Cogent Communications (CCOI) investor relations material

End market outlook

• Enterprise segment, acquired from T-Mobile, stabilized at zero margin and a negative 1-2% growth rate after purging unprofitable products; margin expected to return to 20% over two years.

• Corporate business rebounded from a pandemic-driven decline to 3-4% growth, with office space vacancy rates remaining high at 18%.

• Net-centric business, focused on wholesale internet connectivity, stabilized at 8-9% growth post-pandemic.

• Combined legacy segments are growing around 5% with about 100 basis points of annual margin expansion.

Sprint acquisition and asset repurposing

• Acquired 19,000 route miles of intercity fiber, 482 central office buildings, and 1,200 miles of metro fiber from Sprint.

• Repurposed fiber network now enables wavelength services at 938 locations, targeting a $2 billion intercity market.

• Converted 125 former central offices into data centers, expanding footprint from 55 to 180 facilities.

• 24 facilities earmarked for divestiture, with ongoing negotiations and multiple LOIs received.

• $100 million spent on conversions, completed by June 2025; proceeds from divestitures to be used for buybacks, dividends, or deleveraging.

Wavelength services and competitive positioning

• Wavelength business is a new, fast-growing segment, with a $36 million annual revenue run rate.

• Targeting 25% market share in the $2 billion intercity segment by mid-2028, leveraging five competitive advantages: footprint, speed, unique routes, pricing, and reliability.

• Offering services at a 20% discount to market, with potential for further discounting if needed.

• Network reliability is enhanced by deep-buried, armored cable, resulting in fewer cuts and outages.