Cogent Communications Reports Third Quarter 2024 Results and Increases its Regular Quarterly Dividend on its Common Stock
Cogent Communications (NASDAQ: CCOI) reported Q3 2024 service revenue of $257.2 million, a 1.2% decrease from Q2 2024 and 6.6% decrease from Q3 2023. EBITDA increased by 32.2% to $35.9 million in Q3 2024, with margin improving to 13.9%. Notable metrics include wavelength revenue growth of 45.8% sequentially to $5.3 million and IPv4 address leasing revenue increase of 11.8% to $12.8 million. The company increased its quarterly dividend by $0.01 to $0.995 per share, marking its 49th consecutive quarterly increase. Total customer connections decreased by 8.5% year-over-year to 126,333.
Cogent Communications (NASDAQ: CCOI) ha riportato per il terzo trimestre del 2024 un fatturato di servizio di 257,2 milioni di dollari, in diminuzione dell'1,2% rispetto al secondo trimestre del 2024 e del 6,6% rispetto al terzo trimestre del 2023. EBITDA è aumentato del 32,2% a 35,9 milioni di dollari nel terzo trimestre del 2024, con un margine in miglioramento al 13,9%. Tra i dati salienti si evidenzia una crescita del fatturato da lunghezze d'onda del 45,8% su base sequenziale, raggiungendo i 5,3 milioni di dollari, e un incremento del fatturato da leasing di indirizzi IPv4 dell'11,8% a 12,8 milioni di dollari. L'azienda ha aumentato il suo dividendo trimestrale di 0,01 dollari, portandolo a 0,995 dollari per azione, segnando così il 49° incremento trimestrale consecutivo. Le connessioni totali dei clienti sono diminuite dell'8,5% rispetto all'anno precedente, raggiungendo le 126.333.
Cogent Communications (NASDAQ: CCOI) reportó ingresos por servicios del tercer trimestre de 2024 de 257,2 millones de dólares, una disminución del 1,2% con respecto al segundo trimestre de 2024 y del 6,6% en comparación con el tercer trimestre de 2023. EBITDA aumentó un 32,2% a 35,9 millones de dólares en el tercer trimestre de 2024, con un margen que mejoró al 13,9%. Entre los datos destacados se incluye un crecimiento de los ingresos por longitudes de onda del 45,8% secuencialmente, alcanzando los 5,3 millones de dólares, y un aumento de los ingresos por arrendamiento de direcciones IPv4 del 11,8%, totalizando 12,8 millones de dólares. La empresa incrementó su dividendo trimestral en 0,01 dólares, llevándolo a 0,995 dólares por acción, marcando así el 49º aumento trimestral consecutivo. Las conexiones totales de clientes disminuyeron un 8,5% interanual, alcanzando las 126.333.
코겐트 커뮤니케이션즈 (NASDAQ: CCOI)는 2024년 3분기 서비스 수익이 2억 5720만 달러에 달하며, 이는 2024년 2분기 대비 1.2% 감소하고 2023년 3분기 대비 6.6% 감소한 수치입니다. EBITDA는 2024년 3분기 동안 32.2% 증가하여 3590만 달러에 달하며, 마진은 13.9%로 개선되었습니다. 주목할 만한 지표로는 파장 수익이 전분기 대비 45.8% 증가하여 530만 달러에 이르렀고, IPv4 주소 임대 수익은 11.8% 증가하여 1280만 달러에 달했습니다. 회사는 분기 배당금을 0.01달러 인상하여 주당 0.995달러로 설정하였고, 이는 49번째 연속 분기 증가를 의미합니다. 전체 고객 연결 수는 전년 대비 8.5% 감소하여 126,333개에 이릅니다.
Cogent Communications (NASDAQ: CCOI) a annoncé pour le troisième trimestre 2024 un chiffre d'affaires de services de 257,2 millions de dollars, soit une baisse de 1,2% par rapport au deuxième trimestre 2024 et de 6,6% par rapport au troisième trimestre 2023. EBITDA a augmenté de 32,2% pour atteindre 35,9 millions de dollars au troisième trimestre 2024, avec une marge améliorée à 13,9%. Parmi les indicateurs marquants, on note une croissance des revenus des longueurs d'onde de 45,8% par rapport au trimestre précédent, atteignant 5,3 millions de dollars, et une augmentation des revenus de location d'adresses IPv4 de 11,8% à 12,8 millions de dollars. L'entreprise a augmenté son dividende trimestriel de 0,01 dollar pour le porter à 0,995 dollar par action, marquant ainsi sa 49ème augmentation trimestrielle consécutive. Le nombre total de connexions client a diminué de 8,5% par rapport à l'année précédente, atteignant 126.333.
Cogent Communications (NASDAQ: CCOI) berichtete für das dritte Quartal 2024 einen Dienstumsatz von 257,2 Millionen Dollar, was einem Rückgang von 1,2% im Vergleich zum zweiten Quartal 2024 und einem Rückgang von 6,6% im Vergleich zum dritten Quartal 2023 entspricht. EBITDA stieg um 32,2% auf 35,9 Millionen Dollar im dritten Quartal 2024, wobei die Marge auf 13,9% verbessert wurde. Auffällige Kennzahlen sind das Wachstum der Wellenlängenumsätze, das sich sequenziell um 45,8% auf 5,3 Millionen Dollar erhöhte, sowie der Anstieg der Einnahmen aus der Vermietung von IPv4-Adressen um 11,8% auf 12,8 Millionen Dollar. Das Unternehmen erhöhte seine vierteljährliche Dividende um 0,01 Dollar auf 0,995 Dollar pro Aktie, was die 49. aufeinanderfolgende vierteljährliche Erhöhung markiert. Die Gesamtzahl der Kundenverbindungen ging im Jahresvergleich um 8,5% auf 126.333 zurück.
- EBITDA increased 32.2% quarter-over-quarter to $35.9 million
- Wavelength revenue grew 45.8% sequentially to $5.3 million
- IPv4 address leasing revenue increased 11.8% to $12.8 million
- Quarterly dividend increased for the 49th consecutive time
- On-net buildings increased by 167 year-over-year to 3,424
- Service revenue declined 1.2% quarter-over-quarter to $257.2 million
- Total customer connections decreased 8.5% year-over-year
- Net loss per share of $1.33 in Q3 2024
- GAAP gross profit decreased 67.5% quarter-over-quarter
- Net cash used in operating activities was $20.2 million
Insights
Q3 2024 results show mixed performance with concerning trends. Revenue declined by
Key concerns include declining customer connections (
The
The post-pandemic office market dynamics continue to significantly impact Cogent's business model. While some markets show improving occupancy trends in Q3 2024, the overall office utilization remains below pre-2020 levels, directly affecting corporate customer acquisition and retention.
A notable shift is occurring where corporate clients are upgrading their internet infrastructure to support hybrid work models, partially offsetting the occupancy challenges. However, the geographical variation in recovery patterns and uncertain return-to-office trajectories suggest continued pressure on corporate revenue streams.
Financial and Business Highlights
- Service revenue was
$260.4 million $257.2 million - Wavelength revenue increased by
45.8% , sequentially, and was$3.6 million $5.3 million - Revenue from leasing IPv4 addresses increased by
11.8% , sequentially, and was$11.5 million $12.8 million
- Wavelength revenue increased by
- EBITDA increased by
32.2% from Q2 2024 to$35.9 million - EBITDA margin was
10.4% for Q2 2024 and13.9% for Q3 2024. - Net cash used in operating activities was
$52.4 million $22.2 million $20.2 million
- EBITDA margin was
- Cogent approved an increase of
$0.01 $0.99 5$0.98 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
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 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 decreased by
Non-GAAP gross margin was
Net cash used in 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), 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 167 from September 30, 2023 to 3,424 as of September 30, 2024 and increased by 38 from June 30, 2024.
Quarterly Dividend Increase Approved
On November 6, 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.
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 year ended December 31, 2023 and in its Quarterly Reports on Form 10-Q for the quarterly periods ended 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 November 7, 2024 to discuss Cogent's operating results for the third quarter of 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, and colocation services. Cogent's facilities-based, all-optical IP network backbone provides services in 260 markets globally.
Cogent Communications is headquartered at 2450 N Street, NW,
COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES | |||||||
Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 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 % |
Off-Net revenue | |||||||
% Change from previous Qtr | 1.1 % | 173.5 % | 28.0 % | -5.3 % | -4.4 % | -5.7 % | -0.1 % |
Wavelength revenue (1) | $- | ||||||
% Change from previous Qtr | - | - | 88.8 % | 3.9 % | 7.0 % | 9.0 % | 45.8 % |
Non-Core revenue (2) (16) | |||||||
% Change from previous Qtr | 3.2 % | NM | 49.9 % | -43.5 % | -16.8 % | -23.7 % | -10.2 % |
Service revenue – total (18) | |||||||
% Change from previous Qtr | 1.1 % | 56.1 % | 14.9 % | -1.2 % | -2.2 % | -2.2 % | -1.2 % |
Constant currency total revenue | 0.2 % | 55.9 % | 14.9 % | -1.1 % | -2.3 % | -2.0 % | -1.5 % |
Constant currency total revenue | 4.0 % | 61.4 % | 82.4 % | 78.1 % | 73.1 % | 8.8 % | -6.7 % |
Constant currency and excise | 0.1 % | 51.4 % | 13.4 % | -3.2 % | -2.3 % | -1.5 % | -1.7 % |
Constant currency and excise | 3.7 % | 56.2 % | 75.5 % | 67.4 % | 62.4 % | 5.4 % | -8.6 % |
Excise Taxes included in | |||||||
% Change from previous Qtr | 2.6 % | 163.3 % | 31.9 % | 40.3 % | 0.6 % | -6.7 % | 3.0 % |
IPv4 Revenue, included in On- | |||||||
% Change from previous Qtr | NM | -1.1 % | 2.9 % | 2.1 % | 7.5 % | 7.2 % | 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 |
% Change from previous Qtr | NM | 6.4 % | 5.0 % | 4.1 % | 6.8 % | 4.9 % | 1.0 % |
Corporate revenue (5) (16) | |||||||
% Change from previous Qtr | -0.2 % | 29.6 % | 8.5 % | 5.1 % | -1.4 % | -4.3 % | -2.8 % |
Net-centric revenue (5) (15) | |||||||
% Change from previous Qtr | 2.7 % | 28.9 % | 8.4 % | -1.9 % | -1.3 % | -0.9 % | 0.8 % |
Enterprise revenue (5) (18) | - | ||||||
% Change from previous Qtr | - | NM | 45.6 % | -12.8 % | -5.7 % | 0.9 % | -1.4 % |
Network operations expenses | |||||||
% Change from previous Qtr | 2.8 % | 134.7 % | 26.2 % | 0.6 % | -3.2 % | -7.6 % | 3.4 % |
GAAP gross profit (6) | |||||||
% Change from previous Qtr | -2.3 % | -28.7 % | -69.7 % | 97.0 % | -11.4 % | 14.8 % | -67.5 % |
GAAP gross margin (6) | 45.4 % | 20.8 % | 5.5 % | 10.9 % | 9.9 % | 11.6 % | 3.8 % |
Non-GAAP gross profit (3) (7) | |||||||
% Change from previous Qtr | 0.0 % | 7.8 % | -0.3 % | -4.2 % | -0.3 % | 7.2 % | -8.1 % |
Non-GAAP gross margin (3) (7) | 61.9 % | 42.8 % | 37.1 % | 36.0 % | 36.7 % | 40.2 % | 37.4 % |
Selling, general and | |||||||
% Change from previous Qtr | 2.5 % | 100.9 % | -25.0 % | 28.6 % | -6.4 % | -7.1 % | -7.5 % |
Depreciation and amortization | |||||||
% Change from previous Qtr | 6.8 % | 108.7 % | 65.2 % | -21.8 % | 4.6 % | 4.4 % | 15.9 % |
Equity-based compensation | |||||||
% Change from previous Qtr | 5.1 % | -5.0 % | 18.6 % | -9.8 % | 4.0 % | -48.7 % | 120.9 % |
Operating income (loss) | |||||||
% Change from previous Qtr | -11.0 % | NM | 46.1 % | 35.4 % | 13.3 % | 20.6 % | 22.7 % |
Interest expense (9) | |||||||
% Change from previous Qtr | -13.6 % | 50.8 % | -15.5 % | 44.3 % | -34.1 % | 68.8 % | -16.4 % |
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 |
% Change from previous Qtr | 0.3 % | 0.2 % | 0.2 % | 0.3 % | 0.1 % | 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 |
% Change from previous Qtr | 0.4 % | 0.3 % | -0.6 % | 1.7 % | -1.3 % | 0.2 % | -0.2 % |
EBITDA (3) | |||||||
% Change from previous Qtr | -1.9 % | -56.9 % | 80.4 % | -86.2 % | 207.0 % | 47.0 % | 32.2 % |
EBITDA margin (3) | 36.5 % | 10.1 % | 15.8 % | 2.2 % | 6.9 % | 10.4 % | 13.9 % |
Sprint acquisition costs (14) | $- | ||||||
Cash payments under IP Transit | $- | ||||||
EBITDA, as adjusted for Sprint | |||||||
% Change from previous Qtr | -1.6 % | -4.2 % | 143.1 % | -15.9 % | 4.1 % | -7.7 % | -42.7 % |
EBITDA, as adjusted for Sprint | 36.8 % | 22.5 % | 47.7 % | 40.6 % | 43.2 % | 40.8 % | 23.7 % |
Net cash provided by (used in) | |||||||
% Change from previous Qtr | -1.4 % | 130.7 % | -163.4 % | -7.1 % | -139.5 % | -215.4 % | -8.8 % |
Capital expenditures | |||||||
% Change from previous Qtr | 18.4 % | 61.4 % | -32.2 % | 71.9 % | -6.3 % | 19.3 % | 21.5 % |
Principal payments of capital | |||||||
% Change from previous Qtr | -61.5 % | -17.5 % | 429.7 % | -54.5 % | 23.5 % | 474.4 % | -96.6 % |
Dividends paid (17) | |||||||
Gross Leverage Ratio (3) (11) | 5.47 | 5.63 | 4.79 | 4.07 | 3.57 | 4.06 | 4.94 |
Net Leverage Ratio (3) (11) | 4.46 | 4.56 | 4.24 | 3.75 | 3.17 | 3.14 | 4.13 |
Customer Connections – end of | |||||||
On-Net customer connections | 83,268 | 92,846 | 88,250 | 88,291 | 87,574 | 87,387 | 87,655 |
% Change from previous Qtr | 0.8 % | 11.5 % | -5.0 % | 0.0 % | -0.8 % | -0.2 % | 0.3 % |
Off-Net customer connections | 13,785 | 38,762 | 36,923 | 36,676 | 34,579 | 32,758 | 32,420 |
% Change from previous Qtr | 1.9 % | 181.2 % | -4.7 % | -0.7 % | -5.7 % | -5.3 % | -1.0 % |
Wavelength customer | 414 | 449 | 661 | 693 | 754 | 1,041 | |
% Change from previous Qtr | - | 8.5 % | 47.2 % | 4.8 % | 8.8 % | 38.1 % | |
Non-Core customer connections | 374 | 19,408 | 12,403 | 11,975 | 10,037 | 7,883 | 5,217 |
% Change from previous Qtr | 3.0 % | NM | -36.1 % | -3.5 % | -16.2 % | -21.5 % | -33.8 % |
Total customer connections (15) | 97,427 | 151,430 | 138,025 | 137,603 | 132,883 | 128,782 | 126,333 |
% Change from previous Qtr | 0.9 % | 55.4 % | -8.9 % | -0.3 % | -3.4 % | -3.1 % | -1.9 % |
Corporate customer | 44,570 | 61,284 | 55,045 | 54,493 | 51,821 | 48,690 | 47,613 |
% Change from previous Qtr | -0.6 % | 37.5 % | -10.2 % | -1.0 % | -4.9 % | -6.0 % | -2.2 % |
Net-centric customer | 52,857 | 66,711 | 62,291 | 62,370 | 61,599 | 61,736 | 62,273 |
% Change from previous Qtr | 2.3 % | 26.2 % | -6.6 % | 0.1 % | -1.2 % | 0.2 % | 0.9 % |
Enterprise customer | - | 23,435 | 20,689 | 20,740 | 19,463 | 18,356 | 16,447 |
% Change from previous Qtr | - | NM | -11.7 % | 0.2 % | -6.2 % | -5.7 % | -10.4 % |
On-Net Buildings – end of | |||||||
Multi-Tenant office buildings | 1,841 | 1,844 | 1,860 | 1,862 | 1,861 | 1,864 | 1,870 |
Carrier neutral data center buildings | 1,294 | 1,327 | 1,337 | 1,347 | 1,382 | 1,436 | 1,459 |
Cogent data centers | 55 | 56 | 60 | 68 | 78 | 86 | 95 |
Total on-net buildings | 3,190 | 3,227 | 3,257 | 3,277 | 3,321 | 3,386 | 3,424 |
Total carrier neutral data center nodes | 1,490 | 1,526 | 1,528 | 1,558 | 1,586 | 1,602 | 1,627 |
Square feet – multi-tenant office | 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 |
Total Technical Buildings | - | 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 |
Network – end of period | |||||||
Intercity route miles – Leased | 61,300 | 72,694 | 72,694 | 72,552 | 76,211 | 75,965 | 77,561 |
Metro route miles – Leased | 17,826 | 22,556 | 22,128 | 24,779 | 25,977 | 27,373 | 28,510 |
Metro fiber miles – Leased | 42,863 | 75,577 | 69,943 | 77,365 | 79,138 | 80,042 | 84,476 |
Intercity route miles – Owned | 2,748 | 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 |
Connected networks – AS's | 7,864 | 7,891 | 7,971 | 7,988 | 8,098 | 8,135 | 8,212 |
Headcount – end of period (13) | |||||||
Sales force – quota bearing (13) | 562 | 647 | 637 | 657 | 677 | 656 | 655 |
Sales force – total (13) | 714 | 841 | 833 | 847 | 871 | 851 | 847 |
Total employees (13) | 1,107 | 2,020 | 1,990 | 1,947 | 1,955 | 1,901 | 1,908 |
Sales rep productivity – units | 4.0 | 9.2 | 3.6 | 3.3 | 4.0 | 3.8 | 4.0 |
FTE – sales reps | 539 | 567 | 621 | 620 | 627 | 632 | 620 |
(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 September 30, 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
(12) In connection with the acquisition of the Wireline Business, Cogent acquired 482 technical buildings. Forty-three 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.
(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
$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
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, and
- 2,053 as of September 30, 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 September 30, 2024.
(17) The first quarter 2024 dividend totaling
(18) Included in on-net revenue and enterprise revenue from May 2023 to July 2024 was
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 | |
($ in 000's) – unaudited | |||||||
Net cash provided by (used in) operating | |||||||
Changes in operating assets and liabilities | |||||||
Cash interest expense and income tax | 18,797 | 31,875 | 44,956 | 18,424 | 33,873 | 38,220 | 33,219 |
EBITDA | |||||||
PLUS: Sprint acquisition costs | $- | ||||||
PLUS: Cash payments made to the | - | 29,167 | 87,500 | 87,500 | 87,500 | 66,667 | 25,000 |
EBITDA, as adjusted for Sprint | |||||||
EBITDA margin | 36.5 % | 10.1 % | 15.8 % | 2.2 % | 6.9 % | 10.4 % | 13.9 % |
EBITDA, as adjusted for Sprint | 36.8 % | 22.5 % | 47.7 % | 40.6 % | 43.2 % | 40.8 % | 23.7 % |
Constant currency revenue is reconciled to service revenue as reported in the tables below
Constant currency impact on revenue changes – sequential periods
($ in 000's) – unaudited | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
Service revenue, as reported – current | |||||||
Impact of foreign currencies on service | (1,292) | (417) | 10 | 375 | (304) | 323 | (620) |
Service revenue - as adjusted for | |||||||
Service revenue, as reported – prior | |||||||
Constant currency revenue increase | |||||||
Constant currency revenue percent | 0.2 % | 55.9 % | 14.9 % | -1.1 % | -2.3 % | -2.0 % | -1.5 % |
(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 |
Service revenue, as reported – current | |||||||
Impact of foreign currencies on service | 1,553 | (277) | (1,768) | (1,412) | (362) | 420 | (213) |
Service revenue - as adjusted for | |||||||
Service revenue, as reported – prior | 149,175 | 148,450 | |||||
Constant currency revenue increase | 5,966 | 91,079 | |||||
Constant currency percent revenue | 4.0 % | 61.4 % | 82.4 % | 78.1 % | 73.1 % | 8.8 % | -6.7 % |
(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 |
Service revenue, as reported – current | |||||||
Impact of foreign currencies on service | (1,292) | (417) | 10 | 375 | (304) | 323 | (620) |
Impact of excise taxes on service | (107) | (6,847) | (3,517) | (5,871) | (121) | 1,367 | (570) |
Service revenue - as adjusted for | |||||||
Service revenue, as reported – prior | |||||||
Constant currency and excise taxes | |||||||
Constant currency and excise tax | 0.1 % | 51.4 % | 13.4 % | -3.2 % | -2.3 % | -1.5 % | -1.7 % |
(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 |
Service revenue, as reported – current | |||||||
Impact of foreign currencies on service | 1,553 | (277) | (1,768) | (1,412) | (362) | 420 | (213) |
Impact of excise taxes on service | (451) | (7,592) | (10,439) | (16,342) | (16,356) | (8,142) | (5,195) |
Service revenue - as adjusted for | |||||||
Service revenue, as reported – | |||||||
Constant currency and excise | |||||||
Constant currency and excise tax | 3.7 % | 56.2 % | 75.5 % | 67.4 % | 62.4 % | 5.4 % | -8.6 % |
(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 | |
($ in 000's) – unaudited | |||||||
Service revenue total | |||||||
Minus - Network operations expense | 83,798 | 190,013 | 260,328 | 242,355 | 239,824 | 230,203 | 247,367 |
GAAP Gross Profit (5) | |||||||
Plus - Equity-based compensation – | 149 | 231 | 370 | 370 | 385 | 350 | 469 |
Plus – Depreciation and amortization | |||||||
Non-GAAP Gross Profit (6) | |||||||
GAAP Gross Margin (5) | 45.4 % | 20.8 % | 5.5 % | 10.9 % | 9.9 % | 11.6 % | 3.8 % |
Non-GAAP Gross Margin (6) | 61.9 % | 42.8 % | 37.1 % | 36.0 % | 36.7 % | 40.2 % | 37.4 % |
(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 |
Cash and cash equivalents & restricted | |||||||
Debt | |||||||
Capital (finance) leases – current portion | 19,782 | 20,114 | 63,236 | 64,594 | 64,043 | 21,253 | 21,939 |
Capital (finance) leases – long term | 300,600 | 311,405 | 419,941 | 419,921 | 453,473 | 405,176 | 460,632 |
Senior Secured 2026 Notes | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 |
Secured IPV4 Notes | 206,000 | 206,000 | |||||
Senior Unsecured 2027 Notes | 450,000 | 450,000 | 450,000 | 450,000 | 450,000 | 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 |
Total net debt | 1,035,960 | 1,037,566 | 1,267,105 | 1,320,734 | 1,304,242 | 1,456,188 | 1,622,479 |
Trailing 12 months EBITDA, as adjusted | 232,169 | 227,774 | 298,984 | 352,465 | 411,001 | 463,102 | 392,525 |
Gross leverage ratio | 5.47 | 5.63 | 4.79 | 4.07 | 3.57 | 4.06 | 4.94 |
Net leverage ratio | 4.46 | 4.56 | 4.24 | 3.75 | 3.17 | 3.14 | 4.13 |
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 CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023 (IN THOUSANDS, EXCEPT SHARE DATA) | ||||||
September 30, 2024 | December 31, 2023 | |||||
(Unaudited) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 279,191 | $ | 75,092 | ||
Restricted cash | 36,901 | 38,689 | ||||
Accounts receivable, net of allowance for credit losses of | 99,565 | 135,475 | ||||
Due from T-Mobile,IP Transit Services Agreement, current portion, net of discount of | 81,532 | 179,269 | ||||
Due from T-Mobile, Transition Services Agreement | — | 4,514 | ||||
Prepaid expenses and other current assets | 72,214 | 80,588 | ||||
Total current assets | 569,403 | 513,627 | ||||
Property and equipment: | ||||||
Property and equipment | 3,227,805 | 2,947,376 | ||||
Accumulated depreciation and amortization | (1,607,122) | (1,409,559) | ||||
Total property and equipment, net | 1,620,683 | 1,537,817 | ||||
Right-of-use leased assets | 289,894 | 361,587 | ||||
IPv4 intangible assets | 458,000 | 458,000 | ||||
Other intangible assets, net | 13,481 | 14,815 | ||||
Deposits and other assets | 29,668 | 23,438 | ||||
Due from T-Mobile, IP Transit Services Agreement, net of discount of | 201,022 | 263,750 | ||||
Due from T-Mobile, Purchase Agreement, net of discount of | 21,943 | 38,585 | ||||
Total assets | $ | 3,204,094 | $ | 3,211,619 | ||
Liabilities and stockholders' equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 53,053 | $ | 48,356 | ||
Accrued and other current liabilities | 148,204 | 120,523 | ||||
Due to T-Mobile – Transition Services Agreement | 1,570 | 66,908 | ||||
Due to T-Mobile – Purchase Agreement | — | 4,981 | ||||
Current maturities, operating lease liabilities | 55,867 | 67,962 | ||||
Finance lease obligations, current maturities | 21,939 | 64,594 | ||||
Total current liabilities | 280,633 | 373,324 | ||||
Senior secured 2026 notes, net of unamortized debt costs of | 498,967 | 498,498 | ||||
Senior unsecured 2027 notes, net of unamortized debt costs of | 740,304 | 447,088 | ||||
Secured IPv4 notes, net of debt costs of | 198,984 | — | ||||
Operating lease liabilities, net of current maturities | 270,932 | 330,095 | ||||
Finance lease obligations, net of current maturities | 460,632 | 419,921 | ||||
Deferred income tax liabilities | 382,987 | 471,498 | ||||
Other long-term liabilities | 47,102 | 61,639 | ||||
Total liabilities | 2,880,541 | 2,602,063 | ||||
Commitments and contingencies: | ||||||
Stockholders' equity: | ||||||
Common stock, | 49 | 49 | ||||
Additional paid-in capital | 620,410 | 606,755 | ||||
Accumulated other comprehensive loss | (12,294) | (14,385) | ||||
Accumulated (deficit) earnings | (284,612) | 17,137 | ||||
Total stockholders' equity | 323,553 | 609,556 | ||||
Total liabilities and stockholders' equity | $ | 3,204,094 | $ | 3,211,619 | ||
COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | |||||
(Unaudited) | (Unaudited) | |||||
Service revenue | $ | 257,202 | $ | 275,429 | ||
Operating expenses: | ||||||
Network operations (including | 161,552 | 173,594 | ||||
Selling, general, and administrative (including | 67,664 | 65,308 | ||||
Acquisition costs – Sprint Business | — | 351 | ||||
Depreciation and amortization | 85,815 | 86,734 | ||||
Total operating expenses | 315,031 | 325,987 | ||||
Operating loss | (57,829) | (50,558) | ||||
Interest expense, including change in valuation interest rate swap agreement | (26,877) | (29,023) | ||||
Gain on bargain purchase – Sprint Business | — | (3,332) | ||||
Interest income – IP Transit Services Agreement | 5,438 | 10,299 | ||||
Interest income – Purchase Agreement | 409 | 664 | ||||
Interest income and other, net | (1,153) | 1,604 | ||||
Loss before income taxes | (80,012) | (70,346) | ||||
Income tax benefit | 16,900 | 13,623 | ||||
Net loss | $ | (63,112) | $ | (56,723) | ||
Comprehensive loss: | ||||||
Net loss | $ | (63,112) | $ | (56,723) | ||
Foreign currency translation adjustment | 8,847 | (4,134) | ||||
Comprehensive loss | $ | (54,265) | $ | (60,857) | ||
Net loss per common share: | ||||||
Basic net loss per common share | $ | (1.33) | $ | (1.20) | ||
Diluted net loss per common share | $ | (1.33) | $ | (1.20) | ||
Dividends declared per common share | $ | 0.985 | $ | 0.945 | ||
Weighted-average common shares - basic | 47,426,131 | 47,227,338 | ||||
Weighted-average common shares - diluted | 47,426,131 | 47,227,338 | ||||
COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | |||||
(Unaudited) | (Unaudited) | |||||
Service revenue | $ | 783,813 | $ | 668,822 | ||
Operating expenses: | ||||||
Network operations (including | 486,657 | 369,734 | ||||
Selling, general, and administrative (including | 212,706 | 194,046 | ||||
Acquisition costs – Sprint Business | 21,407 | 1,490 | ||||
Depreciation and amortization | 230,747 | 164,403 | ||||
Total operating expenses | 951,517 | 729,673 | ||||
Gain on lease termination | 3,332 | — | ||||
Operating loss | (164,372) | (60,851) | ||||
Interest expense, including change in valuation interest rate swap agreement | (85,575) | (76,138) | ||||
Gain on bargain purchase – Sprint Business | 22,202 | 1,152,386 | ||||
Interest income – IP Transit Services Agreement | 18,702 | 17,968 | ||||
Interest income – Purchase Agreement | 331 | 1,170 | ||||
Interest income and other, net | 4,074 | 5,154 | ||||
(Loss) income before income taxes | (204,638) | 1,039,689 | ||||
Income tax benefit | 43,881 | 33,599 | ||||
Net (loss) income | $ | (160,757) | $ | 1,073,288 | ||
Comprehensive (loss) income: | ||||||
Net (loss) income | $ | (160,757) | $ | 1,073,288 | ||
Foreign currency translation adjustment | 2,091 | (605) | ||||
Comprehensive (loss) income | $ | (158,666) | $ | 1,072,683 | ||
Net (loss) income per common share: | ||||||
Basic net (loss) income per common share | $ | (3.39) | $ | 22.72 | ||
Diluted net (loss) income per common share | $ | (3.39) | $ | 22.54 | ||
Dividends declared per common share | $ | 2.925 | $ | 2.805 | ||
Weighted-average common shares - basic | 47,453,906 | 47,234,025 | ||||
Weighted-average common shares - diluted | 47,453,906 | 47,624,709 | ||||
COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023 (IN THOUSANDS) | ||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | |||||
(Unaudited) | (Unaudited) | |||||
Cash flows from operating activities: | ||||||
Net loss | $ | (63,112) | $ | (56,723) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
Depreciation and amortization | 85,815 | 86,734 | ||||
Amortization of debt costs and discounts | 1,260 | 334 | ||||
Amortization of discounts, due from T-Mobile,IP Transit Services & Purchase Agreements | (5,847) | (10,963) | ||||
Equity-based compensation expense (net of amounts capitalized) | 7,874 | 7,411 | ||||
Gain on bargain purchase – Sprint Business | — | 3,332 | ||||
Gains – lease terminations and other, net | — | 354 | ||||
Deferred income taxes | (23,348) | (36,319) | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | 12,111 | 1,671 | ||||
Prepaid expenses and other current assets | (16,849) | 9,377 | ||||
Due to T-Mobile – Transition Services Agreement | 16,185 | 9,530 | ||||
Due from T-Mobile – Transition Services Agreement | (716) | (9,816) | ||||
Accounts payable, accrued liabilities and other long-term liabilities | (29,913) | (57,045) | ||||
Deposits and other assets | (3,686) | (310) | ||||
Net cash used in operating activities | (20,226) | (52,433) | ||||
Cash flows from investing activities: | ||||||
Cash payments - IP Transit Services Agreement – T-Mobile | 25,000 | 87,500 | ||||
Purchases of property and equipment | (59,244) | (25,373) | ||||
Net cash (used in) provided by investing activities | (34,244) | 62,127 | ||||
Cash flows from financing activities: | ||||||
Dividends paid | (47,210) | (45,136) | ||||
Proceeds from exercises of stock options | 748 | 402 | ||||
Principal payments of finance lease obligations | (4,516) | (41,302) | ||||
Net cash used in financing activities | (50,978) | (86,036) | ||||
Effect of exchange rates changes on cash | (4,701) | (1,539) | ||||
Net decrease in cash, cash equivalents and restricted cash | (110,149) | (77,881) | ||||
Cash, cash equivalents and restricted cash, beginning of period | 426,241 | 243,953 | ||||
Cash, cash equivalents and restricted cash, end of period | $ | 316,092 | $ | 166,072 | ||
COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023 (IN THOUSANDS) | ||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | |||||
(Unaudited) | (Unaudited) | |||||
Cash flows from operating activities: | ||||||
Net (loss) income | $ | (160,757) | $ | 1,073,288 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 230,747 | 164,403 | ||||
Amortization of debt costs and discounts | 2,364 | 986 | ||||
Amortization of discounts, due from T-Mobile,IP Transit Services & Purchase Agreements | (19,033) | (19,138) | ||||
Equity-based compensation expense (net of amounts capitalized) | 18,390 | 20,241 | ||||
Gain on bargain purchase – Sprint Business | (22,202) | (1,152,386) | ||||
Gains – lease terminations and other, net | (3,332) | (277) | ||||
Deferred income taxes | (66,902) | (63,509) | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | 35,910 | (3,247) | ||||
Prepaid expenses and other current assets | (3,949) | (4,763) | ||||
Due to T-Mobile – Transition Services Agreement | (65,338) | 69,629 | ||||
Due from T-Mobile – Transition Services Agreement | 4,514 | (16,831) | ||||
Accounts payable, accrued liabilities and other long-term liabilities | 32,785 | (2,176) | ||||
Deposits and other assets | (6,374) | (177) | ||||
Net cash (used in) provided by operating activities | (23,177) | 66,043 | ||||
Cash flows from investing activities: | ||||||
Cash payments - IP Transit Services Agreement – T-Mobile | 179,167 | 116,667 | ||||
Acquisition of Sprint Business, net of | 12,323 | (14,037) | ||||
Purchases of property and equipment | (148,894) | (86,023) | ||||
Net cash provided by investing activities | 42,596 | 16,607 | ||||
Cash flows from financing activities: | ||||||
Dividends paid | (140,992) | (135,354) | ||||
Purchases of common stock | (7,968) | — | ||||
Net proceeds from issuance of senior unsecured 2027 Notes - net of discount of | 291,879 | — | ||||
Net proceeds from issuance of secured IPv4 notes – net of debt costs of | 198,426 | — | ||||
Proceeds from exercises of stock options | 952 | 787 | ||||
Principal payments of finance lease obligations | (46,653) | (58,549) | ||||
Settlement of finance lease – at a discount | (114,576) | — | ||||
Net cash provided by (used in) financing activities | 181,068 | (193,116) | ||||
Effect of exchange rates changes on cash | 1,824 | 626 | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 202,311 | (109,840) | ||||
Cash, cash equivalents and restricted cash, beginning of period | 113,781 | 275,912 | ||||
Cash, cash equivalents and restricted cash, end of period | $ | 316,092 | $ | 166,072 | ||
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 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.
FAQ
What was Cogent Communications (CCOI) revenue in Q3 2024?
How much did CCOI increase its dividend in Q4 2024?
What was Cogent Communications' (CCOI) EBITDA margin in Q3 2024?
How many customer connections did CCOI have as of Q3 2024?
