Call Start: 08:30 January 1, 0000 10:03 AM ET Cogent Communications Holdings, Inc. (NASDAQ:CCOI) Q4 2019 Earnings Conference Call February 27, 2020, 8:30 am ET Company Participants Dave Schaeffer - Chairman & CEO Tad Weed - CFO Conference Call Participants Sami Badri - Credit Suisse Philip Cusick - JPMorgan Colby Synesael - Cowen Walter Piecyk - LightShed Frank Louthan - Raymond James Nick Del Deo - MoffettNathanson James Breen - William Blair Michael Rollins - Citi Tim Horan - Oppenheimer Bora Lee - RBC Op ...

Financial Data and Key Metrics Changes - The EBITDA margin increased by 200 basis points to 36.9% from the second quarter of 2019, marking the highest margin in the company's 20-year history [4] - The adjusted EBITDA margin increased by 190 basis points to 37.0% [4] - SG&A expenses declined sequentially by $2 million or 6.1% from the second quarter of 2019 [4] - Gross margin for the quarter increased year-over-year by 170 basis points to 59.9% [4] - Year-over-year revenue growth was 6%, with a sequential revenue growth of 1.7% on a constant currency basis [4][22] - Quarterly cash flow from operations increased 5.3% year-over-year, but decreased sequentially by 17.7% due to increased interest payments [25] Business Line Data and Key Metrics Changes - Corporate customer revenue grew sequentially by 2.3% to $94.4 million and year-over-year by 10.4% [13] - NetCentric customer revenue increased sequentially by 0.1% to $42.5 million but declined year-over-year by 4.7% [13] - On-net revenue was $99.4 million, a sequential increase of 2% and a year-over-year increase of 6% [14] - Off-net revenue was $37.4 million, with a sequential increase of 0.6% and a year-over-year increase of 3.4% [14] - The average price per megabit for the installed base declined sequentially by 4% to $0.61 and by 22.2% year-over-year [16] Market Data and Key Metrics Changes - Approximately 22% of total revenues were reported in U.S. dollars and earned outside the United States, with 16% based in Europe [21] - The foreign exchange impact on reported quarterly revenue was negative $1.1 million year-over-year [22] - The company operates in over 954 million square feet of multi-tenant office space in North America [29] Company Strategy and Development Direction - The company remains focused on Internet access, IP connectivity, and data center co-location services, with a long-term revenue growth target of approximately 10% [31] - The company plans to continue returning capital to shareholders through dividends and stock buybacks, with a recent increase in the quarterly dividend to $0.64 per share [32] - The company is committed to maintaining its position as a low-cost provider in the industry [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the underlying strength of the business and the outlook for the remainder of 2019 and beyond [3] - The company anticipates continued traffic growth driven by over-the-top streaming services and expects the NetCentric business to return to historical growth rates [35] - Management noted that the competitive environment for NetCentric services is improving, while the corporate side remains mixed depending on specific competitors [47] Other Important Information - The company returned $28.6 million to shareholders through dividends during the quarter [4] - The total gross debt at par, including capital lease obligations, was $962.5 million at quarter end [26] - The company has a total of $34.9 million available for its buyback program, which is authorized to continue through December 2020 [32] Q&A Session All Questions and Answers Question: Visibility in NetCentric business and USF rates impact - Management indicated that traffic is expected to grow driven by over-the-top streaming services, with a mix shift in the NetCentric business being transitory [35] - The increase in USF rates primarily affects corporate products, with the charge not applying to Internet services [36] Question: Split between corporate and NetCentric revenues - Approximately 40% of corporate revenues are affected by the slowdown in off-net growth, with over 90% of layer two services subject to USF being to corporate customers [40] Question: Sales productivity and pricing environment - Management noted that lower productivity is largely due to increased hiring and a less mature sales force, with pricing declines in line with historical averages [41][47] Question: Impact of loop costs on margins - Management explained that while gross revenue may decrease with lower loop costs, margins remain stable as they capture benefits from negotiated discounts [50] Question: Strategic opportunities and market positioning - The company sees itself as strategically positioned in the evolving cloud and Internet landscape, focusing on Internet access and VPN services [53] Question: Traffic growth and international markets - Management reported that approximately 47% of NetCentric traffic is outside the U.S., with ongoing expansion into international markets [55]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Cogent Communications' unaudited condensed consolidated financial statements for Q3 2019, covering financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Metric | Sep 30, 2019 (Unaudited) | Dec 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $396,271 | $276,093 | | Total current assets | $474,373 | $350,337 | | Total assets | $932,344 | $739,850 | | Total current liabilities | $86,225 | $75,307 | | Total liabilities | $1,122,845 | $888,852 | | Total stockholders' deficit | $(190,501) | $(149,002) | - The company adopted new lease accounting standards (ASU 2016-02), resulting in the recognition of **$72.6 million** in Right-of-use leased assets and corresponding operating lease liabilities of **$95.6 million** ($10.3 million current, $85.3 million non-current) on the balance sheet as of September 30, 2019, which were not present at year-end 2018[9](index=9&type=chunk)[45](index=45&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q3 2019 vs Q3 2018 Performance (in thousands, except per share data) | Metric | Q3 2019 (Unaudited) | Q3 2018 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | Service revenue | $136,942 | $130,139 | +5.2% | | Operating income | $25,799 | $22,255 | +15.9% | | Net income | $13,701 | $8,231 | +66.5% | | Diluted EPS | $0.30 | $0.18 | +66.7% | Nine Months 2019 vs 2018 Performance (in thousands, except per share data) | Metric | Nine Months 2019 (Unaudited) | Nine Months 2018 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | Service revenue | $405,866 | $388,144 | +4.6% | | Operating income | $72,221 | $64,250 | +12.4% | | Net income | $30,054 | $21,567 | +39.4% | | Diluted EPS | $0.65 | $0.47 | +38.3% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2019 (Unaudited) | 2018 (Unaudited) | | :--- | :--- | :--- | | Net cash provided by operating activities | $102,712 | $93,195 | | Net cash used in investing activities | $(37,059) | $(39,000) | | Net cash provided by (used in) financing activities | $56,144 | $(15,035) | | Net increase in cash and cash equivalents | $120,178 | $37,547 | - The significant increase in cash from financing activities in 2019 was primarily driven by the net proceeds of **$152.1 million** from the issuance of senior unsecured 2024 Euro notes, partially offset by **$82.9 million** in dividend payments[20](index=20&type=chunk) [Notes to Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) - The company is a facilities-based provider of high-speed Internet access, private network services, and data center colocation, serving customers in North America, Europe, Asia, Australia, and Brazil[24](index=24&type=chunk)[25](index=25&type=chunk) - On June 25, 2019, the company issued **€135.0 million** of 4.375% senior unsecured notes due 2024, receiving net proceeds of approximately **$152.1 million**[59](index=59&type=chunk) - The Board of Directors approved a quarterly dividend of **$0.64 per common share**, expected to be paid on December 9, 2019[77](index=77&type=chunk) Revenue by Geography - Nine Months Ended Sep 30, 2019 (in thousands) | Region | On-net | Off-net | Non-core | Total | | :--- | :--- | :--- | :--- | :--- | | North America | $236,636 | $98,670 | $300 | $335,606 | | Europe | $53,889 | $12,192 | $45 | $66,126 | | Latin America | $244 | $8 | — | $252 | | Asia Pacific | $3,300 | $582 | — | $3,882 | | **Total** | **$294,069** | **$111,452** | **$345** | **$405,866** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2019 financial performance, highlighting revenue growth, pricing pressure, SG&A increase, and liquidity from new notes and dividends [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Q3 2019 vs Q3 2018 Key Metrics | Metric | Q3 2019 | Q3 2018 | % Change | | :--- | :--- | :--- | :--- | | Service Revenue | $136,942 | $130,139 | 5.2% | | On-net Revenue | $99,416 | $93,790 | 6.0% | | Off-net Revenue | $37,418 | $36,202 | 3.4% | | SG&A Expenses | $35,971 | $33,409 | 7.7% | | On-net Customer Connections | 73,870 | 67,370 | 9.6% | | Average Price per Megabit | $0.61 | $0.78 | (22.2)% | - Revenue from corporate customers grew **10.4%** in Q3 2019 YoY, while revenue from net-centric customers decreased by **4.7%**, primarily due to a significant decline in the average price per megabit and foreign exchange impacts[106](index=106&type=chunk) - The increase in SG&A expenses was primarily driven by an expansion of the sales force, with headcount growing from **583 to 667** between September 2018 and September 2019[110](index=110&type=chunk) - Interest income and other, net, increased substantially in Q3 2019 to **$8.3 million** from **$1.9 million** in Q3 2018, mainly due to a **$6.1 million** unrealized foreign exchange gain on the company's new Euro-denominated notes[115](index=115&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Financial Position as of September 30, 2019 (in millions) | Metric | Amount | | :--- | :--- | | Cash and cash equivalents | $396.3 | | Total indebtedness (at par) | $962.5 | - In June 2019, the company raised approximately **$152.1 million** in net proceeds from an offering of **€135.0 million** of 2024 Notes[141](index=141&type=chunk)[152](index=152&type=chunk) - The company paid **$82.9 million** in dividends during the first nine months of 2019 and approved a Q4 dividend of **$0.64 per share**[141](index=141&type=chunk)[148](index=148&type=chunk) - As of September 30, 2019, **$34.9 million** remained available under the company's stock buyback program, which is authorized through December 31, 2020. No shares were repurchased in Q3 2019[147](index=147&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposures as of September 30, 2019, compared to its 2018 Annual Report on Form 10-K - There have been no material changes to the company's exposures to market risk from those disclosed in the annual report on Form 10-K for the year ended December 31, 2018[160](index=160&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal controls over financial reporting during the quarter - Based on an evaluation, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period[162](index=162&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[163](index=163&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is involved in legal proceedings in the ordinary course of business, which are not expected to have a material impact on its operations or financial results - The company is involved in legal proceedings in the ordinary course of business that are not expected to have a material impact on its operations or results[177](index=177&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's Board of Directors has authorized a stock repurchase plan through December 31, 2020, with no shares repurchased during the third quarter of 2019 - The company's stock repurchase program is authorized through December 31, 2020. No shares were purchased during the third quarter of 2019[178](index=178&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) This section discloses recent changes to the Board of Directors, including resignations and new appointments with committee assignments - On November 4, 2019, Messrs. Richard Liebhaber and Timothy Weingarten resigned from the Board of Directors[164](index=164&type=chunk) - Effective November 5, 2019, Sheryl Kennedy and Carolyn Katz were appointed to the Board of Directors[164](index=164&type=chunk) - New committee appointments include Ms. Kennedy to the Audit Committee and Ms. Katz to the Compensation and the Nominating and Corporate Governance Committees[165](index=165&type=chunk)[166](index=166&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include certifications from the Chief Executive Officer and Chief Financial Officer, as well as financial data formatted in iXBRL - The exhibits filed with the report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and iXBRL formatted financial statements (Exhibit 101.1)[175](index=175&type=chunk)

Cogent Communications Holdings, Inc. (NASDAQ:CCOI) Q2 2019 Results Earnings Conference Call August 8, 2019 8:30 AM ET Company Participants Dave Schaeffer - Chairman and Chief Executive Officer Tad Weed - Chief Financial Officer Conference Call Participants Reed Kern - J.P. Morgan Colby Synesael - Cowen and Company Nick Del Deo - MoffettNathanson Frank Louthan - Raymond James Michael Rollins - Citi Brandon Nispel - KeyBanc Capital James Breen - William Blair Operator Good morning, and welcome to the C ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-51829 COGENT COMMUNICATIONS HOLDINGS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 46-5706863 (State of Incorporation) (I.R.S. Employer ...

Financial Data and Key Metrics Changes - The EBITDA margin for Q1 2019 increased by 120 basis points to 35.5% compared to Q1 2018 [4] - Gross margin for the quarter reached an all-time high of 59.8%, increasing by 230 basis points year-over-year and by 180 basis points sequentially [5] - Quarterly cash flow grew by 16.2% from Q1 2018, driven by excellent operating leverage [15] - Basic and diluted income per share was $0.20, a 25% increase from the previous quarter and a 33% increase year-over-year [28] Business Line Data and Key Metrics Changes - Corporate business, representing 67% of total revenues, grew year-over-year by 11.2%, outperforming the long-term growth target of 10% [14] - NetCentric business declined by 8% year-over-year, with a constant currency decline of 3% [14] - Revenue from Corporate customers grew sequentially by 2.6% to $90.2 million [18] - Quarterly revenue from NetCentric customers declined by 7.6% year-over-year to $44 million [19] Market Data and Key Metrics Changes - On-net revenue was $97.2 million, with a year-over-year increase of 5.2% [20] - Off-net revenue was $36.8 million, reflecting a year-over-year increase of 1.9% [21] - The average price per megabit for the installed base decreased by 24.4% year-over-year to $0.68 [22] - On-net ARPU decreased by 0.8% to $463, while off-net ARPU decreased by 1.2% to $1,111 [23] Company Strategy and Development Direction - The company remains focused on Internet, IP connectivity, and data center colocation services, which are essential utilities for customers [42] - Long-term growth target is set at 10% with an EBITDA margin expansion of approximately 200 basis points over the next several years [43] - The company plans to utilize its balance sheet opportunistically for stock buybacks and dividends, with $34.9 million remaining under the current buyback authorization [44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the business and its cash flow generating capabilities [9] - The company anticipates a return to historical NetCentric revenue growth rates of about 9.5% year-over-year [47] - Management noted that the decline in NetCentric revenue is expected to improve as traffic patterns normalize [66] Other Important Information - The company returned $26.6 million to shareholders through dividends in the quarter [6] - Cash held at Cogent Holdings was $106 million at the end of the quarter, available for dividends or buybacks [6] - The total gross debt at par was $811.3 million, with a net debt of $552.2 million [36] Q&A Session Summary Question: Can you expand on the pressure on the NetCentric side? - Management noted a slowdown in traffic due to net neutrality violations, but expects a return to historical growth rates as traffic patterns normalize [46] Question: Is there an intention to trend lower productivity per rep? - Management clarified that the decline in productivity was due to an increase in new hires, which typically take time to reach full productivity [50] Question: What is the expectation for Corporate growth going forward? - Management expects consistent Corporate growth in the range of 11% to 13% [64] Question: Can you discuss the improvement in gross margin? - Management attributed the improvement to operating leverage and a higher proportion of on-net sales, which carry a 100% gross margin contribution [73] Question: What is the outlook for shareholder returns? - Management is committed to increasing shareholder returns and will consider using excess cash for larger dividends or opportunistic buybacks based on market conditions [78]

Table of Contents Title of Each Class Trading Symbol Name of Each Exchange on which Registered Common Stock, par value $0.001 per share CCOI NASDAQ Global Select Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-51829 C ...

Financial Data and Key Metrics Changes - The EBITDA margin for the year increased by 230 basis points to 35.5%, the highest annual EBITDA margin in the company's history [3][21] - EBITDA for the full year increased by $23.2 million, a 14.4% increase from the previous year [3][21] - Gross margin for the full year increased by 100 basis points to 58.0% [3] - Cash held at Cogent Holdings was $131 million at quarter end, unrestricted and available for dividends and buybacks [5][28] - The company returned $26.5 million to shareholders through dividends and repurchased 148,000 shares for $6.6 million [4][34] Business Line Data and Key Metrics Changes - Revenue from corporate customers grew sequentially by 2.8% to $87.9 million and year-over-year by 11.7% [14] - Revenue from NetCentric customers declined sequentially by 1% to $44.1 million and year-over-year by 5.1% [15] - On-net revenue was $95.4 million for the quarter, a sequential increase of 1.7% and a year-over-year increase of 6.7% [16] - Off-net revenue was $36.6 million for the quarter, a sequential increase of 1% and a year-over-year increase of 2.5% [16] Market Data and Key Metrics Changes - The company achieved quarterly revenue growth of 1.8% sequentially and 6.2% year-over-year on a constant currency basis [3][26] - Approximately 22% of total revenues were earned outside the United States, with 17% based in Europe [25] - The average price per megabit for the installed base declined by 7.1% sequentially and 26.4% year-over-year [17] Company Strategy and Development Direction - The company is focused on internet, IP connectivity, and data center co-location, with a long-term revenue growth target of approximately 10% due to the slowdown in the NetCentric business [33] - The company plans to continue enhancing its sales force and has opened new offices to support growth [40] - The long-term EBITDA margin expansion target is approximately 200 basis points per year [10][49] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the underlying strength of the business and cash flow generation capabilities [3][34] - The NetCentric business is expected to improve and return to its long-term average growth rate of about 9.5% year-over-year [37] - The company anticipates continued cash flow growth at similar rates in the future [11][49] Other Important Information - The company added 170 buildings to its network in 2018, with a total of 944 million square feet of multi-tenant office space in North America [31] - The sales force turnover was approximately 5%, better than the long-term average [32] - The company has a total gross debt of $809.2 million at year-end, with a net debt of $533.2 million [28] Q&A Session Summary Question: Changes in long-term growth potential for the NetCentric business - Management believes the NetCentric business will improve and return to its long-term average growth rate of about 9.5% year-over-year, despite recent underperformance [37] Question: Sales force churn and strategy - The company has implemented a rigorous training program that has reduced churn and expects to grow the sales force by 7% to 10% annually [40] Question: Update on the NetCentric sales force - The company has 141 of its 487 sales reps focused on the NetCentric market and expects to grow both Corporate and NetCentric sales forces at similar rates [42] Question: Drivers of margin expansion - Approximately 100 basis points of margin expansion came from COGS efficiency, with better utilization of the sales infrastructure contributing to SG&A efficiency [48] Question: Update on SD-WAN offering - The company has seen customer interest in SD-WAN, with many MPLS customers frustrated with high costs and lack of flexibility, indicating a potential market shift [50]

Use these links to rapidly review the document TABLE OF CONTENTS ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2018 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission file number ...