8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 13, 2018

Switch, Inc.

(Exact name of registrant as specified in its charter)

Nevada	001-38231	82-1883953
(State or other jurisdiction of  incorporation)	(Commission File Number)	(IRS Employer Identification No.)
7135 S. Decatur Boulevard		89118
Las Vegas, NV		(Zip Code)
(Address of principal executive offices)

(702) 444-4111

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).  

Emerging growth companyþ

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Item 2.02 Results of Operations and Financial Condition.

On August 13, 2018, Switch, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2018. In addition, the Company made available on its website supplemental financial data for the same period.

The full text of the press release and the supplemental information package are furnished herewith as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Exhibit Description
99.1	Press Release, dated August 13, 2018.
99.2	Quarter Ended June 30, 2018, Supplemental Financial Information, dated August 13, 2018.

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated August 13, 2018.
99.2	Quarter Ended June 30, 2018, Supplemental Financial Information, dated August 13, 2018.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	August 13, 2018	Switch, Inc.
		(Registrant)
		By:	/s/ Gabe Nacht
		Name:	Gabe Nacht
		Title:	Chief Financial Officer

EX-99.1

Switch Announces Second Quarter 2018 Financial Results

Announces $150 Million Common Unit Repurchase Program

LAS VEGAS, NV — August 13, 2018 — Switch, Inc. (NYSE: SWCH) (“Switch”) today announced record financial results for the quarter ended June 30, 2018.

“Switch has introduced a one of a kind holistic hybrid cloud solution that for the first time allows companies to move larger and more mission critical technology environments to our differentiated cloud campus locations. After being introduced to our new product enablement tools, enterprise companies are taking the time to reimagine and reengineer their current use of software, hardware and connectivity as they get ready to embrace the hybrid cloud for their primary mission critical deployments. These companies are for the first time choosing a future legacy location outside of their own data centers for the strategic placement of their enterprise business intelligence engines that will be so important to every business over the next two decades,” said Rob Roy, CEO, chairman and founder of Switch. “Due to this new holistic approach to hybrid cloud solutions, the closing cycles on these projects have extended the sales timelines. Our sales pipeline is the largest it has been in our company’s history and we are extremely confident that we are on the right path to utilizing our industry’s only Tier 5 platinum data center ecosystems to deliver long term customer and shareholder value.”

Second Quarter 2018 Summary

• Record quarterly revenue of $102.2 million, compared to $92.1 million for the same quarter in 2017, an increase of 11%.

• Operating income of $15.8 million, compared to $23.5 million for the same quarter last year, a decrease of 33%. Operating income in the second quarter of 2018 includes the impact of $8.2 million in equity-based compensation expense compared with $1.3 million in the same quarter of 2017. A significant portion of this equity-based compensation expense in the second quarter of 2018 relates to the continued vesting of Common Unit awards granted in connection with Switch’s initial public offering. Operating income in the second quarter of 2018 also includes $4.0 million in additional depreciation from assets placed into service and $2.8 million in additional labor costs from hiring during the past year.

• Net income of $9.5 million, compared to $15.0 million for the same quarter in 2017. Net income in the second quarter of 2018 includes $8.2 million in equity-based compensation expense compared with $1.3 million in the same quarter of 2017.

• Adjusted EBITDA of $50.3 million, compared to $46.8 million for the same quarter in 2017. Adjusted EBITDA margin of 49.2%, compared to 50.8% for the same quarter in 2017, a decrease of 160 basis points.

• Capital expenditures of $99.4 million, compared to $112.9 million for the same quarter in 2017, a decrease of 12%.

• Churn of less than 0.1%, compared to 0.2% for the same quarter in 2017.⁽¹⁾ 

• Announced $150 million Common Unit repurchase program.

• Updated full year 2018 guidance.

⁽¹⁾  Churn is defined as a reduction in recurring revenue attributed to customer terminations or non-renewal of expired contracts, as a percentage of revenue at the beginning of the period.

“The logistics and timing required for customer implementation of our holistic cloud solution impacted our expectations for the year,” said Thomas Morton, president of Switch. “We firmly believe in the long-term growth prospects of our business, and that the unique and market defining solutions available only at the Switch PRIME campus ecosystems will establish our organization as the recognized pillar of enterprise hybrid cloud.”

“We are pleased that our Board of Directors approved a $150 million Common Unit repurchase program, which underscores the Company’s commitment to shareholder value creation,” said Gabe Nacht, CFO of Switch. “With a strong balance sheet and long-term net leverage target of 3 to 4 times annualized Adjusted EBITDA, Switch can commit to a Common Unit repurchase program while we maintain the appropriate level of investment in future growth.”

Balance Sheet and Liquidity

As of June 30, 2018, Switch’s total debt outstanding net of cash and cash equivalents was $426.9 million, resulting in a net debt to last quarter annualized Adjusted EBITDA ratio of 2.1x. As of June 30, 2018, Switch had liquidity of $684.0 million including cash and cash equivalents and availability under its revolving line of credit.

Capital Expenditures and Development

Capital expenditures for the second quarter totaled $99.4 million. Maintenance capital expenditure was $1.0 million for the second quarter of 2018, compared to $1.7 million for the same quarter last year. Growth capital expenditure was $98.4 million for the second quarter of 2018, compared to $111.2 million for the same quarter last year. During the second quarter of 2018, Switch spent $57.0 million in The Core Campus to open the last sector in Las Vegas 10, and for the continued site work and building of the shell on its Las Vegas 11 facility, which is planned to open in late 2018 or early 2019, adding another 340,000 gross square feet. Switch also invested $31.5 million in The Citadel Campus to open the next two sectors and to purchase an additional 515 acres of land. Switch spent $8.0 million for additional expansion in The Pyramid Campus. Finally, Switch spent $2.8 million on site development at The Keep Campus, which is scheduled to open in 2019.

Dividend

Switch today announced that Switch’s Board of Directors has declared a cash dividend of $0.0147 per share of Switch’s Class A common stock for the second quarter of 2018. The dividend will be payable on September 4, 2018 to all stockholders of record as of the close of business on August 24, 2018. Prior to the payment of this dividend, Switch, Ltd. will make a cash distribution to all holders of record of Common Units of Switch, Ltd., including Switch, of $0.0147 per Common Unit.

Future declarations of quarterly dividends are subject to the determination and discretion of Switch’s Board of Directors based on its consideration of many factors, including Switch’s results of operations, financial condition, capital requirements, restrictions in Switch, Ltd.’s debt agreements and other factors that Switch’s Board of Directors deems relevant.

Recent Business Highlights

• Launched the Switch enterprise hybrid cloud program, to enable enterprise adoption of the cloud, and to facilitate our clients’ transition into the hybrid cloud.

• Signed over 550 contracts with new and existing customers, representing more than $165 million of total contract value and over 20MW committed. These contracts represent more than $40 million in annualized revenue at full deployment.

Common Unit Repurchase Program

The Company also announced today that its board of directors has authorized a program, by which Switch, Ltd. will repurchase up to $150 million of its outstanding Common Units and Switch, Inc. will

cancel a corresponding amount of Class B common shares. The program is effective immediately and will help offset the impact of future redemption of Common Units held by Members of Switch, Ltd.

The proposed Common Unit repurchase may be effected in negotiated transactions off the market from time to time as market conditions warrant. ‎The authorization may be suspended or discontinued at any time without notice. Repurchases under the Common Unit repurchase program will be funded from Switch’s existing cash and cash equivalents.

2018 Guidance

Switch expects revenue for 2018 to be impacted by several deals closing later than originally anticipated, as enterprise customers are taking additional time to evaluate the design of their long-term deployments to take advantage of Switch’s new program for enterprise hybrid cloud. These evaluations have lengthened sales cycles and extended the ramp of deployments.

Switch updated its full year guidance, as follows:

• Total revenue in the range of $405 million to $408 million, versus a prior range of $423 million to $440 million.

• Adjusted EBITDA in the range of $197 million to $200 million, versus a prior range of $216 million to $224 million.

• Capital expenditures is unchanged in the range of $260 million to $310 million.

Switch does not provide reconciliations for the non-GAAP financial measures included in the 2018 guidance above due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income, accelerated depreciation, impairment charges, gains or losses on retirement of debt and variations in effective tax rate, which are difficult to predict and estimate and are primarily dependent on future events, but which are excluded from Switch’s calculations of Adjusted EBITDA.

Upcoming Conferences and Events

Switch management will participate in the following investor conference:

• Goldman Sachs 27th Annual Communacopia Conference on September 13, 2018 in New York, NY.

Conference Call Information

Switch will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time on August 13, 2018. Parties in the United States and Canada can access the call by dialing (800) 458-4121, using conference code 5362232. International parties can access the call by dialing (323) 794-2093, using conference code 5362232.

The webcast will be accessible on Switch’s investor relations website at https://investors.switch.com for one year. A telephonic replay of the conference call will be available through Monday, August 20, 2018. To access the replay, parties in the United States and Canada should call (888) 203-1112 and enter conference code 5362232. International parties should call (719) 457-0820 and enter conference code 5362232.

Presentation of Financial Information

This press release includes historical consolidated results for the periods presented of Switch, Ltd. and its subsidiaries, the predecessor of Switch, Inc., for financial reporting purposes. Amounts for the period from January 1, 2017 through June 30, 2017 presented in the consolidated financial statements herein represent the historical operations of Switch, Ltd. and its subsidiaries.

Use of Non-GAAP Financial Measures

To supplement Switch’s condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), Switch uses Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP measures, in this press release. Switch defines Adjusted EBITDA as net income adjusted for interest expense, interest income, income taxes, depreciation and amortization and for specific and defined supplemental adjustments to exclude (i) non-cash equity-based compensation expense; (ii) equity in net losses of investments; and (iii) certain other items that Switch believes are not indicative of its core operating performance. Switch defines Adjusted EBITDA margin as Adjusted EBITDA divided by revenue.

The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. These measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. In addition, the non-GAAP measures exclude certain recurring expenses that have been and will continue to be significant expenses of Switch’s business.

Switch believes these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making.

For more information on Switch’s non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the “Reconciliation of GAAP to Non-GAAP Results” table in this press release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements generally relate to future events or Switch’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, Switch’s anticipated operating results for the year ending December 31, 2018 and Switch’s expectations regarding the evolution of its marketplace, the timing for the opening of its LAS VEGAS 11 facility, statements regarding future declarations of quarterly dividends and customer deployment plans. Switch’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to inherent risks, uncertainties and changes in circumstance that are difficult or impossible to predict. The risks and uncertainties that could affect Switch’s financial and operating results and cause actual results to differ materially from those indicated by the forward-looking statements made in this press release are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in Switch’s Annual Report on Form 10-K for the year ended December 31, 2017 and in Switch’s other reports filed with the SEC. Switch’s SEC filings are available on the Investors section of Switch’s website at https://investors.switch.com and on the SEC’s website at www.sec.gov. The forward-looking statements in this press release are based on information available to Switch as of the date hereof, and Switch disclaims any obligation to update any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law.These forward-looking statements should not be relied upon as representing Switch’s views as of any date subsequent to the date of this press release.

ABOUT Switch

POWERING THE FUTURE OF THE CONNECTED WORLD®

Switch (NYSE: SWCH), the technology infrastructure corporation headquartered in Las Vegas, Nevada is built on the intelligent and sustainable growth of the internet. Switch founder and CEO Rob Roy has developed more than 500 issued and pending patent claims covering data center designs that have manifested into the company’s world-renowned data centers and technology solution ecosystems.

The Switch PRIMES located in Las Vegas and Tahoe Reno, Nevada; Grand Rapids, Michigan; and Atlanta, Georgia are the world’s highest-rated hyperscale data center campus ecosystems with low latency to major U.S. markets. The Switch PRIMES are located in the most cost-effective area of each North American zone based on power, connectivity, taxes, cost of living and lower risk of natural disasters. Visit switch.com for more information.

Investor Contact:Irmina Blaszczyk

The Blueshirt Group for Switch
investorrelations@switch.com
(702) 479-3993

Switch, Inc.

Consolidated Balance Sheets

(in thousands, except for per share data)

	June 30, 2018		December 31, 2017
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	184,004	$	264,666
Accounts receivable, net of allowance of $310 and $472, respectively	10,670		16,386
Prepaid expenses	3,975		5,037
Other current assets	6,085		2,101
Total current assets	204,734		288,190
Property and equipment, net	1,248,939		1,133,572
Long term deposit	4,712		3,842
Other assets	28,867		9,155
TOTAL ASSETS	$	1,487,252	$	1,434,759
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Long term debt, current portion	$	5,194	$	5,194
Accounts payable	18,090		18,934
Accrued salaries and benefits	8,425		5,211
Accrued expenses	7,881		6,469
Accrued construction payables	12,180		7,052
Deferred revenue, current portion	10,220		11,482
Customer deposits	9,396		8,634
Capital lease obligations, current portion	2,309		2,309
Total current liabilities	73,695		65,285
Long term debt, net	583,969		586,566
Capital lease obligations	19,466		19,466
Deferred revenue	19,965		19,382
Liabilities under tax receivable agreement	39,534		—
Other long term liabilities	1,877		1,927
TOTAL LIABILITIES	738,506		692,626
Commitments and contingencies
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.001 par value per share, 10,000 shares authorized, none issued and outstanding	—		—
Class A common stock, $0.001 par value per share, 750,000 shares authorized, 49,553 and 35,938 shares issued and outstanding, respectively	50		36
Class B common stock, $0.001 par value per share, 300,000 shares authorized, 160,200 and 173,624 shares issued and outstanding, respectively	160		174
Class C common stock, $0.001 par value per share, 75,000 shares authorized, 42,945 shares issued and outstanding	43		43
Additional paid in capital	131,845		107,008
Retained earnings	1,774		1,602
Accumulated other comprehensive income	79		31
Total Switch, Inc. stockholders’ equity	133,951		108,894
Non-controlling interest	614,795		633,239
TOTAL STOCKHOLDERS’ EQUITY	748,746		742,133
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,487,252	$	1,434,759

Switch, Inc.

Consolidated Statements of Comprehensive Income

(in thousands, except for per share/unit data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)
Revenue	$	102,161		$	92,101		$	199,878		$	181,258
Cost of revenue	55,194			48,456			110,050			93,831
Gross profit	46,967			43,645			89,828			87,427
Selling, general and administrative expense	31,139			20,104			64,590			39,447
Income from operations	15,828			23,541			25,238			47,980
Other income (expense):
Interest expense, including $409, $245, $818, and $498, respectively, in amortization of debt issuance costs	(6,144		)	(4,913		)	(12,417		)	(8,933		)
Equity in net losses of investments	—			(293		)	(331		)	(734		)
Loss on extinguishment of debt	—			(3,565		)	—			(3,565		)
Other	822			183			1,851			533
Total other expense	(5,322		)	(8,588		)	(10,897		)	(12,699		)
Income before income taxes	10,506			14,953			14,341			35,281
Income tax expense	(967		)	—			(852		)	—
Net income	9,539			14,953			13,489			35,281
Less: net income attributable to non-controlling interest	8,718			—			11,997			—
Net income attributable to Switch, Inc.	$	821		$	14,953		$	1,492		$	35,281
Net income per share/unit:
Basic	$	0.02		$	0.07		$	0.04		$	0.18
Diluted	$	0.02		$	0.07		$	0.04		$	0.17
Weighted average shares/units used in computing net income per share/unit:
Basic	42,358			200,644			39,197			200,247
Diluted	42,463			207,642			39,296			206,605
Dividends declared per common share	$	0.03		$	—		$	0.03		$	—
Other comprehensive income:
Foreign currency translation adjustment, before and after tax	—			293			331			565
Comprehensive income	9,539			15,246			13,820			35,846
Less: comprehensive income attributable to non-controlling interest	8,718			—			12,280			—
Comprehensive income attributable to Switch, Inc.	$	821		$	15,246		$	1,540		$	35,846

Switch, Inc.

Consolidated Statements of Cash Flows

(in thousands)

	Six Months Ended June 30,
	2018			2017
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	13,489		$	35,281
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	50,321			41,786
Loss on disposal of property and equipment	627			37
Income tax expense	852			—
Amortization of debt issuance costs	818			498
Bad debts	92			5
Loss on extinguishment of debt	—			2,065
Equity in net losses of investments	331			734
Equity-based compensation	20,566			3,564
Changes in operating assets and liabilities:
Accounts receivable	4,861			(2,325		)
Prepaid expenses	1,062			1,156
Other current assets	(100		)	(788		)
Other assets	(853		)	(423		)
Accounts payable	(432		)	2,496
Accrued salaries and benefits	3,214			3,125
Accrued expenses	1,412			(652		)
Accrued impact fee expense	—			(27,018		)
Deferred revenue	(679		)	8,833
Customer deposits	762			759
Other long term liabilities	(112		)	(64		)
Net cash provided by operating activities	96,231			69,069
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(160,773		)	(219,916		)
Acquisition of intangible asset	(25		)	(33		)
Escrow deposit	(3,508		)	—
Proceeds from sale of property and equipment	—			100
Proceeds from notes receivable	—			17
Purchase of portfolio energy credits	(67		)	(64		)
Net cash used in investing activities	(164,373		)	(219,896		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of tax withholdings upon settlement of restricted stock unit awards	(1,220		)	—
Proceeds from borrowings	—			976,000
Change in long term deposit	(996		)	—
Repayment of borrowings, including capital lease obligations	(3,000		)	(619,800		)
Debt issuance costs on new loan	—			(7,299		)
Deferred offering costs paid	—			(1		)
Dividends paid to Class A common stockholders	(1,258		)	—
Distributions paid to non-controlling interest/members	(6,046		)	(171,000		)
Net cash (used in) provided by financing activities	(12,520		)	177,900
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(80,662		)	27,073
CASH AND CASH EQUIVALENTS—Beginning of period	264,666			22,713
CASH AND CASH EQUIVALENTS—End of period	$	184,004		$	49,786

Switch, Inc.

Reconciliation of Net Income to Adjusted EBITDA

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)
Net income	$	9,539		$	14,953		$	13,489		$	35,281
Interest expense	6,144			4,913			12,417			8,933
Interest income	(707		)	(12		)	(1,427		)	(19		)
Income tax expense	967			—			852			—
Depreciation and amortization	25,718			21,749			50,321			41,786
Loss on disposal of property and equipment	413			17			627			37
Equity-based compensation	8,209			1,314			20,566			3,564
Equity in net losses of investments	—			293			331			734
Loss on extinguishment of debt	—			3,565			—			3,565
Adjusted EBITDA	$	50,283		$	46,792		$	97,176		$	93,881

###

EX-99.2

INVESTOR PRESENTATION | Q21 2018

SAFE HARBOR | 2018 This presentation includes forward-looking statements. All statements contained in this presentation other than statements of historical facts, including statements regarding future results of operations and financial position of Switch, Inc. and Switch, Ltd. (“Switch,” “we,” “us” or “our”), our business strategy and plans and our objectives for future operations, are forward-looking statements. The words “anticipate,” believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long- term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation, those risks and uncertainties set forth in the “Risk Factors” section of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2017 and in our other SEC filings, including our most recent Quarterly Report on Form 10-Q. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this presentation to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this presentation. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements contained in this presentation. This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Neither we nor any other person makes any representation as to the accuracy or completeness of such data or undertakes any obligation to update such data after the date of this presentation. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk. This presentation contains certain supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are in addition to, and not a substitute or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of non-GAAP measures to GAAP measures is contained in the appendix to this presentation.

FINANCIAL HIGHLIGHTS Q2 2018 • Total revenue of $102.2 million, compared to $92.1 million for the same quarter in 2017, an increase of 11%. Year-to-date, total revenue of $199.9 million, compared to $181.3 million for the same period in 2017, an increase of 10%. • Net income of $9.5 million, compared to $15.0 million for the same quarter in 2017. Year-to-date, net income of $13.5 million, compared to $35.3 million for the same period in 2017, a decrease of 62%. • Adjusted EBITDA of $50.3 million, compared to $46.8 million for the same quarter in 2017. Adjusted EBITDA margin of 49.2%, compared to 50.8% for the same quarter in 2017. Year-to-date, Adjusted EBITDA of $97.2 million, compared to $93.9 million for the same period in 2017, an increase of 4%. • Capital expenditures of $99.4 million, compared to $112.9 million in the same quarter in 2017, a decrease of 12%. • Churn of less than 0.1%, compared to 0.2% for the same quarter in 2017.¹ • Over 550 contracts signed with total contract value greater than $165 million and annualized revenue greater than $40 million ¹ Churn is defined as a reduction in recurring revenue attributed to customer terminations or non-renewal of expired contracts, as a percentage of revenue at the beginning of the period.

The Four Switch PRIMES™ Up to 12 million Up to 1,185 3 Campus Locations Operational and Gross square feet (GSF) Megawatts of power (MW) 1 Under Development Current U.S. facilities: 4M GSF Current U.S. facilities: 415 MW Future U.S. facilities: 8M GSF Future U.S. facilities: 770 MW 850+ 36.6% <0.1% Customers Of revenues from top 10 Revenue Churn 1 customers Q2’18 Q2’18 10.9% 7.5% 18.7% Revenue Growth Q2’17 to Q2’18 Adjusted EBITDA2 Growth Cash flow yield on invested capital Q2’17 to Q2’18 (Last 4 quarters as of Q2’18)3 ¹ Churn is defined as a reduction in recurring revenue attributed to customer terminations or non-renewal of expired contracts, as a percentage of revenue at the beginning of the period. ² See Appendix for a reconciliation of Adjusted EBITDA to Net Income (Loss).. ³ Cash flow yield on invested capital is defined as Adjusted EBITDA less corporate taxes and maintenance capital expenditures, divided by total assets, less cash and equivalents, construction in progress, and non-interest-bearing liabilities

STRATEGICALLY LOCATED PRIME CAMPUS LOCATIONS The Citadel Campus | Reno The Pyramid Campus | Grand Rapids  Designed to be, upon  Designed to be the largest completion, world’s largest data datacenter campus center environment in the Eastern U.S.  TAHOE RENO 1 - Up to a 1.3mm  Over 1,100,000 sq. ft. and 110 sq. ft. and 130 MW power MW power capacity capacity  Low natural disaster rating  TAHOE RENO 1-7 over 5,000,000 sq. ft. and 520 MW Silicon  Tax Renaissance zone Valley Tahoe Reno Grand Rapids AshburnNew York  Stable climate with low-humidity  100% renewable power source Silicon TAHOE RENO GRAND RAPIDS Ashburn  Low tax environment Valley Los The Keep Campus | Atlanta Angeles Las Vegas  100% renewable power source LAS VEGAS Los Angeles Atlanta  Land acquired The Core Campus | Las Vegas ATLANTA  Campus data center designs currently in process  2,340,000 sq. ft. and 315 MW power capacity  Over 1,100,000 sq. ft. and 110 Miami MW power capacity  Stable climate with low-humidity Miami  Construction began Q4 2017  Lowest natural disaster rating in Western U.S.  Low tax environment  100% renewable power source

GROWING PORTFOLIO OF HYPERSCALE FACILITIES Utilization % - Gross Square Feet Utilization % - Power Capacity Campus ¹ Year Operational By Available Data (up to) ² By Campus ³ (up to) ⁴ Center Space ³ The Core Campus Current: 8 Facilities ⁵ 2003-2017 2,000,000 87% 87% 275 MW Future: 1 Facility 2018-2019 340,000 40 MW The Citadel Campus Current: TAHOE RENO 1 2016 1,360,000 19% 38% 130 MW Future: 7 Facilities 2019+ 5,890,000 520 MW The Pyramid Campus Current: Switch PYRAMID 2016 430,000 (Office) 41% 96% 10 MW 220,000 (Data Center) 100 MW Future: 2 Facilities 2019+ 940,000 The Keep Campus Future 2019 1,100,000 N/A N/A 110 MW U.S. Total (Current) 4,010,000 415 MW U.S. Total (Future) 8,270,000 770 MW ¹ SUPERNAP International has also deployed two additional data centers in Milan, Italy and Bangkok, Thailand that collectively provide up to 904,200 GSF of space, with up to 100 MW of power available to these facilities. We hold a 50% ownership interest in SUPERNAP International ² Estimated square footage of all enclosed space at full build-out ³ Utilization numbers are based on available cabinets ⁴ Defined as total power delivered to the data center at full build-out ⁵ Current facilities at The Core Campus include LAS VEGAS 2, LAS VEGAS 4, LAS VEGAS 5, LAS VEGAS 7, LAS VEGAS 8, LAS VEGAS 9, LAS VEGAS 10 and LAS VEGAS 12

COMPELLING FINANCIAL MODEL • 61% of the increase in revenue for the quarter ended June 30, 2018 was attributable to growth from Track Record of Organic customers who have been with Switch over one year, while the remaining 39% of the increase in Top-Line Growth revenue was attributable to new customers initiating service after June 30, 2017 • Long term licenses (3 to 5 year contracts) with ability to escalate rates Predictable and Recurring • Stable monthly recurring revenue Revenue Stream • 3-year average annual revenue churn of 0.9% • Patent-protected technology enables just-in-time capex deployment and low cost construction Capital Efficient Growth • Vertical integration creates additional capex savings • Low maintenance capex – 1.0% of revenue in Q2 2018 Low Capital at Risk • Switch MOD® enables the company to build and open new sectors to meet customer demand Powerful Network Effects • Powerful network effects from 850+ customers and CORE Telecom purchasing cooperative

HISTORY OF ORGANIC GROWTH (IN $ MILLIONS) Revenue Adjusted EBITDA ¹ $378 $318 $195 $266 $153 $142 $207 $200 $181 $112 $94 $97 2014A 2015A 2016A 2017A Q2 YTD Q2 YTD 2014A 2015A 2016A 2017A Q2 YTD Q2 YTD 2017 2018 2017 2018 ¹ See Appendix for a reconciliation of Adjusted EBITDA to Net Income (Loss). ² 2016 Adj. EBITDA includes front loaded costs to open Citadel Campus and Pyramid Campus.

Q2 2018 REVENUE & ADJUSTED EBITDA VS. Q2 2017 Revenue & Adjusted EBITDA Performance $120 $100 $102.2 $92.1 $80 $60 ($ millions) ($ $50.3 $40 $46.8 $20 $0 Q2'18 Q2'17 Actual Actual Revenue $102.2 $92.1 Adj. EBITDA $50.3 $46.8 Adj. EBITDA Margin % 49.2% 50.8% YOY Actual Revenue Growth % 10.9% YOY Actual Adj. EBITDA Growth % 7.5%

ROLLING QUARTERLY REVENUE PERFORMANCE Rolling Quarterly Revenue Performance $120 $100 $102.2 $97.7 $99.3 $97.7 $92.1 $89.2 $80 $81.7 $81.9 $60 ($ millions) ($ $40 $20 $0 Q3'17 Q4'17 Q1'18 Q2'18 2018 Actual Revenue $97.7 $102.2 2017 Actual Revenue $97.7 $99.3 $89.2 $92.1 2016 Actual Revenue $81.7 $81.9 YOY % Growth 19.6% 21.3% 9.6% 10.9% Q1’18 Revenue includes a $3.3 million reduction compared to Q4 2017 from the contract structure with a strategic customer

ROLLING QUARTERLY ADJUSTED EBITDA PERFORMANCE Rolling Quarterly Adjusted EBITDA Performance $60 $50 $51.1 $49.7 $50.3 $46.9 $47.1 $46.8 $40 $41.0 $34.6 $30 ($ millions) ($ $20 $10 $0 Q3'17 Q4'17 Q1'18 Q2'18 2018 Actual Adj. EBITDA $46.9 $50.3 2017 Actual Adj. EBITDA $49.7 $51.1 $47.1 $46.8 2016 Actual Adj. EBITDA $34.6 $41.0 YOY % Growth 43.8% 24.7% -0.4% 7.5%

Q2 2018 NEW CUSTOMERS HIGHLIGHTS BY INDUSTRY • Over 550 contracts signed in Q2 2018 for new services, renewals, and expansions • 46 new customers Industry Description Cloud, IT & Software Global leader in the semiconductor industry Cloud, IT & Software Global provider of data and hybrid cloud analytics and solutions Cloud, IT & Software Leading provider of software as a service and cloud-based remote connectivity services Digital Content & Multi-Media Entertainment Global multimedia company Digital Content & Multi-Media Entertainment Pioneer in the social gaming industry Retail & Consumer Goods One of the largest automotive retailers in the United States Retail & Consumer Goods Global driver risk management company Healthcare Innovative biopharmaceutical company Construction Major Japanese construction company with global operations Security and Risk Management Security planning and risk management operations company Trav el & Tourism A premier travel services company

Q2 2018 TOTAL CONTRACT VALUE HIGHLIGHTS New Existing Total Customers Customers Contracts ¹ 61 497 558 Customers 46 190 236 Power (MWs) >15 >4 >20 Annualized MRC ² ($ millions) >$20 >$20 >$40 Wtd. Avg. Contract Term (yrs) 4.5 3.1 3.9 Total Contract Value ³ ($ millions) >$100 >$65 >$165 ¹ Contracts includes contracts signed by Switch and the customer during the quarter. ² Annualized Monthly Recurring Charges (MRC) is calculated using the monthly recurring revenue multiplied by 12. ³ Total Contract Value is adjusted for returns or discount options and does not include power and bandwidth usage revenue, price escalators or lifts.

CUSTOMER REVENUE & RECURRING REVENUES (IN $ MILLIONS) Customer Revenue Category Q2'18 Q2'17 Growth (%) Q2'18 YTD Q2'17 YTD Growth (%) Colocation $81.2 $74.3 9.2% $158.9 $146.3 8.6% Connectivity $18.9 $16.2 16.2% $37.1 $32.1 15.6% Other $2.1 $1.5 40.8% $3.9 $2.8 38.0% Total $102.2 $92.1 10.9% $199.9 $181.3 10.3% Recurring Revenue ¹ % of % of % of % of Category Q2'18 Revenue Q2'17 Revenue Q2'18 YTD Revenue Q2'17 YTD Revenue MRC $99.3 97.2% $89.9 97.6% $194.6 97.3% $177.2 97.8% NRC $2.9 2.8% $2.2 2.4% $5.3 2.7% $4.0 2.2% Total $102.2 100.0% $92.1 100.0% $199.9 100.0% $181.3 100.0% ¹ Recurring Revenue is comprised of (1) colocation, which includes the licensing of cabinet space and power; and (2) connectivity services, which includes cross- connects, broadband services and external connectivity. We consider these services recurring because our customers are generally billed on a fixed and recurring basis each month for the duration of their contract. Non-Recurring Charges (NRC) is primarily comprised of installation services related to a customer’s initial deployment. These services are non-recurring because they are typically billed once, upon completion of the installation.

REVENUE GROWTH & CHURN (IN $ MILLIONS) Existing vs. New Customer Revenue Growth Q2 YTD Customer Type Q2 2018 2018 % of Revenue Growth From New Customers 39% 36% % of Revenue Growth From Existing Customers 61% 64% Churn ¹ 0.2% <0.1% Q2 2018 Q2 2017 ¹ Churn is defined as a reduction in recurring revenue attributed to customer terminations or non-renewal of expired contracts, as a percentage of revenue at the beginning of the period.

Q2 2018 CAPITAL EXPENDITURES & CAMPUS HIGHLIGHTS Q2 2018 Capital Expenditures Campus Highlights The Citadel Campus: • Continued build-out of 2 new sectors which opened in Q2 $57 $99.4 Million Total 2018 • Added power and cooling infrastructure to support 10MW of new capacity for the next power system which came online in Q2 2018 • $16 million land acquisition in Q2 for future expansion in RNO The Core Campus: • Continued build-out of the final sector in LAS VEGAS 10 $32 which opened in Q2 2018 • Power and cooling infrastructure to support continued customer growth Site development and shell costs for future LAS VEGAS 11 ($ millions) ($ • which is expected to add another 340,000 GSF to Switch’s portfolio when opened $8 The Pyramid Campus: • Power and cooling infrastructure to support continued $3 customer deployment and new sales growth • Continued build-out of the next sector scheduled to open The Citadel The Core The Pyramid The Keep Q3 2018 Campus Campus Campus Campus The Keep Campus: • Site development costs for the land where first building is Maintenance Capex was $1.0 million for Q2 2018, which represents expected to open in 2019 1.0% of revenue

DEVELOPMENT MILESTONES Development Milestones Target Date MW Increase (Up To) Sector Increase The Core Campus LAS VEGAS 10 Sector 1 Q2 2018 - 1 LAS VEGAS 10 Power System 1 Q1 2019 10 MW - LAS VEGAS 11 Sector 1 & Power System 1 Q4 2018 10 MW 1 The Citadel Campus TAHOE RENO 1 Sectors 6 & 7 Q2 2018 - 2 TAHOE RENO 1 Power System 6 Q2 2018 10 MW - TAHOE RENO 1 Substation Q4 2018 40MW Capacity - The Pyramid Campus PYRAMID 1 Area B.2 - Sector 2 Q3 2018 - 1 PYRAMID 1 Area C.1 - Sector 3.1 Q1 2019 - 0.5 PYRAMID 1 Area C.2 - Sector 3.2 Q2 2019 - 0.5 The Keep Campus ATLANTA 1 Sector 1 & Power System 1 2019 10 MW 1

DEBT & LIQUIDITY (IN $ MILLIONS) Debt & Liquidity ¹ Q2 2018 Capital Leases $22 Other Debt $589 Less: Cash & Cash Equivalents ($184) Net Debt $427 LQA Adjusted EBITDA $201 Net Debt / LQA Adjusted EBITDA 2.1x Liquidity $684 ¹ Liquidity defined as: Remaining undrawn revolver capacity plus cash & cash equivalents

FULL YEAR 2018 GUIDANCE SUMMMARY (IN $ MILLIONS) 2017 2018 Guidance Financial Metric Results Low High Revenue $378 $405 $408 Adjusted EBITDA¹ $195 $197 $200 Capital Expenditures $403 $260 $310 ¹ Switch does not provide reconciliations for the non-GAAP financial measures included in the 2018 guidance above due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income (loss), accelerated depreciation, impairment charges, gains or losses on retirement of debt and variations in effective tax rate, which are difficult to predict and estimate and are primarily dependent on future events, but which are excluded from Switch's calculations of Adjusted EBITDA

APPENDIX

NON-GAAP FINANCIAL MEASURES To supplement Switch’s condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), Switch uses Adjusted EBITDA, Adjusted EBITDA margin and recurring revenue, which are non-GAAP measures, in this presentation. Switch defines Adjusted EBITDA as net income (loss) adjusted for interest expense, interest income, income taxes, depreciation and amortization and for specific and defined supplemental adjustments to exclude (i) non-cash equity-based compensation expense; (ii) equity in net earnings (losses) of investments; and (iii) certain other items that Switch believes are not indicative of its core operating performance. Switch defines Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. These measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. In addition, the non-GAAP measures exclude certain recurring expenses that have been and will continue to be significant expenses of Switch’s business. Switch believes these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making.

23 INVESTOR PRESENTATION | Q2 2018

2016-2018 ADJUSTED EBITDA RECONCILIATION BY QUARTER (IN $ MILLIONS) Adjusted EBITDA Reconciliation Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Net income (loss) $17 $19 $16 ($20) $20 $15 $16 ($60) $4 $10 (+) Interest Expense 2 2 2 4 4 5 9 7 6 6 (+) Interest Income (0) 0 (0) (0) (0) (0) (0) (1) (1) (1) (+) Depreciation and Amortization 15 16 16 19 20 22 23 24 25 26 (+) Loss on disposal of property and equipment 0 0 0 1 0 0 (0) 1 0 0 (+) Impact fee expense - - - 27 - - - 1 - - (+) Equity-based compensation 2 1 1 1 2 1 1 80 12 8 (+) Equity in loss of investments 1 1 1 6 0 0 0 0 0 - (+) Loss on extinguishment of debt - - - - - 4 - - - - (+) Gain on lease termination - - (3) - - - - - - - (+) Impairment of notes and interest receivable - - - 2 - - - - - - (+) Income tax (benefit) expense - - - - - - - (1) (0) 1 Adjusted EBITDA $ 38 $ 40 $ 35 $ 41 $ 47 $ 47 $ 50 $ 51 $ 47 $ 50

2014-2017 ADJUSTED EBITDA RECONCILIATION (IN $ MILLIONS) Adjusted EBITDA Reconciliation 2014 2015 2016 2017 Net income (loss) $ 57 $ 73 $ 31 $(9) (+) Interest Expense 7 8 11 25 (+) Interest Income (1) (0) (0) (1) (+) Depreciation and Amortization 44 55 67 89 (+) Loss on disposal of property and equipment 1 1 2 1 (+) Impact fee expense - - 27 1 (+) Equity-based compensation 4 5 6 85 (+) Equity in (net earnings) loss of investments 1 (1) 10 1 (+) Loss on extinguishment of debt - 0 - 4 (+) Gain on sale of asset - (0) - - (+) Gain on lease termination - - (3) - (+) Impairment of notes and interest receivable - - 2 - (+) Income tax benefit - - - (1) Adjusted EBITDA $ 112 $ 142 $ 153 $ 195