Cogent Communications Reports Fourth Quarter and Full Year 2023 Results and Increases its Regular Quarterly Dividend on its Common Stock
- None.
- Service revenue decreased by 1.2% from Q3 2023 to Q4 2023.
- Non-core revenue decreased significantly from $12.8 million in Q3 2023 to $7.3 million in Q4 2023.
- GAAP gross profit decreased by 58.4% from Q4 2022 to Q4 2023.
- Net cash used in operating activities was $48.7 million for Q4 2023.
- Off-net revenue decreased by 5.3% from Q3 2023 to Q4 2023.
Insights
The reported gain on bargain purchase from the Sprint acquisition and the significant increases in earnings per share (EPS) for both Q4 and the full year 2023 are indicative of a potentially transformative event for the company. The EPS figures, with a full-year increase from $0.11 to $26.88, suggest a substantial rise in profitability, likely due to the acquisition synergies and asset valuation adjustments. However, the increase in EPS should be scrutinized alongside the company's operating performance and cash flow metrics to assess sustainability.
Moreover, the leverage ratios presented—gross leverage ratio and net leverage ratio—show a quarter-over-quarter decrease, which may signal an improved debt position or effective debt management. This could potentially reassure investors about the company's financial health and its ability to service debt obligations.
The service revenue trends reflect mixed performance, with a slight quarterly decline but significant annual growth. The impact of foreign exchange rates and the distinction between on-net and off-net revenues provide insight into the company's market expansion and operational efficiency. The substantial increase in off-net revenue suggests successful expansion efforts, though the decline in non-core revenue indicates a strategic shift away from legacy services.
From a market perspective, the dividend increase marks Cogent's forty-sixth consecutive quarterly dividend increase, signaling a strong commitment to shareholder returns and potentially increasing the stock's attractiveness to income-focused investors. It is essential to consider the historical growth rate of these dividends and the payout ratio to evaluate the sustainability of future dividend payments.
Additionally, the changes in customer connections, particularly the sharp rise in off-net connections, could reflect the company's strategic focus and market demand for its services. The growth in on-net buildings signifies infrastructure expansion, which is crucial for long-term scalability and competitive advantage. The increase in customer connections, alongside the revenue growth, can be indicative of market share gains and enhanced service penetration.
The IP Transit Services Agreement with T-Mobile, resulting in significant cash inflows, is a critical component of the financial results. The terms of this agreement, including the payment structure over several years, provide a predictable revenue stream, which is advantageous for financial planning and stability. Legal scrutiny of such agreements is essential to understand potential obligations, termination clauses and implications for long-term revenue recognition.
Furthermore, the Commercial Services Agreement with T-Mobile for colocation and connectivity services contributes additional revenue and signifies potential strategic partnerships. The legal framework governing these agreements can affect the company's operational flexibility and future negotiation leverage.
Financial and Business Highlights
- The gain on bargain purchase from the Sprint acquisition was
$254.0 million $1.4 billion - Included in the gain on bargain purchase in Q4 2023 and full year 2023 was the estimated fair value of acquired IPv4 internet addresses totaling
$458.0 million
- Included in the gain on bargain purchase in Q4 2023 and full year 2023 was the estimated fair value of acquired IPv4 internet addresses totaling
- Basic and fully diluted earnings per share for Q4 2023 were
$4.23 $4.17 $26.88 $26.62 - Gross leverage ratio was 4.79 for Q3 2023 and was 4.07 for Q4 2023.
- Net leverage ratio was 4.23 for Q3 2023 and was 3.75 for Q4 2023
- Service revenue decreased from Q3 2023 to Q4 2023 by
1.2% to$272.1 million 79.0% and increased from full year 2022 to full year 2023 by56.9% to$940.9 million - Non-core revenue decreased from Q3 2023 to Q4 2023 by
43.5% from$12.8 million $7.3 million
- Non-core revenue decreased from Q3 2023 to Q4 2023 by
- Net cash used in operating activities was
$52.4 million $48.7 million $173.7 million $17.3 million - Net cash provided by investing activities was
$62.1 million $60.1 million $76.7 million $79.0 million - Cash received under an IP Transit Agreement with T-Mobile, and included in cash provided by investing activities, was
$87.5 million $87.5 million $204.2 million
- Cash received under an IP Transit Agreement with T-Mobile, and included in cash provided by investing activities, was
- Net cash provided by investing activities was
- EBITDA, as adjusted for Sprint acquisition costs and cash received under an IP Transit Agreement with T-Mobile was
$131.4 million $110.5 million $232.9 million $352.5 million - EBITDA, as adjusted for Sprint acquisition costs and cash received under an IP Transit Agreement with T-Mobile, margin was
47.7% for Q3 2023,40.6% for Q4 2023,38.8% for full year 2022 and37.5% for full year 2023. - Cogent approved an increase of
$0.01 $0.96 5$0.95 5
On-net service is provided to customers located in buildings that are physically connected to Cogent's network by Cogent facilities. On-net revenue was
Off-net customers are located in buildings directly connected to Cogent's network using other carriers' facilities and services to provide the last mile portion of the link from the customers' premises to Cogent's network. Off-net revenue was
Non-core services are legacy services, which Cogent acquired and continues to support but does not actively sell. Non-core revenue was
GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity-based compensation included in network operations expense. GAAP gross margin is defined as GAAP gross profit divided by total service revenue. GAAP gross profit decreased by
GAAP gross margin was
Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as Non-GAAP gross profit divided by total service revenue. Non-GAAP gross profit increased by
Non-GAAP gross margin was
Net cash used in operating activities was
Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, for Sprint acquisition costs and cash paid under the IP Transit Services Agreement (discussed below) was
EBITDA as adjusted, for Sprint acquisition costs and cash paid under the IP Transit Services Agreement margin, was
Basic net income (loss) per share was
Total customer connections increased by
The number of on-net buildings increased by 122 from December 31, 2022 to 3,277 as of December 31, 2023 and increased by 20 from September 30, 2023.
Gain on bargain purchase
The estimated gain on bargain purchase from the Sprint acquisition was
(In thousands) Gain on bargain purchase | |||
Fair value of net assets acquired | |||
Total net consideration to be received from Seller, net of discounts | 607,221 | ||
Gain on bargain purchase |
IP Transit Services Agreement
On May 1, 2023, the closing date of the Sprint acquisition, Cogent and T-Mobile USA, Inc. ("TMUSA"), a
Commercial Services Agreement
Additionally, on the closing date of the Sprint acquisition, Cogent and T-Mobile entered into a commercial agreement (the "Commercial Agreement"), for colocation and connectivity services. Revenue under the Commercial Agreement was
Quarterly Dividend Increase Approved
On February 28, 2024, Cogent's Board approved a regular quarterly dividend of
The payment of any future dividends and any other returns of capital will be at the discretion of the Board and may be reduced, eliminated or increased and will be dependent upon Cogent's financial position, results of operations, available cash, cash flow, capital requirements, limitations under Cogent's debt indentures and other factors deemed relevant by the Board.
Tax Treatment of 2023 Dividends
Cogent paid four quarterly dividends in 2023 totaling
Residual Impact of COVID-19 Pandemic on Corporate Results
Cogent witnessed a deteriorating real estate market in and around the buildings it serves in central business districts in
These and other risks are described in more detail in Cogent's Annual Report on Form 10-K for the year ended December 31, 2023 and in its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023, and September 30, 2023.
Conference Call and Website Information
Cogent will host a conference call with financial analysts at 8:30 a.m. (ET) on February 29, 2024 to discuss Cogent's operating results for the fourth quarter of 2023 and full year 2023. Investors and other interested parties may access a live audio webcast of the earnings call in the "Events" section of Cogent's website at www.cogentco.com/events. A replay of the webcast, together with the press release, will be available on the website following the earnings call. A downloadable file of Cogent's "Summary of Financial and Operational Results" and a transcript of its conference call will also be available on Cogent's website following the conference call.
About Cogent Communications
Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1 facilities-based ISP. Cogent specializes in providing businesses with high-speed Internet access, Ethernet transport, and colocation services. Cogent's facilities-based, all-optical IP network backbone provides services in 228 markets globally.
Cogent Communications is headquartered at 2450 N Street, NW,
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES Summary of Financial and Operational Results | ||||||||
Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |
Metric ($ in | ||||||||
On-Net | ||||||||
% Change | 1.7 % | -0.6 % | 1.1 % | 1.5 % | 1.0 % | 11.3 % | 2.1 % | 6.9 % |
Off-Net | ||||||||
% Change | 0.2 % | -0.3 % | 0.9 % | 0.7 % | 1.1 % | 173.5 % | 28.0 % | -5.3 % |
Non-Core | ||||||||
% Change | -0.6 % | 25.3 % | -11.9 % | -7.6 % | 3.2 % | NM | 49.9 % | -43.5 % |
Service | ||||||||
% Change | 1.3 % | -0.5 % | 1.0 % | 1.3 % | 1.1 % | 56.1 % | 14.9 % | -1.2 % |
Constant | 1.7 % | 0.4 % | 2.0 % | 1.3 % | 0.2 % | 55.9 % | 14.9 % | -1.1 % |
Constant | 2.9 % | 2.7 % | 4.3 % | 5.5 % | 4.0 % | 61.4 % | 82.4 % | 78.1 % |
Constant | 2.1 % | 0.6 % | 1.6 % | 1.3 % | 0.1 % | 51.4 % | 13.4 % | -3.2 % |
Constant | 3.5 % | 3.6 % | 4.7 % | 5.7 % | 3.7 % | 56.2 % | 75.5 % | 67.4 % |
Excise Taxes | ||||||||
% Change | -13.7 % | -7.9 % | 19.4 % | -0.8 % | 2.6 % | 163.3 % | 31.9 % | 40.3 % |
Corporate | ||||||||
% Change | -0.8 % | -1.1 % | 0.4 % | 0.3 % | -0.2 % | 29.6 % | 8.5 % | 5.1 % |
Net-centric | ||||||||
% Change | 4.4 % | 0.3 % | 1.9 % | 2.6 % | 2.7 % | 28.9 % | 8.4 % | -1.9 % |
Enterprise | - | - | - | - | - | |||
% Change | - | - | - | - | - | NM | 45.6 % | -12.8 % |
Network | ||||||||
% Change | 1.8 % | -1.6 % | 1.2 % | -0.3 % | 2.8 % | 134.7 % | 26.2 % | 0.6 % |
GAAP gross | ||||||||
% Change | 1.2 % | -0.3 % | 1.5 % | 2.2 % | -2.3 % | -28.7 % | -69.7 % | 97.0 % |
GAAP gross | 46.3 % | 46.4 % | 46.6 % | 47.0 % | 45.4 % | 20.8 % | 5.5 % | 10.9 % |
Non-GAAP | ||||||||
% Change | 1.0 % | 0.2 % | 1.0 % | 2.3 % | 0.0 % | 7.8 % | -0.3 % | -4.2 % |
Non-GAAP | 61.6 % | 62.0 % | 62.0 % | 62.6 % | 61.9 % | 42.8 % | 37.1 % | 36.0 % |
Selling, | ||||||||
% Change | 3.5 % | -3.1 % | -1.6 % | 14.0 % | 2.5 % | 100.9 % | -25.0 % | 28.6 % |
Depreciation | ||||||||
% Change | 0.5 % | 1.7 % | -0.8 % | 2.9 % | 6.8 % | 108.7 % | 65.2 % | -21.8 % |
Equity-based | ||||||||
% Change | 0.0 % | -2.5 % | 5.1 % | 0.9 % | 5.1 % | -5.0 % | 18.6 % | -9.8 % |
Operating | ||||||||
% Change | -20.4 % | 2.7 % | -5.0 % | -2.8 % | -11.0 % | NM | 46.1 % | 35.4 % |
Interest | ||||||||
% Change | 3.3 % | -4.9 % | 33.2 % | 22.5 % | -13.6 % | 50.8 % | -15.5 % | 44.3 % |
Non-cash | ||||||||
Gain (loss) on | - | - | - | - | - | |||
Net income | ||||||||
Foreign | $- | $- | $- | $- | $- | $- | ||
Basic net | ||||||||
Diluted net | ||||||||
Weighted | 46,575,848 | 46,691,142 | 46,736,742 | 46,885,512 | 47,037,091 | 47,137,822 | 47,227,338 | 47,353,291 |
% Change | 0.3 % | 0.2 % | 0.1 % | 0.3 % | 0.3 % | 0.2 % | 0.2 % | 0.3 % |
Weighted | 46,929,191 | 47,029,446 | 46,736,742 | 47,196,890 | 47,381,226 | 47,526,207 | 47,227,338 | 48,037,841 |
% Change | -0.1 % | 0.2 % | -0.6 % | 1.0 % | 0.4 % | 0.3 % | -0.6 % | 1.7 % |
EBITDA (2) | ||||||||
% Change | -0.4 % | 2.3 % | -1.0 % | -1.3 % | -1.9 % | -56.9 % | 80.4 % | -86.2 % |
EBITDA | 38.3 % | 39.4 % | 38.6 % | 37.6 % | 36.5 % | 10.1 % | 15.8 % | 2.2 % |
Sprint | $- | $- | ||||||
Cash | $- | $- | $- | $- | $- | |||
EBITDA, as | ||||||||
% Change | -0.4 % | 2.3 % | 2.4 % | -4.2 % | -1.6 % | -4.2 % | 143.1 % | -15.9 % |
EBITDA, as | 38.3 % | 39.4 % | 39.9 % | 37.8 % | 36.8 % | 22.5 % | 47.7 % | 40.6 % |
Net cash | ||||||||
% Change | 37.3 % | -30.4 % | 55.7 % | -32.2 % | -1.4 % | 130.7 % | -163.4 % | -7.1 % |
Capital | ||||||||
% Change | 18.5 % | -4.6 % | 38.7 % | -18.3 % | 18.4 % | 61.4 % | -32.2 % | 71.9 % |
Principal | ||||||||
% Change | -5.9 % | -10.7 % | 88.3 % | 148.6 % | -61.5 % | -17.5 % | 429.7 % | -54.5 % |
Dividends paid | ||||||||
Gross | 4.94 | 5.22 | 5.32 | 5.39 | 5.47 | 5.63 | 4.79 | 4.07 |
Net Leverage | 3.58 | 3.70 | 3.93 | 4.20 | 4.46 | 4.56 | 4.24 | 3.75 |
Customer | ||||||||
On-Net | 81,627 | 82,277 | 82,614 | 82,620 | 83,268 | 93,260 | 88,699 | 88,733 |
% Change | 1.1 % | 0.8 % | 0.4 % | 0.0 % | 0.8 % | 12.0 % | -4.9 % | 0.0 % |
Off-Net | 12,922 | 13,160 | 13,359 | 13,531 | 13,785 | 38,762 | 36,923 | 36,895 |
% Change | 2.0 % | 1.8 % | 1.5 % | 1.3 % | 1.9 % | 181.2 % | -4.7 % | -0.1 % |
Non-Core | 335 | 340 | 348 | 363 | 374 | 19,408 | 12,403 | 11,975 |
% Change | 0.3 % | 1.5 % | 2.4 % | 4.3 % | 3.0 % | NM | -36.1 % | -3.5 % |
Total customer | 94,884 | 95,777 | 96,321 | 96,514 | 97,427 | 151,430 | 138,025 | 137,603 |
% Change | 1.2 % | 0.9 % | 0.6 % | 0.2 % | 0.9 % | 55.4 % | -8.9 % | -.3 % |
Corporate | 45,393 | 45,103 | 45,176 | 44,844 | 44,570 | 61,284 | 55,045 | 54,493 |
% Change | -0.1 % | -0.6 % | 0.2 % | -0.7 % | -0.6 % | 37.5 % | -10.2 % | -1.0 % |
Net-centric | 49,491 | 50,674 | 51,145 | 51,670 | 52,857 | 66,711 | 62,291 | 62,370 |
% Change | 2.5 % | 2.4 % | 0.9 % | 1.0 % | 2.3 % | 26.2 % | -6.6 % | 0.1 % |
Enterprise | - | - | - | - | - | 23,435 | 20,689 | 20,740 |
% Change | - | - | - | - | - | NM | -11.7 % | 0.2 % |
On-Net | ||||||||
Multi-Tenant | 1,824 | 1,826 | 1,832 | 1,837 | 1,841 | 1,844 | 1,860 | 1,862 |
Carrier neutral | 1,187 | 1,216 | 1,240 | 1,264 | 1,294 | 1,327 | 1,337 | 1,347 |
Cogent data | 54 | 53 | 54 | 54 | 55 | 56 | 60 | 68 |
Total on-net | 3,065 | 3,095 | 3,126 | 3,155 | 3,190 | 3,227 | 3,257 | 3,277 |
Total carrier | 1,383 | 1,409 | 1,433 | 1,458 | 1,490 | 1,526 | 1,528 | 1,558 |
Square feet – | 992,336,259 | 993,590,499 | 995,522,774 | 1,000,044,418 | 1,001,382,577 | 1,001,491,002 | 1,006,523,795 | 1,008,006,655 |
Total | - | - | - | - | - | 482 | 482 | 482 |
Square feet – | - | - | - | - | - | 1,603,569 | 1,603,569 | 1,603,569 |
Network – end | ||||||||
Intercity route | 60,869 | 61,024 | 61,065 | 61,292 | 61,300 | 72,694 | 72,694 | 72,552 |
Metro route | 16,614 | 16,822 | 17,477 | 17,616 | 17,826 | 22,556 | 22,128 | 24,779 |
Metro fiber | 40,113 | 40,529 | 42,212 | 42,491 | 42,863 | 75,577 | 69,943 | 77,365 |
Intercity route | 2,748 | 2,748 | 2,748 | 2,748 | 2,748 | 21,883 | 21,883 | 21,883 |
Metro route | 445 | 445 | 445 | 445 | 445 | 1,704 | 1,704 | 1,704 |
Connected | 7,625 | 7,685 | 7,766 | 7,792 | 7,864 | 7,891 | 7,971 | 7,988 |
Headcount – | ||||||||
Sales force – | 479 | 477 | 522 | 548 | 562 | 647 | 637 | 657 |
Sales force – | 620 | 619 | 669 | 698 | 714 | 841 | 833 | 847 |
Total | 987 | 988 | 1,041 | 1,076 | 1,107 | 2,020 | 1,990 | 1,947 |
Sales rep | 4.7 | 4.9 | 4.6 | 3.8 | 4.0 | 9.2 | 3.6 | 3.3 |
FTE – sales | 453 | 449 | 465 | 503 | 539 | 567 | 621 | 620 |
(1) Consists of legacy services of companies whose assets or businesses were acquired by Cogent. |
(2) See Schedules of Non-GAAP measures below for definitions and reconciliations to GAAP measures. |
(3) Network operations expense excludes equity-based compensation expense of |
(4) In connection with the acquisition of the Wireline Business, Cogent classified |
(5) GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity based compensation included in network operations expense. GAAP gross margin is defined as GAAP gross profit divided by total service revenue. |
(6) Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as non-GAAP gross profit divided by total service revenue. Management believes that non-GAAP gross profit and non-GAAP gross margin are relevant measures to provide investors. Management uses them to measure the margin available to the company after network service costs, in essence a measure of the efficiency of the Company's network. |
(7) Excludes equity-based compensation expense of |
(8) As of December 31, 2023, Cogent was party to an interest rate swap agreement (the "Swap Agreement") that has the economic effect of modifying the fixed interest rate obligation associated with its Senior Secured 2026 Notes to a variable interest rate obligation based on the Secured Overnight Financing Rate ("SOFR") so that the interest payable on the 2026 Notes effectively became variable based on overnight SOFR. Interest expense includes |
(9) The estimated gain on bargain purchase from the Sprint acquisition was |
(In thousands) Gain on bargain purchase | |||
Fair value of net assets acquired | |||
Total net consideration to be received from Seller, net of discounts | 607,221 | ||
Gain on bargain purchase |
(10) Includes cash payments under the IP Transit Services Agreement, as discussed above, of | ||
• | ||
• | ||
• | ||
(11) In connection with the acquisition of the Wireline Business, Cogent acquired 482 technical buildings. Thirteen of those buildings have been converted to a Cogent Data Centers. | ||
(12) As of June 30, 2023, | ||
ο | Leased intercity route miles of dark fiber include 11,376 former Sprint route miles and 61,318 Cogent route miles. | |
ο | Leased metro route miles of dark fiber include 4,527 former Sprint route miles and 18,029 Cogent route miles. | |
ο | Leased metro fiber miles of dark fiber include 32,346 former Sprint fiber miles and 43,231 Cogent fiber miles | |
• | As of September 30, 2023, | |
ο | Leased intercity route miles of dark fiber include 11,376 former Sprint route miles and 61,318 Cogent route miles. | |
ο | Leased metro route miles of dark fiber include 4,047 former Sprint route miles and 18,081 Cogent route miles. | |
ο | Leased metro fiber miles of dark fiber include 26,602 former Sprint fiber miles and 43,341 Cogent fiber miles. | |
• | As of December 31, 2023, | |
ο | Leased intercity route miles of dark fiber include 11,017 former Sprint route miles and 61,535 Cogent route miles. | |
ο | Leased metro route miles of dark fiber include 3,911 former Sprint route miles and 20,868 Cogent route miles. | |
ο | Leased metro fiber miles of dark fiber include 25,252 former Sprint fiber miles and 52,113 Cogent fiber miles. | |
• | In connection with Cogent's Sprint acquisition, Cogent acquired 19,135 owned intercity route miles of dark fiber and 1,259 owned metro route miles of dark fiber. | |
(13) In connection with the acquisition of the Wireline Business Cogent hired 942 total employees, including 75 quota bearing sales employees and 114 sales employees. | ||
(14) In connection with the acquisition of the Wireline Business and negotiation of the related purchase agreement, the Company incurred | ||
(15) Sales rep productivity for Q2 2023 includes 9,084 net-centric customer connections from a commercial services agreement ("CSA") with TMUSA entered into in May 2023. Net-centric revenue under the CSA was | ||
(16) As of June 30, 2023 total non-core customer connections included 8,486 Session Initiation Protocol ("SIP") customer connections. This non-core corporate product was discontinued. There were no SIP, non-core customer connections as of September 30, 2023 or December 31, 2023. | ||
NM Not meaningful | ||
Schedules of Non-GAAP Measures
EBITDA, EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement , EBITDA margin and EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement , margin
EBITDA represents net cash flows provided by operating activities plus changes in operating assets and liabilities, cash interest expense and cash income tax expense. Management believes the most directly comparable measure to EBITDA calculated in accordance with generally accepted accounting principles in
The Company believes that EBITDA, EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement, EBITDA margin and EBITDA as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement margin are useful measures of its ability to service debt, fund capital expenditures, pay dividends and expand its business. The company believes its EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement, is a useful measure because it includes recurring cash flows stemming from the IP Transit Services Agreement that are of the same type as contracted payments under commercial contracts. The measurements are an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. EBITDA, EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Agreement, EBITDA margin and EBITDA as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Agreement margin are not recognized terms under GAAP and accordingly, should not be viewed in isolation or as a substitute for the analysis of results as reported under GAAP, but rather as a supplemental measure to GAAP. For example, these measures are not intended to reflect the Company's free cash flow, as they do not consider certain current or future cash requirements, such as capital expenditures, contractual commitments, and changes in working capital needs, interest expenses and debt service requirements. The Company's calculations of these measures may also differ from the calculations performed by its competitors and other companies and as such, their utility as a comparative measure is limited.
EBITDA, and EBITDA, as adjusted for Sprint acquisition costs and cash payments made to the Company under the IP Transit Services Agreement, are reconciled to net cash provided by operating activities in the table below.
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | YEAR | YEAR | |
($ in 000's) – unaudited | ||||||||||
Net cash provided by (used in) operating | ||||||||||
Changes in operating assets and liabilities | (1,589) | |||||||||
Cash interest expense and income tax | 14,038 | 18,946 | 17,320 | 16,663 | 18,797 | 31,875 | 44,956 | 18,424 | 67,163 | 114,048 |
EBITDA | ||||||||||
PLUS: Sprint acquisition costs | - | - | ||||||||
PLUS: Cash payments made to the | - | - | - | - | - | 29,167 | 87,500 | 87,500 | - | 204,167 |
EBITDA, as adjusted for Sprint | ||||||||||
EBITDA margin | 38.3 % | 39.4 % | 38.6 % | 37.6 % | 36.5 % | 10.1 % | 15.8 % | 2.2 % | 38.5 % | 13.8 % |
EBITDA, as adjusted for Sprint | 38.3 % | 39.4 % | 39.9 % | 37.8 % | 36.8 % | 22.5 % | 47.7 % | 40.6 % | 38.8 % | 37.5 % |
Constant currency revenue is reconciled to service revenue as reported in the tables below.
Constant currency impact on revenue changes – sequential periods
($ in 000's) – unaudited | Q1 | Q2 | Q3 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | YEAR 2022 | YEAR 2023 |
Service revenue, as reported – current | ||||||||||
Impact of foreign currencies on service | 516 | 1,350 | 1,486 | (92) | (1,292) | (417) | 10 | 375 | 13,063 | (2,079) |
Service revenue - as adjusted for | ||||||||||
Service revenue, as reported – prior | ||||||||||
Constant currency revenue increase | ||||||||||
Constant currency revenue percent | 1.7 % | 0.4 % | 2.0 % | 1.3 % | 0.2 % | 55.9 % | 14.9 % | -1.1 % | 3.9 % | 56.6 % |
(1) | Service revenue, as adjusted for currency impact, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the prior sequential period. The Company believes that disclosing quarterly sequential revenue growth without the impact of foreign currencies on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for currency impact, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. |
Constant currency impact on revenue changes – prior year periods
($ in 000's) – unaudited | Q1 | Q2 | Q3 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | YEAR 2022 | YEAR 2023 |
Service revenue, as reported – current | ||||||||||
Impact of foreign currencies on service | 1,914 | 3,417 | 4,246 | 3,371 | 1,553 | (277) | (1,768) | (1,412) | 13,063 | (2,079) |
Service revenue - as adjusted for | ||||||||||
Service revenue, as reported – prior | 147,208 | 149,175 | 148,450 | |||||||
Constant currency revenue increase | 8,142 | 5,966 | 91,079 | |||||||
Constant currency percent revenue | 2.9 % | 2.7 % | 4.3 % | 5.5 % | 4.0 % | 61.4 % | 82.4 % | 78.1 % | 3.9 % | 56.6 % |
(2) | Service revenue, as adjusted for currency impact, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the comparable prior year period. The Company believes that disclosing year over year revenue growth without the impact of foreign currencies on service revenue is a useful measure of revenue growth. Service revenue, as adjusted for currency impact, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. |
Revenue on a constant currency basis and adjusted for the impact of excise taxes is reconciled to service revenue as reported in the tables below.
Constant currency and excise tax impact on revenue changes – sequential periods
($ in 000's) – unaudited | Q1 | Q2 | Q3 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | YEAR 2022 | YEAR 2023 |
Service revenue, as reported – current | ||||||||||
Impact of foreign currencies on service | 516 | 1,350 | 1,486 | (92) | (1,292) | (417) | 10 | 375 | 13,063 | (2,079) |
Impact of excise taxes on service | 594 | 294 | (670) | 32 | (107) | (6,847) | (3,517) | (5,871) | 3,093 | (34,824) |
Service revenue - as adjusted for | ||||||||||
Service revenue, as reported – prior | ||||||||||
Constant currency and excise taxes | ||||||||||
Constant currency and excise tax | 2.1 % | 0.6 % | 1.6 % | 1.3 % | 0.1 % | 51.4 % | 13.4 % | -3.2 % | 4.4 % | 50.8 % |
(3) | Service revenue, as adjusted for currency impact and the impact of excise taxes, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the prior sequential period and adjusting for the changes in excise taxes recorded as revenue between the periods presented. The Company believes that disclosing quarterly sequential revenue growth without the impact of foreign currencies and excise taxes on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for the impact of foreign currency and excise taxes, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. |
Constant currency and excise tax impact on revenue changes – prior year periods
($ in 000's) – unaudited | Q1 | Q2 | Q3 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | YEAR 2022 | YEAR 2023 |
Service revenue, as reported – | ||||||||||
Impact of foreign currencies on | 1,914 | 3,417 | 4,246 | 3,371 | 1,553 | (277) | (1,768) | (1,412) | 13,063 | (2,079) |
Impact of excise taxes on service | 786 | 1,363 | 695 | 250 | (451) | (7,592) | (10,439) | (16,342) | 3,093 | (34,824) |
Service revenue - as adjusted for | ||||||||||
Service revenue, as reported – | ||||||||||
Constant currency and excise | ||||||||||
Constant currency and excise tax | 3.5 % | 3.6 % | 4.7 % | 5.7 % | 3.7 % | 56.2 % | 75.5 % | 67.4 % | 4.4 % | 50.8 % |
(4) | Service revenue, as adjusted for currency impact and the impact of excise taxes, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the prior year period and adjusting for the changes in excise taxes recorded as revenue between the periods presented. The Company believes that disclosing quarterly sequential revenue growth without the impact of foreign currencies and excise taxes on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for the impact of foreign currency and excise taxes, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. |
Non-GAAP gross profit and Non-GAAP gross margin
Non-GAAP gross profit and Non-GAAP gross margin are reconciled to GAAP gross profit and GAAP gross margin in the table below.
Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | YEAR | YEAR | |
($ in 000's) – unaudited | ||||||||||
Service revenue total | ||||||||||
Minus - Network operations expense | 80,137 | 79,585 | 80,117 | 80,535 | 83,798 | 190,013 | 260,328 | 242,355 | 320,376 | 776,493 |
GAAP Gross Profit (1) | ||||||||||
Plus - Equity-based compensation – | 144 | 145 | 176 | 88 | 149 | 231 | 370 | 370 | 553 | 1,120 |
Plus – Depreciation and amortization | 22,688 | 23,071 | 22,897 | |||||||
Non-GAAP Gross Profit (2) | ||||||||||
GAAP Gross Margin (1) | 46.3 % | 46.4 % | 46.6 % | 47.0 % | 45.4 % | 20.8 % | 5.5 % | 10.9 % | 46.6 % | 17.5 % |
Non-GAAP Gross Margin (2) | 61.6 % | 62.0 % | 62.0 % | 62.6 % | 61.9 % | 42.8 % | 37.1 % | 36.0 % | 62.0 % | 42.3 % |
(1) | GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity-based compensation included in network operations expense. GAAP gross margin is defined as GAAP gross profit divided by total service revenue. |
(2) | Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as non-GAAP gross profit divided by total service revenue. Management believes that non-GAAP gross profit and non-GAAP gross margin are relevant measures for investors, as they are measures that management uses to measure the margin and amount available to the Company after network service costs, in essence, these are measures of the efficiency of the Company's network. |
Gross and Net Leverage Ratios
Gross leverage ratio is defined as total debt divided by the trailing 12 months EBITDA, as adjusted for Sprint acquisition costs and cash payments under the IP Transit Services Agreement. Net leverage ratio is defined as total net debt (total debt minus cash and cash equivalents) divided by the last 12 months EBITDA, as adjusted for Sprint acquisition costs and cash payments under the IP Transit Services Agreement. Cogent's gross leverage ratios and net leverage ratios are shown below.
($ in 000's) – unaudited | As of | As of | As of | As of | As of | As of | As of | As of |
Cash and cash equivalents & | ||||||||
Debt | ||||||||
Capital (finance) leases – | 17,147 | 17,562 | 24,135 | 17,182 | 19,782 | 20,114 | 63,236 | 64,594 |
Capital (finance) leases – long | 228,102 | 236,652 | 263,750 | 287,044 | 300,600 | 311,405 | 419,941 | 419,921 |
Senior Unsecured 2024 Euro | 389,019 | - | - | - | - | - | - | - |
Senior Secured 2026 Notes | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 |
Senior Unsecured 2027 Notes | - | 450,000 | 450,000 | 450,000 | 450,000 | 450,000 | 450,000 | 450,000 |
Note payable | 219 | - | - | - | - | - | - | - |
Total debt | 1,134,487 | 1,204,214 | 1,237,885 | 1,254,226 | 1,270,382 | 1,281,519 | 1,433,177 | 1,434,515 |
Total net debt | 822,716 | 854,637 | 914,221 | 978,314 | 1,035,960 | 1,037,566 | 1,267,105 | 1,320,734 |
Trailing 12 months EBITDA, as | 229,499 | 230,775 | 232,921 | 232,871 | 232,169 | 227,774 | 298,984 | 352,465 |
Gross leverage ratio | 4.94 | 5.22 | 5.31 | 5.39 | 5.47 | 5.63 | 4.79 | 4.07 |
Net leverage ratio | 3.58 | 3.70 | 3.93 | 4.20 | 4.46 | 4.56 | 4.24 | 3.75 |
Cogent's SEC filings are available online via the Investor Relations section of www.cogentco.com or on the Securities and Exchange Commission's website at www.sec.gov.
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2023 AND 2022 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||
2023 | 2022 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 75,092 | $ | 223,783 | ||
Restricted cash | 38,689 | 52,129 | ||||
Accounts receivable, net of allowance for credit losses of | 135,475 | 44,123 | ||||
Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount of | 179,269 | — | ||||
Due from T-Mobile, Transition Services Agreement | 4,514 | — | ||||
Prepaid expenses and other current assets | 80,588 | 45,878 | ||||
Total current assets | 513,627 | 365,913 | ||||
Property and equipment: | ||||||
Property and equipment | 2,947,376 | 1,714,906 | ||||
Accumulated depreciation and amortization | (1,409,559) | (1,170,476) | ||||
Total property and equipment, net | 1,537,817 | 544,430 | ||||
Right-of-use leased assets | 361,587 | 81,601 | ||||
Intangible assets, net | 472,815 | — | ||||
Due from T-Mobile, IP Transit Services Agreement, net of discount of | 263,750 | — | ||||
Due from T-Mobile, Purchase Agreement, net of discount of | 38,585 | — | ||||
Deposits and other assets | 23,438 | 18,238 | ||||
Total assets | $ | 3,211,619 | $ | 1,010,182 | ||
Liabilities and stockholders' equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 48,356 | $ | 27,208 | ||
Accrued and other current liabilities | 120,523 | 63,889 | ||||
Due to T-Mobile – Transition Services Agreement | 66,908 | — | ||||
Due to T-Mobile – Purchase Agreement | 4,981 | — | ||||
Current maturities, operating lease liabilities | 67,962 | 12,005 | ||||
Finance lease obligations, current maturities | 64,594 | 17,182 | ||||
Total current liabilities | 373,324 | 120,284 | ||||
Senior secured 2026 notes, net of unamortized debt costs of | 498,498 | 497,892 | ||||
Senior unsecured 2027 notes, net of unamortized debt costs of | 447,088 | 446,371 | ||||
Operating lease liabilities, net of current maturities | 330,095 | 94,587 | ||||
Finance lease obligations, net of current maturities | 419,921 | 287,044 | ||||
Deferred income tax liabilities | 471,498 | 47,646 | ||||
Other long-term liabilities | 61,639 | 34,990 | ||||
Total liabilities | 2,602,063 | 1,528,814 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock, | 49 | 48 | ||||
Additional paid-in capital | 606,755 | 575,064 | ||||
Accumulated other comprehensive loss | (14,385) | (19,156) | ||||
Accumulated earnings (deficit) | 17,137 | (1,074,588) | ||||
Total stockholders' equity (deficit) | 609,556 | (518,632) | ||||
Total liabilities and stockholders' equity (deficit) | $ | 3,211,619 | $ | 1,010,182 | ||
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME FOR EACH OF THE THREE YEARS ENDED DECEMBER 31, 2023 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | |||||||||
2023 | 2022 | 2021 | |||||||
Service revenue | $ | 940,922 | $ | 599,604 | $ | 589,797 | |||
Operating expenses: | |||||||||
Network operations (including | 544,232 | 228,154 | 226,337 | ||||||
Selling, general, and administrative (including | 275,318 | 163,021 | 162,380 | ||||||
Acquisition costs – Sprint Business | 18,492 | 2,248 | — | ||||||
Depreciation and amortization | 232,209 | 92,222 | 89,240 | ||||||
Total operating expenses | 1,070,251 | 485,645 | 477,957 | ||||||
Gain on lease terminations and other | — | — | 7,393 | ||||||
Operating (loss) income | (129,329) | 113,959 | 119,233 | ||||||
Interest expense | (106,783) | (67,584) | (58,059) | ||||||
Change in valuation – interest rate swap | 13,439 | (43,113) | (9,015) | ||||||
Foreign exchange gain on 2024 Notes | — | 31,561 | 32,522 | ||||||
Loss on debt extinguishment and redemption – 2022 Notes | — | — | (14,698) | ||||||
Loss on debt extinguishment and redemption – 2024 Notes | — | (11,885) | — | ||||||
Gain on bargain purchase – Sprint Business | 1,406,435 | — | — | ||||||
Interest income – IP Transit Services Agreement | 26,796 | — | — | ||||||
Interest income – Purchase Agreement | 1,889 | — | — | ||||||
Interest income and other | 7,030 | 3,438 | 1,437 | ||||||
Income before income taxes | 1,219,477 | 26,376 | 71,420 | ||||||
Income tax benefit (expense) | 53,964 | (21,230) | (23,235) | ||||||
Net income | $ | 1,273,441 | $ | 5,146 | $ | 48,185 | |||
Comprehensive income (loss): | |||||||||
Net income | $ | 1,273,441 | $ | 5,146 | $ | 48,185 | |||
Foreign currency translation adjustment | 4,772 | (8,153) | (9,697) | ||||||
Comprehensive income (loss) | $ | 1,278,213 | $ | (3,007) | $ | 38,488 | |||
Basic net income per common share | $ | 26.88 | $ | 0.11 | $ | 1.04 | |||
Diluted net income per common share | $ | 26.62 | $ | 0.11 | $ | 1.03 | |||
Dividends declared per common share | $ | 3.760 | $ | 3.555 | $ | 3.170 | |||
Weighted-average common shares-basic | 47,373,361 | 46,875,992 | 46,419,180 | ||||||
Weighted-average common shares -diluted | 47,837,512 | 47,207,298 | 46,963,920 | ||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED DECEMBER 31, 2023 AND DECEMBER 31, 2022 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||
Three Months Ended | Three Months Ended | |||||
Service revenue | $ | 272,099 | $ | 151,979 | ||
Operating expenses: | ||||||
Network operations (including | 174,550 | 56,972 | ||||
Selling, general, and administrative (including | 81,221 | 43,889 | ||||
Acquisition costs – Sprint Business | 17,001 | 244 | ||||
Depreciation and amortization | 67,805 | 23,563 | ||||
Total operating expenses | 340,577 | 124,668 | ||||
Operating (loss) income | (68,478) | 27,311 | ||||
Interest expense | (34,928) | (21,990) | ||||
Change in valuation – interest rate swap | 17,722 | 2,590 | ||||
Gain on bargain purchase – Sprint Business | 254,049 | — | ||||
Interest income – IP Transit Services Agreement | 8,828 | — | ||||
Interest income – Purchase Agreement | 720 | — | ||||
Interest income and other | 1,797 | 4,106 | ||||
Income before income taxes | 179,710 | 12,017 | ||||
Income tax benefit (expense) | 20,443 | (11,166) | ||||
Net income | $ | 200,153 | $ | 851 | ||
Comprehensive income: | ||||||
Net income | $ | 200,153 | $ | 851 | ||
Foreign currency translation adjustment | 5,377 | 9,257 | ||||
Comprehensive income | $ | 205,530 | $ | 10,108 | ||
Basic net income per common share | $ | 4.23 | $ | 0.02 | ||
Diluted net income per common share | $ | 4.17 | $ | 0.02 | ||
Dividends declared per common share | $ | 0.955 | $ | 0.915 | ||
Weighted-average common shares-basic | 47,353,291 | 46,885,512 | ||||
Weighted-average common shares -diluted | 48,037,841 | 47,196,890 | ||||
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR EACH OF THE THREE YEARS ENDED DECEMBER 31, 2023 (IN THOUSANDS) | |||||||||
2023 | 2022 | 2021 | |||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 1,273,441 | $ | 5,146 | $ | 48,185 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 232,209 | 92,222 | 89,240 | ||||||
Amortization of debt discounts and premium | 1,323 | 1,464 | 1,759 | ||||||
Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements | (28,685) | — | — | ||||||
Equity-based compensation expense (net of amounts capitalized) | 26,924 | 24,439 | 26,822 | ||||||
Gain on bargain purchase – Sprint Business | (1,406,435) | — | — | ||||||
Foreign currency exchange gain on 2024 Notes | — | (31,561) | (32,522) | ||||||
Loss on extinguishment & redemption of 2024 notes | — | 11,885 | — | ||||||
Loss on extinguishment & redemption of 2022 notes | — | — | 14,698 | ||||||
Gain – lease termination | — | — | (7,375) | ||||||
Gains—equipment transactions and other, net | 212 | 372 | 69 | ||||||
Deferred income taxes | (69,582) | 16,539 | 18,159 | ||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (51,002) | (2,838) | 1,385 | ||||||
Prepaid expenses and other current assets | (11,001) | (7,427) | (17) | ||||||
Change in valuation – interest rate swap agreement | (13,439) | 43,113 | 9,015 | ||||||
Due to T-Mobile – Transition Services Agreement | 66,908 | — | — | ||||||
Due from T-Mobile – Transition Services Agreement | (4,514) | — | — | ||||||
Deposits and other assets | (1,548) | (282) | (12) | ||||||
Unfavorable lease liabilities | (26,511) | ||||||||
Accounts payable, accrued liabilities and other long-term liabilities | 29,045 | 20,635 | 851 | ||||||
Net cash provided by operating activities | 17,345 | 173,707 | 170,257 | ||||||
Cash flows from investing activities: | |||||||||
Cash receipts - IP Transit Agreement – T-Mobile | 204,167 | — | — | ||||||
Acquisition of Sprint Business, net of | 2,191 | — | — | ||||||
Purchases of property and equipment | (129,632) | (78,971) | (69,916) | ||||||
Net cash provided by (used in) investing activities | 76,726 | (78,971) | (69,916) | ||||||
Cash flows from financing activities: | |||||||||
Net proceeds from issuance of 2027 Notes, net of debt costs of | — | 446,010 | — | ||||||
Net proceeds from issuance of 2026 Notes, net of debt costs of | — | — | 496,933 | ||||||
Redemption and extinguishment of 2024 Notes | — | (375,354) | — | ||||||
Redemption and extinguishment of 2022 Notes | — | — | (459,317) | ||||||
Dividends paid | (181,716) | (169,857) | (150,288) | ||||||
Principal payments of finance lease obligations | (77,362) | (45,472) | (23,054) | ||||||
Principal payments of installment payment agreement | — | (790) | (6,922) | ||||||
Proceeds from exercises of common stock options | 1,227 | 614 | 1,823 | ||||||
Net cash used in financing activities | (257,851) | (144,849) | (140,825) | ||||||
Effect of exchange rate changes on cash | 1,649 | (2,599) | (2,193) | ||||||
Net decrease in cash and cash equivalents & restricted cash | (162,131) | (52,712) | (42,677) | ||||||
Cash and cash equivalents & restricted cash, beginning of year | 275,912 | 328,624 | 371,301 | ||||||
Cash and cash equivalents & restricted cash, end of year | $ | 113,781 | $ | 275,912 | $ | 328,624 | |||
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR EACH OF THE THREE MONTHS ENDED DECEMBER 31, 2023 AND DECEMBER 31, 2022 (IN THOUSANDS) | ||||||
Three Months | Three Months | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 200,153 | $ | 851 | ||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||
Depreciation and amortization | 67,805 | 23,563 | ||||
Amortization of debt discounts | 337 | 320 | ||||
Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements | (9,548) | — | ||||
Equity-based compensation expense (net of amounts capitalized) | 6,684 | 6,264 | ||||
Gain on bargain purchase – Sprint Business | (254,049) | — | ||||
Gains—equipment transactions and other, net | 489 | (3,159) | ||||
Deferred income taxes | (6,073) | 11,857 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (47,755) | 265 | ||||
Prepaid expenses and other current assets | (6,238) | 1,977 | ||||
Change in valuation – interest rate swap agreement | (17,722) | (2,590) | ||||
Due to T-Mobile – Transition Services Agreement | (2,721) | — | ||||
Due from T-Mobile – Transition Services Agreement | 12,317 | — | ||||
Deposits and other assets | (1,371) | (518) | ||||
Unfavorable lease liabilities | (10,337) | — | ||||
Accounts payable, accrued liabilities and other long-term liabilities | 19,328 | (2,507) | ||||
Net cash (used in) provided by operating activities | (48,701) | 36,323 | ||||
Cash flows from investing activities: | ||||||
Severance reimbursement – T-Mobile | 16,228 | — | ||||
Cash receipts - IP Transit Agreement – T-Mobile | 87,500 | — | ||||
Purchases of property and equipment | (43,609) | (19,591) | ||||
Net cash provided by (used in) investing activities | 60,119 | (19,591) | ||||
Cash flows from financing activities: | ||||||
Dividends paid | (46,362) | (43,975) | ||||
Principal payments of finance lease obligations | (18,813) | (24,514) | ||||
Proceeds from exercises of common stock options | 440 | 188 | ||||
Net cash used in financing activities | (64,735) | (68,301) | ||||
Effect of exchange rate changes on cash | 1,026 | 3,817 | ||||
Net decrease in cash and cash equivalents & restricted cash | (52,291) | (47,752) | ||||
Cash and cash equivalents & restricted cash, beginning of period | 166,072 | 323,664 | ||||
Cash and cash equivalents & restricted cash, end of period | $ | 113,781 | $ | 275,912 | ||
Except for historical information and discussion contained herein, statements contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions. The statements in this release are based upon the current beliefs and expectations of Cogent's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Numerous factors could cause or contribute to such differences, including the impact of our acquisition of the Wireline Business, including our difficulties integrating our business with the acquired Wireline Business, which may result in the combined company not operating as effectively or efficiently as expected; transition services required to support the acquired Wireline Business and the related costs continuing for a longer period than expected; transition related costs associated with the acquisition; the COVID-19 pandemic and the related government policies; future economic instability in the global economy, including the risk of economic recession, recent bank failures and liquidity concerns at certain other banks or a contraction of the capital markets, which could affect spending on Internet services and our ability to engage in financing activities; the impact of changing foreign exchange rates (in particular the Euro to USD and Canadian dollar to USD exchange rates) on the translation of our non-USD denominated revenues, expenses, assets and liabilities; legal and operational difficulties in new markets; the imposition of a requirement that we contribute to the US Universal Service Fund on the basis of our Internet revenue; changes in government policy and/or regulation, including net neutrality rules by the United States Federal Communications Commission and in the area of data protection; cyber-attacks or security breaches of our network; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering arrangements and right-of-way agreements on favorable terms; our reliance on a few equipment vendors, and the potential for hardware or software problems associated with such equipment; the dependence of our network on the quality and dependability of third-party fiber and right-of-way providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; our ability to make payments on our indebtedness as they become due and outcomes in litigation, risks associated with variable interest rates under our interest rate swap agreement, and outcomes in litigation as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2023 and our Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023 and September 30, 2023. Cogent undertakes no duty to update any forward-looking statement or any information contained in this press release or in other public disclosures at any time.
View original content to download multimedia:https://www.prnewswire.com/news-releases/cogent-communications-reports-fourth-quarter-and-full-year-2023-results-and-increases-its-regular-quarterly-dividend-on-its-common-stock-302074720.html
SOURCE Cogent Communications Holdings, Inc.
FAQ
What was Cogent Communications Holdings, Inc.'s gain on bargain purchase for Q4 2023?
What was the basic and fully diluted earnings per share for Q4 2023?
What was the service revenue for Q4 2023?
What was the change in service revenue from Q3 2023 to Q4 2023?
What was the approved increase in quarterly dividend for Q1 2024?
