Cogent Communications Holdings, Inc. (NASDAQ:CCOI) Q1 2023 Results Conference Call May 4, 2023 8:30 AM ET

Company Participants

Dave Schaeffer - Chairman and Chief Executive Officer

Thad Weed - Chief Financial Officer

Conference Call Participants

David Barden - Bank of America

Walter Piecyk - LightShed Walter

Nick Del Deo - MoffettNathanson

Michael Collins - Citi

Frank Louthan - Raymond James

Evan Young - KeyBanc Capital Markets

Operator

Good morning, and welcome to the Cogent Communications Holdings First Quarter 2023 Earnings Conference Call [Operator Instructions]. 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 at Cogent's Web site when it becomes available. Cogent's summary of financial and operational results attached to its press release can be downloaded from the Cogent Web site.

I would now like to turn the call over to Mr. Dave Schaeffer, Chairman and Chief Executive Officer of Cogent Communications Holdings.

Dave Schaeffer

Hey, good morning, and thank you, and welcome to all on our first quarter 2023 earnings conference call. I'm Dave Schaeffer, Cogent's CEO. With me on this morning's call is Thad Weed, our Chief Financial Officer. Hopefully, you've had a chance to review our earnings press release. Our press release includes a number of historical quarterly metrics that we present on a consistent basis each quarter. Now for an overview of our results. Our revenue for the quarter increased sequentially by 1.1% to $153.6 million and increased 3% year-over-year. On a constant currency basis, our revenue for the quarter year-over-year grew by 4%. Our corporate business continues to be influenced by real estate activity in the central business districts of major cities. Two key statistics, including the level of security badge entries into a building and leasing activities indicate that year-to-date, the real estate market and leasing activity in these central business districts has continued to see improvement, but has not yet returned to pre-pandemic levels.

We continue to remain cautious in our outlook for our corporate revenues given the uncertain economic environment and other challenges that are a result of the after effects of the pandemic. Our NetCentric business continues to benefit from continued growth in video, traffic and streaming. For the quarter, our traffic was up sequentially 3% quarter-over-quarter and increased 20% on a year-over-year basis. On a U.S. GAAP basis, our NetCentric revenues grew sequentially by 2.7% and grew by 7.8% year-over-year. However, adjusting for currency fluctuations, on a constant currency basis, our NetCentric revenues increased by 10.2% from the first quarter of 2022. Our sales force productivity increased from 3.8 orders installed per month per full-time equivalent last quarter to 4 units per month per full-time equivalent sales person. We also increased the number of sales reps in this quarter by 14 or a 2.6% sequential increase. We ended the quarter with 562 sales reps and 539 full-time equivalent sales reps. This represents a sequential increase of 7.2% of full-time equivalent sales reps from the fourth quarter of 2022 to the first quarter of 2023.