[PPT] - INVESTOR PRESENTATION NASDAQ: ARIS FY16 Q3 ARI Network Services, PowerPoint Presentation

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INVESTOR PRESENTATION

NASDAQ: ARIS

FY16 Q3 ARI Network Services, Inc. | investor.arinet.com

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SAFE HARBOR STATEMENT

Statements in this presentation are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. The forward-looking statements can generally be identified by words such as "believes," "anticipates," "expects" or words of similar meaning. Forward-looking statements also include statements relating to the Company's future performance, such as future prospects, revenues, profits and cash flows. The forward-looking statements are subject to risks and uncertainties, which may cause actual results to be materially different from any future performance suggested in the forward-looking statements. Such risks and uncertainties include those factors described in Part 1A of the Company’s most recent Annual Report on Form 10-K, as such may be amended or supplemented by subsequent Quarterly Reports on Form 10-Q or other reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements are made

nly as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to

these forward-looking statements. For more information, please refer to the Company’s filings with the Securities and Exchange Commission. During this presentation, we will discuss GAAP measure such as net income, as well as certain non-GAAP measures such as EBITDA. We have posted on www.investor.arinet.com, a reconciliation of these non-GAAP financial measures to the most comparable financial measures under GAAP. 1

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COMPANY OVERVIEW

Roy W. Olivier, President & CEO

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ARI’S INVESTMENT HIGHLIGHTS

Strategic Financial

Industry-leading provider of software tools and

marketing services

#1 or #2 in all core markets served
Manage largest content library in markets served
Data both a moat and a growth driver
Attractive market opportunity
Strong consumer spending, health care trends, and
nline shopping trends
Market dynamics driving online lead generation and

eCommerce

Multiple growth opportunities
Grown the number of markets served from 4 to 8
Grown the number of products/services from 2 to 4
Raised the ARPD on new products
Raised TAM from $100M to over $1.5B
Europe and Asia remain largely untapped
Consistent track record of growth and

profitability

22% revenue CAGR over last three years
In FY15, Adjusted EBITDA and cash flow growth
utpaced revenue growth
Profitable past 12 years
Strong recurring revenue profile
Over 90% of revenue is recurring
Highly diversified customer base
22,000+ customers
Largest Customer is <3% of Revenue
Profitable and Cash Flow Positive
FY16 Q3 Adjusted EBITDA margins of 18.2%
Operational cash flow inline with Adjusted EBITDA

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WHAT DO WE DO?

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We provide software and related services to help our customers Sell More Stuff™

In-Store

Dealer business management system
OEM parts lookup
Aftermarket Parts, Garments & accessories

(PG&A) lookup

Lead management

Online

Lead generation
eCommerce
OEM parts
Aftermarket PG&A
Digital marketing services

IT Expertise

Customers have limited access to IT expertise
Customers rely on our expertise

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WHO ARE OUR CUSTOMERS

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Dealers Distributors Manufacturers (OEM)

Our Customers are:

Powersports Outdoor Power Marine RV Appliances CORE Tire & Wheel HME

Markets We Serve:

GROWTH Aftermarket Auto Service

What “Stuff”?

Whole Goods (Tires, Bike, Boat, RV) OEM Parts Aftermarket Parts, Garments & Accessories (PG&A) Service & Tire

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CONTENT THAT DRIVES COMMERCE

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OEM Parts

120+ Manufacturers 500K Models 10MParts

Aftermarket PG&A

1,400+ Manufacturers 500K Parts

Whole Goods

315 Manufacturers 176K Models

Improves productivity and profitability at Dealership

Business Management

POS / Inventory Mgmt. & Accounting Drive traffic to dealership

Leads
eCommerce

Digital Marketing

Leads for major units eCommerce sales Web Presence

Lead Gen & eCommerce Websites

eCatalogs

Increases sales in Dealership Improves customer satisfaction

SaaS or Subscription

Perpetual License + Maintenance

r

SaaS

SaaS or Subscription

SaaS

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STRATEGIC GOALS - BACKGROUND

To be the leader in providing software and services

that help our customers Sell More Stuff™.

– Complex equipment will continue to be sold primarily through a dealer network. – Approximately 7 out of 10 units sold originate as web leads. – Online shopping is growing faster than in-store. – Search is now over 50% mobile. – ARI has a strong online footprint with supporting analytics (7,500+ Dealer Sites). – We intend to integrate or own in-store systems (Business Management/Point of Sale).

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STRATEGIC GOALS – THE FUTURE

We intend to be the leader in helping dealers

capitalize on the convergence of online and in- store purchases and research.

– Integrate customer search with the dealership’s location via mobile – Integrate the customer in-store experience with search and purchasing history via mobile – Create personalized shopping experiences based on models owned, history, etc.

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STRATEGIC FOUNDATIONS

Nurture and retain existing customers through world

class customer service and product feature upgrades.

Drive organic growth through innovative new service
fferings, differentiated content and geographic

expansion.

Lead the market with open integration to related

platforms.

Successfully execute acquisitions that align with our core

strategy.

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FOUR POINT GROWTH STRATEGY

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More Markets

¹Total addressable market represented by the green bars . Percentages represent ARI’s market share , or the percentage of U.S. dealers that currently use 1 or more of our products. For example, ARI currently has 40% market-share of the OPE vertical; with 40% of those dealers using 1 or more of ARI’s products.

66% 40% 90% 10% 25K Dealers

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GROWTH DRIVERS

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More Markets
More Products
eCatalog
Lead Gen & eCommerce
Point of Sale / Dealer

Business Mgmt. Systems

(POS/DBMS)

Digital Marketing Services

(DIGMS)

Cross- Selling Opportunities

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GROWTH DRIVERS

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More Markets
More Products
Higher ARPD*
eCatalog

$2,297

LeadGen/eCommerce

$2,925

POS/DBMS

$4,296

DIGMS

$3,784

*Annual Recurring Revenue – annualized as of the quarter ending April 30, 2016

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GROWTH DRIVERS

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More Markets
More Products
Higher ARPD
Acquisitions that align

with our core strategy

Completed 14 in last ten years
Fragmented markets with many

small competitors

We partner with over 90 today
One of our Core Competencies
~50% Future Growth

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HISTORICAL GROWTH

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Historical Revenue

Other

Non-Strategic Revenue Non-Recurring Revenue

Pro Svcs
Older Businesses

*2016 data estimated based off first three quarters revenue annualized.

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HISTORICAL GROWTH

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Historical Revenue

Other eCatalog

*2016 data estimated based off first three quarters revenue annualized.

eCatalog

$17.9M Revenue
17,500+ Dealers
100 Countries

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HISTORICAL GROWTH

In FY13 Q3 we made a change to our lead generation service business model, eliminating the pass-through cost of purchased ad words from the search engine providers on behalf

f our customers.

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Historical Revenue

Other eCatalog Website

Lead Gen/eCom Websites

$23.7M Revenue
7,900 Websites

*2016 data estimated based off first three quarters revenue annualized.

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HISTORICAL GROWTH

In FY13 Q3 we made a change to our lead generation service business model, eliminating the pass-through cost of purchased ad words from the search engine providers on behalf

f our customers.

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Historical Revenue

Other eCatalog Website Digital Marketing

Digital Marketing Services

$1.7M Revenues
500 Customers

*2016 data estimated based off first three quarters revenue annualized.

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HISTORICAL GROWTH

In FY13 Q3 we made a change to our lead generation service business model, eliminating the pass-through cost of purchased ad words from the search engine providers on behalf

f our customers.

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Historical Revenue

Other eCatalog Website Digital Marketing POS

Business Mgmt System/POS

$3.2M Revenues
1,500 Locations

*2016 data estimated based off first three quarters revenue annualized.

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HISTORICAL GROWTH

In FY13 Q3 we made a change to our lead generation service business model, eliminating the pass-through cost of purchased ad words from the search engine providers on behalf

f our customers.

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* Other eCatalog Website Digital Marketing POS

On track to do $47M - $49M in revenue for FY16

*2016 data estimated based off first three quarters revenue annualized.

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GROWTH OPPORTUNITY

Customer Count US TAM # of Customers ARPD TAM Dollars eCatalog 16,200 20,800 $2,297 $38M Lead Gen & eCommerce 7,850 143,800 $2,925 $422M Point of Sale/DBMS 485 143,800 $4,296 $685M Digital Marketing 500 143,800 $3,784 $728M Total US $1.9B

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After various adjustments we think TAM is $1.5B

eCat – Total includes “Bulk” license agreements without international dealers. ARPD is for dealers billed directly. TAM – Total Addressable Market or the number of dealers, service locations or service providers. ARPD– Average Recurring Revenue per dealer, service locations or service providers. Number for FY16Q3 annualized.

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$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 FY12 FY13 FY14 FY15 FY16 Low End Est.

Millions

FY = Fiscal Year Ending July 31

Total Revenue

3 - 5 Year CAGR: 16 - 17%*

$22.5 $30.1 $47.0 $33.0

REVENUE GROWTH

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$40.4

* Based off FY16 estimate

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TARGET OPERATING MODEL

FY15 Act. FY16 Q3 Annualized 3 Years FY19 5 Years FY21

Sales $40M $48M ≅ $75M ≅ $100M Growth CAGR 16.5% 16.5%

Adj. EBITDA %

16.3% 18.2% 18% - 22% 20% - 24%

Adj. EBITDA $

$6.6M $8.7M $14M - $17M $20M - $24M

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Scale
Efficiencies
Product Mix

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FINANCIAL OVERVIEW

Bill Nurthen, CFO

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MOST RECENT QUARTER HIGHLIGHTS¹

1 as of and for the quarter ending April 30, 2016

² YoY for the quarter ending April 30, 2016 ³ Customer Acquisition Costs

10 years of Positive Adjusted EBITDA & Operating Cash Flows

Total Revenue $12.0M
92.2% Recurring Revenue
80.5% Gross Margin
Dealer Sales Bookings Up 22%²
Operating Cash Flow of $2.6M
Total CAC³ ‐ 10.5 months
Adjusted EBITDA Margin of 18.2%

Millions

Quarterly Recurring Revenue (QRR)

FY 14 FY 15

$5.0 $6.0 $7.0 $8.0 $9.0 $10.0 $11.0 $12.0

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

FY 16

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$0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 FY12 FY13 FY14 FY15 TTM Millions

FY = For the fiscal year ended July 31 TTM = For the period ended April 30, 2016 Recurring Revenue Total Revenue

5-yr Total Company Recurring Revenue Growth CAGR = 16.4%

$22.5 $30.1 $40.4 $33.0

REVENUE GROWTH

83.2% 89.7% 93.6% 90.2% $46.4 91.3%

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$1.0

$0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 FY12 FY13 FY14 FY15 TTM Adjusted EBITDA Operating Cash Flow Free Cash Flow

$4.6 $3.8 $4.4 $6.6 $8.1 Millions 12.7% 13.4% 16.3%

ADJUSTED EBITDA & CASH FLOW

Includes $1.2M of acquisition- related costs. Integration related cost- reduction in FY14Q2

$3.5 $2.4 $2.4 $6.3 $1.1 ($0.1) $4.2

Free Cash Flow = cash flow from operations less capital expenditures and capitalized software development

($0.0) $7.3 $4.8 17.5%

FY = For the fiscal year ended July 31 TTM = For the period ended April 30, 2016

20.5% 26

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BALANCE SHEET HIGHLIGHTS¹

FY16 Q3 Cash and Investments: $4.4M Deferred Tax Assets² $4.6M Total Debt and Lease Obligations: $9.6M Shares Outstanding: 17.3M Stock Price³: $4.13 Market Cap.: $71.3M Enterprise Value: $76.4M TTM Enterprise Value/Adjusted EBITDA: 9.4x TTM Enterprise Value/Revenues: 1.6x

¹ As of and for the quarter ending April 30, 2016 ² Includes Federal NOL Carryforwards of $2.5M ³As of Market Close 6/3/16

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COMPANY OVERVIEW

Roy W. Olivier, President & CEO

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SUMMARY

We have significantly increased the size of our

addressable market opportunity

We have a successful track record completing

acquisitions

We have a successful track record executing
perationally
We are well positioned for continued growth and

improved profitability

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PEER GROUP ANALYSIS

Software Equity Group Multiples1

ARI2 SaaS Index3 Software Index4 Internet Index5 EV/Revenue 1.6 4.0 – 6.2 2.7 – 2.9 1.7 – 2.1 EV/EBITDA 9.4* 20.8 – 37.4 13.3 – 15.3 16.2 – 17.3

1 Based on the Software Equity Group’s Software Industry Financial Report for Q4 15 last four quarters’ data 2 As of Market Close 6/3/16

*Adjusted EBITDA

3 64 Public Companies 4 130 Public Companies 5 101 Public Companies

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APPENDICES

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YEAR

COMPANY PRODUCT VERTICAL 2015

DCi eCat Automotive Aftermarket

2015

TASCO Corporation DBMS Tire & Wheel

2014

TCS Dealer Business Management System (“DBMS”), Lead Gen/eCommerce Tire & Wheel

2013

DUO Web Services Digital Marketing Services Powersports

2012

50 Below Lead Gen/eCommerce Home Medical, Tire & Wheel

2012

Ready2Ride eCat Powersports

2009

Channel Blade Lead Gen/eCommerce Marine

2008

Info Access eCat Appliances

2007

OC-Net Lead Gen/eCommerce Powersports

2003

VertX Commerce Lead Gen/eCommerce Powersports

1999

Network Dynamics eCat Outdoor Power

1998

POWERCOM-2000 eCat Outdoor Power

1997

Empart Technologies eCat RV

1996

CD*\.IMG eCat Outdoor Power, Powersports, Marine

APPENDIX 1: ACQUISITION HISTORY

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3 Sales Channels

OEM Sales
Dealer Inside Sales
International Sales

100

Over Countries Served

2 Geographic Markets

Americas & EMEA

Headquarters Milwaukee, WI Leiden, The Netherlands

394

Employees

APPENDIX 2: LOCATIONS

eCatalog Installs Website Installs

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New Delhi, India

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APPENDIX 3: BENEFICIAL OWNERSHIP¹

Amount of Beneficial Ownership1 Percent Ownership

Wellington Management Company (2) 1,531,300 8.53% Cowen Prime Services, LLC (3) 1,259,200 7.01% Michael D. Sifen, Inc. (4) 1,205,128 6.71% Park City Capital, LLC (5) 1,000,000 5.57% All affiliates as a group 4,995,628 27.82%

(1) Except as otherwise noted, the persons named in the above table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Includes options exercisable within 60 days of June 1, 2015. (2) Ownership information is provided as of December 31, 2014 based upon Schedule 13G amendment filed on February 12, 2015. Includes 250,000 shares acquired in connection with the May 7, 2015 equity

ffering.

(3) Ownership information is provided as of the Schedule 13G filed December 31, 2015. (4) Ownership information is provided as of March 15, 2013 based upon Schedule 13G filed on May 22, 2013 by Michael D. Sifen, Inc. Total includes 498,461 shares of common stock held by Michael D. Sifen and 706,667 shares of common stock held by Michael D. Sifen, Inc., an entity controlled by Mr. Sifen. (5) Ownership information is provided as of the Schedule 13D filed December 10, 2014.

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APPENDIX 4: INSIDER OWNERSHIP¹

Name of Officer / Director Amount of Direct Beneficial Ownership Percent Ownership

Roy W. Olivier (2)(3) – President & CEO 856,645 4.77% William A. Nurthen (3) – Chief Financial Officer 151,215 * Chad J. Cooper – Director 160,484 * William C. Mortimore – Director 110,909 * William H. Luden, III – Director 104,822 * Robert Y. Newell, IV - Director 96,164 *

P. Lee Poseidon – Director

107,233 * All current executive officers and directors as a group 1,587,472 8.84%

* Denotes less than 1%

(1) Except as otherwise noted, the persons named in the above table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Includes options exercisable within 60 days of October 21, 2015. (2) Mr. Olivier’s total includes 172,955 shares held in the Company’s 401(k) plan, of which Mr. Olivier is a trustee with voting power. Mr. Olivier disclaims any beneficial ownership in these shares in excess of his pecuniary interest 13,246 shares. (3) Management team granted 110,000 shares of performance based restricted stock that vests at $6, $7, $8 & $9.

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APPENDIX 5: COMPETITIVE LANDSCAPE

eCatalogs Lead Gen + eCommerce Websites Business Management Digital Marketing

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APPENDIX 6: MANAGEMENT TEAM

Roy W. Olivier

President & CEO

Rob A. Ostermann

Chief Technology Officer

Bill Nurthen

Chief Financial Officer

Brad Smith

V.P. Product Management

Management & Insiders own 8.84%

Robert Jones

V.P. of Sales

Joined ARI September 2006 as Vice President of Global Sales and Marketing / Appointed as President and CEO in May 2008 / Director since 2008 / Previously worked for three Fortune 500 companies before starting his first software company in 1989 focused

n developing multi-media CD-ROM titles. Sold that company in 1993 to start a software company focused on developing software to

help dealers in the construction, material handling, mining, and outdoor power vertical markets which was sold to ProQuest (now Snap-On) in 2000. Joined ARI as Chief Financial Officer in November 2013 / CFO of Cabrera Capital Markets, LLC 2011-2013 / CFO of bioLytical Laboratories 2008 to 2011 / Vice President of Finance and then CFO of Inforte Corp., NASDAQ (INFT) 1999 to 2007 / Financial

perations roles at Platinum Technology International NASDAQ (PLAT) / MBA from The Kellogg School of Management at

Northwestern University / BBA undergraduate degree from The University of Notre Dame. Appointed Chief Technology Officer of ARI in August 2012 having served as Executive Director of Technology since November 2011 and Director of Product Engineering since joining the Company in June 2008 / Served in various technology management and development roles at Parcel Pro Inc. in Torrance, California and The California Breath Clinics in Los Angeles, California from 2003- 2008 / Lead developer at OC-Net, Inc. in Cypress, California / B.S. in Business Administration, Computer Information Systems from California State University. Appointed Vice President of Sales in August 2014 / Most recently served as ARI’s Executive Director of Sales and served as Director

f Dealer Sales following ARI’s November 2012 acquisition of Duluth, Minn.-based 50 Below / Joined 50 Below as supervisor of the

UPS Program in the Financial Services Division in 2011 / Promoted to Sales Manager of the Powersports division in January 2012 and Director of Sales and Service in May 2012. Appointed Vice President of Product Management in January 2014 / Joined ARI in 2007 and most recently served as Director of Product Management and General Manager of Aftermarket / Double B.A. in Web/Technology Development and Spanish from the University of Wisconsin-Stevens Point / MBA from the University of Wisconsin-Eau Claire in 2012 / In conjunction with MBA program, consulted on an East Asian supply-chain consultancy for a Fortune 500 marine manufacturer.

*Long-term equity bonus plan aligned with Shareholder interests. Management team granted restricted stock that vests at $6, $7, $8 & $9

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