Cogent Communications (CCOI) Citi’s 2026 Global TMT Conference summary

Revenue and product trends

• Legacy products account for 84% of revenues and have grown organically for 24 years, with recent rebound in corporate segment growth to 3% after pandemic decline.

• Metered internet access is the primary product in 310 markets, representing 98% of network traffic and growing at 8% revenue rate, with recent traffic growth accelerating to 15% year-over-year due to AI demand.

• IPv4 leasing business, now 7% of revenues, grew rapidly after restrictions were lifted, reaching $70 million and 18% year-over-year growth.

• Wavelength business, launched after Sprint acquisition, is now a $65 million run-rate business, 6.5% of revenues, growing 62% year-over-year.

• Co-location business remains small at 2% of revenues, with recent asset sales generating $225 million in proceeds.

Financial performance and outlook

• Combined company experienced a negative 5% top-line growth post-Sprint acquisition, with Sprint revenues declining 69% over three years.

• Organic business grew at a 29% compounded rate over three years, now representing 85% of revenues.

• Margin on acquired Sprint base improved from negative 60% EBITDA to zero, with overall margin expansion averaging 800 basis points annually.

• Expectation to return to total top-line growth within one to two years as Sprint revenues become negligible.

• EBITDA growth expected to continue, with margin expansion moderating to historical 200 basis points per year.

Asset monetization and capital strategy

• Converted 125 former Sprint facilities into data centers, selling 10 for $225 million and marketing 14 more.

• Considering further monetization of IPv4 address space and dark fiber assets.

• Securitized leased IPv4 revenue with two asset-backed deals at 6.8% cost of capital.

• Paid down $190 million in debt, with 2027 debt maturity expected to increase interest costs due to higher leverage and rates.

• Comfortable liquidity position with $180 million due from T-Mobile and strong cash reserves.