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- **Dividend Adjustment**: Reduced dividend to $0.02 to accelerate debt reduction, targeting 4x EBITDA leverage.
- **Wavelength Momentum**: Q3 wavelength revenue up 12.4%, with $20-25M quarterly target by year-end, driven by AI and video traffic.
- **Financial Health**: EBITDA as adjusted of $73.8M, margin up 70bps to 30.5%, with on-net revenue growth offsetting off-net declines.
- **Data Center Sales**: Sold 2 data centers for $144M, with remaining 22 expected to yield similar or higher valuations.
- **Market Position**: 1.5% market share in wavelengths, targeting 25% of long-haul North America, differentiated by route diversity and reliability.

**【CEO Opening Remarks】**
- Announced a dividend reduction to $0.02 per share to accelerate debt reduction, targeting a net leverage ratio of 4x EBITDA.
- Reported Q3 revenue of $241.9 million, with EBITDA as adjusted of $73.8 million, up 0.3% sequentially, and EBITDA margin improving by 70 basis points to 30.5%.
- Highlighted 93% year-over-year growth in wavelength services revenue to $10.2 million, driven by AI and video traffic.
- IPv4 leasing revenue increased 14.1% sequentially to $17.5 million, with 14.6 million addresses leased out of 38 million total.
- Completed integration of Sprint network, reducing capital expenditures by 35.5% to $36.3 million.

**【CFO Financial Commentary】**
- GAAP net income of $420 million and Non-GAAP EPS of $1.08, exceeding expectations.
- Sequential revenue decline of 1.7% due to low-margin off-net and noncore revenue reductions ($1.3 million) and USF revenue decline ($0.8 million).
- On-net revenue grew 2.2% to $135.3 million, offsetting off-net revenue decline of 6.9% to $95.1 million.
- Average price per megabit decreased 10% sequentially to $0.16, with new contracts at $0.07.
- Churn rates improved to 1.3% (on-net) and 2.1% (off-net), with network traffic up 5% sequentially.
- Capital expenditures reduced by 38.8% year-over-year, supporting deleveraging efforts.

**【CEO Additional Remarks】**
- Operates in 1,872 data centers across 57 countries, connected to 8,043 networks, with 22 being paying transit customers.
- Sales force productivity at 4.6, with 617 quota-bearing reps focused on NetCentric, corporate, and enterprise markets.
- Completed data center repurposing, enabling future monetization through sales or leasing.
- Wavelength services capable of 10G, 100G, and 400G, with 79% of sales at 100G and 10% at 400G, targeting 25% market share in long-haul North America.

**【Q&A Highlights】**
- **Dividend Policy**: Dividend cut to prioritize debt reduction, with plans to resume returns once leverage target is met.
- **Data Center Sales**: Sold 2 data centers for $144 million, with remaining 22 expected to yield similar or higher valuations.
- **Wavelength Growth**: Q3 wavelength revenue up 12.4%, with a $20-25 million quarterly run rate target by year-end.
- **Competition**: Differentiated by route diversity, reliability, and provisioning speed, despite Lumen's expanded footprint.
- **Customer Behavior**: Encouraged by shrinking gap between wavelength installation and customer acceptance, driven by industry-wide provisioning acceleration.
- **Revenue Outlook**: Anticipates sequential revenue growth in Q4, with noncore revenue now at $1.4 million, near depletion.
- **AI Impact**: AI-driven demand for 100G and 400G wavelengths is the primary growth driver, with hyperscalers and neoclouds leading the charge.

Cogent Communications Holdings, Inc. (CCOI) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

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Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CCOI

CCOI fundamentals

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