PART I FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements of Cogent Communications Holdings, Inc. and its subsidiaries, including the balance sheets, statements of comprehensive loss for three and six months, and statements of cash flows, along with detailed notes explaining accounting policies, business operations, acquisitions, debt, and other financial aspects [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show an increase in total assets and liabilities from December 31, **2024**, to June 30, **2025**, while total stockholders' equity significantly decreased | Metric | June 30, **2025** (Unaudited) (in thousands) | December 31, **2024** (in thousands) | | :-------------------------------- | :--------------------------------------- | :----------------------------------- | | Total Assets | **$3,270,531** | **$3,173,102** | | Total Liabilities | **$3,223,863** | **$2,950,254** | | Total Stockholders' Equity | **$46,668** | **$222,848** | - Cash and cash equivalents increased from **$198,486 thousand** to **$213,651 thousand**, and restricted cash significantly rose from **$29,430 thousand** to **$93,074 thousand**[11](index=11&type=chunk) - Senior secured **2026** notes were fully redeemed, decreasing from **$499,126 thousand** to **$0**, while new senior secured **2032** notes of **$597,857 thousand** were issued[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss (Three Months Ended June 30, 2025 and June 30, 2024)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(Three%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024)) For the three months ended June 30, **2025**, the company reported a higher net loss and comprehensive loss compared to the same period in **2024**, driven by decreased service revenue, increased interest expense, and a loss on debt extinguishment, despite reduced operating expenses | Metric | Three Months Ended June 30, **2025** (in thousands) | Three Months Ended June 30, **2024** (in thousands) | Change (%) | | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Service revenue | **$246,247** | **$260,443** | **(5.5%)** | | Total operating expenses | **$277,706** | **$310,918** | **(10.8%)** | | Operating loss | **$(31,459)** | **$(47,143)** | **(33.2%)** | | Interest expense, including change in valuation interest rate swap agreement | **$(39,777)** | **$(29,541)** | **34.7%** | | Loss on debt extinguishment and redemption – **2026** notes | **$(5,606)** | — | NM | | Net loss | **$(57,807)** | **$(32,338)** | **78.8%** | | Basic net loss per common share | **$(1.21)** | **$(0.68)** | **77.9%** | | Dividends declared per common share | **$1.010** | **$0.975** | **3.6%** | - Acquisition costs related to Sprint were **$0** in **2025**, down from **$12,370 thousand** in **2024**, contributing to the decrease in total operating expenses[12](index=12&type=chunk) - A gain on bargain purchase of Sprint of **$27,673 thousand** was recorded in **2024**, with no such gain in **2025**[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss (Six Months Ended June 30, 2025 and June 30, 2024)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(Six%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024)) For the six months ended June 30, **2025**, the company experienced a larger net loss and comprehensive loss compared to the prior year, primarily due to decreased service revenue, increased interest expense, and a loss on debt extinguishment, despite lower operating expenses | Metric | Six Months Ended June 30, **2025** (in thousands) | Six Months Ended June 30, **2024** (in thousands) | Change (%) | | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Service revenue | **$493,298** | **$526,613** | **(6.3%)** | | Total operating expenses | **$565,045** | **$636,481** | **(11.3%)** | | Operating loss | **$(71,747)** | **$(106,536)** | **(32.6%)** | | Interest expense, including change in valuation interest rate swap agreement | **$(73,971)** | **$(58,703)** | **26.0%** | | Loss on debt extinguishment and redemption – **2026** notes | **$(5,606)** | — | NM | | Net loss | **$(109,849)** | **$(97,645)** | **12.5%** | | Basic net loss per common share | **$(2.30)** | **$(2.06)** | **11.7%** | | Dividends declared per common share | **$2.015** | **$1.940** | **3.9%** | - Acquisition costs related to Sprint were **$0** in **2025**, down from **$21,407 thousand** in **2024**, contributing to the decrease in total operating expenses[13](index=13&type=chunk) - A gain on bargain purchase of Sprint of **$22,202 thousand** was recorded in **2024**, with no such gain in **2025**[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, **2025**, the company reported a net increase in cash, cash equivalents, and restricted cash of **$78.8 million**, a significant decrease from the **$312.5 million** increase in the prior year, primarily due to reduced cash provided by investing and financing activities | Metric | Six Months Ended June 30, **2025** (in thousands) | Six Months Ended June 30, **2024** (in thousands) | | :------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Net cash used in operating activities | **$(7,687)** | **$(2,951)** | | Net cash (used in) provided by investing activities | **$(64,288)** | **$76,840** | | Net cash provided by financing activities | **$136,739** | **$232,046** | | Effect of exchange rates changes on cash | **$14,045** | **$6,525** | | Net increase in cash, cash equivalents and restricted cash | **$78,809** | **$312,460** | | Cash, cash equivalents and restricted cash, end of period | **$306,725** | **$426,241** | - Cash receipts from the IP Transit Services Agreement with T-Mobile decreased significantly from **$154.2 million** in **2024** to **$50.0 million** in **2025**[15](index=15&type=chunk) - Purchases of property and equipment increased from **$89.7 million** in **2024** to **$114.3 million** in **2025**[15](index=15&type=chunk) [Notes to Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on the company's business, significant accounting policies, the Sprint acquisition, debt structure, lease obligations, income taxes, and capital allocation strategies, offering context to the condensed financial statements [1. Description of the business](index=8&type=section&id=1.%20Description%20of%20the%20business) This note details **Cogent Communications'** business model as a facilities-based provider of high-speed Internet access and network services, its organizational structure, and the significant acquisition of **Sprint Communications'** U.S. long-haul fiber network, including the financial and operational implications of the transaction [Reorganization and merger](index=8&type=section&id=Reorganization%20and%20merger) On **May 15, 2014**, **Cogent Communications Group, Inc.** adopted a new holding company structure, making **Cogent Communications Holdings, Inc.** the parent company. The majority of assets and operations are now conducted by **Cogent Fiber LLC** and **Cogent Communications, LLC** - **Cogent Communications Holdings, Inc.** became the successor issuer and holding company for **Cogent Communications Group, Inc.** (now **Cogent Communications Group, LLC**) on **May 15, 2014**[16](index=16&type=chunk) - The vast majority of the Company's assets and operations are conducted by **Cogent Fiber LLC** (formerly **Sprint Communications Company LP**) and **Cogent Communications, LLC**[16](index=16&type=chunk) [Description of business](index=8&type=section&id=Description%20of%20business) **Cogent Communications** is a facilities-based provider of high-speed Internet access, private network, optical wavelength, and data center colocation services, primarily to businesses and service providers globally. It offers both on-net services through its own facilities and off-net services using other carriers' infrastructure, with a focus on packet-routed data - The Company is a facilities-based provider of low-cost, high-speed Internet access, private network services, optical wavelength and optical transport services, and data center colocation space and power, optimized for packet routed data[17](index=17&type=chunk) - Services are delivered to businesses, communications service providers, and bandwidth-intensive organizations in **57 countries** across North America, Europe, Asia, South America, Oceania, and Africa[17](index=17&type=chunk) - On-net services are provided through the Company's own network, offering speeds from **100 Mbps to 400 Gbps**, while off-net services utilize other carriers for the 'last mile' connection[18](index=18&type=chunk)[20](index=20&type=chunk) [Acquisition of Sprint Communications](index=10&type=section&id=Acquisition%20of%20Sprint%20Communications) **Cogent Infrastructure, Inc.** acquired **Sprint Communications'** U.S. long-haul fiber network (**Cogent Fiber Business**) on **May 1, 2023**, for **$1**, with significant adjustments for working capital and a **$700 million** IP Transit Services Agreement with **T-Mobile**. The transaction resulted in a **$1.4 billion** bargain purchase gain, reflecting the fair value of acquired assets exceeding liabilities and consideration [Purchase Price](index=10&type=section&id=Purchase%20Price) The acquisition of **Sprint Communications'** fiber business closed on **May 1, 2023**, with a nominal purchase price of **$1**. However, a working capital adjustment resulted in a net payment of **$61.1 million** to the seller on the closing date, with an additional **$5.0 million** paid in **April 2024** - The Transaction closed on **May 1, 2023**, with a purchase price of **$1** payable to the Seller for the Purchased Interests[25](index=25&type=chunk) - A Working Capital Adjustment, primarily for acquired cash and cash equivalents, resulted in a **$61.1 million** payment to the Seller on the Closing Date, with an additional **$5.0 million** accrued in Q3 **2023** and paid in **April 2024**[25](index=25&type=chunk) [Short-term lease payment](index=10&type=section&id=Short-term%20lease%20payment) The Purchase Agreement included a **$28.1 million** (**$19.8 million** net of discount) payment from the Seller to the Buyer for acquired short-term operating lease obligations, to be paid in four equal installments from months **55** to **58** after the Closing Date. The payment was recorded at its present value, resulting in an **$8.4 million** discount, which is amortized as interest income - A **$28.1 million** (**$19.8 million** net of discount) Short-term Lease Payment is due from the Seller to the Buyer for acquired short-term operating lease obligations[26](index=26&type=chunk) - The payment will be made in four equal installments from months **55** to **58** after the Closing Date and was recorded at its present value, resulting in an **$8.4 million** discount[26](index=26&type=chunk) - Amortization of the discount resulted in interest income of **$0.4 million** for the three months ended June 30, **2025**, and **$0.9 million** for the six months ended June 30, **2025**[26](index=26&type=chunk) [Severance reimbursements](index=10&type=section&id=Severance%20reimbursements) The Purchase Agreement stipulated that the Seller would reimburse the Buyer for qualifying severance expenses. Total reimbursements amounted to **$28.6 million**, with payments ending in the **second quarter of 2024** - The Seller reimbursed the Buyer for qualifying severance expenses, totaling **$28.6 million**[27](index=27&type=chunk) - Severance reimbursements of **$8.0 million** and **$12.3 million** were recorded for the three and six months ended June 30, **2024**, respectively, with all payments concluding in Q2 **2024**[27](index=27&type=chunk) [IP Transit Services Agreement](index=12&type=section&id=IP%20Transit%20Services%20Agreement) Under the IP Transit Services Agreement, **T-Mobile USA, Inc.** will pay the Company **$700.0 million** over **54 months**. This payment is considered consideration for the acquisition of a distressed business, not revenue, and was recorded at a discounted present value of **$620.4 million**, with the discount amortized as interest income - **T-Mobile USA, Inc.** will pay the Company an aggregate of **$700.0 million** under the IP Transit Services Agreement, with **$350.0 million** in the first year and **$350.0 million** over the subsequent **42 months**[29](index=29&type=chunk) - The **$700.0 million** payment is considered consideration for the acquisition of a distressed business, not revenue, and was recorded at a discounted present value of **$620.4 million** (net of a **$79.6 million** discount)[30](index=30&type=chunk)[40](index=40&type=chunk) - Amortization of the discount resulted in interest income of **$4.3 million** and **$9.0 million** for the three and six months ended June 30, **2025**, respectively[30](index=30&type=chunk) [Transition Services Agreement](index=12&type=section&id=Transition%20Services%20Agreement) The Transition Services Agreement (**TSA**) facilitates an orderly separation of the **Cogent Fiber Business** from **Sprint Communications**, with both parties providing interim services for up to **two years**. Amounts billed to the Company under the **TSA** decreased significantly from **$23.3 million** in H1 **2024** to **$0.4 million** in H1 **2025**, reflecting the transition progress - The **TSA** ensures an orderly transition of the **Cogent Fiber Business**, with services generally provided for up to **two years**, extendable by one year[31](index=31&type=chunk)[32](index=32&type=chunk) - Amounts billed to the Company by the Seller under the **TSA** decreased from **$6.7 million** (Q2 **2024**) to **$10 thousand** (Q2 **2025**) and from **$23.3 million** (H1 **2024**) to **$0.4 million** (H1 **2025**)[34](index=34&type=chunk) - As of June 30, **2025**, the Company owed **$9 thousand** to the Seller and the Seller owed **$0.1 million** to the Company under the **TSA**[37](index=37&type=chunk) [Other Services Provided to the Seller](index=14&type=section&id=Other%20Services%20Provided%20to%20the%20Seller) Under a Commercial Agreement, the Company provides colocation and connectivity services to **T-Mobile USA, Inc.** Revenue from these services decreased from **$5.9 million** (Q2 **2024**) to **$1.1 million** (Q2 **2025**) and from **$9.1 million** (H1 **2024**) to **$1.8 million** (H1 **2025**) - The Company provides colocation and connectivity services to TMUSA under a Commercial Agreement[38](index=38&type=chunk) | Metric | Three Months Ended June 30, **2025** (in thousands) | Three Months Ended June 30, **2024** (in thousands) | Six Months Ended June 30, **2025** (in thousands) | Six Months Ended June 30, **2024** (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue from Commercial Agreement | **$1,100** | **$5,900** | **$1,800** | **$9,100** | - As of June 30, **2025**, TMUSA owed **$0.9 million** to the Company under the Commercial Agreement, down from **$2.6 million** at **December 31, 2024**[38](index=38&type=chunk) [Acquisition-Related Costs](index=14&type=section&id=Acquisition-Related%20Costs) The Company incurred **$13.6 million** in professional fees and other acquisition-related costs (excluding severance) since the Sprint acquisition date. No such costs were incurred in the three or six months ended June 30, **2025**, compared to **$12.4 million** and **$21.4 million** in the corresponding **2024** periods - Total acquisition-related costs (excluding severance) since the acquisition date were **$13.6 million**[39](index=39&type=chunk) | Period | Acquisition-Related Costs (in thousands) | | :-------------------------------- | :------------------------------------- | | Three months ended June 30, **2025** | **$0** | | Three months ended June 30, **2024** | **$12,400** | | Six months ended June 30, **2025** | **$0** | | Six months ended June 30, **2024** | **$21,400** | [Consideration](index=14&type=section&id=Consideration) The acquisition-date fair value of consideration received from the Sprint Transaction totaled **$602.6 million**, primarily comprising amounts due from the Seller under the IP Transit Services Agreement (**$620.4 million** net of discount) and the Purchase Agreement (**$19.7 million** net of discount), offset by working capital payments made to the Seller (**$37.5 million** net of severance reimbursements) | (In thousands) | **May 1, 2023** | | :---------------------------------------------------------------- | :---------- | | Working capital payments made to the Seller, net of severance reimbursements | **$37,532** | | Purchase Agreement payment to be received from the Seller, net of discount | **$19,723** | | Amounts due from the Seller – IP Transit Services Agreement, net of discount | **$620,390** | | Total net consideration to be received from the Seller | **$602,581** | - The IP Transit Services Agreement payments totaling **$700.0 million** were recorded at their present value, resulting in a discount of **$79.6 million**[41](index=41&type=chunk) - Cash consideration for the acquisition was **$1**[41](index=41&type=chunk) [Fair Value of Assets Acquired and Liabilities Assumed and Gain on Bargain Purchase](index=16&type=section&id=Fair%20Value%20of%20Assets%20Acquired%20and%20Liabilities%20Assumed%20and%20Gain%20on%20Bargain%20Purchase) The Company recorded a **$1.4 billion** gain on bargain purchase from the Sprint acquisition, as the fair value of identifiable assets acquired (**$1.86 billion**) significantly exceeded the liabilities assumed (**$1.04 billion**) and the net consideration received (**$602.6 million**). Adjustments were made in Q2 **2024**, increasing the gain by **$27.7 million** - The Transaction resulted in a gain on bargain purchase of **$1.4 billion**, as the fair value of identifiable assets acquired exceeded liabilities assumed and net consideration[42](index=42&type=chunk)[46](index=46&type=chunk) | (In thousands) | **May 1, 2023** | | :-------------------------- | :---------- | | Total assets acquired | **$1,862,017** | | Total liabilities assumed | **$1,035,950** | | Fair value of net assets acquired | **$826,067** | | Total net consideration received | **$602,581** | | Gain on bargain purchase | **$1,428,648** | - Measurement period adjustments in Q2 **2024** increased the gain on bargain purchase by **$27.7 million**, including additional severance reimbursements and adjustments to deferred income tax liabilities[44](index=44&type=chunk) [Acquired Property & Equipment](index=17&type=section&id=Acquired%20Property%20%26%20Equipment) The Company acquired **$965.7 million** in property and equipment, primarily the legacy Sprint network (optical fiber, related equipment, and real estate). These assets were valued using cost and market approaches, reflecting an orderly liquidation value for a distressed business, with optical fiber estimated at **$369.2 million** - The Company acquired **$965.7 million** of property and equipment, primarily the legacy Sprint network, including optical fiber, related equipment, and owned real estate[47](index=47&type=chunk) - Assets were valued using cost and market approaches, based on an orderly liquidation value for a distressed business[47](index=47&type=chunk) - The estimated fair value of the optical fiber on the Closing Date was **$369.2 million**, based on subjective estimations of replacement cost and liquidation value[48](index=48&type=chunk) [Acquired Leases](index=17&type=section&id=Acquired%20Leases) The Company acquired a portfolio of dark fiber, rights-of-way, and facilities leases, accounted for as new at acquisition but retaining the Seller's classification. Adjustments included reclassifying **$24.9 million** from right-of-use to finance lease assets and **$160.9 million** from operating to finance lease liabilities, and recording **$157.2 million** for unfavorable lease terms - The Company acquired a portfolio of dark fiber, rights-of-way, and facilities leases, accounted for as new at the acquisition date but retaining the Seller's classification[49](index=49&type=chunk) - Measurement period adjustments reclassified **$24.9 million** from right-of-use to finance lease assets and **$160.9 million** from operating to finance lease liabilities[49](index=49&type=chunk)[51](index=51&type=chunk) - An adjustment of **$157.2 million** was recorded for unfavorable market terms of the acquired leases, valued using the income approach[52](index=52&type=chunk) [Acquired Intangible Assets](index=19&type=section&id=Acquired%20Intangible%20Assets) Acquired intangible assets include **$458.0 million** in IPv4 addresses and **$16.0 million** in customer relationships. IPv4 addresses are considered indefinite-lived and not amortized, while customer relationships have a nine-year useful life, with annual amortization expense of **$1.8 million** - Intangible assets acquired include **$458.0 million** of Internet Protocol version 4 (**IPv4**) addresses and **$16.0 million** of acquired customer relationships[53](index=53&type=chunk) - **IPv4** addresses are considered to have an indefinite useful life and are not amortized, with no impairment recorded to date[54](index=54&type=chunk) - Acquired customer relationships have an estimated useful life of nine years, with amortization expense of **$0.8 million** for the six months ended June 30, **2025**, and future annual amortization of **$1.8 million**[53](index=53&type=chunk) [Acquired Asset Retirement Obligations](index=19&type=section&id=Acquired%20Asset%20Retirement%20Obligations) The Company assumed **$32.0 million** in asset retirement obligations, primarily for restoration related to acquired leases. No obligation was recorded for optical fiber removal due to an indeterminable settlement date - The Company assumed **$32.0 million** of asset retirement obligations, primarily related to restoration obligations for acquired leases[55](index=55&type=chunk) - No asset retirement obligation was recorded for the removal of acquired optical fiber because a settlement date is indeterminable, preventing a reasonable estimation of fair value[55](index=55&type=chunk) [Reassessment of Bargain Purchase Gain](index=19&type=section&id=Reassessment%20of%20Bargain%20Purchase%20Gain) Due to the material **$1.4 billion** bargain purchase gain, the Company reassessed the recognition and measurement of acquired assets and assumed liabilities, concluding that all were appropriately recognized and valued - The Company recorded a material bargain purchase gain of **$1.4 billion** because the fair value of identifiable assets acquired exceeded the fair value of consideration transferred[56](index=56&type=chunk) - A reassessment confirmed that all acquired assets and assumed liabilities were recognized and that valuation procedures and measures were appropriate[56](index=56&type=chunk) - **Cogent Infrastructure, Inc.** acquired the U.S. long-haul fiber network of **Sprint Communications** (now **Cogent Fiber LLC**) on **May 1, 2023**, through a Membership Interest Purchase Agreement[23](index=23&type=chunk)[25](index=25&type=chunk) - The purchase price was **$1**, with a net working capital payment of **$61.1 million** to the Seller on the Closing Date, and an additional **$5.0 million** paid in **April 2024**[25](index=25&type=chunk) - The transaction was accounted for as a business combination, resulting in a gain on bargain purchase of **$1.4 billion**, as the fair value of identifiable assets acquired exceeded liabilities assumed and net consideration[42](index=42&type=chunk)[46](index=46&type=chunk)[56](index=56&type=chunk) [Basis of presentation](index=19&type=section&id=Basis%20of%20presentation) The unaudited condensed consolidated financial statements are prepared in accordance with **SEC** rules and **GAAP**, reflecting all normal recurring adjustments. Certain information is condensed or omitted, and prior year amounts have been reclassified for consistency - The unaudited condensed consolidated financial statements are prepared in accordance with **SEC** rules and **GAAP**, reflecting all normal recurring adjustments[57](index=57&type=chunk) - Certain information and footnote disclosures are condensed or omitted, and prior year amounts have been reclassified to conform to current year presentation[57](index=57&type=chunk) - The statements include all wholly owned subsidiaries, with all inter-company accounts and activity eliminated[58](index=58&type=chunk) [Use of estimates](index=21&type=section&id=Use%20of%20estimates) The preparation of financial statements requires management to make estimates and assumptions that impact reported amounts, and actual results may differ from these estimates - Management makes estimates and assumptions affecting reported asset and liability amounts, and disclosures of contingent assets and liabilities[59](index=59&type=chunk) - Actual results may differ from these estimates[59](index=59&type=chunk) [Financial instruments](index=21&type=section&id=Financial%20instruments) The carrying amounts of short-term financial instruments like cash, receivables, and payables approximate fair value. The fair values of long-term debt instruments (**2027** Notes, **2032** Notes, **IPv4** Notes) and the Swap Agreement are based on recent trading prices (Level **2** market approach) - Carrying amounts of short-term instruments (cash, receivables, payables) approximate fair value due to their short-term nature[60](index=60&type=chunk) | Financial Instrument | Fair Value as of June 30, **2025** (in millions) | | :------------------------------------------------ | :------------------------------------------- | | **7.00%** Senior Unsecured Notes due **2027** | **$450.0** | | **7.00%** Senior Unsecured Mirror Notes due **2027** | **$300.0** | | **6.50%** Senior Secured Notes due **2032** | **$591.0** | | **7.924%** Existing **IPv4** Notes | **$211.3** | | **6.646%** **IPv4** New Notes | **$175.4** | | Swap Agreement | **$13.6** | [Restricted cash and interest rate swap agreement](index=21&type=section&id=Restricted%20cash%20and%20interest%20rate%20swap%20agreement) Restricted cash increased significantly to **$93.1 million** at June 30, **2025**, primarily due to **IPv4** Notes requirements and margin for the Swap Agreement. The Swap Agreement, maturing in **February 2026**, had a net liability fair value of **$13.6 million** at June 30, **2025**, and converts a fixed interest rate obligation to a variable one - Restricted cash totaled **$93.074 million** at June 30, **2025**, including **$13.6 million** for the Swap Agreement and **$79.5 million** for **IPv4** Notes[11](index=11&type=chunk)[61](index=61&type=chunk) - The interest rate Swap Agreement, maturing in **February 2026**, had a fair value of a net liability of **$13.6 million** at June 30, **2025**, and effectively converts a fixed **3.50%** interest rate to a variable SOFR-based rate[61](index=61&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - The Company made a **$13.8 million** deposit with the counterparty to the Swap Agreement, with additional deposits required if the net liability exceeds this amount[120](index=120&type=chunk) [Gross receipts taxes, universal service fund and other surcharges](index=21&type=section&id=Gross%20receipts%20taxes%2C%20universal%20service%20fund%20and%20other%20surcharges) The Company records certain excise taxes and surcharges, such as Universal Service Fund fees, on a gross basis, including them in both service revenue and network operations expense. These charges amounted to **$20.0 million** for Q2 **2025** and **$40.2 million** for H1 **2025** - The Company records certain excise taxes and surcharges (e.g., Universal Service Fund fees) on a gross basis, including them in service revenue and network operations expense[62](index=62&type=chunk) | Period | Excise Taxes and Surcharges (in thousands) | | :-------------------------------- | :--------------------------------------- | | Three months ended June 30, **2025** | **$20,000** | | Three months ended June 30, **2024** | **$19,200** | | Six months ended June 30, **2025** | **$40,200** | | Six months ended June 30, **2024** | **$39,700** | [Basic and diluted net loss per common share](index=22&type=section&id=Basic%20and%20diluted%20net%20loss%20per%20common%20share) Basic and diluted net loss per common share were **$(1.21)** for Q2 **2025** and **$(2.30)** for H1 **2025**. Due to net losses, all outstanding stock options and restricted stock were anti-dilutive and thus excluded from diluted **EPS** calculations | Metric | Three Months Ended June 30, **2025** | Six Months Ended June 30, **2025** | | :-------------------------------- | :------------------------------- | :----------------------------- | | Basic net loss per common share | **$(1.21)** | **$(2.30)** | | Diluted net loss per common share | **$(1.21)** | **$(2.30)** | | Weighted average common shares - basic | **47,592,836** | **47,804,421** | | Weighted average common shares - diluted | **47,592,836** | **47,804,421** | - Due to net losses, stock options and restricted stock were anti-dilutive and therefore excluded from the computation of diluted **EPS**[64](index=64&type=chunk)[65](index=65&type=chunk) - Unvested shares of restricted common stock totaled **1,657,168** as of June 30, **2025**[65](index=65&type=chunk) [Stockholders' Equity](index=22&type=section&id=Stockholders%27%20Equity) Total stockholders' equity decreased significantly from **$222.8 million** at **December 31, 2024**, to **$46.7 million** at June 30, **2025**, primarily due to accumulated deficit from net losses and dividends paid, partially offset by foreign currency translation adjustments and equity-based compensation | Metric | December 31, **2024** (in thousands) | June 30, **2025** (in thousands) | | :-------------------------- | :------------------------------- | :--------------------------- | | Total Stockholders' Equity | **$222,848** | **$46,668** | | Accumulated Deficit | **$(376,345)** | **$(584,887)** | | Accumulated Other Comprehensive Loss | **$(30,685)** | **$(1,196)** | - Net loss for the six months ended June 30, **2025**, was **$(109.8 million)**, and dividends paid were **$(98.7 million)**, contributing to the decrease in equity[66](index=66&type=chunk) - Foreign currency translation adjustment positively impacted equity by **$29.5 million** for the six months ended June 30, **2025**[66](index=66&type=chunk) [Revenue recognition](index=24&type=section&id=Revenue%20recognition) The Company recognizes revenue under **ASC 606**, recognizing installation fees over the contract term or estimated average customer life for month-to-month contracts. Termination fees are recognized upon collection - Revenue is recognized under **ASC 606**, entitling the Company to revenue for promised goods or services[68](index=68&type=chunk) - Installation fees for contracts longer than month-to-month are recognized over the contract term; for month-to-month contracts, they are recognized over the estimated average customer life[68](index=68&type=chunk) - Termination fees are recognized as they are collected[68](index=68&type=chunk) [Lessor Accounting](index=24&type=section&id=Lessor%20Accounting) The Company acts as a lessor for owned dark fiber leases (**IRUs**) acquired in the Sprint Transaction, which are accounted for as operating leases. Cash consideration, including upfront installation fees, is recognized as service revenue on a straight-line basis over the agreement term - The Company is a lessor for owned dark fiber leases (**IRUs**) acquired in the Transaction, accounted for as operating leases[70](index=70&type=chunk) - **IRUs** typically have terms of **20-25 years**, and cash consideration (including upfront installation fees) is recognized as service revenue on a straight-line basis over the term[70](index=70&type=chunk) [Leases](index=24&type=section&id=Leases) The Company applies **ASU 2016-02** for leases, electing not to recognize short-term leases and not separating lease and non-lease components. Total lease costs for the six months ended June 30, **2025**, were **$87.5 million**, with significant finance and operating lease liabilities and future minimum payments - The Company has elected not to apply **ASU 2016-02** recognition requirements to short-term leases (one year or less) and not to separate lease and non-lease components[71](index=71&type=chunk) | Lease Cost Type | Six Months Ended June 30, **2025** (in thousands) | Six Months Ended June 30, **2024** (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Finance lease cost (amortization of ROU assets) | **$27,891** | **$23,768** | | Finance lease cost (interest expense) | **$23,615** | **$20,330** | | Operating lease cost | **$36,013** | **$46,967** | | Total lease costs | **$87,519** | **$91,065** | - As of June 30, **2025**, total minimum lease obligations were **$519.6 million** for operating leases and **$1,132.2 million** for finance leases, with weighted-average remaining terms of **11.3** and **17.1 years**, respectively[75](index=75&type=chunk) [Allowance for credit losses](index=26&type=section&id=Allowance%20for%20credit%20losses) The Company estimates credit losses on trade receivables based on historical data, current conditions, and forecasts, primarily monitoring collectability by reviewing delinquency status. The allowance for credit losses was **$8.39 million** at June 30, **2025**, with a net bad debt expense of **$4.7 million** for the six months ended June 30, **2025** - The Company estimates credit losses expected over the life of its trade receivables using historical information, current conditions, and forecasts, with delinquency status as the primary indicator[76](index=76&type=chunk) | Metric | June 30, **2025** (in thousands) | December 31, **2024** (in thousands) | | :-------------------------- | :------------------------------- | :------------------------------- | | Allowance for credit losses | **$8,390** | **$9,762** | | Metric | Six Months Ended June 30, **2025** (in thousands) | Six Months Ended June 30, **2024** (in thousands) | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | | Net bad debt expense | **$4,702** | **$5,514** | | Bad debt recoveries | **$2,633** | **$1,125** | [Accounting Standards Not Yet Adopted](index=26&type=section&id=Accounting%20Standards%20Not%20Yet%20Adopted) The Company will not early adopt **ASU 2023-09** (Income Taxes) and **ASU 2024-03** (Expense Disaggregation Disclosures). It does not expect a material impact from **ASU 2023-09** and is evaluating the impact of **ASU 2024-03** - The Company will not early adopt **ASU 2023-09** (Income Taxes: Improvements to Income Tax Disclosures), effective for annual periods after **December 15, 2024**, and does not expect a material impact[78](index=78&type=chunk) - The Company will not early adopt **ASU 2024-03** (Expense Disaggregation Disclosures), effective for annual periods after **December 15, 2026**, and is evaluating its impact[79](index=79&type=chunk) - **Cogent Communications** is a facilities-based provider of low-cost, high-speed Internet access, private network services, optical wavelength and transport services, and data center colocation, serving businesses and service providers in **57 countries**[17](index=17&type=chunk) - The company acquired **Sprint Communications'** U.S. long-haul fiber network (now **Cogent Fiber LLC**) on **May 1, 2023**, for a purchase price of **$1**, with a net working capital payment of **$61.1 million** to the seller[23](index=23&type=chunk)[25](index=25&type=chunk) - The acquisition included a **$700.0 million** IP Transit Services Agreement with **T-Mobile**, recorded at a discounted present value of **$620.4 million**, which is considered consideration received to complete the acquisition of a distressed business, not revenue[29](index=29&type=chunk)[30](index=30&type=chunk)[40](index=40&type=chunk) [2. Property and equipment](index=26&type=section&id=2.%20Property%20and%20equipment) Depreciation and amortization expense related to property and equipment and finance leases increased to **$150.4 million** for the six months ended June 30, **2025**. The Company also recognized a **$3.3 million** gain on lease termination in June **2024** from prepaying an **IRU** finance lease | Metric | Three Months Ended June 30, **2025** (in thousands) | Three Months Ended June 30, **2024** (in thousands) | Six Months Ended June 30, **2025** (in thousands) | Six Months Ended June 30, **2024** (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Depreciation and amortization expense | **$74,846** | **$74,065** | **$150,439** | **$144,907** | | Capitalized compensation cost | **$11,201** | **$11,232** | **$22,445** | **$22,929** | - In June **2024**, the Company prepaid an **IRU** finance lease for **$114.6 million**, resulting in a **$3.3 million** gain on lease termination[81](index=81&type=chunk) [3. Long-term debt](index=28&type=section&id=3.%20Long-term%20debt) As of June 30, **2025**, the Company had **$2.4 billion** in long-term debt, including newly issued **$600.0 million** **2032** Notes (used to redeem **2026** Notes), **$370.4 million** in **IPv4** Notes, and **$750.0 million** in **2027** Notes. The debt instruments have various maturities, interest rates, and covenants, with the Company also managing an interest rate swap agreement [Issuance of $600.0 million principal amount of 2032 Notes and redemption of the Existing Secured 2026 Notes](index=28&type=section&id=Issuance%20of%20%24600.0%20million%20principal%20amount%20of%202032%20Notes%20and%20redemption%20of%20the%20Existing%20Secured%202026%20Notes) On June 17, **2025**, Cogent issued **$600.0 million** of **6.50%** Senior Secured Notes due **2032**, using **$507.3 million** of the net proceeds to redeem the **$500.0 million** **3.50%** Senior Secured **2026** Notes, resulting in a **$5.6 million** loss on debt extinguishment. The **2032** Notes are senior secured obligations, guaranteed by Group's material domestic subsidiaries, and include various covenants and redemption provisions - On June 17, **2025**, **$600.0 million** aggregate principal amount of **6.50%** Senior Secured Notes due **2032** (**2032** Notes) were issued[82](index=82&type=chunk)[83](index=83&type=chunk) - Net proceeds of **

Financial Data and Key Metrics Changes - The company's revenue for the quarter was $246.2 million, reflecting a sequential decline of $800,000 [12] - EBITDA as adjusted increased sequentially by 7% to $73.5 million, with an adjusted EBITDA margin increasing by 200 basis points to 29.8% [5][12] - The company completed two significant debt transactions, enhancing liquidity, including issuing $600 million of secured notes at a rate of 6.5% [4] Business Line Data and Key Metrics Changes - Wavelength revenues for the quarter were $9.1 million, a 150% increase year over year and a sequential increase of 27% [3] - IPv4 leasing revenues increased sequentially by 6.3% to $15.3 million, representing a 40.1% year-over-year increase [5] - Corporate business represented 44.3% of revenues, a decrease of 8.8% year over year, while the NetCentric business increased by 6.8% year over year [14][15] Market Data and Key Metrics Changes - The company served 3,529 on-net buildings, with on-net revenue of $132.3 million, a year-over-year decrease of 6% but a sequential increase of 2.1% [15] - Off-net revenue was $102.2 million, reflecting a year-over-year decrease of 8.3% and a sequential decrease of 4.8% [16] - Average price per megabit for the installed base decreased sequentially by 11% to $0.17 and decreased by 30% year over year [16] Company Strategy and Development Direction - The company aims to capture 25% of the highly concentrated North American wavelength market and is focused on selling high-margin on-net services [3][9] - The company is nearing the end of grooming unprofitable revenue acquired from Sprint, expecting to return to positive top-line growth in 2025 [9] - The company plans to continue improving sales force productivity and managing underperforming representatives [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to positive revenue growth each quarter, primarily driven by on-net services [44] - The company anticipates long-term average revenue growth between 6% and 8%, with EBITDA margins expected to expand by approximately 200 basis points annually [8] - Management noted that the leverage ratio is expected to decline sequentially, with a target to fall below five times over the next six quarters [56] Other Important Information - The company has a backlog of 4,687 wavelength opportunities and has connected 1,675 third-party carrier-neutral data centers [3][6] - The board authorized an additional $100 million buyback program, with a total of $106.4 million available under the buyback program [7] - The company’s capital expenditures for the quarter were $56.2 million, with expectations for a decline in capital spending in the second half of the year [20] Q&A Session Summary Question: What is the target for installed wavelengths by year-end? - Management confirmed the target of 400 to 500 circuits installed per month by year-end, emphasizing the need for quality and timely service delivery [28][30] Question: Can you provide an update on the return to top-line growth? - Management indicated that the rate of revenue decline has materially decelerated and expects to see positive revenue growth each quarter moving forward [42][44] Question: What are the sources of capital for funding dividends? - Management highlighted over $300 million in cash on the balance sheet and indicated that they do not anticipate needing material incremental borrowings to fund dividends or operations [50][56] Question: Where are most wavelength customers coming from? - Approximately 75% of wavelength customers are existing Cogent Transit customers, with 25% being new to Cogent [100] Question: What is the status of data center sales? - Management noted ongoing negotiations with multiple parties and expressed caution regarding the lack of firm deposits from bidders [78][80]

Financial Data and Key Metrics Changes - The company's revenue for the quarter was $246.2 million, reflecting a sequential decline of $800,000 [12] - EBITDA increased sequentially by 11% to $48.5 million, with an adjusted EBITDA of $73.5 million, up by $4.7 million [5][12] - The adjusted EBITDA margin increased by 200 basis points sequentially to 29.8% [6][12] - SG&A expenses declined sequentially by $5.6 million, representing 25% of revenues [6] - The company completed two significant debt transactions, enhancing liquidity with $600 million of secured notes issued at a rate of 6.5% [5] Business Line Data and Key Metrics Changes - Wavelength revenues for the quarter were $9.1 million, a 150% increase year-over-year and a 27% sequential increase [4] - IPv4 leasing revenues increased sequentially by 6.3% to $15.3 million, representing a 40.1% year-over-year increase [6] - The corporate business represented 44.3% of revenues, a decrease of 8.8% year-over-year [14] - The NetCentric business represented 39.5% of revenues, increasing by 6.8% year-over-year [15] - The enterprise business represented 16.2% of revenues, a decrease of 19.9% year-over-year [15] Market Data and Key Metrics Changes - The company serves 3,529 on-net buildings, with on-net revenue of $132.3 million, a year-over-year decrease of 6% [15] - Off-net revenue was $102.2 million, a year-over-year decrease of 8.3% [16] - Average price per megabit for the installed base decreased sequentially by 11% to $0.17 [16] - Average revenue per user (ARPU) for on-net was $5.00, off-net was $12.67, and wavelength ARPU was $2.16 [17] Company Strategy and Development Direction - The company aims to capture 25% of the North American wavelength market and is focused on selling high-margin on-net services [4][9] - The company anticipates long-term average revenue growth between 6% and 8% and expects EBITDA margins to expand by approximately 200 basis points annually [8] - The company is nearing the end of grooming unprofitable revenue acquired from Sprint, expecting to return to positive top-line growth in 2025 [9] Management's Comments on Operating Environment and Future Outlook - Management noted that the sequential revenue decline improved materially to $800,000 compared to $5.2 million in the previous quarter [9] - The company expects to see positive revenue growth each quarter moving forward, primarily driven by on-net services [45] - Management expressed confidence in achieving a quarterly run rate of $20 million for wavelengths by the fourth quarter [92] Other Important Information - The company has a backlog of 4,687 wavelength opportunities and has connected 1,675 third-party carrier-neutral data centers [7][26] - The board authorized an additional $100 million buyback program, with a total of $106.4 million available under the program [7] - The company reported a bad debt expense of less than 1% of revenues for the quarter [22] Q&A Session Summary Question: What is the target for installed wavelengths by year-end? - Management confirmed the target of 400 to 500 circuits installed per month by year-end, with a current backlog of wavelengths installed but not yet billed [30][33] Question: What is the status of data center sales? - Management reported six total letters of intent for data center sales but expressed caution regarding the lack of meaningful deposits from bidders [36][78] Question: When can the company expect to return to top-line growth? - Management indicated that the rate of revenue decline has materially decelerated and expects to see positive revenue growth each quarter moving forward [43][45] Question: How does the company plan to fund dividend growth? - Management stated that with over $300 million in cash and reduced capital expenditures, there is no anticipated need for material incremental borrowings to fund dividends [51][57] Question: What is the mix of wavelength customers? - Approximately 75% of wavelength customers are existing Cogent Transit customers, with 25% being new to Cogent [99]

Company Performance - Cogent Communications reported a quarterly loss of $1.21 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.93, and compared to a loss of $0.75 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $246.25 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.28%, but down from $260.44 million in the same quarter last year [2] - Over the last four quarters, Cogent has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Movement and Outlook - Cogent shares have lost approximately 43.1% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] - The company's earnings outlook is crucial for determining future stock movements, with current consensus EPS estimates at -$0.79 for the coming quarter and -$3.51 for the current fiscal year [4][7] - The estimate revisions trend for Cogent was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6] Industry Context - The Wireless National industry, to which Cogent belongs, is currently in the top 35% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Cogent's performance [5]

[Q2 2025 Earnings Release Overview](index=1&type=section&id=Q2%202025%20Earnings%20Release%20Overview) Cogent Communications announced Q2 2025 financial results, showing improved EBITDA and continued capital allocation through dividends and share repurchases [Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) Cogent Communications reported Q2 2025 service revenue of $246.2 million, with strong Wavelength and IPv4 growth, and significant sequential and year-over-year increases in EBITDA and Adjusted EBITDA Service Revenue Performance | Metric | Q2 2025 ($ millions) | Q1 2025 ($ millions) | Q2 2024 ($ millions) | Sequential Change (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Service Revenue | $246.2 | $247.0 | $260.4 | -0.3% | -5.5% | | Wavelength Revenue | $9.1 | $7.1 | $3.6 | +27.2% | +149.8% | | IPv4 Revenue | $15.3 | $14.4 | $10.9 | +6.3% | +40.1% | EBITDA & Margin Performance | Metric | Q2 2025 ($ millions) | Q1 2025 ($ millions) | Q2 2024 ($ millions) | Sequential Change (pp) | YoY Change (pp) | | :--- | :--- | :--- | :--- | :--- | :--- | | EBITDA | $48.5 | $43.8 | $27.1 | +10.8% | +78.8% | | EBITDA Margin | 19.7% | 17.7% | 10.4% | +2.0 | +9.3 | | Adjusted EBITDA | $73.5 | $68.8 | $106.2 | +6.9% | -30.8% | | Adjusted EBITDA Margin | 29.8% | 27.8% | 40.8% | +2.0 | -11.0 | [Capital Allocation Updates](index=1&type=section&id=Capital%20Allocation%20Updates) Cogent increased its regular quarterly dividend for the 52nd consecutive quarter and expanded its stock buyback program by $100 million - Quarterly Dividend: Increased by **$0.005 per share** to **$1.015 per share** for Q3 2025 (from $1.010 for Q2 2025), marking the **fifty-second consecutive quarterly dividend increase**[2](index=2&type=chunk) - Stock Buyback Program: Purchased **229,507 shares** for **$11.5 million** in Q2 2025 and increased the program by **$100.0 million**, extending through December 31, 2026[2](index=2&type=chunk) [Detailed Quarterly Financial Performance](index=2&type=section&id=Detailed%20Quarterly%20Financial%20Performance) This section provides an in-depth analysis of Cogent's Q2 2025 service revenue, profitability metrics, and cash flow performance [Service Revenue Analysis](index=2&type=section&id=Service%20Revenue%20Analysis) Cogent's total service revenue for Q2 2025 was $246.2 million, a slight sequential decrease. While on-net revenue increased, off-net and non-core revenues declined. Wavelength and IPv4 leasing revenues continued their strong growth trends - Total Service Revenue: **$246.2 million** for Q2 2025, a decrease of **0.3% sequentially** and **5.5% from Q2 2024**. On a constant currency basis, service revenue decreased by **1.3% sequentially** and **6.0% year-over-year**[3](index=3&type=chunk)[4](index=4&type=chunk) Revenue by Service Type (Q2 2025) | Service Type | Revenue ($ millions) | Sequential Change (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | | On-net revenue | $132.3 | +2.1% | -6.0% | | Off-net revenue | $102.2 | -4.8% | -8.3% | | Wavelength revenue | $9.1 | +27.2% | +149.8% | | Non-core revenue | $2.7 | -10.0% | -41.3% | | IPv4 leasing revenue | $15.3 | +6.3% | +40.1% | - Revenue under the Commercial Agreement (Sprint acquisition) was **$1.1 million** for Q2 2025, an increase from **$0.7 million** in Q1 2025 but a decrease from **$5.9 million** in Q2 2024[3](index=3&type=chunk) [Gross Profit and Operating Cash Flow](index=3&type=section&id=Gross%20Profit%20and%20Operating%20Cash%20Flow) GAAP gross profit remained stable sequentially at $33.5 million, while Non-GAAP gross profit saw a slight decrease. Net cash used in operating activities significantly increased in Q2 2025 compared to Q1 2025 and Q2 2024 - GAAP Gross Profit: **$33.5 million** for Q2 2025, a **0.3% sequential decrease** but a **10.7% increase from Q2 2024**. GAAP gross margin was **13.6%** for Q2 2025, stable sequentially and up from **11.6%** in Q2 2024[10](index=10&type=chunk)[11](index=11&type=chunk) - Non-GAAP Gross Profit: **$109.3 million** for Q2 2025, a **0.8% sequential decrease** but a **4.4% increase from Q2 2024**. Non-GAAP gross margin was **44.4%** for Q2 2025, down slightly from **44.6%** in Q1 2025 but up from **40.2%** in Q2 2024[12](index=12&type=chunk)[13](index=13&type=chunk) Net Cash from Operating Activities | Metric | Q2 2025 ($ millions) | Q1 2025 ($ millions) | Q2 2024 ($ millions) | | :--- | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(44.0) | $36.4 | $(22.2) | - Sprint acquisition costs were **$0** in Q1 2025 and Q2 2025, compared to **$12.4 million** in Q2 2024[14](index=14&type=chunk) [EBITDA and Net Loss](index=4&type=section&id=EBITDA%20and%20Net%20Loss) EBITDA and Adjusted EBITDA both increased sequentially in Q2 2025, with corresponding margin improvements. However, the company reported an increased net loss per share EBITDA & Margin (Q2 2025) | Metric | Q2 2025 ($ millions) | Q1 2025 ($ millions) | Q2 2024 ($ millions) | Sequential Change (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | EBITDA | $48.5 | $43.8 | $27.2 | +10.8% | +78.3% | | EBITDA Margin | 19.7% | 17.7% | 10.4% | +2.0 pp | +9.3 pp | Adjusted EBITDA & Margin (Q2 2025) | Metric | Q2 2025 ($ millions) | Q1 2025 ($ millions) | Q2 2024 ($ millions) | Sequential Change (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $73.5 | $68.8 | $106.2 | +6.9% | -30.8% | | Adjusted EBITDA Margin | 29.8% | 27.8% | 40.8% | +2.0 pp | -11.0 pp | Net Loss Per Share (Q2 2025) | Metric | Q2 2025 ($ per share) | Q1 2025 ($ per share) | Q2 2024 ($ per share) | | :--- | :--- | :--- | :--- | | Basic and Diluted Net Loss per Share | $(1.21) | $(1.09) | $(0.68) | - Cash payments under the IP Transit Services Agreement were **$25.0 million** for Q2 2025, consistent with Q1 2025, but down from **$66.7 million** in Q2 2024[16](index=16&type=chunk) [Operational and Strategic Developments](index=5&type=section&id=Operational%20and%20Strategic%20Developments) This section outlines Cogent's customer and network expansion, optical wave service developments, and ongoing shareholder return initiatives [Customer and Network Growth](index=5&type=section&id=Customer%20and%20Network%20Growth) Total customer connections decreased, primarily driven by off-net and non-core segments, while on-net and wavelength customer connections continued to grow. The number of on-net buildings also increased Customer Connections (as of June 30, 2025) | Metric | June 30, 2025 (number) | March 31, 2025 (number) | June 30, 2024 (number) | QoQ Change (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total customer connections | 118,730 | 120,731 | 128,782 | -1.7% | -7.8% | | On-net customer connections | 87,407 | 86,781 | 87,387 | +0.7% | +0.02% | | Off-net customer connections | 26,239 | 27,508 | 32,758 | -4.6% | -19.9% | | Wavelength customer connections | 1,469 | 1,322 | 754 | +11.1% | +94.8% | | Non-core customer connections | 3,615 | 5,120 | 7,883 | -29.4% | -54.1% | - The number of on-net buildings increased by **29** from Q1 2025 to **3,529** as of June 30, 2025, and increased by **143** from Q2 2024[22](index=22&type=chunk) [Optical Wave Network Expansion](index=5&type=section&id=Optical%20Wave%20Network%20Expansion) Leveraging the Sprint network acquisition, Cogent has expanded its optical wavelength services, now offered in 938 data centers across North America - Cogent expanded its product offerings to include optical wavelength services using predominantly owned fiber acquired from the Sprint network. As of June 30, 2025, these services are offered in **938 data centers** in the United States, Mexico, and Canada[23](index=23&type=chunk) [Dividend and Share Repurchase Program](index=5&type=section&id=Dividend%20and%20Share%20Repurchase%20Program) Cogent's Board approved its 52nd consecutive quarterly dividend increase and significantly boosted its stock buyback program, demonstrating a continued commitment to shareholder returns - Quarterly Dividend: The Board approved a regular quarterly dividend of **$1.015 per share** for Q3 2025, an increase of **$0.005 (0.5%)** from Q2 2025, and an annual increase of **3.0%** from Q3 2024. This marks the **fifty-second consecutive quarterly dividend increase**[24](index=24&type=chunk) - Stock Buyback Program: In Q2 2025, Cogent purchased **229,507 shares** for **$11.5 million** at an average price of **$50.18 per share**. In July 2025, an additional **63,487 shares** were purchased for **$3.1 million**. The Board approved a **$100.0 million increase** to the buyback program, extending through December 31, 2026[27](index=27&type=chunk) [Company Information](index=6&type=section&id=Company%20Information) Cogent Communications is a multinational, Tier 1 facilities-based ISP, providing high-speed Internet access, Ethernet transport, optical wavelength, optical transport, and colocation services globally - Cogent Communications is a multinational, Tier 1 facilities-based ISP specializing in high-speed Internet access, Ethernet transport, optical wavelength, optical transport, and colocation services[29](index=29&type=chunk) - The company's facilities-based, all-optical IP network backbone provides services in **302 markets globally**[29](index=29&type=chunk) [Summary of Financial and Operational Results (Tables)](index=7&type=section&id=Summary%20of%20Financial%20and%20Operational%20Results%20(Tables)) This section presents comprehensive quarterly tables detailing Cogent's revenue, profitability, cash flow, and key operational metrics [Revenue and Profitability Trends](index=7&type=section&id=Revenue%20and%20Profitability%20Trends) This section provides a detailed quarterly breakdown of Cogent's revenue streams, including on-net, off-net, wavelength, and non-core, along with GAAP and Non-GAAP gross profit and margins, highlighting recent performance and trends Service Revenue Breakdown (Q1 2024 - Q2 2025, in thousands) | Metric | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) | Q4 2024 ($ thousands) | Q1 2025 ($ thousands) | Q2 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | On-Net revenue | $138,624 | $140,757 | $136,485 | $128,760 | $129,628 | $132,331 | | Off-Net revenue | $118,178 | $111,451 | $111,291 | $113,190 | $107,274 | $102,177 | | Wavelength revenue | $3,327 | $3,625 | $5,287 | $6,966 | $7,119 | $9,057 | | Non-Core revenue | $6,039 | $4,610 | $4,139 | $3,375 | $3,027 | $2,682 | | **Service revenue – total** | **$266,168** | **$260,443** | **$257,202** | **$252,291** | **$247,048** | **$246,247** | | IPv4 Revenue | $10,151 | $10,938 | $11,236 | $12,560 | $14,413 | $15,320 | Gross Profit & Margin (Q1 2024 - Q2 2025, in thousands) | Metric | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) | Q4 2024 ($ thousands) | Q1 2025 ($ thousands) | Q2 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | GAAP gross profit | $26,344 | $30,240 | $9,835 | $29,836 | $33,571 | $33,465 | | GAAP gross margin | 9.9% | 11.6% | 3.8% | 11.8% | 13.6% | 13.6% | | Non-GAAP gross profit | $97,620 | $104,626 | $96,119 | $97,585 | $110,099 | $109,261 | | Non-GAAP gross margin | 36.7% | 40.2% | 37.4% | 38.7% | 44.6% | 44.4% | [EBITDA and Cash Flow Trends](index=9&type=section&id=EBITDA%20and%20Cash%20Flow%20Trends) This section details the quarterly trends for EBITDA, Adjusted EBITDA, net cash from operating activities, and capital expenditures, providing insight into the company's operational efficiency and investment activities EBITDA & Adjusted EBITDA (Q1 2024 - Q2 2025, in thousands) | Metric | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) | Q4 2024 ($ thousands) | Q1 2025 ($ thousands) | Q2 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | EBITDA | $18,452 | $27,126 | $35,861 | $41,853 | $43,759 | $48,495 | | EBITDA margin | 6.9% | 10.4% | 13.9% | 16.6% | 17.7% | 19.7% | | EBITDA, as adjusted | $114,989 | $106,163 | $60,861 | $66,853 | $68,759 | $73,495 | | Adjusted EBITDA margin | 43.2% | 40.8% | 23.7% | 26.5% | 27.8% | 29.8% | Net Cash from Operating Activities & Capital Expenditures (Q1 2024 - Q2 2025, in thousands) | Metric | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) | Q4 2024 ($ thousands) | Q1 2025 ($ thousands) | Q2 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $19,219 | $(22,171) | $(20,226) | $14,532 | $36,351 | $(44,039) | | Capital expenditures | $40,883 | $48,767 | $59,244 | $46,104 | $58,088 | $56,200 | [Customer and Network Metrics](index=10&type=section&id=Customer%20and%20Network%20Metrics) This section provides a detailed overview of customer connections by type, on-net building counts, and network infrastructure metrics, illustrating the company's operational scale and reach Customer Connections (Q1 2024 - Q2 2025, end of period) | Metric | Q1 2024 (number) | Q2 2024 (number) | Q3 2024 (number) | Q4 2024 (number) | Q1 2025 (number) | Q2 2025 (number) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | On-Net customer connections | 87,574 | 87,387 | 87,655 | 87,500 | 86,781 | 87,407 | | Off-Net customer connections | 34,579 | 32,758 | 32,420 | 28,963 | 27,508 | 26,239 | | Wavelength customer connections | 693 | 754 | 1,041 | 1,118 | 1,322 | 1,469 | | Non-Core customer connections | 10,037 | 7,883 | 5,217 | 5,802 | 5,120 | 3,615 | | **Total customer connections** | **132,883** | **128,782** | **126,333** | **123,383** | **120,731** | **118,730** | On-Net Buildings (Q1 2024 - Q2 2025, end of period) | Metric | Q1 2024 (number) | Q2 2024 (number) | Q3 2024 (number) | Q4 2024 (number) | Q1 2025 (number) | Q2 2025 (number) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Multi-Tenant office buildings | 1,861 | 1,864 | 1,870 | 1,871 | 1,867 | 1,871 | | Carrier neutral data center buildings | 1,376 | 1,393 | 1,410 | 1,423 | 1,453 | 1,471 | | Cogent data centers | 78 | 86 | 95 | 104 | 101 | 101 | | Cogent edge data centers | 6 | 43 | 49 | 55 | 79 | 86 | | **Total on-net buildings** | **3,321** | **3,386** | **3,424** | **3,453** | **3,500** | **3,529** | | Wave enabled data centers | 295 | 516 | 657 | 808 | 883 | 938 | Network Metrics (Q1 2024 - Q2 2025, end of period) | Metric | Q1 2024 (miles/AS's) | Q2 2024 (miles/AS's) | Q3 2024 (miles/AS's) | Q4 2024 (miles/AS's) | Q1 2025 (miles/AS's) | Q2 2025 (miles/AS's) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Intercity route miles – Leased | 76,211 | 75,965 | 77,561 | 79,621 | 79,867 | 73,075 | | Metro route miles – Leased | 25,977 | 27,373 | 28,510 | 29,802 | 30,788 | 31,297 | | Intercity route miles – Owned | 21,883 | 21,883 | 21,883 | 21,883 | 21,883 | 21,883 | | Metro route miles – Owned | 1,704 | 1,704 | 1,704 | 1,704 | 1,704 | 1,704 | | Connected networks – AS's | 8,098 | 8,135 | 8,212 | 8,250 | 8,240 | 8,085 | [Non-GAAP Measures and Supplemental Information](index=12&type=section&id=Non-GAAP%20Measures%20and%20Supplemental%20Information) This section provides detailed explanations, reconciliations, and definitions for Cogent's non-GAAP financial measures and key leverage ratios [Notes to Financial and Operational Results](index=12&type=section&id=Notes%20to%20Financial%20and%20Operational%20Results) This section provides detailed explanations and definitions for various financial and operational metrics presented in the summary tables, including classifications related to the Sprint acquisition, gross profit calculations, and specific expense exclusions - Wavelength Services: Cogent began providing optical wavelength and transport services over its fiber network in connection with the Wireline Business acquisition[40](index=40&type=chunk) - Non-Core Revenue: Consists of legacy services from companies whose assets or businesses were acquired by Cogent, which are supported but not actively sold[41](index=41&type=chunk) - GAAP Gross Profit/Margin: Defined as total service revenue less network operations expense, depreciation and amortization, and equity-based compensation included in network operations expense[43](index=43&type=chunk) - Non-GAAP Gross Profit/Margin: Represents service revenue less network operations expense, excluding equity-based compensation and depreciation/amortization. Management uses this to measure network efficiency[44](index=44&type=chunk) - Sprint Acquisition Costs: **$9.0 million** in Q1 2024 and **$12.4 million** in Q2 2024, with **no costs incurred** in Q3 2024, Q4 2024, Q1 2025, or Q2 2025[14](index=14&type=chunk)[45](index=45&type=chunk) - IP Transit Services Agreement: TMUSA will pay Cogent an aggregate of **$700.0 million**, with **$25.0 million** paid in Q1 2025 and Q2 2025[16](index=16&type=chunk)[53](index=53&type=chunk) - Owned Fiber Useful Life Change: On July 1, 2024, Cogent changed the estimated useful life of its owned fiber from an average of **14 years** to an average of **40 years**[54](index=54&type=chunk) [EBITDA Reconciliations](index=16&type=section&id=EBITDA%20Reconciliations) This section defines EBITDA and Adjusted EBITDA, explaining their relevance as non-GAAP measures for evaluating the company's ability to service debt, fund capital expenditures, and expand its business, along with their reconciliation to net cash provided by operating activities - EBITDA is defined as net cash flows provided by operating activities plus changes in operating assets and liabilities, cash interest expense, and cash income tax expense[56](index=56&type=chunk) - EBITDA, as adjusted, includes Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement[56](index=56&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (Q1 2024 - Q2 2025, in thousands) | Metric | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) | Q4 2024 ($ thousands) | Q1 2025 ($ thousands) | Q2 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $19,219 | $(22,171) | $(20,226) | $14,532 | $36,351 | $(44,039) | | **EBITDA** | **$18,452** | **$27,126** | **$35,861** | **$41,853** | **$43,759** | **$48,495** | | PLUS: Sprint acquisition costs | $9,037 | $12,370 | $0 | $0 | $0 | $0 | | PLUS: Cash payments under IP Transit Services Agreement | $87,500 | $66,667 | $25,000 | $25,000 | $25,000 | $25,000 | | **EBITDA, as adjusted** | **$114,989** | **$106,163** | **$60,861** | **$66,853** | **$68,759** | **$73,495** | [Constant Currency Revenue Reconciliations](index=18&type=section&id=Constant%20Currency%20Revenue%20Reconciliations) This section provides reconciliations of service revenue to constant currency figures, both sequentially and year-over-year, and further adjusts for excise tax impacts, offering a clearer view of underlying revenue growth trends unaffected by foreign exchange fluctuations or tax changes Constant Currency Revenue Growth (Sequential, Q1 2024 - Q2 2025, in thousands) | Metric | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) | Q4 2024 ($ thousands) | Q1 2025 ($ thousands) | Q2 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Service revenue, as reported | $266,168 | $260,443 | $257,202 | $252,291 | $247,048 | $246,247 | | Constant currency revenue percent increase (decrease) | -2.3% | -2.0% | -1.5% | -1.5% | -1.9% | -1.3% | Constant Currency and Excise Tax Impact on Revenue Growth (Sequential, Q1 2024 - Q2 2025, in thousands) | Metric | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) | Q4 2024 ($ thousands) | Q1 2025 ($ thousands) | Q2 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Service revenue, as reported | $266,168 | $260,443 | $257,202 | $252,291 | $247,048 | $246,247 | | Constant currency and excise tax revenue percent increase (decrease) | -2.3% | -1.5% | -1.7% | -2.0% | -1.6% | -1.2% | [Non-GAAP Gross Profit Reconciliations](index=20&type=section&id=Non-GAAP%20Gross%20Profit%20Reconciliations) This section reconciles GAAP gross profit to Non-GAAP gross profit, detailing the adjustments for equity-based compensation and depreciation/amortization, providing a clearer view of the company's network efficiency Non-GAAP Gross Profit Reconciliation (Q1 2024 - Q2 2025, in thousands) | Metric | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) | Q4 2024 ($ thousands) | Q1 2025 ($ thousands) | Q2 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Service revenue total | $266,168 | $260,443 | $257,202 | $252,291 | $247,048 | $246,247 | | GAAP Gross Profit | $26,344 | $30,240 | $9,835 | $29,836 | $33,571 | $33,465 | | Plus - Equity-based compensation – network operations expense | $385 | $350 | $469 | $477 | $490 | $506 | | Plus – Depreciation and amortization expense | $70,891 | $74,036 | $85,815 | $67,272 | $76,038 | $75,290 | | **Non-GAAP Gross Profit** | **$97,620** | **$104,626** | **$96,119** | **$97,585** | **$110,099** | **$109,261** | | GAAP Gross Margin | 9.9% | 11.6% | 3.8% | 11.8% | 13.6% | 13.6% | | Non-GAAP Gross Margin | 36.7% | 40.2% | 37.4% | 38.7% | 44.6% | 44.4% | [Leverage Ratios](index=21&type=section&id=Leverage%20Ratios) This section defines and presents various leverage ratios, including gross, net, and indenture-specific ratios, both unadjusted and adjusted for amounts due from T-Mobile, providing insights into the company's debt levels relative to its earnings and assets Leverage Ratios (as of Q2 2025, in thousands) | Metric | March 31, 2024 ($ thousands) | June 30, 2024 ($ thousands) | Sept 30, 2024 ($ thousands) | Dec 31, 2024 ($ thousands) | March 31, 2025 ($ thousands) | June 30, 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total debt | $1,467,516 | $1,882,429 | $1,938,571 | $1,994,386 | $2,024,537 | $2,335,557 | | Total net debt | $1,304,242 | $1,456,188 | $1,622,479 | $1,766,470 | $1,840,567 | $2,028,832 | | Trailing 12 months EBITDA, as adjusted | $411,001 | $463,102 | $392,525 | $348,392 | $302,636 | $269,968 | | Gross leverage ratio | 3.57 | 4.06 | 4.94 | 5.72 | 6.69 | 8.65 | | Net leverage ratio | 3.17 | 3.14 | 4.13 | 5.07 | 6.08 | 7.52 | | Gross leverage ratio, adjusted for amounts Due from T-Mobile | 2.64 | 3.37 | 4.16 | 4.91 | 5.81 | 7.74 | | Net leverage ratio, adjusted for amounts Due from T-Mobile | 2.24 | 2.45 | 3.36 | 4.25 | 5.21 | 6.61 | Leverage Ratios under Company's Indentures (as of Q2 2025, in thousands) | Metric | March 31, 2024 ($ thousands) | June 30, 2024 ($ thousands) | Sept 30, 2024 ($ thousands) | Dec 31, 2024 ($ thousands) | March 31, 2025 ($ thousands) | June 30, 2025 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total debt | $1,342,896 | $1,676,552 | $1,732,697 | $1,788,507 | $1,818,661 | $1,955,287 | | Consolidated Leverage Ratio | 3.51 | 4.50 | 5.11 | 5.81 | 5.86 | 6.82 | | Secured Leverage Ratio | 2.33 | 2.49 | 2.90 | 3.38 | 2.58 | 4.20 | | Fixed Charge Coverage Ratio | 4.05 | 4.06 | 3.85 | 2.88 | 2.80 | 2.43 | - Consolidated Cash Flow under the Company's **$600.0 million** Secured 2032 Notes includes cash payments under the IP Transit Services Agreement with TMUSA, which totaled **$100.0 million** for the most recently completed four fiscal quarters[75](index=75&type=chunk) [Condensed Consolidated Financial Statements](index=24&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Cogent's condensed consolidated balance sheets, statements of comprehensive loss, and statements of cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=24&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Cogent's total assets increased to $3.27 billion, driven by growth in property and equipment. Total liabilities also increased to $3.22 billion, primarily due to new debt issuances, while stockholders' equity decreased Key Balance Sheet Items (as of June 30, 2025 vs. Dec 31, 2024, in thousands) | Metric | June 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Total current assets | $560,971 | $482,101 | +$78,870 | | Total property and equipment, net | $1,725,382 | $1,664,167 | +$61,215 | | Total assets | $3,270,531 | $3,173,102 | +$97,429 | | Total current liabilities | $243,286 | $253,336 | -$10,050 | | Total liabilities | $3,223,863 | $2,950,254 | +$273,609 | | Total stockholders' equity | $46,668 | $222,848 | -$176,180 | - Debt structure changes include the reduction of Senior Secured 2026 Notes to **$0**, a new issuance of Senior Secured 2032 Notes for **$597.9 million**, and an increase in Secured IPv4 Notes to **$370.5 million**[78](index=78&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=25&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) For Q2 2025, Cogent reported an increased net loss of $57.8 million, primarily due to higher interest expense and a loss on debt extinguishment, despite a decrease in total operating expenses. The six-month period also showed an increased net loss Three Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | June 30, 2025 ($ thousands) | June 30, 2024 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Service revenue | $246,247 | $260,443 | -$14,196 | | Total operating expenses | $277,706 | $310,918 | -$33,212 | | Operating loss | $(31,459) | $(47,143) | +$15,684 | | Interest expense (incl. swap) | $(39,777) | $(29,541) | -$10,236 | | Loss on debt extinguishment | $(5,606) | $0 | -$5,606 | | Gain on bargain purchase – Sprint | $0 | $27,673 | -$27,673 | | Net loss | $(57,807) | $(32,338) | -$25,469 | | Basic/Diluted Net Loss per Share | $(1.21) | $(0.68) | -$0.53 | Six Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | June 30, 2025 ($ thousands) | June 30, 2024 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Service revenue | $493,298 | $526,613 | -$33,315 | | Total operating expenses | $565,045 | $636,481 | -$71,436 | | Operating loss | $(71,747) | $(106,536) | +$34,789 | | Interest expense (incl. swap) | $(73,971) | $(58,703) | -$15,268 | | Net loss | $(109,849) | $(97,645) | -$12,204 | | Basic/Diluted Net Loss per Share | $(2.30) | $(2.06) | -$0.24 | [Condensed Consolidated Statements of Cash Flows](index=27&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, net cash used in operating activities increased significantly. Investing activities shifted to net cash used, primarily due to increased property and equipment purchases. Financing activities provided substantial cash, driven by new debt issuances and debt extinguishment Three Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | June 30, 2025 ($ thousands) | June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(44,039) | $(22,171) | | Net cash (used in) provided by investing activities | $(31,200) | $25,889 | | Net cash provided by financing activities | $193,754 | $255,595 | | Purchases of property and equipment | $(56,200) | $(48,767) | | Dividends paid | $(49,560) | $(93,304) | | Net proceeds from issuance of senior secured 2032 notes | $597,842 | $0 | | Debt extinguishment and redemption – 2026 notes | $(505,000) | $0 | Six Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | June 30, 2025 ($ thousands) | June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,687) | $(2,951) | | Net cash (used in) provided by investing activities | $(64,288) | $76,840 | | Net cash provided by financing activities | $136,739 | $232,046 | | Purchases of property and equipment | $(114,288) | $(89,650) | | Dividends paid | $(98,693) | $(93,782) | [Forward-Looking Statements](index=29&type=section&id=Forward-Looking%20Statements) This section contains a standard disclaimer on forward-looking statements, highlighting potential risks and uncertainties that could affect actual results - Statements in the release are forward-looking, based on current beliefs and expectations, and subject to **significant risks and uncertainties**[85](index=85&type=chunk) - Risk factors include the impact of the Wireline Business acquisition (integration difficulties, transition costs), future economic instability (recession, bank failures), changing foreign exchange rates, legal and operational difficulties in new markets, potential Universal Service Fund contributions, changes in government policy/regulation (net neutrality, data protection), cyber-attacks, increasing competition, ability to attract/retain customers, peering arrangements, reliance on equipment vendors, dependence on third-party fiber, debt payment ability, and litigation outcomes[85](index=85&type=chunk) - Cogent undertakes **no duty to update** any forward-looking statement or any information contained in this press release or other public disclosures[85](index=85&type=chunk)

Financial Performance - Service revenue for Q2 2025 was $246.2 million, a decrease of 0.3% from Q1 2025 and a decrease of 5.5% from Q2 2024 [2] - EBITDA increased by 10.8% to $48.5 million for Q2 2025 from Q1 2025 and increased by 78.8% from $27.1 million for Q2 2024 [1][14] - GAAP gross profit decreased by 0.3% to $33.5 million for Q2 2025, but increased by 10.7% from Q2 2024 [8] - Non-GAAP gross profit decreased by 0.8% to $109.3 million for Q2 2025, while it increased by 4.4% from Q2 2024 [10] Revenue Breakdown - On-net revenue was $132.3 million for Q2 2025, an increase of 2.1% from Q1 2025 but a decrease of 6.0% from Q2 2024 [4] - Off-net revenue was $102.2 million for Q2 2025, a decrease of 4.8% from Q1 2025 and a decrease of 8.3% from Q2 2024 [5] - Wavelength revenue was $9.1 million for Q2 2025, an increase of 27.2% from Q1 2025 and an increase of 149.8% from Q2 2024 [6][15] - Revenue from leasing IPv4 addresses was $15.3 million for Q2 2025, an increase of 6.3% from Q1 2025 and an increase of 40.1% from Q2 2024 [15] Customer Metrics - Total customer connections decreased by 7.8% from June 30, 2024, to 118,730 as of June 30, 2025 [18] - On-net customer connections increased by 0.02% from June 30, 2024, to 87,407 as of June 30, 2025 [18] - Off-net customer connections decreased by 19.9% from June 30, 2024, to 26,239 as of June 30, 2025 [18] - Wavelength customer connections increased by 11.1% sequentially from Q1 2025 [18] Dividend and Stock Buyback - Cogent approved an increase of $0.005 per share to its regular quarterly dividend for a total of $1.015 per share for Q3 2025, marking the fifty-second consecutive quarterly dividend increase [21] - In Q2 2025, Cogent purchased 229,507 shares of its common stock for $11.5 million at an average price of $50.18 per share under its buyback program [23] - An additional 63,487 shares were purchased in July 2025 for $3.1 million at an average price of $48.13 per share [23] Strategic Developments - The acquisition of Sprint has allowed Cogent to construct a wavelength network, expanding its product offerings to include optical wavelength services [20] - As of June 30, 2025, Cogent was offering optical wavelength services in 938 data centers across the United States, Mexico, and Canada [20]

Group 1 - Cogent Communications Holdings, Inc. will host a conference call on August 7, 2025, at 8:30 a.m. (ET) to present its operating results for the second quarter of 2025 [1] - A press release with the operating results will be issued at 7:00 a.m. (ET) on the same day [1] - The conference call is accessible via dial-in numbers for U.S. and Canadian callers as well as international callers, with a recommendation to join 15 minutes early [1] Group 2 - Cogent is a facilities-based provider of low-cost, high-speed Internet access and private network services, operating in 292 markets globally [2] - The company is headquartered in Washington, D.C., and offers services primarily to bandwidth-intensive businesses [2] - Additional information about Cogent can be found on its website [2]

Company Overview - Cogent's network carries approximately 20% of all Internet traffic, serving 206 markets across North America, Europe, Asia, Latin America, and Australia[9] - The company serves over 87,200 customer connections, with 69% of revenues from Corporate end users and 31% from Service Provider customers[9] - Cogent focuses on selling Dedicated Internet Access and IP Connectivity, operating a network spanning from Helsinki, Finland to Sydney, Australia[12] Network Infrastructure - The network includes over 58,000 route miles of intercity fiber and over 36,000 miles of intracity fiber in 206 metro markets[12] - Cogent's network is interconnected with over 7,040 different networks and connected to 1,054 data center buildings and 1,769 corporate multi-tenant office buildings[12, 15] - The company has agreements with over 250 building owners (REITs) and operates 54 Cogent data centers with over 606,000 square feet[15] Market Dynamics and Pricing - In the corporate market, the most common On-Net product is 1,000 Mbps for $900/month with a multi-year contract, with typical customers using approximately 12% of purchased capacity[22] - In the NetCentric market, the average price per Mbps was $0.58 in Q4 2019 and $0.53 in Q1 2020, with new sales averaging $0.28 and $0.20 respectively[22] Financial Performance - The company's On-Net revenue for Q1 2020 was $103.5 million, representing a 6.5% year-over-year increase[62] - Off-Net revenue for Q1 2020 was $37.3 million, a decrease of 0.4% quarter-over-quarter[62] - Total revenue for Q1 2020 reached $140.9 million, a 5.1% year-over-year increase[62] - Non-GAAP Gross Margin for Q1 2020 was 60.5%, and EBITDA as adjusted was $50.4 million, representing a 35.8% margin[62] Capital Allocation - Cogent purchased $14 billion of original investment for $60 million through strategic acquisitions[39] - The company has been returning capital to shareholders through share buybacks and dividends, with cumulative totals reaching significant levels from 2005 to Q1 2020[67]

Company Overview - Cogent operates a global network carrying over 20% of all internet traffic[10] - The company provides high-speed internet access, with 69% of revenues from corporate clients and 31% from netcentric clients[10] - Cogent operates in 47 countries across 207 markets[10] Market Opportunity - The potential corporate market includes over 126000 connections[18] - Cogent wins approximately 40% of all corporate proposals[18] - Cogent's network is interconnected with over 7130 access networks[45] Network Infrastructure - The company's network includes over 58000 intercity fiber route miles[45] - Cogent owns 54 data centers with over 606000 square feet[45] - Cogent's network utilization is approximately 30%[45] Financial Performance - In Q2 2020, On-Net revenue was $103.8 million and Off-Net revenue was $37 million[65] - The Non-GAAP Gross Margin in Q2 2020 was 62%[65] - The company has returned over $800 million to shareholders since its IPO[66] Capital Allocation - In 2019, $24 million (43%) of capital expenditure was allocated to new markets, MTOBs, and data centers, while $32.1 million (57%) was for maintenance[64] - Cogent purchased $14 billion of original investment for $60 million through acquisitions[50, 51]

Company Overview - Cogent operates a global network carrying over 20% of all internet traffic[9] - The company's revenue is divided into Corporate (67%) and Netcentric (33%) segments[9] - Cogent operates in 47 countries across 208 markets[9] Market Opportunity - Cogent wins approximately 40% of all proposals in the corporate market[18] - The company interconnects with over 7,220 access networks[42] - Cogent's network has access to approximately 50,000 corporate connections primarily in North America[45] Financial Performance - In Q3 2020, On-Net revenue was $105.1 million, Off-Net revenue was $37.1 million, and Non-Core revenue was $0.1 million[62] - Total revenue in Q3 2020 reached $142.3 million, representing a 3.9% year-over-year increase[62] - Non-GAAP Gross Margin in Q3 2020 was 61.9%[62] - EBITDA as adjusted for Q3 2020 was $54.7 million, with a margin of 38.4%[62] Network Infrastructure - Cogent has agreements with over 250 building owners (REITs)[42] - The company owns 54 data centers with over 606,000 square feet[42] - Cogent's network includes over 58,000 intercity fiber route miles[42]