Cogent Communications (CCOI) 10 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the Cogent Communications Holdings Second Quarter 2023 Earnings Conference Call.

As a reminder, this conference call is being recorded and it will be available for replay at www.cogentco.com. A transcript of this conference call will be posted on the same website when it becomes available.Cogent's summary of financial and operational results attached to its press release can be downloaded from the Cogent website.I would now like to turn the call over to Mr. Dave Schaeffer, Chairman and Chief Executive Officer of Cogent Communications Holdings. Please go ahead.

morning good and you, to everyone. Thank to of this going start by length possible the for call. apologizing I'm There are a going number of new topics chatting to that about. be we are to complete But call. answering to will quarter be we everyone's earnings try questions.Welcome our conference second XXXX in Schaeffer, Executive Officer. Cogent's Chief Dave I'm me morning's the release press Thad and XX-Q for call With Weed, Officer.Hopefully, Financial earnings Chief on review had have our this quarter. you a is our chance to our

present historical press additional consistent going on to release quarter to forward. each we includes Sprint, metrics Our continue included metrics of we these of and related a of every number quarterly We've number quarter quarter. our basis acquisition metrics provide will that a a this

we and and customers, network acquired metrics our of billion $X.We and number to increased these We base, Business in excess with on of hired impossible a the million fiber typical have over set years. $X number of We customers Sprint We own. Our run customer real talent T-Mobile value XXXX. include the We of metrics been valuable our of agreements a will purchased the wireline for million corporate an the facilities. $XX.X of through base. received rate owned monthly of month the million payments very majority assets employees commitment now optimistic press in assets.Now closed customer right-of-way losses release $X the estate business. acquired In for this network operation. been companies. to acquired experienced employees T-Mobile the employee installments billion. significant large $XXX $XXX about larger over a have offset business.We revenue generating of now Cogent receive for our scale XXX network, XX current around acquired. the connections than cash business revenue assets our or the the of related month. have flow annualized will help approximately from many We of virtually would enterprise of the operating from We customer $X.X we our per acquired and monthly materially paid with XX the capabilities company months million that -- Sprint Corporate, Wireline are per relationships.It another The Fortune $XXX a combined of customers and a many XX, and assemble our a first owned from year Cogent's the our few Enterprise This expanded of a on summaries network in and of of be results. scope transaction cash to significantly X, acquisition and May NetCentric million.We're

Our shows we a expectations Cogent and of Many cost these will that recent prior legacy will initial diligence immediate in very savings areas. business our quarter. the analysis due substantial from closing.Our good multiple had be to exceed conducted achieved

This account record working an million million for IP T-Mobile net total transit lease accounting agreement, payment service provisions year-over-year. we business with acquired capital X provided In wireline quarter are we total transaction Cogent's for X% of comments monthly NetCentric in agreement of bargain around margin months million. payments Cogent's in a the for and liabilities million.This of XX% estimated $XX.X Currently, of $XXX XX.X% X.X% gain value legacy T-Mobile.We couple with receive in $XX from margin billion, has total history also A end EBITDA year-over-year. in agreement XX. first payments and and cash, $XX.X its period, in legacy services a EBITDA acquired. year-over-year.Cogent's those the payments achieved Our present we points.Now, through short-term the the of to a that a the was the on revenue term. Included sequentially a XX.X%. purchase that this paid approximately purchase to legacy or experienced $X purchase gain. assumed time as of in for X.X% being basis per price. million.Under sequentially was XX.X% IP $XX.X $X.X transit transit the of the paid $XX.X material had expected and the equal in contract on $XX.X Cogent's for is we resulted the the excess revenues transaction sequential EBITDA Under connection the a basis and the over purchase initially by corporate of agreement, X.X% the of agreement, at were the grew the grew increase the legacy business purchase and revenues billion million IP XX revenues acquisition, share. will XXX growth discounted business sequentially the a Cogent the $XX $X.X by for we is in legacy million recorded straight-line for EBITDA bargain services agreement gain Under the

of purchase million. fair fiber equipment accounting agreements firm resulting assets was estate assets, in The valuation we from an including we of However, in the the routes, consideration SEC a it X the these acquisition, Big with August, to should preclearance independent $XXX at related and $X real net early therefore, and was auditors as Securities gain.The the T-Mobile the determined our report concluded network was as the Exchange in approximately and network, conjunction right-of-way revenue, Commission by total with via appraised in value not consultation and acquired process, a acquired with billion.

present a plus services $XXX gain.Now, savings. cost to value a on $XXX paid for by anticipated synergies comments couple T-Mobile So million including net purchase million, IP totals the billion the of under the bargain approximately $X.X our million and of $XXX us agreement

and approximately run rate optimization continue believe million to the cost in in we that $XX legacy years, $XXX we achieving years. an X Cogent synergies annual and SG&A in International cost maintenance annual revenue X several additional Sprint over additional anticipate operation the achieve other of reduced the network, Wireline the million next next the savings the also $XX a million will network.We and for savings and savings North American network, Over expenses areas: annualized savings on

on recent laid cost Our intend of targets and savings we that a these surpass couple achieving out.Now, new we very in progress class the encouraging and of comments is customers. our have to revenue for

the million XXXX by period quarter-end.All we increased revenue Revenue quarter wireline a related call the was June the year-over-year disclose quarter the Our on from XXXX, basis. Wireline business till for by X-month XX.X% for X-month $XXX.X the increase an $XX million X, XX.X% and to to May XX, a this from the XXXX. period in on amounts for of business second are that Sprint

our revenues sales Included services full-time increase our locations wireline to a been the network. sequentially to reps, for acquired basis.Our outside In services X% sales Excluding reps in quarter. revenue, typically X.X these X.X include organization. reps.Now, by purchase IP employees. typically our FTE as to networks a ended and traditional of Rep with define sold business, XX% X,XXX greater historically customer several have in of of that last tremendous productivity $X has Cogent's a have size full-time sites. customers with XX% optical services this dozen X the of our of are increased from customers and used. In the using sale XX% being of many from employees wireline business, Sprint This tenure encompass dedicated on the quota-bearing we quarter, the and commercial contract.The transport We connection transit orders per force increased Enterprise experienced The reps Netcentric, These in installed our trained a installed discrete Inclusive $XXX Corporate as orders T-Mobile million area transport X% years.During and optical that a the enterprise these under we we sales quarter. our the We revenues the we same equivalent units productivity in our Sprint services XXX the the equivalent of wavelength enterprise employees. and the total we over We've XX% wireline we still were addition includes multiple The increased would connection of X.X% Cogent been processes.Sales we in increase comment which reported to optic this, represents sales sales agreement. rep have per our total XXX transit classified new in acquisition optical sales of products, Enterprise than substantially quarter, average as with to acquisition, Wireline and composition. total running commercial revenue million going are from agreement XX approximately hundred with combined Fortune number Adjusting forward. companies are asset expanded with on XXX to typically sequential in reps, year-over-year.In wireline XX full-time per annual reporting and and Sprint XXX the conjunction sequential the included corporations, for now the million offerings a sales contracts the for fiber XX, customers. revenues from revenues month, and the acquired orders hired for would rep definitions people the systems that in million per over $XX in products. productivity our force. IP acquisition, quarter are quarter force a talented, revenue business company wavelength these on Enterprise, sales business last XXX reps productivity $X.X large has the units, wide is equivalent, several large from and services a rep

are services expenses operating dedicated, ongoing our customers of a new require Sprint a existing capital or network. in to and these acquired to owning deterministic and We customers, transport operational expense the selling optical without connectivity customers customers.These wavelength

connected these XXX quarter quarter with the in services for provisioning revenue XX shorter have wavelength there discrete million and discrete cycles. in quarter-end.We Our at sold the was locations $X.X were wavelengths

comment have X-year in a to be footprint. on connectivity We able expect America.Now, that a period, cycles. for to in longer our locations locations offer still we XXX North expanded carrier-neutral Over provisioning have over XXX to approximately wavelengths

materially expanded Our acquisition our footprint. network Sprint

of We miles intercity have added route fiber, fiber. metropolitan miles of route X,XXX owned XX,XXX owned

footprint. Sprint reconfigure our XX acquired facilities and new data centers XX We add to will

We facilities. have already reconfigured of one those

are footprint Our additional the sites is to and legacy process switch there XX have converted carrier-neutral those Sprint the total X,XXX addition we conversions. Cogent in that.We are data of centers and in one facilities of completing

fiber miles route XX,XXX added the network. route approximately X,XXX intercity of to We metropolitan of also fiber miles IRU and IRU Cogent approximately

have already a services we will that fiber be comment with the as redundant on and are these cost of area for eliminated savings.Now, of Some an transition agreement.

We management, the On to of transition the facilities services paying transition date, certain are other information These to primarily network on behalf T-Mobile the processing quarter, order recorded invoices information T-Mobile chain orderly invoices T-Mobile's TSA back-office and a as of of invoice. and days reverse related and estate, on These finance behalf management, and reverse reverse business. the amounts under to to support, back include are agreement approximately certain XX we due we including $X due recorded T-Mobile support.During services vendors of ensure reimbursement human business [ agreement.The real in office, our Cogent. benefit transition TSA the from are million into expenses to services services ].We services the vendor and support, technology under the billed services T-Mobile finance, technology transition concerned costs, a transition entered are wireline $XXX.X made million and related services of services under closing and receipt are agreement the that the supply wireline with vendor agreement. from for providing under transition for due wireless resources in

program. owed we June and of owed on T-Mobile $XXX.X return dividend a XX, of agreements, T-Mobile us million capital million.For comment and these $X our XXXX, As under

shareholders we quarter, quarterly million $XX.X the to through program. dividend our returned our During regular

an decided Directors, our recognized $X.XX generating on to of reflects capabilities by and quarter Board routinely dividend share and which opportunities, sequential per now our strong sequentially, from annualized consecutive XXth our raising acquisition, share which our share. at increase investment to comment inclusive increase this another dividend per expectations. represents cash Our regular This of $X.XXX per the dividend, X.X%.A the Sprint increase against quarterly of flow is in business $X.XXX the rate growing quarterly

of like points and are X% quarterly in we margin we metrics business, the combined call annual multi-year basis expect to Sprint approximately provide guidance safe read turn EBITDA growth XXX not revenue Wireline be to Now for X% our and and the and Thad that be to annual used company language specific combined to we annually.Our revenue the targets with are specific business as I'd anticipate should the or to to expansion guidance.Now, a and quarter. CFO, some EBITDA operating to rates long-term be Weed, over intended our performance additional harbor the

Following our will for questions. remarks, floor we the Thad? open

cause network our obligation wavelength earnings Yes. releases and more and could posted and on-net, Cogent may off-net, materially.Please Thank Corporate, differ actual for statements.If this forward-looking statements in upon that revenue to to you We use our financial you, undertakes on statements noncore. analyze morning to update be number conference services. and forward-looking Dave, on connection statements will that made actual expectations. forward-looking on and information these this or are is that call website our the our of earnings SEC subject call to good reconciled our a at services current to and all differ. wavelength the corresponding belief not other and everyone. filings results uncertainties on revenues are comments This may historical intent, risks measures by cogentco.com.Some call, statements measurement no factors results GAAP our to which now type, these upon refer forward-looking These facts we are find non-GAAP that and noncore and based NetCentric includes are revise based during

centers. content NetCentric consumer Cogent firms, generally revenues who and located networks connections. revenue and Enterprise services centers services our Cogent legacy reclassified Corporate center And data office revenue these and in XXX customers include than customers Dave -- as serve customer significant small We office data well mentioned, firms of In Corporate customers.Our us multi-tenant our all distribution multi-tenant connection a And or bandwidth as customers upon carrier-neutral service We with the streaming our legacy price to services in Sprint now we in Cogent access institutions Enterprise customers location legacy monthly our to us Enterprise are connections.Corporate professional buildings financial into buy are acquisition, analyze revenue basis customer from data connecting who footprint.Our also we educational typically through based of types: business to base.On reclassifications. on in buy and type. as amounts large classifications classified classify bandwidth of providers network connections from customer are and purchase larger carrier-neutral legacy our per companies, to portion XXX,XXX a Enterprise buildings our NetCentric, business. Enterprise customers.Our and X of revenue customer and recurring Enterprise customer revenue customers typically

statistics, card the swipes including estate but Our year-to-date buildings Two key improvement real Corporate in operate and to leasing districts regions. leasing geographic that central levels we business in estate and central level where real the in influenced districts. seen most not pre-pandemic continues has in business indicate has some by returned activity business market to activity activity be of

this continue the cautious challenges business XX%. represented uncertain of quarter million of XX.X% was revenues increase from We our by economic quarterly a second Corporate our of the to revenues year-over-year other year $XXX our from last given and and XX.X% for environment increased almost remain sequential our the outlook revenue Corporate quarter pandemic.Our in to Corporate and

and X% revenues, wireline that were was NetCentric. wireline included million. connections business increased by this of We connections X.X% positive which wireline sequential customer X.X% quarter.On some and the and on Corporate $X.X a the positive [Technical XX,XXX business to revenue quarter-end. by impact $XX.X sequentially XX.X% million by was on XX.X%.Corporate the our a Difficulty] related network and The for of Legacy was is business wireline increase from $X USF of revenue the year-over-year.For $X.X customer at by year-over-year sequentially million. a period X-month customer year-over-year from decreased the of at increase have X.X% sequential our modestly business, taxes was quarter, in XX,XXX the Corporate year-over-year. Legacy million connections quarter-end, USF the in corporate and a impact

continued business in continues from Our to video benefit growth NetCentric and traffic streaming.

the For X% traffic our XX% up sequentially year-over-year. network quarter, growth and accelerated and was up

Our to wireline year-over-year a had XX.X% NetCentric grew That of network million. was business customer our XX.X% on of increased an was and and business million.Legacy the the sequentially at were by represented revenues sequentially NetCentric this growth.We related quarter, NetCentric XX,XXX connections our year-over-year. XX.X% at Cogent the customer the end connections quarter quarter-end year-over-year XX.X% sequentially $XX.X $XX.X revenue increase by XX.X%. connections from of XX.X% and NetCentric by X,XXX and XX.X%

by sequentially was XX.X% quarter-end. million of this XX,XXX.Revenue and legacy $XX.X connections Cogent revenue increased and customer by wireline revenue from network network Our type. on at was Enterprise NetCentric XX.X% business and XX,XXX Enterprise our our customer by Enterprise quarter XX.X% connections had connections were the we revenues year-over-year.Our and business Enterprise

We $X.X by customer revenue Cogent Our connections the center quarter-end. buildings. on-net and On-net $XXX.X sequential on-net connections data included revenue and revenue carrier-neutral XX.X% X.X% office XX,XXX in X,XXX increase was on-net on-net million and year-over-year. was on-net which from X.X% XX% On-net at increased multi-tenant a business million.Our serve customers and year-over-year. X,XXX wireline the legacy customer sequentially was our by quarter, total for

primarily wireline $XXX by million $XX.X new million.Lastly, and at XXX.X% quarter-end in year-over-year. increase X.X% at Wavelength business, over gigabit revenue was quarter. on-net $X.X larger locations, again business at we connections XXX.X%. XXX buildings Including off-net our Off-net Cogent for for impact which customer off-net occurred revenue. of were the which the XXX million.Our the these revenue quarter-end. We America.Wavelength this the located buildings customer off-net continue gigabit and a off-net legacy locations succeed and in and was revenue now of was quarter increased in are customer to has Off-net included sequentially ARPU, increasing XXX connections. in selling from quarter.Our $X.X off-net revenue by connections was XX,XXX selective increase and XX,XXX year-over-year North connections XXX connections That revenue sequential off-net wireline the customers XX,XXX wireline from the million business was serve of off-net and X.X% the and noncore a customer connections from

installed was connections. revenue per lowering customer ARPU, pricing. for noncore the totaled megabit decline at connections the price Our to the which price changes and and $X.X wireline of business by XX,XXX on-net our customer $X.XX $X.XX, price greater ARPU.With a million for was by was can new average and increased. change X.X%. contracts connections The per respect increased average our in quarter our revenue last our average new contracts ARPUs to Noncore our for megabit $X.X of for per megabit base XX%.Selling customer million.Comments megabit XX,XXX effect than a from have our in quarter XX.X% quarter year-over-year, customer mix connection for sequentially The the rate price the same per and and year-over-year quarter off-net both larger price and but a in on as declined results the was only for

X,XXX, from acquired and X.X% XXX XXX, the to increased ARPU business.Churn. from to off-net Our ARPU from of primarily the these off-net by sequentially we wireline pricing impact customers by sequentially increased in on-net our XX.X% XXX

the business the customer impact for and churn our the combined business. sequential rates from of off-net increased wireline Our for connections on-net

stable. Cogent churn legacy Our were relatively rates

X% X% margin incorporate million for costs of any payments churn for decreased We during was to component EBITDA quarterly by by now EBITDA and was to cash quarter, flow decreased Sprint including off-net quarter, operations and IP million $XX.X X.X%, unit earnings our flow EBITDA and our transit margin. our the EBITDA our year-over-year.Our $X.X quarter.On Our the also last and press quarter from on-net and reconcile including not each last quarter.Our We sequentially from X.X% to million cash rate services compared XX.X%. in releases $XX.X from the EBITDA statement. of Sprint costs acquisition acquisition the incurred agreement a

itself the for X months by wireline Our negative business for the million. EBITDA $XX.X was

negative would the the quarter. the business, impact for EBITDA have Excluding our been million wireline of $XX.X

a as So that would sequential and XX% EBITDA, year-over-year Cogent adjusted. increase, XX.X%.Now, increase X% the legacy a EBITDA and have business which been margin was

XX%. $XX.X and Our be under for EBITDA In add-back which will EBITDA million included payments the services transit cost due, so EBITDA agreement the as T-Mobile. IP months on during have past the have the as adjusted, for been adjusted We cash payments, during as Sprint with quarters, payments both total under the of cash as under have so IP for IP as XX.X% we billed only the million our $XX.X X billed had one the quarter.Our transit transit transit million time.Some payments.If payments $XX.X subsequent currency. services for the been was that X quarter, the for about was the comments few the quarters, includes in EBITDA margin under services in amounts now the be adding foreign paid million and agreement costs quarter, our the collected cash an the as in X services of IP margin. includes payment services will acquisition Sprint All $XXX And agreement $XX.X EBITDA was agreement adjusted and we included the agreement, a $XX.X that, we during of adjusted quarter. adjusted, would million for IP received on quarter, million monthly transit a

XX% revenue South is of About revenues our the we continue a States African $X.X wireline believe that to in positive and -- of We revenues.The dollars connections. our or and FX revenues million.Customer rather. in rate revenues far average Oceanic, based wireline related base very dollar Mexican, will sequential is after that business Europe enterprise XX% the our is our believe approximately average quarter customer Our highly of X% wireline not outside Including were the these -- concentrated, top Canadian, about average more our exchange our revenue million is averages be revenues but estimate were the revenue We base X% revenues third concentrated and our about acquired of customers the United acquisition. remainder earned and of $X.X quarter. business.On dollar this $X.XX our XX% for revenue that and rate, our is impact business it about this Internet so reported American concentration and U.S. CapEx. of the quarter. XX larger the of year-over-year customers $X.XX. impact, quarter, euro with Canadian U.S. Sprint's was wireline represented that If operations. We this a international for positive only total number on customer of to the about was and

including the multiple meet of customer wavelength and payments. to Our investments of and X designed centers locations quarterly leases networks typical and levels the data plans, These equipment. uncertainty our we CapEx to purchasing product and was $XX.X equipment the Sprint that inventory anticipatory ensure for have new from million. of caused are schedule accommodate including Supply together network data needs.Finance, in offerings to Cogent to chain growth centers conversion to interconnection our network lease shift satisfactory acquisition our us

years longer initial or and Our IRU leases to long-term often on options dark finance XX after renewal obligations term. fiber initial term include have and multiple the for lease terms XX are typically of

wireline across of and million United Sprint obtain dark with those right-of-way represent all be obligations totaled suppliers as obligations dark and on asset with These we in difficult finance right-of-way extremely acquisition, numerous to XXX relationships would business, over the quarter-end. significant were different own. lease with of operating States. suppliers. have acquired suppliers Our leases.Fiber IRU agreements set the acquired We leases treated have lease at and their $XXX.X new no with acquired were business.We a IRU contracts In acquired fiber diverse several agreements wireline the connection There of fiber IRU very a network. our IRU finance and

XXX acquired also We technical buildings.

buildings acquired technical convert fiber, has those fiber X,XXX centers.We owned amount a XX to significant and XX,XXX metro our miles acquired network. dark route fiber. another and a data data will we of significantly dark route Cogent of buildings expanded We center intercity owned of converted One Cogent been to owned of dark miles

with of Sprint and fiber our fiber, Cogent of miles XXX and XX,XXX that's X,XXX XX,XXX This intercity to metro Sprint miles Cogent fiber, fiber. and dark Sprint miles metro fiber route leased respect XX,XXX XX,XXX XX,XXX route miles. leased and So route network of intercity dark route following and fiber: from includes leased intercity miles.XXX,XXX legacy fiber dark legacy legacy metro intercity consists that's of miles; XXX,XXX now miles; intercity miles XXX,XXX route Cogent

operating our fiber dark Lastly, metro of XX,XXX leased a cash cash quarter-end, At metro cash legacy Cogent fiber XX,XXX and miles, totaled $XXX and flow. million. fiber, miles.Cash lot cash and equivalents miles. that's It's restricted from Sprint and and XX,XXX

is Our agreement estimated $XX.X at rate swap quarter-end. our to million of tied interest fair restricted the value cash of

by the debt on the net of and operating and Our quarter, comments XXX%, activities to the a operating due cash debt ratios. XXX% flow was $XX.X T-Mobile under million.Some TSA amount for provided cash year-over-year including increase of with increase million our $XXX.X sequentially

$X.X gross debt $X wireline par, business at billion. with Our billion at our total was including none our again, and IRU total the obligations quarter-end acquired was debt lease net -- obligations lease finance finance -- the

was consolidated under and leverage Our is as quarter-end was calculation ratio under and ratio net cash. an restricted And our the total in secured was X.XX, X.XX. at EBITDA from X.X for which calculated that our gross slightly interest was agreement -- note essentially was decline XX [ it quarter, from under swap indentures, our note counted X.X.On debt the as is X.XX.Our indentures a which months improvement to adjusted income ratio leverage as calculated X.XX last debt ] -- trailing different

for We to we variable the $XX.X modifies market fair We noncash rate swap notes financing each of at $X.X on period interest reporting and a associated an to from our obligation obligation swap incur $XXX secured interest gains the term last changes 'XX and million are by of remaining rate the quarter estimated rate value that liability party of fair rate million. based record the notes. agreement XXXX our rates.At the agreement to quarter-end, interest with the swap million to value in interest a agreement our corresponding fixed due of losses overnight increased

We are the with maintain balance sales liability.On outstanding. a debt to to this cash counterparty bad day and required restricted equal

the are receivable business accounts Our was day worldwide outstanding sales billed customers for days. in the advance. wireline XX of Most of

cycles However, Cogent billing for at accounting to in the their third the debt quarter, Cogent the business had wireline And that debt to in In was billing a and the we the be speaking an the related And several of platform monthly for all It I which of are accounts at Cogent the total were converting speaking unusual million expense quarter. and mention separately. be won't be billed last about billing charge they $X under debt expense any We will we bad business wireline for point, under business the advance. we Cogent the will those our bad legacy will billing legacy we wireline wireline U.S. the Net absent will business customers business revenues combined combined.Our during should receivable to $X this quarter. to million. was GAAP the cycle.And All required quarter. bad will of value be record operation related It of was quarter the legacy the rules to the in book this reserves, be X% third and reserves. re-establish wireline are billed separately. customers month. be

If is consistent expense fantastic Sprint from turn over have want X.X% and from that, an been new back will our I of our collection you job billing and for wireline with the customers it doing wireline in doing amazing serving to Dave. legacy business our them. job.And They collecting Cogent customers our our and would a which trends.Finally, are to impact, and that bad including new I revenues, and exclude debt billing employees members, recognize with our team historical thank collection worldwide

I'd customer some and our highlight Thad. details. for our sales Thanks, couple network, to our base a NetCentric strengths like force.Now of about

significant We NetCentric growth our legacy continue to business. experience in

our beneficiaries the measured to Cogent-owned data lead quarter's of enable in particularly this breadth there were to and and to and several carrier-neutral customers.We optimize add and to more research. directly data over data this us grand centers our project by of market the X,XXX is independent data video for XXX networks as X,XXX our continue coverage carrier centers. markets.At their international are over-the-top next in customers direct a to network reduce years. centers an additional The footprint to of centers in better year connecting to to other any streaming, We expect NetCentric acceleration widen total connected their allows end, latency third-party than continued XX in our per This carrier-neutral

And selling of to wavelengths We also spaces technical expect provisioning Cogent provisioning Sprint being XX cycle centers. converted more anticipate XXXX, these To of with data wavelengths the carrier-neutral we today, carrier-neutral intervals. provisioning XXX we are of in convert into with centers. to reduced data can additional we the in extended facilities. end an continued able facilities.As over data an rapid one we a in centers date, XXX have By or of carrier-neutral sell XX sell cycle, U.S. with wavelengths

observations. sales this our one solely believe fiber will IRUs as right-of-way most on market for X,XXX give us largest, world's other we corporate of agreements.At companies, the of broadband footprint of majority We have professionals of sale focusing we primarily direct the and additional and the as networks. quarter's products that and subscriber telephone This sales carriers the unique to couple focused to and users.At sales NetCentric for this companies, a professionals mobile we group We cable the quarter's had wavelength is force significantly with well sophisticated end, market. of.Now, force connected XXX teams The expand phone of responsible continue collection operators segment ISPs, industry. directly a base vast be end, of to the expanded owned on of are our availability mobile access network

corporate are trends We seeing positive business. in our

bidirectional corporate our the coverage lower boost and provide typically sales on on world and We of Our part are inside demand greater gigabit corporate costs, force. sales their push includes premises.Our workers.Now, gig ad-hoc integrate data become new remote productivity. growing interfaces.Corporate are connections, to a XX of centers which focused customers capacity bandwidth are for requires video This force products, force begun for to both sales of support and video our the outside conferencing. comment applications which remain carrier-neutral use their has in support symmetric to continuing X connections in our increasingly and working customers connectivity to buying redundancy usage for higher of aggressively a VPNs to aggressive

increased improve a to total XX underperformers. sales manage continue our XXX. force On sequential training our programs number by out basis, to reps of We and

small- Our X.X% historical month and month a below of American X.X% unique peak our districts and of during for sales serving cities per average position the are X we down of pandemic rate space summary, feet multi-tenant turnover major extremely buildings was square X.X%.So medium-sized X,XXX rentable slightly central on-net. the billion our about and with North per in optimistic force the in from approximately businesses quarter, office over office business of in

customer center expanding base. to expanding and we capabilities wavelengths, pre-pandemic about the to network We footprint.Currently, that parts the tenants customers sell employees product pre-pandemic activity, to to addition remain still our in indicators time see of including But And in country. enterprise about portfolio and key excited very optical or data return regions, our the optimistic Cogent-owned encouraged office of the workforce more adding transport a activity to in activity large services are and are of re-entry, that for ability levels spend below our are an are our levels sales efficacy.We are pandemic leasing requiring number many office. to increasing many seeing we our

downsizing to the including of years, international holding working annual network. agreements, cash we exceeds savings network, indenture have a per note are addressable Sprint million ultimately our on generation North market requirements, $XXX integrate on increasing cash million annual for the encouraged available our We flow company corporate buybacks our also will at out diligently and X $XX we the ability corporates remain $XX general basket, have the as dividends American these larger cost opportunity.Under amount actually building, to more tenants cumulative and in many ability our that their have to next intend assets Cogent on Sprint achieve resulting optimistic about to savings costs office discrete network and of the are and We that savings million assets. and the of hand.We approximately the Sprint $XXX cash project.Over wireline we million achieve the legacy a on take the we

and themselves We also should through anticipate for the optimization next system as floor manifest SG&A synergies open revenue like that, questions. headcount I'd office years.With several These the as well additional savings efficiencies. over to

Your first comes of the Phil with Cusick Instructions] [Operator question from JPMorgan. line

going Dave, committing could in that's things And just in customers that maybe what is growth And go about the this and maybe like year-over-year forward? start think and through help organic to revenue segment sequentially. we that, again quarter, us with of NetCentric. growth NetCentric going size drive both

Yes.

traffic both in So as improvement as in well growth in the growth. an traffic year-over-year sequentially saw as call, we we a acceleration mentioned

as was and the demand and well ended strong the was to NetCentric of T-Mobile were we X on-net of to acquiring agreement. up we in year-over-year both growth services 'XX, VPN Layer organically customer that me, quarter. as -- similar seen additional the off-net and QX T-Mobile, basis. of you netted this out sequential outside primarily from revenue traffic of benefit XX.X% excuse in These the growth have business colocation approximately a outside if being XX.X%.Even That services transit and having the a or and services customers additional from X growth services legacy Cogent base was The the T-Mobile. of U.S. with on XX.X% selling And sold benefits services. that We of that business

how And opportunities? of be But there's these helpful. growth is the sustained once That's other obviously, you business, the through, in growth month movement in quarter. -- from annualized double-digit everything that that to going a do all think is of organic another given sort go-forward this about here

Yes.

will Phil. an correct, are have additional in we because a selling third will T-Mobile. the recognize full clearly of services that So the you commercial benefit months quarter, are We X we

been which line an the year-over-year in NetCentric the our has by skyrocketed the long-term went quarter but very averaged has this will business, continued to slowly those that those all XX% in services of underlying beginning a long XX-year year-over-year, the strong rate encouraged to growth.Growth pandemic demand wean X% believe that there's will international to remind we over above ability at forward.We're tail provide XX% average. But has non-transit or at revenue also we away year-over-year. investors, of business our design. up about about growth. of that markets. strength think about XX% the remains It X% into growing the To the We to substantially pandemic, to history Some in a organic going continue growth T-Mobile.Independent very services below trend by closer some of phenomena, way and reverted average,

NetCentric low XX% we future. will I company now continue combined for and foreseeable in said, double digits about year-over-year believe revenues As to we're grow the that growing the for

up the Any follow on customers Last could of it a in size I If quarter, larger. was lot one change -- buying? more. of

shift any quarter, there? This

actually from see some continue large our We demand strong some of to hyperscalers.

Actually, As on of remained customer at our basis sale megabit. megabit Thad the up base T-Mobile base. acquired $X.XX about installed $X.XX average in mentioned, to a went new per part flat per our because

being change the a application, last patterns a intelligence artificial been quarters seen for and the actually data. I over of couple think new we've collection in of has buying people that shift towards the big buying

of applications. of that And a amount driven customers traditionally had of that have we using growth traffic is more from their I direction, now has collecting the generative asymmetrically what models think think data hyperscale seen some very in had large build beginning at we're So only the some larger are significant the path. outbound and return the that skewed artificial who data We companies in to create software really intelligence did some and we language much been up in maybe NetCentric exhibiting ago. from has international our and is small in acceleration here regional months business.Now, for access encouraging our who start entire tailwind of video U.S. trend. more networks And of in customers customers those seen the smaller the Most Europe in also may an and as of really an markets have streaming XX types Western that patterns. catch growth that

international the a pulling smaller content. increasingly there to for their information things So is got AI are large The X applications, are as going really and different pull customers you've the customers opposed of lag.So on. accelerating pushing

question the with Louthan next James. comes Frank line of Your from Raymond

quarter? previously going what clear, run can kind you're recognition through will of be back, cash each the Just would the us thought that you adding payments from going T-Mobile Just in cash you able be full to forward walk be the to not to payments rate clear, be you want to recognizing that recognize. straight-line EBITDA, be

Yes. Sure, Frank.

month XX So or the $XX.X for months agreement, a of the a million recognize $XX.X first quarter. will million we

X. billed payment, one only This quarter, we we recognized though had even for

that concluded bargain that transaction. we a we transit though purchase the should Ernst are We a be we alignment & our are SEC with IP they cash we recognizing this XX for on The revenue, services under stream both months. the do meet as and basis. Even When would revenue recognized Young, a a of T-Mobile criteria providing many down a auditors, month cash next continue it treated XXX in with with and consulted the for is payment step associated on and will basis actually straight-line in million unified revenue to the because they XX were recognition,If that have contract. $X.X month

purchase. to and quarter bargain in decision not was a recognize that that transactional a accounting a viewing first cash a the a this we period.The services that point, as customer were as as for treatment this had will basis T-Mobile cost after made So agreement. treat saying reason we the change $XX.X a At they the XX-month on million

a David, didn't That's as I'll purchase. side... just it correct one T-Mobile treat thing. bargain our

That's of Correct. our it. side

That it of of a loss a disposition on was treated as their end business. They 'XX the side. at

bargain So of the we matching purchase gain. the had account of terms kind in

clear. Sorry me made But that let to interrupt.

flow are that Thad. you're our why we quarter the each cash back it add because the accountant, Was That's But and and we statement. cash Frank? to reconciling helpful, that that will recognize cash is

revenue? great. No, size, a is Sprint percentage customer is the think a the gave as what's customer? percentage trend customer on kind a or as legacy of And of Sprint of And that's largest the the that largest been I you then legacy breakdown. And with the revenue? What kind of that customer a Cogent Yes. And then what's revenue?

Yes.

revenues. largest our about customer from revenues as total of are percentage kind legacy So of X% And we is XXX world. of the Cogent large of services which, I companies, now corporate portion the of a around did X,XXX Sprint They customer. acquire a a number in think, buy largest locations approximately

Williams Cowen. comes of TD line next Your the Greg from question with

of I just really does big insight business?Second terms Sprint here get the lastly, what's have organic was to same the and year housekeeping question How -- true customers' those next ramp question, the centers could start to Q&A the opportunity that on in is NetCentric XXX and on reclass sneak business, some You organic when on legacy nice the sales on there.And ex-Sprint revenue connection and growth corporate? did much of question. of to do just sort business a Gap] the the waves revenue, the [Audio XXX impacting up in And after? data corporate Can you speed? folks in ambitions year if you Cogent the First what the provide some on can customers growth? your

T-Mobile paid payments arrears X and going is X to guys, we are typically to you to if see it months should quarter? X going quarter? So next of it month Or be months be next in only

indicated, X%... year-over-year, or your We'll on typically the on corporate let Thad X.X% third I'll prompt Cogent them. had quarter. pay month take the get making X Organically, they And time.Now, easy questions invoice sequentially in those me X us take one after extremely we They on payments next second been grew first months side. first. the the of as

X.X%.

And forward, X.X% customers of type customers any we reclassed going was as -- will from excuse by all acquisition. treat Sprint me, X.X%, so just under equally. were independent said, that X%. the And that Thad

independent So Cogent as us, acquired. small enterprise, NetCentric whether direction organically were as or number they'll took corporate, And of think, by a be of well Cogent sold other they either the customers this a them and good or as enterprise. we had baseline. in give I customers reclassed moving We would

customers that is probably commercial with majority, already XX% of engaged with has say that are transit the fairly quarters' existing growth the wavelength would consistently rate rate X line wavelength is sequential in the in majority Cogent force sales a the managers improvement get services. well enterprise force fulfilled.And potential reps NetCentric X question. wavelengths. XXX network connected dimensions vast with.I and customers, the So the we and had engaged is streamline improvement The to slow growth opportunities forward. as that locations existing sales quarter NetCentric the an of have report market then, been our and previous the us can to sell that discussing All account be challenge corporate customers.The corporate of our business.Now, of corporate for demand vast from last wavelength we not and relationship where consistent as can the provisioning indicates and secondly, There that. our trend can has going opportunity. but wavelength NetCentric type enough The wavelength to our the market last wavelength to But business of year-over-year for national Sprint

In That on-net. XXX terms we acceptable the wavelengths target.So in look We Of by we of today year-end looked period, north months in test that way days incremental U.S. at XXX In and will of but not we're that can data the averaged wavelengths. installed X provision sales operated about grow. their when business, have XXX have provisioning have and those XX our had through only wavelength. we of they Waves, Sprint number ultimate neutrals we sold XX We'll an at where of centers a we continue our and those, X/X is connectivity, the have carrier to carrier-neutral of have over goal. U.S. growing. number

the when we we contractual had run XXX transit we our of XX-day the sold process. X-day that the averaged U.S. by actually still late are we why for substantial where our minimum. XX the average reseller port goal Sprint period we slightly of days, rate we but run the actually facilities. than announced mirror the able XXX business.For during provisioned And rate to is were acquired installed, some to do Cogent in wavelengths not of we so that were what improvement, a in is actually will That's all wavelengths, Now window.We to but 'XX the that a acquired by a the end higher looking they install do carrier-neutral be very

from One, a So facilities. happening. again, of to there's, we've XXX X different to got go things XXX total

number that on report quarter. will We every

staging that, do footprint.And that need to to We the OADMs it expect X to we secondly, the that this give provisioning have rapid in And means shelves relatively ramp in deploying next linearly provisioning. and facilitate over will locations time. that quarters to us full those transponder then, reduce locations

XXXX.So in That rate $XX our prioritize for X-year increase that. not on are over we million of We rate. we of million XXXX about We a that meaning, we the month the closing beginning, will equipping period relatively help anticipate revenue the our our demand million, run from using the million can't linearly trailing what wavelength is about of then to of consistently.At demand rate of pretty us a at to run X in fulfill. by a network $X.X about the doing be monthly pent-up it, end year combined have today growing from process May be to basis Putting will selling complete facilities. performance, a a run but of run those $XXX rate, a $XX that XXX number we those expressions call were and lot by wavelengths process the

indicate made.But we day as we're resource hit on that very the turn are base comfortable our number to foundational And place actually there the of for is me. be footprint We have anticipated.Thanks, what can only has We have that Greg. will way been a by wavelength that steps demand to them better are a pre-provision. than one in way, our can't had were on, constrained. goals. needed X going of all you I wavelengths competitors hosting basis. daily wavelength they conference do And at available Thanks your the we on heard to The

with Your of line next Partners. question Walter comes from Piecyk the LightShed

to back Dave, I go want to corporate.

I was sure if mentioned I that looks think like for it's XX.X% the just out, Sprint to It this twice - think Obviously, the pulled talking I I took a like was because it didn't USF. want for -- sequentially. you it you corporate call we're at up number the make on X.X% contribution. look out and took business think that noncore number. true I sequentially, organic legacy when down apples-to-apples, maybe

my guessing the it looking sequentially? out not math can at strip that So we grow and me if Sprint, had you give just And hoping -- did you wrong. benefit I'm I'm from we're USF is

Sprint and came And includes The core USF benefit minimal. the noncore sequentially. benefit of from both did actually to very It products. USF you, was increase that grow in corporate customers. again, remind Most the or

access, So the at versus and then, every service coy products trying you not classifications. gets enterprise. of type, services. to gets and it which sequentially off. finally, year-over-year. Cogent corporate grew But the for gets then, X.X% wavelengths -- Internet is NetCentric When organic colocation, X.X% X.X% product. and rest now And which gets U.S. noncore It look here. And world. It every on-net is customers, and they finally, I'm gets VPN X services, now the revenues corporate, include geographic, be It product customer or

was USF know quarter $X.X from specifically what was contribution So the last I Because Sprint? million.

USF? comparable what's for business the legacy on the So

million. about U.S. $X majority of was was in contribution It change the USF Sprint any

the actual flat. Yes, was rate

early like have I you -- issues next to companies Labor run know why to way. into 'XX. of a the was that a finally I haven't basis, inverted And the out end 'XX. of of speak expect grown is I getting finally or you a people that's how you long then the corporate year obviously on kind since happened? the crackdown into corporate which -- That will going back is September positive? of hit Can think that maybe bit and terms on finally speak sequentially inverted then finally sequential prediction course friends of things question. can the office.I the mean goes This opposite the the to the now Day. there's you on that So why Day just your this in over it's maybe Labor of issues in to Dave, play has a

Yes.

do believe part-time at on So that taking proactive employees a approach into getting many basis. a least office, on are I more companies the

to Phoenix, Secondly, kind no we a we've trend a kind have think markets continue think seen like spread seen of there I of that And performed as is to Florida, when deal great market-by-market, if pandemic. other differences. markets. there South that Texas, was improvement We of will

is unequal. almost -- from markets, it's COVID.So recovery we there's like it looked our San geographically Francisco, no if very worst-performing at been Now

thing not the modernized. and companies can to they basis.I months we signs so the saw seen And and quite starting as in that's we are where think market-by-market sales order. South new customer levels, is efficacy the see what But second in However, until but has we need again, or to hadn't I maybe now to we've path are we're pre-pandemic the And X a a happening to is and activity ago.So decision-making X% you but this getting improved improved Atlanta, of spread again, growth only happened Texas in that year-over-year, like worked. still to we're on and that appear the more does actually procrastinate markets decisions lot not know markets tools is Florida it tracking we in long wane. X starting Arizona, that improving. historically into making depends on don't hiatus a XX% the in corporate deploy think appear They're X-year it recovery, funnels

negative, least though, Dave. At not it's

trend finally to that break. a was So good

paid question, final I business But $X anything, Sprint's of you prior I call, on you think, disclosure I my you contested kind which is of some mean more for didn't for deregulatory purchased. a is it. guess, kind a pay that terms had you question I

right? legacy wouldn't You're this they to highly don't kind I and any This -- there's valued of not workhorse it's this wouldn't now going okay, inverted historically think been not at business valued you forward kind why of for this COVID -- has the corporate multiyear -- finally we business. to print that people had of have maybe And let's So look question why you they provide nothing, a highly bought that engine this able a say, is business. to stat provide yet dip.So this until getting kind positive, revenue. that investors COVID get not bought

ability forward? like understand unless bad growth. to Let's if mask put expenses it like see a now what bucket and stuff your synergies.But Dave wouldn't to how not and a some together investors you side what hide really at to don't dividend that is squeeze returning see that grow good this then companies a to the and present get thing revenue that going can story; story, of out drives in maybe look do other that it why core the I why that's

all, to think of tell. I have actually we multiple first Well, stories good

of disaggregate let and question kind So statement. your me

both party, actually bought auditor we coming of realized third had for. bought no their It T-Mobile said, We it's used asset. network. optic network And can growth They saw no optical services practical. an sites world. into and But connecting the said, physical rest We're that worth we quickly. in and are process business correct in fiber equipment $X it not high-capacity come a and $X colocation KPMG, We the use we've strategic actually paid were huge asset was We switch footprint.We or the with that that asset value that I was we transport smart the uptick repurpose it. a tax Arms reality be is and have had AI for to series just for appraisal a an that there's making we the wish billion. and pay have I that transport for so in was for tell bought. colocation compute business.So conversion in like empty, sitting previous would that to taxes been wavelengths tenants relationship; able by and I selling like them to X OADMs optical and them of asset for they office had a could was They no different that literally this done much on create on They an to evaluate of hired it. And a view transfer that known building the you in would provision Let's a tailwind to of We're transponder never and as start it easily an data coming.But that. on those because them. liability. in selling -- as the to that term Internet. that were We is the the things. for and demand high putting of in services, need the high a work.It short not that

at place. So the were we right

argue why show me that bought them you AI. separate to even a that rather just the it mean, not I show with respect I going that's right before you because I together. all $X doing if billion you in though. certainly this appreciate and was that. narrative, But what true the put asset as can and T-Mobile continue take off business that business you, of then, fact David, interrupt bucket let a then how did is mashing than legacy to sold

question. your going get rest and I'm answer the to of And there

sitting was in network virtually that the These sites the we sitting been So is in When $XXX associated day. you at we with of the them. switch services of XX,XXX CapEx, network. decade give customer a we equipment a million had The were million million of that least center sense, $XX bunch service do for looked hasn't the with base was empty.To a nearly of acquired that a a data your had burning services. nothing to of or question racks second part initially, EBITDA have $X and acquired follows the That unprofitable business, this there, at dead it them.

additional X things that business.The to But third out. services We knew business fix to we end-of-life a we point only customer products $XXX payment base. have revenue and That's to That's X,XXX the traffic the we to us actually to convinced the T-Mobile transactions.Once an base stream there enterprise. disclosed corporate NetCentric on transit and wants told saw from customer on-net the we there FTC appropriately. clear mitigate were closing. realized classified acquired We customers names to is was that us on of customer million them the the some prior in that We we and non-consummated way fair. in the we we the those it.We quickly in to needed that operating unmasked some were order were that we stuff with buy customers, in time give there bought, and stream of at burn least move

We the maybe port-by-port made up. through and also customers there customer reconciliation connections a up. for that fit the that really should said enterprise.We've customer-by-customer other and definition corporate XXX,XXX went we We that of true true way some go are Cogent the

the businesses. which are work traffic Now network, we you as way the that that all this work for people converge all not the converged why report work Sprint systems, products, separate one organization.There company. get They point, final and do for to The savings not people the X one billing is is are your put to of sales on going Cogent. for

We're cycles doing to be As that systems.We're to X Cogent. separate mirror Thad X by said, bases. operate those It not networks, into to will Cogent's impossible we X are disaggregate. X going customer separate databases, customers separate collapsing to billing pushing XX

will absolute which headwind legacy a sense higher growth corporate greater up that, Now understand all customers, will will had have got legacy for since businesses. corporate to X would be base, be they're signing same makes riding But we're We they're to going a customers.In report the all customer to what Cogent separate to consistently, We're products. say a customers. we've the we these treat network, products. which set misleading headwind. is of actually and to going network.It Sprint run corporate be rate one our one the same than run that buying it churn we to same the going same one thing to try They're be we've paying that report

I actual Well, did just before real you. close quick, the you to give want numbers USF

USF went sequentially, $X and was Sprint total the $X.X up of So million USF million.

So sequentially. Cogent down Classic USF $XXX,XXX was

of and mix Is number? enterprise -- or course there just that a that you that of is in corporate the given total just

The total number.

America. from Your comes with question Barden of the of next David line Bank

opportunities. always. as on the noodling Thanks time wavelengths savings services some the all and lot detail, the of for and kind a the lit Dave, spend of We of cost

think one which to a a today. elaborate I have a of more actual you're of is strategy x distinct with x there there? to These to generate share megawatts opportunity? putting some technical already just an facility could capacity your expand bit Cogent Could per of of center data products be talked dollars going on revenue. technical us into generate you purely this of a capital little that about? these data thinking Or work Is y incremental way something we've your Could on-net approach center. to to converted a with facilities, bit referenced kind you XX you reach little this where you

I'm capital this. need the thing question. for is to incremental only going the dispute David, Thanks, Yes. the And to do spend to

virtually are switch data former million of That traffic little those on today. technically network technical XXX in it There's network it facilities. square So sites exclusively in a until switch proprietary and bit simple. That voice empty these a Sprint that was This back the then fee built switch 'XXs. to early 'XXs is optic carried feet to no designed in Almost carried on were allow designed tandem and traffic. and Internet in fiber actually These connectivity late 'XXs owned network some terminates X.X terminated sites. fibers. sites.There black buildings the traffic

project of big underway XXX,XXX cost we of feet way leases. North well be In can will addition million million of our part the facilities, that But part there's we rate we That own internationally. that, $XX we is a for that nearly as is as space to the exiting leased in initiatives.And savings that $XXX exit America, those the can technical save run of are facilities. than X.X at that million them today look no rest revenue sitting TDM XXX world applicable. the those.There already of the were longer to interfaces, the megawatts backbone other to square to with comprised empty the and no those which no That in feet their of generating power have of territory for XX and ILEC to are connectivity Sprint largest

X metro doing footprint. those we to physically connecting our we So are are things.One, networks

We We network Sprint have we're X thing reasons second the full that. wavelengths.The you want centers you addict we to make extend two, facilities data of something can do about. to the center need these new. carrier-neutral old sell forgot marketable; to into go is buy that's we your that doing so out. And cleaning It's data things like

a have to to put it. got place You

third In housecleaning, clean there You out. going convert XXX come our offices, to those facilities not up that's go that into out plants. Data data what run plants. DC. the and XX-volt a They AC, thing need racks to power in and underway.The we these centers these central XX,XXX well we're chunk positive turn into the want to negative we a power way. and do were go to are the Telephone that's need and that and is these centers old do case, and

these changed. assuming companies sold going for facilities. million to leased will all to a case That's to center come legacy our looked Cogent going operated forward, and turn opportunity. X of colocation, or take into $XX that a thinking invert those power and feet these expense incremental be there our from facilities. of In computing relatively power additive or retail AC. time. active put large taking of there of and of capital the hyperscalers of a data XXX equipment network to doing centers basis were final a Sprint We're anticipate to significant we take You or doing to equipment is it things. facilities.The that that inverter data accelerated in Cogent halls the X% data similar in X.X that from a megawatts million And which of X do modest products, either power.We racks you on and thing or X% another put an that in monetize typically AI our XX We're XX Cogent at of about we're wholesale But our do We think completely at revenues need only power. assumed we kind we opportunity revenues.So business do Those going in will will to space in into in data coming the the a perhaps is turned megawatts capacity. derive to corner. if a as operators another incremental is put facilities revenue corners, square Classic, each that from the pre-acquisition are result, hall million a X mix compute $XX not is $XX a X independent about has program it operate or of with to what demand is other AI could We spread data across X XX megawatts is called. to and in think the meaning cage and year center, did Cogent so XXX would so are at incremental X sales, or Edge small very we place And marketable one it we empty compute.That for million.I colocation have Popped business.

we've forecast. is over customers get that X% these this at to that take do least $XX to going commercially our be from that's viable.But lot will to that be larger a million next better not year demand today million opportunity. And us revenues It of think the encourages or incremental there the golden seen year. things may of We baked set do of we'll I us $XX some into revenue than a another think with our we

Your of Goldman comes Brett next from line question Sachs. with Feldman the

if questions, Dave, don't mind. X you

revenues You a multiyear getting $XXX over of to talked about period. target this of wavelength million

you I think than would that's higher discuss what before.

your operating if closer I'm positioned to has give target end clearly to you you higher raising lower think deliver, when end the the faster your going as of business your me in buyback an correct current range?And that obviously some current comfort that wrong, but of delivering just would dividend alternative? what the or evolution then, So a with does capital to range. you'll curious about thinking pace or about the Meaning, ultimately factor into how confidence in forward, then, start above at outlook?And trajectory return. you How have level how are I'm

Yes.

uniquely public of very the is coming world But growing, majority Internet wavelength flexible share. appears now, to feel to for and at market market, We're leverage a less slightly initial this market with So Internet.Let's been XX% get to driving growth There not that's to that.And is the that to let's replication now service start that a appears studies have AI bit that the premium using that And the majority we to period. static grow to $XXX larger share at do of is a is to We that was scale. the clear, be took and positioned a higher is seven-year of public going think $X the And than market the the be well XX% a cost seems indicate for over view going driver X% will market be Internet. linear. said able wavelength data market million per our sit would same positive new a The a the a believe these market. for be to where represents we The of had applications number it's going capture question. that to growth us.Now billion be independent going to large be in wavelengths. XX% from. growth relatively there the on right year.We about in public just to share market market, we be traffic we the is get that and third-party

buy give if follow-up the right in wave mind, question the before are just to we You discount? you the with talked coming well, of don't have much about it's leverage. just wave Can price How you you update? pricing on don't if now? us How you because the not a Sorry, low base? a such market. you Cogent saying, if premium get cost are has market mind in price you But how you your premium

have we So levers X distinct pull in business. to winning

They the uniqueness that is weren't routes important most the available people in for diversity. think I have of the want we market and the before routes.

services. quickly the there be In of vendor. metro customer buy solution. to wave have transit center different Cogent's now of from provision a an the data thing end-to-end wide from demand.The situations of the wavelengths are that ubiquity third strategy in centers where will wave number it a intercity offer ability Part a and offering Secondly, is ability many we to is and we to data today, is every and an has to one have the vendor that go

delivery actually quality a We heard that transit. wavelengths have as is service with from what manner.It solution provisioning.And And able our fourth will for you fail sell. is critical, is marketplace we of we on what have many to replicate we to thing, holistic don't competitors which then timely in the a consistently deliver NN the seamless deliver delivered being our deliver is to critical that have or

Now discount. not we is with brand. market established those quickly.We X have the use to But to goal price. capture an it is will but market, we destroy advantages, will My

as as And aggressive We that, in sales established an we be were of the don't we transit force. will think market. have need I because to

to Arithmetically, We want I price because X got it sell of to We achievable.Now, high-margin feel ago. or clear are committed years Walt cost don't and And will, necessary, today.Now network buck. the are T-Mobile incremental comfortable the But back the question. that delever a to X switch definitely think its and come have will I rates the it to leverage our short going stream. leverage is go if But a I market The today at for refinance down. payments That's because from we market, we of open. capital scale cheaper if your current rapidly, debt great.But ramping targets term, in windows we'll share revenue there could than are very said, our as takes was use very I it. I'll it higher revenue of bringing this to not may down, replicate we to levels than to.

to an cash. want sheet. We hoard also We balance inefficient don't want don't

what it intend when makes to now. So we We're be X.Xx going with out, that laid we to in get within we target. will range that capital leverage we've to X.X sense.And and market-driven. going leverage maintain extra then to a is opportunistically that come range.But that the above net down that be do We're

We are committed to not hoarding capital.

not to transaction M&A. committed bad we're that are XXX bad a how we deal we the deal. view We And to this to shows do discipline no going targets deal. Hopefully when investors we doing do M&A.There's have than a them bad worse applied no and

have extra means rate being the making raising the return to probably We're to to So for of to make when or our it capital. sure commitment we're with will cash. be shareholders is rewarded dividend growth buybacks.But going means we'll it Board are we has made that look the supplement with And are and going going appropriate we Cogent. we're

with of from question & Your next comes Horan line Company. Tim Oppenheimer the

that? on And I just got basic driving Do You had a NetCentric you pricing. major guys guide. some have go-forward improvement think in is sustainable? think the And what then you that's do questions

Yes.

into factors of and And about and different. extend a to typically up quarter that there this top each buys, customer was every are on terms to tend customers in that weigh You commitments How are how buy pricing. they look layer existing we a connections what pricing, really X buying? X,XXX in long of So doing much extend reprice a see their that they NetCentric for that and geography no that end customer quarter. quarter

we So NetCentric.More of of growth going disciplines see growth pricing on the overall the moderation decline price slight rate of from customer to our is for coming I base, when international a think to in markets; more customers in smaller is are the from those we coming layer general.

didn't probably before XX% reducing use have seeing, we the down price is that layer moderating large going down rate per growth.When a they having sufficiently that the is market for bit, maybe The together, continue decline are to some transit however, case and of reasons. We megabit a kind is new this in come of customers driving X long-term little price also decline. competitive. But XX% to of to

CAGR we're about it to optically compounded the to year that to or secondly, improve I about think naive interfaced trends XX% I an underlying are technologies XX% it'd a not decline prices But at NetCentric routing rates. ever at will produce not.And be improvement, would were, are multiplexing, then, miles going that continue.So wave but Whether think division per We monopolist, the rate we wish bit continue I routed to consistent think of be improving plateau. underlying those will moderate. pretty a improving at

seeing rate geographic now is but new of point So diversification XXX a decline customer if basis from improvement use from lot of the diversification you're improvement, and cases.

while So decline these. the for because a better it look will than XX% of

Tim. That's right. That's right, exactly

And don't you of of guidance. both like parts you and going we can have And know then on related. guidance the growth points moving and revenue give give for -- guide. to related and The third look the the us the some just I basis that are on that's awful. XXX Can you the here revenue improvement. EBITDA just ton long guess a this, I base what up quarter? term But X% us for sense the to give

people this this foundational longer most critical Well, give think much to I than all is would of think a reasons But it call I is like. background. for

be to X%. revenue is the of to guidance clear, range X% So a

of off of we that The is pick combined that that You revenue the revenues multiple of the go are noncore the to midpoint the components. go want over within that are And there next are There There base down. base, now is to question period. customers any of company. that wavelengths, and away are product There And like are wavelengths revenues independently.The combined. on-net then about Walt's absolute the combined. reporting are NetCentric margin. will is that there incremental highest carry be other and the product corporate that enterprise new reported multi-year

all off to month will were and or pieces able those mix have mid-XXs. expense of year intermeshed be months revenue a in on-net us building we'll put third X payment be in assets. We dependence $X.X payment base T-Mobile a they QX, expense of on transit we will beyond reduced customer to We one.And expansion a we the we and of look and not the $X.X we network other about from about inclusive we T-Mobile. margins from and payments purchase also acquired.These wireless a of X% deliver their over decline the basis we because When growing the margin in have services only for wean in as should of off-net, quarter, know of that of that time X billion had When above together, billion have at have will as months. will T-Mobile that at X products transport the have transit QX, year, will In of their networks X%. from we we X we T-Mobile, XXX points

points range? that XXX mid-XXs so is And the basis guide of that

going for T-Mobile agreement to the over but step payment is million It that is, transit multiyear remember, a $XXX down. period,

so that from years now, mean, mean be extremely? XX%, of would I I goal the But XX XX% roughly,

that's Tim. Yes, think think I it, about way fair to a

Your next Del question comes Deo Nick from with MoffettNathanson. the of line

that is T-Mobile confirm to agreement just revenue entirely commercial with allocated from I NetCentric? being to the the want

Yes. It component it is to layer predominantly is It is and of X for services a on-net. services that it VPN is colocation. and small entirely off-net is There NetCentric. primary

Okay.

I'm just figure ago. question. -- in of think I said to similar you it, earlier When to are changes said QX to NetCentric these for you results growth I I But get commercial deducted allocate because year trying you QX, you what forget I the asked that rates were the you agreement up the appropriately. a got that I slightly who from think sequentially. numbers adjust how that if out to want confirm I said

Nick. that's I Yes, right, think

because I growth heavily and of in to go outside to year, students QX was the sequential traffic not our 'XX, roughly be NetCentric that feedback start quarter, last growth think It more. dependence So on of the people X.X%. biggest tends

I So counted they better think et the T-Mobile cetera. sale it clearly was on-net. to these are of non-transit predominantly us And much because of sequentially services

mentioned Like a you costs out? have like severance bad on thinking seems it's some termination thing. not costs, in for may the remember EBITDA. you're of is consider when this I I a line, in debt out expense onetime Sprint. just But wondering about Q, over And breaking related then weighed that are Can that that the I'm you're think his sort time, and not quarter like specifically remarks, talk other stuff initial bottom deal bit breaking second, or the bottom we inefficiencies, results. about It at there that that you should looking line

Yes.

the because to for wasn't to our this that in reserve SG&A that a So Thad previously million $X there quarter. debt was accounting. need acquired And one-time re-establish business mention one bad did the hit a was

processing we them think the auditing vendors. send the remotely, them I disciplined to fully the them The will million of agreement. of we that we as $XXX that are T-Mobile bring to handled have through transition And with also as not and inefficiencies have our payments We being in-house under intend very quickly. for ability terms payments in those is aggressive be to to send primarily are while services have to vendors.We

and a from T-Mobile we As it it in out, expecting Cogent transition year. to for infrastructure turns parallel to run the were IS

have due quarter. the that to security network concerns accelerated monitoring to time tools Cogent's unable the Systems third of all the of that been move we into some customers, in to have all our T-Mobile dealing of is with.So We and do the line

understand we purposes.With So quantified models and year-end, additional those they archival more that, probably better project.We get benefits employees that the savings the are legacy we be last tools to at this XXX use Cogent Sprint absolutely agreement software probably some fully will in business, some that that headcount headcount, also, XXX September, were of we we have model. in well that employees. when just than systems, that cost our our X,XXX were by almost T-Mobile the looking will up said signed expect We we not they only of doesn't start when ended X,XXX roughly terms have and there employees.We purchase there acquiring fit we for

agreement total our that T-Mobile. of those to T-Mobile part with by had the pay and As severance ability employees funded have to severance

realignment being additional XXX expect do see that has on here retirements, anticipate average numbers. are company, been don't will drag.And probably the employee that said, we years. and the XX as be through So an eventually consolidations parcel there we We'll Thad additional office both people savings another of exit savings.We underway resulting to XXX operations the that part those SG&A incremental side have combined an

So additional baked I fully the not our We network first. model. are on of that SG&A think benefits some into kind there are focused

it respect about is with from a on you to Okay. How should we a reimbursed gross clear, get basis? that? basis And just an net think that is to perspective, reported severance by T-Mobile or on when reported be accounting

The entire hit since P&L severance it's cost of our reimbursed by would the not T-Mobile.

it's when the door reimbursed. would So be our on paid out be it we them billed month, and then to cash would then next the and

a June So in when due were the P&L from amount amounts that. T-Mobile severance you paid. impact of that will of have the after But -- that increase because RTSA, no under on we see lot

revenue. as that report can't We

It's not cash transaction. it's and revenue not It's just a expense.

to or And last, payments them to when transit they're treat or than decision What on paid EBITDA when quickly, behind dragging based the out. of sorry just they're billed for the this include kind in was rather accrued? rather

to flow our bills that and non-GAAP can't cash reconcile impacted And a And pay to it. such, received can statement is to felt cash statement. made most cash as and the as the it the critical as you meet reconcile business. recognize coming money how was EBITDA ability bill only that it that. measure. it you We burn reconcile to operating and you acquired was the investors the it, not to you of it sense accruals our We in to this had it understood flow

comes Brandon next Our KeyBanc. from with of question the Nispel line

more up first on Is that expansion. EBITDA to with at the from Brandon. I question, end trying if mid-XXs just like. end the guys was gauge point I XQ, looking we're Evan where that to was margin based demand had market It's about dark off basis learnings we're the going of any like guess the sure the for the of would like XXX the year. for have not at just still or be you seems And were quite It fiber. you wondering what what

So if developments that. with just any wondering been there's

Evan, I'll reverse those order. in take

assets absolutely selling route-by-route the set So we demand the that we on to are basis. to need monetizing includes fiber. and We a inventory committed understand have, the dark better and

We have for dark had a requests number fiber. of

We of to are view set. a inventory don't pricing we the The demand overall start selling complete position in we a the have. could that have not because that and achieve we enough

in those to all. probably position a a are fiber nothing in our really at There's about dark not consider model based year in baked be will We into sales.They there.

points or is, a both I The XX-year of want that basis payments that basis.To something year achieve it also goals. will answering XXX lease we in we that XX XXX% basis types inclusion you those basis long-term of look over are or said, into it I try parts also there's before overall quarter thoughtful the T-Mobile divide see stepping but long-term it a we say, need discussed; services on we Tim's it'd basis and XXX next a in again, additive. over, margin it'd as to is be, So I it that, margins, point be But transit those to a trend in on the rather sequentially.As so. us. their we've at to is payment of improvement will incremental around here, sun-setting decline period commercial question, to use as be of every than points think and going well and a ultimately payments question margin lot margin decade from be that opportunities moving a incremental these think, savings to whether sales T-Mobile long-term of and expansion be the whether your to sell asset know completely to the But down.So the

term. of really think So these as long

year-end us going not in You're to number. trick EBITDA to you a give

your And from of line question comes of Michael Citigroup. the Rollins final

I Two could. if more,

for First, pacing each them that relationships, to just to relationships menu acquired a look of what's product when you'll into And acquired the these given either and ask on direction customer or of alternatives, the manage of the the second Cogent be customer the that's you contracts Cogent question over to then able the the at assets? focus be good would for CapEx. consider push

you're augment describing the do If as you rest new and pacing well services and as the products that about of CapEx us integration invest update want to all purchased the opportunities how and capital to think can this year the heritage that of you to through give enable an that of offer. to next you year the the to assets

Thanks for sticking Yes. around.

very as is contracts end So for term longest bespoke, of The remaining contract though months. XX average the that through duration the all exist let's into Mike the the would I contracts are on is contracts. primary XXXX. customer very, today. question. Sprint X asked fall the and start run with acquired One say Probably services the from about And custom; they categories. the we customer they

time services them. have originated, of will products by customers all manage we forward. have new we've And are those so the been some the been certain that requests continue second virtually modernizing $X.X therefore, changes, The products are about and notified addressed quarter basis. in noncore revenue as going incremental more have give continuing products.Finally, those reminded and purchase do a and the have the a these products.We part one been of those the in a by said, from of end have adds and about of million those noncore sun-setting There services.So process out. discussion XX,XXX customer-by-customer little on T-Mobile services incremental to came to for customers us customers to those moves, is each lifing are for these Cogent Those please time opportunity of

moves, adds only that our of.One, the are are there changes X sell informed being changes, delivered desire For and services customers to over fiber.

alternative in term. long we scalability licensed. other loops are copper, change we're in sun-setting are no not a accommodate of sense So local not customer therefore, countries term, religious a service second And purposes in yes, are if delivered access we international that, fiber.The we sales that quality to are coax, and or satellite. use that is about the over wireless looking only short we'll big this there's But for

So countries. were have used in country in licenses method do is we we XX are we trying what XX, XX those to about Sprint procure to today the regime. with.I licensing serve and based comfortable are believe its and loops markets The something countries operational of technically XXX customers fits it don't is in that in in non-licensed that those not

had to purchase will be providers of port bills, from provider have second sell.So will the a acquiring very which VPLS service in they when that buy are first Uruguay, we in have believe X closing, they migrate direct There little that customers contracts.So firmly platform a than asset at for company those only we the our be what U.S.-based over is services circuit, places are are in have for using to license. have non-licensed we tail the pulled that some there to a markets. is Yemen, country country a the way the for not NPLS which that customer, said, in So There for are in to on for can a that. them a like a -- the it we that do we to Cogent looked change, forklift will to different difference even network. is loop customers, that where found X,XXX we for equipment that in I customer have talking where one customers license. anticipated those reason, is a at came license technological are world China, where out And the have difficult them go we a a And we what countries that huge to even countries of will services encouraging through is locations way final to world with get that for time to have should we a the one behalf where are altered sites.So those had Cogent, those those buy. up for and a But markets.These upgrade like and exotic ability customers in desire is of license X but have the XXX to when frame.We get support longer to

MPLS. routers obsolete that on X,XXX we the shelves We can have that nearly sitting viewed as support

very support those these MPLS noncore been very up circuits a for customers. delivered to the well And So received those coming a in by customers majority is decade.That our willingness to pain has our positive to is of products. the message we've

had those for expansion $XX about CapEx customers buckets million is spent will for of to incremental a acquired maintenance We don't we There of number CapEx. $XX $XX maintenance ability think be of changing. Sprint. anticipate then million even integration $XX that Cogent spend. CapEx.We've a CapEx, is There's, more about And and million business of there's about there $XX finally, There million actually little of retain Cogent CapEx inside million over more grow of expected.Now, of the business that. we your question, $XX from to to CapEx. million core we So than us are some X the initially there had

I $XX pretty think the million maybe remainder I to projects. But completion on investors expect million for the basis, run run a $XXX roughly year rate that rate a those be of think number, to should of slightly should combined elevated CapEx going due So this good integration forward.

remarks. further the to this are at Mr. back time. call closing questions no turn I will for Schaeffer There Dave

if didn't you not for very possible. on We as again care, Well, and available being how we're you we well this reported all had be for asked in $XX Take questions. is to quarter. repeat I to hear everyone next a the won't their of much. Hopefully, was one everyone, this that Thanks. I transparent tried want thank consistent patience to confusing. predict, I we anyone quarter. answer you assure to as stay surprise call.And EPS and thank But follow-on too can

today's you concludes for conference This joining. call. Thank

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