Cogent Communications Reports Fourth Quarter and Full Year 2024 Results and Increases its Regular Quarterly Dividend on its Common Stock
Cogent Communications (NASDAQ: CCOI) reported Q4 2024 financial results with service revenue of $252.3M, down 1.9% QoQ and 7.3% YoY. Full-year 2024 revenue reached $1.0B, up 10.1% from 2023. EBITDA increased 16.7% to $41.9M in Q4 2024, with margin expanding to 16.6% from 13.9% in Q3.
Notable highlights include a 31.8% sequential increase in wavelength revenue to $7.0M and an 11.8% growth in IPv4 address leasing revenue to $12.6M. The company's board approved its 50th consecutive quarterly dividend increase to $1.005 per share for Q1 2025.
Total customer connections decreased 10.3% YoY to 123,383, while on-net buildings increased by 176 to 3,453. The company received a $24.2M US federal tax refund for 2023 and expects no federal tax liability for 2024.
Cogent Communications (NASDAQ: CCOI) ha riportato i risultati finanziari del Q4 2024 con ricavi da servizi pari a $252,3 milioni, in calo dell'1,9% rispetto al trimestre precedente e del 7,3% su base annua. I ricavi totali per l'intero anno 2024 hanno raggiunto $1,0 miliardo, con un aumento del 10,1% rispetto al 2023. EBITDA è aumentato del 16,7% a $41,9 milioni nel Q4 2024, con un margine che è passato dal 13,9% del Q3 al 16,6%.
Tra i punti salienti si segnala un aumento sequenziale del 31,8% nei ricavi da lunghezze d'onda, pari a $7,0 milioni, e una crescita dell'11,8% nei ricavi da leasing di indirizzi IPv4, che hanno raggiunto $12,6 milioni. Il consiglio di amministrazione dell'azienda ha approvato l'aumento del dividendo trimestrale per il 50° trimestre consecutivo, portandolo a $1,005 per azione per il Q1 2025.
Le connessioni totali dei clienti sono diminuite del 10,3% su base annua, scendendo a 123.383, mentre gli edifici on-net sono aumentati di 176, arrivando a 3.453. L'azienda ha ricevuto un rimborso fiscale federale statunitense di $24,2 milioni per il 2023 e non prevede alcuna responsabilità fiscale federale per il 2024.
Cogent Communications (NASDAQ: CCOI) reportó los resultados financieros del Q4 2024 con ingresos por servicios de $252,3 millones, una disminución del 1,9% en comparación con el trimestre anterior y del 7,3% interanual. Los ingresos totales del año completo 2024 alcanzaron $1,0 mil millones, un aumento del 10,1% respecto a 2023. EBITDA aumentó un 16,7% a $41,9 millones en el Q4 2024, con un margen que se expandió del 13,9% en el Q3 al 16,6%.
Los aspectos destacados incluyen un aumento secuencial del 31,8% en los ingresos por longitud de onda a $7,0 millones y un crecimiento del 11,8% en los ingresos por arrendamiento de direcciones IPv4 a $12,6 millones. La junta de la compañía aprobó el aumento del dividendo trimestral por 50° trimestre consecutivo a $1,005 por acción para el Q1 2025.
Las conexiones totales de clientes disminuyeron un 10,3% interanual a 123,383, mientras que los edificios en red aumentaron en 176, alcanzando un total de 3,453. La compañía recibió un reembolso fiscal federal de EE. UU. de $24,2 millones por 2023 y no espera ninguna responsabilidad fiscal federal para 2024.
코겐 커뮤니케이션즈 (NASDAQ: CCOI)는 2024년 4분기 재무 결과를 발표하며 서비스 수익이 2억 5,230만 달러로 전분기 대비 1.9%, 전년 대비 7.3% 감소했다고 보고했습니다. 2024년 전체 연간 수익은 10억 달러에 도달하여 2023년 대비 10.1% 증가했습니다. EBITDA는 2024년 4분기 동안 1,670만 달러 증가하여 4,190만 달러에 이르렀으며, 마진은 3분기 13.9%에서 16.6%로 확대되었습니다.
주요 하이라이트로는 파장 수익이 전분기 대비 31.8% 증가하여 700만 달러에 이르렀고, IPv4 주소 임대 수익이 11.8% 성장하여 1,260만 달러에 도달했습니다. 회사 이사회는 2025년 1분기 주당 1.005달러로 50번째 연속 분기 배당금 인상을 승인했습니다.
총 고객 연결 수는 전년 대비 10.3% 감소하여 123,383에 이르렀고, 네트워크 건물은 176개 증가하여 3,453개에 달했습니다. 회사는 2023년을 위한 2,420만 달러의 미국 연방 세금 환급을 받았으며, 2024년에는 연방 세금 책임이 없을 것으로 예상하고 있습니다.
Cogent Communications (NASDAQ: CCOI) a annoncé les résultats financiers du 4e trimestre 2024 avec des revenus de services de 252,3 millions de dollars, en baisse de 1,9 % par rapport au trimestre précédent et de 7,3 % par rapport à l'année précédente. Les revenus totaux pour l'année 2024 ont atteint 1,0 milliard de dollars, en hausse de 10,1 % par rapport à 2023. EBITDA a augmenté de 16,7 % pour atteindre 41,9 millions de dollars au 4e trimestre 2024, avec une marge passant de 13,9 % au 3e trimestre à 16,6 %.
Les points saillants notables incluent une augmentation séquentielle de 31,8 % des revenus par longueur d'onde, atteignant 7,0 millions de dollars, et une croissance de 11,8 % des revenus de location d'adresses IPv4, qui s'élèvent à 12,6 millions de dollars. Le conseil d'administration de l'entreprise a approuvé l'augmentation du dividende trimestriel pour le 50e trimestre consécutif à 1,005 $ par action pour le 1er trimestre 2025.
Le nombre total de connexions clients a diminué de 10,3 % par rapport à l'année précédente, atteignant 123 383, tandis que le nombre de bâtiments connectés a augmenté de 176 pour atteindre 3 453. L'entreprise a reçu un remboursement d'impôt fédéral américain de 24,2 millions de dollars pour 2023 et ne prévoit pas de responsabilité fiscale fédérale pour 2024.
Cogent Communications (NASDAQ: CCOI) berichtete über die finanziellen Ergebnisse für das 4. Quartal 2024 mit Dienstleistungsumsätzen von 252,3 Millionen Dollar, was einem Rückgang von 1,9% im Vergleich zum Vorquartal und 7,3% im Vergleich zum Vorjahr entspricht. Der Gesamtumsatz für das Jahr 2024 erreichte 1,0 Milliarden Dollar, was einem Anstieg von 10,1% gegenüber 2023 entspricht. EBITDA stieg im 4. Quartal 2024 um 16,7% auf 41,9 Millionen Dollar, wobei die Marge von 13,9% im 3. Quartal auf 16,6% anstieg.
Zu den bemerkenswerten Highlights gehört ein sequenzieller Anstieg der Wellenlängenumsätze um 31,8% auf 7,0 Millionen Dollar und ein Wachstum der Einnahmen aus der Vermietung von IPv4-Adressen um 11,8% auf 12,6 Millionen Dollar. Der Vorstand des Unternehmens genehmigte die 50. aufeinanderfolgende Erhöhung der vierteljährlichen Dividende auf 1,005 Dollar pro Aktie für das 1. Quartal 2025.
Die Gesamtzahl der Kundenverbindungen sank im Jahresvergleich um 10,3% auf 123.383, während die On-Net-Gebäude um 176 auf 3.453 zunahmen. Das Unternehmen erhielt eine Rückerstattung von 24,2 Millionen Dollar von der US-Bundessteuer für 2023 und erwartet für 2024 keine Bundessteuerverpflichtungen.
- EBITDA increased 16.7% QoQ to $41.9M
- Wavelength revenue grew 31.8% QoQ to $7.0M
- IPv4 address leasing revenue up 11.8% QoQ to $12.6M
- 50th consecutive quarterly dividend increase
- Full-year revenue grew 10.1% to $1.0B
- Q4 service revenue declined 1.9% QoQ and 7.3% YoY
- Total customer connections decreased 10.3% YoY
- Net loss of $0.91 per share in Q4 2024
- EBITDA margin declined to 33.6% for FY2024 from 37.5% in FY2023
- Off-net customer connections decreased 21.0% YoY
Insights
Cogent Communications' Q4 2024 results reveal a company in strategic transition, with mixed financial performance that requires careful analysis. While quarterly service revenue declined 1.9% sequentially to
The most promising developments come from Cogent's newer business segments. Wavelength revenue surged
Profitability metrics showed meaningful improvement, with EBITDA increasing
However, concerning trends persist. Total customer connections declined
Cash flow dynamics have improved substantially, with Q4 generating
The fiftieth consecutive quarterly dividend increase to
Cogent's Q4 2024 results highlight a significant strategic pivot in its network infrastructure model, with the company aggressively transitioning from a traditional internet service provider to a diversified network services company leveraging its expanded fiber assets.
The optical wavelength business has emerged as Cogent's most promising growth engine, with revenue surging
Equally significant is Cogent's monetization of its IPv4 address space, generating
The
However, concerning structural challenges persist in Cogent's traditional business. The
The contrasting performance between Cogent's legacy services and emerging high-growth segments illustrates a company in transition – strategically shifting its infrastructure investments toward data center connectivity, wavelength services, and IP resource monetization while managing the gradual decline of its traditional corporate internet access business. This transformation appears well-timed as enterprise connectivity needs increasingly center around cloud access and high-capacity data transport rather than basic internet connectivity.
Financial and Business Highlights
- Service revenue was
$252.3 million $257.2 million - Service revenue was
$1.0 billion $940.9 million - Wavelength revenue increased by
31.8% , sequentially, and was$7.0 million $5.3 million - Revenue from leasing IPv4 addresses increased by
11.8% , sequentially, and was$12.6 million $11.2 million
- Wavelength revenue increased by
- EBITDA increased by
16.7% to$41.9 million - EBITDA margin was
16.6% for Q4 2024 and was13.9% for Q3 2024. - Net cash provided by operating activities was
$14.5 million $48.7 million $20.2 million
- EBITDA margin was
- EBITDA, as adjusted, increased by
9.8% to$66.9 million - EBITDA, as adjusted, margin was
26.5% for Q4 2024 and was23.7% for Q3 2024.
- EBITDA, as adjusted, margin was
- EBITDA, as adjusted, was
$348.4 million $352.5 million - EBITDA, as adjusted, margin was
33.6% for full year 2024 and was37.5% for full year 2023.
- EBITDA, as adjusted, margin was
- Cogent received a US federal income tax refund of
$24.2 million - Cogent does not expect a US federal income tax liability for full year 2024.
- Cogent approved an increase of
$0.01 $1.00 5$0.99 5
Foreign exchange rates negatively impacted service revenue growth from the three months ended September 30, 2024 to the three months ended December 31, 2024 by
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
Wavelength 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 increased 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 decreased by
Non-GAAP gross margin was
Net cash provided by operating activities was
Total Sprint acquisition costs were
IP Transit Services Agreement
On May 1, 2023, the closing date of the Sprint acquisition, Cogent and T-Mobile USA, Inc. ("TMUSA"), a
Earnings before interest, taxes, depreciation and amortization (EBITDA), was
EBITDA margin, was
Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, for Sprint acquisition costs and cash paid under the IP Transit Services Agreement, was
EBITDA as adjusted, for Sprint acquisition costs and cash paid under the IP Transit Services Agreement margin, was
Basic and diluted net (loss) per share was
Total customer connections decreased by
The number of on-net buildings increased by 176 from December 31, 2023 to 3,453 as of December 31, 2024 and increased by 29 from September 30, 2024.
Optical Wave Network
Acquiring the Sprint network has also allowed Cogent to construct a wavelength network using predominantly owned fiber. This enabled Cogent to expand its product offerings to include optical wavelength services. As of December 31, 2024, Cogent was offering optical wavelength services in 808 data centers in
Federal Income Taxes –
Cogent received a US federal income tax refund of
Quarterly Dividend Increase Approved
On February 26, 2025, 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 2024 Dividends
Cogent paid four quarterly dividends in 2024 totaling
Continued Impact of Changing Office Occupancy Rates on Corporate Results
Cogent continues to witness lower office occupancy rates overall in 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 years ended December 31, 2023 and December 31, 2024 and in its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024.
Conference Call and Website Information
Cogent will host a conference call with financial analysts at 8:30 a.m. (ET) on February 27, 2025 to discuss Cogent's operating results for the fourth quarter of 2024 and full year 2024. 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, optical wavelength, optical transport and colocation services. Cogent's facilities-based, all-optical IP network backbone provides services in 264 markets globally.
Cogent Communications is headquartered at 2450 N Street, NW,
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES | ||||||||
Summary of Financial and Operational Results | ||||||||
Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | |
Metric ($ in 000's, except share, | ||||||||
On-Net revenue (15) (18) | ||||||||
% Change from previous Qtr. | 1.0 % | 9.9 % | 1.1 % | 7.0 % | 0.4 % | 1.5 % | -3.0 % | -5.7 % |
Off-Net revenue | ||||||||
% Change from previous Qtr. | 1.1 % | 173.5 % | 28.0 % | -5.3 % | -4.4 % | -5.7 % | -0.1 % | 1.7 % |
Wavelength revenue (1) | $- | |||||||
% Change from previous Qtr. | - | - | 88.8 % | 3.9 % | 7.0 % | 9.0 % | 45.8 % | 31.8 % |
Non-Core revenue (2) (16) | ||||||||
% Change from previous Qtr. | 3.2 % | NM | 49.9 % | -43.5 % | -16.8 % | -23.7 % | -10.2 % | -18.5 % |
Service revenue – total (18) | ||||||||
% Change from previous Qtr. | 1.1 % | 56.1 % | 14.9 % | -1.2 % | -2.2 % | -2.2 % | -1.2 % | -1.9 % |
Constant currency total revenue | 0.2 % | 55.9 % | 14.9 % | -1.1 % | -2.3 % | -2.0 % | -1.5 % | -1.5 % |
Constant currency total revenue | 4.0 % | 61.4 % | 82.4 % | 78.1 % | 73.1 % | 8.8 % | -6.7 % | -7.1 % |
Constant currency and excise tax | 0.1 % | 51.4 % | 13.4 % | -3.2 % | -2.3 % | -1.5 % | -1.7 % | -2.0 % |
Constant currency and excise tax | 3.7 % | 56.2 % | 75.5 % | 67.4 % | 62.4 % | 5.4 % | -8.6 % | -7.3 % |
Excise Taxes included in service | ||||||||
% Change from previous Qtr. | 2.6 % | 163.3 % | 31.9 % | 40.3 % | 0.6 % | -6.7 % | 3.0 % | 6.1 % |
IPv4 Revenue, included in | ||||||||
% Change from previous Qtr. | 2.7 % | 5.1 % | 4.0 % | 8.6 % | 2.8 % | 7.8 % | 2.7 % | 11.8 % |
IPv4 Addresses Billed | 9,839,870 | 10,465,694 | 10,987,884 | 11,438,286 | 12,213,414 | 12,813,955 | 12,943,590 | 13,033,248 |
% Change from previous Qtr. | NM | 6.4 % | 5.0 % | 4.1 % | 6.8 % | 4.9 % | 1.0 % | 0.7 % |
Corporate revenue (5) (16) | ||||||||
% Change from previous Qtr. | -0.2 % | 29.6 % | 8.5 % | 5.1 % | -1.4 % | -4.3 % | -2.8 % | -2.7 % |
Net-centric revenue (5) (15) | ||||||||
% Change from previous Qtr. | 2.7 % | 28.9 % | 8.4 % | -1.9 % | -1.3 % | -0.9 % | 0.8 % | 1.9 % |
Enterprise revenue (5) (18) | - | |||||||
% Change from previous Qtr. | - | NM | 45.6 % | -12.8 % | -5.7 % | 0.9 % | -1.4 % | -7.1 % |
Network operations expenses (4) | ||||||||
% Change from previous Qtr. | 2.8 % | 134.7 % | 26.2 % | 0.6 % | -3.2 % | -7.6 % | 3.4 % | -4.0 % |
GAAP gross profit (6) | ||||||||
% Change from previous Qtr. | -2.3 % | -28.7 % | -69.7 % | 97.0 % | -11.4 % | 14.8 % | -67.5 % | 203.4 % |
GAAP gross margin (6) | 45.4 % | 20.8 % | 5.5 % | 10.9 % | 9.9 % | 11.6 % | 3.8 % | 11.8 % |
Non-GAAP gross profit (3) (7) | ||||||||
% Change from previous Qtr. | 0.0 % | 7.8 % | -0.3 % | -4.2 % | -0.3 % | 7.2 % | -8.1 % | 1.5 % |
Non-GAAP gross margin (3) (7) | 61.9 % | 42.8 % | 37.1 % | 36.0 % | 36.7 % | 40.2 % | 37.4 % | 38.7 % |
Selling, general and | ||||||||
% Change from previous Qtr. | 2.5 % | 100.9 % | -25.0 % | 28.6 % | -6.4 % | -7.1 % | -7.5 % | -7.5 % |
Depreciation and amortization | ||||||||
% Change from previous Qtr. | 6.8 % | 108.7 % | 65.2 % | -21.8 % | 4.6 % | 4.4 % | 15.9 % | -21.6 % |
Equity-based compensation | ||||||||
% Change from previous Qtr. | 5.1 % | -5.0 % | 18.6 % | -9.8 % | 4.0 % | -48.7 % | 120.9 % | -6.7 % |
Operating income (loss) | ||||||||
% Change from previous Qtr. | -11.0 % | NM | 46.1 % | 35.4 % | 13.3 % | 20.6 % | 22.7 % | -43.3 % |
Interest expense (9) | ||||||||
% Change from previous Qtr. | -13.6 % | 50.8 % | -15.5 % | 44.3 % | -34.1 % | 68.8 % | -16.4 % | 39.7 % |
Non-cash change in valuation | ||||||||
Gain on bargain purchase (10) | - | $- | $- | |||||
Net income (loss) | ||||||||
Basic net income (loss) per | ||||||||
Diluted net income (loss) per | ||||||||
Weighted average common | 47,037,091 | 47,137,822 | 47,227,338 | 47,353,291 | 47,416,268 | 47,511,613 | 47,426,131 | 47,540,833 |
% Change from previous Qtr. | 0.3 % | 0.2 % | 0.2 % | 0.3 % | 0.1 % | 0.2 % | -0.2 % | 0.2 % |
Weighted average common | 47,381,226 | 47,526,207 | 47,227,338 | 48,037,841 | 47,416,268 | 47,511,613 | 47,426,131 | 47,540,833 |
% Change from previous Qtr. | 0.4 % | 0.3 % | -0.6 % | 1.7 % | -1.3 % | 0.2 % | -0.2 % | 0.2 % |
EBITDA (3) | ||||||||
% Change from previous Qtr. | -1.9 % | -56.9 % | 80.4 % | -86.2 % | 207.0 % | 47.0 % | 32.2 % | 16.7 % |
EBITDA margin (3) | 36.5 % | 10.1 % | 15.8 % | 2.2 % | 6.9 % | 10.4 % | 13.9 % | 16.6 % |
Sprint acquisition costs (14) | $- | $- | ||||||
Cash payments under IP | $- | |||||||
EBITDA, as adjusted for Sprint | ||||||||
% Change from previous Qtr. | -1.6 % | -4.2 % | 143.1 % | -15.9 % | 4.1 % | -7.7 % | -42.7 % | 9.8 % |
EBITDA, as adjusted for Sprint | 36.8 % | 22.5 % | 47.7 % | 40.6 % | 43.2 % | 40.8 % | 23.7 % | 26.5 % |
Net cash provided by (used in) | ||||||||
% Change from previous Qtr. | -1.4 % | 130.7 % | -163.4 % | 7.1 % | 139.5 % | -215.4 % | 8.8 % | 171.8 % |
Capital expenditures | ||||||||
% Change from previous Qtr. | 18.4 % | 61.4 % | -32.2 % | 71.9 % | -6.3 % | 19.3 % | 21.5 % | -22.2 % |
Principal payments of capital | ||||||||
% Change from previous Qtr. | -61.5 % | -17.5 % | 429.7 % | -54.5 % | 23.5 % | 474.4 % | -96.6 % | 519.6 % |
Dividends paid (17) | ||||||||
Gross Leverage Ratio (3) (11) | 5.47 | 5.63 | 4.79 | 4.07 | 3.57 | 4.06 | 4.94 | 5.72 |
Net Leverage Ratio (3) (11) | 4.46 | 4.56 | 4.24 | 3.75 | 3.17 | 3.14 | 4.13 | 5.07 |
Customer Connections – end | ||||||||
On-Net customer connections | 83,268 | 92,846 | 88,250 | 88,291 | 87,574 | 87,387 | 87,655 | 87,500 |
% Change from previous Qtr. | 0.8 % | 11.5 % | -5.0 % | 0.0 % | -0.8 % | -0.2 % | 0.3 % | -0.2 % |
Off-Net customer connections | 13,785 | 38,762 | 36,923 | 36,676 | 34,579 | 32,758 | 32,420 | 28,963 |
% Change from previous Qtr. | 1.9 % | 181.2 % | -4.7 % | -0.7 % | -5.7 % | -5.3 % | -1.0 % | -10.7 % |
Wavelength customer | 414 | 449 | 661 | 693 | 754 | 1,041 | 1,118 | |
% Change from previous Qtr. | - | 8.5 % | 47.2 % | 4.8 % | 8.8 % | 38.1 % | 7.4 % | |
Non-Core customer | 374 | 19,408 | 12,403 | 11,975 | 10,037 | 7,883 | 5,217 | 5,802 |
% Change from previous Qtr. | 3.0 % | NM | -36.1 % | -3.5 % | -16.2 % | -21.5 % | -33.8 % | 11.2 % |
Total customer connections | 97,427 | 151,430 | 138,025 | 137,603 | 132,883 | 128,782 | 126,333 | 123,383 |
% Change from previous Qtr. | 0.9 % | 55.4 % | -8.9 % | -0.3 % | -3.4 % | -3.1 % | -1.9 % | -2.3 % |
Corporate customer | 44,570 | 61,284 | 55,045 | 54,493 | 51,821 | 48,690 | 47,613 | 46,371 |
% Change from previous Qtr. | -0.6 % | 37.5 % | -10.2 % | -1.0 % | -4.9 % | -6.0 % | -2.2 % | -2.6 % |
Net-centric customer | 52,857 | 66,711 | 62,291 | 62,370 | 61,599 | 61,736 | 62,273 | 62,236 |
% Change from previous Qtr. | 2.3 % | 26.2 % | -6.6 % | 0.1 % | -1.2 % | 0.2 % | 0.9 % | -0.1 % |
Enterprise customer | - | 23,435 | 20,689 | 20,740 | 19,463 | 18,356 | 16,447 | 14,776 |
% Change from previous Qtr. | - | NM | -11.7 % | 0.2 % | -6.2 % | -5.7 % | -10.4 % | -10.2 % |
On-Net Buildings – end of | ||||||||
Multi-Tenant office buildings | 1,841 | 1,844 | 1,860 | 1,862 | 1,861 | 1,864 | 1,870 | 1,871 |
Carrier neutral data center buildings | 1,294 | 1,327 | 1,336 | 1,346 | 1,376 | 1,393 | 1,410 | 1,423 |
Cogent data centers | 55 | 56 | 60 | 68 | 78 | 86 | 95 | 104 |
Edge data centers | - | - | 1 | 1 | 6 | 43 | 49 | 55 |
Total on-net buildings | 3,190 | 3,227 | 3,257 | 3,277 | 3,321 | 3,386 | 3,424 | 3,453 |
Total carrier neutral data center nodes | 1,490 | 1,526 | 1,528 | 1,558 | 1,586 | 1,602 | 1,627 | 1,646 |
Wave enabled data centers | - | - | - | 265 | 295 | 516 | 657 | 808 |
Square feet – multi-tenant | 1,001,382,577 | 1,001,491,002 | 1,006,523,795 | 1,008,006,655 | 1,009,702,653 | 1,011,171,523 | 1,015,544,543 | 1,015,861,483 |
Total Technical Buildings | - | 482 | 482 | 482 | 482 | 482 | 482 | 482 |
Square feet – Technical | - | 1,603,569 | 1,603,569 | 1,603,569 | 1,603,569 | 1,603,569 | 1,603,569 | 1,603,569 |
Network – end of period | ||||||||
Intercity route miles – Leased | 61,300 | 72,694 | 72,694 | 72,552 | 76,211 | 75,965 | 77,561 | 79,621 |
Metro route miles – Leased | 17,826 | 22,556 | 22,128 | 24,779 | 25,977 | 27,373 | 28,510 | 29,802 |
Metro fiber miles – Leased | 42,863 | 75,577 | 69,943 | 77,365 | 79,138 | 80,042 | 84,476 | 87,678 |
Intercity route miles – Owned | 2,748 | 21,883 | 21,883 | 21,883 | 21,883 | 21,883 | 21,883 | 21,883 |
Metro route miles – Owned | 445 | 1,704 | 1,704 | 1,704 | 1,704 | 1,704 | 1,704 | 1,704 |
Connected networks – AS's | 7,864 | 7,891 | 7,971 | 7,988 | 8,098 | 8,135 | 8,212 | 8,250 |
Headcount – end of period (13) | ||||||||
Sales force – quota bearing (13) | 562 | 647 | 637 | 657 | 677 | 656 | 655 | 650 |
Sales force – total (13) | 714 | 841 | 833 | 847 | 871 | 851 | 847 | 843 |
Total employees (13) | 1,107 | 2,020 | 1,990 | 1,947 | 1,955 | 1,901 | 1,908 | 1,916 |
Sales rep productivity – units per | 4.0 | 9.2 | 3.6 | 3.3 | 4.0 | 3.8 | 4.0 | 3.5 |
FTE – sales reps | 539 | 567 | 621 | 620 | 627 | 632 | 620 | 622 |
(1) In connection with the acquisition of the Wireline Business, Cogent began to provide optical wavelength services and optical transport services over its fiber network.
(2) Consists of legacy services of companies whose assets or businesses were acquired by Cogent.
(3) See Schedules of Non-GAAP measures below for definitions and reconciliations to GAAP measures.
(4) Network operations expense excludes equity-based compensation expense of
(5) In connection with the acquisition of the Wireline Business, Cogent classified revenue and customer connections as follows:
$12.9 million $6.5 million $20.1 million - Conversely, Cogent reclassified
$0.3 million $0.3 million $0.02 million
(6) 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.
(7) 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.
(8) Excludes equity-based compensation expense of
(9) As of December 31, 2024, 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 payments of
(10) The 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 | 602,581 | ||
Gain on bargain purchase |
(11) Includes cash payments under the IP Transit Services Agreement, as discussed above, of
$29.2 million $87.5 million $87.5 million $87.5 million $66.7 million $25.0 million $25.0 million
(12) In connection with the acquisition of the Wireline Business, Cogent acquired 482 technical buildings. Fifty two of those buildings have been converted to a Cogent Data Center.
(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.
- As of June 30, 2023, there were 888 employees remaining from the original Wireline Business employees.
- As of September 30, 2023, there were 839 employees remaining from the original Wireline Business employees.
- As of December 31, 2023, there were 758 employees remaining from the original Wireline Business employees.
- As of March 31, 2024, there were 718 employees remaining from the original Wireline Business employees.
- As of June 30, 2024, there were 655 employees remaining from the original Wireline Business employees.
- As of September 30, 2024, there were 635 employees remaining from the original Wireline Business employees.
- As of December 31, 2024, there were 624 employees remaining from the original Wireline Business employees.
(14) In connection with the acquisition of the Wireline Business the Company incurred the following Sprint acquisition costs:
$0.4 million $0.7 million $0.4 million $17.0 million $9.0 million $12.4 million
Included in Sprint acquisition costs were the following reimbursable severance costs:
$16.2 million $4.3 million $8.0 million
(15) Sales rep productivity for Q2 2023 included 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 (predominantly on-net revenue) was
$7.3 million $8.0 million $8.6 million $3.2 million $5.9 million $4.1 million $1.5 million
Net-centric customer connections under the CSA were:
- 8,028 as of June 30, 2023,
- 4,661 as of September 30, 2023,
- 3,576 as of December 31, 2023,
- 2,658 as of March 31, 2024,
- 2,117 as of June 30, 2024,
- 2,053 as of September 30, 2024, and
- 1,776 as of December 31, 2024.
(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 from September 30, 2023 to December 31, 2024.
(17) The first quarter 2024 dividend totaling
(18) Included in on-net revenue and enterprise revenue from May 2023 to July 2024 was
(19) On July 1, 2024, Cogent changed its estimated useful life of its owned fiber to an average of 14 years to an average of 40 years.
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) | 30,343 | ||||||||
Cash interest expense and income tax | 18,797 | 31,875 | 44,956 | 18,424 | 33,873 | 38,220 | 33,219 | (571) | 114,048 | 101,120 |
EBITDA | ||||||||||
PLUS: Sprint acquisition costs | $- | $- | ||||||||
PLUS: Cash payments made to the | - | 29,167 | 87,500 | 87,500 | 87,500 | 66,667 | 25,000 | 25,000 | 204,167 | 204,167 |
EBITDA, as adjusted for Sprint | ||||||||||
EBITDA margin | 36.5 % | 10.1 % | 15.8 % | 2.2 % | 6.9 % | 10.4 % | 13.9 % | 16.6 % | 13.8 % | 11.9 % |
EBITDA, as adjusted for Sprint | 36.8 % | 22.5 % | 47.7 % | 40.6 % | 43.2 % | 40.8 % | 23.7 % | 26.5 % | 37.5 % | 33.6 % |
Constant currency revenue is reconciled to service revenue as reported in the tables below.
Constant currency impact on revenue changes – sequential periods
($ in 000's) – unaudited | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | YEAR 2023 | YEAR 2024 |
Service revenue, as reported – | ||||||||||
Impact of foreign currencies on | (1,292) | (417) | 10 | 375 | (304) | 323 | (620) | 1,022 | (2,079) | 261 |
Service revenue - as adjusted | ||||||||||
Service revenue, as reported – | ||||||||||
Constant currency revenue | ||||||||||
Constant currency revenue | 0.2 % | 55.9 % | 14.9 % | -1.1 % | -2.3 % | -2.0 % | -1.5 % | -1.5 % | 56.6 % | 10.1 % |
(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 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | YEAR 2023 | YEAR 2024 |
Service revenue, as reported – | ||||||||||
Impact of foreign currencies on | 1,553 | (277) | (1,768) | (1,412) | (362) | 420 | (213) | 405 | (2,079) | 261 |
Service revenue - as adjusted | ||||||||||
Service revenue, as reported – | 149,175 | 148,450 | ||||||||
Constant currency revenue | 5,966 | 91,079 | ||||||||
Constant currency percent | 4.0 % | 61.4 % | 82.4 % | 78.1 % | 73.1 % | 8.8 % | -6.7 % | -7.1 % | 56.6 % | 10.1 % |
(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 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | YEAR 2023 | YEAR 2024 |
Service revenue, as reported – | ||||||||||
Impact of foreign currencies on | (1,292) | (417) | 10 | 375 | (304) | 323 | (620) | 1,022 | (2,079) | 261 |
Impact of excise taxes on | (107) | (6,847) | (3,517) | (5,871) | (121) | 1,367 | (570) | (1,208) | (34,824) | (30,224) |
Service revenue - as adjusted | ||||||||||
Service revenue, as reported – | ||||||||||
Constant currency and excise | ||||||||||
Constant currency and excise | 0.1 % | 51.4 % | 13.4 % | -3.2 % | -2.3 % | -1.5 % | -1.7 % | -2.0 % | 50.8 % | 6.9 % |
(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 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | YEAR 2023 | YEAR 2024 |
Service revenue, as | ||||||||||
Impact of foreign | 1,553 | (277) | (1,768) | (1,412) | (362) | 420 | (213) | 405 | (2,079) | 261 |
Impact of excise taxes on | (451) | (7,592) | (10,439) | (16,342) | (16,356) | (8,142) | (5,195) | (532) | (34,824) | (30,224) |
Service revenue - as | ||||||||||
Service revenue, as | ||||||||||
Constant currency and | ||||||||||
Constant currency and | 3.7 % | 56.2 % | 75.5 % | 67.4 % | 62.4 % | 5.4 % | -8.6 % | -7.3 % | 50.8 % | 6.9 % |
(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 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | YEAR | YEAR | |
($ in 000's) – unaudited | ||||||||||
Service revenue total | ||||||||||
Minus - Network operations | 83,798 | 190,013 | 260,328 | 242,355 | 239,824 | 230,203 | 247,367 | 222,455 | 776,493 | 939,849 |
GAAP Gross Profit (5) | ||||||||||
Plus - Equity-based | 149 | 231 | 370 | 370 | 385 | 350 | 469 | 477 | 1,120 | 1,681 |
Plus – Depreciation and | ||||||||||
Non-GAAP Gross Profit (6) | ||||||||||
GAAP Gross Margin (5) | 45.4 % | 20.8 % | 5.5 % | 10.9 % | 9.9 % | 11.6 % | 3.8 % | 11.8 % | 17.5 % | 9.3 % |
Non-GAAP Gross Margin (6) | 61.9 % | 42.8 % | 37.1 % | 36.0 % | 36.7 % | 40.2 % | 37.4 % | 38.7 % | 42.3 % | 38.2 % |
(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 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 – | 19,782 | 20,114 | 63,236 | 64,594 | 64,043 | 21,253 | 21,939 | 21,225 |
Capital (finance) leases – long | 300,600 | 311,405 | 419,941 | 419,921 | 453,473 | 405,176 | 460,632 | 517,161 |
Senior Secured 2026 Notes | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 |
Secured IPV4 Notes | 206,000 | 206,000 | 206,000 | |||||
Senior Unsecured 2027 Notes | 450,000 | 450,000 | 450,000 | 450,000 | 450,000 | 750,000 | 750,000 | 750,000 |
Total debt | 1,270,382 | 1,281,519 | 1,433,177 | 1,434,515 | 1,467,516 | 1,882,429 | 1,938,571 | 1,994,386 |
Total net debt | 1,035,960 | 1,037,566 | 1,267,105 | 1,320,734 | 1,304,242 | 1,456,188 | 1,622,479 | 1,766,470 |
Trailing 12 months EBITDA, as | 232,169 | 227,774 | 298,984 | 352,465 | 411,001 | 463,102 | 392,525 | 348,392 |
Gross leverage ratio | 5.47 | 5.63 | 4.79 | 4.07 | 3.57 | 4.06 | 4.94 | 5.72 |
Net leverage ratio | 4.46 | 4.56 | 4.24 | 3.75 | 3.17 | 3.14 | 4.13 | 5.07 |
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, 2024 AND 2023 | ||||||
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||
2024 | 2023 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 198,486 | $ | 75,092 | ||
Restricted cash | 29,430 | 38,689 | ||||
Accounts receivable, net of allowance for credit losses of | 96,934 | 135,475 | ||||
Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount of | 83,085 | 179,269 | ||||
Due from T-Mobile, Transition Services Agreement | 62 | 4,514 | ||||
Prepaid expenses and other current assets | 74,104 | 80,588 | ||||
Total current assets | 482,101 | 513,627 | ||||
Property and equipment: | ||||||
Property and equipment | 3,319,731 | 2,947,376 | ||||
Accumulated depreciation and amortization | (1,655,564) | (1,409,559) | ||||
Total property and equipment, net | 1,664,167 | 1,537,817 | ||||
Right-of-use leased assets | 324,315 | 361,587 | ||||
IPv4 intangible assets | 458,000 | 458,000 | ||||
Other intangible assets, net | 13,029 | 14,815 | ||||
Due from T-Mobile, IP Transit Services Agreement, net of discount of | 179,534 | 263,750 | ||||
Due from T-Mobile, Purchase Agreement, net of discount of | 22,360 | 38,585 | ||||
Deposits and other assets | 29,596 | 23,438 | ||||
Total assets | $ | 3,173,102 | $ | 3,211,619 | ||
Liabilities and stockholders' equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 39,805 | $ | 48,356 | ||
Accrued and other current liabilities | 134,609 | 120,523 | ||||
Due to T-Mobile – Transition Services Agreement | 525 | 66,908 | ||||
Due to T-Mobile – Purchase Agreement | — | 4,981 | ||||
Current maturities, operating lease liabilities | 57,172 | 67,962 | ||||
Finance lease obligations, current maturities | 21,225 | 64,594 | ||||
Total current liabilities | 253,336 | 373,324 | ||||
Senior secured 2026 notes, net of unamortized debt costs of | 499,126 | 498,498 | ||||
Senior unsecured 2027 notes, net of unamortized debt costs of | 740,934 | 447,088 | ||||
Secured IPv4 notes, net of debt costs of | 199,298 | — | ||||
Operating lease liabilities, net of current maturities | 302,004 | 330,095 | ||||
Finance lease obligations, net of current maturities | 517,161 | 419,921 | ||||
Deferred income tax liabilities | 398,266 | 471,498 | ||||
Other long-term liabilities | 40,129 | 61,639 | ||||
Total liabilities | 2,950,254 | 2,602,063 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock, | 49 | 49 | ||||
Additional paid-in capital | 629,829 | 606,755 | ||||
Accumulated other comprehensive loss | (30,685) | (14,385) | ||||
Accumulated (deficit) earnings | (376,345) | 17,137 | ||||
Total stockholders' equity | 222,848 | 609,556 | ||||
Total liabilities and stockholders' equity | $ | 3,173,102 | $ | 3,211,619 | ||
COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND DECEMBER 31, 2023 | ||||||
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||
Three Months Ended December 31, 2024 (Unaudited) | Three Months Ended December 31, 2023 (Unaudited) | |||||
Service revenue | $ | 252,291 | $ | 272,099 | ||
Operating expenses: | ||||||
Network operations (including | 155,183 | 174,550 | ||||
Selling, general, and administrative (including | 62,603 | 81,221 | ||||
Acquisition costs – Sprint Business | — | 17,001 | ||||
Depreciation and amortization | 67,272 | 67,805 | ||||
Total operating expenses | 285,058 | 340,577 | ||||
Operating loss | (32,767) | (68,478) | ||||
Interest expense, including change in valuation interest rate swap agreement | (37,739) | (17,206) | ||||
Gain on bargain purchase – Sprint Business | — | 254,049 | ||||
Interest income – IP Transit Services Agreement | 5,065 | 8,828 | ||||
Interest income – Purchase Agreement | 417 | 720 | ||||
Interest income and other, net | 10,014 | 1,797 | ||||
(Loss) income before income taxes | (55,010) | 179,710 | ||||
Income tax benefit | 11,693 | 20,443 | ||||
Net (loss) income | $ | (43,317) | $ | 200,153 | ||
Comprehensive (loss) income: | ||||||
Net (loss) income | $ | (43,317) | $ | 200,153 | ||
Foreign currency translation adjustment | (18,391) | 5,377 | ||||
Comprehensive (loss) income | $ | (61,708) | $ | 205,530 | ||
Net (loss) income per common share: | ||||||
Basic net (loss) income per common share | $ | (0.91) | $ | 4.23 | ||
Diluted net (loss) income per common share | $ | (0.91) | $ | 4.17 | ||
Dividends declared per common share | $ | 0.995 | $ | 0.955 | ||
Weighted-average common shares - basic | 47,540,833 | 47,353,291 | ||||
Weighted-average common shares - diluted | 47,540,833 | 48,037,841 | ||||
COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | |||||||||
FOR EACH OF THE THREE YEARS ENDED DECEMBER 31, 2024 | |||||||||
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | |||||||||
2024 | 2023 | 2022 | |||||||
Service revenue | $ | 1,036,104 | $ | 940,922 | $ | 599,604 | |||
Operating expenses: | |||||||||
Network operations (including | 641,836 | 544,232 | 228,154 | ||||||
Selling, general, and administrative (including | 275,781 | 275,318 | 163,021 | ||||||
Acquisition costs – Sprint Business | 21,407 | 18,492 | 2,248 | ||||||
Depreciation and amortization | 298,018 | 232,209 | 92,222 | ||||||
Total operating expenses | 1,237,042 | 1,070,251 | 485,645 | ||||||
Gain on lease terminations and other | 3,332 | — | — | ||||||
Operating (loss) income | (197,606) | (129,329) | 113,959 | ||||||
Interest expense, including change in valuation – interest rate swap | (123,317) | (93,344) | (110,697) | ||||||
Foreign exchange gain on 2024 Notes | — | — | 31,561 | ||||||
Loss on debt extinguishment and redemption – 2024 Notes | — | — | (11,885) | ||||||
Gain on bargain purchase – Sprint Business | 22,202 | 1,406,435 | — | ||||||
Interest income – IP Transit Services Agreement | 23,767 | 26,796 | — | ||||||
Interest income – Purchase Agreement | 748 | 1,889 | — | ||||||
Interest income and other | 14,557 | 7,030 | 3,438 | ||||||
(Loss) income before income taxes | (259,649) | 1,219,477 | 26,376 | ||||||
Income tax benefit (expense) | 55,575 | 53,964 | (21,230) | ||||||
Net (loss) income | $ | (204,074) | $ | 1,273,441 | $ | 5,146 | |||
Comprehensive (loss) income: | |||||||||
Net (loss) income | $ | (204,074) | $ | 1,273,441 | $ | 5,146 | |||
Foreign currency translation adjustment | (16,300) | 4,772 | (8,153) | ||||||
Comprehensive (loss) income | $ | (220,374) | $ | 1,278,213 | $ | (3,007) | |||
Basic net (loss) income per common share | $ | (4.28) | $ | 26.88 | $ | 0.11 | |||
Diluted net (loss) income per common share | $ | (4.28) | $ | 26.62 | $ | 0.11 | |||
Dividends declared per common share | $ | 3.920 | $ | 3.760 | $ | 3.555 | |||
Weighted-average common shares-basic | 47,627,873 | 47,373,361 | 46,875,992 | ||||||
Weighted-average common shares -diluted | 47,627,873 | 47,837,512 | 47,207,298 | ||||||
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND DECEMBER 31, 2023 | ||||||
(IN THOUSANDS) | ||||||
Three Months | Three Months | |||||
Cash flows from operating activities: | ||||||
Net (loss) income | $ | (43,317) | $ | 200,153 | ||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||||||
Depreciation and amortization | 67,272 | 67,805 | ||||
Amortization of debt discounts and premium | 1,324 | 337 | ||||
Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements | (5,482) | (9,548) | ||||
Equity-based compensation expense (net of amounts capitalized) | 7,348 | 6,684 | ||||
Gain on bargain purchase – Sprint Business | — | (254,049) | ||||
Gains—equipment transactions and other, net | — | 489 | ||||
Deferred income taxes | 15,279 | (6,073) | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | 2,631 | (47,755) | ||||
Prepaid expenses and other current assets | (1,890) | (6,238) | ||||
Due to T-Mobile – Transition Services Agreement | (1,045) | (2,721) | ||||
Due from T-Mobile – Transition Services Agreement | (62) | 12,317 | ||||
Deposits and other assets | 2,409 | (1,371) | ||||
Accounts payable, accrued liabilities and other long-term liabilities | (29,935) | (8,731) | ||||
Net cash provided by (used in) operating activities | 14,532 | (48,701) | ||||
Cash flows from investing activities: | ||||||
Cash receipts - IP Transit Services Agreement – T-Mobile | 25,000 | 87,500 | ||||
Severance reimbursement – T-Mobile | — | 16,228 | ||||
Purchases of property and equipment | (46,104) | (43,609) | ||||
Net cash (used in) provided by investing activities | (21,104) | 60,119 | ||||
Cash flows from financing activities: | ||||||
Dividends paid | (48,416) | (46,362) | ||||
Principal payments of finance lease obligations | (27,979) | (18,813) | ||||
Proceeds from exercises of common stock options | 1,252 | 440 | ||||
Net cash used in financing activities | (75,143) | (64,735) | ||||
Effect of exchange rate changes on cash | (6,461) | 1,026 | ||||
Net decrease in cash and cash equivalents & restricted cash | (88,176) | (52,291) | ||||
Cash and cash equivalents & restricted cash, beginning of period | 316,092 | 166,072 | ||||
Cash and cash equivalents & restricted cash, end of period | $ | 227,916 | $ | 113,781 | ||
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
FOR EACH OF THE THREE YEARS ENDED DECEMBER 31, 2024 | |||||||||
(IN THOUSANDS) | |||||||||
2024 | 2023 | 2022 | |||||||
Cash flows from operating activities: | |||||||||
Net (loss) income | $ | (204,074) | $ | 1,273,441 | $ | 5,146 | |||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||
Depreciation and amortization | 298,018 | 232,209 | 92,222 | ||||||
Amortization of debt discounts and premium | 3,688 | 1,323 | 1,464 | ||||||
Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements | (24,515) | (28,685) | — | ||||||
Equity-based compensation expense (net of amounts capitalized) | 25,738 | 26,924 | 24,439 | ||||||
Gain on bargain purchase – Sprint Business | (22,202) | (1,406,435) | — | ||||||
Foreign currency exchange gain on 2024 Notes | — | — | (31,561) | ||||||
Loss on extinguishment & redemption of 2024 notes | — | — | 11,885 | ||||||
Gain – lease termination | (3,332) | — | — | ||||||
Gains—equipment transactions and other, net | — | 212 | 372 | ||||||
Deferred income taxes | (51,623) | (69,582) | 16,539 | ||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | 38,541 | (51,002) | (2,838) | ||||||
Prepaid expenses and other current assets | (5,839) | (11,001) | (7,427) | ||||||
Due to T-Mobile – Transition Services Agreement | (66,383) | 66,908 | — | ||||||
Due from T-Mobile – Transition Services Agreement | 4,452 | (4,514) | — | ||||||
Deposits and other assets | (3,966) | (1,548) | (282) | ||||||
Accounts payable, accrued liabilities and other long-term liabilities | 2,852 | (10,905) | 63,748 | ||||||
Net cash (used in) provided by operating activities | (8,645) | 17,345 | 173,707 | ||||||
Cash flows from investing activities: | |||||||||
Cash receipts - IP Transit Services Agreement – T-Mobile | 204,167 | 204,167 | — | ||||||
Acquisition of Sprint Business, net of | 12,323 | 2,191 | — | ||||||
Purchases of property and equipment | (194,998) | (129,632) | (78,971) | ||||||
Net cash provided by (used in) investing activities | 21,492 | 76,726 | (78,971) | ||||||
Cash flows from financing activities: | |||||||||
Net proceeds from issuance of senior unsecured 2027 Notes, net of debt costs of | 291,879 | — | 446,010 | ||||||
Net proceeds from issuance of secured IPv4 notes – net of debt costs of | 198,426 | — | — | ||||||
Redemption and extinguishment of unsecured 2024 Notes | — | — | (375,354) | ||||||
Dividends paid | (189,408) | (181,716) | (169,857) | ||||||
Purchases and retirement of common stock | (7,968) | — | — | ||||||
Principal payments of finance lease obligations | (74,632) | (77,362) | (45,472) | ||||||
Settlement of a finance lease – at a discount | (114,576) | — | — | ||||||
Principal payments of installment payment agreement | — | — | (790) | ||||||
Proceeds from exercises of common stock options | 2,204 | 1,227 | 614 | ||||||
Net cash provided by (used in) financing activities | 105,925 | (257,851) | (144,849) | ||||||
Effect of exchange rate changes on cash | (4,637) | 1,649 | (2,599) | ||||||
Net increase (decrease) in cash and cash equivalents & restricted cash | 114,135 | (162,131) | (52,712) | ||||||
Cash and cash equivalents & restricted cash, beginning of year | 113,781 | 275,912 | 328,624 | ||||||
Cash and cash equivalents & restricted cash, end of year | 227,916 | 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 years ended December 31, 2023 and December 31, 2024 and our Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024. 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.
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SOURCE Cogent Communications Holdings, Inc.
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