of Accolade 3 Board Meetings Held during the Process Srinivas Tallapragada Kathy Zwickert Independent Directors Chief Engineering Officer of Salesforce Former Chief People Officer of NetSuite 18 3 Avalara appears to count as "independent” two directors with longstanding relationships with Vista, its principals and its portfolio companies Marcela Martin serves on the Board of a Vista-controlled company, Cvent, with four other Vista professionals, including the Vista partner responsible for the Avalara deal1 Rajeev Singh has served on the board of a company that Vista acquired² The Company suggests a three-month sale process is exceptional or evidence that the Board's sale process was particularly robust; in reality, a three-month process is merely typical³ The number of meetings does not, in our view, have any bearing on how comprehensive the process was or how aggressively the Board negotiated on behalf of shareholders; we do not believe this is a particularly relevant data point Avalara neglects to mention that its CEO stands to realize approximately $30 million in golden parachute compensation as a result of this transaction; 4 we believe this would have been a vastly more attractive outcome to him than the "leadership changes" that the Board was apparently contemplating 1 Source: Avalara Definitive Proxy Statement, filed with the SEC on September 12, 2022, at page 60. 3 Analysis of the length of the sale processes among the companies used by Avalara's financial advisor in its Selected Transactions Analysis, the average length of the sale process was 3.2 months. 2 Id. 11 4 Source: Avalara Definitive Proxy Statement, filed with the SEC on September 12, 2022, at page 70. 5 Source: Avalara Investor Presentation, filed with the SEC on September 23, 2022, at page 8 ("Transformation will take time and require leadership and team changes"). Altair US, LLC#12Avalara Appears to Misrepresent a Process with Limited Competitive Tension Avalara ran a robust 3+ month competitive sale process Avalara May 19, 2022 Following a review of the business performance and outlook, Avalara's BoD approved Goldman Sachs to begin outreach to a targeted group of financial investors June 13, 2022 On behalf of Avalara, Goldman Sachs sent a letter to interested parties requesting initial indications to be submitted by June 22, 2022 July 7, 2022 and After Various media reports speculated that Avalara had been contacted by vista regarding a potential acquisition. Thereafter, representatives of Goldman Sachs received inquiries of varying degrees of seriousness from a variety of parties; none presented a proposal to acquire Avalara April 2022 Board conducted review of broad range of strategic alternatives, including standalone path Initial outreach 8 parties Goldman Sachs contacted 7 financial sponsors An additional Party 6 (majority owner of Company B) contacted Avalara expressing interest in a transaction Initial diligen 7 parties participated in initial diligence and management meetings Parties B, C, and E expressed interest to partner with additional PE firms to help finance a potential acquisition of Avalara Initial indications 2 parties submitted initial indications of interest Reasons Parties Cited for Not Submitting Bids Concerns around operating plan Market conditions Size of deal and valuation Party G: Difficulty of achieving significant synergies with Company B Second round diligence 2 parties participated int second round diligence, including previewing Q2 earnings Reasons Party A Cited for Not Submitting a Revised Bid Q2 performance below management expectations and 2022 likely to follow Unfavorable macroeconomic conditions Revised price would likely be substantially below previous offer and not attractive Continued negotiation to final proposal 1 party (Vista) submitted revised indication of interest and continued to negotiate a final fully financed proposal following several price increases Source: Avalaia merger proxy 2 1 2 Of the 7 parties involved in Goldman's "initial outreach," 5 appear to have proactively and independently reached out to Avalara expressing an interest in the Company1 The 8th party appears to have been overlooked by Goldman during its initial round of outreach and reached out to management independently a month after the sale process had started² Goldman's outreach did not appear to extend to any strategic acquirers We believe strategics could have paid a higher price for Avalara and should have been contacted as a means of maximizing the potential universe of buyers during the sale process 3 Though this chart makes it appear as if there was competition until the penultimate stage of the sale process, Party A's last engagement with Avalara was on July 8, leaving Vista as the only interested party for almost a full month³ 4 The implication that the Board spent time negotiating with Vista is misleading; there was no change to Vista's proposed price from July 19 to August 4; the two price increases came in a span of three days from August 4 to August 7, during which time Avalara's stock was trading above $94 per share In our view, because Goldman Sachs' outreach was limited and potential interest was inhibited by macroeconomic factors, the Board's process was neither “competitive” nor “robust” 12 1 Source: Avalara Definitive Proxy Statement, filed with the SEC on September 12, 2022, at page 34 (indicating that Parties A-D had reached out to Avalara in March and April 2022) and 36 (indicating that Party E appears to have reached out to Avalara independently of Goldman's process). 2 Id. at page 36 (indicating that Party G, which does not appear to have been on Goldman's initial list of targets, reached out to Avalara on May 29, a month after the Board determined to initiate a sale process on April 27). 3 Source: Avalara Definitive Proxy Statement, filed with the SEC on September 12, 2022, at page 40 (indicating Party A met with Avalara to conduct due diligence on July 8, but had no further engagement with the Company and failed to submit a definitive proposal). Altair US, LLC#13In Our View, Avalara's Board Did Not Negotiate "Heavily"; It Caved Avalara heavily negotiated to maximize potential shareholder value Preliminary Bids 6/23/22 $97.00-$101.00 Preliosisory indication of interest Source Avalara x 7/10/22 Preview of Oz earnings with Vate and Party A 6/23/22 $90.00 - $95.00 Polimery cor of ot 2/12/22 Party A informet submit a revised indic erence unfavorable moerotis and the revised in and Mely beaubriantiully buen tie preminary la June 2022 Subsequent Negotiation 8/4/22 597.00-101.00 Ascona 8/5/22 505.75 Avera second co 7/19/22 $91.00 Unsolicited revised indication of interest 8/4/22 $91.00 Verbal Indication July 2022 8/4/22 $92.25 Revised indicarian Avalara August 2022 3 O O Avalara Vista 0 8/5/22 $93.50 "Best and fina per Vista Party A 1 2 3 Avalara attempts to depict Party A as a genuine competitor to Vista, but Party A never submitted a final bid; by July 12, Vista was the only party left in the process Like several other parties, Party A withdrew citing, among other issues, continued deterioration of the macroeconomic environment¹ After Vista failed to submit a bid by the due date, the Board terminated the sale process² In our view, the Board should have held firm in its decision that the sale process had not yielded an acceptable offer and recommitted to achieving Avalara's transformation in the public markets Instead, the Board appeared to eagerly re-engage with Vista even after it presented a significantly inferior indication of interest³ Avalara's Board seems to desire recognition for "heavily negotiating" a 3% price bump However, this "heavily negotiated” price is nearly 4% lower than the low end of Vista's initial indication of interest In our view, the Avalara Board should not be credited for re-engaging with Vista and accepting an offer price that was below Vista's initial indication of interest 13 2 Id. 1 Source: Avalara Definitive Proxy Statement, filed with the SEC on September 12, 2022 at page 41 ("Party A informed Goldman Sachs that they would not submit a definitive proposal because... general macroeconomic conditions were uncertain and unfavorable..."). 3 Id. at page 42 (indicating that after Vista submitted a revised indication of interest at $91/share - which Scott McFarlane noted was significantly lower than Vista's initial range - the Board nevertheless directed its counsel to advance the merger agreement with Vista). Altair US, LLC#14Avalara's Claim That That a Majority of Analysts Support the Deal is Misleading Following review of the proxy statement, majority of analysts endorsed the timing of the sale and the attractiveness of the deal price Timing is Right Avalara "The filing also enumerated a number of compounding operational and market-related challenges that have been building in recent quarters, introducing substantial amount of uncertainty regarding the company's ability to execute on its strategic vision over the next couple of years... Given the incremental information provided in the proxy filing, we see another offer as unlikely." William Blair, 24-Aug-2022 "We continue to believe that the agreed-upon acquisition by Vista will remain the best near term offer for AVLR... we believe shares would likely face significant near-term pressures should the sale not proceed until investors can gain greater confidence on its recent investor day outlook." -Raymond James, 23-Aug-2022 2 This selective quote merely states that another offer is unlikely 1 Price is Attractive vs. Standalone "We believe the company is fairly priced as it was sold to Vista Equity Partners because: 1) several additional PE firms contacted Avalara financial advisor... none submitted any oral or written indication of interest following the initial contact, while no strategic party expressed interest; and 2) Avalara's 2022 revenue came in below expectations and there is uncertainty surrounding the company's expected performance..." -IMP Securities, 29-Aug2022 "In Vista (Avalara] found a partner with a proven track record of driving efficient growth, so it would not surprise us to see Avalara reemerge in the years ahead with a different look... when you assume forward estimates were very likely moving lower, the multiple becomes even more appealing." -Canaccord Genuity, 8-Aug-2022 2 3 Piper Sandler, 8-Aug-2022 "This acquisition was announced in conjunction with Q2 results that were mixed with the lowest q/q subscription growth rate of 1.9% in five years and a sharp moderation in calculated billings growth that slipped to 17% vs. 28% last quarter. Justification of a higher premium appear challenging from a timing perspective given the uncertain macro backdrop and mixed operating results." SOUDE WON Notes sided for aidil emph William Blair's full remarks on the deal, which Avalara omits, were: "Given Avalara's leading position in the large and underpenetrated market for tax compliance automation software, our initial view is that the proposed transaction price is somewhat underwhelming."1 Only states that Avalara's price may face near-term pressure if the sale does not proceed On the deal, Raymond James also stated: "[W]e are a little surprised at AVLR'S willingness to sell at $93.50 given its recently laid out medium-term targets ($250 million of FCF by CY 25) and an aspirational goal of reaching $3 billion in revenue. "2 3 Like other analysts, Piper Sandler notes that a higher premium was unlikely to be obtained given the macroeconomic environment and the Company's mixed Q2 operating results; we believe this reinforces our view that now was not the right time to sell the Company 4 Even if we assume that every analyst on this page is supportive (which we do not believe is the case), Avalara has 13 coverage analysts covering the stock;³ to claim that a "majority" of analysts "endorse" the deal is misleading Avalara appears to be misinterpreting analyst sentiment to manufacture support for the transaction 1 Source: William Blair Analyst Note, August 8, 2022. 14 2 Source: Raymond James Analyst Note, August 8, 2022. 3 Source: Bloomberg. Altair US, LLC#1515 Conclusion ■ We remain convinced that Avalara is a fundamentally strong business with excellent long-term growth prospects ☐ Despite the Company's near-term challenges - several of which seem to have been introduced for the first time in its recent investor presentation - we believe Avalara is well-positioned as a market leader with limited competition and a strong competitive moat ■ The Board appears to have anticipated near-term headwinds and determined that, rather than work to fortify the business. and evolve the leadership team, the best outcome was a fire sale in a difficult financing market We disagree; we believe the Board's decision was the easy one, but not the optimal one for shareholders ▪ This transaction suffers from: Bad timing A poorly designed process - An inadequate price Don't be misled by Avalara's false and misleading claims - join us in voting the GOLD proxy card AGAINST the sale to Vista Altair US, LLC#1616 Contact Information MACKENZIE PARTNERS, INC. Shareholders Call Toll-Free: (800) 322-2885 Email: [email protected] Altair US, LLC