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

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

Stock Overview + AppRiver - 1000 + 2000 Industry Application Software Life Cycle Stage Growth Market Cap 351.21 M Shares Outstanding 54,481,295 Stock Price (as of 03/24/2019) $6.66 52 week range $4.21 – 9.07 P/E Ration (TTM) 22.97 Forward Dividend N/A History: Bought 2000 @ 2.89 on April 17, 2012 Sold 1000 @ 3.96 on April 18, 2016 + 2000 - 1000 + AppRiver Source: Yahoo Finance

Company Overview

Key Acquisition Activities Key Drivers of Revenue Growth Business Overview Company Introduction Key Highlights in 2018 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 3.7 M Total Licensed Zix Users > 90% Customer Retention Rate 80,000+ Customers 7.33% Revenue Growth September 2017, Acquired Entelligence Messaging Server Technology (EMS) April 2018, Acquired Erado February 2019, Complete the acquisition of AppRiver Key Acquisition Activities 1 March 2017, Acquired Greenview Data, Inc Key Drivers of Revenue Growth New Customer Acquisition Sales to Existing Customers Increasing Retention Source: Capital IQ; Company Website

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

Leadership DAVID WAGNER DAVE ROCKVAM 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. DAVID WAGNER PRESIDENT & CHIEF EXECUTIVE OFFICER 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. DAVE ROCKVAM VICE PRESIDENT & CFO 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. GEOFF BIBBY VICE PRESIDENT, MARKETING 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) KELLY HAGGERTY VICE PRESIDENT, PRODUCT MANAGEMENT & STRATEGY DENA BAUCKMAN VICE PRESIDENT, PRODUCT MANAGEMENT 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. 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. STEVE IRONS VICE PRESIDENT, SALES Source: Company Website

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

Industry Overview

Growing Trend Source: The Radicati Group; 451 Research

Source: IBISWorld; Company Website

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

Competitors Email Encryption Data Loss Prevention Email Threat Protection Mobile Security Cloud Security

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

Major Acquisitions

Acquisition Activities 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. 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 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

One Major Acquisition in 2019 Advanced Threat Protection Secured Archiving Email Encryption Secured Hosted Exchange Microsoft Office 365 Reseller Combined Company Double revenue and adjusted EBITDA Approximately $8 million of cost savings Attach AppRiver’s O365 solutions to Zix’s base Higher attach rates, customer retention and greater market share Source: Earnings Call Presentation Q4 2018

Financial Analysis

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

DuPont Analysis Return on Equity Source: Annual reports

Valuation

Valuation-Comparable Comps 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

Valuation-Comparable Comps Source: Capital IQ

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.

Valuation-DCF Data Assumptions 2014 2015 2016 2017 2018 2019 Revenue (mm) 50 55 60 66 70 162 Gross Margin 83.47% 82.47% 82.49% 80.81% 78.45% 59.00% R&D % of Rev 17.98% 15.20% 15.88% 16.72% 16.07% 13.00% SG&A % of Rev 52.08% 52.80% 51.11% 48.54% 48.24% 42.00% EPS 0.07 0.09 0.11 (0.15) 0.29 (0.08) 2023 220-239 62%-65% 8%-10% 38%-39% 0.20-0.35

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%

Recommendation

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