Cogent Communications Conference Call Summary Company Overview - **Company**: Cogent Communications (NasdaqGS:CCOI) - **Date**: December 09, 2025 Key Points Dividend Reduction - Cogent reduced its dividend by 98% to $0.02 per share due to increased leverage from the Sprint acquisition and negative revenue growth from that business [2][3] - The company had grown its dividend for 52 consecutive quarters prior to this reduction [2] Financial Performance - EBITDA has grown for nine consecutive quarters post-Sprint acquisition, despite a 2.4% average decline in top-line revenue [3][4] - EBITDA margin improved from approximately 1% post-acquisition to 20%, with potential to reach 30% when including T-Mobile subsidy payments [4] - Capital expenditures (CapEx) decreased by $20 million sequentially, stabilizing around $100 million annually [4] Wavelength Revenue Growth - Wavelength revenue, which constitutes about 4% of total revenues, grew 93% year-over-year and 14% sequentially [4][5] - Investors expected a faster growth rate in wavelength revenue [5] Deleveraging Strategies - Cogent plans to improve its leverage profile through EBITDA growth and divesting surplus assets, including 24 identified data centers [6][9] - The company has a total of 186 data centers and aims to monetize excess fiber and IP address space [9][11] - Cogent owns approximately 38 million IPv4 addresses, with a leasing income projected to increase from $12 million in 2022 to over $70 million by the end of 2025 [12] Market Position and Sales Strategy - The company has seen a shift in its sales mix, with 79% of sales being 100 gig wavelengths, compared to the market average of 40% [22] - Cogent's average revenue per user (ARPU) for wavelengths is around $2,000, with potential increases as the mix shifts towards higher capacity waves [25] Legacy Business Performance - The legacy Cogent business accounts for 70% of revenue, with the Netcentric segment growing at about 8% year-over-year [26][27] - The acquired Sprint business is declining at approximately 24% year-over-year, primarily affecting off-net corporate segments [29][30] Investor Misunderstandings - Investors may misunderstand the complexity of accounting related to the Sprint acquisition and the distinction between revenue growth from acquired versus organically growing customer bases [31][32] - The wavelength business is new for Cogent, and growth may not be as rapid as anticipated due to the broader market dynamics [32] Additional Insights - The company has paused its buyback program to avoid signaling that all capital is being used for buybacks instead of dividends [3] - There is a significant surplus of dark fiber and IP addresses that Cogent plans to monetize, with ongoing negotiations for sales and leases [10][12] - The company is exploring wholesale agreements for IP addresses to accelerate revenue generation [14][18] This summary encapsulates the key discussions and insights from the Cogent Communications conference call, highlighting the company's financial strategies, market positioning, and growth opportunities.

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