Cogent Communications Holdings, Inc. · NASDAQ:CCOI
Cogent Communications — Q3 2024 Earnings Presentation
25 slides from Cogent Communications's earnings presentation, Nov 7, 2024
Slide 1: Investor Presentation
NASDAQ CCOI INVESTOR PRESENTATION
Slide 2: Cautionary Note Regarding Forward-Looking Statements; Non-GAAP Measures
Cautionary Note Regarding Forward‐Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future, not past, events and are subject to risks and uncertainties. The forward-looking statements,
Slide 3: Company overview
company overview • We operate a global network carrying approximately 25% of all internet traffic • We offer high speed internet access to three customer bases: Cogent is a ― Corporate: 45% of revenues leading, global ― Netcentric: 36% of revenues ― Enterprise: 19% of revenues provider of ― We sell
Slide 4: Competitive advantage
competitive advantage The On‐net The Off‐net The Netcentric The IP Address The Netcentric IP The Enterprise The Colocation Corporate IP & Corporate IP & WAVE Leasing Opportunity Opportunity Opportunity VPN Opportunity VPN Opportunity Opportunity Opportunity Market Players Market Players Market Playe
Slide 5: Growth opportunity
$0 $2 $4 $6 $8 $10 $12 $14 $16 $18 0 200 400 600 800 1,000 Q1 2010 Q1 2010 Q2 2010 Q2 2010 597 Q3 2010 Q3 2010 Q4 2010 Q4 2010 Q1 2011 Q1 2011 Q2 2011 Q2 2011 Q3 2011 Q3 2011 Q4 2011 Q4 2011 Q1 2012 Q1 2012 Q2 2012 Q2 2012 Q3 2012 Q4 2012 Q3 2012 Q1 2013 Q4 2012 Q2 2013 Q1 2013 Q3 2013 Q2 2013 Q4 20
Slide 6: Customer segmentation
customer segmentation corporate netcentric enterprise Connections: 47,613 Connections: 62,273 Connections: 16,447 Revenue Revenue Revenue 45% 36% 19% Share: Share: Share: Traffic Share: 4.9% Traffic Share: 95.0% Traffic Share: 0.1% Geography: North America Geography: Global Geography: Global Profess
Slide 7: Highly focused sales organization
0 100 200 300 400 500 600 700 800 Q1 2010 Q2 2010 Q3 2010 262 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Salesforce Growth Q2 2014 Q1 2010 – Q3 2024 Q3 2014 Q4 2014 * Acquisition of Sprint Wireline business Q1 2015 Q2 2015 Q3 2015
Slide 8: Business breakout
business breakout 2%2% 2% 2%2% 1%<1% 6% 5% 19% 12% 17% 32% 45% 53% 36% 20% Q3 2024 36% 24% 82% 5% 2% 2% 10% 47% 43% 95% 98% 98% Q3 2024 On Net Off Net 4% <1% 1% <1% 6% 13% 5% 7% 22% 12% 9%5% 38% 49% 41% 72% 58% 9% 20% 27% Q3 2024 On-Net Netcentric On-Net Corporate VPN IP (DIA & Transit) US Europe Co
Slide 9: Broad, deep, scaleable network
broad, deep, scaleable network • Interconnected with 8,212 access networks • 1,114 metro IP networks; 30,000+ metro route miles • 3,424 On‐Net buildings • 168 metro wave networks • 55% multi‐tenant office buildings (1,870) • 97,000+ intercity fiber route miles • 45% carrier neutral and Cogent data c
Slide 10: Wavelength services network
wavelength services network • Cogent provides wavelength services to customers in over 200 locations with the capability in 657 locations • Cogent expects to offer wavelength services in over 800 locations by year end 2024 10
Slide 11: Network architecture IRU/owned fiber
network architecture IRU/owned fiber • Longhaul and metro backbone is built from a diverse set of 360 IRU suppliers • Owned fiber is on unique rights of way Our network is • IRUs from 10 to 44 years; many are pre‐paid and have diverse end dates facilities based— • O+M expenses are calculated by shar
Slide 12: Cogent's network advantage
cogent’s network advantage Choice Implication • Simple, predictable performance IP over DWDM • Lowest cost network Cogent’s Simple Vendor / • ‘Southwest Airlines’ cost and Configuration operating advantages network offers LT Lease of Fiber Pairs • Reduced capital intensity and operating costs substa
Slide 13: Big, diverse & balanced global IP network
big, diverse & balanced global IP network Access to Business/Residential Leading Share of Content Customers Worldwide Providers • 47,613 corporate connections • OTT Media Services primarily in North America • Gaming Providers • In 1,870 On‐Net MTOBs • CDN Networks • 22,929 Off‐Net Buildings • 1,722
Slide 14: Proven integration execution
proven integration execution Investment Customers Addresses Network Building Original Peering Access PP&E Date IPv4 NetRail Sep 2001 $180 $35 Cogent purchased Allied Riser Feb 2002 $590 $335 PSINet* Apr 2002 $5,180 $2,175 over $34 BILLION (Fiber Network Solutions, Inc) FNSI Feb 2
Slide 15: Revenue growth
‐5% ‐3% ‐1% 11% 13% 15% 1% 3% 5% 7% 9% ‐10% ‐5% 0% 5% 10% 15% Q1 2010 Q1 2010 Q2 2010 Q2 2010 Q3 2010 Q3 2010 Q4 2010 Q4 2010 Q1 2011 Q1 2011 Q2 2011 Q2 2011 Q3 2011 Q3 2011 Q4 2011 Q4 2011 **Q1 2012 Sequential Q1 2012 Q2 2012 Q2 2012 Q3 2012 Q3 2012 Q4 2012 Q4 2012 Q1 2013 Q1 2013 Q2 2013 Q2 2013 Q
Slide 16: Historical & continuing margin expansion
$‐ $50 $0 $100 $150 $200 $250 $300 $350 $400 $50 $100 $150 $200 $250 $300 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 ($ in millions) Q2 2012 Q3 2012 Q4 2012 Q1 2010 – Q3 2024 Q1 2013 On net revenue 2010 – 2024 YTD Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q
Slide 17: Investing: increasing returns, demand driven, all funded internally
investing: increasing returns, demand driven, all funded internally 250 ** Capital Expenditures and Principal Payments on IRU Finance (Capital) Leases ($ in millions) 2010 – 2024 YTD 161.2 200 77.4 150 100 45.5 23.1 148.9 19.1 18.2 24.0 129.6 50 15.5 16.8 11.2 11.2 10.3 9.1 79.0 20.2 12.5 52.8 45.9
Slide 18: Highlights
highlights ($ in millions) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q/Q % Y/Y % 2023 2023* 2023 2023 2024 2024 2024 Change Change On‐Net Revenue $116.1 $127.7 $129.0 $138.1 $138.6 $140.8 $136.5 (3.0)% 5.8% Off‐Net Revenue $37.3 $102.0 $130.6 $123.7 $118.2 $111.4 $111.3 (0.1)% (14.8)% Wavelength Revenue $‐ $1.6 $3.0 $3.
Slide 19: Highly disciplined allocator of capital
highly disciplined allocator of capital • M&A Discipline: Cogent has evaluated and passed on 825 acquisitions since 2005. • Sprint (T‐Mobile Wireline) Acquisition: Cogent paid $1 for the Purchased Interests Cogent is o Less a commitment from T‐Mobile to purchase $700 Million in IP Transit services f
Slide 20: Consistent return of capital; modest leverage
consistent return of capital; modest leverage Cumulative Total Return of Capital by type ($M) $2,000 $1,500 $1,000 $500 $‐ 2007* 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 YTD *Includes June 2007 Note Transaction Cumulative Total Share Buyback Cumulative Tot
Slide 21: Investment highlights
investment highlights • Fundamentals provide for continued, consistent growth and profitability • Focused on fastest growth products in Telecommunications • Independent, low‐cost global IP network • IP & Transport network footprint targeted at high traffic locations Cogent is a • Three attractive cu
Slide 22: Cogent Communications Holdings, Inc.
Cogent Communications Holdings, Inc.
Slide 23: Appendix
Appendix Reconciliation of non‐GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP 23
Slide 24: Non-GAAP EBITDA and EBITDA, as adjusted, reconciled to GAAP cash flows
Non‐GAAP EBITDA and non‐GAAP EBITDA, as adjusted, reconciled to GAAP cash flows provided by operating activities Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 ($ in 000’s) – unaudited Net cash flows provided by operating activities $35,821 $82,654 $(52,433) $(48,701) $19,219 $(22,171) $(20
Slide 25: ESG efforts
ESG efforts Cogent is focusing on its ESG performance and improving and broadening its disclosure: Cogent is Environmental • Provided detailed performance characteristics and carbon footprint related to its Network Backbone focused on • • Carbon emissions from Network Backbone declined in 2022 75% r
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