Cogent Communications Holdings, Inc. (NASDAQ:CCOI) Q4 2023 Earnings Conference Call February 29, 2024 8:30 AM ET

Company Participants

Dave Schaeffer - Chief Executive Officer

Thaddeus Weed - Chief Financial Officer

Conference Call Participants

Anton Rinnert - Cowen

Alex Waters - Bank of America

Walter Piecyk - LightShed Ventures

Nick Del Deo - MoffettNathanson

Tim Horan - Oppenheimer

Michael Rollins - Citi

Bora Lee - RBC Capital Markets

Brandon Nispel - KeyBanc Capital Markets

Operator

Good morning, and welcome to the Cogent Communications Holding 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. Please go ahead.

Dave Schaeffer

Yes, hi. Good morning. Welcome to our earnings call for the fourth quarter of 2023 and full year 2023. I'm Dave Schaeffer, Cogent's Chief Executive Officer. With me on this morning's call is Thad Weed, our Chief Financial Officer. Hope we've had a chance to review our earnings press release. Our press release includes a number of historical metrics that we present on a consistent basis each and every quarter.

Now, for a quick summary of our results, we closed the acquisition of the Sprint business on May 1st, 2023. This transaction significantly expanded our network, our customer base, and materially increased the scope and scale of our business. Our annualized revenue run rates are now in excess of a billion dollars.

We acquired a large number of enterprise customer relationships. These customers are typically larger than our Cogent legacy corporate customer base. We also acquired a significant network comprised of owned fiber and owned facilities, many of which are being converted to data centers.

We acquired a network with an appraised value substantially above a $1 billion for $1. We are repurposing the acquired fiber network to be optimized for the sale of Wavelength services. We received a total of $700 million over time from T-Mobile to offset the operating losses of serving enterprise customers.

350 million of these payments will be made in the first year at $29.2 million per month, and then $350 million of payments will be spread out over the next 42 months of $8.3 million per month. We remain optimistic about the cash flow capabilities of our combined operations.