Industry Reports

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FOCUS Telecom Business Services Quarterly: Spring 2021 Report

Telecom Investment Banking

Public Markets

The FOCUS Telecom Business Services Index (TBSI) had a fourth straight reporting period with a positive return, marking a full year of positive returns since the outbreak of the pandemic. This past three months was particularly strong as the sector’s gain of 20.1% handily outperformed both the 5.8% gain in the S&P 500 and the 2.8% gain in the NASDAQ. For the full year, the TBSI is up a very impressive 63.0%. While this gain was good enough to give it a comfortable lead over the 53.7% year-over-year increase in the S&P 500, it still lagged the 72.0% gain in the NASDAQ, Sub sector multiples are also meaningfully higher than they were at this time last year.The sub sector revenue multiple jumped from 0.5x to 0.7x, while the EBITDA multiple spiked from 6.6x to 9.3x.

ServiceNow Market Insights

ServiceNow Partners and the Industry Solutions Model

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In the short 10 months since ServiceNow announced the expansion of its partner program and industry-aligned solutions in May 2020, Partners have benefited from rapid growth in the ServiceNow category. Furthermore, as most IT projects move to a virtual environment in the post-COVID-19 era, ServiceNow has emerged as the preferred IT service management (ITSM) platform for enterprise IT departments.
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FOCUS Carrier-Focused Telecom Technology Quarterly: Spring 2021 Report

Telecom Investment Banking

Public Markets

The FOCUS Carrier-Focused Telecom Technology Index (CFTTI) was in the black for the second straight reporting period with a three-month gain of 5.7%. While this gain beat the 5.2% increase in the S&P 500 over the corresponding time period, it also fell short of the 8.2% gain in the NASDAQ. The sector also looks strong for the full year period with a gain of 17.8%. However, despite the robust increase, the CFTTI still lagged far behind both the 29.0% gain in the S&P 500 and the 54.0% gain in the NASDAQ. Sector multiples closed out the period at 2.3x revenue and 11.2x EBITDA. Both of these are higher than year-ago multiples of 2.1x revenue and 10.4x EBITDA.
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FOCUS Enterprise-Focused Telecom Technology Quarterly – Winter 2021

Public Markets

The FOCUS Enterprise-Focused Telecom Technology Index (EFTTI) turned in a very strong overall performance this period with a three-month gain of 18.2%.This handily out- performed the 13.6% gain in the S&P 500 but fell slightly short of the 19.8% gain in the NASDAQ over the same time frame. The story is similar for the full year period with a 41.5% gain in the EFTTI comparing favorably to the 15.2% gain in the S&P 500 but trailing the 42.8% gain in the NASDAQ. Sector multiples are up sharply compared to this same time last year. The sector revenue multiple jumped from 4.3x a year ago to 6.3x currently, while the sector EBITDA multiple expanded from 16.8x to 24.7x.
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FOCUS U.S. Communications Service Provider Quarterly: Winter 2021 Report

Public Markets

The FOCUS Communications Service Provider Index (CSPI) managed to pull off a hat trick by posting its third straight reporting period with a strong gain. The sector was up 7.8% over the past three months. While a very good performance, it still managed to lag the 11.7% gain in the S&P 500 and the 15.4% gain in the NASDAQ over the corresponding time frame. This period’s gain was enough to bring the CSPI into the black for the full year period with a gain of 4.9%. Once again, this underperformed both the S&P 500 (up 16.3%) and the NASDAQ (up 43.6%). Sector multiples are slightly higher than at this same time last year. The sector revenue multiple closed out the period at 3.1x (up from 3.0x a year ago) and the sector EBITDA multiple ended at 8.7x (up from 8.4x a year ago).
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FOCUS Telecom Business Services Quarterly: Winter 2021 Report

Telecom Investment Banking

Public Markets

For the third straight reporting period the FOCUS Telecom Business Services Index (TBSI) managed a positive return, outperforming the S&P 500 and only slightly underperforming the NASDAQ. The TBSI gained 14.3% over the past three months, while the S&P 500 and NASDAQ gained 11.7% and 15.4%, respectively, over the same time frame. The TBSI remains in negative territory for the full year period with a drop of 4.2%. This compares unfavorably to strong gains in both the S&P 500 (up 16.3% year-over-year) and the NASDAQ (up 43.6% year-over-year). Sector multiples are also lower than they were at this time last year. The sector revenue multiple fell from 0.7x a year ago to 0.6x, while the sector EBITDA multiple declined from 9.2x to 8.4x.
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FOCUS Carrier-Focused Telecom Technology Quarterly: Winter 2020 Report

Telecom Investment Banking

Public Markets

FOCUS’ Carrier-Focused Telecom Technology Index (CFTTI) recouped some of the previous quarter’s 1.3% loss with a gain of 0.5% in the past three months.The CFTTI continues to underperform relative to the broader market, with the S&P 500 up 3.5% and the NASDAQ up 3.6% over the corresponding time period.The sector remains in positive territory for the full year with a 12-month gain of 4.1%. Even so, this gain significantly underperformed both the 15.3% gain in the S&P 500 and the 40.8% gain in NASDAQ over the past year. Multiple performance for the CFTTI is mixed. The sector revenue multiple held steady at 2.2x from the year-ago period, while the sector EBITDA multiple declined from 11.5x to 11.1x.
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FOCUS Enterprise-Focused Telecom Technology Quarterly – Fall 2020

Public Markets

FOCUS’ Enterprise-Focused Telecom Technology Index (EFTTI) was back in the red this period, albeit with a slight loss of only 1.0%.This compared to a flat performance for the S&P 500 and a modest gain of 1.6% for the NASDAQ. Even with this period’s loss, the EFTTI is still up strongly for the full year with a 12-month gain of 23.4%. This puts it more or less in the middle of the 7.7% gain in the S&P 500 and the 31.6% gain in the NASDAQ over the corresponding time frame. Sector multiples are also higher than at this same time last year. The sector revenue multiple increased from 4.1x to 5.2x, while the sector EBITDA multiple went from 17.0x to 20.4x.
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FOCUS U.S. Communications Service Provider Quarterly: Fall 2020 Report

Public Markets

For the second straight reporting period the FOCUS Communications Service Provider Index (CSPI) posted a solid gain. The sector was up 5.6% over the past three months. However, the CSPI also lagged the broader indices again, as the S&P 500 gained 8.5% and the NASDAQ gained 11.0% over the corresponding time frame. The …

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FOCUS Telecom Business Services Quarterly: Fall 2020 Report

Public Markets

For the second straight reporting period the FOCUS Tele- com Business Services Index (TBSI) managed a positive return but still underperformed the broader indices. The TBSI gained 1.0% over the past three months, but the S&P 500 and NASDAQ gained 8.5% and 11.0%, respectively, over the same time frame. The TBSI remains in negative territory for the full year period with a drop of 5.7%. Once again this compares unfavorably to strong gains in both the S&P 500 (up 13.0% year-over-year) and the NASDAQ (up 39.6% year-over-year).The sector revenue multiple held steady compared to the year-ago period at 0.6x. However, the sector EBITDA multiple has declined over the past 12 months from 8.5x to 7.4x.