Cogent Communications (CCOI) TD Cowen 12th Annual Communications Infrastructure Summit summary

Key financial and operational updates

• $750 million unsecured debt went current in Q2; refinancing as secured debt with likely reduced amount and shorter tenure for flexibility.

• Revenue growth has been negative for 12 quarters due to Sprint acquisition, but EBITDA grew in 11 of 12 quarters, with margins expanding over 2,000 basis points mainly from cost cutting.

• Sprint's revenue base now only 15% of total, down from 42%, with continued focus on purging unprofitable products and services outside 58 licensed countries.

• Integration spending reduced from $60M to $36M annually, with further headcount reductions leading to a $50M EBITDA tailwind for next year.

• CapEx declined sequentially to $38.5M in Q2, with expectations for further moderation as network consolidation and data center sales progress.

Market and industry trends

• Equipment prices have risen sharply, with multiple price hikes from major vendors and supply chain constraints extending delivery times to 18–24 months.

• Hyperscalers now dominate vendor order books, driving up demand and prices, but supply constraints are expected to ease as manufacturing ramps up.

• Office building vacancies remain elevated post-pandemic, impacting on-net building growth, while residential conversions reduce addressable market.

• Corporate on-net revenue growth has slowed to 3% annually, with a disciplined focus on large, dense buildings and carrier-neutral data centers.

Product and business development

• Wavelength business grew 9.2% sequentially and 68% year-over-year, now at 3% North American intercity market share, targeting 25% long-term.

• Customer confidence in wavelength offerings is rising, with upgrades and new orders from hyperscalers, neoclouds, and content distributors.

• Backlog remains strong, with most delayed orders still installing; cancellations have been modest.

• Data center sales continue, with 14 facilities and 55MW remaining for sale; timing of transactions planned to optimize NOL tax treatment in 2027.