CCOI - Earnings call transcript Q4 2018 | Cogent Communications Holdings, Inc.

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Operator

Good morning and welcome to the Cogent Communications Holdings Fourth Quarter and Full Year 2018 Earnings Conference Call.

As a reminder, this conference call is being recorded and it will be available for replay at www.cogentco.com. I would now like to turn the call over to Mr. Dave Schaeffer, Chairman and Chief Executive Officer of Cogent Communications Holdings. Sir?

Dave Schaeffer

morning good and you to everyone. Thank our conference call. to fourth quarter earnings XXXX end year and Welcome I Schaeffer, Weed, on this am with morning’s and Dave call Cogent’s Chief is Tad our Officer CFO. Executive me

year our with our and about the for be We are our and strength outlook results to of pleased continue underlying beyond. and quarter for and the business the XXXX optimistic for

EBITDA the to representing for margin year percentage annual XX.X% our full EBITDA XXX points increased XX-year Our basis our XXXX, from year highest history. margin in by

Our million, EBITDA of full by for the full XXXX. year XX.X% which increased $XX.X year increase is an from

quarterly for margin growth and X.X% revenue XXXX gross XXX XX.X%. sequentially basis growth of from year-over-year of the Our achieved XXXX to increased currency by revenue full year constant On of year full a X.X%. points we basis,

quarterly at average is average our rep X.X rep productivity above units per the Our remains which above equivalent long-term X.X significantly full-time long-term sales FTE. per

and traffic traffic growth Our of our achieved growth we was year-over-year XX%. network on quarterly XX% sequential

our growth to over accelerated year from last year XX% full for XX% year the traffic XXXX. full For full year year, XXXX

During the shareholders program. our our million quarter, $XX.X dividend quarterly returned to regular through we

million our U.S. federal a treated tax purposes. As of posted as should for dividends and treated taxable of of website, total XX% XXXX our capital by on for $XX.X return dividends as XX% be shareholders should be

authorized for board stock of we stock of throughout available for to our stock During the $XX.XX cost common end, of At quarter, average we has share. program quarter December which our total under continue had $XX.X a our XXX,XXX also million been buyback of per at by purchased buybacks $X.X XXXX to a XX. shares million an price

quarter decreased and X.XXx X.XXx. at Our to leverage was This decreased and available for and held ratios from dividends cash buybacks. to use net for $XXX unrestricted Cash at from million Holdings end. is X.XXx gross X.XXx Cogent our ratios leverage

confident in our remain cash to generating continue capabilities potential and flow the We growth business. of

we regular have operational dividend. I and provide sequential business result, regular As a dividend will consecutive in as per Throughout this some $X.XX another and highlight our will share. quarterly detail indicated XXth on discussion, of performance. increase $X.XX increase from in the our that $X.XX additional we’ll greater to yet share announced the represents quarterly increasing quarterly This operational quarterly some dividend, press financial release, our our statistics. details several review our per of highlights Tad share per trends in in

open the floor questions. our for remarks, we’ll Following prepared

Tad to Now, it Safe over I’d language. like to turn Harbor to read our

Tad Weed

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

Dave Schaeffer

a review had chance have press you to Hopefully, our Tad. earnings release. thanks, Hey,

earnings a release includes Our a on of number consistent basis. historical press metrics reported

against expectations our targets. a long-term for Now about few words guidance

it XX% for has and guidance range grew growth targeted approximately fact, of full for revenue our at represents been full growing XX.X% two-thirds between XXXX revenue in over long-term which XXXX. full year our year business, within of XXXX, Corporate XX%. year And Our

rates, underperforming, revising However, its been business business and revenue recovers growth long-term historical NetCentric to to has our that are growth long-term target we until XX%. our full year

expansion approximately guidance EBITDA XXX is annual targeted annual improvement points. of an basis Our margin long-term

we full EBITDA our annual points. For and expansion basis achieved growth guidance we EBITDA XXX exceeded year of XXXX margin annual margin targeted

of XXXX growth by cash in in Due the full continue leases, year CapEx, future. Our operating at to leverage by the this similar flow, on defined grew as XXXX. our minus we EBITDA principal expect XX.X% to payments minus our excellent capital cash full rate flow rates year business, over

used annual year. Our revenue additional be are the and to Tad not relating quarter or as details guidance now EBITDA targets meant quarterly our full and some to will results are guidance. be to and goals specific for multiyear intended cover

Tad Weed

and Dave, again, and and also results everyone. very very like congratulate and for Cogent thank work Cogent. to busy again entire our to and year I’d hard good efforts for quarter another and Thanks team their morning during productive continued

network NetCentric upon we based which customers on-net, customer customers. corporate our analyze and NetCentric We analyze and upon And based and and also on type. our comments customer all and customers of by our off-net types, Some connections. two Corporate type, we non-core, revenues classify is revenues revenues into

to by $XX.X the bandwidth customers NetCentric over buy which multi-tenant over office sequentially XXXX. at by an the of XXXX $XXX.X an for the from and million from NetCentric million XX,XXX mentioned, XXXX. X.X% We million million our year a year customers Quarterly end, was Revenue was X.X% NetCentric customers our which X.X% us full corporate at year-over-year of end, as on had year increase, XX.X% full of which quarter sequentially Revenue NetCentric XXXX. centers XX.X us for Our year X.X% declined and by XX,XXX $XXX.X an customers declined We increase decrease quarter. which was for our corporate our was connections to represented over full revenue amounts neutral of customers over on large carrier connections from for XX.X% the buildings. in Dave XX.X% corporate year-over-year X% bandwidth XXXX. customer from full grew year, and of quarter. our our increase by for grew was and had data quarter customer corporate buy from network full large quarter our Revenue network customers for

Our revenues impact X.X%. other our factors. a seasonal and volatility network our customer due to That NetCentric growth of the than sequential more certain and of increase on-net for the quarter. revenue the foreign increase on corporate and of revenue the type, $XX.X customers year-over-year was revenue experiences X.X% exchange, million of connections by significant size those was Comments

X.X% year XXXX. million XXXX full year was $XXX.X full increase which on-net revenue Our for of was an over

sequentially on-net customer X.X% XX.X% year-over-year. data in increased We neutral on-net office connections and and carrier year increased on X,XXX by total XX,XXX and connections by the center ended buildings. our buildings multi-tenant network on-net customer our quarter Our with

off-net increase Our quarterly of X.X%. was of a increase revenue $XX.X and sequential for a year-over-year million quarter which X% the was

Our XXXX for full was off-net over increase XXXX. revenue $XXX an which million was year of X.X%

connections America. buildings sequentially by in increased ended XX,XXX Our We are year and X.X%, year-over-year. the and serving off-net in and off-net North XX.X% primarily increase off-net buildings these quarter by over connections customer X,XXX customer

the with megabit of quarter. historical Some per trends, installed for average price comments decreased base our pricing. the on Consistent

$X.XX average megabit also all However, per stable. quarter the the flat our customer contracts per and declined the by for of periods. average $X.XX price for year-over-year The XXXX. our our was fourth contracts megabit from per sequentially price declined price for new average X.X% The quarter sequentially base installed and XX.X% megabit was at for to by flat new for

ARPU. on comments Some

the off-net Our quarter. decreased both ARPU for on-net sequentially and

X.X% both includes which ARPU decrease of customers $XXX corporate which on-net Our quarter, for was and last from quarter. the was a NetCentric

which customers, for Our a Comments comprised was ARPU, off-net and of churn. predominantly was is corporate that the on X.X%. of decrease $X,XXX quarter

rate unit improved churn was quarter. off-net our stable churn and rate during unit on-net the Our

unit quarter. the rate on-net quarter, was for X% Our the which rate last churn as same was

and from quarter. Our that was an churn was off-net rate from improvement unit X.X% last X% also

on for comments change NetCentric customers. to Corporate move and Some terms contract offer NetCentric related customers. discounts We and of our to all orders

volume commitment to We discounts customers. our also NetCentric offer

into over customers X,XXX contracts discounts and During their million. this customer revenue long-term our quarter, by $XX.X commitment increased and over of for connections certain Cogent NetCentric contract term and that advantage volume to entered took

Some as EBITDA and more adjusted. EBITDA detail on

and net each annual fees neutrality and and in beginning our adjusted, include as equipment press year, releases. timing occur in our all January expenses cost factors services, to impact and earnings the our of and typically which that our costs, States EBITDA increases, plan gains sales annual and the CPI cost and on of living amount benefit meeting and typically our audit tax reconciled resetting of adjusted level Our quarterly transactions are annual increases. at Seasonal SG&A at timing from or of taxes EBIDTA of EBITDA EBITDA United operations the flow our cash and our payroll of as consequently the

to or year-over-year $X.X $XX.X by quarterly and million by increased XX%. EBITDA sequentially Our or $XXX,XXX increased by by X.X% million

million by for $XX.X XX.X% EBITDA Our or over XXXX increased XXXX. full by year

quarterly Our XXX and basis decreased year-over-year XX% points. to margin by points increased basis EBITDA quarterly sequentially XX

Our EBITDA of as full represents again Dave margin mentioned, basis over EBITDA and year margin XX.X% this XXXX our annual by in EBITDA XXXX largest history. XXX points increased percentage XXXX margin the percentage

have equipment recently last our and $XXX,XXX equipment only from from down our quarter. as of and quarter, $XX,XXX gains gains for the the includes year EBITDA adjusted been and fourth transactions declining $XXX,XXX quarter Our last on from were

million year. were compared $X for $X.X gains Our equipment as million XXXX for to last

or by by to EBITDA X.X% quarterly year-over-year adjusted increased million Our $XXX,XXX $XX.X sequentially was $X.X increased by and which X.X%. as million

the increased Our XXX XX year-over-year. as by basis adjusted our million quarterly sequentially increased to EBITDA margin for as and full by or decreased XX.X% $XX.X XX.X% by EBITDA and basis points by adjusted year points

Some comments on earnings per share.

diluted last a XXXX to $X.XX for compared and rather fourth quarter $X.XX. for income per of the basic share quarter quarter loss was and Our of per the share $X.XX

a year in increase XXXX fourth XX% Tax a The and the XXXX. of flat and represented tax tax asset GAAP, basic maximum Cuts rate, in deferred of non-cash the for our full rate in the by As $X.XX income full million quarter Under deferred of of of XXXX about $XX.X corporate in diluted last expense year reduced and the and U.S. change XXXX. because and of in impact year resulted signing Jobs net tax lower tax of fourth Act year share revalued the rate. rate quarter December the the tax quarter income was XX% using from reminder, tax loss to of fourth also about for reduction income an last the rate a our income the of

the impact. Some comments and on currency foreign

and Our Canadian, our revenues. Mexican, revenues XX% States our related of of Asia-Pacific were to this reported About outside total U.S. XX% X% based and of in our Europe in of represented operations. American earned and quarter about dollars about the revenues were our revenues United Latin

our $X.X and quarterly sequential results in Continued foreign was a financial impact on exchange our overall materially impact foreign foreign our revenue negative reported volatility the can year-over-year million. revenue revenue on a and reported million negative our quarterly impact results. rates was The quarterly exchange exchange $X.X

For impact full a year XXXX, $X the million. positive was

the is year-over-year exchange on far our this over be estimate XXXX these Our this exchange year quarterly for full average the rates is quarter quarter the sequential impacts XXXX, quarterly a of to currency impact $X.XX revenue primarily full conversion $X.XX. year of foreign foreign NetCentric impact and Canadian X.X% revenues not a euro at basis U.S. average remain and levels for will of growth dollar dollar revenues. we exchange rates rate material. X.X% for this first on the were quarter our current The FX that remainder The so sequentially, constant X.X% XXXX. average rate average Should

Comments we be concentrated, the represented than that revenue our negative and customer to X.X% and be year-over-year believe on top is million. customers However, XX to not CapEx. less base this our our quarter. revenues revenues is concentration, highly conversion a Customer $X.X quarterly of estimated material impact and on

the for declined quarter expenditures by subsequently X.X%. capital Our

capital fourth XXXX. quarter $XX.X million $XX.X were for and last million of expenditures year, to quarter the Our third $XX.X quarter the of compared this million for

payments. full expenditures compared XXXX. lease were year to and $XX.X capital for million the for lease $XX.X Capital Our capital million as for

fiber IRU years longer XX lease XX have renewal for of after are capital long-term initial term. leases to terms initial the options and often include obligations dark Our typically multiple and or

total $XXX.X and Our And capital dark with of quarter XXX suppliers. at contracts we total different IRU have end fiber fiber lease obligations year-end. lease at million year-end, IRU

payments XXXX. million it Capital was $X.X Our quarter. principal these with lease this combined our cash with if in CapEx million subsequently quarter were XX% And end fourth total by you XXXX in cash was an in compared IRU added at buildings million agreements under added $XX.X cash year to than buildings these that payments XXXX for and $XX.X on-net and is this for $XX Cash $XX.X to CapEx, decrease equivalents network XX year. the year. million. million capital this million quarter and were that third and we lease $XX.X our more of combine year last total million more for addition flow, compared and the the our operating to quarter, payments a $XXX.X X% We

the We returned our $X.X For by to stakeholders $XX.X million. of decreased our this cash quarter, quarter. million capital

the quarter, During semiannual totaling stock our and for paid we debt, $XX.X interest dividend, spent our bought was a this million payment million we on $X.X $X.X quarter on million.

XX greatest cash operating our operating the history. increase $XX.X increased cash operating cash by year, was of of XX% was over XX.X% operating million, million year this year-over-year. was quarterly This million the flow which flow $XXX.X increased subsequently almost flow $XX flow our to cash year. XX.X% quarterly Our an in last over and And by quarter for

Our at year-end, total million leases, and capital gross was including debt $XXX.X net par, million. was at $XXX.X debt our

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

on receivable. accounts day Finally and debt sales bad some comment and

bad quarter, and year, expense was for again year. was $XXX,XXX our total X.X% the the that down debt only the amount revenue only our of of X.X% Our for revenues year-over-year for and

to for members days. sales a and our end was our amount only I And recognize days same worldwide Our do was customers. with again team from customers that, job just for accounts call Dave. billing the last worldwide thank I the fantastic to our and receivable return serving to the year. And continuing in outstanding collections over and collecting XX want of as back That

Dave Schaeffer

and I’d on thanks our and moment scope Hey, Tad. its the to scale network expansion. like take and comment of a

America, in network network. in XXX feet North space of have XXX million on square directly XXXX. We added over multi-tenant our We office our to buildings

metro XX,XXX the most Our world Cogent in settlement XX over the The network we miles consists customers. direct are with route XX,XXX fiber. of of the less which connectivity of over remaining free networks, all fiber network than remains transit these X,XXX and networks intercity networks Cogent network peers, and miles interconnected have are

We utilizing to rates. are currently network. of maintain these of We low in utilization the network the lit routinely our XX% capacity approximately augment segments

traffic at on we For XXX,XXX operate of own the We sequential year-over-year of in grew the growth comprise a raised-floor XX% XX% achieved by and quarter our XX today quarter. traffic data And XX%. which utilization. operating space basis, approximately our centers, feet of are

turnover Our is our long-term force than the sales force X.X%. of better approximately rate monthly turnover sales X% in was quarter, which

is increase services, average is time selling monthly X.X ended orders was we’ve provider sales long-term installed with of measured services, at We month. selling is Our end per a on reps the orders above number XXX sales had summary, our our reps for services proposition quarterly which per productivity as In rep the the basis had XXX value sales significant our rep time history. per from equivalents corporate the our and This of QX month. rep the full per quarter Cogent of of unmatched full installed our we transit services X.X most equivalent and remains industry. a in low a reps cost in internet that

on revenues, to not material are center and we internet, April far customers. we do to necessary the thus also contributor focused continue data grow. completely remains in XXXX, to business our all which Xst selling Beginning of but been expect co-location, of services, which Our our a SD-WAN IP to has began connectivity utilities

to approximately EBITDA And currency due year. XX% revenue our business. in long-term slowdown expansion be per the our NetCentric constant points target growth expected is to margin is basis long-term rate approximately multi-year Our XXX

to Directors Board Our share $X.XX increase that our dividend of has of dividend another $X.XX quarterly approved bringing per per quarterly share quarter. to yet per

capabilities the Our of flow dividend cash optimism demonstrate regarding continued generating business. the our increases

opportunistic We the common our stock. about purchase of will of be timing

an still the of of quarter, end buyback for stock we per common million $X.X of authorized under At we XXX,XXX the our quarter, program. the share purchased remaining $XX.XX. shares average million current During $XX.X our have price at

increasing our shareholders up to to With for an committed regular are basis. amount a open it that, We returning like capital on to I’d of questions.

Operator

Cowen And Colby question [Operator our Company. with Thank you. Instructions] Synesael first & from comes

line Your is open.

Unidentified Analyst

business Thank Great. growth quarters? over business couple your Thanks is now? question. XX% much John changed quarter, Colby. growth especially tweak the for the we to of taking the How has next term on trends And for how the This or thinking last you. of your given the on targets be NetCentric about that view within for long potential growth the since should

Dave Schaeffer

Yes.

So, improve about to and NetCentric is business I return long-term X.X% that its average our think year-over-year. will long-term of view continue rate growth to

the mentioned a I underperform has reasons. in with business at multiple investors call for repeated As interactions and last have number that continued of to

has While percent. accelerated, down has revenue basis, full of year a X/XX lagged. traffic were growth revenues a On growth

time were rate substantial If term adjust with over recovery sense revise for to on you the XXXX be lower made slower X.X% Based growth of they our up that, us to average. the realistic than about the which rate long in X.X% market. market business, it long-term that per average rates, rate FX growth XXXX, going is to that share, ultimate our gain business is twice fast accelerate, continue the as will But to for will to about as continue it’s growing recover. and Cogent at traffic view about take be price amount year growth of declines XX% will historical to

back be the in return range. we NetCentric to fact due to in XX% rate total But that X% therefore, XX% And to expect eventually to the do parameters, total growth when seemed organically range. those growth will target to substantially with that telecom which is business’ So, growth the globally. to visibility is our still better revenue growing occur, than to have wireline to provider prudent that will not any other XX%, do reduce service who it XX% we

Unidentified Analyst

you. thank Great

Operator

comes with next Matthew Niknam from question Our Deutsche Bank.

line Your open. is

Unidentified Analyst

Hi on for This Thanks is Benjamin the for question. guys. Matt. taking

quick sales Just on force. one the one

sort also noted a was churn you in there quarter we net there lower saw of that while. additions and So, have we guys highest this that the

and around call to dig is your there? anything lower if out want in you changed a has there’s anything trend, to strategy people around, want just churn to in Just how add, many there this Thanks. see

Dave Schaeffer

Yes.

and that place initiatives pleased remain continue enhance force. put in we on sales the with So, we’ve the to

in much more spoken we allowed rigorous the and we’ve formalized a with have reduce As about to has program implemented us past, investors training that churn.

We over have force that experienced continue and several number the lower last turnover improve quarters see even sales the further. ability to to

of achieved Singapore that our have at we productivity. be and productivity per we orders And above place. that, then people, total the in been full sales open rep bought we force our In equivalent footprint over similar force type rep Columbus, To offices that average. aggregate month augment time expect between think and We the the and place XXXX enhanced help expect Ohio, XXXX. ‘XX per sales the number long grow we finally, to that Recently versus growth efforts in XX% continue offices. opened to put terms we had installed facilitate we annually. substantially on force have somewhere of continues sales we X% in additional in that term sales ‘XX in training And Montreal in to sales to for responsible X.X

sales to therefore dividend margins cash of flow the therefore, force us nearly to at a both our continue similar confidence size So, and business this at rate. our that grow the that to force our will improve XX% will improvement and and efficiency it the of continue is operating and ability grow grow the the aggregate in gives sales

Unidentified Analyst

Great thanks.

Operator

from with Our next comes Louthan Raymond question Frank James.

is line open. Your

Frank Louthan

done an you in progression you’ve give so anything just you on the there sort and can of hiring expect do update think the force how that over Where months? where XX the NetCentric changed you to with forth in your And Yes, organization? be sales us is next business? that

Dave Schaeffer

Yes. Hi, Frank.

between So of effectively America are reps and have the North of XXX our rest NetCentric. XXX the equally world. today divided we are They

market, to grow in The limited part expect the is the Singapore opportunities NetCentric the of and on Corporate sales Columbus with whereas the focused at NetCentric forces that to office rate. of continue purely the both in retail same market NetCentric We the office opening on the is about mostly focused country.

of just going improve both that’s the training organizations run the comfortable year-over-year will from know happen. enhance We back sales don’t when the over long exactly that NetCentric we to continue the and to feel We to growth that business X.X% X.X%.

So we productivity that reps, of guidance reps. forward. from for the more saying was elevated right expect we’re going Their number is sales lower of reason just NetCentric as substantially to have we Corporate the we remain their targets But the that think the and than the conservative entire slightly force. turnover at levels continue

Frank Louthan

you is sort with trick get is more right focusing do to of get is it on to sort that little a bit that. I like big exactly think it’s a the or web-scale mean, So, what So, up? going back to then job. tweaked it growth pretty you’ve of it What and providers back take up? it’s and around focus things their

Dave Schaeffer

Sure.

over use to the the get reaccelerated. We that temporary of seen, that transit retarded the that to of neutrality, rate. couple our direct So, lower our paid divert is all, been into cost have in of One, lowest growth of our past traffic however, priced of point. as back lower Frank, that previously that traffic believe numbers connect ports when were is violations some growth constrained easier to a a utilize Cogent and reaccelerated. most from largest has price service. come a What unit customers have agreements X revenue which are has year now were period who customers, growth has already they It we reasons. unit traffic NetCentric the for that phenomenon has The points, first and growth net able of there had pressured

web centric that outpace customers, of have the larger the general we of hyperscale growth seen Secondly, organic market. providers rates

is next and more that customers that small rates and disproportionate expect a X, customers. growth or our we transitory the both seeing phenomena whereas and we think of year equivalent, today, from over a the market become are would growth large largest I to homogenize

is is price there’s depressing nothing we sales effective The NetCentric megabit. a So, efficiency with big to efficacy. selling the per the actually actually and to think And which wrong temporary costumers, phenomenon. issue that’s

Frank Louthan

thank Okay you very much.

Operator

Our MoffettNathanson. Del comes Deo from next with question Nick

Your line is open.

Nick Del Deo

Hi Thanks taking my good morning. for questions.

to in Dave, noted prepared growth SG&A revenue driven as by shy you First was in in again a expansion margin expansion bear Even strong SG&A made SG&A your Were though bit three had XXXX, mind as think the of year. QX that lower in really your XXXX? than drivers any out contribution first should drivers you quarters mostly of year goals. other or despite to that remarks, during we we coming be the an sized leverage the in there about a bit margin seemed controls. It

Dave Schaeffer

continue decline our efficiency came COGS cost our basis a all, XXX of from to expansion margin roughly of points goods first revenues. as as sold So, of Nick, of percentage

margins gross to from Our XX%. XX% increased

We come efficiency. have margin per COGS XXX that efficiency equally year the term points roughly of that said and basis SG&A long expansion almost from over will

SG&A getting force. more are of the efficacy your of we out part the On question, sales

getting utilization infrastructure. of better We are sales our

that and control attributed have adding headcount. operating filling G&A really we management the in spans the As are out, all the our significantly those SG&A all the to grows, to not sales things business. It leverage of are of force is

long-term the have side, the more operating network off-net. actually utilizing operating from still are and leverage, on-net full and substantially for sale business, the revenue the deliver the substantially in fact lower That average. term, out really is expect continue. from in But our to the ability our our actually, to the SG&A which margins is this continue XXXX, growth over guidance on services deliver substantial margins portion XXX is we XXXX about Cogent’s to not high confident margins as contribution If efficiently. leverage the our NetCentric XXXX. we remain improved, of to We, infrastructure for term. that the target years look it’s in we is that that, on long that XX.X%. revenue And the EBITDA actually, side, it comes margin slower still just expect selling that We, revised due above also points contribution but it’s though that XX% why were total short-term of the for growth saying even basis we expansion. that in contribution well. long And of our but on So, EBITDA XX.X% Again, been comes year above we approximately

Nick Del Deo

since then you Got any or your interest it. maybe learned of unexpected SD-WAN maybe terms offering you perspective That’s have great sales color. And client interesting it? can And you us of give operating sort anything launched a update your in on and have funnel? from marketing or

Dave Schaeffer

Yes.

is deployed from our and lot a technology think of about that can been VPLS there deliver, superior are service. X customers launch. think The I with have I offerings. actually takeaways confused have customers the happy are our So, X, it to what the really prospective where

offering is, has conversations SD-WAN technologies, And as actually of network MPLS over actually and chosen some network with of say would want of over some of advantages the is customers who I customers actually been SD-WAN, the saying flexibility, commencement the difficulty evaluate to of of of that So, sales managing off cost, I And any today force frustrated. an long universally, our is operating customer the high think what MPLS frustrated that big have the they VPLS one the MPLS. with the term. lack They’re that those chosen SD-WAN. X switch have is

that billion represents that to North there of to will and in ports migrating replacement, X.X to are be or So, is America, in vulnerable about all to think that VPLS. spend. SD-WAN million deployed MPLS and We $XX close

number they like what selling the And force feature actually of point promises have are some SD-WAN can about of accurate. the around of expectations multitude there or a remain of And those And to throughput a big versus deliver been are probably about vendors promises by third and the set. it’s equipment equipment customers some effort confused not of in CPA And are our sales think vendors. part I I’d sales is, market and make the a really make equipment. that that completely been expectations the made customer their has boast a tradeoff. managing

interfaces, turn sets in on of control, multi-vendor end you security, terms feature sacrificing throughput. then of If all the up and you

our to If with success but, percentage are XX% revenues revenues, many is as total seeing solution have both XX% up from in and a of increase you’re mature more a and on XX% about of VPNs throughput, ways from corporate grown and VPLS technologies of products XX% focused revenues. to to continue both delivered we’re our over

Nick Del Deo

so That’s great it. Thanks much. Got color Dave.

Dave Schaeffer

Hi thanks Nick.

Operator

Thank I’m showing the turn like at time. back to Schaeffer this I’d further Mr. any you. for call closing questions to remarks. over any not And

Dave Schaeffer

like today events all, investor I know we us. of first Well, Okay. other I’d pleased is day, a joining thank going to some are performance. busy but our with and everyone there for remain on,

buyback strategy. in has by increasing continuing to struggling. amounts commitment generation where a our cash our And wireline both other demonstrated of We’re demonstrate is increase to been cash our business carriers market shareholders flow been encouraged our the and by dividend have returning that to

be want everyone. we’ll talking to thank I and Cogent team, I to So, thank entire soon. want

Operator

This and Ladies you a thank day. wonderful conference. for may program, you Everyone have and gentlemen, today’s all disconnect. in today’s participating conclude does

Cogent Communications (CCOI) 25 Feb 192018 Q4 Earnings call transcript