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FOCUS Enterprise-Focused Telecom Technology Quarterly – Fall 2019

Public Markets

The FOCUS Enterprise-Focused Telecom Technology Index (EFTTI) experienced a double-digit loss in our fall report- ing period, dropping 11.4% in the past three months. This was despite the fact that the S&P 500 and NASDAQ were up 1.9% and 1.4%, respectively, over the same time period.The EFTTI still remains in positive territory for the full year with a 12-month gain of 6.7%. However, this gain once again trails the broader indices as the S&P 500 is up 12.0% year-over-year and the NASDAQ is up 13.5% year-over-year. Even with the overall decline in the index, sector multiples actually increased compared to this same time last year.The sector revenue multiple went from 3.9x to 4.2x, while the sector EBITDA multiple increased from 16.2x to 17.5x.

FOCUS U.S. Communications Service Provider Quarterly: Fall 2019 Report

Public Markets

It was a hat trick for the FOCUS Communications Service Provider Index (CSPI) as the sector posted a third straight period in positive territory. This fall’s three-month gain was 6.6%, which was good enough to outperform both the 1.2% gain in the S&P 500 and the 0.1% loss in the NASDAQ. However, gains this period were not broad- based as three of the five sub sectors in the CSPI were actually in negative territory. For the full year period the sector is up 13.0%, a return that once again handily outperforms both of the broader indices. Sector multiples are slightly higher than they were at this time last year. The sector revenue multiple increased from 2.6x a year ago to 2.8x currently, while the sector EBITDA multiple went from 8.1x to 8.4x over the corresponding time period.

FOCUS Telecom Business Services Quarterly: Fall 2019 Report

Public Markets

After a solid performance in our summer report, the FOCUS Telecom Business Services Index (TBSI) continued to make steady progress in the fall reporting period. The TBSI was up 4.5% in the past three months, which significantly outperformed both the 1.2% gain in the S&P 500 and the 0.1% drop in the NASDAQ over the corresponding time period. The sector also outperformed the broader indices for the full year period. The TBSI is up 10.7% in the past year, while the S&P 500 was only up 2.2% and the NASDAQ fell 0.6%. Sector multiple performance was mixed. The sector revenue multiple ticked up slightly compared to last year, increasing from 0.4x to 0.5x. However, the sector EBITDA multiple dropped from 10.0x a year ago to 9.4x currently.

FOCUS Carrier-Focused Telecom Technology Quarterly: Fall 2019 Report

In public markets, the FOCUS Carrier-Focused Telecom Technology Index (CFTTI) had a second straight reporting period in negative territory with a three-month loss of 7.9%. This was despite strong positive returns in the broader indices of 6.3% in the S&P 500 and 6.8% in the NASDAQ. The loss this period was enough to put the CFTTI into negative territory for the full year period with a year-over-year loss of 1.3%. This performance was worse than the 0.9% gain in the S&P 500 over the corresponding time frame but slightly better than the 1.8% drop in the NASDAQ. Sector multiples are lower than they were at this same time last year. The sector revenue multiple fell from 2.4x to 2.2x, while the sector EBITDA multiple dropped from 15.0x to 12.0x.
Enterprise-Focused Telecom Technology Quarterly

FOCUS Enterprise-Focused Telecom Technology Quarterly: Summer 2019 Report

In public markets, the FOCUS Enterprise-Focused Telecom Technology Index (EFTTI) turned in a stellar reporting period this spring with a three month gain of 17.3%. Gains were broad-based as every single sub sector in the index was in positive territory for the period. In addition, the gains in the EFTTI handily outperformed the broader indices …

U.S. Communications Service Provider Quarterly

FOCUS U.S. Communications Service Provider Quarterly: Summer 2019 Report

In public markets, the FOCUS Communications Service Provider Index (CSPI) enjoyed a second straight reporting period with a positive return as the index gained 3.7% in the past three months. This gain exactly split the difference between the 3.8% gain in the S&P 500 and the 3.6% gain in the NASDAQ over the corresponding time period. For the full year, the CSPI is up 13.4%, a gain which significantly outperformed the annual gains of 8.2% and 6.6% in the S&P 500 and the NASDAQ, respectively. Sector multiples also closed out the period higher than they were at this same time last year. The sector revenue multiple now stands at 2.7x (up from 2.4x a year ago) while the sector EBITDA multiple climbed to 8.0x (up from 7.4x a year ago).
Telecom Business Services Quarterly

Download the FOCUS Telecom Business Services Quarterly: Summer 2019 Report

In public markets, the FOCUS Telecom Business Services Index (TBSI) enjoyed a second straight reporting period in the black as it turned in a solid three-month gain of 4.0%. This increase was strong enough to outperform the gains in both the S&P 500 (up 3.8%) and the NASDAQ (up 3.6%) over the corresponding time period. The TBSI also outpaced the broader indices over the past year. The sector is up 14.6% over the past 12 months, handily besting both the 8.2% gain in the S&P 500 and the 6.6% gain in the NASDAQ. Sector multiple performance was mixed over the past year. The sector revenue multiple inched up from 0.4x a year ago to 0.5x currently. However, the sector EBITDA multiple declined from 9.7x to 9.4x over the same time frame.

Download the FOCUS Carrier-Focused Telecom Technology Quarterly: Summer 2019 Report

In public markets, after a string of positive returns, the FOCUS Carrier-Focused Telecom Technology Index (CFTTI) reversed course and suffered a modest loss of 2.7% over this past three months. This underperformed both the S&P 500 and NASDAQ, which suffered losses over this time frame of 1.2% and 1.1%, respectively. Even with this period’s decline, the CFTTI still handily outperforms the indices over the 12-month time frame. The CFTTI is up 15.3% in the past year, while the S&P 500 is up 1.7% and the NASDAQ eked out only a 0.2% gain. The sector revenue multiple is up strongly over the past year, increasing from 2.0x to 2.5x. The sector EBITDA multiple also increased, but much more modestly from 12.9x to 14.1x. This indicates that overall sector EBITDA margins improved.
Enterprise-Focused Telecom Technology Quarterly

Download the FOCUS Enterprise-Focused Telecom Technology Quarterly: Spring 2019 Report

In public markets, the FOCUS Enterprise-Focused Telecom Technology Index (EFTTI) turned in a stellar reporting period this spring with a three month gain of 17.3%. Gains were broad-based as every single sub sector in the index was in positive territory for the period. In addition, the gains in the EFTTI handily outperformed the broader indices as the S&P 500 was up 8.9% and the NASDAQ was up 11.2% over the corresponding time frame. The story is similar for the full year period, where the EFTTI’s year-over-year increase of 23.7% compares favorably with both the 11.3% gain in the S&P 500 and the 14.6% gain in the NASDAQ. The sector has benefited from meaningful multiple expansion over the past year. The sector revenue multiple ended the period at 4.9x (up from 4.0x a year ago) and the sector EBITDA multiple ended the period at 20.5x (up from 16.5x a year ago).