
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]