Data Centers & Cloud Infrastructure - Credit Suisse - 8 Apr 2021

2021 Mid-year Outlook
The Cloud Has Four Walls 8 April 2021

Equity Research Americas
Research Analyst Research Associate Research Associate

Sami Badri George Engroff Lauren Lucas
Communications Equipment & Infrastructure Research Communications Equipment & Infrastructure Research Communications Equipment & Infrastructure Research
Tel: +1 (212) 538-1727 Tel: +1 (212) 325-2289 Tel: +1 (212) 325-4310
ahmedsami.badri@credit-suisse.com george.engroff@credit-suisse.com lauren.lucas@credit-suisse.com
DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND
THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors
should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making
their investment decision.
Table of Contents (Click Below to Jump to Section) Outlook
I. Coverage Summary – Ratings & Target Prices

II. Data Centers
III. Towers
IV. Telecom & Networking Equipment
V. Company Ratings & Target Prices
VI. Appendix
Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 2

Credit Suisse Coverage Model Outlook
Telecom & Networking Equipment Communications Infrastructure
Data Center Capex &

Construction Trends
Cloud Network Architecture
Shifts Led by Equipment
Affecting Capacity Needs
Enterprise & Cloud IT Spend
Customers Shared
Telecom Spending Trends
and Upgrades
Coverage Model Structured to Capture Both Communications Sectors with Converged IT

Spend, Cloud, & Telecom Visibility Modeled Across Both Sectors.
Source: Credit Suisse Research.

Coverage Summary Outlook
Ticker Rating, Target Price, and Thesis Summary
Top Pick: (Outperform, $19 Target Price) – The only publicly traded equity focused solely on tower land interests. We believe RADI’s indexation to the telecom ecosystem and their scalability across 19 countries should sustain 20%+ CAGR for the next 3 years., making
RADI them an attractive company, especially since their cash flow streams are less risky than already low risk tower companies.
(Outperform, $942 Target Price) - As EQIX extends its scale more easily and establish itself with a wider spectrum of channel partners, its interconnection revenues should grow at 2x the colocation market revenues through 2024 and EQIX remains the dominant
EQIX interconnection vendor globally. All in, a premium multiple is warranted, in our view.
(Outperform, $156 Target Price) – Following challenged lease renewal pricing and elevated churn in the last two years, churn, lease renewal rates, and overall revenue growth are set to improve in 2021 based on company guidance and our review of enterprise end market
COR dynamics. Given COR’s revenue mix is ~45% enterprise, an uptick in enterprise activity can accelerate the broader business tremendously.
(Outperform, $19 Target Price) – Longer-term, we expect SWCH to grow ahead of MTDC peers on revenue and EBITDA, despite churn headwinds in 2021, due to its highly power-dense facilities which address large workload applications. Despite its strong growth
SWCH outlook, SWCH still trades at a meaningful discount to the peer group.
Top Pick: (Outperform, $198 Target Price) – MSI is one of very few providers that can offer a true end-to-end solution for customers from first responder radios to full command center (software) communications in one aggregated and auditable system. We see MSI as
MSI the leading provider and highly irreplaceable given it is the only true large scale U.S. based end-to-end provider serving municipal, state, and federal first responders in North America.
(Outperform, $296 Target Price) – AMT is the largest REIT in one of the world’s most highly visible businesses, towers. The U.S. 5G buildout cycle will provide solid visibility long-term, and international expansion should boost growth over the medium and longer-term as
AMT the company remains acquisitive, consolidating high value opportunities within its already vast and diversified portfolio of assets. Recent stock pull back presents attractive entry point.
(Outperform, $21 Target Price) – Despite recent pressures on COMM’s end markets, we continue to view the company’s relevance to overall telecom network densification and data center build-outs as positive over the next few years. The company boasts a strong track
COMM record of operational excellence and discipline with respect to debt pay-downs and achieving synergies from integrating acquisitions.
(Outperform, $167 Target Price) – Global hyperscale data center leader. We are constructive due to strong hyperscale/enterprise demand, improving renewal spreads, and better European positioning (InterXion assets). DLR’s development yields to climb to the 12%+
DLR range given these factors and increased cross-selling.
(Outperform, $359 Target Price) – ANET is well positioned to benefit from strong cloud titan capex spend growth. Cloud titans and SPs will continue to look to ANET for data center switching long-term, in our view, based on the company’s proprietary EOS software, quick
ANET adoption and integration of leading edge components (merchant silicon use, latest DC switching chip), and network equipment power efficiency.
(Neutral, $207 Target Price) – Despite the end market equipment pressures by cloud providers, we continue to see FFIV's relevance in the enterprise customer multi-cloud transition as networking interconnectivity becomes increasingly more complex, requiring superior
FFIV product solutions like FFIV’s ADCs. Partial or full hybrid cloud adoption, heightened by COVID-19, highlights the importance of FFIV’s technology, increasing its relevance in a highly virtual and secure network.
SBAC (Neutral, $277 Target Price) – Third largest TowerCo, with impressive execution to benefit from ramping 5G buildout, but slowdown in domestic tower activity due to Sprint churn will hinder SBAC, which has limited optionality given elevated leverage.
CCI (Neutral, $155 Target Price) – Unlike AMT and SBAC, CCI pursued small cells/fiber in the U.S over international and macro towers. We believe the long-term ROIC prospects are therefore lower, but its U.S. business remains strong.
(Neutral, $46 Target Price) – CSCO continues to dominate numerous networking equipment end markets, but faces pressure from SP and enterprise spending, exacerbated by COVID-19. While we expect CSCO’s influence and innovative prowess will persist regardless of
CSCO the COVID-19 constrained macro backdrop, we are neutral pending end-market competitive dynamics, in particular for campus switching and WLAN.
QTS (Neutral, $71 Target Price) – QTS’ recent performance has been strong, indexed to cloud/hyperscale growth and enterprise hybrid growth with solid assets in Georgia and expansions into Arizona, but dilution remains overhang in our view.
(Neutral, $82 Target Price) – Hyperscale demand accelerated due to COVID-19, and we believe solid demand should continue through 1H21. However, hyperscale pricing remains dynamic despite checks that pricing has troughed, and we favor MTDC peers that have
CONE more exposure to hybrid cloud dynamics or vast global footprints.
(Neutral, $70 Target Price) – We continue to believe that CCOI’s NetCentric business is positioned well on a longer-term basis given its 5G, AR, and VR customer application ramps, but the medium-term dynamics regarding Corporate Customer growth have moved us to
CCOI the sidelines. We remain cautious on CCOI’s Corporate customer growth until U.S. office vacancy indicators recover.
(Underperform, $22 Target Price) – JNPR faces multiple pressures that we believe will lead the stock to Underperform. These include intensifying technological pressures from CSCO – virtual core and new Silicon One/8000 Series offerings – the rise of White Boxes, and
JNPR slower than expected 5G deployments. In our view, potential growth from JNPR’s customer diversification attempts will be offset by fierce competition in the service provider space.
(Underperform, $126 Target Price) – Total revenue forecasted to decelerate from recent highs, pressuring UI’s trading multiple. We are forecasting decelerated growth for UI’s key end-markets including WLAN and campus switching driven by macro trends and increased
UI competition. In our view, the capital allocation intensity is unsustainable and will not be able to counter expected revenue contractions.

Data Centers & Cloud Infrastructure
High Cloud Demand Remains Stable in 1H 2021, Elevated
Demand Levels Expected to Last Through 2021

Data Center Outlook Data Centers
Executive Summary
For 2021, we see the data center sector as well positioned to continue its rise in relevance and growth (despite recent share price pullbacks), driven by enterprise
momentum. We identify the data center environment to be presenting a major buying opportunity for medium to long-term investors and highlight the following key
drivers and observations embedded in our 2021 Outlook:
 Multi-Tenant Data Centers (MTDC) to See Solid Growth Due to Increasing Enterprise Strength in 2021, But Expect it in 2H: We believe industry commentary/channel checks
suggest that enterprise demand momentum should strengthen into 2021, acting as a strong tailwind versus 2020 performance, which was partially hindered by COVID-19, albeit still
maintaining a solid backdrop. Robust enterprise demand by 2H21 would boost both colocation and interconnection revenues for Outperform-rated EQIX, DLR, COR, and SWCH. We view
that enterprise demand will be especially strong in 2021 for a couple main reasons – (1) demand looked to be solid heading into 2020, but COVID-19 altered some plans for expansion,
as many companies deploying in smaller retail colocation environments chose to be cautious with spend in an uncertain environment; and (2) COVID-19 then acted as an accelerant for
digital transformation, turning many enterprises to a WFH model, and growing gaming and video streaming to new heights. All in, we believe the stars are aligned for enterprise
demand to accelerate in 2H 2021E creating a favorable situation for MTDCs. Importantly, see our 1Q21 channel checks slide to grasp the 2021 dynamics for timing.
 Hyperscale Capex Spend Projected to Grow 14.7%/5.4% in 2021E/2022E, Driving More Business to MTDCs: Hyperscale Capex is a leading indicator for the Multi-Tenant
Data Center industry largely because ~60% (2020 assumption) of all data center space, power, cooling, and interconnection is outsourced to third party data centers (MTDCs) rather than
built and maintained by the cloud service providers (insourcing). We expect this percent of outsourcing to begin indexing closer to the ~50% range through 2021E, largely a by-product of
the vast scale the MTDCs have gained over the last five years, driving even more business to MTDCs, especially wholesale providers that have specialized in large scale data center
developments across top tier markets. Notably, across Tier 1 European Markets cloud providers have been reported to outsource almost 100% of capacity as they seek to collaborate
with experienced operators when globally expanding.
 Backlog Intensity Has Surged Above 2018 Highs: MTDC backlogs remain high as of 4Q20, and backlog intensity (backlog / last quarter’s annualized revenue) has leveled at 8.5%,
above the last major high water mark levels seen in mid-2018 (6.4% in 3Q18). We expect intensity to come down slightly in 2021E as major data center builds are delivered to
customers, commencing backlog revenues. Review: Using history as a guidepost, following the 1H18 high backlog intensity levels, 2019 was a year of pronounced outperformance with
strong commenced leases, revenue growth, and further follow-on leasing activity, strengthening the financial visibility and supply chains of MTDCs. We expect 2021E to see similar
characteristics as 2019, a year that several publicly traded data centers outperformed market indices and comparable asset classes.
 Valuation – Following a Cooling Period, Data Centers Are on Sale: Data Center shares are trading at 19x EV/FY+2 EBITDA, versus their August 2020 peak of 22x and we think
this presents an attractive entry point opportunity given the aforementioned indicators/dynamics and the fundamental strength yet to come in a lease commencement year of major
backlog builds. Note, we believe it is possible that DC REITs could remain a victim to broader sector rotation, however we believe this dynamic has mostly played out and it will take a
backseat to inflections in data center topline, EBITDA, and AFFOS growth as the year goes on, resulting in a share price momentum throughout 2021.
Key Stock Picks:

 COR (Outperform, $156 Target Price, 28% upside) – Following challenged lease renewal pricing and elevated churn in the last two years, churn, lease renewal rates, and overall
revenue growth are set to improve in 2021 based on company guidance and our review of enterprise end market dynamics.
 EQIX (Outperform, $942 Target Price, 38% upside) – As EQIX extends its scale more easily and establish itself with a wider spectrum of channel partners, its interconnection
revenues should grow at 2x the colocation market revenues through 2024 and EQIX remains the dominant interconnection vendor globally. All in, a premium multiple is warranted, in our
view.
 SWCH (Outperform, $19 Target Price, 10% upside) – Longer-term, we expect SWCH to grow ahead of MTDC peers on revenue and EBITDA, despite churn headwinds in 2021,
due to its highly power-dense facilities which address large workload applications. Despite its strong growth outlook, SWCH still trades at a meaningful discount to the peer group.
 DLR (Outperform, $167 Target Price, 17% upside) – We are constructive due to strong hyperscale/enterprise demand, improving renewal spreads, and better European positioning
(InterXion assets). We expect DLR’s development yields to climb to the 12%+ range given these factors and increased cross-selling.

Data Centers Versus Market Returns (Stock Prices) Data Centers
Data Center Shares Have Roughly Matched the S&P 500 Since 2018 Until Recently;
Performance to Improve Due to Secular Tailwinds, in Our View.
Data Center share prices have now nearly matched the performance of the Dow Jones Equity REIT index and but lagged the S&P 500 since January 2018. Following the
COVID-driven market pressures in 1Q 2020, public cloud providers’ performance has vastly outpaced the data centers. We believe that gap is likely to narrow given powerful
secular data center tailwinds, such as Edge, 5G, hybrid cloud, and the exponential growth of data creation/consumption.
300
Data Center Performance Has Softened of Late,
Expected to Strengthen in 2021 on Continued
250
Cloud Demand and Further Lifted by Enterprise.
Logarithmic Scale for Share Prices (Base 100)
200
150
100
50
0
1/1/2018 1/1/2019 1/1/2020 1/1/2021
CS Data Center Index S&P 500 Index Dow Jones Equity REIT Index AMZN MSFT GOOGL ORCL IBM
Source: Factset, Credit Suisse Research. Data Center Index includes EQIX, DLR, COR, CONE, SWCH, & QTS.

Data Centers Versus Market Returns (Stock Prices) Data Centers
Data Centers Have Underperformed the Broader Market Since the Announcement of
the COVID-19 Vaccine with Investors Buying Into Other Parts of the Market.
Data Center share prices have lagged other parts of the market in recent months. Since the end of October (about when the market was beginning to understand vaccines
would shortly be on the horizon), our Data Center Index has been up about 2%, while the S&P, DJ Equity REIT Index, and MSCI US REIT Index have gained 23%, 21%, and
24%, respectively. Despite recent moves, we view Data Centers are positioned for a re-rating in 2021, driven by continued growth and overall tech infra demand.
130
125 Data Center Performance Lagging Broader REIT

and Market (S&P 500) Indices
120
115
110
105
100
95
90
85
80
10/29/2020 11/29/2020 12/29/2020 1/29/2021 2/28/2021 3/31/2021
CS Data Center Index S&P 500 Index Dow Jones Equity REIT Index MSCI US REIT Index
Source: Factset, Credit Suisse Research. Data Center Index includes EQIX, DLR, COR, CONE, SWCH, & QTS.

Data Center Returns (EBITDA Multiples) Data Centers
Data Center EBITDA Multiples Expanded Post-COVID; But Multiples Have Recently
Eased Largely Due to Vaccine Rotation and Tough Compares.
30.0x
DC EV/EBITDA Multiples Compressed in

25.0x 1Q21 Reflecting Sector Rotation, and Are
Now Below Jan-2020 Levels…
20.0x
EV/FY2 EBITDA
15.0x
10.0x
5.0x
Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20
QTS COR CONE DLR INXN EQIX SWCH Average
Source: Factset, Credit Suisse Research.

Data Center & Tower Returns (Indexed Stock Prices) Data Centers
Rising LT Interest Rates Have Punished DCs and Towers Much More Harshly Than
Broader REITs, Despite Similar Levels of Leverage and Capital Intensity.
10yr rates have moved roughly 1.7%, and while the recent trend is a negative for the REITs industry, nominal (and real) yields remain historically low.
Expectations for the level of interest rates are also low, which is beneficial for data centers and towers moving forward. In our view, as long as rates hold
below 2018 levels, we believe the outperformance of Data Center and Tower REITs can be sustained, assuming secular tailwinds are intact.
200 3.5%
180
3.0%
160
2.5%
140
120
2.0%
100
1.5%
80
60 1.0%
40
0.5%
20
0 0.0%
1/1/2018 1/1/2019 1/1/2020 1/1/2021
CS Data Center Index CS Tower Index S&P 500 Index Dow Jones Equity REIT Index 10 YR Note (%)

Outlook: Channel Checks for 1Q 2021 Results Data Centers
Our Channel Checks Include Inputs From: (1) Wholesale and Retail DCs (Colocation);
(2) Hybrid Cloud Vendors (Managed Services & Web Hosting Providers, etc.); (3) Real
Estate Brokers; (4) DC Builders; and (5) Private Equity Industry Contacts.
Customer Type Channel Check Summary
Leasing Activity: 1Q21 has been observed to be similar to 4Q20, albeit without new record leasing levels compared to 1H20 quarterly run-rates.
The most recurring message this quarter was “hyperscalers are signing all their Right Of First Refusals (ROFRs),” which is signaling a
continued low supply-high demand market setup in 2021. The implication is actually very bullish for the sector and is continued evidence that
there is a supply shortage for data center capacity in the market. Another interesting data point we heard was that hyperscalers have been very
Cloud Service active “land banking” across markets, suggesting a large cycle of insourcing beyond 2022 for future compute infrastructure needs and this may
Providers & also explain why hyperscale capex spending growth for 2021 has been revised up since 4Q20 reports, factoring in sizeable land purchases.
Technology Pricing: Pricing for 5MW+ remains very competitive but the new pricing trough remains $70/kW for 10MW multi-block (10MW x 3), which
Companies compares to ~$65/kW that we were hearing about in 2019/2020. Major lease vintage renewals continue to be double digit negative but this is
expected to ease in 2021E, DLR a key winner here, seeing better comps. Connectivity: Web Traffic levels have stabilized further in 1Q21
vs. 2020. Cloud On-ramps continue to be of highest strategic importance for cloud, hyperscale, and technology service providers as network
node distribution and enterprise customer harvesting continues to be a focus area for high revenue growth. DLR called out and remains well-
positioned on the wholesale colocation side to deal with pricing, tight capacity supply and ramping cloud growth globally, especially in Europe.
Leasing Activity: Overall, behind our expectations, which were high in 4Q20 for 1Q21. We have heard numerous reports that enterprise deals
that began negotiations in 2020 were delayed in 1Q 2021 with the following reasons mentioned: (1) WFH/in office staff rightsizing taking more
time to figure out; (2) Solarwinds hack leading to network vulnerability assessments, slowing system integrator selection; and (3) chip/supply
shortages for IT solution gear also called out as an issue. Other factors include equipment refreshes and public cloud ecosystem lock-in as
decelerators to the enterprise cloud transition. We are now hearing that a big bulge of enterprise deals won’t get signed until May-June 2021 and
Enterprise
will commence in 2H21. Beyond the slowdown, DC operators continue to expect 2021E to be a big enterprise leasing year across
Companies
customer verticals. Government deal flows slowed down further in 1Q21 vs. 2H20. Pricing: Very stable pricing across markets and operators,
most DC operators reporting strong pricing and renewals per checks as tier 1 retail colo market supplies get tighter.
Connectivity/Ecosystem/Channel: Interconnection ecosystem and channel remain strategically imperative for enterprises to deploying into your
infrastructure, specifically calling out SaaS, SDN, Cloud On-ramps as requirements for deployment. EQIX/COR/SWCH are key winners here
given rising tide of enterprise demand expected in mid-2021; DLR strong in Americas and even stronger in EMEA.
Activity: Very active in 1Q21 with continued strong demand. Cable network checks indicating a very active 1Q21 compared to 2H20, perhaps
Telecoms & Networks
suggesting they are now upgrading systems following the telco analyst days in mid-1Q21 and Federal funding proposals/bills.
Other Customer
Gaming Companies: Very active in capacity deployments across numerous geographies.
Types

Outlook: 2021 Could be a Repeat of 2019 Data Centers
Based Our Review of 2019 Data Center Performance and Stock Returns, We Believe
That 2021 May be Comparable in Return/Growth, Supporting Our Upside Bias.
Fundamentally, 2021 has a similar looking setup as 2019, which was a year the data center group returned 48% on average, not including dividends. First (1), on
revenue growth, 2021E is expected to grow slightly behind 2019 (+9.5% versus +10.1%) as major data center developments signed in 2H20 are set to commence in 2H21 due to
supply constraints. Second (2), Adj. EBITDA Growth is expected to trail topline growth in 2021E but margins remain healthy. This dynamic is also being driven by major leasing
commencements, but with added enterprise strength bolstering revenue growth alongside lower churn levels. Additionally, we believe there are elements of conservatism in mgmt.
initial 2021 guidance. Third (3), AFFO per share decelerated in 2019 to low single digits due to M&A and dilution from development funding and in 2021E we expect the AFFOS to
accelerate from 2020 levels, driven by greater scale and stronger balance sheets. Fourth (4), given the fundamental improvements in the 2021E data center cycle versus the last
comparable one in 2019, we expect strong stock returns in 2021E with (5) scope for multiple expansion given recent compression, similar to what we saw in the 2019 cycle (when
it was compared to 2018). We expect 2021 returns to be composed of both bottom-up performance and to see valuation multiple expansion as data centers gain
further investor interest if the enterprise strength our channel checks and industry compiled data points are accurate.
MTDC Metrics
1 1 3 3
2018 2019 2020 2021E 2018 2 2019 2020 2 2021E 2018 2019 2020 2021E
Revenue Growth Adj. EBITDA Growth AFFOS Growth
EQIX 16.1% 9.7% 6.5% 10.6% EQIX 17.6% 11.4% 6.1% 9.1% EQIX 11.9% 10.4% 8.5% 9.4%
DLR 23.9% 5.3% 21.6% 10.5% DLR 27.2% 2.7% 15.9% 10.5% DLR 10.5% -2.2% -1.7% 1.4%
COR 13.0% 5.2% 6.0% 7.0% COR 12.5% 4.1% 5.3% 6.0% COR 26.2% 5.9% 0.6% 2.6%
CONE 22.2% 19.5% 5.3% 8.9% CONE 21.7% 13.3% 4.9% 8.5% CONE 9.1% 5.1% 8.5% 0.7%
QTS 0.9% 6.7% 12.2% 12.9% QTS 7.8% 11.7% 19.2% 12.6% QTS -6.8% -1.6% -1.5% 11.8%
SWCH 7.3% 13.9% 10.7% 7.4% SWCH 3.6% 14.2% 16.4% 6.5% SWCH - - - -
Group Average 13.9% 10.1% 10.4% 9.5% Group Average 15.1% 9.5% 11.3% 8.9% Group Average 10.2% 3.5% 2.9% 5.2%
Backlog Intensity Share Price Returns* EV/FY+2 EBITDA
4 65% 5
EQIX - - - - EQIX -22% 24% -5% EQIX 15.8x 18.0x 22.8x 19.5x
DLR 3.1% 3.7% 6.3% - DLR -7% 11% 20% 0% DLR 16.9x 19.0x 22.0x 19.7x
COR 2.6% 3.4% 3.5% - COR -24% 30% 17% -5% COR 14.7x 16.0x 18.6x 17.2x
CONE 6.1% 5.1% 9.4% - CONE -11% 23% 15% -7% CONE 14.7x 16.4x 19.0x 17.0x
QTS 13.9% 18.8% 26.8% - QTS -33% 47% 18% 2% QTS 14.5x 15.8x 18.1x 15.9x
SWCH - 7.7% 9.8% - SWCH -62% 115% 12% -2% SWCH 15.6x 17.0x 16.3x 14.9x
Group Average 6.4% 7.7% 11.2% - Group Average -27% 48% 18% -3% Group Average 15.4x 17.0x 19.5x 17.4x
Source: Company data, Credit Suisse estimates. *2020 share price returns are YTD through 12/29/20.

Data Center Industry Surveys (Published March 2021) Data Centers
Industry Surveys Suggest Public Cloud Demand is Shifting Towards Hybrid and
Multi-cloud Approaches, With IT Budgets Allocating Increasing Spend to Off-prem.
Omdia’s colocation and cloud services surveys published on March 2021, were composed of 140+ respondents each and based on collected responses in November 2020. Based on
the company sizes of the responders, we view these surveys as good barometers of the overall cloud and colocation industry to gauge enterprise demand and IT architecture changes. Our
view of Enterprise acceleration in 2021 coincides with our channel checks and these Omdia surveys. Additionally, for four of these categories we estimate category forecasts based on our
own channel checks and due diligence. Our findings below are based on the consumption of both Omdia surveys covering cloud/colocation changes in IT architectures.
Survey Question: Which types of cloud service architectures does your organization use now, and what will it Key Survey Findings:
(1) Public Cloud – Sizeable downtick registered by
be using by year-end 2022?
enterprise spenders for public cloud seeing 77% of
responders today and moving down to 48% by year-
end 2022. With clear shifts into off premise private cloud,
Public cloud 77% hybrid clouds and multi-cloud models. Note, 2020 was a
48% big year for public cloud as the pandemic made it difficult
for enterprises to deploy other types of IT models.
On-premises private cloud 53% 62% (2) Off-premises Private Cloud – Noticeable uptick
in this category moving from 40% of architectures
40% today to 49% by year end 2022. Furthermore, we see
Off-premises private cloud 49%55% this category going to ~55% by 2023E driven by
41% increased colocation demand and better connectivity
Community cloud options in colocation DCs rather than in on premise
43% enterprise environments.
(3) Hybrid Cloud – Noticeable step up in responder
49%
Hybrid cloud 56% votes to 56% of total responders by year end 2022,
70% but even bigger to 2023 in our view. We believe this
27% will become a dominant architecture by 2023E driven by
Off-prem hybrid cloud 40% more optimized IT consumption models by both hardware,
50%
software, and cloud companies.
31% (4) Multi-cloud – Big step up to 2022 as well, driven
Multicloud 44% 65% by the same forces highlighted in our Hybrid Cloud
view. We believe this category should also see significant
Don't know 0%
1% adoption among enterprises.
Bottom-line and Stock Impacts: Given the
aforementioned findings, EQIX, DLR, COR, SWCH,
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% QTS, ANET, FFIV, CSCO, and JNPR in our coverage
are best positioned. However, strong execution will
be required to win enterprise business, a feat that
Now Year-end 2022 Credit Suisse Est. 2023E only some of the above names posses.
Source: Credit Suisse Research, Omdia Colocation Service & Leadership Strategies March 2021 (N=142), Omdia Cloud Service Leadership Survey March 2021 (N=154).

Industry Surveys Suggest Public Cloud Demand is Shifting Towards Hybrid and
Multi-cloud Approaches, With IT Budgets Allocating Increasing Spend to Off-prem.
Survey Question: Approximately, how many cloud service providers does your organization
currently use, and how many do you expect to be using by year-end 2022? Enterprises are increasing the number of Cloud SPs they
25 are using and we expect the number of Cloud SPs they are
using to inflect even higher by 2023E. Note, when the number
21 of Cloud SPs increases, this does not mean that Public Cloud
20
18 increases, but the number of providers that offer their services in a
cloud native consumption model is increasing. This data point
complements the architecture data points highlighted on the prior
15
13 slide.
10 Survey Question: Approximately, what percent of your cloud service providers are used for SaaS
or IT infrastructure now, and what do you expect by year-end 2022?
100%
5
90%
26%
80% 39%
0
70%
Now Year-end 2022 Credit Suisse Est. 2023E
60% 29%
As the number of Cloud SPs used by enterprises increases, 50%
28%
enterprises are using Cloud SPs for specific services, 40%
capabilities, and tools. Today 45% of enterprises are using the same 30%
provider for Both SaaS and IT Infrastructure, but by the end of 2022 this 45%
20%
goes down to 33% and 39% of Cloud SPs will be IT Infrastructure only. 33%
10%
Differentiation among Cloud SPs is the next competitive frontier for
major providers. As the number of providers and offerings increase, this 0%
Now Year-end 2022
is a positive reinforcing cycle for the MTDC industry, and exceptionally
better for interconnection dense players. Both SaaS and IT infrastructure SaaS-only IT infrastructure only

Industry Surveys Suggest Big Shift to Colocation DCs, Driven by Hybrid/Multi cloud.
18% of Total IT Budgets for Colocation Expenses by YE 2022 from 14% 64% of IT Racks Deployed in Colocation DCs by YE 2022 from 52%
Today. We See 22% by 2023E Driven by Hybrid Cloud Architecture Shift. Today. We Est. 70% by 2023E.
25% 80%
22% 70%
70% 64%
20%
18%
60%
52%
15% 14% 50%
40%
10%
30%
20%
5%
10%
0% 0%
Now Year-end 2022 Credit Suisse Est. 2023E Now Year-end 2022 Credit Suisse Est. 2023E
For IT Workload Placements, Colocation to Take 45% of Total Share by For Number of DCs in Use, by YE 2022 42% of Enterprises Expected to
2023E, Up From 35% Today. be Deployed in 10+ DCs, Moving to 47% by 2023E
100%
100% 6%
90%
90%
35% 30% 30% 80% 42%
80% 34% 47%
70%
70%
60%
60%
37% 50%
50%
35% 45% 40%
40% 47% 41%
30% 44%
30%
20%
20%
30% 33%
10% 25% 10%
13% 16%
1% 9%
0% 0%
0%
1 2 to 4 5 to 9 10+
On-premises data centers Colocation data centers Cloud SP data centers

Enterprise Remains Underpenetrated Data Centers
As of 4Q 2020 Data Center Operator Results, Enterprise Revenue Mix Remains

Relatively Low for Key Interconnect Dense Players EQIX, DLR, COR, and SWCH.
Following 4Q 2020 data center leasing and sector performance results, we continue to believe that there is a sizeable opportunity for the data center operators to
attract enterprise customers, including Financial Services, Government, Healthcare, Retail, Education, Industrial and other customer categories. The average percent
of revenue from Enterprise customers in 4Q 2020 across the major data center operators was ~25% of total revenues whereas the cloud mix was ~36%,
highlighting the potential revenues mix ahead since MTDCs are geared broadly to overall IT needs, but should be indexed more to Enterprise customers over time
given their hybrid cloud plans and their ramp in deployments to colocation environments (click: highlighted in the survey data points slide). Based on our estimates,
the Government, Healthcare, and Education industries alone make-up ~10% of data center operator revenues. We believe these industries will be data center
operator focus areas in 2021E, in addition to the already heavy financial services customer focus, assisting them in adopting the latest technologies for cloud,
connectivity, and edge application infrastructure.
60%
Revenue Mix (4Q 2020 Results)
50%
44%
40%
30% 28%
26%
23%
21%
20%
11%
10%
0%
EQIX DLR CONE COR SWCH QTS
Cloud/IT Network Content Enterprise/Fins* Healthcare* Gov./Utilities* Education*
Source: Company data, Credit Suisse Estimates. Note: Content Category Credit Suisse Estimated for COR and CONE.

Data Gravity to Intensify Over Next Four Years Data Centers
Increasing Digitization of Enterprise Workflows Driving Multi-year Growth.

DLR’s Data Gravity Index Score utilizes data from 2000 global enterprises across 53 metros and 23 industries. The score measures the intensity and gravitational
force of enterprise data growth and is measured in gigabytes per second, providing a relative proxy for measuring data creation, aggregation and processing.
According to DLR’s forecast, total data gravity intensity (Gigabytes/second) is expected to grow at a 139% CAGR from CY20-24, highlighting that enterprises
will continue to increase their digital infrastructure at an accelerating pace, a secular trend that will benefit both sides of our coverage,
communications infrastructure and networking equipment. Examining the individual sectors, we highlight that the banking & financial services sector’s data
gravity intensity is expected to grow the quickest over the next four years at a 144% CAGR from CY20-24.
Global Data Gravity Intensity By Industry (Gigabytes Per Second) Banking/Financial Services Sector Data Intensity to Grow Fastest
257.1 1000.0
Manufacturing
7.3 866.7
900.0
244.2
Insurance 800.0
7.0
Gigabytes per Second

700.0
180.5
Professional Services
5.5 600.0
49.5 500.0
Retail
1.6
400.0
37.8
Mining & Natural Resources
1.4 300.0
36.8 200.0
Pharmaceuticals & Chemical
1.1
100.0
23.5
0.0 50.0 100.0 150.0 200.0 250.0
0.0
Gigabytes per Second 2020 2024
2024 2020
Source: DLR Data Gravity Index. 2020.

Cloud SP vs. MTDC Market Growth Through 2024E Data Centers
Cloud Service Provider Market CAGR

($ millions) 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 13-'18 19-'24
Infrastructure as a Service (IaaS) 30,525 33,906 42,348 58,601 76,459 95,579 112,684 126,395 136,439 143,315 27.1% 13.4%
Y/Y Change 17.2% 11.1% 24.9% 38.4% 30.5% 25.0% 17.9% 12.2% 7.9% 5.0%
Cloud as a Service (CaaS) 6,419 10,191 16,496 27,150 39,376 55,507 70,957 83,211 91,543 96,632 69.9% 19.7%
Y/Y Change 70.2% 58.8% 61.9% 64.6% 45.0% 41.0% 27.8% 17.3% 10.0% 5.6%
Platform as a Service (PaaS) 5,697 9,343 16,509 26,563 39,138 52,783 65,299 75,088 81,834 86,086 82.4% 17.1%
Y/Y Change 77.4% 64.0% 76.7% 60.9% 47.3% 34.9% 23.7% 15.0% 9.0% 5.2%
Software as a Service (SaaS) 47,498 54,909 59,082 82,258 97,787 122,808 147,369 169,439 187,744 201,938 32.4% 15.6%
Y/Y Change 53.0% 15.6% 7.6% 39.2% 18.9% 25.6% 20.0% 15.0% 10.8% 7.6%
Total CSP Revenue 90,138 108,350 134,436 194,572 252,760 326,676 396,308 454,133 497,559 527,971 36.5% 15.9%
Y/Y Change 40.7% 20.2% 24.1% 44.7% 29.9% 29.2% 21.3% 14.6% 9.6% 6.1%
Cloud Service Provider Revenues Are Growing at a 15.9% CAGR from $253bn in 2019 to $528bn in 2024E: The most significant attributor to the growth of
Data Center REITs (MTDCs) in the past few years has been its indexation to rapid growth of the Cloud Service Providers, building hyperscale data center campuses
and interconnecting latency sensitive applications, largely driven by the major Big5 public cloud players Amazon Web Services (AWS), Microsoft Azure, Google Cloud
(GCP), Oracle Cloud, and IBM Cloud. Even though MTDCs are growing at ~50% the rate of CSPs, we do not see the growth rate decelerating within the
next 10yrs, largely driven by overall cloud infrastructure demand that is growing faster.
Multi-Tenant Data Center Market CAGR

($ millions) 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 13-'18 19-'24
Colocation 16,314 19,121 20,968 23,637 26,431 27,850 29,399 31,370 33,793 36,579 11.6% 6.7%
Y/Y Change 8.0% 17.2% 9.7% 12.7% 11.8% 5.4% 5.6% 6.7% 7.7% 8.2%
Interconnection 1,643 1,900 2,163 2,463 2,761 3,080 3,451 3,862 4,341 4,902 13.3% 12.2%
Y/Y Change 10.8% 15.7% 13.8% 13.9% 12.1% 11.6% 12.1% 11.9% 12.4% 12.9%
Total MTDC Revenue 17,957 21,021 23,131 26,101 29,192 30,930 32,850 35,232 38,134 41,481 11.8% 7.9%
Y/Y Change 8.2% 17.1% 10.0% 12.8% 11.8% 6.0% 6.2% 7.3% 8.2% 8.8%
Total MTDC % of IaaS 58.8% 62.0% 54.6% 44.5% 38.2% 32.4% 29.2% 27.9% 27.9% 28.9%
Interconnection Attach To Colo 10.1% 9.9% 10.3% 10.4% 10.4% 11.1% 11.7% 12.3% 12.8% 13.4%
MTDC Market Is Growing at a 7.9% CAGR from $29bn in 2019 to $41bn in 2024E: Based on market projections, the MTDC market is projected to maintain
the 7.9% CAGR level not only through 2024 but beyond, driven by a combination of factors including lease price escalators (average at ~2% per year), higher
demand for power (that is being passed through to the customer), space, and interconnectivity (cloud on-ramps, SDN on-ramps, Software Co. Pops) to accelerate
processes. We note that MTDC revenues comprise of colocation revenues and interconnection revenues. Given MTDC market’s relevance to the public cloud
ecosystem, we believe our 7.9% CAGR estimate may prove conservative especially after considering the overall Cloud SP market is 15.9% CAGR
though 2024E (see above). Note: MTDC forecasts above do not include M&A/divestitures from non-MTDC industries selling into MTDC (like Enterprise DCs).
Source: Omdia, Credit Suisse Research.

MTDC and Cloud SP Market Share (as of 2H20) Data Centers
EQIX/DLR Remain Dominant Forces, Expected to Advance Further with Expanded

Global Reach via Recent M&A.
Colocation Market Share: Digital Realty’s acquisition of InterXion raised its share to ~13% on a combined basis, behind the leading colocation
provider, Equinix (~19%). That said, the industry still remains significantly fragmented, with many private colocation providers around the world. We
believe consolidation is only expected from a base of ~500 individual operators.
Cloud Service Provider Market Share (IaaS and CaaS Only): For cloud service providers, Amazon’s AWS unit remains the largest industry
constituent, but Microsoft (Azure), Google (GCP), and Alibaba (Alibaba Cloud) are all focusing on growing their cloud platforms, in addition to a number
of other software-focused companies with upstart platforms. Notably, most enterprise customers want a variety of public cloud service providers, forcing
formidable runner-ups in the CSP sector. For now, AWS, MSFT, and Google are ~50% of the CSP market.
EQIX is the Largest DC In a Very Fragmented Industry AWS Remains the Dominant CSP, But Azure is Gaining Ground
Switch, 2% *IaaS & CaaS only

QTS, 2%
GDS, 2% Microsoft, 14%
Coresite, 2% Amazon, 30%

China Unicom, 2% Google, 5%
Cyxtera, 2%
All others, 46% Alibaba, 4%
NTT, 3%
CyrusOne, 3% China Telecom, 3%
China Telecom, 4% IBM, 2%

Digital Realty, 13% SAP, 2%
Equinix, 19%
Equinix Digital Realty China Telecom CyrusOne All Others, 38%
NTT Cyxtera China Unicom Coresite

GDS Switch QTS All others All Others Amazon Microsoft Google Alibaba China Telecom IBM SAP
Source: Omdia, Credit Suisse Research

MTDC Versus Cloud Data Centers Data Centers
Cloud Service Providers and MTDC (Colocation) Providers are “Natural Allies, Not
Competitors,” With the Rate of Cloud SP Outsourcing Increasing Overtime.
Multi-Tenant Data Center (Colocation) Cloud Service Provider (CSP) Data Center
Colocation is about more than just data center facilities. Some A CSP data center is generally not directly accessible to the public
colocation data centers offer a host of services including managed I.T. to the and connections to the cloud are made typically through colocation.
hybrid cloud. They can also provide greater power density, which is key to Much of a CSP’s data center is customized and tend to be shrouded in
quickly scaling and supporting new technologies. Several providers even offer secrecy relative to a colocation facility. These facilities can also be much
a direct connection to the top public cloud providers such as AWS, GCP, larger and operate at higher capacities than a typical data center. CSPs tend
Azure, etc. to be selective with their locations and customers are not allowed in to install
their own servers.
Pros: Great option for the service provider, much cheaper than building own
Pros (Pure Cloud Play): Great option for organizations to focus on
data center, data and electrical power redundancies, data center
delivering solutions, more cost effective, improvements in rolling out cloud
infrastructure management (DCIM), infrastructure professionals for technical
services quickly, lowers I.T. operating costs, major driver for outsourcing,
on-site support (remote hands), physical and logical security, interconnection
outsourcing without losing secure information, and the host is responsible for
benefits
HVAC, electrical power, and I.T. equipment
Cons: Managing equipment technologies can be burdensome, requires I.T.
staffing, dependent on hosts’ network connections, electrical power, HVAC, Cons: Diminished control of I.T. resources, requires SLA agreements,
requires leasing, costly OPEX and CAPEX, I.T. infrastructure become more requires OPEX costs, platform and equipment dependent, all hosts not equal
complex to manage security concerns, potential compliance issues regarding security regulations

Interconnection Growth Extends Data Centers
Network Interconnection Proliferation Remains a Significant Driver, Led by

Telecoms, Clouds, and Digital Media Industries…
Examining EQIX’s global forecast data, we can see that interconnection installed bandwidth capacity (Tbps) is expected to grow at a 45% CAGR from CY19-23,
a positive dynamic for both comm. infrastructure and equipment. We highlight that the telecom & government sectors’ bandwidth capacity are forecasted to expand the
fastest over the next three years growing both at a 48% CAGR from CY19-23.
18000
Other
16000 Government & Education
Interconnection Installed Bandwidth Capacity (Tbps)
Healthcare & Life Sciences

14000
Wholesale & Retail Trade
Energy & Utility
12000
Business & Professional Services
10000 Manufacturing
Securities & Trading
8000 Banking & Insurance
Content & Digital Media
6000
Cloud & IT Services
Telecommunications
4000
2000
0
2019 2020 2021 2022 2023
Source: EQIX GXI Volume 4. 2020.

Interconnection Growth Through 2024E Data Centers
Growth Across Regions Should Also Be Strong, Led by Asia. Importantly

Interconnection Attach Rates Expected to Increase Through 2024E, Driven by Cloud
and Enterprise Activity Within IT Dense Data Center Facilities.
Interconnection Market Across Regions CAGR
($ millions) 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 15-'18 19-'24
Americas Interconnection Revenue 931 1,088 1,255 1,397 1,529 1,692 1,882 2,091 2,334 2,617 14.5% 11.4%
Y/Y Change - 16.9% 15.3% 11.4% 9.4% 10.7% 11.2% 11.1% 11.6% 12.1%
Asia Interconnection Revenue 332 404 450 543 652 743 850 971 1,113 1,282 17.9% 14.5%
Y/Y Change - 21.7% 11.5% 20.7% 20.0% 13.9% 14.4% 14.2% 14.7% 15.2%
EMEA Interconnection Revenue 380 408 458 522 580 645 719 800 894 1,003 11.2% 11.6%
Y/Y Change - 7.3% 12.2% 14.1% 11.0% 11.1% 11.5% 11.2% 11.7% 12.2%
Total Interconnection Revenue 1,643 1,900 2,163 2,463 2,761 3,080 3,451 3,862 4,341 4,902 14.5% 12.2%
Y/Y Change - 15.7% 13.8% 13.9% 12.1% 11.6% 12.1% 11.9% 12.4% 12.9%
Interconnection continues to gain importance to colocation Interconnection Revenues Have Outpaced Colo Revenues Since
providers, as shown in the chart to the right. As data integration, 2016 and This Momentum is Not Expected to Slow
Point of Presence (PoP) cross connection, and low latency 45,000 14%
Colo & Interconnection Revenue ($ mil)

capabilities become even larger priorities for enterprises, we expect 13%
13%
Interconnection Attach to Colo

40,000 12%
the interconnection market to continue to outpace colocation growth 13%
35,000
by 400+ bps. In light of this view, we are positive on EQIX and
30,000 12%
SWCH mainly (and would highlight COR’s and DLR’s direct
indexation to this trend as well given COR legacy and DLR’s recent 25,000 12%
11%
interconnection dense acquisitions, like INXN/Westin Building), 20,000 11%
given their established interconnection and colocation revenues, 15,000 10% 10%
10% 10%
boasting robust customer ecosystems across cloud, service provider 10,000 10%
9%
and enterprise. We highlight key data center metrics in the following 5,000
slides that support our view that interconnection density should 0 8%
increase in coming years, partially driven by a significant enterprise 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E
customer transition to deploy Hybrid cloud environments and reap
Colocation Interconnection Interconnection Attach to Colo
direct connect benefits.

Interconnection Market Growth Data Centers
Interconnection Growth Expected to Continue at High Growth and High Attach

Rates Over The Next Year with EQIX-AMER and COR Leading.
Interconnection Will Continue to be a Dominant Driver in the MTDC Industry: Interconnection revenue mix has gradually increased, while mostly sustaining
double digit growth, and we project this trend to continue into 2021, with interconnection mix approaching 13%. EQIX-Americas, EQIX-Global, and COR have notably
higher exposure to interconnection revenues than the peer group, but every MTDC has grown its interconnection mix from 2018 to 2020. Note, CONE and QTS
forecasts are high comparably but off very low basis from a % of revenue perspective.
Interconnection Revenues
($ millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021E 2Q 2021E 3Q 2021E 4Q 2021E
EQIX-Global $195 $198 $202 $207 $213 $219 $227 $235 $242 $249 $261 $271 $278 $285 $293 $300
y/y growth 31.7% 19.3% 12.6% 10.3% 9.1% 10.8% 12.2% 13.4% 13.8% 13.9% 15.1% 15.2% 15.0% 14.2% 11.8% 10.4%
Interconnection Mix 16.0% 15.7% 15.7% 15.8% 15.6% 15.8% 16.2% 16.6% 16.8% 17.0% 17.2% 17.3% 17.7% 17.6% 17.6% 17.6%
EQIX-Americas $129 $132 $134 $137 $139 $142 $146 $149 $151 $153 $157 $161 $165 $169 $172 $174
y/y growth 28.2% 13.3% 7.9% 7.2% 7.2% 8.2% 9.0% 9.1% 8.9% 7.7% 7.2% 7.3% 9.4% 10.1% 9.4% 7.8%
DLR $61 $62 $63 $64 $68 $64 $65 $66 $70 $85 $86 $86 $89 $92 $94 $97
y/y growth 7.2% 6.0% 4.9% 5.9% 11.1% 4.0% 4.1% 2.8% 2.4% 33.0% 31.3% 32.0% 28.3% 8.6% 12.0% 14.8%
COR $17 $17 $18 $18 $18 $19 $19 $19 $20 $21 $21 $22 $21 $22 $23 $25
y/y growth 14.1% 13.7% 9.3% 10.9% 11.2% 7.8% 7.8% 8.0% 9.1% 11.3% 10.8% 11.4% 9.5% 8.7% 15.8% 17.3%
CONE $10 $10 $10 $11 $11 $12 $13 $13 $13 $14 $15 $15 $15 $16 $16 $16
y/y growth 20.5% 18.8% 13.3% 17.4% 15.5% 19.8% 24.5% 20.4% 17.9% 14.9% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%
QTS $7 $7 $9 $8 $8 $9 $10 $10 $10 $10 $11 $13 $11 $12 $12 $14
y/y growth 15.0% 15.0% 15.0% 17.6% 15.0% 15.0% 15.0% 15.0% 15.9% 17.0% 8.2% 15.0% 15.0% 15.0% 15.0% 15.0%
SWCH $4 $4 $4 $4 $4 $4 $4 $5 $5 $5 $5 $5 $5 $6 $6 $6
y/y growth 9.6% 10.9% 5.2% 9.7% 15.6% 3.2% 17.6% 16.8% 16.5% 37.2% 21.4% 21.2% 21.8% 16.7% 19.1% 18.5%
Total InterC Revenues $293 $298 $305 $312 $323 $327 $338 $347 $360 $385 $398 $411 $419 $432 $445 $459
y/y growth 10.1% 9.6% 10.8% 11.2% 11.4% 17.9% 17.8% 18.5% 16.6% 12.2% 11.7% 11.6%
Source:, Credit Suisse estimates, Company data. Total InterC Revenues excludes EQIX-Americas as it is accounted for in EQIX-Global.

On-Ramps Remain Core to MTDC Scale-out Data Centers
Cloud On-Ramps Have Reached Critical Mass Deployment Within MTDCs.

160
140
On-Ramp 2020 Y/Y Increases:
AMZN +6% Y/Y
Number of Cloud On-Ramps (#)
120 GOOGL +29% Y/Y

IBM +24% Y/Y
100 MSFT +57% Y/Y
ORCL +43% Y/Y
80 RAX +30% Y/Y
BABA +56% Y/Y
60
VMW -11% Y/Y
40
20
Source: Credit Suisse Estimates, Cloudscene (12.30.2020), Company data. 2017 2018 2019 2020
SDN On-Ramps Have Also Scaled Significantly Within MTDCs, Elevating the
Strategic Importance of MTDC Nodes.
800 SDN On-Ramp Increases:

700
Megaport +27% Y/Y
PacketFabric +21% Y/Y
600 PCCW (Console Connect) +76% Y/Y
Number of On-Ramps (#)
500
400
300
200
100
2017 2018 2019 2020

Source: Cloudscene, Company data, CS estimates for Megaport & PCCW 2017

On-Ramps Are Key to Hybrid Cloud Buildouts Data Centers
SDN Fabrics Have Matured, but Hybrid Cloud Adoption Has Room to Run.
Although still in their early stages of growth, network fabric businesses are now critical to the data center market, as CIOs increasingly look to
buildout hybrid cloud infrastructure versus exclusively public or private clouds. Megaport’s hyper growth is beginning to decelerate slightly, as shown
below, and this is a positive showing industry maturity/standardization of connectivity; enterprises are increasingly using interconnection services through MTDCs.
20,000
18,145
18,000
16,712
16,000
Key Metric Growth is Beginning to

13,914
14,000 Decelerate, Signaling a
Stabilization/Maturity
Growth Trends
12,000 11,561
10,000
8,735
8,000
6,333 6,567
6,000 5,700 5,800 5,767
4,863 5,041
4,600
4,069
4,000 3,600 3,344
2,700 2,755
2,000 2,259
2,000 1,600
185 221 245 300 317 366 385

0
Data Centers (#) MRR ($) Ports (#) Total Services (#)
Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20

Note: Total services comprise of Ports, Virtual Cross Connections (VXCs), and Internet Exchange (IX)
Source: Company data, Credit Suisse Research.

CDN/System Integrators/SaaS Company PoPs/On-Ramps Major Drivers of Further

Enterprise Colocation Adoption. These Service Providers Are Fueling Further MTDC
Infrastructure Adoption, Accelerating Their Own Business’s Growth.
160
140
Enterprises Are Seeking Application
Service Ecosystems; Data Centers with One-
120
Stop-Shops for all application consumption.
# of PoPs
100
Expect PoP/On-Ramp Proliferation to
80 Continue Through the Next Five Years.
60
40
20
2019 2020
Source: Credit Suisse Estimates, Cloudscene (12.30.2020), Company data.

Cloud On-Ramps Versus SDN On-Ramps Data Centers
Cloud On-Ramps Software Defined Networking (SDN)
What is a Cloud On-Ramp? What is a SDN Fabric?

A Cloud On-Ramp is when an AWS, a GCP, an Azure, an IBM Similar to Cloud On-Ramps, SDN fabric service providers, such as
SoftLayer, or Oracle Cloud leases a small sized area (10-20 companies like Megaport and PacketFabric, enable dynamic, real-
cabinets) within a MTDC to establish a Point of Presence or "On- time connectivity services between major carrier-neutral colocation
Ramp" to make it very easy and seamless for other tenants within centers. This allows enterprises to virtually connect their IT
that facility to directly connect into public cloud platforms. This infrastructures through internet routing tables rather than
drastically reduces connectivity bottlenecks, constraints, and purchasing millions of dollars’ worth of IT equipment, and relieves
general engineering issues. Cloud on-ramps should not be enterprises of network issues, IT spending budget constraints, and
confused with a public cloud data center facility, since that is a engineering expertise required to launch a complex technology, like
completely different type of data center deployment and may also software-defined networking.
be deployed into an MTDC.
Cloud On-Ramps and SDN Fabrics provide greater incentives for enterprises to use MTDCs, drawing in enterprise clients and
interconnection networks. They act as enablers to further push the MTDC to new heights.
Source: Cloudscene, Credit Suisse Research.

Outlook: Hyperscale Capex Spend Growth Data Centers
Hyperscale Capex Spending Growth Projected to Accelerate Meaningfully in

2021E; Best Growth Since 2018, When MTDCs Grew Revenues Rapidly.
Hyperscale Capex is a leading indicator for the Multi-Tenant Data Center (MTDC) industry largely because ~half of all data
center space, power, cooling, and interconnection historically has been outsourced to third party DCs (MTDCs) rather than built and
maintained by the hyperscale / cloud service providers themselves. Based on our discussions with industry professionals and MTDC
construction data points, we expect this percent of outsourcing to be below 50% in 2021E versus the very high levels of
outsourcing (60%+) seen in 2020E largely driven by better hyperscaler predictability and DC development in tier 2, 3, and new
markets. For data center operators reliant on significant signings to maintain growth levels, this may be an issue, but for EQIX,
COR, and SWCH, we view this as a relatively neutral impact, with some impact to DLR.
Hyperscale CapEx CAGR (%)
Hyperscale Capex
($ millions) 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 14-'18 18-'22
FB $1,831 $2,523 $4,491 $6,732 $13,980 $15,102 $15,115 $22,322 $22,626 66.2% 12.8%
includes Capital
AMZN (AWS) $4,295 $4,681 $5,193 $9,190 $9,783 $13,058 $15,738 $15,918 $16,395 22.9% 13.8% Expenditure
GOOGL $10,959 $9,915 $10,183 $13,184 $25,139 $23,548 $22,281 $25,688 $26,376 23.1% 1.2% investments into
MSFT $5,294 $6,696 $10,208 $11,400 $15,800 $18,000 $20,487 $24,847 $24,552 31.4% 11.6% office space, I.T.
ORCL $801 $1,606 $1,628 $1,986 $1,736 $1,520 $1,968 $2,669 $2,144 21.3% 5.4%
equipment, data
IBM $3,740 $3,579 $3,567 $3,229 $3,395 $2,286 $2,641 $2,499 $2,535 -2.4% -7.0%
Total U.S. CapEx $26,920 $29,000 $35,270 $45,721 $69,833 $73,514 $78,231 $93,942 $94,629 26.9% 7.9% center infrastructure,
Y/Y Change 7.7% 21.6% 29.6% 52.7% 5.3% 6.4% 20.1% 0.7% land, and other
BABA $1,244 $1,705 $2,608 $4,502 $7,397 $4,784 $5,522 $8,520 $11,958 56.2% 12.8% major ticket items.
Tencent $1,077 $1,601 $2,823 $4,736 $8,170 $7,532 $8,644 $8,644 $9,944 66.0% 5.0% Amazon Web
BIDU $1,036 $1,237 $1,582 $2,064 $3,380 $1,775 $2,005 $2,005 $2,413 34.4% -8.1% Services and
Total Chinese CapEx $3,357 $4,543 $7,013 $11,302 $18,947 $14,091 $16,171 $19,169 $24,315 54.1% 6.4%
Microsoft Capex
Y/Y Change 35.3% 54.4% 61.2% 67.6% -25.6% 14.8% 18.5% 26.8%
figures include both
Total Hyperscale CapEx $30,277 $33,543 $42,283 $57,023 $88,780 $87,605 $94,401 $113,112 $118,943 30.9% 7.6%
Y/Y Change 10.8% 26.1% 34.9% 55.7% -1.3% 7.8% 19.8% 5.2%
Capex and Capital
% of Revenue 6.8% 6.7% 7.6% 8.2% 9.9% 8.4% 7.4% 7.6% 7.1% Leases.
Source: Factset, Credit Suisse Research. Tencent, Alibaba, Baidu are Consensus Estimates.

Outlook: High Demand Translated Into Peak Backlogs Data Centers
MTDC’s Have Been Key Beneficiaries of Growing Hyperscale Capex Spend, Driven by
(1) Available Colocation Supply; (2) Increased Outsourcing by Large Cloud/Tech.
Customers; and (3) High Growth Application Demand, Accelerated by COVID-19.
MTDC Leasing Backlog Backlog Intensity Above 2018 Highs:
MTDC backlogs grew materially in 2020,
($ millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 and backlog intensity (backlog / last
DLR $126 $142 $148 $97 $144 $127 $99 $116 $122 $251 $229 $269 quarter’s annualized revenue) has
maintained elevated levels. We expect
y/y growth 59.5% 121.9% 39.6% -16.4% 14.3% -10.6% -33.1% 19.6% -15.3% 97.6% 131.3% 131.9% intensity to stay above ~6% through 2021
Annualized Revenues $2,977 $3,020 $3,076 $3,113 $3,258 $3,203 $3,226 $3,150 $3,293 $3,972 $4,099 $4,250 as capacity is built and then leases are
Backlog Intensity 4.2% 4.7% 4.8% 3.1% 4.4% 4.0% 3.1% 3.7% 3.7% 6.3% 5.6% 6.3% commenced over the following quarters,
driving continued revenue growth
QTS $54 $51 $59 $63 $55 $68 $80 $93 $101 $111 $131 $154 momentum for MTDCs.
y/y growth 28.9% 29.3% 4.3% 33.8% 1.6% 32.7% 35.3% 48.6% 84.2% 63.3% 63.7% 65.9% Reported Backlogs 8.5% of annualized
revenues driven by three key dynamics:
Annualized Revenues $455 $449 $449 $449 $451 $477 $501 $495 $505 $527 $550 $576
(1) MTDCs have developed or are
Backlog Intensity 11.9% 11.4% 13.1% 13.9% 12.2% 14.3% 15.9% 18.8% 20.0% 21.1% 23.7% 26.8% developing DC supply in markets where
CONE $39 $85 $89 $54 $40 $24 $53 $52 $88 $97 $82 $101 large service providers/hyperscalers needed
the capacity; (2) MTDCs also benefited from
y/y growth -11.3% 73.5% 140.8% 164.7% 1.0% -72.0% -41.1% -4.3% 122.8% 307.6% 56.2% 95.4% increased outsourcing by hyperscale/cloud
Annualized Revenues $786 $788 $826 $885 $900 $1,006 $1,004 $1,016 $984 $1,026 $1,051 $1,074 providers (we estimate ~60%), enlarging
total leasing opportunities; and (3) High
Backlog Intensity 5.0% 10.8% 10.8% 6.1% 4.4% 2.4% 5.2% 5.1% 8.9% 9.5% 7.8% 9.4%
growth applications, like Zoom Video, Public
COR $17 $21 $18 $14 $14 $30 $28 $20 $22 $19 $24 $21 Clouds (AWS, Azure, etc.), Video Games,
y/y growth -33.9% -14.7% -25.5% -25.0% -19.0% 41.1% 62.3% 38.5% 64.0% -37.3% -16.9% 8.1% and Other bandwidth intensive apps required
MTDC customers to move fast and
Annualized Revenues $518 $546 $557 $557 $556 $572 $580 $584 $589 $602 $616 $620 accelerate expansion plans, benefiting the
Backlog Intensity 3.2% 3.8% 3.1% 2.6% 2.4% 5.2% 4.9% 3.4% 3.8% 3.1% 3.8% 3.5% MTDC industry.
SWCH - - - - $35 $26 $22 $37 $24 $24 $27 $50 2021E Outlook: Using history as a guidepost,
following the mid-2018 high backlog
y/y growth - - - - - - - - -31.4% -7.7% 23.2% 35.7% intensity levels, 2019 was a year of
Annualized Revenues - - - - $428 $446 $470 $482 $512 $508 $515 $511 pronounced outperformance with strong
commenced leases, revenue growth, and
Backlog Intensity - - - - 8.2% 5.8% 4.7% 7.7% 4.7% 4.7% 5.3% 9.8% further follow-on leasing activity,
Total Backlog $236 $299 $314 $228 $287 $274 $282 $318 $357 $502 $492 $596 strengthening the financial visibility and
supply chains of MTDCs. We expect
Y/Y Change 21.7% -8.3% -10.2% 39.3% 24.5% 82.8% 74.8% 87.7%
2021E to see similar characteristics as
Backlog Intensity 5.0% 6.2% 6.4% 4.6% 5.1% 4.8% 4.9% 5.5% 6.1% 7.6% 7.2% 8.5% 2019, a year that several publicly traded
data centers outperformed market
indices and comparable asset classes.

Outlook: MTDC Capex Spend Growth Data Centers
MTDC Capex Spend Decelerates in 2021E (Based on Current Estimates), Following

Already Supportive 2020 Spend to Match Solid Demand, Which We Believe Reflects
Significant Amount of Planned Space Coming Online Early in 2021E.
Multi-Tenant Data Center Capex Growth Forecasted to Slow: We believe this highlights (1) the cyclical nature of the industry, where overbuilding and
pullbacks may occur; and (2) the maturation of the data center industry, which clearly grew significantly from 2015-2018. In light of this, we do believe there is
high likelihood that MTDCs end up revising up their capex plans as new deals come in, which is what our checks have revealed (more cloud deals expected).
MTDC CapEx CAGR (%)

($ millions) 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 14-'18 18-'22
EQIX $660 $868 $1,113 $1,379 $2,096 $2,080 $2,283 $2,430 $2,695 33.5% 6.5%
DLR $805 $627 $654 $1,055 $1,262 $1,350 $1,937 $2,383 $2,481 11.9% 18.4%
QTS $292 $613 $452 $434 $601 $424 $838 $859 $749 19.8% 5.6%
CONE $284 $235 $731 $1,407 $1,329 $876 $902 $976 $985 47.1% -7.2%
COR $106 $157 $364 $187 $269 $401 $221 $205 $193 26.3% -8.0%
SWCH $130 $190 $287 $403 $276 $308 $347 $350 $323 20.6% 4.1%
INAP $74 $56 $46 $36 $42 $21 $21 $21 $20 -13.3% -17.0%
Total U.S. CapEx $2,351 $2,745 $3,648 $4,900 $5,874 $5,460 $6,550 $7,225 $7,447 25.7% 6.1%
Y/Y Change 16.8% 32.9% 34.3% 19.9% -7.1% 20.0% 10.3% 3.1%
GDS - - $144 $271 $634 $642 $1,235 $1,501 $1,393 - 21.8%
Chindata - - - - - - $382 $646 $609 - -
NextDC $103 $25 $101 $159 $283 $378 $398 $265 $252 28.6% -2.9%
Total Int'l CapEx $103 $25 $245 $430 $916 $1,020 $2,015 $2,412 $2,254 72.6% 25.2%
Y/Y Change -76.1% 891.7% 75.6% 113% 11.3% 97.6% 19.7% -6.6%
MTDC CapEx $2,583 $2,788 $3,870 $5,647 $7,288 $6,480 $8,565 $9,637 $9,700 29.6% 7.4%
Y/Y Change 7.9% 38.8% 45.9% 29.1% -11.1% 32.2% 12.5% 0.7%
Source: Factset, Credit Suisse Research, Company Data. GDS and NXT-ASX are consensus estimates.

Outlook: The Case for a 2022E “Super-cycle” Data Centers
Drivers: (1) Hyperscale Capex Spend Growth to Accelerate and Remain Elevated; (2)
Meanwhile MTDC Capex Declining in 2021E (for now) and Marginally Increasing; (3)
Construction Intensity at Trough (~3%); (4) High Data Growth Expected.
(1) Hyperscale Capex Spend Accelerating and Remaining High (3) MTDC Construction Intensity at Trough in 3Q 2020
Hyperscale CapEx CAGR (%)
($ millions) 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 14-'18 18-'22
FB $1,831 $2,523 $4,491 $6,732 $13,980 $15,102 $15,115 $22,322 $22,626 66.2% 12.8% 5,000 8%
6.8%
DC Install Base (in MegaWatts)

AMZN (AWS) $4,295 $4,681 $5,193 $9,190 $9,783 $13,058 $15,738 $15,918 $16,395 22.9% 13.8% 4,500
6.2% 7%
Construction Intensity (%)

GOOGL $10,959 $9,915 $10,183 $13,184 $25,139 $23,548 $22,281 $25,688 $26,376 23.1% 1.2% 4,000
MSFT $5,294 $6,696 $10,208 $11,400 $15,800 $18,000 $20,487 $24,847 $24,552 31.4% 11.6% 6%
3,500
ORCL $801 $1,606 $1,628 $1,986 $1,736 $1,520 $1,968 $2,669 $2,144 21.3% 5.4% 5%
3,000
IBM $3,740 $3,579 $3,567 $3,229 $3,395 $2,286 $2,641 $2,499 $2,535 -2.4% -7.0% 3.6% 3.7%
2,500 4%
Total U.S. CapEx $26,920 $29,000 $35,270 $45,721 $69,833 $73,514 $78,231 $93,942 $94,629 26.9% 7.9% 3.0%
2,000 3%
Y/Y Change 7.7% 21.6% 29.6% 52.7% 5.3% 6.4% 20.1% 0.7%
1,500
BABA $1,244 $1,705 $2,608 $4,502 $7,397 $4,784 $5,522 $8,520 $11,958 56.2% 12.8% 2%
1,000
Tencent $1,077 $1,601 $2,823 $4,736 $8,170 $7,532 $8,644 $8,644 $9,944 66.0% 5.0% 1%
500
BIDU $1,036 $1,237 $1,582 $2,064 $3,380 $1,775 $2,005 $2,005 $2,413 34.4% -8.1%
- 0%
Total Chinese CapEx $3,357 $4,543 $7,013 $11,302 $18,947 $14,091 $16,171 $19,169 $24,315 54.1% 6.4%
Y/Y Change 35.3% 54.4% 61.2% 67.6% -25.6% 14.8% 18.5% 26.8%
Total Hyperscale CapEx $30,277 $33,543 $42,283 $57,023 $88,780 $87,605 $94,401 $113,112 $118,943 30.9% 7.6%
Y/Y Change 10.8% 26.1% 34.9% 55.7% -1.3% 7.8% 19.8% 5.2%
Data Center Install Base Under Construction Construction Intensity
% of Revenue 6.8% 6.7% 7.6% 8.2% 9.9% 8.4% 7.4% 7.6% 7.1%
(2) MTDC Capex Growth Decelerating Into 2021E and 2022E (4) Installed Bandwidth Expected to Surge 45% CAGR thr. ’23E
18000
Other
16000 Government & Education
Interconnection Installed Bandwidth Capacity (Tbps)

MTDC CapEx CAGR (%)
($ millions) 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 14-'18 18-'22 Healthcare & Life Sciences
14000
EQIX $660 $868 $1,113 $1,379 $2,096 $2,080 $2,283 $2,430 $2,695 33.5% 6.5% Wholesale & Retail Trade
DLR $805 $627 $654 $1,055 $1,262 $1,350 $1,937 $2,383 $2,481 11.9% 18.4% Energy & Utility
12000
QTS $292 $613 $452 $434 $601 $424 $838 $859 $749 19.8% 5.6% Business & Professional Services
CONE $284 $235 $731 $1,407 $1,329 $876 $902 $976 $985 47.1% -7.2% 10000 Manufacturing
COR $106 $157 $364 $187 $269 $401 $221 $205 $193 26.3% -8.0% Securities & Trading
SWCH $130 $190 $287 $403 $276 $308 $347 $350 $323 20.6% 4.1% 8000 Banking & Insurance
INAP $74 $56 $46 $36 $42 $21 $21 $21 $20 -13.3% -17.0%
Content & Digital Media
Total U.S. CapEx $2,351 $2,745 $3,648 $4,900 $5,874 $5,460 $6,550 $7,225 $7,447 25.7% 6.1% 6000
Cloud & IT Services
Y/Y Change 16.8% 32.9% 34.3% 19.9% -7.1% 20.0% 10.3% 3.1%
Telecommunications
4000
GDS - - $144 $271 $634 $642 $1,235 $1,501 $1,393 - 21.8%
Chindata - - - - - - $382 $646 $609 - -
2000
NextDC $103 $25 $101 $159 $283 $378 $398 $265 $252 28.6% -2.9%
Total Int'l CapEx $103 $25 $245 $430 $916 $1,020 $2,015 $2,412 $2,254 72.6% 25.2% 0
Y/Y Change -76.1% 891.7% 75.6% 113% 11.3% 97.6% 19.7% -6.6% 2019 2020 2021 2022 2023
MTDC CapEx $2,583 $2,788 $3,870 $5,647 $7,288 $6,480 $8,565 $9,637 $9,700 29.6% 7.4%
Y/Y Change 7.9% 38.8% 45.9% 29.1% -11.1% 32.2% 12.5% 0.7%
Source: Credit Suisse Research, FactSet, Equinix GXI Volume 4.

U.S. Data Center Markets: Power Rate Trend Data Centers
Tier 1 Data Center Markets Largely Have Improving Power Rates and Very Large
Data Center Inventories, Creating a Continuously Reinforced Cycle of Growth,
Connectivity, and Follow-on Infrastructure Investments.
Average Power Rates (cents/kWh) 2014 2015 2016 2017 2018 2019 2020 Trendline Total Inventory (MW) CS Market Tier
North America
Atlanta 4.7 4.8 4.8 4.8 4.7 4.7 4.5 270 Tier 2
Austin and San Antonio 7.0 7.2 7.4 7.4 7.2 7.2 7.3 145 Tier 2
Boston 18.0 22.0 20.0 16.0 15.0 14.5 14.5 160 Tier 3
Chicago 7.0 6.8 6.5 6.5 6.0 5.8 5.8 621 Tier 1
Dallas/Fort Worth 5.8 5.6 5.4 4.5 4.3 4.2 4.2 596 Tier 1
Denver 7.5 7.4 7.1 7.1 7.2 7.2 7.2 102 Tier 2
Houston 6.6 6.5 6.5 6.5 6.5 6.5 6.5 142 Tier 3
Los Angeles 13.5 13.5 14.5 14.5 14.5 14.5 14.5 230 Tier 1
New Jersey 9.0 9.0 8.5 8.5 8.4 8.6 8.3 410 Tier 1
New York City 16.1 15.5 14.6 14.3 13.6 13.5 13.3 152 Tier 2
Northern California 11.9 12.7 12.9 13.4 13.4 12.5 12.6 468 Tier 1
Northern Virginia 5.7 5.7 5.2 5.2 5.2 5.2 5.2 2105 Tier 1
Pacific Northwest 4.7 4.8 6.2 6.4 6.6 6.8 7.0 365 Tier 2
Phoenix 6.7 6.7 6.6 6.4 6.4 6.4 6.3 327 Tier 2
Salt Lake City - - 5.8 5.8 5.8 5.8 5.6 80 Tier 3
Greater Montreal Area* 3.5 3.5 3.6 3.7 3.9 N/A Tier 3
Greater Toronto Area* 13.8 9.2 13.0 14.6 12.5 N/A Tier 2
Western Canada (Vancouver / Calgary)* 6.8 7.3 7.5 7.5 8.0 N/A Tier 3
Europe
Amsterdam 8.1 8.1 9.2 9.2 9.2 10.3 11.4 426 Tier 1
Dublin 12.7 12.7 13.9 13.9 13.9 16.0 17.0 161 Tier 2
Frankfurt 17.4 17.4 17.4 17.4 17.4 20.0 23.4 443 Tier 1
London 18.0 18.0 18.9 16.2 19.8 20.6 23.6 768 Tier 1
Paris 9.0 10.0 11.0 12.0 13.0 14.0 14.7 271 Tier 1
Exception to Tier 1 Market Trend: Los Angeles, European Markets. *Credit Suisse Estimates for cents/kWh
Source: JLL Research, Credit Suisse Research.

Data Center Fundamentals (Margins/Growth) Data Centers
Modest Improvement in DCs EBITDA Margins, with Double Digit Growth.

Adj. EBITDA Margins – QTS, DLR Lead MTDC Group O/P SWCH to Grow Adj. EBITDA Ahead of MTDC Avg.
60.0% 16.0% 15.2%
55.5%
55.2% 55.0% 14.0%
54.0% 12.6%
55.0% 53.8% 53.0% 52.1%
51.9% 52.0% 12.5%
51.8% 12.0% 10.8% 11.1%
Adj. EBITDA Growth

Adj. EBITDA Margin
50.0% 47.0% 10.0%

46.9% 9.1% 8.5%
7.5%
45.0% 8.0% 6.5% 7.2%
6.0% 6.1%
6.0%
40.0%
4.0%
35.0% 2.0%
30.0% 0.0%
QTS DLR COR CONE SWCH EQIX QTS SWCH EQIX COR CONE DLR
2021E 2022E 2021E 2022E
SWCH Trades at a Discount Despite Solid Growth & Margins Data Center Group EBITDA Comments:
25.0x
• We forecast Data Centers to grow adjusted EBITDA by 8.1% on
23.0x
average in 2021E, and to follow it up with 10.7% growth in 2022E.
20.7x Among the peer group, we expect QTS and SWCH to see the fastest
21.0x 20.0x
growth over the next two years, while CONE and DLR trail the rest of
EV/EBITDA Multiples
19.0x 18.2x 17.8x 17.0x the group.

17.0x 15.4x • While Data Centers continue to deliver double digit adjusted EBITDA
15.0x growth, we project them to roughly maintain margins through 2022,
13.0x with the peer group achieving an average margin of 52.6% in 2022E.
11.0x We expect COR to see the largest margin improvement, while DLR
9.0x sees slight contractions, mostly because of the InterXion integration.
7.0x • On an EV/EBITDA basis, EQIX continues to lead the Data Centers,
5.0x being rewarded for its scale and reach. Meanwhile, SWCH trades at a
EQIX DLR COR CONE QTS SWCH notable discount vs. peers despite fairly strong metrics.
2021E 2022E
Source: Credit Suisse estimates, Factset estimates, Company Data.

Data Center Fundamentals (FFOS/AFFOS) Data Centers
We Expect DCs to Broadly See Robust FFOS, AFFOS Growth Through 2022E.
FFO/Share Growth – O/Ps EQIX, DLR, COR to Grow Ahead AFFO/Share Growth – EQIX, QTS Robust, CONE Lags
30.0% 27.2% 16.0%
14.0%
24.2% 14.0%
25.0%
11.4% 11.8%
FFO/Share Growth
12.0%
AFFO/Share Growth
20.0% 9.4%
10.0%
13.9% 7.7%
15.0% 8.0% 6.4%
9.1% 9.5% 6.0%
10.0% 8.0%
6.1% 4.0% 2.6%
5.0% 3.8% 3.5%
1.4% 1.5%
1.5% 2.0% 0.7%
0.0% 0.0%
EQIX DLR COR QTS CONE EQIX QTS COR DLR CONE
2021E 2022E 2021E 2022E
DLR & CONE Cheapest on FY22 AFFOS Basis, EQIX Leads Data Center Group FFOS/AFFOS Comments:
30.0x • We forecast Data Centers to grow FFO/share by 12.6% on average in
2021E, and to follow it up with 8.8% growth in 2022E. Among the
24.0x peer group, we expect EQIX and DLR to see the fastest growth over
25.0x
the next two years, while CONE lags the group average.
P/AFFOS Multiples
21.3x
19.9x • On AFFO/share, we project Data Centers to grow by 5.2% on average
20.0x 19.0x
17.3x in 2021E, and by 8.2% in 2022E. We expect EQIX and QTS to lead
the peer group in AFFO/share growth through 2022E, and we expect
15.0x CONE to again see the slowest growth.
• On a Price/AFFOS basis, EQIX leads the Data Center group, which
10.0x we believe is warranted due to its scale, interconnection strength,
diversification, and growth profile. DLR and CONE trade at a discount
5.0x vs. peers, but we view DLR should trade closer to EQIX’s multiple
EQIX QTS COR DLR CONE given its aggressive diversification into retail colocation and potential
2021E 2022E ROIC improvement.
Source: Credit Suisse Research estimates, Company Data.

Data Center Fundamentals (Debt/Leverage) Data Centers
DC Cost of Debt Has Fallen Despite Rising Leverage Due to Improved

Fundamentals and a Fairly Favorable Interest Rate Environment. We Do Not Expect
The Declines in Cost of Debt to Slow As DCs Become More Mature Assets.
5.0% 7.0x
4.5%
6.0x
4.0%
Weighted Average Cost of Debt
5.0x
Net Debt/EBITDA (Leverage)

3.5%
3.0%
4.0x
2.5%
3.0x
2.0%
1.5% 2.0x
1.0%
1.0x
0.5%
0.0% 0.0x
2017 2018 2019 2020 2021E
EQIX Leverage DLR Leverage COR Leverage CONE Leverage QTS Leverage SWCH Leverage
EQIX CoD DLR CoD COR CoD CONE CoD QTS CoD SWCH CoD
Source: Credit Suisse estimates, Company Data.

Data Center Fundamentals (Dividend Yield) Data Centers
Dividends Continue to Grow Modestly For Most MTDCs

5.0%
4.4%
COR Leading on 4.5%

4.0%
Dividend Yield with

3.5%
80% 3.5% 3.2%

3.1%
Dividend Yield
Solid Div. Growth 3.0%
70% Trajectory
2.5%
2.0% 1.7%
60%
1.5%
Dividend Growth
1.1%
1.0%
0.5%
50% 0.0%
COR DLR CONE QTS EQIX SWCH
40%
30%
20% 17%
14%
10% 6% 5%
0% 2%
0%
SWCH EQIX COR QTS DLR CONE
2020 2021E 2022E
Source: Credit Suisse Research, Company Data.

Data Center REITs vs. Other REITs (Multiples) Data Centers
Data Centers Are Attractive at Current Levels Considering Growth Forecasts.

DCs Show Consistently Higher Revenue Growth Across REITs EBITDA Margins Are On The Lower End
20% 80%
70%
EBITDA Margins
15%
Revenue Growth Y/Y
60%
10%
50%
40%
5% 30%
20%
0%
10%
(5%) 0%
(10%)
2020 2021E 2022E 2021E 2022E

AFFO Per Share Growth is Projected to Accelerate 2021-2022E Favorable Growth, With Leverage Comparable to REIT Peers
20%
10.0x
9.0x
AFFO Per Share Growth Y/Y
Net Debt/ FY20 EBITDA

10% 8.0x
7.0x
0% 6.0x
5.0x
4.0x
-10%
3.0x
2.0x
-20% 1.0x
0.0x
-30%
-40%
2020 2021E 2022E
Source: Factset, Credit Suisse Research estimates. *2020-2022 Hotels’ & 2020 Regional Malls’ revenue growth not to scale for graphical purposes. Hotels’ AFFOS growth and net leverage ratio N/A.

Public Versus Private Data Center Operators Data Centers
Data Center Industry Remains Fragmented; Private Market Stacked With Vendors.
Public Data Centers Private Data Centers (30+ Operators)

Public Versus Private Data Center Operators Data Centers
Key Differences Between Public/Private Data Center Operators, Publicly Traded

Operators in a Position of Strength Currently.
Given the formations of recent private data centers from a variation of larger company divestitures (telecoms), mergers (managed services, colocation), and demand surges from
wholesale and retail providers, inquiries from private equity, asset manager and fixed income institutional investors have increased significantly with a common theme across all the
inquires is to understand the key differences between the private and publicly traded data center operators. Below we highlight the five key differences between the two types of
providers based on our industry contacts and our general sector observations, collected through industry conferences, reported metrics, and other sources.
Factor Details on Public / Private Operators Offering Retail & Wholesale Colocation
Almost all publicly traded data center operators primarily offer space, power, cooling, and interconnection. Private operators offer these
services in addition to web/cloud hosting, managed services, security services, construction services, and other. This means private
1) Business Segments operators generally have higher OPEX levels to support the extra staff to service these extra segments in cases that the services are more
OPEX intensive than the standard colocation business, pertaining mainly to web hosting and managed services. Wholesale is lean.
Publicly traded operators predominantly focus/deploy into Tier 1 or 2 markets given enterprise customer and cloud availability zone
concentrations. Tier 1 & 2 markets are also more interconnection dense compared to lower tier metros/markets. Private operators deploy
2) Location & Markets similarly for both retail and wholesale builds, but have a larger presence in Tier 3 markets (Charlotte, Orlando, Minneapolis, Montreal,
Seattle, Nashville, etc.). Tier 3 markets are more complex to scale with enterprise and cloud customers, ramping slower and smaller.
Publicly traded data center operators have a healthy combination of new capacity from facility expansions and net-new campus builds while
3) Age of Facilities & maintaining older facility vintages given consistent non-recurring CapEx investments for retail/wholesale facility sites. Private operators in
Power Distribution retail on average have much older data centers, with lower power capacities supporting older IT hardware & networking equipment
Capabilities deployments, and in some cases have not seen non-recurring CapEx investments for several years. New private wholesale builds are
generally in good shape given their recent development standards, using experienced facility design engineering firms.
Publicly traded operators are balanced well between retail and wholesale data centers and have robust retail capabilities with cloud and
4) Type of Colocation SDN On-Ramps whereas private operators have lower On-Ramp capabilities, forming less capable customer/cloud/SDN tenant
ecosystems. Public operators have a material scale and connectivity advantage compared to private operators in this factor.
Publicly traded operators have several capital financing options including: 1) follow-on equity raises/public markets, 2) credit facilities, 3)
senior debt notes (investment grade, high yield), 4) variety of joint venture partnership opportunities, and 5) other forms of funding at high
public equity valuations. Private companies have combinations of public company sources (debt, credit facilities, etc.), but at lower
5) Access to Financing
valuations, lower scale, usually lower than investment grade rated debt options, more complex JV partnership agreements, and private
& Capital operators do not have access to equity raise capabilities from public markets (especially not at REIT valuations), restricting cash injections
to private/pension/sovereign equity or new investor funding sources, which is usually an unfavorable course of action for more private
market investors if the new capital is not going towards new facility developments or expansions.

Data Center Operating Business Models/Strategies Data Centers
Company Strategy Description Pros Versus Cons

Pros: Higher colocation price points and higher interconnection revenue
streams per cabinet, lifts returns on invested capital yields (~15% to 25%)
Retail / Retail / Colocation businesses focus for businesses. High moat businesses, requires solid balance sheet and
Colocation on smaller customer deployments, assets to compete effectively. Can upsell into other services and
oftentimes having dense connectivity offerings given tech industry position.
(Ecosystem/ interconnection activity and two to
Interconnection 50 cabinets per customer per multi- Cons: Retail Colocation Market is not high growth; market generally
tenant data center. growing ~8% CAGR for the next five years. Stable ROICs in existing
Density) markets but fluctuations in international markets with regulations impacting
interconnectivity. Short term leases/contracts (~2yrs).
Pros: High market growth during high IT spend cycles, indexed to

Wholesale / Hyperscale data center hyperscale capex growth that is almost double retail colocation growth rates
businesses are generally leased by over the next five years. Long lease maturities, lower churn rates, and solid
one customer/tenant per data center repeat business. Balance Sheet is strategic, longer leases can lock-in
Wholesale / better costs of debt (Invest. Grade ratings).
facility. Customers are generally
Hyperscale cloud providers (AMZN, MSFT, FB, Cons: Customer has sizeable bargaining power during renewal process and
(Cloud Targeted) CRM) or large enterprises seeking to returns on invested capital can generally be low (~9% to ~11% per year).
exit their older enterprise facilities Often times regarded as a commoditized business and sensitive to power
and outsource infrastructure needs. rates per market. Small number of target customers to achieve high
growth. Tech. obsolescence is a big risk.
Pros: Higher price points for colocation price points with upsell
Various strategies include: opportunities into cloud hosting, cyber security, and connectivity offerings,
Various and (1) Targeting Tier 2 and 3 data lifts return on invested capital yields to 11% to ~15% range. Tier 2 and 3
Mixed center markets (international markets can be more profitable than Tier 1 markets, given limited
Strategies markets, etc.); competition.
(2) Cyber security Offerings with
(Enterprise, colocation services; Cons: Market growth for mixed strategy businesses are lower than ~8%
Hosting, (3) Colocation, Web Hosting, and CAGR for the next five years, largely because customers are legacy
Connectivity offered together for enterprises managing private cloud workloads. Mixed strategy businesses
Connectivity, receive lower valuations given their mixed offerings and difficult to
customer deployments (Flexential,
Cyber Security) Switch, INAP). understand business models compared to Retail/wholesale businesses that
have a good number of publicly traded comps.

Enterprise DC Divestitures to Continue (Credit Suisse) Data Centers
Credit Suisse Example—IRM-CS Transaction: In 2Q17, Iron Mountain Incorporated (IRM) announced plans to make its first international acquisition by
purchasing two data centers owned by Credit Suisse (CS) in London and Singapore for $100 million. As part of the transaction, CS will enter into a long-term lease
with IRM to maintain their existing data center operations. The two data centers would add a total of 273,000 square feet and over 14 MW of capacity (including
future expansions) to IRM’s portfolio of which 4.2 MW will be leased back to CS. The London data center totals 120,000 square feet and is located in the Slough
Trading Estate, while the Singapore data center totals 153,000 square feet and is located in Serangoon. Both facilities provide access to large power networks and
an ability to serve numerous enterprises in the respective data center markets. Designed to meet the security requirements of a highly regulated financial services
firm, the data centers comply with IRM's standards for security and compliance. Additionally, after accounting for the 4.2MW leased to Credit Suisse, IRM will have
additional expansion capacity of approximately 10MW in these two attractive data center markets.
• Why Did CS Divest Their Data Centers? CS found that it was very expensive to maintain its two data center facilities where they were only utilizing ~30% of
capacity. Therefore, it made more economical sense to sell these locations to avoid the recurring capex and overall costs of maintaining a data center facility while
being able to still use the facilities through a leaseback deal. Ultimately, CS built these data centers overestimating for capacity it never used and by leasing back
through a third-party data center provider, CS will only need to pay for what it uses, rather than for the whole facility.
• Why Did IRM Acquire CS’ Facilities? IRM is continuing to build out its data center business and this transaction enabled IRM to establish an international
presence at an affordable price (we believe the price point of ~$7million per MW, is at or below traditional build levels). In addition, CS serving as IRM’s anchor
tenant in these facilities is an added bonus and with an anchor tenant signed and excess gross power available, IRM will be able to expand its colocation expertise
on the facility and increase the facility’s utilization, leasing the entire facility’s available gross power.
Win-Win Transaction: In summary, we view enterprise data center facility divestitures to MTDCs as a win-win transaction, giving the enterprises access to
interconnection services that MTDCs specialize in at lower overall OPEX and giving MTDCs facilities at price tags below their and the market’s average cost basis for
similar facilities. We do not see a reason for the rate of enterprise data center facility divestitures to drop.

Credit Suisse January 2021 CIO Survey Results Data Centers
Data Center Builds (Enterprises Building Their Own Data Centers) Are One of the
First Areas Enterprise CIOs Would Pull-back Spending From Their Budgets.
Unsurprising In Our View Given the Secular Dynamics Within the Data Center Sector.
Consulting 20% 43%
36%
Data Center Builds 13% 32% 34%
13% Based on data from our January 2021
Servers 27%
26%
PCs 17% 21% CIO Survey (77 Global CIOs at
25%
Data Center Switches N/A companies with revenue >$1bn), when
21%
Campus Switches N/A we asked: What are the top 3 areas
18%
Storage 9% 13% 16% where you would likely pullback spend
AI/Machine Learning 18% if necessary? Data Center Builds have
14%16%
10% 12%
Microsoft Office 13% a ~3x greater likelihood today (34%)
Infrastructure software 4%
9%
12% 15% versus 13% in January 2020 of being
IoT 12%
4%
12% an area a CIO would pull-back
Database 8%9%
spending, top of the list of areas a CIO
Routers 4%5% 9%
ERP Applications 15%
16%
would cut spending allocations. This is
8%
DevOps 4%
4% a trend that has been in motion for the past
8%
Edge Compute 1% 5%6% 5+ years given the capital intense nature of
Wireless Connectivity N/A
5% building than managing an enterprise
0%
Observability 5% 7% owned data center. Financially, it does not
SD-WAN 5%6%
5% make sense in our view for an enterprise to
Hybrid Cloud 4%5% 13%
16%
build, own, and managed a data center
Public Cloud 11%
4%
11% given the highly distributed nature of next
BI/Analytics 4% 5%
HCM Applications 6% 12%
generation of IT workloads and compelling
3%
CRM Applications 11% 15% public cloud offerings across various
3%
Collaboration Software 1%3% vendors. We expect this trend to accelerate
0%
Security Software 0%
0%
1% and enterprise owned data center builds to
dramatically pull back in coming years.
January 2020 Survey July 2020 Survey January 2021 Survey
Source: Credit Suisse CIO July 2020 Survey (See Report: July 2020 CIO Survey – Data Center Implications Remain Positive; Networking Impact Negative Overall).

Edge Data Centers Data Centers
Edge Data Center Proliferation Expected to Accelerate in 2021-2022.

Edge Computing and Edge Data Centers in Focus: Throughout 2019 there was a consistent narrative ramp in edge
computing and data centers, and this ramp was finally topped by Amazon Web Services at Re:Invent in the first week of
December 2019 with the announcements pertaining to their new partnership with Verizon to deliver 5G Edge Cloud Computing
services and AWS Outposts. Incorporating sub-sector technology capex spend cycle views across Hyperscale, Multi-Tenant Data
Centers, Telecom, and Cable companies, we presented our views on the edge compute and the micro data center landscape at
Edge Congress (November 2019, Austin, TX). We believe the physical edge/micro data center opportunity will
materialize in a more meaningful way in 2021, following more telecom capex spending ramps in preparation for 5G, cable
company network core re-distributions (and virtualization core completions), further hyperscale capex spending trends, and the
emergence of more edge application use cases, discussed in our keynote with projections and supporting observations.
Click Here for Link to Video Timeline for Edge Proliferation – 2021-2022 Critical for Edge Ramps

Edge Compute & Edge Data Centers Data Centers
Significance of Edge Computing Elevated By The Pandemic

While the COVID-19 pandemic led to a downturn of investment in the automation sector (estimated ~10% contraction of spend in 2020) as
enterprises focused on business resiliency and connectivity of a remote workforce, the sector is positioned to benefit in the medium and long-term
as organizations recognize the significance of industrial IoT with use cases for remote monitoring and operations. Industries with high-throughput
such as automotive, semiconductor, and food and beverage are expected to be the quicker adopters of edge computing. The industrial edge
computing market is expected to grow from at a 20% CAGR over the next decade growing from $619M in 2019 to $4,789M in 2030
as organizations continue to recognize the benefits of edge computing (lower cost of data transmission, lower latency etc.)
Market for Industrial Edge Computing By Region Top Four Growth Industries For Industrial Edge Compute
350 327 328

311 310
EMEA
1,986 300 281
Revenues (Millions of $)
250
206
Asia & Oceania 200
1,801
150
102 100 74
Americas
1,002 50 35 33 30
0
0 500 1,000 1,500 2,000
Food and beverage Semiconductor and Power Automotive
Revenues (Millions of $) machinery electronics
2019 2030 2019 2030
Source:. Industrial Edge Compute and The Future of Automation – Omdia. November 2020.

Tower REITs
Fundamentals Remain Very Attractive Compared to Overall REIT
Industry, Albeit at Lower Growth Rates

Tower Outlook Data Centers
Executive Summary – Secular Gainers, Structural Winners Amidst 5G Cycle

Five Key Revenue Drivers Lifting U.S. Towers Higher: Following the formation of a large third carrier, New T-Mobile, and the commencement of the 5G cycle, we identify a
meaningful sequence of revenue drivers for the U.S. towers, which we expect to lift their business performance both short and long term. We identify: (1) elevated carrier capital
expenditures (Capex) to remain intensified through 2023E as carriers look to further build out 5G radio nationwide coverage; (2) we expect tower tenancy to increase steadily over
time from a ~2x industry average level (factoring in industry telecom consolidation); (3) with the introduction of new spectrum portfolios, including C-Band, we expect more
densification on towers over time, especially on macro towers given the growing mind-share of mid-band for 5G networks (see our recent post telco analyst day note here for
further details); (4) we expect 5G handsets from major handset providers (5G iPhone especially) to lead to further tower densities; and (5) as the aforementioned drivers ramp,
we see tower amendment activity increasing and ROIC rising. Given the 5G cycle is expected to last through 2023 by our estimates and many digital consumption trends (WFH,
OTT streaming, and online gaming) accelerated due to COVID-19, we believe that the TowerCos are well-positioned for growth over the long-term. Additionally, in the short-term,
we believe concerns around wireless carrier capex are overblown, as carriers remain committed to winning the 5G race (due to its implications to winning customers), and therefore
view TowerCos as oversold and undervalued at current levels relative to the long term opportunity ahead, despite concerns of rising rates. To review our detailed thesis, see our
recent sector primer: Tower REITs – Riding the 5G Wave.
• Top Pick: RADI (Outperform, $19 TP, +31% upside potential) – Solid Grower with Superior Cash Flow Visibility: We recently initiated on RADI with an Outperform
rating, based on the following factors: (1) Vast TAM opportunity to consolidate land interests; (2) RADI’s highly effective, globally distributed 300 person business dev. team
which leverages RADI’s proprietary database of land owners/interests; (3) Macro environment to bolster RADI’s acquisition pipeline as individual land owners increasingly look to
sell their lands amid challenging economic dynamics; (4) RADI has $324M of available cash, ample access to credit, with sufficient leverage capacity for continued high levels of
acquisition activity; and (5) 5G should further bolster RADI’s business opportunity as connectivity density rises, increasing the number of TAM site and lease interests. Our
valuation is based on the average of two methods: (1) EV/GCF multiple of 25x (~2x above TowerCo peer group) our 2022E GCF of $100.4M; and (2) EV/EBITDA multiple of
25x (~5x above TowerCo peer group but below RADI’s current multiple of 33x) our 2022E adjusted EBITDA of $34.7M.
• AMT (Outperform, $296 TP, +21% upside potential) – Indexed to Global Connectivity Proliferation: We maintain an Outperform rating on AMT, based on the following
main factors: (1) AMT’s globally distributed macro tower business is set to benefit from various telecom standard upgrades within high growth markets; (2) AMT’s average
macro tower tenancy is expected to increase over time as TMUS-S optimizes its nationwide 5G network; (3) net leverage levels are below peers and AMT has scope to increase
depending on M&A opportunities, which benefit from lower costs of debt and interest rates; and (4) AFFO payout ratio is expected to grow dividends and to increase to ~57%
payout level (2021 CS estimate) as U.S. business accelerates in response to the 5G cycle. Our valuation is based on a 30x FY22 AFFOS of $9.31 and DCF assuming a WACC
of 5.6% and terminal growth rate of 2.5% (below standard portfolio lease escalators of ~3%).
• SBAC (Neutral, $277 TP, -3% downside potential) – Moved to the Sidelines Due to Slower Domestic Growth: We moved to Neutral on SBAC based on the following
main factors: (1) Given ~80% of SBAC’s revenues are generated with U.S. domestic customers, we viewed consensus estimates as too high for domestic revenues in light of
elevated Sprint churn over the next couple of years; (2) Rising rates are a headwind, with the 10 Year Treasury currently yielding ~1.6%, up from ~0.5%. While we don’t view
rising rates as a substantial detriment to SBAC’s free cash flow generation, SBAC has generally seen poor share price returns in years in which rates rise; (3) SBAC also has
limited optionality relative to its peers due to higher leverage; and (4) That said, valuation levels have appeared to trough in the short-term. Our valuation is based on a P/AFFOS
multiple of 23x our 2022E AFFOS of $10.73 and DCF assuming a WACC of 5.4% and terminal growth rate of 2.1%.
• CCI (Neutral, $155 TP, -12% downside potential) – Valuation Difficult to Justify Considering Long-Term Tenancy Trend and ROICs: We have a Neutral rating on CCI
and identify the following factors keeping us on the sidelines: (1) ROIC concerns tied to their small cell business, which has yet to accelerate node deployment despite previous
expectations for an acceleration; (2) as CCI builds further outside of major metro cities, the likelihood of achieving higher tenancy above the ~2.3x industry average over time is
reduced in our view, (3) in our view, the capital return and dividend payout ratio are already optimized at ~80%; and (4) DISH’s long-term leasing agreement with CCI can be a
key driver if DISH ends up leasing close to 20,000 towers from CCI. We view the buildout will be more equitable than not given AMT’s MLA. Our valuation is based on a
P/AFFOS multiple of 25x (in-line with CCI’s current level) our 2022E AFFOS of $6.96 and DCF valuation assuming a WACC of 5.6% and terminal growth rate of 2.5%.
Five Key Revenue Drivers Lifting U.S. Towers Higher Towers
We Expect All Five Core Drivers to Be Operationally Bolstering the Tower

Industry in 2021 and Lifting TowerCo Share Prices Higher.
Carrier CapEx & 5G Cycle

Carrier CapEx across U.S. Carriers to deploy $30B
from 2019-2023E to further densify nationwide
networks, including 4G/LTE density and nationwide
5G rollout.
Tower Amendments Increased Tenancy

As major carriers right-size their networks and Formation of three major carriers and a new fourth
deploy nationwide 5G coverage by augmenting carrier (DISH, assuming successful entry) to
existing/new macro towers and small cells, Towers increase tower tenancy over time from ~2.3x per
to see continued elevated amendment activity. tower through 2023E and 5G cycle.
5G Handsets & Use Cases are More Spectrum, More Site

Tailwinds Densification
In addition to deploying more mid-band spectrum
Launch of commercial and consumer 5G use
through major carriers (enabling 5G nationwide
cases introduce several key drivers for tower
coverage), C-Band to further augment tower
industry, including increased network importance.
opportunity.

Expectations For Major Carriers’ 5G Rollout Plans Towers
5G Race Stunted by COVID-19, to Reaccelerate in 2021E, Albeit with Sprint Churn

We expect material improvements to 5G networks supported by increased capital expenditure capacities accelerating in 2021, given carrier plans and minimized
COVID impacts. In July 2020 AT&T achieved its nationwide 5G goal, the second carrier to do so after TMUS. Verizon achieved nationwide 5G (mid-band) in
October and plans to extend 5G coverage in densely populated areas using mmWave spectrum and MEC, but progress remains behind the other carriers. DISH
remains in the nascent stages of network development.
2019 2020 2021 2022 2023
Verizon dynamic spectrum sharing (DSS) and 5G Secured 60 MHz of early clearing $10B incremental C-Band capital
marketing launch in tandem with iPhone, 5x+ y/y A-Block spectrum. $10B spending from 2021-2023. $10B incremental C-Band capital
5G available in 31 increase in 5G small cells, 60+ 5G Ultra Wideband incremental C-Band capital >50% of 4G and 5G sites to be spending from 2021-2023.
5G available in 10 markets over
VZ markets over (UWB) Mobility cities, 10+ 5G UWB Home cities on 5G spending from 2021-2023. 2x on Verizon-owned fiber by 2023. >50% of 4G and 5G sites to be
mmWave (Aug)
mmWave (Dec) NR and nextGen CPE, 10+ 5G commericial MEC mid-band spectrum post C-Band Verizon expects the contribution on Verizon-owned fiber by 2023.
centers. Nationwide 5G achieved in October 2020, up auction. 7-8k C-Band equipped to revenue growth from 5G B2B 175M+ POPs covered b C-Band.
to 230M people covered. sites in 2021. segment to build in 2022.
Acquired 80 MHz of C-Band for

To spend $6-8B in capex To spend $6-8B in capex
AT&T to continue $27.4B. Plan to deploy the first
5G available in 58 markets deploying C-Band spectrum, with deploying C-Band spectrum, with
5G available in 5G available in expanding its low-band 5G 40 MHz by the end of 2021. C-
total; 35 markets over the vast majority of spend the vast majority of spend
T 19 markets over 21 markets over coverage. FirstNET is Band deployment costs already in
mmWave (Feb). Nationwide occuring from 2022-2024. We occuring from 2022-2024.
mmWave (Apr) mmWave (Nov) nationwide already and 2021 guide. 3M new fiber
5G achieved in July 2020. expect AT&T to finish FirstNet mmWave to be part of network
80% of the build is done. locations across 90 metros in
builds through 2022. densification strategy.
2021.
T-Mobile committed to a
The New T-Mobile committed to The New T-Mobile committed to
Nationwide 5G network within 3
TMUS* 5G S* 5G available TMUS* 5G TMUS-S Deal T-Mobile is offering 5G service on a rural 5G deployment within offering in-home broadband
years of closing [low-band area
available in 6 in 9 markets available in 200+ Closed following 600Mhz. First Nationwide 5G three years of closing [low-band within three years of closing
TMUS covering 97% US pop., mid-band
markets over over 2.5 GHz POPs over low favorable ruling achieved, which now covers 270M area covering 85% US [market In-home broadband to at
area covering 75% of US pop.].
mmWave (Jun) (Aug) band (Dec) (Feb) people in the U.S. population, mid-band area least 9.6M eligible households,
Fast 5G to cover 200M people by
covering 55% of US population]. 2.6M rural households].
EOY '21.
Dish does not expect a lot of 5G build out in 2020 DISH must offer postpaid
[$250M-$500M spend]. For 2020, Dish expects much national wireless service in 2021. Dish must have a 5G network
Dish must have a 5G network
Dish was in litgation looking to extend buildout terms of the 5G work to be centered on RF planning and To receive radios at scale from that covers 20% of country and
that covers 70% of country and
DISH on spectrum holdings. Original DISH buildout plans permitting. DISH has the option on at least 20k Fujitsu in 2021. Low and mid- have a core network built (Jun).
may also purchase Sprint's
were for 2020. decommissioned S and TMUS cell sites within the first band spectrum share declined to Plans to deploy 10,000 sites by
800Mhz spectrum (Jun).
five years of the deal closure. Dish is launching its first 8% from 13% following C-Band 2022.
city this year as a demo market. auction.
Source: Credit Suisse Research. Company Data.

5G Cycle: We Are In the Early Innings Towers
We Are in the Build-out Stage of the 5G Wireless Capex Cycle That Should
Build Momentum in 2021 and Last Until 2024.
5G adoption is expected to translate into significant network traffic increases. However, we expect the 5G cycle to be bigger than the prior
network standard upgrade cycle given the magnitude of bandwidth growth expectations and overall volume of new users consuming
broadband intense applications wirelessly. Given the significant step-up in expected traffic, we expect carriers to absorb the majority of
data traffic increases through existing further cell site densification – leveraging existing 4G macro cell tower nodes, and augment the
network further with new macro and small cell sites. However, we previously saw ~4 years of spend associated with the coverage buildout
phase of the 4G cycle equating to $26.4B of CapEx spend across the four major carriers and our expectations for the 5G cycle is to see
at least 6 years of elevated capex spending equating to $33.1B of CapEx, on average, to densify and right-size the existing and new
network. Importantly, we believe that 5G standardization is fundamentally a more robust network upgrade cycle than 4G was
for its predecessor, given the extensive 3GPP standards and target data transmissions capabilities by the major carriers,
therefore necessitating greater spend intensity for high-quality coverage maps.
45.0 4G Cycle: $26.4B 5G Cycle: $33.1B Estimated

40.0
1.4 3.8
35.0
3.1
1.1 1.1
Wireless Capex ($ billions)
30.0
13.5 13.2
9.4 11.7
25.0 10.5 12.8 13.0 13.0
8.9 10.3 8.5 9.1 8.9
11.2
20.0 9.0
8.4
11.2 9.6 9.5
15.0 6.5 7.2 10.1 9.3 7.9 6.9
6.5 10.8 12.2 9.5 9.4 9.3
9.6
10.1
10.0 3.7 9.8
5.3 9.2 4.2
6.0 4.7 5.5 6.4
2.7 3.7 4.3 12.0 11.8 11.8
5.0 5.2
4.7 9.5 9.4 9.4
3.6 3.7 2.7 6.8
5.0 2.8 4.9 4.0 5.4 4.6 4.5
1.8 1.4 2.4 2.1 3.1
0.0 1.2
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E
Sprint T-Mobile AT&T Verizon DISH
Source: Credit Suisse Research and Estimates.

Tower Tenancy Has Declined Due to Consolidation Towers
Overall Tenancy Should Remain Fairly Stable Given 2021 Churn Dynamics. Acquired
Tower Portfolios, Such as Telxius, Have Healthy Tenancy Ratios.
We believe that with the establishment of New T-Mobile as the third major U.S. carrier, the TowerCos’ U.S. tenancy should improve gradually, especially if Dish is capable of
competing as a fourth carrier, providing more upside to tenancy, thereby improving ROIC on macro towers especially.
2.4
2012 Acquired Vivo SA sites with ~1.3x 2.0
Acquired Telefonica sites with ~1.1x
17k sites added over 2 years averaging 1.6x 2.4
2013 1.9
2.3
2014 Acquired Oi SA sites with ~1.2x 1.8
1.9
Two portfolios acquired, including Sunesys, with 1.5x sites 2.2
2015 1.8
30k sites added averaging 1.3x
2.2
2016 1.8
1.9
2.2
2017 Acquired LatAm sites with ~1.1x 1.8
Acquired Verizon sites with ~1.1x 1.9
2.2
2018 Acquired Millicom sites with ~1.2x 1.8
Acquired V. Idea sites with ~1.1x 1.9
2.1
2019 Acquired GTS sites with ~1.7x 1.8
Acquired Eaton sites with ~1.1x 1.9
2.1
2020 1.8
1.9
0.0 0.5 1.0 1.5 2.0 2.5

Average Tenants Per Tower

CCI SBAC AMT

New Spectrum Additions Are LT Positives for Towers Towers
Following C-Band Auction, Mid-Band is More Evenly Spread Between Operators; C-

Band Capex is a Solid Boost for TowerCos, While They Work Through Sprint Churn.
Low and Mid Band Spectrum Holdings (MHz) by Major Carrier
Incremental $10B in C-Band

capital spending through 2023
Incremental $7B in C-Band

capital spending through 2024
In our view, C-Band and other mid-band spectrum are clearly long-term opportunities for tower companies that will vary
based on product and customer mix, but given 1) the amount of capital spent on acquiring C-Band spectrum and 2) the
noted incremental capex dollars to be spent on deploying C-Band, we believe Mid-Band, again, should be a backbone of
the next wireless evolution. We expect the new mid-band spectrum will provide new tower leases and amendment revenues as
operators aggressively extend capacity for 5G. In the figure above, we highlight the current state of spectrum for mobile operators. We
highlight that the New T-Mobile has the largest mid-band spectrum holdings, but note that the vast majority of it is in the lower Mid-
Band region, while Verizon now owns the largest collection of upper Mid-Band spectrum. Between Verizon’s additional $10B spent
from 2021 to 2023, and AT&T’s incremental $7B spent from 2022-2024, new Mid-Band spectrum blocks are clearly going to be a
driver of tower activity going forward. The auction for the 3.45-3.55GHz spectrum will begin in December 2021, with potential for a
mid-2022 deployment. Importantly, the new block is adjacent to 430MHz of mid band spectrum that has previously been freed up.

Carrier Spectrum Holdings Breakdown Towers
T-Mobile Leads Low & Mid-Band, But Verizon & AT&T Have Gained Ground.
Spectrum Holdings
Band Category Low-Band Lower Mid-Band Upper Mid-Band Total High Band/mmWave (fka Ultra-High)
Band Name 600 MHz 700 MHz Cellular SMR Total L-Band PCS AWS-1 AWS-3 H Block AWS-4 WCS EBS/BRS Total 3.5GHz CBRS C-Band Total Low MVDDS 24GHz LMDS 37/39 47GHz
Low 1710-1755 1695-1780 1915-1920 2000-2020 Lower Upper + Mid 12.2 - 24.25 - 27.5 - 37.6 - 47.2 - Total
Frequency (MHz) 663-698 698-806 824-894 854-940 1525-1661 1850-1990 2305-2310 2495-2690 3450-3550 3550-3700 3700-3980
12.7 GHz 25.25 GHz 28.35 GHz 40 GHz 48.2 GHz
Band 2110-2155 2155-2180 1995-2000 2180-2200 Mid Mid Band mmWave
Population-Weighted Avg MHz
Verizon 21.7 25.2 46.9 21.4 35.2 11.4 68.0 15.7 160.9 176.6 291.5 6 621 1,086 1,713
T-Mobile 30.8 9.9 13.9 54.6 66.0 36.9 3.4 137.1 243.4 0.1 26.9 27.0 325.0 334 120 339 380 1,173
AT&T 2.6 29.2 23.6 55.4 38.1 14.6 20.3 20.0 93.0 79.9 79.9 228.3 254 90 795 1,139
Dish 17.8 6.0 23.8 21.1 10.0 40.0 71.1 19.4 19.4 114.3 375 17 5 1 610 1,008
Total Big 4 51.2 66.8 48.8 13.9 180.7 125.5 86.7 56.2 10.0 40.0 20.0 137.1 475.5 35.2 267.7 302.9 959.1 375 611 836 2,221 990 5,033
Comcast 5.0 5.0 7.8 7.8 12.8
Charter 4.4 4.4 4.4
Other & FCC 11.7 4.6 4.1 0.5 20.9 40.0 4.9 3.3 4.2 25.0 56.9 134.3 100.0 102.6 12.3 214.9 370.1 125 89 15 179 10 418
All Others 16.7 4.6 4.1 0.5 25.9 40.0 4.9 3.3 4.2 25.0 56.9 134.3 100.0 114.8 12.3 227.1 387.3 125 89 15 179 10 418
Total 67.9 71.4 52.9 14.4 206.6 40.0 130.4 90.0 60.4 10.0 40.0 45.0 194.0 609.8 100.0 150.0 280.0 530.0 1,346.4 500 700 850 2,400 1,000 5,450
Band Share
Verizon 30% 48% 23% 16% 39% 19% 11% 10% 57% 33% 22% 1% 73% 45% 31%
T-Mobile 45% 14% 97% 26% 51% 41% 6% 71% 40% 0% 10% 5% 24% 48% 14% 14% 38% 22%
AT&T 4% 41% 45% 27% 29% 16% 34% 44% 15% 29% 15% 17% 36% 11% 33% 21%
Dish 26% 8% 12% 35% 100% 100% 12% 13% 4% 8% 75% 2% 1% 0% 61% 18%
Total Big 4 75% 94% 92% 97% 87% 96% 96% 93% 100% 100% 44% 71% 78% 23% 96% 57% 71% 75% 87% 98% 93% 99% 92%
Comcast 7% 2% 5% 1% 1%
Charter 3% 1% 0%
Other & FCC 17% 6% 8% 3% 10% 100% 4% 4% 7% 56% 29% 22% 100% 68% 4% 41% 27% 25% 13% 2% 7% 1% 8%
All Others 25% 6% 8% 3% 13% 100% 4% 4% 7% 56% 29% 22% 100% 77% 4% 43% 29% 25% 13% 2% 7% 1% 8%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Source: Company reports, Credit Suisse estimates, FCC, press reports.
Given that radios utilizing low and mid-band spectrum constitute the majority of macro tower radios (due to the spectrums’
propagation), it is important to understand which customers are capable of growing their 5G network to the benefit of TowerCos.
Following the C-Band auction, all of the major carriers are in a great position to build out their 5G networks with a combination of
low/mid-band in rural/suburban locations, supplementing that with high-band in metros and other dense areas (arenas/airports).
Source: Credit Suisse Research (Doug Mitchelson – Telecom, Cable, Media Research Team).

5G Coverage Ramps: Network Traffic to Increase Towers
5G Build-outs to Accelerate in 2021

By the end of the year, more than 1B people (~15% of the world’s population) will live in 5G coverage areas, according to the Ericsson Mobility
Report November 2020. Ericsson increased its estimate for the number of 5G subscriptions at the end of 2020 to 220M. 5G’s faster adoption than
4G (LTE) is primarily driven by earlier availability of 5G-enabled devices by a number of vendors and China’s earlier engagement with 5G compared
to 4G. We believe that momentum for 5G build outs and adoption will accelerate in 2021 driven by the 150+ 5G device models
commercially launched, first standalone network launches in Asia and North America, and the availability of different device price
tiers and operating systems.
Mobile Subscriptions By Technology (Billion)
Source: Ericsson Mobility Report – November 2020.

5G Overview: Benefits are Numerous
5G Benefits Yet to be Realized in Full.
Benefits of 5G: Higher speeds, Lower latency, More device connections
Real World Theoretical Download Network Device
Generation Technology Data Volume
Download Speed Speed Latency Connections
2G GSM 9.6 Kbps <114 Kbps 1000 ms
2.5G GPRS 32-48 Kbps 114 Kbps 500-700 ms
2.75G EDGE 175 Kbps 384 Kbps 300 ms
HSPA 650 Kbps 7.2 Mbps
3G HSPA+ 1.4 Mbps 21Mbps 100-500 ms
DC-HSPA+ 6 Mbps 42 Mbps
4G LTE 15 Mbps 100 Mbps 100 ms 10k
4.5G LTE- Advanced 42 Mbps 300 Mbps 50 ms 50-100k 0.01 TB / sec
5G 1.0 Gbps* 10 Gbps 1-10 ms 1,000k 10 TB / sec
5G vs. 4G – performance and functionality differences 5G data usage 2.8x higher

than 4G in Korea (Sep 2019)

5G Coverage Ramps: Network Traffic to Increase Towers
Expect Significantly Elevated Network Traffic in a 5G World.

Global total mobile data traffic reached ~38 exabytes (EB) per month by the end of 2019, and is projected to grow 4 fold to reach
160 EB/month by 2025. Below, we can see the regional breakout of total mobile data traffic. We highlight that data traffic for the
Middle East and Africa are expected to grow at the fastest rate (CAGR 38% ‘19-25). We believe higher data traffic levels will
help drive the need for improved mobile standards and 5G deployments.
Total Mobile Data Traffic By 2025E (EB/Month) – All Regions Growing +20% CAGR from 2019-2025
CAGR 21%
50 ‘19-25 47
CAGR 20%
‘19-25
40
35
CAGR 34% CAGR 21%
30 ‘19-25
EB/Month
CAGR 31% ‘19-25 CAGR 38%

CAGR 28%
‘19-25 22 ‘19-25
‘19-25
CAGR 34% 20
20 17 ‘19-25 CAGR 33% 18
16 ‘19-25 15
11.6 11.8
9.5 10.5 8.5
10 6.9
4.6
2.5 3.3 1.4 2 2.6 3.7 1.2 1.7 2.3 3.5 1.7 2.6
0
North Latin Western Central and North East China South East India, Middle East
America America Europe Eastern Asia Asia and Nepal, and Africa
Europe Oceania Bhutan
2018 2019 2025E
Source: Credit Suisse Research. Ericsson Mobility Report.

5G Coverage Ramps: Migration to 4G/5G Networks Towers
North America and Western Europe Lead on Most 5G Mobile Connections.

We can see below the regional breakout of mobile connections by 2023. We note that the top three 5G countries in terms of percent
of devices and connections share on 5G will be China (20.7%), Japan (20.6%), and United Kingdom (19.5%), by 2023. Increased
adoption of newer mobile standards will benefit towers as carriers build out 5G coverage, incurring amendment revenues while new
equipment adds weight to the tower structures.
Mobile Connections By 2023 (%) TowerCo Revenues Heavily Indexed to N. America
AMT SBAC
4%
100%
14% 12% 11% 1%
16% India, 16.1%
2% 28% Brazil,
Brazil,11%
12%
2% 22% 37%
11% 13%
Brazil, 8.0%
% Mobile Connections
Other,
Other,9%
7%
Mexico, 6.8%
50% 16% US, 56.8%
50% 17% Nigeria, U.S.,
U.S., 81%
80%
50% 46% 3.0%
52%
Africa Other,
4.7%
73% 43% LatAm Other,
2.9%
Europe, 1.8%
45%
31% 37%
29%
23% CCI
13%
0% 1%
Global APAC Central Latin Middle North Western
and America East and America Europe
Eastern Africa
Europe U.S., 100%
3P and Below 4G 5G LPWA
Source: CSCO Annual Internet Report, Company Data

5G Coverage Ramps: Migration to 4G/5G Networks Towers
APAC and North America Leading the Way in Network Migrations.

Moving Towards A 5G World: 5G is still in the early innings, which should allow for meaningful tower growth as carriers ramp their
spending on 5G coverage. TowerCos should benefit by generating amendment revenues as customers upgrade antenna systems, especially
given the higher spectrum frequencies used for 5G, which necessitate the utilization of more towers.
NAM Breakdown of Mobile Infrastructure Spend (%) EMEA Breakdown of Mobile Infrastructure Spend (%)
100% 0% 0% 0% 3% 100% 0% 0% 0% 1%
NAM % Mobile Infrastructure Spend
14%
EMEA % Mobile Infrastructure

21%
47% 41% 43% 44% 43% 40%

75% 48% 50% 52% 75% 49%
58% 53% 56%
62% 66%
73%
76% 82%
Spend
87% 89% 62%
50% 50%
69%
57% 54%
25% 53% 52% 57% 56% 57% 50%
50% 48% 25% 46%
42% 44%
38% 34%
21% 27% 24%
13% 11% 18%
7% 10%
0% 2% 0% 0% 0% 0% 0% 0% 0% 1% 0% 0% 0%
CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25
2G/3G LTE 5G 2G/3G LTE 5G
CALA Breakdown of Mobile Infrastructure Spend (%) APAC Breakdown of Mobile Infrastructure Spend (%)
100% 0% 0% 0% 0% 0% 4% 100% 0% 0% 0% 3%
7%
15%
CALA % Mobile Infrastructure
APAC % Mobile Infrastructure

16%
24% 26% 23%
37% 34%
75% 75%
57% 63% 58%
74% 74% 75% 78% 69% 74%
80% 85%
Spend
83% 90%
Spend
85%
50% 88% 50%
84% 84% 68%
76% 74%
63% 66%
25% 25%
43% 40%
37% 30% 25%
26% 26% 25% 22% 20% 15%
12% 13% 9% 10%
0% 5% 2% 0% 0% 0% 0% 2% 1% 0% 0% 0% 0%
CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25
2G/3G LTE 5G 2G/3G LTE 5G

Source: Omdia.

Lease Amendment Activity Trending Higher Towers
Tower Amendment Activity Has Meaningfully Inflected Upwards and We Expect

Amendments to Remain Elevated Through 2023E Given That We Are in the 5G
Cycle.
SBAC Amendment Activity Has Grown as a Share of Leasing Revenue, 5G the Likely Driving Force
100%
90% 88%
84% 84%
80% 80%
80%
70% 70% 71% 69%
70% 67% 67% 67% 68%
65%
60% 60% 60% 62% 63% 60% 60%
60% 53%
51% 50%
50%
40%
30%
20%
10%
0%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
We expect that carriers will continue to meet their 5G coverage targets by upgrading existing cell sites, driving amendment revenue
more so than expansion site revenue in the early innings. The chart above quantifies the amendment activity motion that this trend has
already been in place for over a year, with carriers deploying 5G-ready equipment. We expect lease amendment activity to remain
elevated, with Verizon noting that “initial C-Band build [will take place] on existing infrastructure.”
Above, SBAC noted that amendments accounted for 79% of domestic tower leasing revenue over the past seven
quarters, up from an average of 62% in the seven quarters preceding 2Q19. As carriers look to accelerate the commercial
availability of 5G across more geographies, we view that amendment activity will remain elevated across major tower operators in 2021.
Source: Credit Suisse Research, Company Data

Fundamentals: Gross Margins Towers
Tower Gross Margins Expected to be Marginally Higher Through 2022E Versus

2020. Margins are Mature, But Very Solid, Especially Considering Site Mix.
TowerCos’ Gross Margin Trajectory Muted From ’20-22 AMT’s ’21 GM Remains Ahead of CCI & Data Centers
80.0% 77.2%
80.0% 77.0% 76.8%
75.0% 72.9% 75.0% 72.2%
68.2% 69.1% 67.7%
70.0% 70.0% 66.9% 66.1%
65.0%
Gross Margin
Gross Margin
65.0% 61.6% 61.1% 60.9% 60.5%

60.0%
55.0% 60.0%
50.0% 55.0%
45.0%
50.0%
40.0%
35.0% 45.0%
30.0% 40.0%
SBAC AMT CCI SBAC AMT CCI QTS COR CONE DLR EQIX
2010 2015 2020 2021E 2022E
We forecast gross margin (GM) to rise slightly for TowerCos through 2022, while noting that TowerCos are already at very
solid GMs, well ahead of MTDC peers.
We note that TowerCos primary direct operating expense is ground rent, followed by power and fuel costs. While we would expect fuel
costs to remain relatively stable given crude oil’s price recovery, ground rent costs will likely continue to increase with fixed escalators
built into most of the ground leases. Additionally, international tower GMs are lower than that of the US, which means AMT’s GM
projection is impressive considering we project its international mix of sites to grow. In total, while variable costs in GM may remain flat,
the larger fixed costs should over-index as TowerCos build out in new regions, leaving minimal room for GM leverage, albeit with better
topline growth. That said, we compare TowerCo GMs to data center GMs and it remains clear that TowerCo margins are robust.
Source: Credit Suisse Research, FactSet

Fundamentals: Adj. EBITDA Margins Towers
Cost Management Remains Robust, but Margins are Facing Headwinds from
Business Maturity and Exploration Costs of New Infrastructure Assets.
CCI ‘21-22 Margins Down vs. Expansions from AMT, SBAC Towers 2021E EBITDA Margins Well Ahead of Data Centers
75.0% 72.3% 75.0% 71.8%

70.0% 67.9%
65.8% 70.0%
65.0% 61.8% 62.4% 65.0%
Adj. EBITDA Margin

Adj. EBITDA Margin
58.0% 65.0%
60.0%
55.0% 60.0% 58.3%
55.2%
50.0% 55.0% 53.8% 53.0%
52.0% 51.8%
45.0%
50.0% 46.9%
40.0%
35.0% 45.0%
30.0% 40.0%
SBAC AMT CCI SBAC AMT CCI QTS DLR COR SWCH CONE EQIX
2010 2015 2020 2021E 2022E
We forecast AMT and SBAC to expand adj. EBITDA margins slightly over the next couple of years from 2020 levels, while
CCI’s margin should revert to more normalized levels in 2021/2022. SG&A costs for TowerCos are driven by personnel
costs to support the procurement of towers for expansion through M&A and new builds, and they continue to improve
efficiency and boost operating leverage.
TowerCos primary costs are above the gross margin line, that said, TowerCos have been very successful in optimizing SG&A expenses,
lowering the costs from a double-digit percentage of revenue in the past decade to high single-digits today. Therefore, in light of our
expectations for modestly improved gross margins and slightly improved SG&A costs, we arrive to very modestly improved adj. EBITDA
margins for TowerCos. Although longer-term, as tenancy gets closer to 3 tenants per tower, adj. EBITDA margins have room for upside,
given improved leverage with relatively static procurement costs (employees).
Source: Credit Suisse Research, FactSet.

Valuations: AFFOS and EBITDA Multiples Towers
SBAC Trades at a Premium on a P/AFFOS and EV/EBITDA Basis Compared to Peers;

However, We View AMT is Best Positioned in the Group.
P/AFFOS Multiple Valuation EV/EBITDA Multiple Valuation

30.0x 30.0x
26.8x 26.3x 26.5x 26.1x
26.0x 25.7x 25.8x
24.9x 25.0x 24.9x
25.0x 25.0x 22.9x
EV/EBITDA Multiples
P/AFFOS Multiples
21.6x
20.0x 20.0x 18.8x
18.1x
15.0x 15.0x
10.0x 10.0x
5.0x 5.0x
SBAC AMT CCI SBAC CCI AMT CLNX-MCE
2021E 2022E 2021E 2022E
P/AFFOS: SBAC trades at a ~1 turn premium to AMT, which trades at a slight premium to CCI. SBAC’s premium to AMT is due to its
greater share of revenue generated in the US (at 80% of site leasing revenue versus AMT which only generates a little over half of its
site leasing revenues domestically). While CCI’s discount is due to its significant exposure to small cells and fiber, which are not viewed
as positively as macro towers.
EV/EBITDA: SBAC trades at a premium to CCI and AMT. Additionally, we included CellNex, a European tower operator, to highlight the
premium placed on U.S.-focused tower operators. The multiple gap between U.S. TowerCos and CellNex has narrowed as colocation
share has grown in Europe, but the U.S. premium remains due to greater market share and REIT status in our view.

Valuations: Dividend Yields Towers
Rising Rates Flattened Tower Shares, While Dividends Grew,

Elevating Yields in 1Q21, Following Prior Yield Compression.
Group Average: 2.1% AMT – Elevated Yield at 2% in Recent Months
5.0% 3.0%
4.5% 2.5%
2.5%
4.0%
3.5%
2.0% 1.8%
Dividend Yield
3.0%
Dividend Yield
2.5% 1.5%
2.0%
1.0% 1.2%
1.5%
1.0%
0.5%
0.5%
0.0% 0.0%
Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20
AMT CCI SBAC Average Yield Avg Min Max
SBAC – Started Paying a Dividend in 2019 CCI – Group Leading Yield of 3.1%
1.2% 5.0%
4.4%
4.5%
1.0%
4.0%
0.9%
3.5%
3.5%
0.8%
Dividend Yield
Dividend Yield
3.0%
0.6% 2.5%
2.0%
0.4%
1.5%
1.0%
0.2%
0.5%
0.0%
0.0% 0.0%
Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20
Yield Avg Min Max Yield Avg Min Max

Fundamentals: Dividend Towers
AMT & SBAC Have Room to Expand Dividends to Match DC Dividend Yields.
CCI Dividend Payout is Already More Mature at 73%.
2019-2022E AFFO Payout Ratio: SBAC & AMT Have Meaningful Room to Grow Dividends to Supplement Shareholder Returns
120%
100%
80%
AFFO Payout Ratio
60%
40%
20%
0%
SBAC EQIX CONE AMT QTS DLR CCI COR
2019 2020 2021E 2022E
In General, Tower AFFO Payout Ratios are Slightly Below Data Center Peers: While CCI’s AFFO payout ratio is only second to COR, SBAC
and AMT have lower payout ratios, closer to that of EQIX and CONE.
• AMT: Paid out 53% of its AFFO through a dividend in 2020, well below most other REITs. AFFO payout is forecasted to rise in 2021, but only
marginally to 57%, again, below most REIT peers. If AMT were to grow its 2021E div. by 50% we project that it’s AFFO payout would only rise to
73%, highlighting the optionality the company has with its cash flows.
• SBAC: Paid out 20% of its AFFO through a dividend in 2020, SBAC’s first year with a dividend. We project AFFO payout to rise to 23% in
2021E, still well below payout ratios for all other towers and data centers, as SBAC is still aggressively growing its site count.
• CCI: Paid out 73% of its AFFO through a dividend in 2020, higher than most towers and data centers, and more in-line with broader REITs. CCI’s
payout ratio is expected to rise to 79% in 2021E.
Source: Credit Suisse Research, Credit Suisse Estimates.

Valuations: Relative REIT Group Valuations Towers
Due to Impressive Rev./AFFOS Growth Towers Trade Ahead on All Metrics,

Warranted in Our View, Especially as the Most REITs Struggled Due to COVID.
P/Sales EV/EBITDA
16.0x 40.0x
14.0x 35.0x
EV/FY+2 EBITDA
12.0x 30.0x
P/FY+2 Sales
10.0x 25.0x
8.0x 20.0x
6.0x 15.0x
4.0x 10.0x
2.0x 5.0x
0.0x 0.0x
2021E 2022E 2021E 2022E
P/FFO P/AFFO
30.0x 35.0x
25.0x 30.0x
P/FY+2 AFFO
P/FY+2 FFO
20.0x 25.0x
15.0x 20.0x
10.0x 15.0x
5.0x 10.0x
5.0x
N/A
0.0x
0.0x
2021E 2022E 2021E 2022E

Source: Credit Suisse estimates, FactSet, Hotels 2021 P/AFFO is N/A due to negative AFFO.

Telecom & Networking Equipment
Expect Mixed Results from Enterprise Customers in 1Q21
Results, Cloud Demand Remains Consistently Elevated

Telecom & Networking Equipment Outlook Networking
Executive Summary – 2021E Should Be a Better Year for Equipment Than 2020
Following a challenging 2020 for Networking companies, we expect the dynamic to turn relatively favorable for the group in 2021E, and in specifically 2H21E based on our industry
data and channel checks.
Across the Comm. Equipment End Markets, we would highlight the following:
 Overall Networking Market Growth (Switching, Routing, ADCs, WLAN): Following our recent checks, we continue to expect a strong enterprise recovery in 2021 albeit
weighted to the 2H, driven by enterprises adopting long-term projects and long-lasting approaches to digitizing workflows, an effort that was essentially fully halted when
COVID-19 hit. Furthermore, we believe the strength in enterprise this year will be magnified by lapping easier comps from 2020 with the WLAN market growing +10.5 y/y
(revised up from 6.3%) in 2021. We expect the data center switching market will continue to steadily grow, stemming to even stronger than anticipated U.S hyperscale capex
growth, 20.1% y/y versus initial expectations of +16% y/y. According to the latest Omdia forecast, the data center switching market is projected to grow to $12.38B (+2.7%
y/y) in 2021, slightly below our expectations given our channel checks, while the campus switching market is expected to grow to $15.71B (+8.2% y/y), revised down from
+9.4% y/y, but still well above our conversations with industry contacts. Heading into another year of the 5G cycle, we expect the SP routing and switching markets will
continue to expand as carriers continue to invest in 5G equipment, but we need to see tangible examples of equipment vendors winning deals and what types of technologies
deployed to determine if they are repeatable sales motions. We still expect security will continue to remain a key priority in 2021 and over the next several years.
 Channel Check Summary: We have heard numerous reports that enterprise deals that began negotiations in 2020 were delayed in 1Q 2021 with the following reasons
mentioned: (1) WFH/in office staff rightsizing taking more time to figure out; (2) Solarwinds hack leading to network vulnerability assessments, slowing system integrator
selection; and (3) chip/supply shortages for IT solution gear also called out as an issue. Other factors include equipment refreshes and public cloud ecosystem lock-in as
decelerators to the enterprise cloud transition. We are now hearing that a big bulge of enterprise deals won’t get signed until May-June 2021 and deployed in 2H21.
 Valuation – Given the aforementioned industry dynamics and the difficult 2020, we expect to see a constructive recovery in the narrative, fundamental models, or valuations as
a group, but continue to favor vendors indexed to specific trends like MSI (first responder, LMR, Command Center), ANET (growing cloud titan capex spend, strong enterprise
growth opportunities) and COMM (telecom wireless equipment for 5G cycle, cable network densification).
Credit Suisse Outperformers and Underperformers:
1. Top Pick: MSI (Outperform, $198 Target Price) – MSI is one of very few providers that can offer a true end-to-end solution for customers from first responder radios to full
command center (software) communications in one aggregated and auditable system. We see MSI as the leading provider and highly irreplaceable given it is the only true large
scale U.S. based end-to-end provider serving municipal, state, and federal first responders in North America.
2. ANET (Outperform, $359 Target Price) – ANET is well positioned to benefit from strong cloud/hyperscale capex spend growth. Cloud titans and SPs will continue to look to
ANET for data center switching long-term, in our view, based on the company’s proprietary EOS software, quick adoption and integration of leading edge components
(merchant silicon use, latest DC switching chip), and network equipment power efficiency.
3. COMM (Outperform, $21 Target Price) – Despite recent pressures on COMM’s end markets, we continue to view the company’s relevance to overall telecom network
densification and data center build-outs as positive over the next few years. The company boasts a strong track record of operational excellence and discipline with respect to
debt pay-downs and achieving synergies from integrating acquisitions
4. JNPR (Underperform, $22 Target Price) – JNPR faces multiple pressures that we believe will lead the stock to Underperform. These include intensifying technological
pressures from CSCO – virtual core and new Silicon One/8000 Series offerings – the rise of White Boxes, and slower than expected 5G deployments.
5. UI (Underperform, $126 Target Price) – Total revenue forecasted to decelerate from recent highs, pressuring UI’s trading multiple. We are forecasting decelerated growth
for UI’s key end-markets including WLAN and campus switching driven by macro trends and increased competition.

CS Comm Equipment Performance vs. Major Indices Networking
Most CS Comm. Equipment Coverage Has Underperformed the S&P 500;

Underperformed the IGM Tech ETF Index Since Jan 1, 2019, But MSI In-Line With
S&P500 Amid COVID; UI The Only Exception. Vaccine Lift Has Been Marginal.
300 COVID-19 Weighed on Group in 2020, But Returns Have Underperformed Even Before
Virus Effects on Comm. Equipment Dating Back to 2H19. Following Biden’s Vaccine
Timeline, Group Returns Have Improved But Continue to Lag Broader Tech Returns.
Logarithmic Index of Share Prices (Base 100)
250
200
150
100
50
0
11-Jul-19 11-Oct-19 11-Jan-20 11-Apr-20 11-Jul-20 11-Oct-20 11-Jan-21
ANET CSCO JNPR FFIV

UI MSI COMM CS Comm. Equipment AVG
S&P 500 N.A. Tech ETF (IGM)

Comm Equipment Forward EPS (FY2) Multiples Networking
Unlike Major Market Indices/Markets (S&P500, Nasdaq), Com. Equipment Stocks

Have Not Seen Multiples Expand. COVID-19 Impacts Continue to Weigh on Group
Despite Vaccine Announcement.
40.0x
ANET and UI Saw Large Multiple Expansions in 2H20: These expansions were predominantly driven by
idiosyncratic fundamentals (better revenue/EPS results in 3Q 2020 rather than market multiple expansions.
Companies that should see further multiple expansions include FFIV/MSI driven by their software business
35.0x transitions and robust core revenue growth sustainability, a 2021 dynamic we believe should play-out.
30.0x
25.0x
P/FY2 EPS
20.0x
15.0x
10.0x
5.0x
0.0x
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21
ANET COMM CSCO UI MSI FFIV JNPR Average


Outlook: Channel Checks for 1Q 2021 Results Networking
Our Channel Checks Include Inputs From: (1) Data Center Infrastructure Providers
(Colocation); (2) Hybrid Cloud Vendors (Managed Services & Web Hosting Providers
etc.); (3) Equipment/System Integrators; and (4) Value Added IT Resellers.
Equipment Type Channel Check Summary
Data Center Switching demand from Cloud Service Providers and Technology customers has been strong in 1Q21, and the trajectory for 1H21 is more
positive than what some of the equipment coverage may have suggested, in our view. And, we are incrementally more positive following our checks on the
trajectory of cloud SP spend going into 1H21. Most of our conviction stems from the commentary we have heard regarding continued hyperscale data
center signings and significant facility openings in the next 6 months― facilities ready for data center switch shipments. Additionally, when reviewing the
Hyperscale Capex spending acceleration in 2021E by North American Hyperscalers, we are more constructive than current market expectations; the
Data Center
aforementioned dynamics put ANET in a position to benefit given the rapid pace of data center densification and scale across numerous regions at a time.
Switching – Cloud
400G Shipping at Scale Likely 2H21E/1H22E: Based on our industry checks, 400G switches shipping at scale by 2021 remains unlikely based on our industry
Service Providers & checks with industry engineers and end users when discussing the 400G switching upgrade/deployment opportunity. Most of our industry checks highlighted that
Hyperscalers most of the 2016 to 2018 data center build vintages do not need to be upgraded to 400G switching speeds from 100G until 2H21 or early 2022 (~5yrs in
operation versus the suspected ~3yrs in our prior sector outlooks) given their optimized electrical efficiencies, aligning with the dynamics that equipment vendors
have discussed on earnings calls relating to cloud customers running their equipment longer and hotter than they have before. Commentary around CSCO/JNPR
insertions into cloud networks were not prevalent, no mentions or wins for any of them, whereas ANET came up a few times for Tier 1 data center
market designs.
We have heard numerous reports that enterprise deals that began negotiations in 2020 were delayed in 1Q 2021 with the following reasons
mentioned: (1) WFH/in office staff rightsizing taking more time to figure out; (2) Solarwinds hack leading to network vulnerability assessments, slowing
Data Center system integrator selection; and (3) chip/supply shortages for IT solution gear also called out as an issue. Other factors include equipment refreshes behind
schedule and public cloud ecosystem lock-in as decelerators to the enterprise cloud transition in 1H21. We are now hearing that a big bulge of enterprise
Switching &
deals won’t get signed until May-June 2021 and deploying/commencing in 2H21. ANET, along with its new offerings, is expected to make significant
Equipment (ADC,
progress in DC switching this year. Checks were positive on the soundness of the FFIV Voltera acquisition and we expect FFIV to maintain its very relevant
Blades, etc.) – product/services portfolio, trekking better than expectations from a business perspective than most industry experts thought 12 months ago, but no
Enterprise acceleration detected to make us more constructive going into quarterly results. CSCO/JNPR came up in checks, but little stood out as noteworthy from a
deal perspective for 1Q21. Most experts believe 2021 is CSCO’s “breakout year” to take back market share and win a series of new major enterprise
deals, expectations are very high whereas reported deal flow has not kept up with the hype.
Service Provider Positive commentary on quarter checks for 1Q20 from SPs. There continues to be order flow by cable/telecom customers swapping out 10G
Routing and Carrier equipment for 100G switching/SP routing, which was better in 1Q21 versus 4Q20. Despite the consistent order flow, this segment has underperformed
Switching especially for core providers CSCO & JNPR, and this trend may improve in 1Q21, but strength extending through 2021 unclear.
Based on 4Q20 earnings results and the lack of reconciliation of channel checks to actual results, we do not believe summarizing our checks for Campus
Campus Switching &
Switching & WLAN are additive. We do believe there is continued pressure on this product group, but Federal funding seems to be backstopping many
WLAN issues which was shown explicitly through CSCO’s earnings results last quarter (and their 1Q20 revenue guidance).

Outlook: A Stabilization in Enterprise Into 2021 Networking
Key Commentary From 4Q 2020 Earnings Calls

Following a challenging and tumultuous year for enterprise networking spend, we expect a stabilization of enterprise spend. Our channel checks suggest
that the enterprise customer base should continue its rebound from CY 4Q20 with some isolated impacts depending on the sectors and quality of a company’s customer
mix. In addition, we expect campus switching and WLAN end markets, specifically, will continue to see improving conditions and reach a stabilization in 2021.
Augmenting our checks, we highlight key commentary from CY4Q20 earnings calls from some of the largest enterprise focused companies both in/out of our coverage.
Company 4Q 2020 Key Earnings Results Comments

CSCO: On the F2Q21 (4Q20) call, mgmt. noted that the enterprise market remained soft driven by “some elongated
sales cycles and a continued pause in spending amongst some customers”. With a positive tone, mgmt. emphasized the
commercial orders led, followed by enterprise following 2008, noting that commercial orders grew 6% in 4Q20.
ANET: ANET’s guidance for 2021 was generally upbeat with the expectation for continued growth with Enterprise and
Provider customers. Furthermore, mgmt. emphasized that ANET’s single OS, CloudVision has resonated with enterprise
customers with the company just crossing over 1,000 CloudVision customers since they began shipping the product.
JNPR: Mgmt. believes that enterprise will be JNPR’s fastest growth vertical in 2021. In 4Q20, JNPR saw a 125%
increase in new logos for Mist. And, while mgmt. is not accounting for a recovery in their 2021 outlook, mgmt. believes
that in the 2H21 dynamics should reverse and “enterprises go back to spending more like they used to”.
EQIX: Per mgmt.’s commentary, healthcare and retail as telehealth and digital initiatives had strong momentum in 4Q20
resulting in a strong quarter for the enterprise vertical. In an upbeat tone, mgmt. noted that they believe that the
enterprise momentum they have seen over the past several years should absolutely continue into 2021.
DELL: In the F4Q21 (4Q20), DELL saw improved demand from large enterprises and continued improvement
from their small & medium customers. Looking ahead, mgmt. believes that the demand environment will continue to
improve noting that estimates from both IDC & Gartner see overall IT spending growing mid-single digits in CY2021.

Rural Digital Opportunity Fund (RDOF) Networking
RDOF a Solid Market Opportunity for Equipment Names in 2021 and Beyond.
Factor Details
The Rural Digital Opportunity Fund (RDOF) is a program initiated by the Federal Communications Commission (FCC)
under the Universal Service Fund (USF) to address the digital divide in the U.S. In essence, the fund allocates $20.4B
in federal government grants over the next 10 years. The RDOF grant will take place in two phases: Phase 1 auction
What is RDOF?
results ($16B reverse auctioned) were announced in December 2020. Phase 1 focuses on areas with no internet access.
And Phase 2 (Remaining $4.4B of funds) will focus on underserved areas and rely on updated FCC data that will more
accurately depict which areas have coverage. The date for Phase 2 bids has not been announced yet.
Regional service providers that have won funds from Phase 1 of the RDOF reverse auctions will need to have completed a
Long Form Application (FCC Form 683), which includes a detailed technology and system design plan. A winning bidder
must have a network design that describes how they will deliver the performance levels they’ve guaranteed in their bid to
Timing of Sector
at least 95% of the required number of locations in each state by the end of the 6yr build-out period and for the duration
Impact?
of the 10yr support term, assuming a 70% subscription rate by the final service milestone. We expect the start of the
tailwind to comm. equipment will begin to materialize in a more meaningful way in 2H21 as the deadlines to
get final approval of funding for Phase 1 will run until June 2021 (several year tailwind as projects commence).
Equipment
Vendors that that sell fixed line access equipment, fiber termination points and/or in-home equipment, CPE
Categories to
systems, and Wi-Fi mesh systems are poised to benefit.
Benefit
CommScope (COMM) has A “long-tail of smaller customers [service providers] in Tier 2 and Tier 3 markets” and an end-
Stock Calls to-end solution offering. On the 4Q20 earnings call, mgmt. noted that RDOF has generated enormous demand across
Indexed to RDOF their portfolio of fiber cable, hardened connectivity and fixed wireless products. COMM also rated Outperform in our
coverage.

Biden Infrastructure Bill Networking
A Promise to Close the Digital Divide.

Factor Details
Separate from the coronavirus relief package (~$1.9T rescue plan), President Biden has offered up a massive $2.3T
infrastructure bill that aims to invest in America’s ageing infrastructure such as roads and bridges as well as
expanding broadband internet access and boosting funding for research and development. In addition, Biden has included
What is the Bill’s
higher corporate taxes to help pay for the package raising the corporate tax rate from 21% to 28%. Focusing on
Scope?
connectivity, the bill prioritizes broadband expansion by allocating $100B to bring affordable internet to “all Americans” by
2029. The bill seeks to achieve “100% high-speed broadband coverage” across the US, and aims to prioritize broadband
networks “owned, operated by, or affiliated with local governments, non-profits, and cooperatives”.
When will this Bill The bill has not been approved yet. Cited by major news media outlets, House Speaker Nancy Pelosi (D-Calif.) has
impact the said her goal is for that chamber to pass the bill by July 4, 2021, which could mean that the bill won’t make it to the
Equipment Senate until the middle of that month. Even when the bill is finally passed, the money is expected to be spent over an eight
Sector? year period providing an elongated tailwind for the comm. equipment sector.
Depending on how Biden’s plan further defines “building 'future-proof' broadband infrastructure” massive fiber-to-the-
Equipment home (FTTH) investments could be necessary. Service providers like AT&T have pushed back arguing that “it is not
Categories to practical to assume fiber can or should serve every household in rural America” (Joan Marsh, EVP, AT&T). If the narrative
Benefit continues to focus on fiber, these investments may challenge cable providers and fixed wireless providers. However, we
believe that given the impractical nature of only utilizing fiber, a mix of investments (cable, fixed wireless) will be necessary,
Stock Calls Within our coverage we see Cisco (CSCO), Commscope (COMM), and Juniper (JNPR) as key potential beneficiaries
Indexed to of the proposed Biden infrastructure bill. We believe of the three companies COMM may see the greatest uplift from
Biden’s the bill as it offers an extensive fiber-to-the-home (FTTH) portfolio for access cabling. COMM also rated Outperform in
Infrastructure Bill our coverage.

COVID-19 – Imagining The New Normal Networking
Broadband for All, Pandemic Magnified Connectivity Inequalities

COVID-19 magnified the digital divide and inequality surrounding connectivity. In the U.S specifically, it is estimated that roughly ~10% of
all public school teachers live in households without adequate internet connectivity, and roughly 15-16M K-12 public school students, or 30% of all
public K-12 students, live in households without either an internet connection or devices adequate for distance learning at home (Common Sense &
BCG Report). Based on data aggregated from the National Conference of State Legislatures (NCSL), we estimate ~$1.48B (potentially more as
these are states that have publically disclosed information) of the CARES funding allocated to states has been spent on technology/broadband.
Under the U.S treasury guidance, provided that funds are spent by Dec. 30, states may use their Coronavirus Relief Funds (CRF) to expand
broadband capacity for distance learning and telework. Given President Elect Biden’s vocal stance on closing the digital divide, we believe
there will be an increased focus on broadband connectivity for all leading to potential more funds and grants in the space (RDOF).
CARES Funds Allocated to Technology / Broadband Spending
State, Millions of $
Alabama $203.4 New Hampshire $50.0
Arizona $2.0 New York $48.0
California $61.5 North Carolina $39.0
Georgia $9.0 North Dakota $61.9
Idaho $40.7 Oklahoma $161.0
Iowa $85.0 Oregon $23.5
Kansas $60.0 South Carolina $50.0
Maine $10.6 Utah $28.9
Maryland $25.0 Vermont $31.1
Michigan $25.0 Virginia $30.0
Mississippi $267.0 Washington $24.3
Missouri $37.8 West Virginia $50.0
Nevada $50.0 Wisconsin $5.0
Total Spend $1,479.6
Source: NCSL

Outlook: Forward Looking Product Orders Networking
CSCO Service Provider Product Orders Materially Impacted by Decelerating Trends

Since 2015, Negative Pressures Only Intensified Through 2020.
Despite High Expectations for 5G Equipment Upgrades and SP Capex Spending (See Tower REIT Section and next Slide
for Metrics), Service Provider Order Demand Still Declined in 2020: When charting CSCO’s product orders on a logarithmic
300 basis (across all reported order segments and regions), it is clear that service provider customer demand has been the clear laggard in
CSCO’s results, largely driven by declining Cable and Telecom customer demand throughout the year. Given COVID-19 headwinds,
other customer segments, including Commercial and Enterprise exacerbated the total product order declines. In 2021, we expect
lumpiness in the Service Provider segment, and anticipate positive inflections in the Enterprise, Commercial, and Public
Logirithmic Index to Reported Order Growth (Base 100)
250 Sector categories after already reporting better than CS expected results last quarter.
200
150
100
50
0
YE2015 F1Q16 F2Q16 F3Q16 F4Q16 F1Q17 F2Q17 F3Q17 F4Q17 F1Q18 F2Q18 F3Q18 F4Q18 F1Q19 F2Q19 F3Q19 F4Q19 F1Q20 F2Q20 F3Q20 F4Q20 F1Q21 F2Q21
Total Cisco Enterprise Public Sector Commercial Service Provider Americas EMEA APJC

5G Cycle: Global Wireless Capex Outlook Networking
We Remain in the Early Innings of an Extended Wireless Generation Cycle. Western

Europe and India to See Large Step-Ups in Spend in 2021E.
Wireless capex (US$ bn) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E
Western Europe 17.8 19.0 20.7 21.7 21.9 24.3 25.5 23.5 22.8 22.3 22.3 21.0 22.1 22.5 22.3
% change -9% 7% 9% 5% 1% 11% 5% -8% -3% -2% 0% -6% 5% 2% -1%
North America 21.3 24.4 26.9 30.7 34.5 33.6 32.3 29.7 30.3 31.5 33.1 32.4 35.0 37.4 36.7
% change -7% 15% 10% 14% 13% -3% -4% -8% 2% 4% 5% -2% 8% 7% -2%
Asia-Pacific 73.3 63.1 64.1 71.7 80.9 84.4 92.2 81.5 75.1 76.2 79.0 82.5 85.3 87.0 88.8
% change 3% -14% 2% 12% 13% 4% 9% -12% -8% 1% 4% 4% 3% 2% 2%
China 41.6 30.9 31.4 33.3 42.9 47.3 51.5 41.7 35.9 33.7 36.1 41.9 42.7 42.7 42.7
% change 24% -26% 2% 6% 29% 10% 9% -19% -14% -6% 7% 16% 2% 0% 0%
India 6.2 7.1 4.4 4.1 3.6 5.2 8.1 6.9 6.3 7.9 6.3 4.8 5.9 6.2 6.6
% change -24% 15% -38% -7% -11% 44% 55% -15% -8% 25% -20% -25% 25% 5% 5%
Asia Pacific ex China, India 25.6 25.1 28.3 34.2 34.4 31.9 32.6 32.9 32.9 34.5 36.6 35.9 36.6 38.0 39.6
% change -13% -2% 13% 21% 0% -7% 2% 1% 0% 5% 6% -2% 2% 4% 4%
Latin America 13.1 14.4 18.9 20.7 21.2 22.5 20.7 17.8 17.7 18.0 18.6 13.7 15.2 15.5 16.0
% change -19% 10% 31% 10% 3% 6% -8% -14% -1% 2% 3% -26% 11% 2% 3%
Emerging EMEA 25.2 25.8 29.3 25.2 26.0 26.6 24.8 22.0 21.6 22.7 22.7 22.2 22.9 23.5 24.5
% change -7% 2% 14% -14% 3% 2% -7% -11% -2% 5% 0% -2% 3% 3% 4%
Global wireless capex 150.8 146.7 159.8 169.8 184.6 191.5 195.5 174.6 167.4 170.7 175.7 171.8 180.5 186.1 188.3
% change -4% -3% 9% 6% 9% 4% 2% -11% -4% 2% 3% -2% 5% 3% 1%
US$ bn 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E
Wireless capex 150.8 146.7 159.8 169.8 184.6 191.5 195.5 174.6 167.4 170.7 175.7 171.8 180.5 186.1 188.3
% change -4% -3% 9% 6% 9% 4% 2% -11% -4% 2% 3% -2% 5% 3% 1%
Wireless equipment spend 62.3 58.3 65.2 59.9 59.8 63.5 64.8 59.8 54.9 51.9 55.9 61.7 65.4 67.9 69.2
% change -7% -6% 12% -8% 0% 6% 2% -8% -8% -6% 8% 10% 6% 4% 2%
Equipment to capex (%) 41.3% 39.7% 40.8% 35.2% 32.4% 33.1% 33.2% 34.3% 32.8% 30.4% 31.8% 35.9% 36.3% 36.5% 36.8%
4G rollouts during 2011-2015: Wireless capex rose from ~$150bn Slower but Longer 5G cycle ahead: As telcos try to manage a balance between 5G investments and
pre 4G to as high as $195bn at the peak of 4G in 2015.This led to service revenue growth and FCF, we believe that 5G capex cycle may see slower growth than what we
wireless equipment spend also peaking at $65bn in 2015. saw in 4G cycle. But equally we see a longer sustained investment cycle with focus shifting towards 5G
resulting in equipment to capex ratio rising from the lows of 30% in 2018 to 36% in 2020
Source: Credit Suisse Research and Estimates from Credit Suisse Analyst Achal
Sultania.

Networking End Market (Revenue) Networking
2021 Growth in Mid-Single Digit Range; Lifted by DC Switching and WLAN.

Networking Market CAGR
($millions) 2017 2018 2019 2020E 2021E 2022E 2023E 2024E '14-'19 '19-'24
Switching
Carrier Switching 2,413 2,294 2,380 2,161 2,239 2,174 2,098 2,026 (2.2%) (3.2%)
Data Center Switching 11,510 11,663 12,002 12,056 12,383 13,034 14,086 14,591 7.4% 4.0%
50GB & Below 9,046 7,693 6,769 5,825 5,105 4,544 4,063 3,607 (4.1%) (11.8%)
100GB & Above 2,464 3,970 5,233 6,231 7,278 8,490 10,023 10,984 131.8% 16.0%
Campus Switching 13,430 15,453 15,749 14,521 15,713 17,198 17,521 17,379 3.4% 2.0%
Total Switching 27,353 29,410 30,131 28,738 30,334 32,406 33,706 33,995 4.3% 2.4%
Y/Y Growth 7.9% 7.5% 2.5% -4.6% 5.6% 6.8% 4.0% 0.9%
Application Delivery Controllers

Hardware 1,348 1,214 1,074 972 816 721 627 547 (8.4%) (12.6%)
Virtual 515 577 648 696 781 803 822 829 18.9% 5.0%
Total ADC Market 1,862 1,791 1,722 1,668 1,597 1,523 1,450 1,375 (2.4%) (4.4%)
Y/Y Growth -5.1% -3.8% -3.9% -3.2% -4.2% -4.6% -4.8% -5.1%
Routing
Service Provider Routing 13,171 12,757 12,673 12,263 12,652 12,859 12,987 13,128 0.1% 0.7%
Core Routers 3,471 3,564 3,385 3,098 3,463 3,587 3,710 3,838 5.2% 2.5%
Edge Routers 9,700 9,193 9,288 9,165 9,189 9,272 9,277 9,290 (1.5%) 0.0%
Enterprise Routing 2,920 2,852 3,132 2,594 2,756 2,856 2,882 2,888 1.3% (1.6%)
Optical Networking 14,496 14,649 15,448 16,181 16,830 17,591 18,428 18,428 4.0% 3.6%
Total Routing Market 30,587 30,258 31,252 31,038 32,238 33,305 34,297 34,444 2.0% 2.0%
Y/Y Growth 2.4% -1.1% 3.3% -0.7% 3.9% 3.3% 3.0% 0.4%
WLAN
Access Points 4,654 5,131 5,171 5,225 5,995 6,844 7,636 8,332 7.0% 10.0%
Controllers 1,207 1,415 1,528 1,679 1,633 1,653 1,717 1,812 7.2% 3.5%
Total WLAN Market 5,862 6,546 6,699 6,904 7,628 8,497 9,354 10,144 7.0% 8.7%
Y/Y Growth 10.8% 11.7% 2.3% 3.1% 10.5% 11.4% 10.1% 8.4%
Overall Networking Market 65,664 68,006 69,805 68,347 71,797 75,732 78,807 79,958 2.4% 2.8%
Y/Y Growth 5.1% 3.6% 2.6% -2.1% 5.0% 5.5% 4.1% 1.5%
Source: Credit Suisse Research, Omdia data & estimates

Networking End Market (Units/Ports) Networking
Growth in High-Single Digit Range; Led by WLAN and DC Switching Units.

Networking Market CAGR
(Unit/Ports in millions) 2017 2018 2019 2020E 2021E 2022E 2023E 2024E '14-'19 '19-'24
Switching (Ports)
Carrier Switching 10.030 10.430 10.130 9.881 10.501 10.395 10.232 10.074 7.8% (0.1%)
Data Center Switching 55.428 58.512 57.908 60.914 65.231 69.976 78.899 86.378 10.7% 8.3%
50GB & Below 47.512 44.111 39.977 39.206 38.926 37.417 37.387 36.313 2.8% (1.9%)
100GB & Above 7.916 14.402 17.931 21.708 26.306 32.559 41.512 50.065 331.0% 22.8%
Campus Switching 582.995 631.868 663.512 630.510 680.735 715.667 738.062 746.272 5.8% 2.4%
Total Switching 648.453 700.810 731.550 701.305 756.468 796.037 827.193 842.724 6.2% 2.9%
Y/Y Growth 8.6% 8.1% 4.4% -4.1% 7.9% 5.2% 3.9% 1.9%
Application Delivery Controllers (Units)

Hardware 0.051 0.0436 0.0353 0.0331 0.0284 0.0252 0.0220 0.0192 (11.0%) (11.5%)
Virtual 0.067 0.074 0.080 0.087 0.098 0.100 0.102 0.103 13.5% 5.1%
Total ADC Market 0.118 0.117 0.114 0.114 0.114 0.114 0.112 0.112 1.5% (0.3%)
Y/Y Growth -6.8% -0.8% -2.8% 0.5% -0.1% -0.5% -1.6% 0.0%
Routing (Ports)
Service Provider Routing 8.320 8.227 8.088 7.799 7.958 7.958 7.902 7.868 3.5% (0.6%)
Core Routers 0.602 0.619 0.577 0.512 0.552 0.555 0.565 0.590 3.9% 0.4%
Edge Routers 7.718 7.608 7.511 7.287 7.406 7.403 7.337 7.278 3.5% (0.6%)
Total SP Routing 8.320 8.227 8.088 7.799 7.958 7.958 7.902 7.868 3.5% (0.6%)
Y/Y Growth 0.1% -1.1% -1.7% -3.6% 2.0% 0.0% -0.7% -0.4%
Enterprise Routing (Ports) 8.036 6.979 8.148 7.330 7.897 8.400 8.634 8.744 1.9% 1.4%
Y/Y Growth -10.8% -13.2% 16.8% -10.0% 7.7% 6.4% 2.8% 1.3%
WLAN (Units)
Access Points 26.718 29.631 31.415 34.290 38.138 42.654 47.126 51.528 12.9% 10.4%
Controllers 0.191 0.238 0.207 0.184 0.178 0.180 0.180 0.180 (1.3%) (2.7%)
Total WLAN Market 26.909 29.869 31.622 34.475 38.317 42.834 47.306 51.707 12.8% 10.3%
Y/Y Growth 14.6% 11.0% 5.9% 9.0% 11.1% 11.8% 10.4% 9.3%
Source: Credit Suisse Research, Omdia data & estimates

Networking Market Share Dynamics Networking
FFIV and ANET Are Leaders for Respective Market Share Gains.
Below we provide a market share by revenues comparison for several of the comm. equipment companies in our coverage. We highlight that FFIV
and ANET have led the coverage group with double digit market share gains (percent change) gains since over the past five years. Furthermore, we
call out FFIV’s dominance in its respective markets (physical ADC and virtual ADC) which we do not think investors are fully appreciating.
Revenue Market Share of Key Product Segments
2016 2017 2018 2019 2Q 2020 3Q 2020 4Q 2020 '16 to Latest (bps)
FFIV
pADC 45.1% 45.1% 47.9% 48.9% 50.1% N/A N/A 498
vADC (virtual) 35.6% 40.9% 45.6% 48.7% 47.6% N/A N/A 1,197
ADC (total) 42.7% 43.9% 47.1% 48.8% 49.1% N/A N/A 640
CSCO
Data Center Switching 55.1% 50.2% 43.6% 41.0% 36.8% 43.4% N/A -1,166
Campus Switching 57.6% 54.2% 55.6% 55.6% 52.5% 51.4% N/A -616
WLAN 44.9% 42.5% 41.7% 41.5% 40.4% 40.0% 35.8% -486
Enterprise Routing 70.5% 66.1% 67.1% 67.9% 68.3% 66.2% 61.7% -429
SP Routing 31.0% 29.7% 29.5% 27.4% 23.9% 27.6% 20.4% -344
SP Switching 46.0% 46.8% 53.1% 50.2% 47.9% 52.9% 48.2% 691
JNPR
Data Center Switching 5.4% 5.7% 4.4% 4.1% 3.3% 3.2% N/A -221
Campus Switching 2.4% 2.3% 2.7% 2.4% 2.8% 2.8% N/A 44
WLAN 0.0% 0.0% 0.0% 0.0% 1.1% 1.0% 1.0% 103
SP Routing 18.2% 16.6% 14.4% 12.8% 12.6% 14.0% 13.0% -519
ANET
Data Center Switching 9.7% 12.4% 15.8% 16.8% 14.1% 14.6% N/A 489
Campus Switching 0.0% 0.0% 0.0% 0.1% 0.4% 0.4% N/A 38
Source: Omdia

Data Center Switching Share Remains Dynamic Networking
ANET Share Continues to Expand in DC Switching Driven by Cloud/Hyperscale.

2021 May Be a Large Enterprise Breakout Year for ANET as Demand Accelerates.
CSCO: We do not expect CSCO’s significant market share
80.0% rebound will continue in 2021.
ANET: High expected enterprise demand presents a very
67.2%
70.0% 61.6%
sizeable opportunity for ANET to expand market share in DC
59.2% switching in 2021, in addition to strong cloud share.
Marketshare by Revenue
60.0% 55.5%
50.5%
50.0% 43.2% 41.1% 41.4% 43.4%
36.8%
40.0%
30.0%
20.0% 15.6% 16.8% 16.3% 14.1% 14.6%

12.5%
8.3% 9.8%
6.3%
10.0%
-
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20
Cisco White Box Other Arista
ANET's Extensible Operating System (EOS) Continues to Be One of the Most Compelling Sales Propositions for the Cloud Service
Providers: Its customer ease-of-use and breadth of flexibility has enabled ANET to take market share away from the other companies (most
notably CSCO); ANET has more than doubled its market share by revenue from 6.3% in 2014 to 16.8% as of 2019. We see scope for ANET’s
market position to continue expanding, driven by both continued cloud growth and enterprise demand acceleration in 2021.

Data Center Switching: 100G DC Switching Share Networking
Market Share Split by CSCO/ANET Across Enterprise/Hyperscale with ANET

Advancing Fastest in Americas, Driven by Major Cloud Deployments.
Global 100G Switching Market Shares Americas 100G Switching Market Shares
Americas 100G Switching Market Share by

70% 70%
100G Switching Market Share by Revenue
63%
58%
60% 53% 60%
44.2%
50% 38% 50% 45.2%
39% 42%
36.3% 35.4% 31% 32% 37% 36.5%
34.5% 36.1% 36.7%
Revenue
40% 34% 34% 40% 47% 33.6%
31% 33.5%
28.1% 28.6% 30.9%
25.7% 26.0% 25.1% 37%
30% 30% 35% 35%
21.0% 20.6% 34% 34%
29% 30%
20% 20%
10% 10%
0.0%
0% 0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20
Arista Cisco White Box Juniper Other Arista Cisco White Box Juniper Other
EMEA 100G Switching Market Shares APAC 100G Switching Market Shares
EMEA 100G Switching Market Share by
APAC 100G Switching Market Share by

80% 72% 80%
66% 67%
70% 70%
56%
60% 60%
48% 48%
44%
Revenue
44%
Revenue
50% 42% 43% 50%

40% 37%
35% 37%
40% 40%
26.8% 26.2%
24.0% 28% 27%
30% 21.8% 30% 24% 23% 24%
19.4% 21.7% 21%
17.8% 14.6%
20% 15.2% 13.3% 13.0% 11.1%
10.8% 20%
11.1% 9.7%
8.7% 7.9%
10% 5.9%
10%
0.0% 0.0%
0% 0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20
Arista Cisco White Box Juniper Other
Source: Omdia, Credit Suisse Research. Arista Cisco White Box Juniper Other

Data Center Switching: 400G Share Remains Low Networking
400G Share Forecasted to be ~3% in 2021E, ~7% in 2022E, and ~16% in 2023E…
Ramp Pushed Out Further Due to Optics Constraints & COVID
Total DC Switching Growing 4.9% CAGR Through ’24E Average Selling Price By Port Speed Stable for 100G
$16 $1,000
$875
$900
Revenue by Speed (in $bil)
$800
ASP By Port Speed

$12
$700
$600 $572
$520 $456
$8 $500
$392
$400 $311 $276 $291 $285 $356
$271
$300 $248 $218 $191
$4 $200
$100
$-
$0 2016 2017 2018 2019 2020 2021 2022 2023 2024
2018 2019 2020 2021 2022 2023 2024 1GE 10GE 25GE 40GE
Other 10GE 25GE 40GE 100GE 400GE 50GE 100GE 200GE 400GE
ANET Capturing Fair Share of 100G+ DC Switching Market 400G Only ~3%/~7% of DC Switching Market ’21/’22
70%
100G Switching Market Share by Revenue
100% 1% 3%
0% 7%
16%
Revenue Market Share (%)

60% 90% 21%
80% 34%
43%
50%
70% 51%
56%
36.3% 35.4% 60% 57%
40% 55%
28.1% 28.6% 22% 54%
25.7% 26.0% 25.1% 50% 15%
30% 10%
21.0% 20.6% 40% 7% 5%
13% 2%
20% 30% 20% 0%
24% 0%
20% 35% 26% 24%
10% 26% 22%
10% 17% 11% 7% 4%
0% 0% 2%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 2018 2019 2020 2021 2022 2023 2024
Arista Cisco White Box Juniper Other Other 10GE 25GE 40GE 100GE 400GE

Data Center Switching: White Box Networking
Bare Metal Switching Market Forecast to Grow at a ~26% CAGR From 2019 To
2024; White Box Vendors Represents ~49% of Bare Metal Switching Market.
Based on survey data from Omdia’s North American Leadership Survey, 76% of respondents adopted OCP switches in 2019, a large step-up
from the 60% of respondents in the 2018 survey. This increase from the prior survey highlights that OCP-certified switch acceptance is still rising. In
addition, 81% of respondents expect to be using OCP-certified switches in 2021. Currently, white box vendors represent ~49% of the bare metal
switching market. OCP-certified equipment is offered by these white box vendors which include Edgecore, Delta Networks, Mellanox, and NVIDIA. The Bare
Metal Switching Market is Expected to Grow to $4.17B at a ~26% CAGR from 2019 to 2024.
OCP Certified Switch Adoption [n=139] Bare Metal Switching Forecast To Grow At 26% CAGR CY19-24
4500 4172 50%

81%
Yes 4000 45%
76% 3571
3500 40%
2907 35%
3000
Revenues ($M)
12%
Growth (y/y)
No 2430 30%
2500
22% 25%
1913
2000
20%
1500 1329
7% 1201 15%
Don't Know
10% 1000 10%
500 5%
0% 20% 40% 60% 80% 100%
0 0%
Use OCP Switches CY18 CY19 CY20 CY21 CY22 CY23 CY24
Revenues ($M) y/y Growth

2021 Now
Impacts to Incumbent Data Center Switching Vendors is Negative: Generally, as white box adoption increases and its growth continues to outpace the
overall data center switching market, its adoption resistance begins to ease driven by increased service/maintenance/know-how. This could grow to be a very
negative dynamic in the medium-term for major networking providers. Long-term we believe this could have negative effects on Juniper Networks and Arista
Networks that work heavily with customers in data center switching environments. However, based on our most recent work on Arista Networks, our
findings and company’s view is that their relevance may increase than decrease overtime with customers who currently deploy white box
solutions in their networks, which was one of the key reasons why we upgrade Arista to Outperform (illustrated in following slides).

ANET: White Box Threat Dissolving Networking
Key Differentiator – ANET Continues to Innovate and Evolve its Proprietary EOS
Software; ANET Has Demonstrated That It Can Add Feature Rich Capabilities
Without Sacrificing Performance Shown By Its Enterprise Customer Adoption.
ANET’s EOS software utilizes a multi-process
state sharing architecture separating state Legacy Approach to Network Operating System vs. ANET’s EOS
information and packet forwarding from protocol
processing and application logic. The EOS
architecture is grounded upon a centralized
System Database (State) where system state and
data is stored and maintained. When data in the
State needs to be accessed, an automated
publish/subscribe/notify model is employed. This
distinct architecture focused a centralized
database allows for a (1) self-healing, resilient
network, (2) easier software maintenance, (3)
module independence, (4) higher software quality
overall, and (5) quicker time-to-market for new
features. The legacy approach is contingent upon
an embedding state system and manual
integration of subsystems without an automated
structure core (ANET’s State) resulting in more
time-consuming and difficult recoveries from
system process failures/restarts. Overall,
ANET’s EOS software provides organizations
with more visibility, improved agility, and self-
healing processes, and this technology is a
differentiator especially when
comparing/contrasting open compute
software solutions (white box) to ANET’s
products/software.
Source: Company Data

Data Center Switching― 100G Market Demonstrates Stabilized Share for ANET;
White Box Not Disrupting ANET’s Overall Ethernet Switching Opportunity
100G Market Shares Remained Relatively Stable Over Past 4yrs 400G Ramp in Very Early Stages; Total 3Q Market Revs at ~$26M
35.0% 95.2%
400G DC Market Sshare By Revenues

100G DC Market Share By Revenues
100.0%
30.0% 84.9%
80.0%
25.0% 22.0%
20.6%
60.8%
20.0% 57.1%
60.0% 54.0%
49.5%
15.0%
19.5% 15.5% 40.0%
10.0%
14.8% 18.2% 20.2%
5.0% 20.0%
5.9% 6.8%
0.0% 0.0%
1Q16
2Q16
1Q20
2Q20
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
3Q20
0.0%
2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
ANET White Box ANET CSCO White Box Other
Based on Omdia’s 3Q20 Campus vs. Data Center Ethernet Switching Tracker, we can see that while ANET’s market share has fluctuated quarter to
quarter over the past four years, it has remained relatively stable at ~21% of 100G Ethernet data center switches. Similarly, white box switching
market share by revenues for 100G has declined slightly over the past four years from 20% to 15%. We believe this stabilized share highlights
that white boxes do not pose as large as a threat than we had initially thought to ANET. Looking ahead to the upcoming 400G data center
switching market, we note that early market share data highlights ANET, CSCO, and white box as early movers. We note that the market for 400G
data center switching is nascent, with 3Q revenues totaling around~$26M. Based on the early adopters for 400G, large cloud providers
upgrading their data center interconnect, we believe ANET will be a key early mover in the 400G market.
Source: Omdia 2Q20 Campus vs Data Center Switching

ANET an Early Mover in 400G; Robust Data Center Switching Offering

In 2019, ANET released its 400G router-switch platforms (7800R Series), demonstrating ANET’s ability to be an early mover for next-generation
technologies. And, we believe the white box threat is diminishing as cloud providers recognize the benefits of ANET EOS’ multi-process state and
the increasing complexities, engineering rigor, and associated costs associated with white-box switching. Bottom-Line: Cloud titan and service
providers will continue to look to ANET for data center switching based on the company’s (1) proprietary EOS software and (2) quick
adoption and integration of leading edge components (merchant silicon use, latest data center switching chip).
ANETs 400G Data Center Switching Offerings
Cloud
Modular Spine
Optimized
Switches
Switches
Dynamic Deep
Fixed
Buffer,
Configuration
Universal Leaf
Switches
and Spine

Key Differentiator― ANET Continues to Innovate and Evolve its Proprietary EOS
Software Across Equipment Types and Platforms.
We highlight ANET’s dedication to invest in EOS to maintain the best-in-breed capabilities for cloud, service providers, and enterprise customers.
We note that all enhancements have stuck to ANET’s core cloud-base principles of openness, programmability, and quality. In our view, ANET’s
major customer base, cloud providers, will increasingly turn to ANET for its innovation and agility as they look to seamlessly roll-out new services and
features. Furthermore, the unrivaled concentration and continued investment in the ANET’s proprietary EOS gives us confidence that
the company will continue to be a key partner and innovator for its major customer base, cloud titans.
History of Rich Innovation in ANET’s Extensible Operating System

Long Standing & Close Relationships with Open Networking Community

In May 2020, ANET announced the Arista SAI (Switch Abstraction Interface) offering, providing customers with have the flexibility to deploy SONiC
software on Arista switching platforms allowing them to leverage open source software with EOS. The SAI initiative emerged from ANET’s
partnership with MSFT. SONiC, an open source network operating system that runs on multiple hardware platforms, was developed initially by MSFT
for the Azure cloud platform. In our view, the long track record of working with the open networking community and some of largest
cloud titans underscores ANET’s commitment to reducing complexities and challenges for customers through continued innovation.
We believe that this virtual cycle of partnership may fuel further collaborations and increase ANET’s relevance to cloud providers.
History of ANET’s Open Networking Collaboration SAI Layer Enables SONiC to Run on ANET Switches

Understanding Key Differences Between White Box and Branded Are Important.
Branded Bare Metal
Bare Metal Switch White-box (WB) Switch Proprietary Switch
(BBM)
Hardware only with original
Hardware only with basic Commodity hardware and
equipment manufcaturer Proprietary hardware and
Definition support from original design Network Operating System
branding and Network Operating System
manufacturer preloaded
warranty/support/services
Hardware Cost Low Low Low High
Off-the-shelf components Off-the-shelf components Off-the-shelf components
Type of Hardware Components Proprietary (Custom ASIC)
including ASIC including ASIC including ASIC
None (customer can load Non (customer can load Vendor's own or 3rd party Vendor's own Network
Network Operating System PicOS/Cumulus/Big PicOS/Cumulus/Big already loaded (Example: Operating System (Cisco
Switch) Switch) Arista EOS) ACI, Arista EOS, etc.)
Dell S4810-ON/S6000-
Accton AS5712 ON (Broadcom) Nexus 7000 / 9000
Arista 7250x (Broadcom)
(Broadcom) HP 5700/5712/6700 HP 3500/5400/8200 (HP
Examples / Vendors Dell S6000 (Broadcom)
Penguin 4800 (Broadcom) (Broadcom) ProVision)
HP 5930 (Broadcom)
Quanta 3048 (Broadcom) HP 5700/5712/6700 Juniper 9200 (Trio)
(Broadcom)
White Box Switch Vendors
Source: Forester, Credit Suisse Research, Company data

Service Provider Routing Networking
CSCO Gradually Losing Share, Seen Through SP Product Orders (See Earlier Slides)
Global Carrier Routing Market Shares Americas Carrier Routing Market Shares
45%
50% 46.8%
45.2%44.7% 47.3%
40% 35.4% 43.4% 44.3%
Ameriacs Market Share by Revenue

35.2% 34.3% 41.5% 40.9% 39.6% 42.1%
45%
Global Market Share by Revenue
35% 31.0% 36.0%

29.7% 29.5% 40%
27.4% 27.7%
30% 26.0% 35%
23.9% 29.3% 30.0%
30% 26.4%26.2%
26.2% 27.0% 25.6%
25% 20.4% 24.1% 24.5% 24.0%
18.8% 22.5%
17.6% 18.5% 18.2% 16.6% 25%
20%
14.4% 14.1% 13.0%
12.8% 13.0% 12.6% 20%
15%
15%
10%
10%
5% 5%
0% 0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
Cisco Nokia Juniper ZTE Other Huawei Cisco Nokia Juniper Brocade Other Huawei
EMEA Carrier Routing Market Shares APAC Carrier Routing Market Shares
50% 65%
45% 60%
EMEA Market Share by Revenue
APAC Market Share by Revenue

55%
40% 35.4%
34.4% 50%
35% 31.2% 30.4% 30.5% 30.7% 45%
27.8% 29.1% 28.8%
30% 40%
23.0% 35%
25% 19.6% 20.8%
18.0% 18.7% 17.9% 17.3% 30% 23.2% 22.7%
20% 15.5% 14.4% 13.4% 14.5% 14.8% 15.6% 25% 21.7% 20.7%
18.2% 17.3% 18.6%
15% 20% 15.2%
12.5% 14.2% 10.7%
10% 15% 9.0% 7.9%
6.9% 6.9% 6.5% 5.6%
5% 10% 4.1% 4.3% 4.1% 5.7% 5.6%
5%
0% 0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
Cisco Nokia Juniper ZTE Other Huawei
Source: Omdia, Credit Suisse Research. Cisco Nokia Juniper ZTE Other Huawei

Service Provider Routing Networking
CSCO New SP Routing Innovations Aimed at Webscale and Telecom Customers; We

Anticipate Elevated Pressures in SP Routing, Impacting JNPR Negatively
Cisco Silicon One, 8000 Series Router, and Flexible Buying Options: New Cisco 8000 Series Routers
CSCO introduced the Cisco Silicon One December 2019, which is a networking
silicon architecture developed for the rapidly growing networking needs of global
content and web scale customers that has the versatility to address numerous
use cases. CSCO says that this is the industry's first networking chip designed to
be universally adaptable across service provider (SP) and web-scale customer
markets. Designed for both fixed and modular platforms, it can manage
challenging requirements that have evolved materially across the routing market.
First, CSCO announced the Silicon One 'Q100' model and how it surpasses the
10Tbps routing milestone for network bandwidth without sacrificing
programmability, buffering, power efficiency, scale or feature flexibility. Second,
the company released the new Cisco 8000 Series, its new carrier class router,
built on the new Cisco Silicon One Q100 architecture with a new operating
system, the IOS XR7. XR7 is designed to be lightweight, highly programmable,
and optimized for 400GB networking. Finally, CSCO announced new purchasing
options that enable customers to consume the company's technology through Cisco’s Pluggable Announced
disaggregated business models, including non-CSCO applications, which has
generally not been par for the course at CSCO.
Addressing Traffic and Network Cost Surges: CSCO plans on leveraging its
silicon, routing appliance, and optics to differentiate itself ahead of broad based
5G deployments to address the network bottlenecks that have been created
across the industry due to surging video streaming traffic. Importantly, CSCO
says that innovation has not kept up with rising traffic loads, and this has led to
elevated levels of OPEX and TCO for SP customers.
JNPR Implications Negative: Based on what CSCO is addressing, we believe
this is more negative for Credit Suisse Underperform-rated JNPR given the direct
overlap in both silicon innovations and SP routing capabilities.
Source: Cisco December 2019, Credit Suisse Research.

Carrier Switching Networking
CSCO Market Share Stable, Even in Huawei Dominated APAC.

Global Carrier Switching Market Americas Carrier Switching Market
60% 54.1%
53.1% 52.2%
83.4% 85.8% 85.2%
49.6% 48.2% 90% 81.8%
47.0% 46.0% 46.8% 47.4% 79.7%
75.8% 73.9% 76.4% 76.1%
43.4% 73.4%
70.6%
Americas Market Share by Revenue

45% 40.3% 75%
60%
30%
45%
30%
15%
15%
0% 0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
CSCO Huawei ZTE Other CSCO Huawei ZTE Other
EMEA Carrier Switching Market APAC Carrier Switching Market

75% 67.6% 60%
62.3% 61.6% 60.7%
59.5% 60.1% 59.4%
56.6% 56.0% 56.0%
60%

49.9% 45%
39.1%
45%
28.4% 28.2% 27.8% 27.0%
30% 25.2%
23.0%
30% 21.3%
17.7% 19.2%
13.3%
15%
15%
0% 0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
CSCO Huawei ZTE Other CSCO Huawei ZTE Other

Enterprise Routing Networking
CSCO Remains Dominant Force in Enterprise Routing Market, Huawei Challenging

CSCO in APAC But EMEA Offsetting Weakness.
Global Enterprise Routing Market Shares Americas Enterprise Routing Market Shares
100%

80% 74.6% 73.1% 84.9% 87.0% 87.3% 85.3% 85.6% 87.5% 86.2% 87.5% 86.7% 82.7%
85.4%
71.1% 70.5% 68.8% 68.3% 90%
66.1% 67.1% 67.9% 66.2%
70%
61.7% 80%
60% 70%
50% 60%
50%
40%
40%
30%
30%
20% 20%
11.3%
7.4% 8.9% 6.8% 6.8% 6.5% 5.0% 4.9% 5.8% 5.2% 4.5% 5.6% 5.1% 5.6% 4.4%
6.6%
10% 2.9%4.0% 5.1% 3.0% 5.2% 4.9% 10%
0% 0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
Cisco H3C ZTE Ekinops Other Huawei Cisco Teldat HPE Other Adtran Huawei
EMEA Enterprise Routing Market Shares APAC Enterprise Routing Market Shares
90% 81.4% 50% 45.2%

78.6% 79.4% 42.7% 42.3%
80% 70.3% 71.2% 73.7% 72.9% 40.5% 39.1% 39.7% 38.0%
65.1% 67.5% 67.3%

65.4%
70% 40% 33.7% 33.5% 33.9%
60%
27.2%
50% 30%
20.8%
40%
30% 20%
13.9% 15.1%
17.8% 10.6% 10.8% 12.0% 10.5% 9.9%
20% 10.4% 12.4% 8.0%
7.4% 8.2% 8.7%
5.1% 7.2% 6.6% 9.2% 7.4% 10%
10% 3.1% 3.2%
0%
2014 2015 2016 2013 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 0%
Cisco Ekinops Teldat 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
HPE Other Huawei Cisco OneAccess Yamaha
Source: Omdia, Credit Suisse Research. H3C Other Huawei

Enterprise/Campus Switching Networking
Campus Switching Remains CSCO’s Territory

Global Enterprise Switching Market Shares Americas Enterprise Switching Market Shares
65.0% 61.0% 60.6% 80% 74.0%74.2% 75.8% 74.6%

58.6% 73.1% 72.3%
57.6% 57.5% 70.7% 70.6% 70.3%
60.0% 54.2% 55.6% 55.6% 68.6%

52.5% 51.4% 70%
55.0%
Market Share by Revenue
50.0% 60%
45.0%
40.0% 50%
35.0%
40%
30.0%
25.0% 30%
20.0%
20%
15.0%
10.0% 10% 3.0%
5.0% 2.3%2.6% 0.0% 0.0% 0.0% 0.0% 0.1% 0.2% 0.4% 0.4% 3.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.4% 0.8% 0.7%
2.5% 2.7% 2.6% 2.8% 2.8% 3.6% 3.4% 3.7% 3.7% 4.2% 3.8% 4.3% 4.4% 4.2%
2.4% 2.4% 2.3% 2.4%
0.0% 0%
0.0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20
Cisco HPE (Aruba) Arista Cisco HPE (Aruba) White Box
H3C Juniper White Box Dell Extreme NETGEAR
Extreme Other Huawei Other Juniper Arista
EMEA Enterprise Switching Market Shares APAC Enterprise Switching Market Shares
50%
70% 44.0%
57.9% 45%
60% 56.0%
55.8% 54.6% 37.9%
53.0% 53.3% 37.4% 36.9% 37.7%
50.4% 51.9% 52.0% 40%

34.8%
48.4% 33.8% 32.9%

50% 35%
29.5% 30.2%
40% 30%
25%
30%
20%
20% 15%
10% 10%
2.0% 1.9% 1.6%
1.2%
2.1% 0.4% 0.0% 0.0% 0.1% 0.2% 0.2% 1.6% 1.5% 1.2% 1.2%
2.5% 5%
0% 0.0% 0.0% 0.0% 1.4% 1.9% 1.7% 1.4% 2.1% 1.4% 1.4% 0.0% 0.0% 0.1% 0.1% 0.1%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 0% 0.0% 0.0% 1.3% 1.1% 1.2% 1.0% 1.3%
0.0% 0.0%
Cisco HPE (Aruba) D-Link 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20
Dell Extreme Huawei Cisco HPE (Aruba) White Box
Other Juniper Arista ZTE H3C Huawei
Source: Omdia, Credit Suisse Research. Other Juniper Arista

Enterprise Campus Switching & WLAN Equipment Networking
COVID-19 Impacts to the New Normal: Extending the Remote Workforce Will
Continue to Be a Priority in 2021, But May Prolong Demand Overhang.
Based on data from CSCO’s 2021 Global Networking Trends Report, an average of 4.7 times more employees are working from
home now compared to before the pandemic. When the pandemic first hit, IT teams struggled with scaling to cope with the sudden demand
and numerous IT issues. Security remains a top priority when assessing the WFH model. We expect WFH will continue to be a dominant trend in
the 1H21, and LT employees will demand more flexibility. As enterprises consider a return to the workplace, the top priority focuses on deploying
more pervasive video conferencing suggesting that the WFH model and or less business travel will persist beyond the pandemic. The by-product
of this behavior may create a prolonged overhang on campus switching and WLAN equipment for office spaces.
Top Four Challenges for Enabling Remote Workers Preparing for Safe Return to Workplace
Deploying more pervasive

video conferencing 62%
Security 65%
Implementing social density
insights to ensure safe 38%
working conditions
End-user Behavior 52%
Focused on remote NetOps
and help desk 36%
App Performance 43%
Deploying proximity reporting
to maintain social distancing 32%
IT Operations 35% Establishing new workplace

safety measures such as
thermal cameras, touchless 30%
elevator controls, etc..
0% 20% 40% 60%
0% 20% 40% 60%
Source: 2021 Global Networking Trends Report (See Report: 2021 Global Networking Trends Report.)

Wireless Local Area Network (WLAN) Networking
CSCO Continues to Dominate WLAN Market Despite Intensified JNPR/ANET Comp.

Global WLAN Market Shares Americas WLAN Market Shares
60%
50.6% 60% 54.1%
52.0% 51.2%

48.5% 50.2% 48.7% 50.0% 49.7% 48.9% 49.0%
47.2% 47.6%
50% 44.9%
42.6% 41.7% 41.5% 50% 45.1%

39.0% 40.4% 40.0%
40% 35.8%
40%
30%
30%
20% 20%
9.6% 9.3% 10.8% 10.2%
9.0% 9.0%
10% 6.1% 6.7% 6.6% 7.1% 6.5% 7.7%
4.4% 5.1% 10% 4.4% 5.5%
1.5% 2.6% 2.9% 1.3%2.5% 2.7%
0% 0%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
Cisco Ruckus Other Huawei HPE (Aruba) Ubiquiti Cisco Ruckus Other Aerohive HPE (Aruba) Ubiquiti
EMEA WLAN Market Shares APAC WLAN Market Shares

60% 60%
51.1%
49.0% 47.5%
APAC WLAN Market Share by Revenue

46.2%
50% 43.8% 44.1% 42.3%
40.1% 41.4% 38.6% 50%

40% 34.7% 39.8%
37.5%
40% 35.8%
30% 30.0% 29.0%
28.1% 26.6%
30% 24.7% 24.3% 24.6% 22.6%
20% 12.8% 13.2% 13.8%
8.8% 8.3% 8.7%
10% 5.8% 6.5% 20%
3.5% 3.9%
2.1%
0% 10%
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
-10%
0%
Cisco Ruckus Other 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20
Huawei HPE (Aruba) Ubiquiti
Cisco Ruckus Other Huawei HPE (Aruba) H3C

Wireless Local Area Network (WLAN) Networking
Recent Consolidation Intensifying WLAN Market Competition, COVID-19 Only

Challenging Market Further; Wifi 6 Continues to be Most Attractive Opportunity.
Acquirer Target Date Market Share / Revenue Estimates / Comments
Date Announced:
Arista acquired Mojo Networks to strategically address industry changes as
August 2, 2018
enterprises move to Internet of things (IoT) ready campuses. Mojo Networks, a
leader in cloud-managed wireless networking, created its own cloud-managed
Date Closed:
proprietary technology, cognitive WiFi.
August 2, 2018
Date Announced:
Juniper added Mist Systems to its portfolio for its cloud-managed wireless
March 4, 2019
networks powered by artificial intelligence (AI). The acquisition strengthened
Juniper’s best-in-class wired LAN, SD-WAN and security solutions with Mist’s
Date Closed:
next-generation wireless LAN (WLAN) platform.
April 1, 2019
Date Announced: CommScope acquired ARRIS for its strong leadership positions in customer
November 8, 2018 premise equipment (CPE), Network & Cloud (N&C), and enterprise networks
(Rukus Wireless). The business combination enables end-to-end wired and
Date Closed: wireless communications infrastructure solutions giving COMM access to new and
April 4, 2019 growing markets.
Date Announced:
The acquisition of Aerohive adds critical cloud management and edge capabilities
June 26, 2019
to Extreme's portfolio of end-to-end, edge to cloud networking solutions. Aerohive
was one of first companies to offer controller-less Wi-Fi and cloud network
Date Closed:
management, including cloud-managed Wi-Fi and network access control (NAC).
August 9, 2019
Source: Credit Suisse Research, Company data.

Application Delivery Controllers (ADC) Networking
FFIV Market Share Continues to Remain Elevated, At 49.1% of Market Revenues.

Global ADC Market Continues to Contract at Mid Single Digits vADCs Starting to Make up ~40% of Total Market Revenues
100%
$2.0bn 1%
Global ADC Market Revenue Breakdown

$1.8bn
0%
$1.6bn
Total Revenue ADC Market
$1.4bn (1%)
y/y Revenue Growth

$1.2bn
(2%) 75%
$1.0bn
(3%)
$0.8bn
$0.6bn (4%)
$0.4bn
(5%)
$0.2bn
50%
$0.0bn (6%)
2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E
2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20
pADC vADC
FFIV Continues to Dominate Market Share at 49% As of CY2Q20 FFIV Transitioning Business to Virtual Gradually, at 20% in F4Q20
60% 100%
49.4%49.8%50.1% 50.1%49.1%
46.9%
Global ADC Market Share
50% 44.4%45.7% 44.4%44.7% 44.6% 45.5%

43.2% 42.4%
75%
40%
30.5%
30.1% 30.3%
28.1% 27.8%27.0% 28.6%
30% 24.9%25.5%24.9%25.3%26.2% 25.2%26.5%
50%
20%
10% 25%
0% 16% 16% 20%

12% 14% 12%
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 7% 6% 7% 8% 8% 8%
0%
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
F5 A10 Other KEMP Radware Citrix
Source: Omdia, Credit Suisse Research. Software Systems Services

Credit Suisse 1H21 (Jan’21) CIO Survey Results Networking
Security Remains A Top Priority Among CIO Spending, A Positive Dynamic For FFIV.
Based on data from our January 2021 CIO Survey (75 Global CIOs at companies with revenue >$1bn), we found that the most
important priority for 2020 will be security software, a positive for FFIV given its growing focus on security. Towards the bottom of the
priority list are Campus Switches (3%) and Routers (4%), which is another data point highlighting our tempered outlook for networking equipment
companies in 2021, namely JNPR and ANET. Following 4Q20 results, we have found the CIO preferences as highly precise and have
found that security software importance is only increasing following the SolarWinds-FireEye-Cisco incidents.
Security Software 55% 65% 69%

Public Cloud 41% 47% 53%
BI/Analytics 46% 55%
45%
Hybrid Cloud 40%43%
44%
Collaboration Software 4% 31% 38%
AI/Machine Learning 26%29%
32%
ERP Applications 23% 35% Very favorable directionally for FFIV
27%
CRM Applications 21%
25% 29% given their multi-cloud solutions,
15%
IoT 16% 19% recent software acquisitions in multi-
SD-WAN 11%
13%16% cloud (NGINX) and security (Shape
Storage 9%11% 16%
Infrastructure software 4% 7% Security).
13%
Wireless Connectivity N/A 12%
DevOps 10% 27%
10%
Microsoft Office 11% 21%
10%
Edge Compute 3% 12%
10%
PCs 8% 12%
10%
HCM Applications 10% 15%
9%
Consulting 4% 8% 9%
Servers 3% 8%
6%
Observability 0%
0% 5%
Database 10%
11%
4%
Data Center Builds 5%
5%
4%
Routers 4%
3%
4%
Data Center Switches N/A
3%
Campus Switches N/A
3%
January 2020 Survey July 2020 Survey January 2021 Survey
Source: Credit Suisse CIO July 2021 Survey (See Report: January 2021 CIO Survey – Data Center Implications Remain Positive; Networking Impact Negative Overall).

Security, Security, Security

Based on Gartner’s 3Q20 WW forecast, we expect the info security and risk mgmt. market to grow 8.6% y/y in 2021 from $131.9B in 2020 to
$143.2B. We highlight the forecasts for individual segments below, noting that the highest growing segment is cloud security, in-line with the
accelerated adoption of the cloud and hybrid cloud model driven by the pandemic. In addition, the forecast reconciles with our Jan 2021 CIO survey,
which emphasized that security continues to be a top priority. We believe security will continue to be an area of focus among CIOs in 2021.
Total Info Security & Risk Management Market by Revenues (Constant Currency U.S $) [Segment, CY19-24 CAGR%)
Consumer Security Software, 3.8%

200,000
Security Services, 7.0%
Other Information Security Software, 6.4%

Revenue (Millions of $, CC)
150,000
Network Security Equipment, 6.3%
Integrated Risk Management, 8.0%
100,000 Infrastructure Protection,12.5%
Identity Access Management, 10.9%
50,000 Data Security, 12.4%
Cloud Security, 33.1%
0 Application Security, 8.1%

2018 2019 2020 2021 2022 2023 2024
Source: Gartner 3Q20 Security Forecast

Cloud Gaming Growth Accelerated By Pandemic; Expect Moderation as Pandemic

Lockdowns are Eventually Lifted, But Strength to Continue LT
As the popularity of PC gaming has grown, so too has interest in watching gameplay streamed online; even before COVID significantly accelerated
demand, average time watched on Twitch grew at a 36% CAGR over CY13-19. With widespread “stay at home” measures around much of the
world in CY20, average Twitch viewership has surged +55% in Apr-Sep vs. a Jan-Mar baseline. While we expect some moderation as things return
to “normal” over the next 12-24 months, we think growth in online streaming is here to stay. See our CS colleague Matt Cabral’s initiation of Corsair
Gaming (CRSR) here. According to Statista, the worldwide cloud gaming market is forecasted to grow to $4.8B by 2023, underscoring the
strength in cloud adoption and at-home entertainment. In our view, we believe there may be a moderation in cloud gaming demand as vaccines
rollout and pandemic lockdown measure are lifted; however, long-term we expect the strength in gaming infrastructure resources to continue.
Streaming Popularity Already Increasing Rapidly Pre-Pandemic Cloud Gaming Market Forecast WW For 2019-2023
1000 4.8
917 5.0
900
Avg. Monthly Time Watched (mm hrs)
781
800 4.0
Market Value in Billions of US$

700
600 545 3.0

500 441
394
400 2.0
300 249
200 146 1.0

0.58
100
0.17
0 0.0
2013 2014 2015 2016 2017 2018 2019 2019 2020 2023
Source: Twitchtracker Streaming Data, Statistia Market Data

Survey Data – Planning The New Normal Networking
CSCO’s Accelerating Digital Agility Survey 2021 Emphasizes Hybrid Model

Hybrid Model Continues To Be Attractive to CIOs and IT Decision Makers. Based on survey data from >23,000 CIOs and IT decision makers
(ITDMs) across 34 global markets from CSCO’s Accelerating Digital Agility Survey 2021, deployed in November 2020, in the future businesses
plan to leverage a variety of solutions that will span on premise, private cloud, multi-cloud, and cloud-native. In addition, 86% of CIOs and ITDMs
believe that offering a consistent operation model that goes across on-premises, private cloud, public cloud, and SaaS is important or very important.
For motions to cloud adoption in future progress or planned for the future, CIOs and ITDMs…
think offering a consistent operation model that goes

across on-premises, private cloud, public cloud, and 86%
SaaS is important or very important
are leveraging at least one on premise solution 85%
are leveraging at least one cloud-first / cloud-native

83%
solution
are leveraging at least one multi-cloud and on-

83%
premises solution
are leveraging at least one private cloud solution 83%
81% 84% 87%
Source: Accelerating Digital Agility Survey 2021

CSCO’s Accelerating Digital Agility Survey 2021 Emphasizes Several of Automation

Use Cases
Businesses Cite Several Use Cases for Automation and Analytics. Following the pandemic, CIOs and ITDMs will increasingly look to create
resilient and adaptive IT that incorporates analytics, insights, and automation. For survey respondents, the most popular reason to adopt automation
and analytics is to utilize business insights (76% of respondents). As devices per person continues to increase and online shopping remains popular,
businesses will look to glean insights from the consumer and employee data to address operational issues and capitalize on new opportunities.
Creating resilient and adaptive IT hinges on analytics, insights, and automation. CIOs and ITDMs…
want to be able to utilize business insights

76%
better
believe insights will be more important than

74%
ever to deliver a seamless user experience
will use insights to drive automation to free

73%
up human time for more complex tasks
69% 72% 75% 78%


CSCO’s Accelerating Digital Agility Survey 2021 Emphasizes Overall Uncertainty

IT Leaders Are Unsure How The Next 12 Months Will Play Out. Twelve months after IT teams had to make a massive shift to remote work, IT
leaders are still defining what the future of work looks like. More than 60% of CIOs and IT leaders are unsure about how work will look in 2021
underscoring the overall uncertainty surrounding the work-from-home model and regarding how many businesses will adopt more flexible working
models going forward and what the flexibility could look like (# of allotted days allowed to work from home in a week, month, year etc.).
CIOs and ITDMs Agree / Strongly Agree That…
75%
73%
70%
65%
61%
60%
55%
I am still unsure what the future of work I will redefine what productivity looks like in
looks like for my business in 2021 2021 compared to how we defined it pre-
pandemic

Networking Model Fundamentals Networking
MSI Continues To Be A Front Runner Comm. Equipment Peers in Key Metrics.

Operating Income (Non-GAAP) YoY Growth Operating Margins (Non-GAAP) – MSI Expansion Runway Solid
40% 37%
Operating Income Growth (Non-
34%
Operating Margins (Non-GAAP)

31% 34%
30% 28%
21% 17%
13%
10%
GAAP)
11% 8%
3.7%
20%
3% 16%
14%
1%
10%
-9%
-19% 0%
CSCO ANET JNPR FFIV COMM MSI CSCO ANET JNPR FFIV COMM MSI
2019 2020 2021 2022 2019 2020 2021 2022
EPS YoY Growth Led by Our O/Ps – MSI, ANET, COMM Strong FCF/Share YoY Growth For Our O/Ps – MSI, ANET
39%
EPS Growth (Non-GAAP)
85%
29%
FCF/Share Growth
60%
19% 16% 17%
13% 12% 32%
35%
9%
6% 15% 14% 17% 16%
9%
10% 3%
-1%
-15%
-11%
CSCO ANET JNPR FFIV COMM MSI -40%
CSCO ANET JNPR FFIV COMM MSI
2019 2020 2021 2022
2019 2020 2021 2022

Data Center Switching & Networking Use Cases Networking
Top Six Use Cases for Continued Rapid Adoption of Data Center Switching.
As robust Cloud Networking Fabrics (SDNs) continue scaling, the number of use cases grow as networking efficiencies are gained. In this slide, we highlight some
of the most common use cases across Cloud, Interconnection, Wide Area Networks, and Consumer connectivity from Arista Networks.
Source: Arista Networks, Credit Suisse Research.

Data Center Switching & Network Evolution Networking
Universal Leaf-Spines Are the Architecture of Choice, Integrating Routing

Capabilities Into the Switching OS… This Allows For Lower TCO and Greater Control
Of Network Capabilities. Universal Leaf-Spine is the Cloud Network Fabric of Choice.
Source: Arista Networks, Credit Suisse Research.

Comparing Software Defined Networking (SDN) Networking
XXXXXXXXXXXXXXXXX
Company SDN Description Comments
Pros: Focuses on the data center components and leverages high-end
Application-centric infrastructure equipment; also the largest installed base vendor, leading to highest
(ACI) is a programmable number of enterprise personnel.
Ethernet fabric that supports a
centralized policy-based model Cons: High-priced solution; platform provides limited investment protection
versus a traditional device- for the existing installed base of Nexus and Catalyst equipment, or for UCS
centric command line interface server architectures; lacks features such as FCoE support and external
(CLI)-based approach. data center interconnect capabilities that many organizations have adopted.
Extensible operating system Pros: Works extremely well with industry standard approaches; is flexible
(EOS) is a scalable network allowing customers freedom of choice without lock-in to any one
architecture; tends to be more cost-efficient than other vendors.
operating system (OS) that
offers high availability,
streamlines maintenance Cons: Although EOS is a very flexible and sound network foundation,
organizations looking for a dynamic orchestration systems will need to
processes, and enhances integrate it into an external orchestration system.
network security.
Pros: Strong track record in supporting demanding, mid- to large-scale
Juniper Contrail Networking is a data center environments in both enterprise and service provider
simple, open, and agile cloud environments; aggressively prices its solutions; offers an open and
interoperable architecture.
network automation product that
implements an SDN
Cons: Still primarily network- and security-focused, limiting its market to
architecture. those looking for an independent network layer.
Software-defined networking (SDN) is an approach to using open protocols, such as OpenFlow, to apply globally aware software control at the
edges of the network to access network switches and routers that typically would use closed and proprietary firmware. SDN offers numerous
benefits including on-demand provisioning, automated load balancing, streamlined physical infrastructure, and the ability to scale network resources in lockstep with
application and data needs. Coupled with the ongoing virtualization of servers and storage, SDN ushers in no less than the completely virtualized data center, in
which end-to-end compute environments will be suddenly deployed and decommissioned on a whim.
Source: Company data, Gartner, Tech Target, Credit Suisse Research.

SDN Versus NFV Networking
Comparing and Contrasting the Virtualization of Network Software Technology

SDN and NFV Synergies Description
SDN
Network function virtualization (NFV) and software-defined networks (SDN) are
Function/location closely related, complementary technologies that address different elements of a software-
separation Vendor-independence
Control/data plane driven solution. Both are driven by the desire to transform today’s networking infrastructure
Rapid service innovation
separation into more cost-effective, flexible, robust solutions through:
Improved operational efficiency
No predominantly Standardized, open interfaces – SDN can be thought of as a series of network objects (e.g., switches, routers,
topology focused Dynamic chaining of network and firewalls) that can be deployed in a highly automated manner
functions
Centralized orchestration Focus on network – NFV can be thought of as the process of moving services, such as firewalls and
Reduced power usage management function connectivity load balancing, away from dedicated hardware into a virtualized environment
(elastic scalability) Consistent policy framework (logical topologies)
Timeline? For SDN, a trickier decision for vendors – a greenfield opportunity, as no
enterprise-wide standard, many unknowns. NFV is certainly coming and is carrier driven.
NFV
Both Provide New Approaches to Network Management Complementary, Open, and Software-Driven
SDN NFV Creates network

Creates abstraction to enable
Focus Data Center Service Providers competitive supply faster innovation
of innovative
Strategy
Split control and data forwarding Replace network devices with applications and
SDN
planes software third parties
Not determined yet, does support
Protocol OpenFlow
OpenFlow
On industry-standard servers or
Applications run On industry-standard servers
switches
Open
Drives down complexity and cost, Drives down complexity and cost, NFV
Customer Benefit
increases agility increases agility Innovation
Enterprise networking software
Prime Initiative Supporters Telecom service providers Reduces capex, opex,
and hardware vendors
space, and power
Business Initiator Corporate IT Service Provider consumption
Source: Credit Suisse Networking Survey, August 2013

SDN and NFV: Why do they matter? Networking
IT Overhead Costs Require IT Spenders to Watch Hardware/Architecture Costs

Closely and Virtualization/SDN/NFV Alleviate Constraints and Allow Networks to
Scale-out Efficiently.
Administration Overhead Can Be Onerous Faster Provisioning & Applications Drive SDN
$160
Other
$140
Admin/Maintenance 2%
Server Hardware Less Capex
$120 Faster
Power & Cooling
provisioning 15%
$100 24%
$80 Applications
and APIs
$60 Less Opex 21%
6%
$40
More
Automation Centralized
$20 13% Point of Control
$0 19%
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
“We should be able to treat a switch like a server in the rack….We should be able to load a Linux-based operating system, and that
server just happens to have a lot of I/O ports on it.“
— Frank Frankovsky Vice President, Hardware Design and Supply Chain Operations at Facebook
“Because networking gear is complex and, despite them all implementing the same RFCs, equipment from different vendors (and
sometimes the same vendor) still interoperates poorly. It’s very hard to deliver reliable networks at controllable administration costs
from multiple vendors freely mixing and matching. The customer is locked in, the vendors know it, and the network equipment prices
reflect that realization.”
— James Hamilton of Amazon Web Services

Company Ratings & Target Prices

Radius Global Infrastructure (RADI) Towers
TOP PICK: OUTPERFORM | Target Price: $19 | Mkt. Cap. $887.5M

Key Points Key Charts
• RADI’s highly effective, globally distributed ~300 person business RADI Mini P&L
development team leverages its proprietary database of land
owners/interests to address a vast TAM opportunity. (in $ millions) FY19 FY20 FY21E FY22E
Total Revenue 55.7 69.8 86.8 105.4
• Macro environment should bolster RADI’s acquisition pipeline as
Total Revenue Y/Y Growth (%) 20.0% 25.2% 24.4% 21.4%
individual land owners increasingly look to sell their lands amid
challenging economic dynamics. Gross Profit 55.4 69.1 86.1 104.5
Gross Margin 99.4% 99.1% 99.2% 99.2%
• RADI has $215M of available cash, ample access to credit, with
Adjusted EBITDA 20.5 18.5 21.0 31.6
sufficient leverage capacity for high levels of acquisition activity.
Adjusted EBITDA Margin 36.8% 26.6% 24.2% 30.0%
• 5G should further bolster RADI’s business opportunity as connectivity EPS 0.00 -3.12 -1.30 -1.41
density rises, increasing the number of TAM site and lease interests. EPS Y/Y Growth - - - -
Valuation Rev. to Grow With Rapid Site Expansion Through 2023E

$19 Target Price, ~31% Upside Potential: RADI is valued on the avg 10,000
8,876
of two methods arriving to a $19 TP: (1) EV/GCF multiple of 25x our 9,000
2022E GCF of $104.5M, computing $31/share; and (2) EV/EBITDA 8,000 7,592
multiple of 25x our 2022E adj. EBITDA of $31.6M, computing $7/share. 7,000 6,472
Risks: 1) high overall leverage, 2) volatile FX rates, 3) geopolitical 6,000 5,427

4,586
instability, 4) increased site decommissions, and 5) increased competition. 5,000
3,717
4,000
2,969
NDR – Momentum Building with Strong Execution 3,000
1,770
2,336
2,000 1,273
4Q20 Results – Metrics Ahead of Estimates; Set for Solid 2021 1,000
0
2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E
Initiation: Radiating Growth in a 5G World
Source: Company Data, Factset, CS Research.

Equinix (EQIX) Data Centers
OUTPERFORM | Target Price: $942 | Mkt. Cap. $60.5B

• EQIX is the market interconnection leader, with highly recurring EQIX Mini P&L
revenues and margin expansion potential long-term. They are the most
(in $ millions) FY19 FY20E FY21E FY22E
globally distributed data center with a world class brand. Co-location Revenue 4,022.2 4,259.0 4,626.0 5,129.3
Interconnection Revenue 893.6 1,023.3 1,155.8 1,275.0
• Growing SaaS company/customer on-ramps, and accelerating Managed Infrastructure Revenue 292.6 337.3 383.4 427.9
interconnection growth are drivers of EQIX’s portfolio through 2021. Rental & Other 29.8 38.4 36.9 36.9
Total Recurring Revenue 5,238.2 5,658.0 6,202.0 6,869.1
• Lower average interest expense from refinanced investment grade debt Non-Recurring Revenue 324.0 340.5 346.4 391.3
will support higher AFFOS growth long-term. Total Revenues 5,562.1 5,998.5 6,548.4 7,260.4
• EQIX is executing well, adding to its network dense asset dominance Adjusted EBITDA 2,687.7 2,852.9 3,113.5 3,460.5
through M&A globally (e.g. Canada, India) and JV’s. Adjusted EBITDA Margin 48.3% 47.6% 46.9% 47.0%
FFO 1,314.6 1,300.6 1,694.0 1,891.2
• We believe EQIX is best positioned as a global interconnection leader FFO per share (diluted) 15.53 14.75 18.75 20.47
given its business moat, global distribution, and strategically executed Adjusted FFO 1,931.1 2,189.1 2,450.7 2,792.9
acquisitions to expand into new markets. Adjusted FFO per share (diluted) 22.85 24.79 27.13 30.23
AFFO Y/Y Growth 10.3% 8.5% 9.4% 11.4%
Valuation Revenue Growth to Rebound in 2021 Following FX Volatility

8.0 25%
$942 Target Price, ~38% Upside: Our target price of $942 is based on
30x our FY22E AFFOS of $30.23 per share and a DCF valuation 7.0
20%
assuming a terminal growth of 2.1% and WACC of 5.3%.
Total Revenue ($billions)

6.0
Risks: Technological disruption, market competition, rising interest rates, 5.0
Y/Y Growth
15%
and REIT qualification loss. 4.0
3.0 10%
4Q20 Results ― Global Mom entum , Position Strengthening 2.0
5%
Review: Global Interconnection Leader Warrants Valuation 1.0
0.0 0%
Link Initiation: Pioneering the Interconnection of Things 2017 2018 2019 2020 2021E 2022E
EMEA Asia Americas Y/Y Growth

CoreSite Realty (COR) Data Centers

COR Mini P&L
• COR has solid execution across businesses, especially in
interconnection, often being compared to EQIX. (in $ millions) FY19 FY20 FY21E FY22E
Rental Revenue 308.6 329.3 349.9 383.3
• COR is set up for stronger growth in 2021 due to robust enterprise Power Revenue 165.4 169.7 182.0 202.5
demand momentum, given the company’s retail colocation focus. Interconnection Revenue 75.8 84.1 91.9 104.4
Tenant Reimbursement & other 11.1 13.3 14.2 15.5
• COR should see improved churn in 2021, now that Uber’s move out is Total Data Center Revenue 560.9 596.4 638.0 705.7
mostly behind it. Office, light-industrial and other revenue 11.8 10.4 11.1 11.1
• 2021 renewal rates should improve off of easy comps, better churn, Total Revenue 572.7 606.8 649.1 716.8
y/y growth 5.2% 6.0% 7.0% 10.4%
and broad end market supply/demand balance.
Adjusted EBITDA 308.1 324.5 343.8 386.8
• COR continues to target development yields that exceed MTDC peers, EBITDA Margin 53.8% 53.5% 53.0% 54.0%
and we view its ROIC leadership should continue in 2021. FFO per share / OP unit 5.10 5.31 5.51 6.27
AFFO per share / OP unit 5.13 5.16 5.29 6.03
AFFO Y/Y Growth 5.9% 0.6% 2.6% 14.0%
Valuation Expect Renewal Rates to Improve in 2021 with Better Churn

7.0%
5.7%
5.6%
5.5%
5.3%
5.2%
6.0%
23x our FY22E AFFOS of $6.03 per share and a DCF valuation assuming
4.8%
4.2%
a terminal growth of 2.5% and WACC of 5.1%. 5.0%
4.0%
3.9%
3.8%
3.7%
3.7%
3.5%
3.4%
3.2%
3.2%
4.0%
3.0%
2.9%
2.9%
2.8%
Risks: Technological disruption, market competition, rising interest rates,
2.6%
2.6%
3.0%
1.9%
and REIT qualification loss.
1.4%
2.0%
1.0%
0.4%
1.0%
4Q20 Results – Initial Guidance Leaves Room for Upside
0.0%
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
-1.5% 2Q20
3Q20
4Q20
2015
2016
2017
2018
2019
Upgrade to O/P: Positioned Well for Hybrid Cloud Demand -1.0%
-2.0%
-0.8%
Link Initiation: Fairly Valued, Upside Priced In
-2.2%
-3.0%
Cash renewal rate Churn

Digital Realty (DLR) Data Centers

DLR Mini P&L
• DLR is in strong position as the leading hyperscale MTDC, in an
(in $ millions) FY19 FY20 FY21E FY22E
environment with robust hyperscale demand and solid pricing.
Rental 2,266.1 2,758.7 3,066.2 3,138.7
• Following the acquisition of InterXion, DLR now has a solid portfolio of Tenant Reinbursements - Utilities 431.2 565.1 611.6 626.0
both hyperscale and enterprise/hybrid assets, which we believe is Tenant Reimbursements - Other 235.8 235.3 246.2 329.6
important given the aforementioned strong enterprise demand. Interconnection & Other 263.3 327.4 372.4 419.2
Construction Management (Fee income) 11.7 15.2 16.5 16.5
• InterXion also strengthened DLR in Europe, which is expected to see Other 1.2 1.9 1.0 1.0
strong growth through 2021, mainly from hyperscale, whom DLR Total Revenue 3,209.2 3,903.6 4,313.9 4,530.9
already has strong relationships with. y/y growth 5.3% 21.6% 10.5% 5.0%
Adjusted EBITDA 1,886.7 2,187.0 2,320.3 2,493.5
• DLR’s development yields to climb to the 12%+ range given improving EBITDA Margin 58.8% 56.0% 53.8% 55.0%
renewal spreads and increased cross-selling. FFO per share / OP unit $6.65 $6.22 $6.41 $6.93
AFFO per share / OP unit $5.93 $5.83 $5.90 $6.28
AFFO Y/Y Growth (2.2%) (1.7%) 1.4% 6.4%
Valuation Hyperscale Growth Should Power DLR Through 2022E

$1,000,000 $90,000
$167 Target Price, ~17% Upside: Our target price of $167 is based on $900,000 $80,000
26.5x our 2022E AFFO/share estimate of $6.28.
Revenues in $ millions
$800,000 $70,000
Risks: Technological disruption, market competition, rising interest rates, $700,000
$60,000
Capex in $ millions
and REIT qualification loss. $600,000
$50,000
$500,000
$40,000
$400,000
$30,000
4Q20 Results ― InterX ion Value Taking Shape $300,000
$200,000 $20,000
$10,000
Review: Network Dense Assets Should Boost Yields $100,000
$0 $0
2016 2017 2018 2019 2020 2021E 2022E
Reinstatement: INXN Strengthens Position and Boosts ROIC
Revenue Capex

Switch (SWCH) Data Centers

• Over the long-term, SWCH is growing ahead of the data center market SWCH Mini P&L
rate. It offers immense amounts of power for customer workloads at low (in $ millions) FY19 FY20 FY21E FY22E
power rates, and through their fiber routes, the company passes Colocation 369.8 413.7 449.2 514.0
through tax incentives on data center demand. Connectivity 80.4 92.0 94.4 109.9
Professional services & Other 6.5 5.8 5.7 7.6
• SWCH’s S3 sales team is driving better growth outside of Las Vegas,
Total Revenue 456.7 511.5 549.3 631.6
with larger average deal sizes since the team has started.
• In 4Q20, SWCH signed incremental annualized recurring revenue of Income from continuing operations 75.9 203.4 213.5 271.5
$36M, its highest quarterly figure ever. Margin 16.6% 39.8% 38.9% 43.0%
Adjusted EBITDA 230.3 268.1 285.6 328.9
• It trades at a significant discount to MTDC peers on a multiple basis. Adjusted EBITDA Margin 50.4% 52.4% 52.0% 52.1%
• Growth is hindered this year by outsized churn impact, but in our view, AFFO 198.6 218.1 238.5 275.4
that still does not counterbalance the distinct discount on SWCH. AFFO Per Share 0.81 0.91 0.99 1.13
AFFOS Y/Y Growth 18.7% 11.6% 9.0% 14.5%
Valuation Double Digit Revenue Growth to Return in 2022E, Post-Churn

800,000 30%
$19 Target Price, ~10% Upside: Our target price is based on our
SWCH DCF model, with a WACC of 6.0% (reflecting a 22% debt-to- 700,000
Revenues (in $thousands)
Y/Y Revenue Growth (%)

25%
capital ratio) and a terminal growth of 2.5%. 600,000
20%
Risks: Revenue concentration, interest rate risk, data center pricing 500,000
volatility, and intellectual property protection ability. 400,000 15%
300,000
NDR ― Tone Confident, Valuation Attractive 10%
200,000
4Q20 Results ― Custom er Migration Weighs Near-Term 5%
100,000
0 0%
Link Initiation: More Data Center Power For Less 2015A 2016A 2017A 2018A 2019A 2020A 2021E 2022E 2023E
Revenues Y/Y Growth (%)


QTS Realty (QTS) Data Centers
NEUTRAL | Target Price: $71 | Mkt. Cap. $4.6B

• QTS’ recent performance has been strong, indexed to cloud growth and QTS Mini P&L
enterprise hybrid growth with solid assets in Georgia and expansions (in $ millions) FY19 FY20 FY21E FY22E
into Arizona, but it continues to dilute equity more heavily than peers. Rental 410.06 465.56 523.98 577.88
• Record lease signings highlight the consistency of the company’s new Recoveries from customers 55.07 54.30 63.01 69.21
Other 15.70 19.51 21.96 24.22
core strategy, and a record backlog provides good visibility into 2021
Total revenues 480.82 539.37 608.95 671.30
growth. Its software defined platform has spurred recent growth.
y/y growth 6.7% 12.2% 12.9% 10.2%
• Broad sector strength can cause QTS to rise with the tide, and low Adjusted EBITDA 250.38 298.49 336.11 372.58
churn shows positive potential for the future. Adjusted EBITDA Margin (%) 52.1% 55.3% 55.2% 55.5%
• Federal segment may slow in 2021, but remains a strong growth driver Operating FFO 165.73 199.04 231.09 264.66
Operating FFO per share (diluted) 2.63 2.84 3.01 3.25
in the long-term, as the U.S. government aims to modernize its
Operating AFFO 154.80 169.51 207.68 237.22
infrastructure in the wake of COVID.
Operating AFFO per share (diluted) 2.46 2.42 2.70 2.91
AFFO Y/Y Growth -1.6% -1.5% 11.8% 7.7%
Valuation EBITDA Margin Expansion to Pause in 2021, Resume in 2022

450 58%
$71 Target Price, ~11% Upside: Our target price of $71 is based on a
P/AFFOS multiple of 24.5x our 2022 AFFO per share of $2.91. 400 56%
350 54%
Risks: Technological disruption, market competition, rising interest rates,
EBITDA (in $mil)
BITDA Margin (%)

and REIT qualification loss. 300 52%
250 50%
200 48%
4Q20 Results ― Another Solid Quarter, With a Solid Outlook 150 46%
100 44%
DCs Post-4Q20 Results: Takeaways
50 42%
Link Initiation: Secular Growth Is Not Enough - 40%
2017A 2018A 2019A 2020A 2021E 2022E 2023E

CyrusOne (CONE) Data Centers

CONE Mini P&L
• Adjusted EBITDA margin compressed again in 2020, and we expect
slight degradation in 2021, following heavy buildouts in Europe.
Base Revenue 842.5 872.1 934.9 1,000.5
• Hyperscale demand accelerated due to COVID-19, especially in Meter Power Reimbursement Revenue 138.8 161.4 190.1 203.4
Europe, which was already seeing strong demand. Strong demand Total Revenue 981.3 1,033.5 1,125.0 1,203.9
should continue through 2021. Total Revenue Y/Y Growth (%) 19.5% 5.3% 8.9% 7.0%
Net Operating Income (CONE defined) 597.9 621.9 687.2 732.8
• Bookings results improved following soft leasing in new mgmt.’s first full NOI Margin 60.9% 60.2% 61.1% 60.9%
quarter, investors will need improvement in direction in 2021. Adjusted EBITDA 512.2 537.2 583.1 624.9
• CONE is targeting lower stabilized yields in 2021 to win market share, FFO 409.0 459.4 504.3 549.1
we are cautious on the outcome of this strategy. However, we concede FFO Per Share 3.63 3.90 3.96 4.10
that the current demand/supply may support the stock. AFFO 394.3 448.4 487.7 520.6
AFFO Per Share 3.50 3.80 3.83 3.88
AFFO Y/Y Growth 5.1% 8.5% 0.7% 1.5%
Valuation Revenue Growth Behind the Market Rate Through 2022

1,400 35.0%
~21x our 2022E AFFO/share estimate of $3.88. 1,200 30.0%
Total Revenue ($millions)

Risks: Technological disruption, market competition, rising interest rates, 1,000 25.0%
Y/Y Growth (%)

and REIT qualification loss.
800 20.0%
600 15.0%
4Q20 Results ― Strong Bookings, But Weak 2021 Outlook 400 10.0%
DCs Post-4Q20 Results: Takeaways 200 5.0%
- 0.0%
Link Initiation: Driving the Colo. Boom with the Fortune 1,000 2016A 2017A 2018A 2019A 2020A 2021E 2022E

American Tower (AMT) Towers

• AMT’s global macro towers are set to benefit from multiple telecom AMT Mini P&L
standard upgrades within high growth developing markets.
• AMT’s avg macro tower tenancy is expected to increase over time as Property Revenue 7,465 7,954 8,597 8,984
the company works to lease up its recently acquired towers. Services Revenue 115 88 96 104
• Net leverage levels below peers with scope to increase if M&A Total Revenue 7,580 8,042 8,693 9,088
opportunities present themselves. Seen in Telxius deal. Total Revenue Y/Y Growth (%) 1.9% 6.1% 8.1% 4.5%
Gross Profit (NOI) 5,364 5,816 6,278 6,624
• Opportunity for expansion into new digital infrastructure assets. AMT’s
Gross Margin 70.8% 72.3% 72.2% 72.9%
lower leverage benefits it, enabling greater strategic agility.
Adjusted EBITDA 4,745 5,156 5,651 5,976
• Robust end market drivers make us bullish on the tower industry and Adjusted EBITDA Margin 62.6% 64.1% 65.0% 65.8%
AMT, however churn headwinds are likely a drag on our 2021 AFFO 3,521 3,788 4,114 4,316
estimates. That said, we maintain our Outperform rating given the AFFO Per Share 7.90 8.49 9.20 9.31
constructive long-term view of the company. AFFOS Y/Y Growth -1.2% 7.4% 8.3% 1.2%
Valuation Trading Off Peak Valuation With Full 5G Opportunity Nearing

35.0x
$296 Target Price, ~21% Upside Potential: AMT is valued based on
the average of two methods arriving to a $296 TP, implying upside of 30.0x
29.5x
36%: (1) P/AFFOS multiple of 30x our 2022E AFFOS of $9.31; and (2)
DCF valuation assuming a WACC of 5.6% and terminal growth rate of 25.0x
P/FY2 AFFO
2.5% (below standard portfolio lease escalators of ~3%). 23.7x
20.0x
Risks: 1) slowdown in overall telecom spending, 2) shift away from macro 19.0x
tower infrastructure, 3) customer concentration, 4) interest rate risk, and 15.0x
5) REIT qualification risk. 13.9x
10.0x
Tower REITs: Takeaways from VZ, TMUS, and T Analyst Days

5.0x
The Next Digital Infra. Frontier: Consolidating European Towers

P/ FY2 AFFO Avg Min Max

SBA Communications (SBAC) Towers

• SBAC has reported elevated macro tower amendment activity, which SBAC Mini P&L
we view should be a driver going forward due to 5G. (in $ millions) FY19 FY20 FY21E FY22E
• Potential to expand into broader digital infrastructure assets, such as Site Leasing Revenue 1,861 1,957 2,043 2,118
data centers, following an exploration period. Management has already Site Development Revenue 154 129 152 172
begun the diversification process. Total Revenue 2,015 2,086 2,195 2,290
• However, compared to peers it does have the same flexibility given Total Revenue Y/Y Growth (%) 8.0% 3.5% 5.2% 4.3%
elevated levels of leverage. Gross Profit (NOI) 1,522 1,610 1,695 1,764
Gross Margin 75.5% 77.2% 77.2% 77.0%
• 2021E, 2022E is likely to be subdued due to elevated levels of churn
Adjusted EBITDA 1,409 1,494 1,576 1,657
associated with the Sprint, given overlap of sites with T-Mobile.
• Valuation has troughed, in our view, as TowerCos were hit by rising AFFO 972 1,070 1,137 1,201
rates early in 2021. AFFO Per Share 8.48 9.47 10.18 10.73
AFFOS Y/Y Growth 11.3% 11.7% 7.5% 5.4%
Valuation ’21 EBITDA Margin Leads All Communications Infra. Peers

75.0%
$277 Target Price, ~3% Downside Potential: SBAC is valued on the 71.8%
avg of two methods arriving to a $277 TP: (1) P/AFFOS multiple of 23x 70.0%
our 2022E AFFOS of $10.73; & (2) DCF valuation assuming a WACC of 65.0%
Adj. EBITDA Margin

65.0%
5.4% and terminal growth rate of 2.1% (below portfolio lease escalators).
60.0% 58.3%
Risks: 1) slowdown in overall telecom spending, 2) shift away from macro 55.2%
tower infrastructure, 3) customer concentration, 4) interest rate risk, and 55.0% 53.8% 53.0%
52.0% 51.8%
5) REIT qualification risk.
50.0% 46.9%
Tower REITs: Takeaways from VZ, TMUS, and T Analyst Days 45.0%
40.0%
The Next Digital Infra. Frontier: Consolidating European Towers SBAC AMT CCI QTS DLR COR SWCH CONE EQIX

Crown Castle (CCI) Towers

• Deployment constraints in small cells are likely to continue as municipal CCI Mini P&L
permitting for new builds has not allowed for node count to scale as
mgmt. had previously projected.
Site Rental Revenue 5,093 5,320 5,555 5,858
• As CCI builds further outside of major metros, the likelihood of achieving Network Services & Other 670 520 620 660
tenancy above the ~2.3x industry average is reduced over time, in our Total Revenue 5,763 5,840 6,175 6,518
view. Total Revenue Y/Y Growth (%) 7.3% 1.3% 5.7% 5.6%
• Capital return already optimized with AFFO payout ratio at ~73%. Gross Profit (NOI) 3,777 3,869 4,132 4,416
Margin 65.5% 66.3% 66.9% 67.7%
• DISH’s long-term leasing agreement with CCI can be a key driver if
Adjusted EBITDA 3,299 3,707 3,602 3,783
DISH ends up leasing close to 20,000 towers from CCI. We view “up
to 20,000” likely does not ultimately signal 20,000 sites. Adjusted EBITDA Margin 57.2% 63.5% 58.3% 58.0%
AFFO 2,372 2,878 2,911 3,051
• That said, CCI, would be the beneficiary of a major edge or micro data AFFO Per Share 5.67 6.76 6.71 6.96
center overhaul in the U.S. given their fiber rich assets.
AFFOS Y/Y Growth 4.0% 19.2% -0.7% 3.7%
Valuation Dividend Yield Leading the TowerCo Group

5.0%
$155 Target Price, ~12% Downside Potential: CCI is valued on the 4.4%
4.5%
avg. of two methods arriving to a $155 TP: (1) P/AFFOS multiple of 25x
4.0%
(in-line with CCI’s current level) our 2022E AFFOS of $6.96; and (2) DCF 3.5%
3.5%
valuation assuming a WACC of 5.6% and terminal growth rate of 2.5%
Dividend Yield
3.0%
(aligned with AMT/SBAC).
2.5%
Risks: 1) slowdown in overall telecom spending, 2) shift away from small 2.0%
cell infrastructure, 3) customer concentration, 4) interest rate risk, and 5) 1.5%
REIT qualification risk. 1.0%
0.5%
Tower REITs: Takeaways from VZ, TMUS, and T Analyst Days 0.0%
The Next Digital Infra. Frontier: Consolidating European Towers Yield Avg Min Max

Cogent Communications (CCOI) Fiber

CCOI Mini P&L
• CCOI is growing faster than the competitive and challenged Internet
Service Provider industry, despite Corporate customer challenges. ($ millions) FY19 FY20 FY21E FY22E
On-Net 396.75 419.46 444.18 477.15
• NetCentric has returned to growth and should sustain strength given Off-Net 148.93 148.13 146.23 148.86
growing OTT and gaming use cases. Non-Core 0.48 0.52 0.48 0.51
Total revenues 546.16 568.11 590.89 626.52
• CCOI has raised its dividend 34 consecutive quarters, and we project
y/y growth 5.0% 4.0% 4.0% 6.0%
+14.2% y/y growth in dividend per share in 2021. Gross Profit 327.35 350.17 365.41 390.57
• Office space may weaken over the coming year, with vacancy rates Gross Margin 59.9% 61.6% 61.8% 62.3%
rising, putting further pressure on Corporate Customer growth. Adjusted EBITDA 198.96 214.35 223.73 241.60
Adj EBITDA Margin 36.4% 37.7% 37.9% 38.6%
• Decline in pricing per megabit has accelerated recently, putting further Net income 37.52 6.22 38.52 45.96
pressure on CCOI. Sharecount 45.93 46.20 46.74 46.89
EPS 0.82 0.13 0.82 0.98
y/y growth 30.5% -83.5% 512.5% 18.9%
Valuation EBITDA Margins to Maintain Generally Upward Trajectory

$70 40%
$70 Target Price, ~2% Upside: Our target price of $70 is based on a 39%
$60
div. yield basis, using an assumed 2021 yield of 4.5%, and forecast 38%
Adjusted EBITDA (Millions $)

+14.2% y/y dividend per share growth in FY21. 37%
Adjusted EBITDA Margin

$50
36%
Risks: Key executive, technological disruption, FX headwinds, market $40 35%
competition, and net neutrality laws. 34%

$30 33%
32%
NDR ― Corporate Growth at a Trough Reiterated by Mgm t. $20
31%
30%
$10
4Q20 Results ― Below Expectations on Corporate 29%
$0 28%
1Q21E
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Link Initiation: High Dividend Growth in a Challenged Market
Adjusted EBITDA Adjusted EBITDA Margin

Motorola Solutions (MSI) Networking
TOP PICK: OUTPERFORM | Target Price: $198 | Mkt. Cap. $26B

Key Points Key Exhibits
• Motorola Solutions possesses the only true end-to-end solution in the MSI Mini P&L
first responders and public safety market, launching “Command Center”
for full automation, big data, and auditable system install, materially ($ millions) FY19 FY20 FY21E FY22E
enhancing functionality for customers. Products 5,329.0 4,634.0 4,877.7 5,059.5
Services 2,559.0 2,780.0 3,110.2 3,330.3
• Revenues are also transitioning to a recurring revenue model, allowing Total revenues 7,888.0 7,414.0 7,987.9 8,389.8
for a potential multiple re-rating as the shift continues. y/y growth 7.4% (6.0%) 7.7% 5.0%
Gross Profit 3,962.6 3,660.0 4,069.3 4,320.8
• Expansive revenue synergy opportunities exist from the Avigilon Gross Margin 50.2% 49.4% 50.9% 51.5%
acquisition, particularly within the government and first responder Operating Expense 1,987.6 1,824.0 1,904.1 1,945.6
customer segments where MSI is under-indexed. Operating Profit 1,975.0 1,836.0 2,165.2 2,375.1
• Recent acquisitions continue to augment and simplify communications Operating Margin 25.0% 24.8% 27.1% 28.3%
Net income 1,399.0 1,339.0 1,504.1 1,681.1
in the Command Center software suite with new, convenient modes of
Sharecount 175.7 174.1 174.4 174.0
communication (i.e texting capabilities) EPS 7.96 7.69 8.62 9.66
y/y growth 11.4% (3.4%) 12.1% 12.0%
Valuation
Since 2011, MSI Has Returned over $14bn to Shareholders, and
Strong Capital Returns Are Expected to Continue
$198 Target Price: Our target price is based on 20.5x our 2022E EPS of
3,452
$9.66. 3,500
Total Capital Return ($millions)

Risks: Execution of strategy, technological disruption, timing of refresh 3,000
2,708
2,864
cycles, dependency on U.S. government contracts. 2,500
1,986
2,000
Link: 4Q20/2020 Results Beat
1,500
1,182 1,123 1,157
1,048 1,106
Link Initiation: Leading End-to-End Public Safety Provider

1,000 789
694
469
500
Link Sector Primer: Cloud Networking Fabrics to Proliferate 0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Company Data, Factset, CS Research. Buybacks Dividends

Arista Networks (ANET) Networking
OUTPERFORM | Target Price: $359 | Mkt. Cap. $15B

• DC capacity influx is expected to be significant in 2021, driven by U.S. ANET Mini P&L
hyperscale capex spend acceleration to 16% y/y and multi-tenant data
center capacity availability and commencement timing ($ millions) FY19 FY20 FY21E FY22E
Product 2,021.2 1,830.8 2,065.0 2,303.4
• Campus switching and WLAN product revenue ramp provides a Services 389.6 486.7 587.9 705.5
compelling opportunity, augmented by Awake Security and Big Switch Total revenues 2,410.7 2,317.5 2,652.9 3,008.9
acquisitions y/y growth 12.1% (3.9%) 14.5% 13.4%
Gross Profit 1,559.5 1,505.6 1,716.0 1,946.1
• Cloud titans and SPs will continue to look to ANET for data center
Gross Margin 64.7% 65.0% 64.7% 64.7%
switching long-term, in our view, based on the company’s proprietary Operating Expense 641.9 651.4 728.2 833.3
EOS software, quick adoption and integration of leading edge Operating Profit 919.0 854.2 987.8 1,112.7
components (merchant silicon use, latest DC switching chip), and Operating Margin 38.1% 36.9% 37.2% 37.0%
network equipment power efficiency. Net income 786.8 718.4 780.9 882.9
• ANET should benefit from an elongated 100G DC switching cycle Sharecount 80.9 79.4 79.6 79.7
EPS 9.73 9.04 9.81 11.08
y/y growth 22.3% (7.0%) 8.4% 13.0%
Valuation
$359 Target Price: Our $351 target price is based on the average of a CS Model Relatively in-line Consensus View
sales multiple: $339 from 8.0x our FY22 Sales estimate of $3,009M and
$3,500
$378 from our DCF computing (WACC 7.2%, TVGR 2.5%).
$3,000
Risks: Decreased long-term campus demand, delayed product refresh
cycle timing for 400G, and weakening cloud capex trends.

$2,500
$2,000
Link: Upgrading to Outperform
$1,500
Link: 3Q20 Earnings – Beat & Raise $1,000
$500
Link Initiation: Levered to Surging Hyperscale Capex $0

2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
Source: Company Data, Factset, CS Research. CS Revenue Cons. Revenue

CommScope (COMM) Networking

COMM Mini P&L; New Segments
• COMM’s management has a history of achieving cost synergies and
($ millions) FY20 FY21E FY22E
reducing leverage ahead of schedule, a major positive in the minds of Venue and Campus Networks 1,936.6 1,986.2 2,065.6
investors as COMM integrates ARRS. BroadBand 2,895.5 3,024.4 3,093.9
• MetroCell and OneCell are compelling long-term opportunities for Outdoor Wireless 1,243.8 1,328.0 1,347.0
COMM in a 5G-ramping world, as COMM is one of the few vendors Home 2,360.0 2,335.6 2,464.0
that can offer an end-to-end solution set for customers. Total revenues 8,435.9 8,674.1 8,970.6
y/y growth 15.3% 2.8% 3.4%
• The opportunity for ARRS to utilize COMM’s sales channel is a revenue Gross Profit 2,803.3 2,952.2 3,132.6
synergy opportunity that is not modeled into our assumptions. Gross Margin 33.2% 34.0% 34.9%
Operating Profit 1,056.8 1,138.0 1,227.7
• COMM revenue mix remains skewed towards the enterprise-owned Operating Margin 12.5% 13.1% 13.7%
data centers versus hyperscale highlighting the significant opportunity Net income 370.8 449.4 541.0
that remains. Sharecount 238.5 247.1 255.1
EPS 1.55 1.81 2.12
y/y growth (25.7%) 13.0% 16.6%
Valuation Adjusted EBITDA Emphasizes Seasonality

$22 Target Price: Our target price is computed from a P/EPS multiple of 400.0
10.0x on our 2022 EPS estimate of $2.12. 350.0
Adjusted EBITDA (Millions $)

Risks: Changes to competitive position, execution of strategy, leverage, 300.0
Home Networks
and technological obsolescence. 250.0
200.0 Outdoor Wireless

Link: 4Q20 Results Networks
150.0
Broadband Networks
100.0
Link Initiation: Increasingly Indexed to Cloud Capex Trends
50.0 Venue and Campus
Networks (Includes
Link Sector Primer: Cloud Networking Fabrics to Proliferate 0.0 Rukus)
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F5 Networks (FFIV) Networking

• We are Neutral feeling confident in our modeling and recent 1Q21
industry channel checks indicate a slight slowdown in enterprise
FFIV Mini P&L
demand for IT solutions and lower US Federal demand in 1H21 than ($ millions) FY19 FY20 FY21E FY22E
our initial 2021 expectations Products 985.6 1,032.6 1,192.0 1,381.8
• F5 Networks still remains the ADC market leader, commanding over Services 1,256.9 1,325.0 1,353.0 1,366.5
40% market share in the past five years and an expanding lead. Total revenues 2,242.4 2,357.6 2,545.0 2,748.4
y/y growth 3.7% 5.1% 7.9% 8.0%
• High software revenue growth and traction are still expected to continue Gross Profit 1,916.7 2,001.4 2,153.3 2,355.1
amid COVID-19 related spending uncertainty, fueled by customer Gross Margin 85.5% 84.9% 84.6% 85.7%
readiness for software solutions and FFIV’s efforts to reduce adoption Operating Expense 1,146.7 1,284.9 1,344.8 1,408.2
friction. Operating Profit 770.0 716.5 808.5 946.9
Operating Margin 34.3% 30.4% 31.8% 34.5%
• Despite COVID-19 challenges, large enterprises will adopt hybrid clouds Net income 626.3 574.9 632.8 745.9
given their network complexities and compliance, and FFIV provides Sharecount 60.3 61.2 62.3 63.0
products and services essential for this transition EPS 10.38 9.39 10.16 11.83
y/y growth 4.8% (9.5%) 8.2% 16.4%
Valuation
Revenue Mix to Stabilize; Service Revs at 50% of total 2022E
3,000 60%
$207 Target Price: Our target price is based on a 17.5x price multiple on
our FY22 EPS of $11.83. 2,500 50%
Risks: Changes to competitive position, execution of strategy, ADC
Revenue ($millions)
% of Total Revenue
2,000 40%
market evolution, and technological obsolescence.
1,500 30%
Link Initiation: 1Q21 Preview, Downgrade to Neutral 1,000 20%
Link: Driven, De-risked, and Underappreciated 500 10%
Link Sector Primer: Cloud Networking Fabrics to Proliferate 0 0%

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019E FY2020E FY2021E FY2022E
Source: Company Data, Factset, CS Research. Service Revenue Product Revenue Service as a % of Total Revenue

Cisco Systems Inc. (CSCO) Networking

• CSCO remains a dominant leader across numerous networking CSCO Mini P&L
equipment end markets, but has seen pressure from predominantly
service provider spending. ($ millions)
Key I/S Items (Non-GAAP)
FY19 FY20 FY21E FY22E
• ANET and JNPR entry into campus switching and WLAN have not been Products
Infrastructure Platforms
39,005
30,191
35,978
27,121
35,653
26,638
36,790
27,171
reported to be threatening to CSCO’s very high market share in both Applications 5,802 5,568 5,543 5,820
segments. Security 2,730 3,153 3,456 3,784
Other Products 281 135 16 16
• COVID-19 and WFH movement putting pressure on campus product Services
Total revenues
12,899
51,904
13,323
49,301
13,639
49,292
14,048
50,839
groups that contribute high margins y/y growth 5.2% (5.0%) (0.0%) 3.1%
Gross Profit 33,479 32,538 32,532 33,629
• Tariffs are not having a large impact on CSCO’s results, however Gross Margin 64.5% 66.0% 66.0% 66.1%
numerous end markets for CSCO are experiencing slowdowns into 2020, Operating Profit 16,716 16,651 16,593 17,201
Operating Margin 32.2% 33.8% 33.7% 33.8%
incl. Service Providers, where we don’t expect recovery near-term. Net income 13,787 13,649 13,596 13,985
Sharecount 4,455 4,255 4,212 4,100
EPS 3.09 3.21 3.23 3.41
Valuation y/y growth 18.8% 3.7% 0.6% 5.7%
$46 Target Price: Our target price is based on FY22E EPS of $3.41 at a
CSCO Working to Increase Recurring Revenue Streams Across
13.5x FY2 multiple. Software and Services
$16,000
Risks: Disruption to distribution model, reliance on suppliers, heavy market
$14,000
competition, industry consolidation, and more.
$12,000

$10,000
Link: F2Q21 Results, Solid Results $8,000
$6,000
Link Initiation: Transitioning into a Recurring Place $4,000
$2,000
Link Sector Primer: Cloud Networking Fabrics to Proliferate $0
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Juniper Networks (JNPR) Networking
UNDERPERFORM | Target Price: $22 | Mkt. Cap. $7.7B

• Solutions have historically been more levered to the telecom service

JNPR Mini P&L
providers (carriers), and we note that the telco capex outlook remains ($ millions) FY19 FY20 FY21E FY22E
Product 2,997.5 1,150.1 1,128.2 1,210.6
unclear and if it directly benefits JNPR. Recent trends suggest further Service 1,424.6 504.7 508.9 546.3
pressure on JNPR routing products. Routing 1,623.2 1,612.1 1,708.4 1,725.5
Switching 901.0 918.9 971.3 981.0
• JNPR will not be able to offset expected profit headwinds with share Security 343.5 314.0 319.6 323.9
repurchases with further revenue pressures medium term. Services 1,577.7 1,600.1 1,642.6 1,683.7
Total revenues 4,445.4 4,445.1 4,642.0 4,714.1
• CSCO advancing into JNPR’s turf with 8000 Series SP routers y/y growth (4.3%) (0.0%) 4.4% 1.6%
intensifies JNPR’s already struggling SP segment. Gross Profit 2,671.8 2,632.4 2,780.3 2,828.3
Gross Margin 60.1% 59.2% 59.9% 60.0%
• New Mist Systems acquisition to be met with heavy WLAN competition. Operating Expense 1,932.9 1,940.8 2,051.0 2,079.5
Operating Profit 738.9 691.6 729.3 748.8
• The upcoming 400G switching cycle will be a more competitive Operating Margin 16.6% 15.6% 15.7% 15.9%
landscape (white boxes, CSCO, ANET) Net income 597.5 519.7 525.7 544.7
Sharecount 347.0 333.9 322.0 306.3
EPS 1.72 1.56 1.63 1.78
y/y growth (8.4%) (9.6%) 4.9% 8.9%
Valuation
JNPR Is Heavily Levered to Telco and Cable Customers,
$22 Target Price: Our target price is based on an average of a 12.5x Comprising ~39% of Revenues
P/EPS multiple on our FY22 estimates of $1.78. 100%
90% 21% 25% 24% 21% 20% 22%

Risks: Technological advancements, increased customer spend, 28% 30% 27% 29% 27% 26% 24% 23% 24% 25% 21%
80%
increasing market share, increasing capital returns.
% of Total Revenue
70%
60% 44% 43% 41% 35% 39%

49% 44% 44% 46% 41% 40% 38%
50% 47% 46% 47% 43% 46%
Link: 2021 Investor Day Takeaways 40%
30%
Link Initiation: Competitive Pressures Only Intensifying 20% 36% 34% 34% 36% 36% 33% 32% 34%
31% 33% 33%
10%
25% 24% 26% 28% 27% 30%
Link Sector Primer: Cloud Networking Fabrics to Proliferate 0%

3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Source: Company Data, Factset, CS Research. Enterprise Telecom and Cable Cloud

Ubiquiti Inc. (UI) Networking
UNDERPERFORM | Target Price: $126 | Mkt. Cap. $10.5B

• While UI beat expectations in 2020, benefiting from WFH dynamics, we UI Mini P&L
believe UI’s growth should moderate in 2021 due to (1) its low-end
customer base, not requiring further updates or additions to connectivity Non-GAAP ($ millions) FY19 FY20 FY21E FY22E
purchases and (2) lapping difficult comps in enterprise Service Provider Technology 428.5 442.0 574.6 488.4
Enterprise Technology 733.2 842.5 1,114.4 920.7
• While we are not certain the extent of the damage and operational risk Total Revenue 1,161.7 1,284.5 1,689.1 1,409.1
of the January 2021 breach, we believe there is some merit to the y/y growth 14.2% 10.6% 31.5% (16.6%)
whistleblower’s report considering the source (KrebsonSecurity, a Gross Profit 538.0 608.3 814.2 679.3
trusted cybersecurity investigator) and given the UI customer impact Gross Margin 46.3% 47.4% 48.2% 48.2%
Operating Expense 122.8 127.2 168.9 145.1
from breaches of this sort, we believe there is reputational risk to UI
Operating Income 415.2 481.1 645.3 534.1
which may begin impacting UI’s sales generation starting in CY2Q21 Operating Margin 35.7% 37.5% 38.2% 37.9%
• Capital allocation intensity is unsustainable; >200% intensity in share Net Income 356.0 384.6 534.4 433.4
Diluted S/O 71.6 65.0 62.9 60.1
repurchases alone in FY19 and FY20, we forecast repurchases of
EPS $4.97 $5.92 $8.50 $7.21
$275M/$325M in FY21/22. y/y growth 34.8% 19.1% 43.6% (15.2%)
Valuation
UI Repurchase Program Unsustainable
$126 Target Price: Our target price is based on a P/FY2 EPS multiple of
17.5x and our FY22 EPS estimate of $7.21 400%
700
Capital Allocation ($ millions)

Risks: Technological advancements, increased customer spend, 600
350%
increasing market share, increasing capital returns. 500

300%
As % of OCF
250%
400
200%
300
150%
Link: UO: Not An April Fool’s Joke 200 100%
100 50%
Link: UI: Ubiquitous Growth Deceleration 0 0%
UBNT: LTU Chip to Propel or Break UBNT

Share Repurchases OCF Share Repurchases % of OCF

Appendix
Comp Sheet – Communications Infrastructure
Basic Information
Current Market Net Debt Rating / Target Upside / EV/Revenue EV/NOI EV/EBITDA P/FFO P/AFFO Net Debt/EBITDA Capex/Revenue Div. Yield
Company / Group Ticker Price EV ($mil)
Cap ($mil) ($mil) Consensus Price Downside 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E Current
Equinix EQIX $684 $61,113 $10,616 $71,729 Outperform $942 37.6% 10.8x 10.1x 16.6x 15.3x 23.0x 20.6x 36.5x 36.6x 25.2x 24.2x 3.4x 3.1x 38% 38% 1.6%
Digital Realty DLR $143 40,172 12,474 52,647 Outperform $167 16.9% 12.2x 11.1x 18.9x 17.6x 21.0x 19.6x 22.5x 21.7x 24.2x 19.3x 5.0x 4.6x 46% 45% 3.1%
CyrusOne CONE 70 8,419 3,148 11,567 Neutral $82 17.3% 10.3x 9.5x 16.5x 15.1x 19.8x 17.6x 17.7x 17.6x 18.3x 17.8x 5.4x 4.8x 82% 76% 2.9%
CoreSite Realty COR 121 5,221 1,684 6,905 Outperform $156 28.4% 10.6x 9.9x 16.8x 15.5x 20.1x 18.0x 22.0x 19.8x 23.0x 20.1x 4.9x 4.4x 32% 30% 4.0%
QTS Realty QTS 64 4,590 1,670 6,260 Neutral $71 10.7% 10.3x 9.4x 16.0x 14.3x 18.6x 17.0x 21.3x 20.3x 23.7x 21.9x 5.0x 4.5x 128% 126% 3.0%
Data Center REITs AVG $23,903 $5,918 $29,822 10.8x 10.0x 17.0x 15.6x 20.5x 18.6x 24.0x 23.2x 22.9x 20.7x 4.7x 4.3x 65% 63% 2.9%
GDS Holdings GDS $79 $15,624 1,280 $16,904 Consensus 13.9x 10.3x 29.1x 21.1x 2.2x 1.6x 53% 102% 0.0%
Switch, Inc. SWCH 17 4,292 892 5,185 Outperform $19 10.2% 9.4x 8.2x 18.9x 16.5x 17.5x 15.5x 3.0x 2.7x 59% 51% 1.0%
NextDC NXT 8 5,064 110 5,174 Consensus 26.9x 22.4x 610.2x 51.4x 41.5x 1.1x 0.9x 132% 152% 0.0%
Chinadata Group CD 16 5,796 (353) 5,443 Consensus 12.8x 8.8x 214.3x 29.2x 18.8x 90% 0.0%
Non-REIT Data Centers AVG $8,327 $761 $9,088 15.8x 12.4x 18.9x 280.3x 31.8x 24.2x 2.1x 1.7x 81% 102% 0.3%
American Tower AMT $245 $108,745 $23,131 $131,876 Outperform $296 21.0% 15.4x 14.5x 21.5x 20.3x 23.3x 22.1x 27.4x 26.4x 26.6x 26.3x 4.1x 3.9x 12% 16% 1.9%
Crown Castle CCI 176 76,177 19,453 95,630 Neutral $155 -12.1% 15.5x 14.8x 23.3x 22.2x 26.5x 25.3x 29.0x 27.5x 26.3x 25.3x 5.4x 5.1x 26% 26% 2.9%
SBA Comm. SBAC 284 31,047 10,473 41,520 Neutral $277 -2.5% 18.9x 18.0x 24.5x 23.4x 26.6x 25.1x 34.5x 31.7x 27.9x 26.5x 6.7x 6.3x 6% 16% 0.7%
Radius Global Infrastructure RADI 15 888 430 1,317 Outperform $19 29.7% 15.2x 12.5x 15.9x 13.1x 51.8x 38.0x 16.9x 12.4x 161% 153% 0.0%
Tower REITs AVG $54,214 $13,371 $67,586 16.2x 14.9x 21.3x 19.7x 32.1x 27.6x 30.3x 28.5x 26.9x 26.0x 8.3x 6.9x 51% 53% 1.4%
Bharti Infratel INFRATEL.NS $7 $38,661 $19,754 $58,416 Consensus 3.7x 3.3x 66.4x 33.1x 7.6x 6.5x 2.6x 2.2x 19% 22% 0.4%
Cellnex Telecom CLNX-MCE 50 $28,764 $7,955 $36,719 Consensus 13.6x 10.0x 224.9x 17.3x 12.1x 3.8x 2.6x 18% 26% 0.1%
China Tower 0788.HK 0 $26,084 $16,675 $42,759 Consensus 3.2x 3.0x 33.6x 26.5x 4.4x 4.1x 1.6x 31% 43% 1.4%
Helios Towers HTWS.L 2 $2,113 $692 $2,805 Consensus 6.0x 5.2x -177.7x 179.9x 10.8x 9.0x 28% 26% 0.0%
Infrastrutture Wireless Italiane INW.MI 11 9,153 4,544 13,696 Consensus 14.6x 13.4x 58.6x 40.7x 16.9x 15.4x 5.6x 5.1x 8% 53% 1.4%
Rai Way SpA RWAY.MI 6 1,319 57 1,376 Consensus 5.0x 4.8x 18.8x 17.4x 8.4x 7.9x 0.3x 0.3x 14% 26% 4.8%
International Tower AVG $17,682 $8,280 $25,962 7.7x 6.6x -0.1x 87.1x 10.9x 9.2x 3.1x 2.4x 20% 33% 1.3%
Akamai AKAM $102 $16,728 $1,679 $18,407 Consensus 5.4x 5.1x 20.7x 19.0x 12.3x 11.4x 1.1x 1.0x 18% 21% 0.0%
Limelight Networks LLNW 4 451 (9) 442 Consensus 2.0x 1.8x 20.1x 14.7x -0.4x -0.3x 15% 11% 0.0%
Fastly FSLY 68 7,741 (104) 7,637 Consensus 20.0x 15.8x 5% 10% 0.0%
Cloudflare NET 70 21,633 (606) 21,027 Consensus 35.5x 26.8x 8% 10% 0.0%
CDN AVG $11,638 $240 $11,878 15.7x 12.4x 20.7x 19.0x 16.2x 13.1x 0.4x 0.4x 11% 13% 0.0%
Lumen Technologies LUMN $13 $14,786 $33,212 $47,998 Consensus 2.4x 2.5x 28.0x 32.4x 5.7x 6.0x 3.9x 4.1x 18% 19% 7.5%
Uniti Group UNIT 11 2,537 4,826 7,363 Consensus 6.8x 6.6x 71.5x 59.9x 8.6x 8.4x 5.2x 6.3x 4.3x 6.3x 5.7x 5.5x 32% 29% 5.4%
Cogent Communications CCOI 70 3,309 685 3,994 Neutral $70 0.6% 6.8x 6.4x 10.9x 10.2x 17.9x 16.5x 3.1x 2.8x 11% 12% 4.1%
Consolidated Comm. CNSL 7 528 2,059 2,587 Consensus 2.0x 2.1x 59.9x 144.5x 5.1x 5.3x 4.1x 4.2x 18% 17% 0.0%
Fiber AVG $5,290 $10,196 $15,485 4.5x 4.4x 42.6x 61.7x 9.3x 9.0x 5.2x 6.3x 4.3x 6.3x 4.2x 4.2x 20% 19% 4.2%
AT&T T $31 $220,793 $173,206 $393,999 Consensus 2.3x 2.3x 24.4x 23.0x 7.3x 7.3x 3.2x 3.2x 11% 9% 6.7%
Verizon VZ 59 244,260 127,181 371,441 Consensus 2.8x 2.7x 17.7x 17.3x 7.6x 7.4x 2.6x 2.5x 13% 14% 4.2%
T-Mobile TMUS 130 161,589 96,862 258,451 Consensus 3.3x 3.2x 87.0x 63.7x 9.5x 9.0x 3.6x 3.4x 8% 14% 0.0%
U.S. Cellular USM 37 3,184 2,188 5,372 Consensus 1.3x 1.3x 32.0x 33.2x 5.1x 5.0x 2.1x 16% 24% 0.0%
Cincinnati Bell CBB 15 783 2,004 2,787 Consensus 1.7x 1.7x 14% 14% 0.0%
Telecoms AVG $126,122 $80,288 $206,410 2.3x 2.3x 40.3x 34.3x 7.4x 7.2x 2.9x 3.0x 13% 15% 2.2%
Comcast CMCSA $55 $250,104 101,632 $351,736 Consensus 3.1x 3.0x 30.5x 23.2x 10.7x 9.5x 3.1x 2.7x 9% 8% 1.7%
Charter Communications CHTR 612 118,492 83,099 201,591 Consensus 4.0x 3.8x 49.0x 38.4x 10.3x 9.4x 4.2x 3.9x 14% 15% 0.0%
Liberty Global LBTA 26 14,838 13,518 28,356 Consensus 2.2x 2.3x 59.9x 45.6x 5.1x 5.0x 2.4x 2.4x 9% 14% 0.0%
Dish DISH 38 19,859 12,089 31,948 Consensus 1.8x 1.8x 17.8x 21.3x 9.7x 10.5x 3.7x 4.0x 3% 2% 0.0%
Cable One CABO 1779 10,736 1,622 12,357 Consensus 8.5x 7.8x 45.3x 38.6x 16.3x 14.5x 2.1x 1.9x 18% 20% 0.5%
WideOpenWest Inc WOW 13 1,175 2,281 3,456 Consensus 3.1x 3.2x 58.4x 45.5x 7.8x 7.5x 4.9x 22% 21% 0.0%
Cable AVG $69,200 $35,707 $104,907 3.8x 3.6x 43.5x 35.4x 9.9x 9.4x 3.1x 3.3x 13% 13% 0.4%
Credit Suisse Defined TMT AVG $39,547 $19,345 $58,892 9.6x 8.3x 25.5x 69.2x 17.3x 14.8x 19.8x 19.3x 18.0x 17.7x 3.6x 3.3x 34% 39% 1.6%
Source: Company Data, FactSet, CS Research.

Comp Sheet – Telecom & Networking Equipment
Basic Information
Current Market Upside / P/Revenue P/E P/FCF EV/FCF
Company / Group Ticker Price Net Debt ($mil) EV ($mil) Rating / Consensus Target Price
Cap. ($mil) Downside 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E
Cisco Systems CSCO $51.77 218,755 (9,538) 209,217 Neutral 46.0 (11.1%) 4.4x 4.3x 16.0x 15.2x 14.5x 12.9x 13.9x 12.3x
Arista Networks ANET $307.82 23,496 (2,447) 21,049 Outperform 359.0 16.6% 8.9x 7.8x 31.4x 27.8x 28.2x 24.8x 25.3x 22.2x
Juniper Networks JNPR $25.42 8,314 (1,139) 7,175 Underperform 22.0 (13.5%) 1.8x 1.8x 15.6x 14.3x 15.6x 13.9x 13.4x 12.0x
F5 Networks FFIV $210.90 13,002 (1,331) 11,671 Neutral 207.0 (1.8%) 5.1x 4.7x 20.8x 17.8x 20.6x 15.4x 18.5x 13.8x
Ubiquiti Networks UI $277.90 17,455 526 17,980 Underperform 126.0 (54.7%) 10.3x 12.4x 32.6x 38.6x 31.2x 46.0x 32.1x 47.4x
Networking AVG 56,205 53,419 6.1x 6.2x 23.3x 22.7x 22.0x 22.6x 20.6x 21.6x
1 1 3 5 6 7 8
Apple AAPL $482.46 2,118,826 35,217 2,154,043 Consensus 6.4x 6.1x 108.6x 102.9x 25.7x 24.3x 26.1x 24.7x
Microsoft Corp MSFT $249.90 1,869,414 (49,186) 1,820,228 Consensus 11.4x 10.3x 33.8x 30.9x 35.3x 31.8x 34.4x 31.0x
Alphabet GOOGL $2,239.03 1,393,138 (108,822) 1,284,316 Consensus 6.2x 5.3x 32.2x 27.6x 26.6x 22.1x 24.5x 20.4x
Tencent Holdings 700 $80.86 806,921 4,730 811,651 Consensus 8.9x 7.4x 34.4x 28.1x 27.4x 25.4x 27.5x 25.5x
Facebook FB $313.09 736,693 (51,018) 685,675 Consensus 6.8x 5.7x 27.7x 23.2x 27.2x 21.0x 25.3x 19.6x
Intel INTC $66.25 266,983 13,033 280,016 Consensus 3.7x 3.7x 14.4x 14.1x 19.9x 17.2x 20.9x 18.0x
Cisco Systems CSCO $51.77 218,755 (9,538) 209,217 Neutral 46.0 (11.1%) 4.4x 4.3x 16.0x 15.2x 14.5x 12.9x 13.9x 12.3x
Oracle ORCL $74.07 214,189 33,435 247,624 Consensus 5.2x 5.0x 15.4x 14.2x 16.4x 15.2x 19.0x 17.6x
IBM IBM $134.93 119,938 52,194 172,132 Consensus 1.6x 1.6x 12.1x 11.1x 13.7x 10.3x 19.7x 14.8x
Broadcom AVGO $482.46 197,565 32,380 229,945 Consensus 7.4x 7.0x 18.0x 16.6x 15.7x 14.5x 18.3x 16.9x
Texas Instrument TXN $193.09 179,608 551 180,159 Consensus 10.8x 10.3x 28.7x 26.7x 28.9x 27.1x 29.0x 27.2x
Applied Materials AMAT $139.14 128,050 (925) 127,125 Consensus 5.9x 5.5x 23.1x 21.0x 25.2x 21.5x 25.0x 21.3x
VMware VMW $153.57 16,893 1,271 18,164 Consensus 1.3x 1.2x 22.6x 20.2x 4.8x 4.0x 5.2x 4.3x
HPE HPE $15.90 20,714 14,574 35,288 Consensus 0.8x 0.7x 8.7x 8.3x 16.7x 11.1x 28.5x 19.0x
Symantec SYMC $21.75 12,773 2,629 15,402 Consensus 4.7x 4.5x 13.4x 12.5x 13.7x 13.0x 16.5x 15.7x
Large Cap. Internet AVG 558,103 552,812 5.6x 5.2x 26.8x 24.3x 20.8x 18.1x 22.0x 19.0x
Salesforce CRM $220.79 203,624 (5,557) 198,067 Consensus 7.9x 6.7x 64.2x 53.2x 45.2x 34.6x 44.0x 33.7x
Citrix Systems CTXS $142.68 17,458 1,100 18,558 Consensus 5.2x 4.8x 22.5x 19.6x 17.5x 14.9x 18.6x 15.8x
Cloudera CLDR $12.34 3,686 83 3,769 Consensus 4.0x 3.7x
Next Gen. Data Center AVG 53,032 51,922 5.5x 4.8x 35.2x 30.2x 23.9x 19.6x 23.3x 19.0x
Fortinet FTNT $192.83 31,770 (1,784) 29,986 Consensus 10.4x 9.0x 52.4x 45.5x 31.0x 26.2x 29.2x 24.7x
Zscaler ZS $180.02 24,757 (504) 24,254 Consensus 38.8x 29.2x
Palo Alto Networks PANW $338.57 32,808 459 33,267 Consensus 7.9x 6.6x 57.7x 48.0x 27.0x 21.5x 27.4x 21.8x
Netscout Systems NTCT $27.98 2,109 34 2,144 Consensus 2.5x 2.3x 16.2x 14.2x 12.4x 10.9x 12.6x 11.1x
F5 Networks FFIV $210.90 13,002 (1,331) 11,671 Neutral 207.0 (1.8%) 5.1x 4.7x 20.8x 17.8x 20.6x 15.4x 18.5x 13.8x
Ubiquiti Networks UI $277.90 17,455 526 17,980 Underperform 126.0 (54.7%) 10.3x 12.4x 32.6x 38.6x 31.2x 46.0x 32.1x 47.4x
High Growth Networking AVG 18,442 18,032 10.6x 9.2x 33.4x 30.3x 22.2x 21.3x 21.5x 20.8x
Motorola Solutions MSI $189.93 32,166 4,589 36,755 Outperform 198.0 4.2% 4.0x 3.8x 22.0x 19.7x 20.7x 17.9x 23.6x 20.5x
CommScope COMM $15.42 3,136 9,524 12,660 Outperform 21.0 36.2% 0.4x 0.3x 8.5x 7.3x 5.8x 5.4x 23.2x 21.9x
L3Harris LHX $208.65 43,029 6,492 49,521 Consensus 2.3x 2.2x 16.1x 14.5x 15.0x 13.8x 17.2x 15.9x
Nokia NOK $13.61 23,064 (1,927) 21,136 Consensus 0.9x 0.9x 62.0x 49.3x 88.9x 81.5x 39.4x
Ericsson ERIC $13.61 45,186 (1,336) 43,850 Consensus 1.6x 19.2x 22.2x 21.6x
Telco. Equipment AVG 30,158 34,053 1.8x 1.8x 25.6x 22.7x 30.5x 7.4x 33.4x 24.4x
CS Telco & Networking AVG 143,188 142,047 5.9x 5.4x 28.8x 26.0x 23.9x 17.8x 24.2x 21.0x
Source: Company Data, FactSet, CS Research.

Investment Risks
We identify a number of investment risks in Data Center REITs ("the companies") including:
1. Technological Disruption: Currently, the market environment is pushing enterprises and I.T. customers to outsource and decentralize their I.T. operations
(specifically workloads), and we acknowledge that this theme could flip, pushing companies back to insourcing their operations, decreasing demand for data
center space.
2. Data Center Space Demand & Supply: Space and power pricing have led to significant increases and decreases in lease pricing per square foot, which we
believe is a risk, given some I.T. infrastructure operators may decide to flood the market with capacity in a speculative fashion, depressing market prices and
challenging a data center REIT's ability to deploy capital at the right returns on investment.
3. Heavy Market Competition: Currently, the market is favoring data center REITs for their expertise and ecosystems; however, expertise, general technology,
and ecosystems are becoming critical table stakes to operate in the industry, increasing the competition and differentiation and inevitably compressing prices.
4. Reliable Infrastructure: Data center REITs generally operate in locations that have direct, or close proximity to, dark fiber for Internet connectivity. If these
infrastructure connections break or are rendered obsolete, they will challenge data center REITs from a latency perspective, making them less attractive
solutions for I.T. customers.
5. Power Reliability and Cost: Power costs are currently stable and declining; however, it is possible that costs may increase, driven primarily by rising interest
rates, affecting margins and valuation for the data center REIT group.
6. Macro and FX Risk: The companies may generate revenues or underwrite leases denominated in non-U.S. currency, exposing themselves to non-U.S.
headwinds such as currency fluctuations in the international markets.
7. Political/Regulatory Risks: Data sovereignty is a major issue across continental, regional, national, and state borders, making some data center operators
completely irrelevant to certain types of businesses or entities, specifically government entities, or companies that are domiciled in strictly regulated countries.
8. Rising Interest Rates: The general interest rate environment is trending upward based on the Fed's reviews, and even though data center REITs are not as
levered as other assets such as utilities, interest rates may still have an adverse effect on equity valuations.
9. REIT Qualification Loss: The companies must abide by several complex rules to qualify for their tax-free status including the distribution of 90%+ of REIT
taxable income (before dividends) or risk being subject to statutory tax rates. Of the value of assets, 75% must be cash equivalents or real estate assets.
Further, no more than 50% of a data center REIT's shares may be owned by less than five owners. This structure may prevent data center REITs from funding
future opportunities. Dividends payable by REIT’s generally are not eligible for the preferential tax rates on qualified dividend income, which could make data
center REIT shares less attractive than normal corporations that pay dividends. The company’s REIT structure gives it the ability to limit investor ownership
above 9.8% of outstanding shares and prevent a change in control. The company also cannot merge unless 35%+ of holders of its common and long-term
incentive units agree. Further, holders of preferred shares can convert their holdings into common stock during a change of control.
Source: Credit Suisse estimates, Company data

IMPORTANT LEGAL INFORMATION
HOLT Valuation Methodology and Risks
The HOLT methodology does not assign ratings or a target price to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called
the HOLT valuation model, that are consistently applied to all the companies included in its database. The HOLT valuation model is a discounted cash flow model. Third-party data (including consensus earnings
estimates) are systematically translated into a number of default variables and incorporated into the algorithms available in the HOLT valuation model. The source financial statement, pricing, and earnings data
provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. These adjustments provide consistency when
analyzing a single company across time, or analyzing multiple companies across industries or national borders.
The default scenario that is produced by the HOLT valuation model establishes a warranted price that represents the expected mean value for a security based upon empirically derived fade algorithms that forecast a
firms future return on capital and growth rates over an extended period of time. As the third-party data are updated, the warranted price updates automatically. A company’s future achieved return on capital or
growth rate may differ from HOLT default forecast. Additional information about the HOLT methodology is available upon request.
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countries.
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Valuation Methodology and Risks
Target Price and Rating
Target Price and Rating Valuation Methodology and Risks: (12 months) for CyrusOne Inc. (CONE.OQ)
Valuation Methodology and Risks: (12 months) for American Tower (AMT.N) Method: We value Neutral-rated CyrusOne at a target price of $82, based on 21x our 2022 P/AFFOS estimate of $3.88.
Method: Our Outperform rating and Target Price of $296 for American Tower are weighted one-half to our 30.0x P/ 2022 AFFO per share estimate of Risk: We identify five major risks to our $82 target price and Neutral rating, including: 1) change in I.T. architecture displacing CyrusOne's
$9.31 and one-half to our DCF with a WACC of 5.6% and terminal growth rate of 2.5%. We rate American Tower Outperform as we expect its technology, 2) speculative data center developments that may compress market pricing and impact CyrusOne's profits, 3) macro-economic
total return to exceed REIT peers. risk associated with a slowdown in overall I.T. spending, 4) regulatory risks associated with changes in data sovereignty laws, requiring
Risk: Risks to our $296 target price and Outperform rating for American Tower are 1) economic risk associated with a slowdown in overall telecom companeis to own and manage their own data centers rather than leasing from CyrusOne, and 5) REIT qualification risk where the company
spending, 2) shift away from macro tower infrastructure towards small cells, 3) customer concentration - revenues are highly tied to the three must abide by several complex rules to qualify for its tax free status including the distribution of 90%+ of REIT taxable income (before
large US carriers, 4) interest rate risk - leading to greater borrowing costs, and 5) REIT qualification risk where the company must abide by dividends) or risk being subject to statutory tax rates.
numerous complex rules to qualify for its tax free status. Target Price and Rating
Target Price and Rating Valuation Methodology and Risks: (12 months) for Digital Realty Trust, Inc. (DLR.N)
Valuation Methodology and Risks: (12 months) for Arista Networks (ANET.N) Method: Our $167 target price and Outperform rating for Digital Realty is computed from a 26.5x P/ AFFO multiple applied on our 2022 AFFO per
Method: We value ANET based on a 8.0x EV/FY2 Sales multiple multiplied by our FY22 non-GAAP Sales estimate of $3,009M to arrive at a multiple- share estimate of $6.28.
based valuation of $339, blended with our DCF valuation of $378 (WACC 7.2%, TVGR 2.5%) to arrive at our target price of $359, which Risk: Risks to our $167 target price and Outperform rating for Digital Realty are 1) changes in I.T. architecture displacing Digital's technology and
helps drive our Outperform rating. real estate, 2) speculative data center developments that may compress market pricing and impact Digital's margins and profits, 3) economic
Risk: Potential downside risks to our Outperform rating and $359 TP include decreased long-term campus demand, delayed product refresh cycle risk associated with a slowdown in overall I.T. spending, 4) regulatory risks associated with changes in data sovereignty laws, requiring
timing for 400G, and weakening cloud capex trends. companies to own and manage their own data centers rather than leasing from multi-tenant data centers, and 5) REIT qualification risk where
the company must abide by numerous complex rules to qualify for its tax free status.
Valuation Methodology and Risks: (12 months) for Cisco Systems (CSCO.OQ) Target Price and Rating
Valuation Methodology and Risks: (12 months) for Equinix, Inc. (EQIX.OQ)
Method: Our Target Price of $46 and Neutral rating for CSCO are based on a 13.5x P/E multiple on our 2022 Non-GAAP EPS estimate of $3.41. We
rate CSCO Neutral as we expect it to perform in line with its peers. Method: Our Outperform rating and target price of $942 are based on 30.0x our FY22E AFFOS of $30.23 per share and a DCF valuation assuming a
terminal growth of 2.10% and WACC of 5.3%.
Risk: Risks to our $46 target price and Neutral rating for CSCO are a weaker than expected macroeconomic recovery, failure to repatriate off-shore
cash, and a faster than anticipated SDN development. Risk: Risks to our $942 target price and Outperform rating for Equinix are 1) changes in I.T. architecture displacing Equinix's technology and real
estate, 2) speculative data center developments that may compress market pricing and impact Equinix's margins and profits, 3) economic
Target Price and Rating risk associated with a slowdown in overall I.T. spending, 4) regulatory risks associated with changes in data sovereignty laws, requiring
Valuation Methodology and Risks: (12 months) for Cogent Communications Holdings Inc. (CCOI.OQ) companies to own and manage their own data centers rather than leasing from multi-tenant data centers, and 5) REIT qualification risk where
the company must abide by numerous complex rules to qualify for its tax free status.
Method: Our $70 target price and Neutral rating for CCOI are based on dividend yield valuation, given its strong record of consecutive dividend
increases. We project a 2021 dividend growth rate of 14.2% and a yield of 4.5%. Target Price and Rating
Valuation Methodology and Risks: (12 months) for F5 Networks, Inc. (FFIV.OQ)
Risk: Risks to our $70 target price and Neutral rating for CCOI are losing key executives, high leverage, rising interest rates, technological
disruption, wireless network substitution, internet pricing, decreased business activity, and macro and FX risks. Method: Our $207 target price and Neutral rating for FFIV are based on 17.5x our FY2022 Non-GAAP EPS estimate of $11.83.
Target Price and Rating Risk: Risks to our $207 target price and Neutral for FFIV are the company executing better or worse than our expectations for several dynamics
Valuation Methodology and Risks: (12 months) for CommScope Inc. (COMM.OQ) such as the transition to virtual appliances, SDN choosing ADC functionality level, the transition to DevOps converged infrastructures, and
security initiatives traction.
Method: Our $21 target price and Outperform rating for CommScope are derived from our 2022 EPS estimate of $2.12 multiplied by 10x. We rate
CommScope Outperform as we expect it to appreciate more than its peers. Target Price and Rating
Valuation Methodology and Risks: (12 months) for Juniper Networks (JNPR.N)
Risk: We see three risks to CommScope's achievement of our $21 target price and Outperform rating. 1) If wireless capex spending completely
shifts away from equipment spend and becomes focused on other aspects of the telecom infrastructure the company will likely not Method: We value the company at $22 per share and an Underperform rating based on an average of P/E multiple of 12.5x on our 2022E EPS of
experience the revenue growth that we currently forecast. 2) Intensified competition for data center facility business may grow, impacting our $1.78.
growth projections of the company. 3) Net leverage and lack of recurring revenues raise some concerns as interest rates and commodity
prices (copper mainly) may potentially rise on a relative basis, eroding business segment margins. Risk: The investment risks to our $22 target price and Underperform include technological disruption in the scenario new technologies arise making
JNPR’s products/ services necessary. Buybacks and dividends may also drive upwards pressure on the stock.
Valuation Methodology and Risks: (12 months) for CoreSite Realty Corp. (COR.N) Target Price and Rating
Valuation Methodology and Risks: (12 months) for Motorola Solutions (MSI.N)
Method: We value COR at $156 per share which helps drive our Outperform rating. We calculate using an average of 23x 2022E adjusted funds from
operations (AFFO/share) multiple and a DCF utilizing a 2.5% terminal growth rate and a 5.1% WACC. Method: Our $198 target price and Outperform rating for MSI are based on 20.5x our 2022 Non-GAAP EPS estimate of $9.65.
Risk: Risks to our $156 target price and Outperform rating for CoreSite are 1) changes in I.T. architecture displacing CoreSite's technology and Risk: Risks to our $198 target price and Outperform rating for MSI are i) Macroeconomics risks, particularly U.S. exposure, ii) exposure to the U.S.
real estate, 2) speculative data center developments that may compress market pricing and impact CoreSite's margins and profits, 3) government's spending trends, iii) Risk of a large acquisition, and iv) disruptive technology. While we believe Motorola is currently well-
economic risk associated with a slowdown in overall I.T. spending, 4) regulatory risks associated with changes in data sovereignty laws, positioned in the solutions they provide on current standards and technologies, we acknowledge the possibility of new standards and
requiring companies to own and manage their own data centers rather than leasing from multi-tenant data centers, and 5) REIT qualification technologies having a negative impact on the demand for the company's current product portfolio.
risk where the company must abide by numerous complex rules to qualify for its tax free status. Target Price and Rating
Target Price and Rating Valuation Methodology and Risks: (12 months) for Palo Alto Networks, Inc. (PANW.N)
Valuation Methodology and Risks: (12 months) for Crown Castle (CCI.N) Method: Our $425 target price and Outperform rating for PANW are based on our DCF analysis, using a discount rate of 6% in 2021 increasing to 8%
Method: Our Neutral rating and Target Price of $155 for Crown Castle are weighted one-half to our 25.0x P/ 2022 AFFO per share estimate of $6.96 in 2031 and a terminal growth rate of 3.5%. We expect firewall growth to be durable in 2021 and longer term, expect PANW will be able to
and one-half to our DCF with a WACC of 5.6% and terminal growth rate of 2.5%. We rate Crown Castle Neutral as we do not expect its total drive incremental share gains through its relatively broad cloud security portfolio.
return to exceed REIT peers. Risk: Risks to our $425 target price and Outperform rating for PANW are (1) Competition (2) Faster than expected deterioration of the firewall
Risk: Risks to our $155 target price and Neutral rating for Crown Castle are 1) economic risk associated with a slowdown in overall telecom market (3) An inability to cross and upsell recent cloud security portfolio additions.
spending, 2) technological shift away from small cell infrastructure, 3) customer concentration - revenues are highly tied to the three large US Target Price and Rating
carriers, 4) interest rate risk - leading to greater borrowing costs, and 5) REIT qualification risk where the company must abide by numerous Valuation Methodology and Risks: (12 months) for QTS Realty Trust, Inc. (QTS.N)
complex rules to qualify for its tax free status.
Method: We apply a P/AFFO multiple of 24.5x to our 2022 AFFO per share estimate of $2.91 leading us to our $71 target price and Neutral rating.
Risk: The largest risks to our $71 target price and Neutral rating include technological disruption, market competition, rising interest rates, and
REIT qualification loss. Companies Mentioned (Price as of 07-Apr-2021)
AT&T (T.N, $30.93)
Target Price and Rating Akamai Technologies, Inc. (AKAM.OQ, $102.49)
Valuation Methodology and Risks: (12 months) for Radius Global Infrastructure (RADI.OQ) Alphabet (GOOGL.OQ, $2239.03)
Amazon com Inc. (AMZN.OQ, $3279.39)
American Tower (AMT.N, $244.71, OUTPERFORM, TP $296.0)
Method: We rate RADI Outperform and value it based on the average of two methods, attaining a $19 target price: (1) EV/GCF multiple of 25x (~2.5x Apple Inc (AAPL.OQ, $127.9)
above TowerCo peer group) our 2022E GCF of $104.5M, computing $31.13 per share; and (2) EV/EBITDA multiple of 25x (~5x above Arista Networks (ANET.N, $307.82, OUTPERFORM, TP $359.0)
Cable One (CABO.N, $1779.03)
TowerCo peer group but below RADI’ s current multiple of 40x) our 2022E adjusted EBITDA of $31.6M, computing $7.22 per share. Charter Communications (CHTR.OQ, $611.63)
Cincinnati Bell (CBB.N, $15.38)
Cisco Systems (CSCO.OQ, $51.77, NEUTRAL, TP $46.0)
Risk: Risks to our $19 target price and Outperform rating include high leverage, volatile FX rates, geopolitical instability, customer concentration, Cloudflare (NET.N, $70.05)
Cogent Communications Holdings Inc. (CCOI.OQ, $69.55, NEUTRAL, TP $70.0)
and increased site decommissions & competition. Comcast Corp. (CMCSA.OQ, $54.6)
CommScope Inc. (COMM.OQ, $15.42, OUTPERFORM[V], TP $21.0)
Target Price and Rating Consolidated Com (CNSL.OQ, $6.66)
CoreSite Realty Corp. (COR.N, $121.47, OUTPERFORM, TP $156.0)
Valuation Methodology and Risks: (12 months) for SBA Commns (SBAC.OQ) Crown Castle (CCI.N, $176.26, NEUTRAL, TP $155.0)
CyrusOne Inc. (CONE.OQ, $69.89, NEUTRAL, TP $82.0)
Method: Our Neutral rating and Target Price of $277 for SBA Communications are weighted one-half to our 23x P/ 2022 AFFO per share estimate of Dell Technologies (DELL.N, $91.51)
$10.73 and one-half to our DCF with a WACC of 5.4% and terminal growth rate of 2.1%. We rate SBA Communications Neutral as we expect Digital Realty Trust, Inc. (DLR.N, $142.9, OUTPERFORM, TP $167.0)
Dish Network (DISH.OQ, $37.74)
its total return to match peers. Equinix, Inc. (EQIX.OQ, $684.45, OUTPERFORM, TP $942.0)
F5 Networks, Inc. (FFIV.OQ, $210.9, NEUTRAL, TP $207.0)
Risk: Risks to our $277 target price and Neutral rating for SBA Communications are 1) economic risk associated with a slowdown in overall Facebook Inc. (FB.OQ, $313.09)
Fastly (FSLY.N, $67.55)
telecom spending, 2) shift away from macro tower infrastructure towards small cells, 3) customer concentration - revenues are highly tied to GDS Holdings Limited (GDS.OQ, $79.09)
the three large US carriers, 4) interest rate risk - leading to greater borrowing costs, and 5) REIT qualification risk where the company must GTT Commns (GTT.N, $1.78)
Hewlett Packard Enterprise (HPE.N, $15.9)
abide by numerous complex rules to qualify for its tax free status. International Business Machines (IBM.N, $134.93)
Juniper Networks (JNPR.N, $25.42, UNDERPERFORM, TP $22.0)
Target Price and Rating Limelight (LLNW.OQ, $3.63)
Lumen Tech (LUMN.N, $13.48)
Valuation Methodology and Risks: (12 months) for Switch, Inc. (SWCH.N) Megaport (MP1.AX, A$12.16)
Microsoft (MSFT.OQ, $249.9)
Method: Our $19 target price and Outperform rating based on our discounted cash flow model with a WACC of 6.0% and a terminal growth rate of Motorola Solutions (MSI.N, $189.93, OUTPERFORM, TP $198.0)
NEXTDC (NXT.AX, A$11.09)
2.5%. NetApp (NTAP.OQ, $73.67)
Oracle Corporation (ORCL.N, $74.07)
Risk: Risks to our Outperform rating and $19 target price for Switch are: 1) changes in I.T. architecture displacing Switch technology, 2) speculative Palo Alto Networks, Inc. (PANW.N, $338.57)
QTS Realty Trust, Inc. (QTS.N, $64.16, NEUTRAL, TP $71.0)
data center developments that may compress market pricing and impact profits, 3) revenue concentration, 4) management and board Radius Global Infrastructure (RADI.OQ, $14.5, OUTPERFORM[V], TP $19.0)
structure, and 5) share ownership control. SBA Commns (SBAC.OQ, $284.19, NEUTRAL, TP $277.0)
Salesforce.com (CRM.N, $220.79)
ServiceNow, Inc. (NOW.N, $510.73)
Target Price and Rating Switch, Inc. (SWCH.N, $17.24, OUTPERFORM, TP $19.0)
Valuation Methodology and Risks: (12 months) for Ubiquiti Inc. (UI.N) T-Mobile US (TMUS.OQ, $130.02)
U.S. Cellular (USM.N, $37.0)
Ubiquiti Inc. (UI.N, $277.9, UNDERPERFORM[V], TP $126.0)
Method: Our target price of $126 is derived off its 25x our FY22 EPS of $7.21. We rate UI stock Underperform, as end-market pressures continue, and Uniti Group (UNIT.OQ, $10.865)
we anticipate a return less than the typical stock in our coverage. VMware Inc. (VMW.N, $153.57)
Verizon Communications (VZ.N, $59.0)
WideOpenWest, Inc. (WOW.N, $13.47)
Risk: Risks to our $126 target price and Underperform rating on UI are include increased demand for low networking equipment, customer network
architecture changes, and additional elevated share repurchase activity.
Disclosure Appendix
Analyst Certification
I, Sami Badri, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities
and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.
3-Year Price and Rating History for American Tower (AMT.N)
AMT.N Closing Price Target Price

Date (US$) (US$) Rating
28-Apr-20 243.53 308.00 O*
30-Apr-20 238.00 300.00
03-Nov-20 234.23 301.00
06-Jan-21 214.89 307.00
26-Feb-21 216.13 296.00
* Asterisk signifies initiation or assumption of coverage.
O U T PERFO RM
3-Year Price and Rating History for Arista Networks (ANET.N)
3-Year Price and Rating History for CommScope Inc. (COMM.OQ)

ANET.N Closing Price Target Price
09-May-18 259.42 303.00 O* COMM.OQ Closing Price Target Price
03-Aug-18 257.54 305.00 Date (US$) (US$) Rating
04-Oct-18 257.74 311.00 09-May-18 29.58 31.00 N*
02-Nov-18 257.77 315.00 20-Dec-18 16.05 20.00
15-Feb-19 263.95 317.00 02-Apr-19 22.83 34.00 O
25-Apr-19 318.11 347.00 10-May-19 19.09 30.00
03-May-19 278.41 344.00 23-Jul-19 14.61 27.00
07-Jun-19 246.44 340.00 08-Aug-19 12.95 23.00
02-Aug-19 244.12 312.00 O U T PERFO RM 04-Dec-19 13.01 21.00
01-Nov-19 185.30 144.00 N N EU T RA L
09-Apr-20 10.41 19.00
19-Dec-19 203.75 153.00
08-May-20 11.18 17.00 N EU T RA L
14-Feb-20 223.47 150.00
07-Aug-20 11.02 18.00 O U T PERFO RM
06-May-20 208.01 147.00
04-Nov-20 9.67 19.00
05-Aug-20 235.13 148.00
06-Jan-21 14.24 22.00
03-Nov-20 249.49 184.00
18-Feb-21 13.50 21.00
06-Jan-21 285.87 351.00 O
19-Feb-21 310.95 359.00 * Asterisk signifies initiation or assumption of coverage.
3-Year Price and Rating History for CoreSite Realty Corp. (COR.N)
3-Year Price and Rating History for Cisco Systems (CSCO.OQ)
COR.N Closing Price Target Price
CSCO.OQ Closing Price Target Price Date (US$) (US$) Rating
Date (US$) (US$) Rating 27-Apr-18 106.00 112.00 N
09-May-18 46.04 41.00 N* 30-Jul-18 113.03 R
16-Aug-18 45.16 43.00 03-Aug-18 114.30 112.00 N
15-Nov-18 46.77 44.00 20-Dec-18 87.00 111.00
14-Feb-19 48.40 47.00 08-Feb-19 100.02 110.00
16-May-19 55.93 52.00
26-Apr-19 109.49 111.00
14-Aug-19 50.61 50.00
26-Jul-19 105.18 103.00
05-Nov-19 47.76 49.00
11-Nov-19 113.83 100.00
14-Nov-19 44.91 46.00
19-Dec-19 113.62 101.00
13-Feb-20 47.32 45.00 N EU T RA L
N EU T RA L
REST RICT ED 07-Feb-20 112.61 100.00 REST RICT ED

09-Apr-20 41.20 40.00 O U T PERFO RM
14-May-20 43.85 41.00

01-May-20 120.85 124.00
13-Aug-20 42.72 45.00 04-Aug-20 128.26 141.00
19-Oct-20 39.30 36.00 30-Oct-20 119.36 142.00
13-Nov-20 41.40 41.00 06-Jan-21 117.27 161.00 O
07-Dec-20 44.35 R 05-Feb-21 125.48 156.00
23-Dec-20 44.38 41.00 N * Asterisk signifies initiation or assumption of coverage.
10-Feb-21 47.24 46.00
* Asterisk signifies initiation or assumption of coverage. 3-Year Price and Rating History for Crown Castle (CCI.N)
3-Year Price and Rating History for Cogent Communications Holdings Inc. (CCOI.OQ)
CCI.N Closing Price Target Price
CCOI.OQ Closing Price Target Price 28-Apr-20 161.26 149.00 N*
01-May-20 156.41 148.00
31-May-19 58.50 68.00 O*
23-Oct-20 158.47 146.00
19-Dec-19 63.97 75.00
06-Jan-21 151.43 158.00
28-Feb-20 73.01 86.00
29-Jan-21 159.26 155.00
14-Apr-20 88.16 99.00
07-Aug-20 74.61 93.00 * Asterisk signifies initiation or assumption of coverage.
16-Oct-20 61.07 70.00 N
N EU T RA L
O U T PERFO RM
N EU T RA L
3-Year Price and Rating History for CyrusOne Inc. (CONE.OQ) 3-Year Price and Rating History for F5 Networks, Inc. (FFIV.OQ)
CONE.OQ Closing Price Target Price FFIV.OQ Closing Price Target Price
Date (US$) (US$) Rating Date (US$) (US$) Rating
04-May-18 54.70 73.00 O 09-May-18 172.00 188.00 O*
20-Dec-18 54.85 68.00 05-Sep-18 189.72 216.00
25-Feb-19 51.64 52.00 N 25-Oct-18 171.47 218.00
03-May-19 61.11 56.00 24-Jan-19 156.09 215.00
02-Aug-19 63.02 67.00 25-Apr-19 162.47 211.00
01-Nov-19 71.11 68.00 18-Jul-19 145.59 188.00
19-Dec-19 64.67 70.00 25-Jul-19 147.69 191.00
21-Feb-20 69.60 68.00 24-Oct-19 145.94 192.00
06-May-20 73.23 78.00 O U T PERFO RM
20-Dec-19 138.32 163.00 O U T PERFO RM
04-Aug-20 84.80 92.00 N EU T RA L
28-Jan-20 126.00 160.00
03-Nov-20 71.71 87.00 09-Apr-20 125.39 156.00
06-Jan-21 68.65 82.00 28-Apr-20 140.86 151.00
* Asterisk signifies initiation or assumption of coverage. 20-Jul-20 152.37 170.00
28-Jul-20 137.97 183.00
3-Year Price and Rating History for Digital Realty Trust, Inc. (DLR.N) 22-Oct-20 127.33 184.00
27-Oct-20 136.26 185.00
19-Nov-20 160.20 205.00
DLR.N Closing Price Target Price
08-Jan-21 191.24 207.00
27-Apr-18 107.80 101.00 N
08-Aug-18 121.54 130.00
3-Year Price and Rating History for Juniper Networks (JNPR.N)
24-Sep-18 115.92 R
25-Sep-18 115.92 130.00 N
20-Dec-18 106.10 123.00 JNPR.N Closing Price Target Price
29-Oct-19 130.59 R Date (US$) (US$) Rating
16-Mar-20 128.31 NR 09-May-18 26.17 21.00 U*
31-May-20 143.56 164.00 O 30-Jan-19 25.83 20.00
31-Jul-20 160.54 173.00 N EU T RA L
19-Dec-19 24.43 19.00
30-Oct-20 144.30 179.00 REST RI C T ED 09-Apr-20 21.67 18.00
N O T RA T ED
06-Jan-21 132.11 169.00 O U T PERFO RM
29-Apr-20 23.07 17.00
12-Feb-21 140.06 167.00 28-Jul-20 24.26 20.00
* Asterisk signifies initiation or assumption of coverage. 06-Jan-21 23.58 21.00
16-Feb-21 24.45 22.00
3-Year Price and Rating History for Equinix, Inc. (EQIX.OQ) * Asterisk signifies initiation or assumption of coverage. U N D ERPERFO RM
EQIX.OQ Closing Price Target Price 3-Year Price and Rating History for Motorola Solutions (MSI.N)
27-Apr-18 421.15 525.00 O MSI.N Closing Price Target Price
09-Aug-18 444.99 520.00 Date (US$) (US$) Rating
02-Nov-18 392.43 500.00 09-May-18 105.78 129.00 O*
20-Dec-18 358.21 467.00 20-Aug-18 124.99 137.00
14-Feb-19 420.59 474.00 08-Jan-19 119.51 134.00
02-May-19 465.01 506.00 08-Feb-19 135.37 148.00
11-Jul-19 523.88 556.00 03-May-19 143.62 153.00
09-Oct-19 575.00 581.00 02-Aug-19 170.08 189.00
19-Dec-19 575.92 634.00 O U T PERFO RM 31-Oct-19 166.32 179.00
13-Feb-20 635.75 630.00 11-Nov-19 161.15 177.00
11-May-20 678.00 704.00 19-Dec-19 161.11 178.00 O U T PERFO RM
30-Jul-20 777.95 782.00 07-Feb-20 179.46 196.00
29-Oct-20 740.68 818.00 08-May-20 131.27 161.00
06-Jan-21 668.96 915.00 01-Jun-20 138.94 163.00
11-Feb-21 717.70 942.00 30-Oct-20 158.06 181.00
* Asterisk signifies initiation or assumption of coverage. 11-Nov-20 169.73 202.00
05-Feb-21 182.09 198.00
3-Year Price and Rating History for QTS Realty Trust, Inc. (QTS.N) 3-Year Price and Rating History for Ubiquiti Inc. (UI.N)
QTS.N Closing Price Target Price UI.N Closing Price Target Price
Date (US$) (US$) Rating Date (US$) (US$) Rating
26-Apr-18 34.50 30.00 U 09-May-18 73.35 74.00 N*
08-Aug-18 44.34 42.00 N 11-May-18 81.72 73.00
02-May-19 44.34 44.00 27-Aug-18 85.04 79.00
31-Jul-19 46.28 46.00 12-Nov-18 105.96 86.00
06-Nov-19 53.17 51.00 08-Feb-19 124.53 103.00
19-Dec-19 52.69 52.00 13-May-19 130.95 115.00
25-Feb-20 61.20 64.00 15-Jan-20 171.25 134.00 U
05-May-20 65.85 68.00 10-Feb-20 142.01 130.00
29-Oct-20 62.17 67.00 U N D ERPERFO RM
26-Mar-20 146.07 127.00 N EU T RA L
06-Jan-21 58.39 70.00 N EU T RA L 11-May-20 187.37 132.00 U N D ERPERFO RM
18-Feb-21 64.12 71.00 28-Sep-20 160.93 130.00

* Asterisk signifies initiation or assumption of coverage. 06-Jan-21 267.75 157.00
01-Apr-21 289.15 126.00
3-Year Price and Rating History for Radius Global Infrastructure (RADI.OQ) * Asterisk signifies initiation or assumption of coverage.
As of December 10, 2012 Analysts’ stock rating are defined as follows:

RADI.OQ Closing Price Target Price
Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark* over the next 12 months.
22-Dec-20 13.47 19.00 O Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months.
* Asterisk signifies initiation or assumption of coverage. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months.
*Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which
consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractiv e, Neutrals the less attractive, and
Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European (excluding Turkey) ratings are based on a
stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst withi n the relevant sector, with Outperforms
representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin America, Turkey and Asia
(excluding Japan and Australia), stock ratings are based on a stock’s total return relative to the averag e total return of the relevant country or regional benchmark (India
- S&P BSE Sensex Index); prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and
(2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, the expected total return
O U T PERFO RM
(ETR) calculation includes 12-month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an
ETR less than or equal to 5%. A Neutral may be assigned where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that
3-Year Price and Rating History for SBA Commns (SBAC.OQ) puts ETR in the context of associated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds be tween
15% and 7.5%, which was in operation from 7 July 2011.
Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications,
SBAC.OQ Closing Price Target Price
including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other
circumstances.
28-Apr-20 305.31 365.00 O*
06-May-20 288.35 361.00 Not Rated (NR) : Credit Suisse Equity Research does not have an investment rating or view on the stock or any other securities related to the company
03-Nov-20 291.01 357.00
at this time.
06-Jan-21 264.64 365.00 Not Covered (NC) : Credit Suisse Equity Research does not provide ongoing coverage of the company or offer an investment rating or investment view
03-Feb-21 272.12 291.00 N on the equity security of the company or related products.
23-Feb-21 248.79 277.00
Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24
* Asterisk signifies initiation or assumption of coverage. months or the analyst expects significant volatility going forward.
O U T PERFO RM Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of
N EU T RA L
the sector* relative to the group’s historic fundamentals and/or valuation:
Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months.
3-Year Price and Rating History for Switch, Inc. (SWCH.N)
Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months.
SWCH.N Closing Price Target Price Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months.
Date (US$) (US$) Rating *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cov er multiple sectors.
16-May-18 13.20 19.00 O
Credit Suisse's distribution of stock ratings (and banking clients) is:
14-Aug-18 10.85 14.00
07-Aug-19 13.75 15.00
Global Ratings Distribution
09-Oct-19 15.51 18.00
11-Nov-19 15.57 19.00 Rating Versus universe (%) Of which banking clients (%)
12-Feb-20 17.05 21.00 Outperform/Buy* 53% (32% banking clients)
28-Feb-20 14.34 22.00 Neutral/Hold* 34% (25% banking clients)
11-May-20 18.17 23.00 Underperform/Sell* 11% (20% banking clients)
Restricted 2%
16-Oct-20 15.94 21.00 O U T PERFO RM
Please click here to view the MAR quarterly recommendations and investment services report for fundamental research recommendations.
02-Mar-21 15.37 19.00
*For purposes of the NYSE and FINRA ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, a nd Underperform most closely correspond
* Asterisk signifies initiation or assumption of coverage. to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.)
An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other indivi dual factors.
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Data Centers &amp; Cloud Infrastructure - Credit Suisse - 8 Apr 2021

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Data Centers &amp; Cloud Infrastructure - Credit Suisse - 8 Apr 2021

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2021 Mid-year Outlook

The Cloud Has Four Walls 8 April 2021

Research Analyst Research Associate Research Associate

I. Coverage Summary – Ratings & Target Prices

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 2

Telecom & Networking Equipment Communications Infrastructure

Data Center Capex &

Coverage Model Structured to Capture Both Communications Sectors with Converged IT

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 3

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 4

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 5

Key Stock Picks:

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 6

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 7

125 Data Center Performance Lagging Broader REIT

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 8

DC EV/EBITDA Multiples Compressed in

QTS COR CONE DLR INXN EQIX SWCH Average

Source: Factset, Credit Suisse Research.

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 9

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 10

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 11

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 12

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 13

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 14

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 15

As of 4Q 2020 Data Center Operator Results, Enterprise Revenue Mix Remains

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 16

Increasing Digitization of Enterprise Workflows Driving Multi-year Growth.

Gigabytes per Second

Source: DLR Data Gravity Index. 2020.

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 17

Cloud Service Provider Market CAGR

Multi-Tenant Data Center Market CAGR

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 18

EQIX/DLR Remain Dominant Forces, Expected to Advance Further with Expanded

Switch, 2% *IaaS & CaaS only

Coresite, 2% Amazon, 30%

CyrusOne, 3% China Telecom, 3%

China Telecom, 4% IBM, 2%

Equinix Digital Realty China Telecom CyrusOne All Others, 38%

NTT Cyxtera China Unicom Coresite

Source: Omdia, Credit Suisse Research

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 19

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 20

Network Interconnection Proliferation Remains a Significant Driver, Led by

Healthcare & Life Sciences

Source: EQIX GXI Volume 4. 2020.

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 21

Growth Across Regions Should Also Be Strong, Led by Asia. Importantly

Colo & Interconnection Revenue ($ mil)

Interconnection Attach to Colo

Source: Omdia, Credit Suisse Research.

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 22

Interconnection Growth Expected to Continue at High Growth and High Attach

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 23

Cloud On-Ramps Have Reached Critical Mass Deployment Within MTDCs.

120 GOOGL +29% Y/Y

800 SDN On-Ramp Increases:

2017 2018 2019 2020

Sami Badri | 212-538-1727 | ahmedsami.badri@credit-suisse.com 25

Key Metric Growth is Beginning to

185 221 245 300 317 366 385

Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20

Data Centers & Cloud Infrastructure - Credit Suisse - 8 Apr 2021

Data Centers & Cloud Infrastructure - Credit Suisse - 8 Apr 2021