Cogent Communications Holdings, Inc. (NASDAQ:CCOI) Q1 2024 Earnings Conference Call May 9, 2024 8:30 AM ET

Company Participants

Dave Schaeffer - CEO
Thaddeus Weed - CFO

Conference Call Participants

Sebastian Petti - JPMorgan
Greg Williams - TD Cowen
David Barden - Bank of America
Frank Louthan - Raymond James
Walter Piecyk - LightShed Ventures
Michael Rollins - Citi
Nick Del Deo - MoffettNathanson

Operator

Good morning, and welcome to the Cogent Communications Holdings First Quarter 2024 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's website.

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

Dave Schaeffer

Thank you, and good morning to everyone. Welcome to our first quarter 2024 earnings conference call. I'm Dave Schaeffer, Cogent's Chief Executive Officer, and with me on this morning's call is Tad 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 metrics we present in a consistent manner each and every quarter. On May 2nd of this year, we closed the issuance of our $206 million IPV4 securitization notes at 7.9%. These notes mature in five years, but may be extended for up to a 30-year term. This securitization was the first ever of the securitization of IPV4 lease revenue.

Cogent is the owner of approximately 38.8 million IPV4 addresses. We acquired 28.8 million of these addresses when we purchased PSINet and various other acquisitions early in our history. We acquired an additional 9.9 million IPV4 addresses in May of 2023 with the acquisition of the Sprint network assets from T-Mobile.

We are leasing approximately 12.2 million of these IPV4 addresses out for a monthly revenue run rate of approximately $3.4 million a month. We have securitized $3.1 million of that monthly leased revenue, and this represents revenue from 11.1 million lease addresses. We also included 1.4 million unleased addresses in the pool of the securitization. The IPV4 Internet addresses are a finite resource. The price of these addresses has substantially increased over the past several years.