NASDAQ: ZIXI

1. NASDAQ: ZIXI Nicole Shan, Muen Yue Presented: March 26, 2019

2. Agenda • Introduction • Stock Market Prospect • Company Overview • Industry Overview • Major Acquisitions • Financial Analysis • Valuation • Recommendation

3. Stock Overview History: Bought 2000 @ 2.89 on April 17, 2012 Sold 1000 @ 3.96 on April 18, 2016 + AppRiver - 1000 + 2000 Source: Yahoo Finance

4. Company Overview

5. Business Overview Company Introduction Key Highlights in 2018 3.7 M Total Licensed Zix Users > 90% Customer Retention Rate • Zix is a leader in small medium business email security, data loss prevention, email encryption, and advanced threat protection. • Headquartered in Dallas, Texas • Mission: Protecting business communication for its customers and the communities. • Customers: Organizations in the healthcare, financial services, insurance and government sectors • Differentiator: ease of use and exceptional support • transparent delivery of encrypted email messages 7.33% Revenue Growth 80,000+ Customers Key Drivers of Revenue Growth Key Acquisition Activities March 2017, Acquired Greenview Data, Inc April 2018, Acquired Erado 1 1 1 1 1 September 2017, Acquired Entelligence Messaging Server Technology (EMS) February 2019, Complete the acquisition of AppRiver Source: Capital IQ; Company Website

6. Key Products ZIXSUITE ZIXPROTECT ZIXENCRYPT ZIXMAIL ZIXARCHIVE ZIXONE EASE DIGITAL COMPLIANCE EMAIL SECURITY WITHOUT A DOUBT THE PROMISES OF BYOD DELIVERED SECURE IN TRANSIT SECURE AT REST DETECT AND PROTECT COMPLETE AND TOTAL PROTECTION ALL IN ONE Source: Company Website

7. Leadership DAVID WAGNER PRESIDENT & CHIEF EXECUTIVE OFFICER DAVE ROCKVAM VICE PRESIDENT & CFO David Wagner joined Zix as President and Chief Executive Officer in January 2016. Prior to his role at Zix, David held leadership roles at Entrust for 20 years. Most recently David served as President of Entrust from 2013 through 2015, where he led the successful integration of Entrust after its acquisition by Datacard. STEVE IRONS VICE PRESIDENT, SALES GEOFF BIBBY VICE PRESIDENT, MARKETING DENA BAUCKMAN VICE PRESIDENT, PRODUCT MANAGEMENT KELLY HAGGERTY VICE PRESIDENT, PRODUCT MANAGEMENT & STRATEGY Steve Irons joined Zix in September 2003 and serves as Vice President, Sales. Steve is responsible for overall corporate sales, Zix channel partners and marketing programs. He has been a successful sales leader with Zix for several years and has more than 17 years of sales and sales management experience. Kelly Haggerty joined Zix in April 2016. Kelly has more than 20 years of experience in the software security market. Before to Zix, he served as Chief Product Officer for IID, a Software as a Service Security company. For eight years, Kelly held several leadership roles for McAfee (now Intel Security) Geoff Bibby joined Zix in September 2003 and serves as Vice President of Marketing. Geoff has more than 15 years of experience in high tech marketing. Prior to Zix, he spent 6 years at Entrust Inc., an internet security vendor, where he served in various management roles. He joined Zix as Vice President and Chief Financial Officer in June 2016. He brings a wealth of experience in the data security market and more than 20 years of experience in investor relations, financial planning, and business and corporate development. Dena Bauckman joined Zix in October,2005. Dena has more than 20 years of experience in product management/marketing of security, cloud and networking technology. Source: Company Website

8. SWOT Analysis • Strength: • Large and loyal customer base • Easy to use products • Office 365 • Opportunities: • New Acquisition • R&D • Geographic Expansion SWOT Analysis • Weakness: • Relatively new management team • Small Size • Threats: • Competitors might take up the market share • Weak management on the new combined company

9. IndustryOverview

10. Growing Trend Source: The Radicati Group; 451 Research

11. Source: IBISWorld; Company Website

12. Industry Overview Life Cycle Stage Late Growth Technology Change High Competition Level High Industry Globalization High Capital Intensity Low Concentration Level Medium Barriers to entry Medium Switch Cost Medium

13. Competitors Email Encryption Data Loss Prevention Email Threat Protection Mobile Security CloudSecurity

14. Key External Drivers for ZIXI Cloud and Virtualized Business Environments Expand Mobile Internet Connections Government Regulation, Consumption and Investment Per Capital Disposable Income

15. Major Acquisitions

16. Acquisition Activities • 14.4 Million • Expand Zix’s cloud-based email archiving capabilities into more than 50 content channels, including social media, instant message, mobile, web, audio, and video • 1.7 Million • Acquired of Entelligence Messaging Server technology from Entrust Datacard • Strength Zix’s email encryption capabilities, demonstrating the company’s ongoing commitment to deliver the industry’s premier email encryption solutions. • 7.7 Million • With the acquisition, Zix adds advanced threat protection, antivirus, anti-spam and archiving capabilities to its industry-leading email encryption to deliver a comprehensive email security solution for customers that demand bundled services. Source: Company Annual Report 2018

17. One Major Acquisition in 2019 Source: Earnings Call Presentation Q4 2018

18. Financial Analysis

19. Financial Analysis EBITDA Net Income Sales Revenue Return on Assets Diluted EPS Return on Equity Source: 2018 Annual report

20. DuPont Analysis Return on Equity Source: Annual reports

21. Valuation

22. Valuation-ComparableComps MobileIron Inc. is an American software company specializing in mobile device management . Its software allows the management of mobile devices such as smartphones and tablet computers in an enterprise environment, as well as the secure mobile access to enterprise data. Mkt.Cap($MM)-566 Rev.($MM)-193.2 EBITDA($MM)-(38.7) Sophos Group plc is a British security software and hardware company. It provides the services including encryption, email security, and mobile security. Mkt.Cap($MM)-1532.4 Rev.($MM)-693.4 EBITDA($MM)—(39.1) OneSpan provides a cloud-based and open architected anti-fraud platform Mkt.Cap($MM)-751 Rev.($MM)-212.3 EBITDA($MM)-9.6 Qualys, Inc. provides cloud security, compliance and related services and It has added cloud-based compliance and web application security offerings. Mkt.Cap($MM)-3251.5 Rev.($MM)-278.9 EBITDA($MM)-79.3 Mimecast provides the services including security, archiving, and protection on business mail. And also it is specializing in cloud-based email management for Microsoft Exchange and Microsoft Office 365. Mkt.Cap($MM)-2734.7 Rev.($MM)-321.6 EBITDA($MM)-25.7 Source: Company Websites

23. Valuation-ComparableComps Source: Capital IQ

24. Valuation-DCF Key Assumptions Company Combined* with NO Material Cancellation of Revenues: Revenues increase of between 132% and 137% year-over-year. Cross-selling among Customers Boost Organic Growth: Customer Base: 21000+ Plus 60000+ Add On: ZixSuite + Office 365 +Hosted Exchange • Cost Savings of 8 Million Annually: • $2 million of executive compensation and expenses; • $2 million of third-party cost synergies for redundant expenses; • $4 million of headcount reductions as the result of 40 employee separations.  Source: Company Website; Outlook includes approximately 10 months of AppRiver financial results consolidated into Zix and also GAAP adjustment.

25. Valuation-DCF Data Assumptions

26. Valuation-DCF Discount Rate Total Equity Value: 397,196,000 WACC 6.6% Average ROE (5 yrs) 7.0% Premium 2% Terminal Growth Rate 2% Terminal Value 470,815,000 Discount Rate 9%

27. Recommendation

28. Recommendation Place a Limit Order to: SELL 1000 @ $7.00 Good thru April 2, 2019 Price Range: 6.90 – 7.08