FINANCIAL RESULTSQ2 2016

ESA TIHILÄ, CEO

NICLAS ROSENLEW, CFO

JULY 19, 2016

IMPORTANT NOTICE

The following information contains, or may be deemed to contain, forward-looking statements. These

statements relate to future events or future financial performance, including, but not limited to,

expectations regarding market growth and development as well growth and profitability of Basware. In

some cases, such forward-looking statements can be identified by terminology such as “expect,” “plan,”

“anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of those

terms or other comparable terminology. By their nature, forward-looking statements involve risks and

uncertainties because they relate to events and depend on circumstances that may or may not occur in

the future. Future results may vary from the results expressed in, or implied by, the forward-looking

statements, possibly to a material degree. All forward-looking statements included herein are based on

information presently available to Basware and, accordingly, Basware assumes no obligation to update

any forward-looking statements, unless obligated to do so pursuant to an applicable law or regulation.

Nothing in this presentation constitutes investment advice and this presentation shall not constitute an

offer to sell or the solicitation of an offer to buy any securities of Basware or otherwise to engage in any

investment activity.

2

ESA TIHILÄ

CEO REVIEW

HUGE MARKET POTENTIAL FOR E-INVOICING

4

370 billion invoices annually, globally,

95% currently in paper and unstructured data format

Current Total

Addressable

Market:

3 billion e-invoices,

1% of total

Source: Management estimates, Billentis, EESPA. Covers B2B, B2G and B2C

E-invoice Other electronic formats Paper and unstructured data

BASWARE A LEADER IN GARTNER’S MAGIC QUADRANT FOR PROCURE-TO-PAY SUITES

“P2P suite Leaders demonstrate a market-defining vision of how technology and services can help procurement establish, develop and maintain contract compliance and cost-effective processes for managing and controlling external spend.

They have the ability to execute against their vision with products and services, and they have demonstrated results in the form of growth and customer satisfaction. Leaders successfully sell into multiple industries and multiple geographies.

Leaders are often what other providers in the market measure themselves against, and they are the most likely vendors from this report to be in the P2P suite business five years from now.”

*Gartner, Magic Quadrant for Procure-to-Pay Suites, Deborah R Wilson, Paolo Malinverno, Magnus Bergfors, Desere Edwards, 13 June 2016This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from www.basware.com. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Source: Gartner (June 2016)

Q2 2016 HIGHLIGHTS

Extend cloud

P2P leadership

Accelerate

Network growth

Unleash

Financing

Services

SaaS revenues

+99.0%

27.2 million Q2

Transactions

(+15.7%)

Select

customers live

in Arrowgrass

JV

27 new P2P

SaaS deals

closed (vs 19 in

Q2 2015)

June record

month at 9.2

million

Focus on

development

work continues

Strategy:

Q2 2016

Progress:

CLOUD TRANSITION CONTINUED IN Q2 2016

Announced

2018 Goal:

Recurring

Revenues**

Cloud

Revenues*

Q2 2016

Progress:

80% Recurring2/3rds Cloud

70.6% Recurring

vs 68.7%

in Q2 2015

42.4% Cloud

vs 37.6%

in Q2 2015

* Cloud revenue includes transactions services, SaaS and other subscription and financing services revenue excluding alliance fees

** Recurring revenue consists of net sales excluding license sales, non-recurring consulting revenue and alliance fees

34 Alusta go-lives

vs 15 in Q2 2015

Express delivery for

Alusta now available

in select countries

Progress on moving

to public cloud

infrastructure

Continued focus on

productivity

Q2 INVESTMENTS FOR THE STRATEGY

Announced

Growth

Enablers:

Further

shortening of

delivery times

Investing in

demand

generation

and sales

Scalable

company

infrastructure

Q2 2016

Progress:

Sales and marketing

headcount up 19.6%

Bulk of new sales

and marketing hires

now made

Focus on key markets

Expanding to mid-

market customers

Growing cloud

revenues

VERIAN INTEGRATING WELL

Further strengthens

Basware’s market

position in the US

Stronger customer

offering through

enhanced e-

procurement

Extends Basware’s

network

Rationale Fit with strategy

First cross-sell deals

already achieved:

Network

Verian

procurement and

Alusta

Tehseen Dahya, former

Verian CEO appointed

Head of Basware US

Integration progress

FINANCIAL REVIEW

NICLAS ROSENLEW

(EUR Thousands) Q2 2016 Q2 2015 Change H1 2016 H1 2015 Change

Reported Net Sales 38 948 36 590 6.4 % 73 073 70 631 3.5%

Organic Net Sales 36 298 36 535 68 058 67 522

Organic Net Sales at

Constant Currencies37 092 36 535 1.5% 69 238 67 522 2.5%

KEY GUIDANCE METRICS

(EUR Thousands) Q2 2016 Q2 2015 H1 2016 H1 2015

Reported EBITDA -2 870 64 -3 737 2 855

Total Adjustments 409 1 715 759 -1 057

Adjusted EBITDA -2 461 1 779 -2 978 1 798

6.4% Net

Sales growth

(1.5% organic)

in Q2 2016

Q2 2016 NET SALES PROGRESSION

EUR thousand Q2 2016 Q2 2015 Change

Transaction

services8 919 8 634 3.3%

SaaS 5 904 2 967 99.0%

Consulting

services9 473 9 510 -0.4%

Maintenance 10 385 10 499 -1.1%

License

sales2 588 2 927 -11.6%

Other

revenue1 680 2 054 -18.2%

Group total 38 948 36 590 6.4%

• SaaS growth accelerated at 34.5%

organic, 99.0% total

• Transaction services revenue

increased 3.3%; differences vs

transaction volume driven by

timing of billing

• Overall growth impacted by the

decline in license sales,

maintenance and consulting

Q2 OPERATING EXPENSES AND INVESTMENTS

• Operating Expenses increased by EUR 6.1m versus Q2 2015

• Sales and marketing headcount grew 19.6% compared to 12.4% for group headcount

• R&D Expenses accounted for 14.8% of sales versus 14.0% in Q2 2015

• While investing for growth, focus on efficiency of the cost base continued

* Operating expenses include employee benefits, depreciations & amortizations, and other operating expenses

EUR thousand Q2 2016 Q2 2015 Change

Employee Benefit Expenses 29 068 23 221 25.2 %

Other Operating Expenses 8 792 8 870 -0.9 %

Depreciation and Amortization 2 129 1 822 16.9 %

Total Operating Expenses 39 988 33 913 17.9 %

Materials and Services 3 959 4 437 -10.8 %

R&D Expenses 5 782 5 137 12.6 %

Capitalised R&D 2 794 2 222 25.7 %

Personnel 1 818 1 618 12.4 %

Q2 CASHFLOW AND BALANCE SHEET

• Cashflow from operating activities

was EUR -2.96 m in Q2

• Cashflow was impacted by the

increase in growth

investments

• Cash position continues to be

strong, with EUR 21.8 m of cash

and cash equivalents

• Decrease in cash position

compared to Q2 2015 related

to acqusitions of Procserve

and Verian and growth related

investments

(EUR Thousands) Q2 2016 Q2 2015

Cash flows from operating

activities-2 962 -28

Net change in cash and

cash equivalents-32 812 18 638

Cash and cash equivalents* 21 799 62 570

* Includes short term deposits

KEY GROUP REPORTED FINANCIALS

EUR thousand Q2 2016 Q2 2015 Change

Net sales 38 948 36 590 6.4%

Material and services -3 959 -4 437 -10.8%

Personnel expenses -29 068 -23 221 25.2%

Other operating expenses -8 792 -8 870 -0.9%

EBITDA -2 870 64

Depreciation and amortization -2 129 -1 822 16.9%

Operating result (EBIT) -4 999 -1 757 184.5%

Net result -4 528 -1 715 164.1%

EPS, EUR (diluted) -0.32 -0.12 162.3%

OUTLOOK

ESA TIHILÄ

2016 FULL YEAR OUTLOOK

• Organic revenue growth at constant currencies of 5 percent or more

• SaaS revenue expected to grow; strong growth of Basware’s Network to be sustained

• Continued increase in recurring revenue to outpace progressive slowdown in license revenues

• Temporary pressure on margins driven by growth investments

• Growth related operating investments expected to amount to approximately EUR 20 million

• Adjusted EBITDA at break-even

• Disciplined acquisition strategy continues in the e-invoicing key markets; in Europe & US

Q2 2016 SUMMARY HIGHLIGHTS

+ 1.5% Organic

revenue growth

at constant

currencies

Adjusted

EBITDA

EUR -2 461 K

+ 99.0% total

SaaS revenue

growth

+ 15.7%

Network

transaction

volume growth

+ 19.6% Sales

and Marketing

headcount

Bulk of new

sales and

marketing hires

made

42.4% Cloud

Revenues

27.2 million

Transactions

FinancialsSales

momentumInvesting in

growthTransition to

cloud

MORE INFORMATION:

www.basware.com/investors

www.basware.com

www.twitter.com/basware

www.facebook.com/BaswareCorporation

www.linkedin.com/company/basware

Q3 INTERIM REPORT ON OCTOBER 19, 2016

NEXT REPORT