Cogent Communications (CCOI) investor relations material

Key financial and operational events

• Dividend reduced by 98% to $0.02 per share to address leverage concerns after the Sprint Wireline acquisition; buyback program paused with $105 million still available.

• EBITDA has grown for nine consecutive quarters post-acquisition, despite a 2.4% annual revenue decline; EBITDA margin improved from 1% to 20% (30% including T-Mobile subsidy), but still below pre-acquisition levels.

• CapEx fell by $20 million sequentially, stabilizing around $100 million annually, with $40 million in annual capital lease payments.

• Wavelength revenue grew 93% year-over-year and 14% sequentially, but from a small base, representing 4% of total revenues.

Deleveraging and asset monetization strategies

• Two main deleveraging paths: grow EBITDA and divest surplus assets.

• Identified 24 surplus data centers (1 million sq ft, 109 MW) for sale, targeting $10 million per MW; $20 million annual carry cost could be eliminated.

• Letter of intent signed for two data centers at $144 million; more LOIs in negotiation.

• Exploring monetization of excess dark fiber and IP address space; 22 million IPv4 addresses available, with leasing income projected to exceed $70 million by end of 2025.

• Wholesale leasing of IP addresses accelerates monetization but at roughly half the retail price.

Wavelength business trends and outlook

• Multi-year guidance: total revenues to grow 6%-8% annually with 200 bps margin expansion; wavelength revenue targeted at $500 million annual run rate by mid-2028.

• Wavelength sales skewed toward higher capacity: 79% of sales are 100 gig, 10% are 400 gig; equipment supports up to 3.2 terabits per wave.

• ARPU for waves averages $2,000–$2,100, with pricing about 20% below market; 400 gig waves command higher ARPU ($7,000–$8,000 for long paths).