Cogent Communications (CCOI) 7 Nov 242024 Q3 Earnings call transcript

Good morning, and welcome to Cogent Communications Holdings Third Quarter 2024 Earnings Conference Call.

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

Thank Welcome Hopefully, press Cogent's to quarter morning our our this you, good and earnings Tad is everyone. a And me conference Weed, chance I'm morning's review call Officer. Financial XXXX call. to had Dave release. Executive Schaeffer, Officer. Chief Chief with on you've earnings third our to

of quarter. Our a historical includes press number quarterly on every a we consistent which basis metrics, present release

Now take savings some we've to I'd the been of achieve. address like to moment a to expected that cost able

have continuing entirety May of rates substantial of savings annual the are May million September $XXX and in million initially our on expected in achieved acquisition $XXX and our Markets Global savings realizing between to cost business. were of Based in of of XXXX We XX% cost to make or savings Sprint the by the realized run synergies be cost XXXX, of from their we difference XXXX. progress monthly approximately targeted cost These savings. these in

combined business Our good a quarter. Cogent very had

Our quarter. total million was revenue the $XXX.X for

revenue which sequentially. by million terminated declined QX. million for acquired impacted continuing customer classified of elimination from $X.X T-Mobile. under was we the by T-Mobile off-net that have quarter million revenue agreement by grooming contract, we from that for resale continued the acquisition, and our $X.X and on-net with Revenue with the of revenue was sequentially Revenues decreased low-margin connections, million reduction the the low-margin products the intentionally in Sprint agreement enterprise revenues as in to Our low-margin noncore commercial business a and $X.X results for the were with commercial services quarter from $X.X which services

increased would X.X% Excluding the our total sequentially. X million have of results these approximately our $X.X by revenues for revenue, impact or

quarter. for $XXX,XXX declined noncore to by also $X.X another revenues the million Our

increased of sequentially revenues year-over-year million an $X.X increase wavelength by and a on Our XX.X% to XX.X% basis.

XX.X% by $XX.X XX.X% a Our on IPvX year-over-year and increased to million sequentially revenue leasing basis. increased

for and year-over-year quarter traffic basis. network the by Our on XX% X% a increased sequentially

Our and increased points million, basis $X.X margin sequentially EBITDA our XXX by XX.X%. sequentially to increased by EBITDA

adjusted service $X.X previous the T-Mobile, compares payments totaling $X.X million, These this payments payments with of XXXX. transit for reduction with million our quarter that This payments monthly to T-Mobile, included in million, million margin with quarter offset million. are additional due to a quarter payments under quarter million of adjusted per X in IP for million. XX are we partially and as versus in agreement payments EBITDA month as but the EBITDA through was for EBITDA $XX.X scheduled decline sequential payments XXXX. change and our was was for Our The $XX.X of $XX the an the $X.X received our million transit services $XX.X as will received adjusted. XX.X% QX our of continue XX.X% we our sequential the monthly The of was IP In accordance November increase in of EBITDA. $XXX.X agreement in

We continue to reductions expense the base. cost realize acquired from

or decreased sequentially X.X%. $X.X Our by SG&A million

quarter. a decreased XX.X% revenue percentage to from last as SG&A of Our also XX%

the converting Our were that sites cost the expenses, of goods X costs in million due the tri-party to vendor additional end that The sold switch last Cogent we major termination certain This that was contract of former out increased agreement and had to terminated relationship. centers Sprint opportunity was and first agreement. that was costs. data by from in the $X.X quarter contract involved to capitalized buy primary a not

or X%. the cost goods by of our on sold $XX.X basis, of still course decreased year, the year-over-year million over However, a

was quarter, reduction quarter X.XX IP a cash to sheet. ratio Our gross of and ratio increase as of X.XX net the We debt our debt as $XXX.X to with million the balance for on result and trailing equivalents primarily in cash did the last EBITDA payments the X.XX, transit adjusted XX quarter from ended T-Mobile. months from

quarter hired sales rep Our productivity remain X.X month quarter's At orders XXX X from XXX In of of XXXX. to in in QX. of these with the employees in per Cogent. force Sprint total with month installed rep orders improved acquisition, in the QX per May employees per per conjunction end, we a

as business expanded services network. In wavelength over these network, optic conjunction the we materially. We with Sprint improved fiber services wavelength to and began the North we selling sales throughout acquisition our to and end as locations product XXX wavelength optical capabilities of the Our At customers. our customers include of offering America. new quarter, well had in connectivity Sprint existing acquired from customers the

However, with provisioning we targeting. than longer are cycles

wavelength now over cycle. locations. XXXX, We able offer more slightly end have sold XXX much we services with a XXX in over rapid be in services wavelength locations to By expect to provisioning the of

We X,XXX have a of Wave and opportunities backlog over wavelengths. of funnel unique

footprint. Sprint materially expanded our data Our acquisition center

we to megawatts. data which added have of XXX are an centers in data there As of network. and protected the addition to our Cogent connects aggregate to. condition centers, have Today, partially are data capacity XX facilities reconfigured that X,XXX power These of XX XX, centers the acquired September Cogent added carrier-neutral them

that We redundant data center are our are Cogent Sprint legacy facilities decommissioning leased fee facilities. some with simple-owned

expand period dividend. XXX raising Board share per of to on capabilities revenue margins cash year. made opportunities quarterly of dividend is consecutive XXth decided investment We share per progress we to per by between to to points on combined roughly quarter. the our increase This achieve Cogent and rate. reflected and long-term and regular increase have to flow represents a annual over quarter X.X% basis and a and expect the per our $X.XXX average quarterly have X%, of Sprint quarterly Our multiyear adjusted average per in increase $X.XXX growth Directors of business we sequential dividend a generating again, our expect growth This that the the business. X% $X.XX do our we EBITDA share, continue from the dividend at

Our revenue multiyear specific used even be and to as guidance. not or and guidance specific are be intended intended annual quarterly to guidance EBITDA

Our that adjusted the $XXX we received leverage by ratios with EBITDA as are transit million under impacted the agreement IP and T-Mobile.

Now for to the floor some safe we I'd like ask and will metrics read and performance open answers. to harbor provide for language then our Tad operating the additional questions quarter,

And and refer morning, the revise to non-GAAP are may differ that information no and conference statements. cogentco.com. to our find everyone. Thank our all not the you, actual forward-looking for corresponding call, update Please could call other are that are financial this These we of forward-looking during statements, factors website to at will these more use Dave, SEC forward-looking filings upon our obligation results and belief a on made cause facts GAAP any materially. in good forward-looking measurement or actual on these posted measures our on reconciled subject based Cogent historical and to earnings undertakes call includes intent, to and differ. This may our expectations. if results that statements earnings current you this that release be are risks statements number statements and uncertainties,

our off-net, connections. and types: all customer is we analyze NetCentric and corporate wavelength, and also our noncore, analyze based into upon classify corporate type. connection revenues enterprise and type, based revenues We customers. NetCentric, and network We customer revenue customers on upon comments on-net, Some which X

continued sequentially end. at year-over-year business On revenue and of noncore elimination the grooming represented network revenues decreased corporate our primarily quarter business, X.X% connections the corporate of corporate our quarterly on the off-net had by sequential XX,XXX connections of was The and products. for by We our XX.X% decrease quarter, corporate to low-margin and due our the X.X%.

quarter, of a USF NetCentric revenues corporate sequential business. the the impact For our on $XXX,XXX. positive was

artificial business Our NetCentric benefit traffic, intelligence, to video activity in continued streaming wavelength growth from sales. to and continues related

of revenues business X.X% NetCentric X.X%. the grew year-over-year, and but for XX.X% by quarter decreased by Our sequentially our represented

Our had and year-over-year, customer XX,XXX our $X.X declined by our sequentially quarter with declined at on NetCentric impacted NetCentric million that service connections revenue agreement $X.X T-Mobile NetCentric our under We results. end. by revenue million and network commercial

On enterprise the business.

enterprise customer had was million. of end Our network the at of remainder $XX.X XX.X% this represented enterprise quarter. our We revenues on business our the the XX,XXX connections of quarter and

by noncore that the on-net and in revenue enterprise year-over-year by or $X.X low-margin enterprise by from acquired low-margin due and sequentially revenue by terminated reduction classified Sprint decreased XX.X% mentioned as sequentially $XXX,XXX. and in resale and X.X% revenues. a revenue that we This Our Dave intentionally we a million. Revenue was to declined primarily customer acquisition

in customers impact revenue. office X,XXX network and exclude our this this increased carrier-neutral or We customer by from have by million center by If would sequentially buildings. enterprise on-net revenue on-net total type, cancellation, our data X.X%. serve On on-net revenue $X.X connections multi-tenant you our

in and selling succeed larger selling centers to and XXX XX in office connections XXX connections select multi-tenant data gigabit gigabit continue buildings. in gigabit carrier-neutral We connections

an of Our The our our X%. of our Exclusive services the and results have of sequentially on-net revenue on-net which decline resale aggregate was X%. cancellation revenue in T-Mobile $XXX.X again these that sequential million or year-over-year but for million. impacted $X.X commercial total with would revenue of sequential our low-margin impacts, increased on-net increase quarter, X.X%, was a of the decrease million $X.X on-net under a agreement revenue negatively by by customer

end. were connections quarter Our on-net customer XX,XXX at

revenue. off-net Our

decrease $XXX.X of X.X%. Our by revenue off-net and revenue partially million customers more off-net contracts, the again XX.X% impacted small a an The grooming of continued the of year-over-year was sequential in on-net certain quarter, off-net sequential to low-margin which of a of had and impact. decline termination and was our off-net decrease for migration

off-net connections end. customer XX,XXX quarter at were Our

Our and for increase a sequential XX.X% wavelength quarter, the year-over-year of revenue million increase of $X.X a XX.X%. was

at XX.X% X,XXX were end, a increase. connections customer wavelength Our quarter sequential

Our revenue. IPvX

million and an leasing IPvX and end the quarter, were business last had year-over-year XX.X% by the million $XX.X and IPvX quarter. the leasing $XX.X increased excellent XX.X% from addresses our increased IPvX of by the of was We for quarter quarter. at Our revenue

noncore of quarter our of customer a the end, connections our $X.X due noncore for quarter, XX.X%. or of a sequential And decline life noncore these end decrease decision was X,XXX again, to Lastly, products, XX.X%. revenue sequential at were $XXX,XXX million to

pricing on megabit. per comments Some

price per megabit year-over-year, average with decreased Our and base to XX.X% installed trends. $X.XX sequentially consistent historical by for our X.X%

and XX% megabit per was for new decrease price the year-over-year. ARPU. Comments quarter of sequential customer XX% average Our $X.XX, was which on our a contracts for

ARPU Year-over-year, decreased Our from $XXX X.X%. of X.X% it sequentially on-net increase $XXX. was to an by

from ARPU sequentially increased by Our off-net $X,XXX off-net Year-over-year, to ARPU X%. $X,XXX. our increased by X.X%

quarter. increased was quarter. average address a of the compared was last per XX.X% $X.XX ARPU revenue was per quarter sold the by and IPvX this beginning average address at wavelength for addresses the was materially for quarter. an of all Our That the from $X.XX The $X,XXX XX.X% to and increase higher $X,XXX base of

rate That churn monthly was from X.X% last X.X% on-net quarter. for an Our quarter. the improvement was

off-net our margin. this to to Comments on each monthly and our EBITDA churn from last We quarter. of in flow increased releases. X.X% EBITDA unit our quarterly reconcile operations cash Our rate X.X% quarter press EBITDA from classic

increased to XX.X%. EBITDA points our Our by by million increased and basis EBITDA sequentially sequentially $X.X XXX margin

includes EBITDA agreement IP this under it acquisition adjustments Last quarter. costs million quarter, Our $XX.X $XX.X collected cash We agreement IP T-Mobile. $XX as adjusted for transit so received of million. was services and under a the reduction the with million, payments Sprint transit

of IP of EBITDA was it $XX.X due sequential T-Mobile, sequential acquisition payments adjusted classified of scheduled as The costs last $XXX.X to ended as May was quarter. agreement million Sprint this $X.X the the incurred the and XXXX. decline XX.X% XX.X%. quarter acquisition That a the and we million was as in of million we EBITDA Sprint quarter, or adjusted under quarter, $XX.X Last the offset million costs margin. none with million EBITDA, as our anniversary acquisition incurred change of was Our in Sprint X-year transit that $XX.X increase for

currency. foreign comments on Some

The quarter, Canadian and If that would our highly States the and USD was our Oceanic, revenue related this reported average Canada, Europe quarter. of remainder Our American, About African revenues and dollars and to X% Mexico, the for XX% for XX% earned United far quarter were euro U.S. based our is impact at rate we in in South exchange so operations. to outside rate the $X.XX the FX about of and current believe customer of revenues revenues the dollar We is the $X.XX. not was be Customer for not average significant. and that fourth both levels the estimate sequential revenue concentration. conversion rates quarter on concentrated. year-over-year base those our remainder remain was of the

down Our XX% top our customers revenues XX quarter. quarter, last CapEx. represented of this from slightly XX%

Our the were quarterly million capital expenditures for quarter. $XX.X

one into the former network We Cogent network Sprint unified switch data legacy are centers. and into integration Sprint of continuing network sites and our network former converting Cogent

the for center our spending quarter high our quarter and due this availability, level we We this and through as demand to will have per power conversion require CapEx program of expanded incurred similar program accelerated mid-XXXX. data

finance on leases. comments Some

Our finance IRU leases. fiber for are dark obligations long-term

cash under IRU were and restricted IRU fair obligations ratios. and debt quarter contracts Our the and cash. the million. dark the end, diverse total lease fiber of we our million IPvX value swap $X in agreement cash million Debt at suppliers, the requirements restricted was was and world. of was tied our IRU to $XXX.X have restricted, set cash Of very we of $XX.X million aggregate quarter and that and $XXX.X our notes. was end, tied suppliers different $XX.X our finance to have cash across with At million Cash XXX equivalents a and

finance gross debt billion. total was quarter and our billion $X.X obligations, at at IRU our Our $X.X was including net par, end, debt

debt quarter Our X.XX net X.XX. ratio and months as our total XX was EBITDA was debt gross last ratio to adjusted end, at

consolidated secured calculated as X.XX. leverage note Our ratio indentures our leverage our and under note ratio indentures our was calculated was as X.XX under

Further calculated coverage under was indentures the ratio as swap. fixed on note comments Our our X.XX.

classified the public party rate our based swap a fair to million secured to in our rate term $XXX interest by Changes decreased an swap filings notes are interest expense value of $X.X obligation swap on that associated financing of fair our remaining rate quarter million. our required interest modifies with fixed agreement GAAP. value with are rate the from XXXX We our overnight the for XXXX U.S. variable notes. of agreement as interest The in agreement under last obligation

Finally, comments on and DSO. bad debt

days days the XX XX was for versus quarter. DSO last quarter Our

XXth. to for customer bad since largely Our just where with Sprint increases was also with due our issues associated quarter. the a some was quarter calendar former These $X.X that debt being and expense XXth the collection million of the And resolved X.X% after fell, large revenues unkind with again end. we it were a cash the and worldwide in Cogent that, We some the want serving final thank substantial incurred collections we the doing, remarks. members customers. and team after turn Dave billing back I again, call our for fantastic And our week first and job over recognize to to will

our to like and network, couple base a force. strengths sales highlight Thanks, of Tad. customer on I'd

growth quarter's IP that X,XXX customers coverage substantial At facilities. enables their in this end, carrier-neutral Cogent-owned We accelerating we our traffic optimize continue and NetCentric to data to XX were The centers, experience latency. and breadth in X,XXX centers our reduce business. NetCentric better data bringing of networks total to

a XX services. have these in countries globally presence We for

market connected next to of We to services are these centers to transit of this year over networks project data are wavelength carrier-neutral sell to expect we adding directly Cogent carrier-neutral on XXX the peers and XXX remain force. By lead continue years. and these At sales in intervals. the in reduced able network for We to our the to widen several networks. substantially each expect X,XXX we our networks centers end, over XXXX, North end quarter's of with X,XXX American customers. provisioning focused data XX be

sales force that at Our training them successful. company underperforming managing dependent is out reps those more on to even productivity the reps make and remain

space. of from We of focused over our NetCentric had sales about height focused our businesses rentable end, our force X.X% rate position over on above of the turnover remain districts unique market optimistic on professionals for sales focused quarter, and with square market, sales feet corporate medium-sized located force on month. but multi-tenant average per of in still billion small and pandemic, slightly professionals X month XX central sales of office services during per the American quarter's major the the XXX exclusively peak connected was turnover X.X% North down to Our serving with our the salespeople force IP-based in enterprise market. a network, rate At we XXX the directly of X.X% buildings sales the the X,XXX business cities comprising historical

our continue to our opportunity grow the about to services excited profitable customer large to enterprise are base. We

or our addition to We transport and business are and portfolio. optimistic services wavelength enthusiastic about optical product their our

a We of significant funnel X,XXX backlog, wavelength a wavelength over have opportunities.

cycles, all due will, not provisioning are to these longer be in our sure we orders However, installed. of fact,

reduce by that will window provisioning substantially We end. quarter

the capabilities our cost of $XXX realized We integration are between diligently and million September on $XXX we of working of operation. XXXX, to Based the complete have in Sprint the confident and of flow cash costs network annual combined Cogent million generating closing at or network the very XX% targeted reductions. the monthly about difference remain this versus

continue to and our our monetize importantly, dark power. most fiber unleased ways center data capacity focusing to we are on at IPvX will look excess excess maybe We addresses, our and

are sale We are lease. either counterparties in long-term as direct multiple on these discussions basis, a marketing wholesale a or for a with sites. Currently, multiple we

We been modification With feedback their open floor requirements. to of I'd these taking meet the and like the from that, questions. accelerating facilities counterparties those have to for

Instructions] comes Schneider Jim Goldman Sachs. of [Operator question our from first line the And from

what was expected sequentially wondering, installed. you of better some that Clearly, the already but really ago? sequentially for you a on said provisioning on backlog, the I a be then up maybe comment revenue. moment. And comment you uptick business would also may than backlog, if maybe you're getting improvement you a that Dave, about fact quarter I maybe these on the just reflect could XXX think not the Does wavelengths in had nice on

expect provision would it? determine to next that about, quarters, you you if to rate we point at backlog can't backlog and of expect growth look the any write we So could as the you maybe of talk any few whether down

Yes.

Thanks different for So questions, X them. Jim.

wavelength we of number increased First of deliver all, we could substantially services. that endpoints the

while confident XXX that number sites to In year-end, ended that provision sites. need be be wavelength over all order the rapidly, of will quarter the wavelength that we implementation. quite are sites intermediate at to XXX for We by a optimized

Our we customers the wavelengths. from resources in that and risk program to to days. our sites goal XXX to had weeks enough comfortable the is get provision XX backlog these some had install optimization today that to those and did by from about the year-end the away diverted significant points in about made X certain windows down we network were wavelengths, hit total we We the had for that intermediate that not wavelength needs of progress all pushing out. We

We backlog. customers our are accelerate continue to we orders, talk will. the in to can of that certain if And we those

We also sitting know for those that orders been months. some of have

transparent customers have customers We those in X tolerant on have have also orders us customers to Most that not be of that are those is with or wavelengths. continued we'll and provision in if sitting it to But have when of orders, view limitations reaffirm those X of what we have actually discussions. provisioning go our may acceptable those we been and tried windows. very terms interested that to as hitting they some months, realistic to some for accept and been

with of next actually Now into expansion funnel year. we rate should the materially the funnel regard building, to think accelerate

that fact, and we our our industry standards aggressive. They with of The in more we or exceeds As meet those establish in success pricing delivering remains quality see the demonstrate credibility windows. then wavelengths, provisioning we meets service can, buyers.

see business wavelength to share that for the target in be will transit. IP XX% in optimistic doing hit which wavelength very ramp America, our feel share market to $XXX our represents that of we our to material in market similar sales, able X-year growth we post-acquisition North of in XXXX, a of a million So in

network I things. And wanted of maybe then follow-up, a ask the side about to cost as

vendor you costs. sites individual some the cited termination think converting I and items Sprint some also

for on rate where overall of a in basis, into we as QX, So head settle line, does out? XXXX, should be go-forward how revenues maybe we those a about where that run thinking cost

of circuits we unprofitable eliminate customer improve can eliminate to we is services. or they those contract for noncore that they the off-net any reasons. X for will out continue be One, low-margin products, So once products whether

between substantial actually had X this a was expense onetime we was Secondly, to because with out buying complicated but it it, bilateral a of That inherited, and contract. did had quarter, to counterparties we a associated we those parties. have get just concurrence contract contract not it that

While cost incurred we receiving we it were is the basis. a It amount, we've That that and has of exact onetime substantially a it. can't concur largest us to to typical we and the that that was exit quite and good people almost worked year gone. to honestly run probably the settlement disclose was allow the cost on most to of these above contracts get for rate on revenue complex

be then smaller definitely the some item we contracts XXXX. the center While accelerated our that they of up, smaller, data third sale will will lease. there up will few marketing space, come have are a but or wholesale either is And as show for in

been have dozens locations conducting We counterparties. of dozens tours with of at many

from We counterparties on getting feedback want they been what to those have significant see.

accelerating our we sometimes in has sometimes us Now resulted But we facilities. these don't. of it, conversion it accept

the Just announced transaction, was remind facilities. been XX. XX intention investors, to That's when our to increased we to convert Sprint

sit X remaining was fallow. Secondly, XX,XXX to we convert power and square into to Cogent going intending feet about and space data center megawatt were and retail the a only about

that power of excess in fully will data QX. complete about all converted the an we 'XX, of centers. space. power conversions. all beyond quarters and that shortage of time spending couple that the end April of acute data and an to marketable probably to be these of mentioned, X and more for run caused $XX center rate increase incremental of listening We these million attributable As amount opportunity center feedback, And of we them an was to the an and in to that capital We anticipated. conducting we customers so AI capital on in by had network necessary acceleration as potential elevated excess result at CapEx monetize the data talking we that solely began believe conversions, Based we training last realized had will things: tours, we did complete Tad power, the conversion have a operational and with these that midyear excess

had to also work the We that and be facilities in deprovisioning cannot demo these and work accelerate demo capitalized.

of our did it increase therefore, sold. So goods cost

for to that next come down this expect quarter We couple continue the down quarters. to of and start come to

question of Our line comes from Greg Williams. next the

your Dave, on-net was down revenue quarter-over-quarter.

You that million, that it was mentioned $X.X impact, that, million but would still contract been this. $X.X that had have down excluding terminated

So and forward just trying would corporate the I be same-store mentioned think will of helpful. size the great. that you cadence And sales would here. the to there understand dribble color More future going color uneconomic contracts XXXX. on And into be

Second $XX question for sale the CapEx it per few the Could less they just But marker? into sell like it on process center they the is $XX so next just price. can sounds for megawatt megawatt than fetch million then quarters command and mentioned. you're the you per million data putting a

Let Greg. X those, me to all of hit try

contributors the in primary revenue, were decline. to all, of there that first So X on-net

commercial in agreement first The was sequential $X.X million decline with a of our services T-Mobile.

in services As we $X.X We the use million They do clear they X, or T-Mobile. not come have these its them can, our we anticipate particularly to at T-Mobile to agreement that been going decision, them are quarter. deliver down profitable are and asymethodically continue by to bound not. purchase did to and very

of second big this contract. as commercial the was impact, the The actually reduction reduction services it in was twice big as agreement the

million were in until stream, that quarter. get which $X.X had exercised buyout than in counterparties it we in but revenue to a provision, out not we could a that X was we resulting counterparties selling that would that agree had service We actually that a both to the costs. agreement of So more

to wasn't parties both concurrence like we the of honestly, And for didn't just impossible a this was us X was about. when because need may opportunities something happen one us this parties. on. to would months the It that to think some but I XX And that predict have investors it took also we get we've working know we forward, quite this been for agree. going smaller it almost

If I the on-net. just could add to

the So prepared this in was remarks.

of of So contract transactions, both on million the the on-net. our impact $X.X and customer was CSA the total those

would up sequentially, So if those X you adjusted have been by we line. X% in the just for on-net sequentially

Yes, are and corporate on your year-over-year pre-pandemic, but then absolutely, they to our basis. to sequential question at continuing where to corporate, secondly, reduced products still rate growing about a Tad. And a core perform were

streams, X are are probably corporate on-net. services services probably That off-net grooming revenue cannot rate, for even we of continue we customers, We and noncore reduced margin will to the at corporate bring grooming low that margin a types process but or negative cases, reason more are contract $XXX we such contracts in until we contractually That quarters primary loss to at by many in those because that is services time the the several bound a T-Mobile paid acquired acquisition ends. the provide as us million.

have question. price looked no and at of We we and were the We establishing had go-to-market our experience data traded recently Now I'll this wholesale what market. looked that centers points. center operators to your data other at charging pivot in price

opportunity convert were we converted. initial April to on power facilities. that bus we some in far tours and go being contemplated. for transaction, facilities. that when the center. to are site a marketplace, did begin research began an fact, tour along to at We've counterparties purpose-built need the brand-new In this sensed we end start felt those to But we as that not it acute we of even the the enough We than investors facilities switch to allow data They is to allowed the have analysts are some These of that. even different to a the on written was

the are to have literally we held done, While tours that dozens, be gathering understood we there we hundreds things that maybe of are customers. needed many input even from

they Sometimes the things requests want. unreasonable are on

reasonable. Sometimes are they

and we work be this that bit work. a done, to We with also as done capital there have these facilities to still of goods contractors of That cannot We're does resources but require are demolition and primarily use more cost is team little get sold There's that. lot doing of and the a ready. more it precondition incremental incremental a that be of diverted capitalized. require preparatory does our

say, a will the and by want they of I divergence counterparties, around counterparty. deal Now there's site great what among by

to return capital The on are the of to capital. opportunity. trying minimis relative are We amount spending to the optimize we is highest de here

$X on or get capital, sites, So outcome our megawatt we of a whether them. we these million phenomenal this million based $XX be will sell basis, this if even $XX with million, a out

a on We but both, We basis viewed, also more triple market. have counterparties think, the have, I net has a interested sales. than long-term million leases exceptional the megawatt say, would an as I CPI $X in in bargain increases with per do been year

effectively on to continuing there counterparties. site-by-site auction some get a my where that be to quiet are have multiple guess ask. And is We premium have we we the a sites a will basis will

the Some sites return highest achieve transact. and we for a is shareholders. It the and parallel the get maybe some our effort to don't get ask ready to

Our next line question Barden. David comes from the of

two. have I

more be of X% a to range. we've kind seeing like related housekeeping the is X%, at IPvX in first question, leasing that of The volumes been I guess, IPvX. growing And

going updated the the right to sites of You at raised you looking your of the about, brokerage And the a little bit I AI sense call, your having Internet not And Dave, AI from then X% at in view the this Lumen been the and it's prices your that the moving now?We've talk some just the secure away to where rest falling. it interested of sweet have basically just made as opportunity are that there. and spot at the prices is risk in in of kind current too too world second, that and the talk is really growing case small, they're slow range. the the elasticity kill in of price thoughts. and puck emerging the Cogents that the enough for wanted and they're physical operating. market now Could earlier week Dave, been that world latest and you

that, retort love hear If could to give I'd you your me to it.

Yes.

question IP address Let me the take first. space

their lower price. contracts And think, that the had price. signed obviously think I order they shock was around just there pay When to implemented negotiations to the robust. to I of So not increase, customers then demand the a get need there's bit that in a adjustment we head price in some but were remains at new

of behind that us. most think is I

volumes a or as of sometimes continue foreign corrupt do don't I sure will the run on counterparties to make a the see those on increase. there think diligence lag type issues. addresses, of any to Also the you bit issues is security we provisioning file practices of a they

threat. X have then that existing that and of a people new of customers present dedicated sure a We the make base to don't they monitor security vet team addresses

the pretty see by the reaccelerate. to growth you'll do good decent substantial inventory. think is a begin And sequential still XX.X% revenue We way, have and volumes the of I base. off

is the think In sales, I terms bifurcated. market of

have For sales, block prices small fallen.

For largest ever possesses large prices remember, And block Cogent been the block sales, the on firm. basis. held that very a single has have given

Now there are others, the size block. of our

that don't has want single we're one in contiguous present block. we unique, to but no I So a have than more

want now, we achieve be growth whether in we're in leverage pleased of lot a of pricing pretty with have per we growth think terms right able and them. the to to to But in going we're that sell the volume both I So address.

XXX I growth, centers, has year-over-year needs public zettabytes traffic my Today, year. an public it's elasticity replace and that of the growth rate demand on don't short a decline. technology the yet alternate predicted the sequential hardly has and answer The all promise to growth bandwidth. a data die think in over AI technology a or rate. the zettabytes amassed then I grew Internet is some is possible at Internet. grow. and Every is of pivot, because things; going Internet at We fabrics, Internet, collected answered Internet everybody in direct to of there's the about that X% whether been is XX% XXX growing been of CDNs So That data have is Internet rate and the roughly been from there years. now to and cross want connections, data of continues there XX questions AI because of collections, the time peering do the that actually to there connects that's else's for always to get that's X keep to I'm I going a problem. state is

it has So an storage AI the acceleration in now value because data and training. of collection for

additional fully point And think third-party that require beginning, training pair true not traffic mile. We certain to the is only the optical piece. are efficient latency hierarchy bits I of that of world. one of we're and that And metropolitan X/X are allows and carry continued not Cogent to the infrastructure wavelength between security. that The developed that services sufficient. There selling see visibility it, utilizing XX% we're cheapest, the the fibers, being fact fiber only sitting of the still the these transmission our to piece move about of going market. current most of trend It per There do numbers. and acceleration. major defined has lit models storage of exhausted thousands us is Internet's to is pair way every is just not The are the area bit strands to of fibers then and to and attack Internet. a capacity. about is throughput of Cogent of cost dark

most a is second wavelength. way cost-effective The

finally, third that else fiber. The engaged disagree premise service. premium there's expensive build And I is the way buy move and But with replacing a dark there And the companies to your has something is bit absolute peaked expensive to will own most it. the way then are fiber. most strategies. It's those more a in Internet cost-effective

line the comes Walter Our Piecyk. from of next question

obviously, in So on is the the meaning see you front this these engaging with all you're market discussions. speculative, of you, CapEx, that basically

next Y? these then look of sales at? year? pay Or Or do CapEx X, see contracted to now going second have that the and the can spend sales start we we there You specifically say, we're guys been in half first you already to have

been there not So sales. have

of We have intent. letters

have parties. We multiple

a have of executed We not letter intent.

this not even our letters acquired were assets. gotten buyers. monetize of to part from have We initially We planning

had couple a sell. the initial Based probably are review said it real of value, retail we on a described X/X back advantage. were like initially we the that percent colo these go much a transcripts, on and continuing was amount preparatory footprint of has our exists, built, demo because and a all only work today, we capital. has you we and were then If to it much inbounds knew just But our wider these and in where data One, use That facilities. Cogent assets. we to is also the the to to roughly doesn't of that an going components. footprint sell sitting product, modest power work we outbounds, X going we and asset And have of of and be has then time-to-market reconfiguration major to reconfigure center

market incremental the to number have We overall is several parties, are going that and capital return. very the give over confident price that we a enough to the on amount the quarters spend of differential we're based us high next the modest going of

tied at is, it a get data spend to September want already in reasonable get time I there then half. million the more hope think $XX capital that, then I then lease call the a down of does let's million-ish then it's Or sale it, the look a will payments, run was 'XX, dropping question there's capital know you next you of like, the centers, drop $X some for don't I I CapEx second to lease? else the in and in that's is cash there sales do like onetime sense then quarter, million more? of that. terms to had there? whatever million Does $XX $XX you appreciate for continuation let's you but payment $X is you have level? your but And said. say, say of in year. contribute Or And Or million 'XX, a to do reiterating more last off? to back you X June end spend trying million, $X what it to what quarters, the we you But is so basically a like guess numbers burn? it rate June new the get I when you is, I'm year? just

Yes.

will that are one, question, your before answer center data they reportable whether directly to I have believe we leases transactions, or June. So sales be

So don't wait to a have June proof point. you to for

the that's we the will related points. I have centers whether entire proof Now doubt, conversion. continuing have CapEx we data beyond Two, initial to will not but portfolio, this

have will to acquired quarter. That prepayment last the spending do are money to did incremental a will of And is Sprint So when acquired network actually see we also leases the what down. capital some payments, our our the capital convert lease to very we go dropping meaningful leases number we acquired got the event. XX fiber related of But have XXX onetime With we regard of facilities. we off. total reconfiguration. will some still down expenses go miles was We that a and

going more probably on capital payments? this of principal million lease forward is So run a quarter rate reasonable the $X number

pretty Yes, reasonable. it seems

talked contributes going revenue, CapEx, increases. about the we wavelengths, dividend. debt you're sustain getting obviously How but the all to when terms all put Barden off, pieces together you're this if increase of now volumes ramping have So this to price continue in IP then to elevated you dropped the things, obviously those to

is just So especially the there math, it's know I drop-offs don't how question because TSA the guess the I burn. cash with that payment exist.

go cash in So I terms to working comfortable think don't up is capital. drop going debt what because below, you to your of has know is

future time going any also, occur the So the in. additional some and dividend? Is kick dividend, be way, given growth not positive fund as to probably reconsideration that how is headed day, there interest to in to projected higher adding all quarters. you're to be maybe maybe given the these sheet right these of sales your of just that the by up is things revenues given the just in outlook by of terms these obviously, balance policies in today, together the a the And are leverage rate numbers turn, the some it debt before work the change

So year. this as X to of before, years, flow Cogent XX from Walt, we've last $XXX XXX% million for more had its discussion grew EBITDA has cash than

payments transit off it an IP T-Mobile the of dropped LTM arithmetic the that and is test. correct are You

leverage up. arithmetically, go So does our

We have additional substantial access capital. to

We have, it's the IPvX, ABS under transaction, trust. for example, a

that into the of XX% that give revenue by just the increased trust immediately. we since run now initiated rate have capacity We XX% would borrowing us

vectors multiple it as have existed comfortable and to we've we comfortable and and monetize has that the consecutive very a for comfortable growth XX quite in what our dividend are ability past of to are progression forward quarters similar We historically. policy are with had continuing

line the Rollins. Michael next comes of Our from question

A questions. couple of

a you this numbers now in much or more how you share cost some of First then one can on look apologize of for relative just the how that secondly, to And and where cost but what constant just you you're normalized XX appreciate growing, in I is to there is through first you quarter, described cost managing if cost heritage this in service X.X%. these is basis currency like think the down everything a the service it's that year-over-year decline, is X.X%, year-over-year, rate acquired the of shrink other that that of is the before, you mentioned quarter if change given right basis? number with in goods months much to much the growing? heritage the all you revenue And revenue? And get noise have then was the of what's NetCentric at I run these corporate things comparable the on how

constant I can take currency. the

the It was only total revenue. negligible. was on So $XXX,XXX year-over-year impact

I'm And I'm Sorry, the just at? NetCentric frame total revenue asking did shrink? did X.X%, using what heritage the currency. was at? acquired about What the grow like revenue did not that as corporate grow if down the what Heritage of

Yes.

of X had intentional buckets basically we shrinkage. So

all are probably again, groomed, Those We way Two, through way had we've away. go to but be what those The first services day them would noncore liked through probably, to going that X/X And the continuing services. of X. of of can services elimination we're being away grow. are the noncore we're XX% off-net grooming. we the low-margin we have

at that XX had but And are we did years situation, are of we take There inherited that sequential to quarterly the there getting we after hit million revenue trying $X.X we total larger unwind. deals In any rid some was particular than of that it the deal. business bad for of if Sprint business extraordinary Third, acquired others, we been case, this had in and looked this from in was actually no growing. we current so was as Cogent it, parse termination combined nothing revenue heritage actually apart. when about enterprise acquired decline talk to The there's this grew us. Sprint, growing revenue a there. phrased company Tri-party is it. absent one is The sequentially, to, which surprising was the business, enterprise heritage streams. you little to those due it let's And

comfortably question, a we to say on I while volatile. but But saw material is Barden's decline? is included then as volume business, a in pretty XX%. and saw we've noncore you the now reacceleration. implement And pricing in the about constant and discipline grow of that reductions traffic being currency been to that's it the finally, at got to And back services, on around slowdown because some Dave And we've connectivity patterns. X% that new absent at X services. starting in better corporate the growth to been back growing QX, seasonality, is of And these is around is corporate NetCentric Internet business, base The more highly that this goes Sprint basis historical it off a is Cogent continuing peak can able and off-net on remaining rate. no. dependent discipline we've It's by a Some selling services. growth to annual for acquired design, core QX, low-margin

on of over rate noise you level the right run that of when service, what's of And the you described this call? the cost out the all take course

allow unusual on is is came from I in decline. noise EBITDA should buyout. It's more QX the And more to to the reductions. goods continuing look they In line with COGS SG&A QX very did This in quarter, us sold was should overall than the did what set And previous of almost growth probably in we from but QX. think came reductions line contracts. EBITDA a QX. certain the of terminating all there grow more COGS this and But QX, cost with associated in noise, there in like of it trend

at On would therefore, QX, complete space be cost CapEx wholesale monies put exclusively think, we in the it is going goods to then and in substantially some demo of by there the up that The show do be hit of point. I won't data that should, center that work, but into sold.

a giving allocation have date, in a and period during which possibilities in going target asset you're target take calls, And that when over time? the do of you is a the way by mentioned to call you past this dollar multiyear number capital you comfort allocation and you at manage for a the look total, certain in that at some monetization you look capital

an second quarter. the we would had IPvX probability I experience. the had around productize monetizing centers. it inbounds it. data customer then because we we as say higher It leverage. result interest We in do rate If assets in So centers I pointed capital. those, the had with QX stream than One, X as leverage, more That may see out. stack at We the the did a today, a that subsidy well to our buybacks very lowest higher a but on reduction absent probable, rank dividends will trying probable, monetized. dimensions, we And ability that these rate and environment, the to number in think or as just even be be net we the sufficient have able large But of most to to in Mike. potentially little fairly just data I as more equal X one fiber, as or from did organically the was sale to we gross a in we've EBITDA, our have will payment them that that return comfort grow was favor of actually fiber a the be dark are of Walt buckets a T-Mobile and that and dark most able to grow do had were

monetization many these me just will added dollar amount, that we a I too a the in in in from of get that front of to permutations specific investors. date benefit comfortable For think I have assets. other specific there's growth delevering put and But beyond to feel EBITDA

comes the question line Our from Deo. of Del next Nick

Dave, sites you're said into that of convert you data that increased. switch number the has centers to planning

number call. gave you sites earlier on that planning to split with, in you're to a breaks of how think I hang think most which you protected the Can a XX a I'm you had wholesale locations XX the facilities out long-term basis, sites I number between sell lease to you're protected terms retail in out locations larger number of and versus across looking sell you previously. can or in engage that think lease both interested been megawatts? or in megawatts the on of

And it still total XX sites is have XX of megawatts converted are of of been And are protected that the we And that on monetization to are for wholesale not have the correct that are we more sites and to even you few today. data megawatts suitable converting is out there the a both retail services. we that XXX centers. offer the that number of XX think yet centers

we're will go as another So where so see the from But number good at only and may of number about go up XX of probably we megawatts today. candidates. of by centers the by up XX X them or

than for Now comes just didn't this we we we the that think. a through we of our was need if more tell monetize wholesale counterparty us outright by would everything location, that what says, it end think And particular the will this view is the is day. market and either facility at sale sale, or in one

leases buried would you was to inclined be the of interest would into whether held there for facilities. of the out, the structure? market then rest for outside appropriate stabilized maybe leased be REIT to that If facilities, streams? looking an than the interesting that was if it's outright it's larger rather sell the about I or fetch those noted more And business of for thought sorts income thinking buyers if in multiple long-term it best Cogent sales plays you that income the stream, just I'm

we Yes. answer And is that that would time. evaluate at the

then an is then that, do be and these out new liquidity some structure and a potentially an valuation. intermediate I to that that might turns step fact, and unlock and securitization facilities a specific think there get with against the you that a get the capital sell cash if for that which revenue of stream way in business way ability portable higher owner monetized,

you've want the then one, And about to bit last number being achieve. about of be. opportunity, have get work to undertaking go you talked that you're enabled a data at a to cadence waves centers settling sell decide provisioning be. to things results go with that to that thinking Thinking the need done and press just into the waves laid consistent business you've force the time about you're them other been installations you into quite blocks Do the to going building every able you network building ready block the test so and sure is trained and when it feel you out have is appropriately sales needs you've like frames that button? where on? of that to the providing to Just make want to where You

looking the And sales blocks, I think force. those everything Yes. with in starts building at

NetCentric and have multiple XXX for trainings We conducted salespeople. the certification

a fairly is got not reps. them or we've but sold of one over broad yet, X little has every across X It but it's organization. not by waves the Now a X,XXX wave sold,

We developed online have training manuals.

vendors do our work managers to learning regional We and and we supplemental transponder work, with hold teach-ins that tutorials. have

Wave with design today integrated completely the So system is the tool. CRM

we So latency deliver the can map quickly. accuracy, with XXX And the a contracts gets a down a X without generate feel contractual of and engineer engaging rep to sales documentation that we millisecond accuracy. meter all

organization. The service second our piece delivery is

tools We there. have developed

of all to could, provision waves all which ultimate waves some because waves cases, were had have only We of couple target. for few a of but provisioned been the sites test in have that not the a in our able weeks, necessary we is

should network that. The block pretty diverted install feel intermediate even not quarter the that we and thought fully the endpoints in North allow the the across did the XXX service process, delivery people to being we and by is of staffing sell American we goal some building the of We entire the if quarter's dark the end. do have jeopardize we and to fiber waves So wave-enabled points. locations dependent on us comfortable would to toolkit

team how will the build And to deliver sales network the the there with to the be is you say there, the comes back. that do ultimately, do you be of exactly going our will be feel credibility we going way service team actually and I it. and deliver confidence most that's we the customers. So and will probably it wavelength blocks market. how It's you're delivery the the that, in we're built without and to deliver a to then what it's have building But important customer problem do IP, there what in

line from comes Tim Horan. Our of the next question

moment, capacity center at good data a the running chance Dave, like have out questions. and feeding there's I year the a frenzy of or three next for so. in looks capacity it we're

moving the timing you years? dictates you any year? have next so range the just can all that much? was sale what a pricing And us, And parts in of this increased then you of of give and just the you ITV do lastly, and EBITDA update don't us then next you portfolio what given lease a So customers can give much a want the for thinking timing you can year, point? again, know how remind to And for margins maybe X guidance, that And the or announcing you capacity? the do buy secondly, whole I at but

who those questions. each the several take portfolio. are interested in I'll There counterparties So entire of are

We the of that this. initially contemplating are not be. to into. and not highest is transaction certain best type may It We're enter

shortage, will market The be multiyear manner. be time, continuing is there demand no correct. Over in a more can is are timely as that's but You cycle. power a to power there for than tighten met

today. We facilities ready. have these available to get power got We've

market in that is on Part we'll hope far enough announce. we'll is quarters, it I the sometime can next along us pay the that fair be get a of have work on think couple of price. the But think we of to it's deals we we done. part what to us

of give EBITDA, guidance. don't quarterly In we terms

there. rate But of want is a also I that the be investors over to So underlying of EBITDA that clear we should last understand couple in the improvement that quarters expect. demonstrated we cadence

in will So lap T-Mobile EBITDA as on clean payments differential our the basis. and will therefore, a more in be adjusted improvement from

the that underlying million EBITDA payment should IP achieve continue quarter was improve pricing, points quarters. continue will a basis the X-step IPvX So it a these effort. then the then the probably on savings. continue received to $XX next X XXX we that at to And in we this to transit as And quarter cost XXX for

The first step the in And on did was prices and summer sales. taking raising that raising installed We September. then new prices. base early second, the XX% of

also our will another on do that little protections very significant the base contractual raise that through has There and portion by installed probably is base. against year-end, to ability of that. of prices go We

I that we question, pretty gives So I XX.X% choose Walt's there monetize to tool if back in and more as should going demonstrated significant leasing ABS growth it. be to just a is we continue. IP use to And this think revenue. sequential The growth way think, us quarter, will another

the to data centers. back Just

to you right next few they and wanted the and customization of someone because you If we want. now to obviously, price wanted or it of maybe customize hear might they quite do some what Could next quarters? have in couple the asking it other instead of sooner, your months that something things you different if got are going look all cooling, liquid than

HVAC for counterparties at is we're we're cooling and the consideration as it into of planning value, have are we couple to needs. highest a the taken the about talking and feedbacks their liquid So And think support least sure can pods that making our and that. best immersion that of containment we one systems

and are in not But XX In start handful close. terms facilities very a of getting single in. of could come today facility timing, there that training the are there's servers and stack that a someone

go facilities, of in tour You I you to fairly I there and pictures Nick a done of potential, been some had random. never facilities. of on get picked opportunities typical. each of went while you facilities is I've work think weekly and them both be and still a Both to there's And But these at to. to lot think they're I these basis.

remarks. more the Dave session. queue, Seeing Schaeffer, the our Chairman I and our to in turn to now that are questions as for closing CEO, there Mr. like question-and-answer call no concludes would over

on all even script. from Well, the thank a got compliment shortening much. I you very Walt

I and Thank something. worth we'll care, that's you. everyone. thank want So to talk Bye-bye. Take soon.

all concluded. has Thank and pleasant meeting for The joining, now day. have you a

disconnect. You may now