PresentationMichael NgResearch Analyst All right. Well, good morning, everybody. Welcome to the Goldman Sachs Communacopia and Technology Conference. I have the privilege of introducing Dave Schaeffer, who is the founder and CEO of Cogent, which he founded in 1999. My name is Mike Ng and I cover U.S. telecom here at Goldman Sachs. We have about 35 minutes for today's presentation, inclusive of any audience Q&A. But I'd like to start in saying thank you, Dave, for making it out here to the conference and spe ...

Cogent Communications Conference Summary Company Overview - **Company**: Cogent Communications Holdings Inc. (NasdaqGS: CCOI) - **Industry**: Telecommunications Key Points and Arguments Market Position and Strategy - Cogent has differentiated itself in a challenging telecom sector by focusing on a limited number of products where it has a structural advantage, with nearly 90% of revenue coming from Internet-based services [3][4] - The company has a significant network reach, operating in 57 countries with approximately 1,870 carrier-neutral data centers and over a billion square feet of multi-tenant office buildings [4] Business Segments - **Internet and VPN Services**: This segment will continue to grow and capture market share [3] - **Enterprise Services**: Acquired from T-Mobile, this segment was previously declining at 10.6% annually but has been streamlined to break even, with expectations to reach a 20% positive EBITDA margin in the coming years [4][5] - **Wavelength Services**: The most promising segment, with a goal to grow from a $36 million run rate to $500 million by 2028, targeting a 25% market share in a $2 billion addressable market [9][10] Wavelength Services Growth - The company has repurposed Sprint's physical assets to deliver wavelength services, enabling 938 sites to receive wavelengths within 30 days [6][8] - The demand for wavelengths is driven by various use cases, including AI training data centers, which are rapidly growing [7][9] Competitive Advantages - Cogent's structural advantages include a unique network architecture, faster provisioning, and the ability to price aggressively due to the low acquisition cost of the Sprint assets [8][9] - The company aims to leverage existing relationships with customers who already use its transit services to expand into the wavelength market [12] Financial Outlook - Cogent expects to grow total top-line revenue by 6% to 8% annually, with a margin expansion of 200 basis points per year [30] - The company has a declining capital intensity, projected to reach a $100 million annual run rate, allowing for increased free cash flow [31][32] Asset Monetization - Cogent is considering selling non-core assets, including converted data centers and IPv4 address inventory, to strengthen its balance sheet [26][28][29] - The company has invested about $100 million in converting former Sprint sites into data centers, with a potential market value of $10 million per megawatt [26][27] Capital Allocation and Shareholder Returns - The company has consistently grown its dividend for 52 consecutive quarters and has repurchased nearly 23% of its outstanding shares [35] - Future capital allocation will focus on maintaining a balance between dividends, buybacks, and operational growth, with a disciplined approach to M&A [34][35] Additional Important Insights - The addressable market for wavelengths is growing at an estimated 5% to 10% annually, driven by increased demand from AI training and data center interconnectivity [19][22] - The company has a unique competitive position due to the spatial separation of its fiber routes, enhancing resiliency and diversity compared to competitors [25] This summary encapsulates the key insights from the Cogent Communications conference, highlighting the company's strategic focus, market opportunities, and financial outlook.

Question-and-Answer SessionMichael FunkBofA Securities, Research Division Yes. Absolutely. Look, given a chance to catch up on what's Cogent, what's happening at Cogent and yourself has certainly made it more interesting for me as I've ramped back up on the space. So I want to start by going back to last quarter and then maybe connecting some things to some previous guidance you gave about the full year exit rates. So if we can start on the wavelength business, and I'm going to paraphrase my interpretation, ...

Cogent Communications (CCOI) 2025 Conference September 04, 2025 11:20 AM ET Speaker0So once again, everyone, you for for coming out and, you know, special thanks to Dave Schaefer. Dave, great to great to see you again. You know, it's good to be covering the space and get reconnected with you and Cogent. So, thank you once again for attending our conference.Speaker1Well, thank you. Hey, Anna. Welcome back to telecom from software. Hopefully, it's a little more exciting. And as always, I want to thank Bank of ...

Group 1 - The company experienced organic growth of 10.2% annually for 15 years prior to the pandemic, which slowed to approximately 5% due to COVID-19 [2] - Margin expansion decreased from an average of 220 basis points per year to about 100 basis points per year during the pandemic [2] - As the pandemic subsided, the business began to improve, and the company took the opportunity to acquire the original Sprint Global Markets business from T-Mobile [3]

Cogent Communications (CCOI) 2025 Conference September 03, 2025 03:30 PM ET Speaker0Only. Welcome back to Citi's twenty twenty five global TMT conference. For those of you I haven't met, I'm Mike Rollins. I cover communications services and infrastructure. Disclosures are available at the back of the room.And if you don't have access or would like another copy, please email me @michael.rollinsatCiti.com. We're pleased to welcome back Dave Schaefer, chief executive officer of Cogent. Dave, thank you for join ...

Summary of Cogent's Conference Call Company Overview - **Company**: Cogent Communications - **Industry**: Telecommunications Key Points and Arguments Revenue and EBITDA Guidance - Cogent aims for a revenue target of $1.5 billion and EBITDA of $500 million by mid-2028, following the acquisition of Sprint [3][8] - The combined revenue from Sprint and Cogent was initially over $1 billion, with Cogent contributing approximately 60% and Sprint 40% [4] - Sprint's revenue had been declining at 10.6% annually prior to the acquisition, while Cogent's revenue grew at about 7% [4] Financial Performance Post-Acquisition - Post-acquisition, Cogent experienced negative revenue growth but improved underlying EBITDA by $5 million each quarter over eight quarters [5] - A subsidy payment from T-Mobile of $700 million over 54 months has significantly boosted EBITDA, with first-year EBITDA rising from $260 million to $350 million [5][9] Revenue Growth Projections - Anticipated revenue growth of 6-8% annually, with a potential acceleration in the near term to meet long-term targets [10][11] - The legacy Cogent business is growing at about 5% year-over-year, while the acquired Sprint enterprise business is flat with lower margins [6][7] Wavelength Business - The wavelength business, which started from zero, has reached a $36 million annual run rate and is projected to grow to $500 million with a 95% contribution margin [7][8] - Cogent aims to increase its market share in the wavelength market from less than 1% to 25% over the next three years [15] Corporate Business Performance - The corporate business, driven by on-net services, has seen a decline but is stabilizing, with growth expected to return to around 5% [38][41] - The Sprint corporate business is expected to remain flat, contributing to a slight overall decline in the corporate segment [40] Pricing Strategy and Market Dynamics - Cogent typically offers a 20% discount to market rates, with transit services discounted by about 50% [28][30] - The NetCentric business has grown 7% year-over-year, driven by increased sales from smaller customers and international markets [32][34] Capital Return Strategy - Cogent has returned $2 billion to shareholders through buybacks and dividends, with a focus on increasing free cash flow [50][52] - The company is considering shifting from dividends to stock buybacks due to the current stock price dislocation [52] Asset Management - Cogent is actively looking to sell non-core assets, including data centers and excess IPv4 addresses, while focusing on growing recurring revenues [55] Market Outlook - The company is optimistic about achieving its growth targets, with a strong focus on the wavelength business and improving EBITDA margins [16][17] Additional Important Information - The integration of Sprint's network is complete, allowing for more effective sales and provisioning of wavelengths [20][21] - Customer feedback indicates a better-than-expected addressable market for wavelengths, enhancing growth prospects [24]

Cogent Communications (CCOI) Conference Summary Company Overview - **Company**: Cogent Communications (CCOI) - **Date of Conference**: August 12, 2025 - **Speaker**: Dave Schafer, CEO of Cogent Communications Key Points Company and Financial Situation - Cogent's shares have seen a significant decline recently, attributed to tax situations rather than commercial real estate concerns [3][12] - The CEO's equity position in Cogent was reduced from 23% to 0.7% during the telecom crash, but he has since rebuilt it to 11% through stock compensation [4][5] - The CEO has injected $152.34 million into his real estate portfolio, which has seen a decline in value, leading to increased loan-to-value (LTV) ratios [10] - The company has returned nearly $2 billion to shareholders, primarily through dividends and stock buybacks [13][65] Earnings and Growth - The company experienced an EBITDA miss and a decline in revenue, but the CEO emphasized that revenue decline was anticipated due to the Sprint acquisition [12][14] - Cogent has a historical compounded growth rate of over 10% for 17 years prior to the Sprint acquisition, which was a declining business [15] - The company reported a 27% sequential revenue growth in its Waves business and a 149.8% year-over-year growth [24] Competitive Landscape - Competitors like Lumen and Zayo are active in the market, but Cogent believes its network architecture provides a competitive advantage [34][35] - The company has a pricing strategy that generally offers a 20% discount compared to competitors, aiming to capture market share without destroying market pricing [46] Data Center Sales - Cogent is in the process of selling non-strategic data centers, with a targeted valuation of $10 million per megawatt [51][56] - The company has received interest from over 160 parties, with ongoing tours and negotiations [57][58] - The CEO emphasized the importance of not negotiating against themselves and the need for buyers to prove their ability to perform [53][60] Future Outlook - The company aims to grow its EBITDA and return capital to shareholders without needing to monetize non-core assets [65][66] - The CEO expressed confidence in achieving a $20 million revenue run rate for the Waves business by year-end [31][32] - The company is focused on building recurring free cash flow and is not reliant on one-time asset sales for value creation [86][87] Market Trends - The internet traffic growth has slowed to 9% year-over-year, contrasting with previous higher growth rates, attributed to market saturation and the company's significant market share [92][94] - Cogent is expanding into new markets, including India, which is expected to provide additional growth opportunities [101][102] Capital Expenditure and Strategy - The company has slowed the rate of new building additions and is focusing on optimizing existing assets [105][106] - Future capital deployment will prioritize areas with a return on invested capital (ROIC) significantly above the cost of capital [106] Additional Insights - The CEO highlighted the importance of quality in service delivery as a key competitive advantage [41][42] - The company is cautious about pricing strategies and market dynamics, particularly in the context of larger deals and RFPs [47][48] This summary encapsulates the key discussions and insights from the Cogent Communications conference, providing a comprehensive overview of the company's current status, challenges, and future strategies.

Cogent Communications (CCOI) Conference Summary Industry Overview - The discussion revolves around the telecommunications industry, specifically focusing on the wavelength services market and data center monetization opportunities. Key Points and Arguments Wavelength Services - The ramp-up of the wavelength business has been slower than expected due to three main factors: 1. Integration of the former Sprint voice network with Cogent's metro network took about a year and a half, which was slightly ahead of schedule [3][56] 2. Building a demand funnel was challenging, with a total of 10,000 expressions of interest, but only 1,000 converted to orders, and 8,000 fell out over time [4][57] 3. A strong funnel of 4,700 orders was reported, including various stages of order fulfillment [5][58] - The market is highly concentrated, with two major players dominating and a few smaller regional players [4][57] - The company has pre-enabled 938 data centers for quick provisioning of wavelength services, which is a significant improvement over traditional market practices [8][62] - The wavelength market is valued at approximately $2 billion, and Cogent aims to capture market share through unique architectural advantages [10][64] Backlog and Revenue Recognition - The backlog consists of four categories: 1. Signed contracts that have been installed but not accepted (200-300 units) [11][66] 2. Signed orders still in provisioning (a few hundred) [13][69] 3. Signed orders not yet provisioned due to customer readiness [15][71] 4. Orders with agreed terms but not yet signed [19][72] - Revenue is only recognized when customers accept the service, leading to discrepancies between installed units and recognized revenue [12][67] Financial Performance and Projections - The company aims to achieve a quarterly revenue run rate of $20 million from wavelength services by the end of the year, up from $9.1 million [21][54] - Historical growth rates indicate that Cogent has grown revenues organically at 10.2% from 2005 to 2020, with a target of 6% to 8% growth moving forward [23][24] - The enterprise business, which represents about 13% of total revenues, is declining but is expected to stabilize [39][40] - The NetCentric business, including WAVES, is currently growing in the high single digits, while excluding WAVES and IPv4 leasing, growth is in the low single digits [46][48] Data Center Monetization - The company has interacted with over 160 counterparties regarding data center monetization, with six letters of intent received [30][31] - The facilities are primarily former central offices, and the company is looking for counterparties willing to invest risk capital [29][30] - There is a potential market for small COLO facilities and portfolio-wide deals, but challenges exist due to the lack of current revenue from these facilities [36][37] Additional Important Insights - The company has faced challenges in the past, particularly with the acquisition of the Sprint Global Markets business, which initially led to a decline in revenue and margins [24][25] - The management emphasizes the need for credibility and transparency in reporting metrics to investors, especially during the early stages of wavelength deployment [22][23] - The company has a history of overcoming financial headwinds and aims to improve EBITDA sequentially through cost-cutting initiatives and ramping high-margin sales [53][54]

Have you assessed how the international operations of Cogent Communications (CCOI) performed in the quarter ended June 2025? For this internet service provider, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects. In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajec ...