Avalara Q2 2022 Financial Analysis

We 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

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