Global Technology| July 22, 2015 UUSS CCoommmmuunniiccaattiioonnss SSyysstteemmss Industry View: Cautious For most of the networking companies that we have under coverage, our 2H15 estimates are below consensus. Recent news flow and checks have increased our confidence in those below-consensus estimates on Arista, A10 Networks, F5 Networks, and Infoblox. Our conservative outlook stems from two key sources: 1. Expectations that product cycle-driven strength would begin to abate during 2H15, particularly ahead of new data center switching products due late in 2015 and early 2016. 2. Our view that the hyperscale web properties were spending to add capacity well ahead of their need to deliver it. While we haven’t known for sure when that scale build out phase would begin to abate, we believed it prudent to start to build a related slowdown into this year’s estimates. Perhaps we are beginning to see our suspicions confirmed. On the other hand any slowdown may be more a function of an aforementioned pause in spending ahead of new switching products combined with the front-half 2015 weighted IT spending and increased security project focus highlighted in our most recent CIO survey rather than any new spending philosophies. For A10 Networks, F5 Networks, and Infoblox, we remain comfortable with our estimates. We also like our 2015 Arista estimates, but as outlined in our note “PPrroodduucctt RReeffrreesshh PPootteennttiiaall LLaatteerr TThhiiss YYeeaarr aass TToommaahhaawwkk--BBaasseedd PPrroodduuccttss RReelleeaasseedd” from March 26, 2015, we believe that successful execution on new switch launches based on the Broadcom Tomahawk chip, and potentially other suppliers, could drive meaningful upside to our 2016 estimates on a stronger-than-expected upgrade cycle. For Cisco, we believe that demand is quite healthy, and the company continues to benefit from strong response to its newest switching and routing products. Nevertheless, in our QQ22 NNeettwwoorrkkiinngg PPrreevviieeww we reduced estimates slightly to take a more conservative view on October quarter estimates, particularly as that will be the 1st quarter of the company’s new fiscal year and we believe we had previously modeled seasonality incorrectly. For Juniper, we are slightly above consensus for the coming few quarters as we believe the company is seeing good response to its new QFX core switch and vMX virtual routing products. There may be a bit of risk to our estimates from Juniper’s data center and enterprise segments (about 1/3rd of revenue), but in the near term we believe the stock and our estimates reflect a positive reception for the company’s newest products. 15