CCOI - Earnings call 4 2023 | Cogent Communications Holdings, Inc.

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Operator

Good morning, and welcome to the Cogent Communications Holdings Fourth Quarter and Full Year 2023 Earnings Conference Call.

As a reminder, this conference call is being recorded and it will be available for replay at www.cogentco.com. A transcript of this conference call will be posted on Cogent's website when it becomes available. Cogent's summary of financial and operational results attached to its press release can be downloaded from the Cogent website.I would now like to turn the call over to Mr. Dave Schaeffer, Chairman and Chief Executive Officer of Cogent Communications Holdings.

David Schaeffer

hi. Yeah, morning. Good earnings and our the quarter fourth Welcome year call XXXX. XXXX full of to for I'm Cogent's Dave Schaeffer, Chief Executive Officer. With Tad Weed, morning's call Financial this me Officer. our on Chief is a press had Hopefully, our to earnings you've release. chance review

expanded Our This press historical we quick network, every increased on Sprint our present acquisition summary and on number transaction of consistent X, each We for business metrics of scale base, closed basis the that customer a quarter.Now and includes scope release the a significantly of of a XXXX. our business. May our our results. the materially and

our annualized We legacy base. are acquired Our customer corporate now billion. number large of than of enterprise $X are rates Cogent run a customers relationships. customer in revenue These excess larger typically

comprised an a centers. above to value converted of fiber acquired are of with and data $X many for also significant network owned appraised which a owned facilities, We $X. being billion substantially We acquired network

operations. repurposing million $XX.X about the the received a XX We cash $XXX these services.We million be be out from over enterprise $XXX million month, of over operating month. the remain optimistic made of months per T-Mobile We serving payments wavelength combined acquired first time for of losses year the of will flow to be are in the of at customers. offset and $XXX next payments of then total per of spread $X.X the sale fiber million network our to will optimized million capabilities

expectations. had good which rates.Our our in that have achieved combined cost savings run year. multiple of from many very quarter substantial We Cogent show and additional have savings results recent business good a very we anticipate Our exceeded and a our initial current areas, immediate

$XXX.X quarter XXXX. $XXX.X for was were quarter full the the adjusted million the year for in full EBITDA million for for and million $XXX.X revenues total million was year XXXX.Our $XXX.X as Our and

margin from net XX.X% X and payments XX.X% XX-month quarter. our total improved adjusted adjusted ratio million full We a was as year this $XXX.X XXXX in for total gross in X quarter million.Our T-Mobile and for Our and is EBITDA EBITDA $XX.X received debt debt trailing XXXX. significantly quarter totaling the totaling the payments of

Our months gross debt to year-over-year. X% and and as XX% quarter.Our trailing a year-end improvement ratio ratio from X.XX sequentially net increased at the network the was in EBITDA adjusted up debt X.XXx XX substantial was our traffic X.XX, last was by

in savings target. an and the on savings over result anticipate savings number period million in we We're -- savings. and hopefully over revenue of in the We exceeding over of have years, cost to that We SG&A areas process $XXX additional and which realizing $XXX execute that a of to achieving synergies will expect continue X-year synergies this cost several million. other next annualized a

quarter. Our sales these recent and and was full-time that equivalent progress is units per we rep productivity do laid very units installed force this X.X targets X.X savings surpass quarter last we to out.Our have in the encouraging per achieving intend

the full been training not us sales processes Cogent These has enterprise on to are substantially productivity impacted rep have the reps reached that receive joined sales continuing Sprint Our from by yet and customer reps their enterprise new business. productivity.

total Now Sprint of the our the we employees. connection of acquisition, for and with size in force, sales scope XXX a hired

remain XXX with employed As Cogent. employees these of of today,

count our or X% rep increased quarter, total approximately increase. sales the During a sequential XX by

with throughout the substantially sales connection our growth wavelength a We include For that optic our for our full-time XX% transport rate increased reps, were by XXX offering are pandemic of counted over some services. XXXX, XXX year force the ahead and increase product XXX years. slower our of our or sales the acquired wavelengths full sales ended total network. business, acquisition up Sprint equivalents.Now and reps growth occurred to of of normal for some on which year comments newly catching optical with fiber optical as expanding In of we transport our the

these as to require services connectivity existing These We transport associated are without capital customers, wavelength customers selling from acquired their well own ongoing expenses network. the as and optical dedicated operating Sprint. customers with

many date in sold have We provisioning these have wavelengths cycles. to of XX locations, shorter

cycles. added We By to to center able wavelength materially today in to the in our shorter services we XXX footprint substantially We with expect miles longer with me, owned excuse an network. with sell X,XXX have wavelengths provisioning capability route be of fiber and of year-end fiber Sprint. to North acquisition route carrier-neutral XX,XXX and connectivity of locations XX,XXX offer additional locations metropolitan data expanded XXXX, XXX times.Our American provisioning miles intercity owned

We of also miles IRU Cogent route added of IRU and intercity metropolitan XX,XXX network. to route fiber X,XXX approximately miles fiber the

them. to agreements exit the We to date, operated added have these Sprint carrier-neutral to rationalizing contractual reconfigured allow as XX, centers data that of data we into are us data today which total centers the their of in the terms also XX centers XXX process operate Cogent centers we data new of fiber the and power. have these acquired X,XXX megawatts and brought we To IRU acquired of facilities

footprint.During XXXX regular million additional optimizing the data our rationalizing XX quarterly Cogent centers We data X Sprint with in are dividends per we our quarter, and $XXX.X We or million, quarterly to and an dividend. process facilities returned paid shareholders of in the totaling share. center our $X.XX converting into $XX.X

therefore of on treated will tax-deferred be as basis. tax expect treated return capital, are dividends the We treatment a dividends for those these so XXX% of generally completely

Directors, acquisition, increase rate that consecutive our for to dividend which and yet quarterly our per around flow $X.XXX our execute a of a X.X% capabilities our growth sequentially, continues our raising comments by evaluate the our in cash the XXth share of dividend of long-term targets. to again inclusive team per of and $X.XXX quarter increased Board quarterly represents couple dividend growth sequential quarterly Our from in per opportunities, increase dividend.Now, This in against a our share quarter. $X.XX Sprint the share to per annual

Now that the X% long-term will T-Mobile. our adjusted between with Cogent anticipate in the average as increase impacted by X% business, payments approximately remain we XXX be Sprint is EBITDA revenue integrated margins our by annually, we points expect in This to and and growth and short-term step down combined the to annually. from basis fully

goals EBITDA specific and and targets. to are be be revenue not or Our as are annual targets quarterly multi-year used to intended guidance intended

like our trailing future XXXX I'd leverage XX-month then of additional back payment subsequent the XX million basis.Now, language Our quarter $XX.X step over EBITDA to place on provide and jump as adjusted turn of I these adjusted and million metrics. reductions $XXX stream we receive some from harbor to payments EBITDA operating will will from as will address The on May and per are a and our month ratios a impact safe and month impacted months. XXXX, Beginning read Tad to for details, third it by in XX million down the will impact that ratios in in the to -- leverage T-Mobile. remain some additional $X.X ratios our to

Thaddeus Weed

the this obligation financial all a and forward-looking made subject which for no not intent, GAAP actual risks are of in posted to differ. call, is a our forward-looking the on the in cogentco.com.So, IP almost $X.X Dave, factors to earnings expectations. statements In differ the year call connection with these good per actual or statements. the acquisition, share gain our website on statements very frankly. undertakes our number filings that bargain revise current to are was upon historical you, Cogent for forward-looking Transit based for to statements accounting complex, other corresponding some $X.X of services for morning, million you comments measures we for billion, gain agreement These billion measures our are and year. that earnings with statements.If the and releases and These total during Thank that use facts find the Sprint refer accounting this call of cause the may discounted the we to on conference are $XXX non-GAAP and at belief, everyone.This that materially. information includes reconciled $XX our our T-Mobile. will Included or present value results results that uncertainties Please recorded we on on SEC purchase more could update forward-looking acquisition

enterprise. a the of including $XXX of of accounting present -- will amounts average $XXX X to the fact already During to auditors of firm, on corporate We $X.X this date $X.X specialists, IPvX asset firm quarter XXXX.Some total be the accounting net-centric million and the into the additional valuation fair fourth we in appropriate recording net to owned transaction purchase while and The is that bargain with T-Mobile Again, the upon us by customer our valuation million this after to and and upon on amortized. quarter.The adjustments analyze firms, The billion network a we and net X services, Internet and we total a of liabilities, acquired, and This from comments These non-core we These of analyze addresses May and Internet material agreements, assets network the valuation IPvX tax that types: addresses impact customers million equipment purchase the our type and recording Internet have bargain on net additional the purchase the indefinite assets, asset IPvX not our Big addresses a million in fourth additional right both X intangible including adjustments or $XX and revenue bargain we our net-centric, way revenues of a the connection of acquisition valuation X the of value we customer total addresses services Internet the discounted other routes, an revenues valuation $XXX are X of been gain acquired million $X.X quarter based value at based was $XXX nature Big million in Big year subject of an so recorded value type, asset, the in by prior acquisition. after resulted off-net, recorded of address. useful and are per estate all of billion. this closing asset recorded was that have $XXX the we paid of and classify addresses. which approach. for appraised a of gain at IPvX novel consideration made asset resulted resulted corporate, connections. we wavelength and fiber in being that accounting of net consultation Because the IPvX through acquired real gain. which Sprint has recorded and the net about X life -- be the -- on-net, in recorded consideration network, an

corporate real business business continues influenced activity by estate in to districts. Our be central

We lingering pandemic uncertain the continue and our cautious for corporate remain effects. in our outlook economic other revenues environment given from the challenges to

business of last sequentially year was and Our total by $XXX.X quarter corporate revenue our increased revenues the corporate of our and quarterly to increased a X.X%. XX.X% quarter million year-over-year from by of XX.X% this fourth

the For $XXX.X corporate XX.X% million. revenue increased XXXX, year to full by

connections a increase We of XX.X%. This of year-end. X% year-over-year a have corporate on decrease customer our sequential at XX,XXX network and represented

$XX.X positive impact year-over-year For a as USF our taxes the was sequential corporate revenues positive a of recorded revenues quarter, on million $X.X quarterly impact the and million. of

the full net-centric impact on positive $XX.X the For was comments business. the million.Some year, USF

to from and benefit growth wavelength the traffic, video in streaming continues continued business net-centric Our sales.

by by year-over-year basis. on to net-centric sequentially declined revenues of XX.X% represented million quarter our this grew Our $XX.X and a X.X% and XX.X% business

sequential full net-centric year-end the revenue $XXX.X a by had our and of For was customer XXXX, increase on XX.X%.Comments connections X.X% our year the year-over-year We that network increase a enterprise business. slight XX.X% of XX,XXX to on increased net-centric million. at

revenues connections represented quarter year enterprise XX.X% at our the XX,XXX $XX.X customer was the the end our Our of had network. and of enterprise business for on We million.

revenue by $X.X by Our or million enterprise XX.X%. decreased sequentially

business enterprise revenues. our was For of the our full XXXX, XX.X% revenue year

to million a the on business, $X.X Need wavelength of network quarter. the network transition million.Lastly, of X.X% there As payments our customers January had quarter, platform. from needed sales our the from year, transition new our and In $XXX.X no represented revenue our or year-end, was billing reminder, a the was our worldwide we increase. from day XX into to this Cogent This temporary last to revenues enterprise into December quarter, are wavelength customers connections billing wavelength Cogent some was which billing connect their the customer product fourth comments type. XXX lockbox. to lockbox in on since some our customer total Sprint went update we All through make former the fully we Sprint delayed a at -- our by that on and systems remit now customers system. integrated This increased year-end.Revenue also at payments fourth and X T-Mobile to connections billed

every off-net non-core we on-net provisioned to revenue billing into $X we of million once Sprint Additionally, reclassified our of $XXX,XXX revenue. revenue and QX system, from order

our tables using through October the retroactively that T-Mobile We on-net reclassified were we and press included X,XXX connections to changes our reflected classification of customer This of end as system our third These is in are also in result billing operational revenue. XXXX. summary of release.On-net the customer financial connections to customer was and off-net methodology at quarter non-core XXX to X,XXX the conform connections.

for revenue, year-over-year including XX.X%. increase a X.X% and increase was quarter, sequential revenue, on-net the million of $XXX.X that Our a was of wavelength

year For million. revenue by the on-net $XXX.X increased full our to XXXX, XX.X%

Our were center in on-net on-net buildings. We our year-end. customer serve at connections our total XX,XXX carrier-neutral and data multi-tenant customers office on-net X,XXX

for to to of X.X% was our succeed That was multi-tenant the office on-net year-over-year XXX.X%. XXX carrier-neutral year-over-year in sequential our connections revenue continue customers ARPU.Our million on-net. centers impacted XX sequentially decrease connections in Selling off-net sequential these increasing increase off-net has decline was to of partially quarter. and off-net selected the XXX data and The in gigabit migration our selling buildings. revenue selling gigabit gigabit by certain larger $XXX.X in and We connections and connections impact of a larger a

For XXXX, $XXX.X XXX.X% to by full off-net year our increased revenue million.

Our non-core XX,XXX served off-net are were over XX,XXX we customer off-net These and off-net on at revenues. located America.Lastly, connections in year-end off-net buildings these in buildings. primarily customers North

to was connections were decision million, non-core a end $X.X $X.X X,XXX to or million at our life statistics customer year-end.Some products. decrease of quarter pricing. revenue due these the non-core that of was Our for on sequential XX.X% Non-core

X.X%. Our installed $X.XX, average for our by base to but decreased per by price megabit X.X% year-over-year sequentially increased

our quarter price Our $X.XX.ARPU. per the average new megabit for contracts customer was for

Our ARPU on-net ARPU off-net and our decreased. sequentially increased

and year-over-year business off-net primarily of the However, the Sprint on-net also increased impact larger from our and selling ARPUs connections.

sequentially increased ARPU Year-over-year, $XXX by $XXX from on-net Our to on-net ARPU X.X% last from by increased $XXX. XX.X% our year.

our ARPU off-net combined churn sequential increased $X,XXX XX.X% Our to $X,XXX. off-net improved. business our ARPU on-net last X.X% by from and Year-over-year, the connections decreased $XXX from sequentially by year.Our off-net for rate for

Our was X.X% on-net quarter, churn X.X% monthly rate was unit the quarter. for last which from a material improvement

quarter million quarter, releases. last $XX million off-net was We Our this each this We acquisition improvement EBITDA quarterly of EBITDA from from severance and we press Sprint that rate costs unit our acquisition incurred monthly last in Included are flow our cash compared X.X% $XX operations that quarter. the $XX.X to fully costs and be fully SG&A gain, Under been to reported by are bargain a no Sprint as the the correspondingly are T-Mobile tied of but net component acquisition as our reimbursed. margin. to post-acquisition EBITDA adjusted these GAAP, costs purchase U.S. classified reimbursed P&L.EBITDA costs need reflected P&L impact, paid that so have as and as since way adjusted are they they as and costs quarter.EBITDA costs Sprint's of of million quarter for $XXX,XXX non-capital of X.X% to on in churn and acquisition margin. our an reconcile directly

on IP that time. adjusted under XXXX. payments that and to year as includes received this million the million under $XXX.X the cost Sprint under been for quarter. collected agreement million agreement for We paid with T-Mobile. cash Transit agreement services Transit billed and adjustments $XX.X amounts All billed us acquisition EBITDA have agreement $XXX Our $XXX.X collected services billed million the We IP and under full

for EBITDA acquisition adjusted a Our cash services IP million agreement the was Sprint as for and quarter Transit under the and XX.X% costs payments margin. $XXX

EBITDA for a was full currency. XX.X% on million year adjusted Our $XXX.X as the foreign and margin.Comments

outside that reported of and is Europe X% quarter in XX% quarterly was on United levels were the our XX% the would of not the XX% the first quarter the FX this remaining our this for Including at on U.S. represented and for a of quarter The outside that average euro year, $X.X for the of quarter our this revenue is $X.X highly the customers rate our for Sprint African current the to earned business, We impact Mexico, rate same a we the estimate of revenues sequential were and the American believe revenues to base if remainder the is average those revenue year.CapEx. year. the customer $X.XX. and revenues our customers the and And revenue XX% year-over-year positive Oceanic, be XX% South million their related U.S. the average and far rates impact with dollar about USD Canadian XX impact basis. based of Our conversion very operations. acquired and Canada, this acquisition. dollars and the top States and in even concentrated so Sprint of of in our quarter about About remain

Our was year. million million CapEx the quarter CapEx $XXX.X quarterly for $XX.X was this our and

network to of leases continuing former integration and legacy Cogent sites Cogent finance We into network one payments. are and unified converting data our centers.On Sprint network switch Sprint the network and

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

finance quarter-end. total million obligations lease at Our $XXX.X IRU were

cash restricted IRU a equivalents cash different dark quarter-end, suppliers cash and worldwide.Comments was $XXX.X At our suppliers with fiber cash very contracts XXX and on diverse over flow. cash of have and and set million. We have we

our estimated swap restricted $XX.X tied directly cash agreement. to million interest fair rate of of the is value Our

timing services the and transition cash classified flow million our as payments of cash considered by IP our with not agreement. the amount operating services under under results and activities. receipts are payments operating agreement of million the U.S. agreement impacted under under are activities Transit Transit the presentation $XXX Our and from IP materially investing Payments T-Mobile $XXX GAAP

use million operating the $XX.X of for $XX.X of compared Our flow last was cash a quarter use quarter. to the million

was and flow cash year billing was by our million full the for Our XXXX. operating cash $XX.X conversion this operating quarter flow impacted

same under the including as was and cash million million par, by at debt for billion lease and payments provided and recorded quarter, collected.Our as Transit quarter, billion. received agreement was finance Our $XX.X $X.X are year-end was IRU this gross activities total investing were year the the $XXX.X at IP $X.X last net debt obligations

total debt quarter. net this last to debt ratios EBITDA and gross Our XX both improved as months significantly adjusted our

Our adjusted XX an at This again, and as X.XX at of improvement of net XX EBITDA compared debt the last to gross as months at X.XX, X.XX was net total QX. debt ratio QX is months was EBITDA of of a quarter. a and end the to X.XX debt last adjusted year-end last to the end in ratio gross X.XX

ratio slightly under to agreement. calculated X.XX indentures related and X.XX under our our leverage X.X from quarter.Some leverage comments our reduced note ratios consolidated X.XX swap secured as different, the note to calculated from quarter last last reduced Our indentures to

incurred non-cash value interest corresponding the remaining We with and of XXXX or an recorded in to financing rate, obligation fixed obligation interest the reporting are period those that interest secured overnight gains rate market and notes interest the due of agreement million swap modifies rate estimated rates. associated based to party our variable losses We the to notes. a for our agreement swap the upon SOFR, fair $XXX each changes term rate

November XXXX million full interest value Our interest impacted to last of fair compared swap swap May decreased associated was The million for of agreement in to cash that $XX.X by operating expense flow and paid last with $X.X quarter agreement the the $XX.X expense million. and million year $XX.X and our year. from was by

outstanding, restricted was mentioned DSO, counterparty significantly day a maintain earlier, the with as I or the to liability.Our to conversion. the impacted required are billing We equal by sales balance cash

receivable accounts worldwide days was days for XX DSO quarter. XX last versus Our

for expense also $X.X impacted DSOs historical to X.X% the norms.Our reverted conversion. was Our was debt million after and billing quarter, of that by have bad our year-end revenues back the

billing of recognize $X.X debt revenues platform the our only billing Our legacy engine. T-Mobile to of in and tremendous billed bad operational was turn and this our the expense now billing team months conversion and managing collection date. over was I to and billing worldwide the customers from want Sprint a the All members call from the billing million Dave. achievement X.X% to for this worldwide were our thank for year.Finally, Cogent Cogent November will starting XXXX.I system completed we back acquisition This from X in

David Schaeffer

Hey, base thanks, of couple I'd network, Tad. and like our of highlight customer force. our strengths to a sales the

growth We experience significant traffic net-centric continue to in business. our

data particularly our carrier-neutral That increased centers By in We independent any of continue allowing centers third-party Cogent than and centers XX globally for measured total to directly of X,XXX their markets. reduced latency. international net-centric us serve with this we better other to the be network. beneficiaries market, breadth networks and optimize connected The video over-the-top our as quarter's research. data ended by to streaming, coverage to is more customers data end, allows X,XXX of carrier

widen next per additional several year years. centers continue as to expect network our data for adding We project over to lead an the XXX in the carrier-neutral we this market to

data facilities in the selling of completed We XXX conversion process a wavelengths today, of we convert centers. also we centers coaching the or being in are data date, into expect total of additional in we centers.As services XX can an of provisioning sell have facilities North carrier-neutral carrier-neutral to XXX facilities centers. facilities data expanded America. these wavelength into across To cycles, With continue also data Sprint XX Cogent to XX converted. of are of

$X.X wavelength with from quarter wavelengths. the revenue are XXX sales of We previous in installed million generating discrete

over wavelength X,XXX in well we of orders in as signed, Today, a funnel of the combination a significant of have orders orders. have, pipeline. We as sales in funnel our

connected us and of XX% companies, This subscribers carriers broadband other we collection we on sales cable traffic operators, network enterprise ISPs, reps X,XXX our reach phone directly It telephone XXX Our of our sequentially At allow segment focused in X% world's this quarter-end, to and increase. and year-over-year. impacted on we sales to market. users. quarter's XXX At vast to end, of mobile corporate seeing still mobile to reps net-centric majority that the directly companies, networks. the increased continues focused market.The trends are a have positive, have corporate the was we been the had addition on that force pandemic. by reps That are focused XX and but

Our normal corporate high customers are conferencing. continuing to connections, become video and extended premises. of usage their high of integrate both new part applications use This which their of requires the capacity including have workload, speed, outside inside

of Our out sales improving Internet VPN on underperforming reps. our to efficacy training access to networks. We managing manage the focused and force's older focus inclusive on continue enterprise sales their dedicated through services, remain technology MPLS and customers

peak force and reps did of pandemic quarter, sales per rep the from number X.X improve rate the at the our Our month turnover height month substantially a for than down X.X%. of historical much per the quarter per in better of average to X.X%

the X,XXX are We join of central to market, feet rentable our Sprint to beginning delivery network space where it our about the optimize over a in from corporate footprint the about new market unique unfold to districts excited for business.We the provides as serving enterprise on-net. and square we our Sprint X who particularly multi-tenant us we optimistic train this wavelength and and business continue position services. targeted billion in buildings is We're continuing repurpose around remain have Cogent office of customer just our reps wavelength as base opportunity large

are mentioned locations earlier, waves. we XX As today, can we customers where serve in delivering

key That for approximately of deal X,XXX continue that wavelengths, that great XXX Sprint provisioning a and windows. We of us the opportunities funnel to backlog to modify with more have of transit a as enhance and that enabled schedule we wavelength net-centric will activity gives leasing and locations able indicators provision network convert another the service our provisioning in experienced are longer pre-pandemic significant we confidence mirror to to office remain be these we and activity, expeditious much workplace levels. hope by year-end below substantially services.The have on reentry windows

and are improve. However, their beginning leasing offices, to to returning appears many to tenants activity

to diligently one systems, working will customers our to We improve to continue and unified cash us flow processes, network. are Sprint This assets our our these into all generation. allow to integrate continue and of

synergies I'd for years, of X a that, we over like year.With $XXX next annual the savings multiple questions. to the now open an million anticipate to call Over due

Operator

[Operator Instructions] Anton first question Your comes from Cowen. Rennert with

Anton Rennert

Anton Williams is TD bit think that we the in million. I How filling at This saw forward just outlook going at CapEx Cowen. Greg in about higher and for little a should came $XX CapEx there?

David Schaeffer

Anton. sure, Yes,

As we a million outlined, $XXX the a basis about to CapEx that be we going-forward should expect spend on year.

that the a We the acquisition network be time also would indicated of one-time Sprint at announced the there we about $XX million set expenditures. of

and capital network. why to There reason way on at there the capital approximately was combined the in thinking and through the categories. million. required a run Sprint maintenance business, to There year capital are came $XX $XX are was last X $XXX XX% is extraordinary a our That the network of year.In CapEx about million required million We about the year. is that really million in acquired expenditures continuing VPN which business, its Cogent the $XX associated IP about approximately the legacy run

are that We spend capital. to continuing

sequentially $XX footprint then we to capital as well quarter, in about quarter as our capital to principal the However, capital a to expand what those payments fact, declined capital, principal third, leases the year the you really repurposing is in materially primarily leases. to And million We $XX.X need in spend from million. to have capital, reported million be to And thinking I'd final the to point about use to look as additionally be $XX.X payments wavelength expenditures of the combination fourth third are to expansion.The -- we make at on able expecting is, like footprint. the opportunity. focus those able on on from

think think going these should good as run rates you pretty I about forward.

capital $XXX on the a And the addition $XX to in about about leases. years that, probably of several order year million in CapEx. for payments principal next million on So then on

Operator

question Bank Your from comes Waters America. Alex with of next

Alexander Waters

just get million press can we quarter just talk quarter uptick range of SG&A that then just And about out can SG&A, about a be talk midyear should we just in talk the about about the the probably we maybe on release?And how the for I around first then bit rationale that quarter-over-quarter? think last we just we Maybe on you wavelengths, think secondly then XXXX, wavelengths by no Can wavelengths. we longer just a XXXX? noted $XX into should as going heading that, there?And into stripping little on

David Schaeffer

Yes, sure.

decision press including the it more revenue the is was prepared release opportunity the important million able the be not sequentially, count I to So run and so rate, unit was have the we to We up fulsome $X.X a both it discuss -- which disclose which XXX. it to would we did. as remarks just in think was on in

are of quarter. sequentially can sites than hampered has still the doubled We by The the more number that backlog provision. in we

acceleration on X,XXX. their that customers, sales our X,XXX going the and earnings quarter third to an call, continue order backlog orders information number see funnel in to up in was That actually anticipate, to force and the funnel. provisioning We conversations approximately the with based on sales we're from approximately So, the volume. is

the frustrated are wave-enable to by We time sites. it's taken amount of

kind to waves of that can will We X-week average be confident sites a able XXX provisioning with have year-end by window. are that still provision we

we of run We probably not a there result, on by are rate be midyear installed of will not million a $XX business. definitely today.As

of number I task. to be think a sites But be done demonstrate optimized very to network convert that steps Sprint wavelength touched have have that that. we a to the will former the sheer into need the a is funnel network voice number and of will that daunting

windows due XXX We are X,XXX will the of not Tad numbers. provisioned targets, will There progressing employees SG&A meet over are those these rate, on by We effort. I almost well. absolutely funnel into that provisioning focused jump X,XXX probably it this demonstrate full-time run I'll to our midyear the will let be year-end who but the in sites.And completely think extended are but

Thaddeus Weed

Sure.

our We cost Result bills we COGS for year. that SG&A at was for a us. quarter to period is paying adjustments time, look run some our had of needed in to make way together. to of and for best and at rate the think look I is the classification the T-Mobile So combined the

information we benefit rate for according the with about in in. the about $X.X what was accounting quarter quarter, The was sold is, a lease. million for cost of a change came to of classify SG&A in million. There in it that were and takeaway for goods getting that So having capital third $XXX the combined

the for million this $XXX was about it's The combined that, for quarter million. $XXX quarter. adjusted for about So

are Now, we that a couple had to not going of increases reoccur.

the also and of delay $X went that because employees combined and adjustments to about we billing and up, then needed Our on call, record USF, the based receipts We as we it's that audit mentioned was bad million. the million. by since And $X cash of we debt to billing, to bonuses have $X that million. had about a of year-end increased relationship on

$XXX So you're for about SG&A this comparing COGS million and adjusted QX an combined quarter. to million $XXX

So other to of it a that look SG&A slightly about way know is going improve. on the complex, that's I and little think helps. a XX% Hopefully forward at did I revenue. basis

Operator

LightShed comes Walter with next Piecyk Your Partners. from question

Walter Piecyk

reversals, my and I some goes be well, USF if to going was of the So That assume was up but down... reversal there right? revenue that expense as question.

David Schaeffer

$X.X That correct, sequentially. Walt. million correct. is That's

Walter Piecyk

this way. look let's So different at a

want take it million, Let's you reported the was $XX.X XX% comparisons $XXX million, year-over-year. $XX Do sequentially. the million gets you down minus which to whatever

run that's new versus $XXX rate, You million. basically just maybe like $XXX million million, said $X the less less

is rate When the finite end. a EBITDA million So have legacy we which exclude run the all business. TSA for the you payments, know $XX of

David Schaeffer

doing flawed your the this case acquired bit we arithmetic subsidy because agreed a to. that in from counting contractually the expenses in is what base you're Walt, Sprint excluding T-Mobile but is that the that then payments So, acquiring enterprise

customers finite, improvements economic from While you reducing by moving to on-net. are so on and are substantial by are exiting we correct those expenses they off-net agreements, by are achieving and headcount,

maybe million on that expenses and As were savings. actually are had not approximately of their could parties We immediately. it but were pacing that, exit payments described, years and achieve that the running and ahead do negotiations that.The we contractual we based the we X to between in take we $XXX schedules us would knew would T-Mobile would annualized exit

the in, both think actually I monies So you and to calculate to coming which... expenses the have use EBITDA

Walter Piecyk

That's X will But not in that the because that's not That's fully X all, synergies true. at achieved I now. flawed years. appreciate be years from

You only years. us you to want baseline don't right? a achieve for give to then $XXX credit a of of the the got full and that's over achieve but of will opposed that synergies million, more that in we'll the not You'd you're less. EBITDA synergies today, we've is and schedule which ahead ahead $XX get positive, for you say million, baseline And to we're X say as off figure trying baseline to necessarily EBITDA synergies, to obviously out your

this So baseline see I'm time. achieved flawed. don't saying math are is I synergies is I my understand today. how how just the EBITDA fully that over

David Schaeffer

Many synergies all, the those and of first off explaining... of been between have in those obligations clear we end now begun of So contractual that we to counterparty have date. very have achieving XXXX roll synergies as

Walter Piecyk

in in is Everyone fall has estimates everyone's knows EBITDA. to which -- that But that off. with It's expenses today's estimates. nothing do those our

David Schaeffer

in to as to is in and payment in possibly be, but severance million of we trying not as EBITDA, payments cover from In your it got you to T-Mobile. cash number, the a the... include quarter a expenses, be obligated that are be can to T-Mobile out, looking was us. pointed us We're to that example, for But Right. we reimbursement Tad have at EBITDA but need those by we transparent to stream granular expenses. those T-Mobile $XX.X paid contractually

Walter Piecyk

trying if to said this in I put I release you think write having data you're it than press feverishly be all people be -- transparent, the would just spirit rather quarter in of want transparency to then on a information helpful as down prepared press the release when not have putting to helpful robust the opposed of the the numbers print that's you comment, to the in but said in you earlier, is released. know

David Schaeffer

a differ it I The the we other think that I level detail companies, in the comment to with granular. Compared the you, in we're rapidly is, Walt. off-line. can and selling to I'm again, we we that, support we're you. release, to up XX I and able frustration in and we orders I EBITDA only of wanted our granular number wavelengths while to only happy wavelengths.But very made have locations think funnel are describe to other in are take to with locations going the consistent enabling wavelength press today in this your in those that I'm opportunity follow public do hundreds pretty to of be putting

K, the you can at the about possible. detail. look I as read granular as can think We're you

We are...

Walter Piecyk

all. read it We

-- last question, me Let Dave.

else? although revenue Sprint numbers excluding least since the Let's like even through us focus in you get these at we on But growth taxes the stuff in not declining is It reported. is positive and sequential the revenue. I the corporate anymore. can't strip excise everything Corporate it you don't there's like give side, that on there's revenue, do -- all Can your looks think again that's not numbers what is -- what non-core. legacy

Thaddeus Weed

the million... release revenue, That are $XXX.X corporate quarter, the for press provided in

Walter Piecyk

of excise That includes million taxes. $XX

David Schaeffer

Hold finish, Walt. on, Tad let

Thaddeus Weed

In finish. million. You an quarter, USF. $X.X Last is of million let That's that million. $XXX.X increase increase of $X.X me

of you So USF. sequentially increase for was adjust $XXX,XXX net a there if about

David Schaeffer

Well, the is... reality and

Walter Piecyk

is that There's go also, down. And that up in non-core, corporate that number -- out. Sprint not also is is which number number and can broken in

David Schaeffer

T-Mobile's ours, million. the non-core revenue Sprint total would another of $X.X than as that that from was because billing there million designated platform really the million. by non-core, that was we codes declined was with product not that out under operating more by billing. T-Mobile from $X.X million but converted represent non-core $X It It customers when declined actually declined pointed $XX we to So

to $X.X million non-core look the the is going of... it's to into not a quarter-over-quarter, in million we're going actually end of went everything at sequential around, consistent with continue terms And can from $X.X the trying me fact $XX.X that to back, in non-core, million moving not is it's a it by go go $X.X positive you million Walt. million.So so stuff to day, the down. $X.X very to We're up, add understated decline So get the at to way, back

Walter Piecyk

it number I'm all get didn't number what like I just pieces quarter. affirm just I with to inverted that because saying it because to a moving multiple Sprint. of prior that I say that looks getting and this wanted positive these predictable was you trying wasn't. was this to to very to of mess

positive I if talk now, the corporate that assume inversion, do. about which positive going so continue you're that to please expecting dynamics -- So an that's market, you And and assume of I you're I and the is to forward. assume want

David Schaeffer

net are pre-pandemic correct, grow. USF are growth at you sequential of that seeing pace sequentially. continuing Well, to corporate did at is our business we is grow The levels, It but not improvements.

Operator

Your next Del comes Nick with from question Deo MoffettNathanson.

Nicholas Del Deo

T-Mobile payments, confused trajectory. a still including to excluding different EBITDA, your slightly and the a quarter ask of I Last the million. questions, cost EBITDA integration guess, Maybe little was way. I'm it on $XXX Number cost,

$XXX million was or This $XXX million. quarter, it

Tad, guess, anything for I you bucks debt a million year-end $XX $XX bonus audit, couple of sequential and And, of higher that know bad out million to out EBITDA. help I QX. in So, couple called million million a a call it, decline calling the worth explain for delta? in else bucks

Thaddeus Weed

Yes. the Last was million. quarter which we of accounting, lease said $X.X I had the benefit

that's a impact. the So also then that. different to And USF's

David Schaeffer

$X debt. Which bad and million was the then

So those...

Thaddeus Weed

that bad Then are million. you've bonus combined accruals, got year-end close all to debt, thing, $X audit, those

Nicholas Del Deo

Okay.

drill X -- Just on that... maybe I'll just of down

Thaddeus Weed

costs it's COGS And Really, million. $XXX that's and million comparable, versus SG&A combined. the about $XXX

pure that's really decline, the as revenue so EBITDA. adjusted Now, did

David Schaeffer

$X million less revenue. in

Thaddeus Weed

$XX.X million, payments cash Because million. $XX.X same. the were

year-end quarter. reclasses forget adjustments revenues for purpose the forward. should for and SG&A to at and XX% -- other going of rate, this Close the about be run So things, XX% modeling

Nicholas Del Deo

things. clarify X Okay, to just

a USF just for USF no profit pass-through $X called out. isn't with the So Again, impact? million, you

Thaddeus Weed

it. is, perspective, but EBITDA wash. those to need it on Yes, I when you include it's the lines, you're a agree reconciling

Nicholas Del Deo

bumped up million -- that to again, a a I where And $XX lease then adjustment, something thought EBITDA. the that thing thinking had lease lease OpEx from -- that went the different, million Okay. adjustment that finance maybe you the or I'm $XX

I and in thought would consistently. that occurred QX So QX have

Thaddeus Weed

previous the changed. were because expenses when the accounting No, reversed was

David Schaeffer

a payment... it But going forward. does Nick, got continue you

Thaddeus Weed

this had you lease and reverse recorded you recorded amounts and we been The to when had the third prior And quarter, the quarter payments the principal. then hit interest the charged. balance, in that

David Schaeffer

From May XX. September through

run months versus really So rate. the X of it reversal was

Nicholas Del Deo

Okay.

for That nuance Okay. right. hadn't thanks All on. X clarifying picked latter I ask other if Well, that. I questions, Maybe can up maybe. all

there? to the First, plan them? what them, financial with impact lease hang time? be for Do addresses, them on Sprint Do what's you the do the the you over IPvX And you sell business? might

David Schaeffer

Okay.

fair a complexity there's So, amount here. of

pre-Sprint, addresses PSINet, previous some acquired a addresses million economic we number some Sprint, yet of acquisitions. an when address. to day had got are value. every sheet, from organic addresses and we other $XX our Those public Cogent But had and large in on exchanges they had balance we XX had So, we that X traded for about real value approximately

of as PSINet, as we When longer which negative record you different, value talk. and was You we can gain. rules we recorded free. still go were to And at the and quotes no they the the goodwill, a for online addresses how is no look accounting because second, acquisition things available did there were

our and have it focus that it's out. generating happened, generate percent a total we since in because numbers, million year not been bring XX% XX% addresses, $XX bargain gain about couple leasing And it's our XXXX, of from almost Sprint, million going we net-centric, enterprise. on now we to a about the primarily them. leasing own. addresses X.X those of corporate, corporate and to in We numbers in revenue net-centric did as net-centric, purchase When included acquired Sprint's out addresses roughly that initially case.In we actually as were You incremental XX.X case record of we million

currently incremental Today, we We the are we inventory. continue to lease that out million XX.X XX.X addresses of have. about million leasing

buyer We per fact, lease in per didn't market $X.XX through a the and address about service the occurred Cogent's these on AWS an an serial hour. addresses. break of separate out And really addresses. about Cogent in price which to a $X.XX And being addresses, the is average on in of our to addresses generate product. in.Now, it. focus Amazon out in We as It address baked It even included hourly basis lease leases address count but an unique we compete didn't they leasing the attention part all with somewhat about been and the going it began year had ago of and number XXx per Our a a provider just Amazon, lot numbers, are was a change whole and having month. were unit of break month, was separately. leases just nobody its by rate. them a when or inventory

That's leasing, those that to X-party based addresses. to point not flows to to and continue We'll done or $XX We're either to address addresses, securitize of market market, So going we these gain leasing for guys we are bargain bigger and $XXX of of lease a continues continue should opportunities or account to is, million.The Is generating why said, on we appraisal kind and evaluate. which sell this today yet, have cash evaluate million better sell? came a up addresses. our potentially to grow. purchase we off now from final a picked have you did to the accounting transaction EBITDA it another the back about recognize that the firm to

Thaddeus Weed

the summarize quickly to Just inventory and the on accounting.

I it. -- covered know Just Dave

the XX PSINet. equivalent the to have In only was, PSINet. with to those We you assets XX your price. Back million days, million total. addresses acquired record were accounting million only purchase So paid XXXX, we in in $XX in cash

recorded are asset are Sprint, value address. per all acquired. We their valued. $XX had include out of basically. now with And addresses intangibles That the net assets be address XX $XX million The firm needs to in you we accounting of additional much rules per came appraisal total acquired With a is how we X.X X it value million, million these worth. the of fair So an record addresses. acquired that Big

gain the million balance for sheet bargain increased the new on $XXX $XXX the So that net adjustment file million will income for our address, to the we they that at today of million we includes in tax purchase, which reflected The $XXX are includes that. in our total. quarter impact XX-K,

some are we as good are the an not. a they that and $XX partly addresses revenue this So, I year. of we are stream XX.X partly and where our currently we we asset summary taxes balance deferred leasing to that's had mentioned, and on with associated revenue no of sheet adjustments Dave other generating that's as about million then There's lease hope recorded.So, costs per and million

Nicholas Del Deo

of how lease many think business? About to? or I one Okay. are you in you do out here. many the if quick wanted great to or guess, you A other just So, detail. lot you how words, clarification securitize could sell need that surplus run

David Schaeffer

none, could XXX,XXX, you Virtually run the probably network.

You company. of would from people the providers rules run could We those very spike addresses in as do other buy and some network as have bandwidth buy addresses relaxed XXXX, us. we Anticipating by number to we in sell Today, roughly Many we XXX,XXX service saw Amazon's about addresses bandwidth. leasing lease pools those own above continue would well only to own. market, we up activity customers limited actually entry XXXX people network the bandwidth, to that devices. leasing your use who that a can devices or addresses. network have midyear bought those don't significant and XX,XXX into to bring their Between that and the

Nicholas Del Deo

I the last guess, I'm with not customer the say revenue hit long. say in in can can sure the you you impacts or going being but coming would you it's to think so and question whether I'm peering any share what dispute about then have interested And I on. quarters. I'm to this for to wanted sorry Okay. want NTT, what

David Schaeffer

it. actually was about It something Cogent. initiated talk by to Happy

had So, They in XXXX. we the largest world. have are the since with a NTT network fourth peering relationship

of they connectivity had welcome and peering refused Asian our to multiple in said As to us they share as and continue the Cogent's entry the they conversations Asia technical to get home Asia In ports outside market of willing we're refuse. of connected gain in attempts multiple to Taipei, home continue market, NTT the protection in the sensitive did Japan, give market to we number refuse into individuals and and their Singapore, Hong take to in them Asia. a to being Europe. locations add with market even remained not management after basically NTT other required. Australia, Asia, retaliation, connect Kong, in We of U.S. We to

was one customers Basically, of kind we there's customers expand it's a back and to result, for similar I'll to still world business to go Europe. the had I to have know have in to Europe. refuse de-peered it Telecom almost has Europe. but a you are similar We in Deutsche bad don't point it Europe. implemented to as from embrace we still neutrality.Now, Asian So connectivity, there Asia the with childish actors a public or in situation know but They a them, only net D.C. Their LA New back. Japan and they tit trombone expand in to but and in capacity further, come which expand European they do have and a sounds and continue strategy tat, unfortunately, been just who were to York to European traffic forcing U.S.

protect they in connectivity the their market. German or expand U.S. to they'll but in want So Asia,

playing in that they finally from may a games. corners actually violating to the it's encouraging And country, while net FCC this somewhat they X way the may their spirit. neutrality of in absolutely people the a meet are So codify these order stop

Operator

comes from question next with Your Tim Oppenheimer. Horan

Timothy Horan

would where prices XXx if those customers? wouldn't customer think I mean, do million $XX AWS if math, million preventing I you I goes Xx? price you do What's like Dave, that? mean, lose have is the Xx increase go, $XXX is free you going of your that's to a And price, So, why the a to cash flow. increase, you if obviously

David Schaeffer

Yes.

have Amazon to to evaluating includes a to each just tell addresses. with you that and that it's AWS started for have opportunities correct or asset address umbrella We're conscious and has while absolutely are our probably were inventories statement changed Cogent. they which decade, know addresses X we our and renumbering declined with to to of didn't our ways I past kind best prices. the have Amazon thought successful and includes it size is we acquired, so the benchmark were pretty small are. And do is months expense are Like to point foreign significant. The be in not sell pricing during inventory a bitcoin can't the securitization, on to Actually, customers that been Microsoft equivalent evaluate they period.Second addresses. involved exactly serial of year addresses all, all should I turned buyers how we we in first We're organic we of the that that something their next out process what particular numbers of sticky. that are that pricing ability and same pretty XX% few pricing leasing as a going explained about in these the Cogent.We at labor its about in that of to do is value a What over XXXX doesn't I to the whether been evaluating maximize from a is is never those this big and bandwidth of disclose your are quite purpose. valuable. and addresses that, lucky comparable raise we are have have honestly product, we we both understand raising is, like prices, includes when So, Amazon, have investor,

better So sometimes than be smart. lucky to it's

Timothy Horan

just kind Dave, does can't know the moving 'XX? maybe out of I us more Well, -- would pace in $XXX savings. EBITDA the be I is and complexity adjusted expense parts, a that of you much million a you bit million Or talk everyone's run like I in next How mean, a the Can X related helpful. a there's look about Is give guess, how $XXX what million in color any to what that, should frustrated years? if accounting. sense about rate? the good the this, over

David Schaeffer

Yes, I'll both them. of to try touch on

there from closing, point 'XX, is receive So from clear we going the is, May cash be a T-Mobile impact we so our down that step that in X first as the reported. been very to have year of that EBITDA payments will

limited contractual in Those Even of some that unfortunately, we business the purchase when in the by negotiation, to achieve bought cost all the those IP back obligations this these price. continuing are we we assumed things to are again, the were cost from synergies, T-Mobile. considered were Secondly, synergies. And that subsidy closing. million have could was and million prior from keep had chosen gain they check they and them, recorded would would honestly, T-Mobile have to have and fully $XXX sold addresses, X more been to sell It that Quite write disclosed to sale. addresses then larger. addresses to us the they

think then the transparent to and of down when you quarters. did And were have to the as What as cost they closing, $XXX about down the rate about X We're thought it's a surprises, $XXX EBITDA, go that of those about the Tad? without are company for as up said $X.X that, is, build absolutely increase of already is and we The down. quarter it's So at are goes current I years of step and are reaffirming we of be couple back will understand terms it I exact this $XXX not come on correct trying payments from next also run like all hard negotiations.In these should do reality up. publicly, those T-Mobile understand and guidance. Then achieved. at gradually within least is down will giving savings in EBITDA. pace and we're then The EBITDA complicated million that. for it's possible model revenue last come million and accounting, and says billion that kind we million of have will least quarter

Thaddeus Weed

$XX.X it's payments $X.X a fixed know so and per month, for the we per term. the month million then are year million for remaining Yes,

think the that May. would I will in first which rate we earlier about say the that an quarter, the as and we percentage cost SG&A about less the of down XX% should run quarter mentioned and be XX%. had occur I was SG&A step -- will in So fourth revenues, in about of

Timothy Horan

network percent be operating that What should roughly? And expenses. then

Thaddeus Weed

relatively flat. That will be

David Schaeffer

May come down as slightly well.

Thaddeus Weed

additional We'll facilities. have some savings experience, savings, from and from circuits

Timothy Horan

should So it quarter? come down XX% slightly this from the

Thaddeus Weed

Yes.

Now, sales, said it's but should up to going off-net from sales. go I decline. on-net net-net, have should additional Yes. it

David Schaeffer

Off-net.

Operator

Rollins with comes next Your from question Michael Citi.

Michael Rollins

A few questions.

and quick that one for you just addresses. the us remind market market? a Just the what on addressable Can your that share IP of is,

David Schaeffer

Yes, sure.

for IANA subsequently by IPvX, allocations the Commerce, then and for of The were were by those to X Those purposes, billion the X XXth registries chose the DoD. approximately then allocated U.S. they the Commerce, is around primarily allocated world. contractor X.X delegated and when government Department was own regional its addresses is addresses a as the held back initially conceived, there were scheme addresses. Internet numbering a to Department of which That So power.

about intervening So market of has or $X addresses. The that $X. developed in run registries that years, an gone those time XXXX. and the to usable X.X from addresses out price been prices $XX. about has In decade, to to at address A billion addresses XX for were buy began there

registries to movement of no has is XXXX All which been to there and number IPvX, are the to power ran there X get.Now, of addresses. the more of XXXth by to addresses out migrate a addresses

So in basically necessary very X.X a number. have challenge be would of the that, many of trillions of very, billion, support doing large square that capital that. replace But dollars equipment literally including there to to been

small presence So Internet, the traffic. on X% IPvX a of still about has relatively

but not as whole Internet. who and those multiple IPvX. buying as schemes, not schemes those workaround are to anybody is market just easily the are easily There reach needs So implemented are the addresses wants or managed and renting

their world lease vX. supply limited either buy needs. as So will I result, future, be or on these and for will the people the a to think fulfill run foreseeable There will

Michael Rollins

flat And and FTE pluses on what's then performance? performance, sales sales in might be the of just there in some a where terms it where kind like might you there question dipped be happening productivity, Can of The in count. a on look productivity unpack minuses business.

David Schaeffer

mean, I to would but productivity, from I Yes. biggest and call came have not over on been Sprint. say that specific I'm the trying out drag names, employees

As to That's organically drag. very than has would way salesperson closing. their our And we year guarantee hired significant had be their different for quota part been an Cogent a productivity the comped. contractual full of obligation, a from

X% enterprise of into dozen expansion has coming sales only down drawn a force. roles, but almost than Xx a to to be and a the year there's sales we And has year-over-year, those of year of productivity they their really net-centric normally remains that about force reps the were at but is, those Normally year, the and we takes second productivity become training months faster have have focused Now, factor the people them. pandemic. grow accounts, a transferred while growing depressed.The left corporate been on them fully force we full-time we out equivalent, rapid and sales absorbing reality so grew productive. it XX% pre-pandemic, the X Last

So on that's a second drag numbers. those been

some hopefully, I improve. see think to see turnover productivity we start we'll will and additional

Operator

Lee Bora Your comes RBC from Markets. next Instructions] with question [Operator Capital

Bora Lee

a is the down housekeeping There the XQ that off number and reclass some Or CapEx go is that forward? of One of jumping increased. be about? Was during G&A the should fourth relative related was thinking first. bit step while to point activities something to in of quarter else there quarter we

Thaddeus Weed

reclass of accounting. third with the the third to quarter. lease in impact rates on do the the the the on Really versus from the occurred impact had predominantly the fourth COGS More quarter in quarter run

Bora Lee

Okay.

the So to fourth Difficulty] the [Technical quarter step down G&A related was in

Thaddeus Weed

quarter the I Well, tried has quarter an reconcile that. from to and the in SG&A third fourth increase all

Bora Lee

G&A.

Thaddeus Weed

Yes, SG&A.

David Schaeffer

SG&A.

about right revenues the of to just way is XX% Bora So, going think forward. about

and Young comply Ernst think we've by all moving matters and GAAP got us hopefully these audited accounting. of into the systems. everything accounting critical for and They're been lease reclass all are that requirements behind & of pieces with I Cogent

So, I good we're pretty shape. in think

Thaddeus Weed

We are.

Bora Lee

you're out spaces. Okay. And as Sprint the clearing

Sorry, Tad, were you saying something?

Thaddeus Weed

go No, ahead.

David Schaeffer

Bora. Go ahead,

Bora Lee

Great.

of of to needs just is spaces, to some is there a you're or As opportunity that that task And sort the an that equipment? sell out old be done? meaningful Sprint clearing

David Schaeffer

driven value. we Cogent equipment. for to a XX those a now going definitely is cost facilities opportunity, scrap minimis or be that there power for revenue become but of these and been done. convert to third-party less racks facilities better equipment be that a either the for have are a have equipment as centers, There and taking brokers, a It to XXX data opportunity not to short-term this also there's needs crunch is this copper we the be those than opportunity of of to going XX% sold effort particularly Net-net, has meaningful significant utilized depopulate out. dead is salvage significant with has some a does XX,XXX not significant them manufactured work equipment this for The task by years. a centers and not associated as is equipment There megawatts data been dead that Most value It's is amount for AI. XX-plus de space of us. that in a

the more quickly. up We in ways of process multiple that fill are to looking space in

Bora Lee

have which across Cogent interest or customer lastly do the recognizing for qualitative has any to extent still on me, color or been early guess, there that actual you days, cross quantitative legacy it's cross-selling I And, and bases? Sprint the

David Schaeffer

wavelengths. and slight with.The are with that of funnel of a where remember, with The come our we start We had majority have to the modest orders people footprint, to been funnel on modernize those reach, in a Cogent the customer in are their wavelengths our a I'll from XXX, a enterprise say, sold with. saw will a to this but vast is sequentially very those been had focusing force customers. not thing that number VPN the that uptick technologies. connections. is, enterprise previously, cases Cogent There relationship in handful second worked had and much the X,XXX have actually relationship I the have wavelengths there and the sales already Cogent with installed, ability very Sprint base And has our of a that receptive the of smaller that are but So, that those customers majority global on-net

be there customers. modernize ability think is those of to going enterprise to I the So help some

So there in both I will opportunities think be cross-selling directions.

Operator

KeyBanc Nispel Your Capital final question with Brandon Markets. comes from

Evan Young

think able for pacing be you were for of It's alternative solutions backlog get you're Evan it's X,XXX on growing you backlog by talked backlog? year? to provisioning end facilities. finding and able saying you that guys of order the the finding wavelengths, to you'll Or you The about customers on now Brandon. do because any your the are the Do through

David Schaeffer

will I Evan, different happen. X things think So,

We who wait. will customers those will there be cannot orders, provision some of most but

net to of we get actually we that shorter with X,XXX. In anticipate it will that number customer's provision, some the like. more We understand X quarter, are with the the -- window year-end. of we out provisioning else are of funnel that site-by-site this it's customers very I a and number a on on, in We continue that need obligation. be In if going we'll if grow. business pace yes, there forward, sites customers, that But took what go we have to problem think going to time, months have with let Cogent building that grew, will from to have enabled look the reconfigurations the and us by up sites network with we been mean, quarter, windows, X,XXX. of credibility them we basically is double build a customer the them discussion do it's last know and that last continue fallout, but the and and not and to the to somewhere window accelerating. that going build And transparent problem.Conversely, can't to want as funnel we more we and trying a closing we provisioning actually got to to a standardized needs I intervening provisioning than

correctly a until manner of think get stated enough but get an run, it's earlier, expeditious revenue. where both the sites we about to looks But couple not and in the backlog talk what a and configured like. weeks, we of I As funnels of I long over investors the network provision give can understanding healthy we install to have customers

Operator

session. I now will remarks. conclude back will This Dave Schaeffer closing over question-and-answer to the for our turn call

David Schaeffer

call, long lot Hey, are there much. I a was but you a of thank of again, it know, pieces very information.

definitely to we'll we you in very and wholesome be trying much, Take care. transparent all are soon. are what We reporting. and talk Thank Bye-bye.

Operator

today's conference. concludes Thank This participation. your you for

disconnect. now may You

Cogent Communications (CCOI) 29 Feb 242023 Q4 Earnings call transcript