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What changed in COGENT COMMUNICATIONS HOLDINGS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of COGENT COMMUNICATIONS HOLDINGS, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+521 added−514 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-28)

Top changes in COGENT COMMUNICATIONS HOLDINGS, INC.'s 2025 10-K

521 paragraphs added · 514 removed · 396 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

127 edited+41 added−14 removed49 unchanged
Biggest changeSecond, it has been well maintained by a tenured engineering and field team, many of whom transitioned with the acquisition and remain employed with the Company. Third, the fiber is buried deeper than newer networks with stronger sheathing, mitigating some of the damage caused by inadvertent cuts.
Biggest changeWhile the Sprint Network was built in the 1980s (the nation’s first transcontinental fiber network), we believe it is of high quality and superior to many newer networks. ● First, it has had only one owner, which ensures accurate and up-to-date records and mapping. ● Second, it has been well maintained by a tenured engineering and field team, many of whom transitioned with the Acquisition and remain employed with the Company. ● Third, the fiber is largely buried along railroad lines, making it less susceptible to inadvertent cuts, and is buried deeper than newer networks with stronger sheathing, mitigating some of the damage caused by inadvertent cuts. ● Lastly, it is one consistent standard of fiber – SMF28 - which is ideal for the requirements of today’s traffic, particularly wave services, with the new optronics we are adding to the Optical Wave Network.
Acquisition of the Sprint Business On May 1, 2023 (the “Closing Date”), Cogent Infrastructure, Inc., (now Cogent Infrastructure, LLC), a Delaware corporation and our direct wholly owned subsidiary (the “Buyer” or “Cogent Infrastructure”), closed on its acquisition of the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications and its Subsidiaries (the “Sprint Business”) in accordance with the terms and conditions of the Membership Interest Purchase Agreement (the “Purchase Agreement”), dated September 6, 2022, by and among us, Sprint Communications LLC, a Kansas limited liability company (“Sprint Communications”) and an indirect wholly owned subsidiary of T-Mobile US, Inc., a Delaware corporation (“T-Mobile”), and Sprint LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of T-Mobile (the “Seller”).
Acquisition of the Cogent Fiber Business On May 1, 2023 (the “Closing Date”), Cogent Infrastructure, Inc., (now Cogent Infrastructure, LLC), a Delaware corporation and our direct wholly owned subsidiary (the “Buyer” or “Cogent Infrastructure”), closed on its acquisition of the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications and its Subsidiaries (the “Cogent Fiber Business”) in accordance with the terms and conditions of the Membership Interest Purchase Agreement (the “Purchase Agreement”), dated September 6, 2022, by and among us, Sprint Communications LLC, a Kansas limited liability company (“Sprint Communications”) and an indirect wholly owned subsidiary of T-Mobile US, Inc., a Delaware corporation (“T-Mobile”), and Sprint LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of T-Mobile (the “Seller”).
We intend to further load our high-capacity network as a result of the growing demand for high-speed Internet access generated by these types of bandwidth-intensive applications such as over-the-top media services, online gaming, video, Internet of Things, voice over IP, remote data storage, and other services.
We intend to further load our high-capacity IP Network as a result of the growing demand for high-speed Internet access generated by these types of bandwidth-intensive applications such as over-the-top media services, online gaming, video, Internet of Things, voice over IP, remote data storage, and other services.
The per bit charge for this burst capacity typically exceeds the rate for contractual services. Overall, we believe that, on a per megabit basis, our service offering is one of the lowest priced in the marketplace. We also offer colocation services in our data centers.
The charge per bit for this burst capacity typically exceeds the rate for contractual services. Overall, we believe that, on a per megabit basis, our service offering is one of the lowest priced in the marketplace. We also offer colocation services in our data centers.
On average, a modest number of our dark fiber leases come up for renewal each year. In addition, with our acquisition of the Sprint Business, we now own a nationwide domestic fiber network (the “Sprint Network”). Acquiring the Sprint Network allows us to capitalize on the benefits of owning network without significant upfront capital investment.
On average, a modest number of our dark fiber leases come up for renewal each year. In addition, with our acquisition of the Cogent Fiber Business, we now own a nationwide domestic fiber network (the “Sprint Network”). Acquiring the Sprint Network allows us to capitalize on the benefits of owning network without significant upfront capital investment.
We also seek to create a diverse workplace that is respectful of all employees, as we believe this is critical to fostering an employee culture that can deliver the best service in our industry to our customers. Our human capital objectives and initiatives are overseen by the Compensation Committee of our Board of Directors. Workforce.
We also seek to create a diverse workplace that is respectful of all employees, as we believe this is critical to fostering an employee culture that can deliver the best service in our industry to our customers. Our human capital objectives and initiatives are overseen by the Compensation Committee of our Board of Directors.
We believe that these network points of presence strategically position our network to attract high levels of Internet traffic and maximize our revenue opportunities and profitability. Balanced, High-Traffic IP Network. Since its inception, our network has grown significantly in terms of its geographic reach, customer connections, and traffic.
We believe that these network points of presence strategically position our networks to attract high levels of Internet traffic and maximize our revenue opportunities and profitability. Balanced, High-Traffic IP Network. Since its inception, our IP Network has grown significantly in terms of its geographic reach, customer connections, and traffic.
Our service is initiated by connecting a fiber optic cable from our customer’s local area network in its suite to the infrastructure in the building riser giving our customer dedicated and secure access to our network using an Ethernet connection.
Our service is initiated by connecting a fiber optic cable from our customer’s local area network in its suite to the infrastructure in the building riser giving our customer dedicated and secure access to our IP Network using an Ethernet connection.
On the Closing Date, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) of Wireline Network Holdings LLC, a Delaware limited liability company that, following an internal restructuring and divisive merger, holds Sprint Communications’ assets and liabilities relating to the Sprint Business (such transactions contemplated by the Purchase Agreement, collectively, the “Transaction”).
On the Closing Date, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) of Wireline Network Holdings LLC, a Delaware limited liability company that, following an internal restructuring and divisive merger, holds Sprint Communications’ assets and liabilities relating to the Cogent Fiber Business (such transactions contemplated by the Purchase Agreement, collectively, the “Transaction”).
While the Internet access speeds offered by traditional ISPs serving MTOBs using DSL or cable modems typically do not match our on-net offerings in terms of throughput or quality, these slower services are usually priced lower than our offerings and thus provide competitive pressure on pricing, particularly for more price-sensitive customers.
While the Internet access speeds offered by traditional ISPs serving MTOBs using DSL or cable modems or fixed wireless typically do not match our on-net offerings in terms of throughput or quality, these slower services are usually priced lower than our offerings and thus provide competitive pressure on pricing, particularly for more price-sensitive customers.
The reports are also made available through a link to the Securities and Exchange Commission (SEC)’s Internet website at www.sec.gov . You can find these reports and request a copy of our Code of Conduct on our website at www.cogentco.com under the “About Cogent” tab at the “Investor Relations” link under “Reports” and under “Governance” at “Corporate Governance Documents.” ​
The reports are also made available through a link to the Securities and Exchange Commission (SEC)’s Internet website at www.sec.gov . You can find these reports and request a copy of our Code of Ethics on our website at www.cogentco.com under the “About Cogent” tab at the “Investor Relations” link under “Reports” and under “Governance” at “Corporate Governance Documents.” ​
Expand our Off-net Corporate and Enterprise Internet Access and VPN Business . We have agreements with over 700 national and international carriers providing us last mile network access to over 6 million commercial buildings that are lit by fiber optic cable in the countries we serve and that are not currently served by our network.
Expand our Off-net Corporate and Enterprise Internet Access and VPN Business . We have agreements with over 740 national and international carriers providing us last mile network access to over 6 million commercial buildings that are lit by fiber optic cable in the countries we serve and that are not currently served by our network.
We have expanded our network by acquiring owned and leased fiber through key acquisitions of financially distressed companies or their assets at a significant discount to their original cost. Due to our network design and acquisition strategy, we believe we are positioned to grow our revenue and increase our profitability with incremental capital expenditures.
We have expanded our IP Network by acquiring owned and leased fiber through key acquisitions of financially distressed companies or their assets at a significant discount to their original cost. Due to our network design and acquisition strategy, we believe we are positioned to grow our revenue and increase our profitability with limited incremental capital expenditures.
In such arrangements, each party exchanging traffic bears its own cost of delivering traffic to the point at which it is handed off to the other party. We do not treat our settlement-free peering arrangements as generating revenue or expense related to the traffic exchanged. We do not sell or purchase paid peering on our transit network.
In such arrangements, each party exchanging traffic bears its own cost of delivering traffic to the point at which it is handed off to the other party. We do not treat our settlement-free peering arrangements as generating revenue or expense related to the traffic exchanged. We do not sell or purchase paid peering on our IP Network.
In order to gain market share in our targeted businesses, we expect to continue our sales efforts including introducing strategies and tools to optimize and improve our sales productivity. We also intend to leverage the skills and relationships of our sales force to sell new service offerings, in particular, optical wavelength and optical transport services.
In order to gain market share in our targeted businesses, we expect to continue our sales efforts including introducing strategies and tools to optimize and improve our sales productivity. We also intend to leverage the skills and relationships of our sales force to sell our expanded service offerings, in particular, optical wavelength and optical transport services.
For the portions of our network that are leased under IRUs from providers, some of which compete with us, we do not have title to the dark fiber. We rely on the owner of this leased fiber to maintain the fiber.
For the portions of our networks that are leased under IRUs from providers, some of which compete with us, we do not have title to the leased dark fiber. We rely on the owner of this leased fiber to maintain the fiber.
Our intra-city networks are a combination of the 1,300 miles of owned Sprint Network and our IRU rights to use optical fiber that we obtained from carriers with optical fiber networks in those cities. These metropolitan networks consist of optical fiber that runs from the central router in a market into routers located in our on-net buildings.
Our intra-city networks are a combination of the 1,704 route miles of owned Sprint Network and our IRU rights to use optical fiber that we obtained from carriers with optical fiber networks in those cities. These metropolitan networks consist of optical fiber that runs from the central router in a market into routers located in our on-net buildings.
We have acquired a large portfolio of dark fiber leases from 369 dark fiber vendors from around the world sourced from the excess inventory of existing networks. The nature of this portfolio and the individual leases provide us long-term access to dark fiber at attractive rates and, in many cases, the opportunity to extend these leases for multiple terms.
We have acquired a large portfolio of dark fiber leases from over 380 dark fiber vendors from around the world sourced from the excess inventory of existing networks. The nature of this portfolio and the individual leases provide us long-term access to dark fiber at attractive rates and, in many cases, the opportunity to extend these leases for multiple terms.
In our on-net MTOBs, we provide our customers the entire network, including the “last mile” and the in-building fiber optic connections to our customer’s suite. In our CNDCs, we are collocated with our customers.
In our on-net MTOBs, we provide our customers their entire network connection, including the “last mile” and the in-building fiber optic connections to our customer’s suite. In our CNDCs, we are collocated with our customers.
We maintain, repair, upgrade and replace the Sprint Network and we pay our dark fiber vendors our annual pro rata fees for these same services, often called “operation and maintenance” for the leased optical fiber. For both the owned and leased portions of our fiber network, we provide our own equipment maintenance. Intra-city Networks.
We maintain, repair, upgrade and replace on the owned Sprint Network and we pay our dark fiber vendors our annual pro rata fees for these same services, often called “operation and maintenance” for the leased optical fiber. For both the owned and leased portions of our Optical Wave Network, we provide our own equipment maintenance. Intra-city IP Networks.
As a result of the size and breadth of our customer base and the extensive footprint and scale of our network, we are a Tier 1 ISP. We currently exchange traffic with 23 other Tier 1 ISPs on a settlement free basis. The remaining networks are customers whom we charge for Internet access.
As a result of the size and breadth of our customer base and the extensive footprint and scale of our IP Network, we are a Tier 1 ISP. We currently exchange traffic with 22 other Tier 1 ISPs on a settlement free basis. The remaining networks are customers whom we charge for Internet access.
With respect to our new optical wave and transport service, our competitors have offered these services for many years and have established customer bases and processes and practices. We also face competition from new entrants to the communications services market. Many of these companies offer products and services that are similar to our products and services.
With respect to our optical wavelength service, our competitors have offered these services for many years and have established customer bases and processes and practices. We also face competition from new entrants to the communications services market. Many of these companies offer products and services that are similar to our products and services.
It also allows us to provision services more quickly and efficiently than provisioning services on a third-party carrier network. The vast majority of our on-net Internet and VPN services can be installed in less than two weeks, which is materially faster than the installation times for some of our incumbent competitors. High-Quality, Reliable Service.
It also allows us to provision services more quickly and efficiently than provisioning services on a third-party carrier network. The vast majority of our on-net Internet and VPN services can be installed in less than two weeks, which is materially faster than the installation times for some of our incumbent competitors.
Our Customers We offer our services to three sets of customers: corporate customers, which primarily include small and medium-sized businesses located in North America, enterprise customers, and net-centric customers, which include, content providers, applications service providers and access networks, comprised of ISPs, cable operators, mobile operators and phone companies located in North America, Europe South America, Oceania and Africa.
Our Customers We offer our services to three sets of customers: corporate customers, which primarily include small and medium-sized businesses located in North America, enterprise customers, primarily from the Transaction, and net-centric customers, which include, content providers, applications service providers and access networks, comprised of ISPs, cable operators, mobile operators and phone companies located in North America, Europe, South America, Asia, Oceania and Africa.
Because of these bases of customers who distribute (content providers) and receive (access networks) content on our network, we believe that the majority of all the traffic remains “on-net” by both originating and terminating on our network. This control of traffic is an important differentiator as it increases our service reliability and speed of traffic delivery.
Because of the number of customers who distribute (content providers) and receive (access networks) content on our IP Network, we believe that the majority of all the traffic remains “on-net” by both originating and terminating on our IP Network. This control of traffic is an important differentiator as it increases our service reliability and speed of traffic delivery.
Our metropolitan fiber runs in a ring architecture, which provides redundancy so that if the fiber is cut, data in our IP network can still be transmitted to the central router by directing traffic in the opposite direction around the ring. The router in the building provides the connection to each of our on-net customers.
Our metropolitan fiber runs in a ring architecture, which provides redundancy so that if the fiber is cut, data in our IP network can still be transmitted to the central router by directing traffic in the opposite direction around the ring. The router in the building provides the connection to each of our on-net customers. Intra-city Optical Wave Network.
We expect that we will continue to grow our shares of these segments by offering our customers a series of attractive features including: ● Geographic breadth – We have one of the broadest CNDC footprints in the industry and currently offer network services in 56 countries – as net-centric customers seek a more international audience this footprint is a significant advantage; ● High capacity and reliability – We offer 100 Mbps to 100 Gbps ports in all of the CNDCs and 400 Gbps in selected locations on our network, which differentiates the capacity choices we provide our net-centric clients; ● Balanced customer base for IP services – Our leading share of content providers and access networks increases the amount of traffic that originates and terminates on our network thereby reducing latency and enhancing reliability; ● Large and dedicated salesforce – Our team of net-centric sales professionals is one of the largest salesforces in this industry segment and enables us to better serve this customer segment while also identifying new sales opportunities and gaining new business and customers; and ● Wave (optical transport services) – We began offering wave (optical transport services) to our net-centric customers who require these high bandwidth dedicated point-to-point services.
We expect that we will continue to grow our shares of these segments by offering our customers a series of attractive features including: ● Geographic breadth – We have one of the broadest CNDC footprints in the industry and currently offer network services in 57 countries – as net-centric customers seek a more international audience this footprint is a significant advantage; ● High capacity and reliability – We offer 100 Mbps to 100 Gbps ports in all of the CNDCs and 400 Gbps in selected locations on our IP Network, which differentiates the capacity choices we provide our net-centric customers; ● Balanced customer base for IP services – Our leading share of content providers and access networks increases the amount of traffic that originates and terminates on our IP Network thereby reducing latency and enhancing reliability; and Large and dedicated salesforce – Our team of net-centric sales professionals is one of the largest salesforces in this industry segment and enables us to better serve this customer segment while also identifying new sales opportunities and gaining new business and customers.
For example, the California Internet Consumer Protection and Net Neutrality Act, previously upheld by the U.S. Court of Appeals for the Ninth Circuit in 2022, is not impacted by the January 2025 ruling. Page 14 of 96 Table of Contents In all jurisdictions regulations continue to evolve. We also enter into new markets with their own regulations.
For example, the California Internet Consumer Protection and Net Neutrality Act, previously upheld by the U.S. Court of Appeals for the Ninth Circuit in 2022, is not impacted by the January 2025 ruling. In all jurisdictions regulations continue to evolve. We also enter into new markets with their own regulations.
On May 2, 2024, Cogent IPv4 LLC (the “IPv4 Issuer”), a special-purpose, bankruptcy remote, indirect wholly owned subsidiary of the Company, issued $206.0 million aggregate principal amount of 7.924% IPv4 Notes (the “IPv4 Notes”), with an anticipated term ending in May 2029 (such anticipated repayment date, the “ARD”), in an offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”).
On May 2, 2024, Cogent IPv4 LLC (the “IPv4 Issuer”), a special-purpose, bankruptcy remote, indirect wholly owned subsidiary of the Company, issued $206.0 million aggregate principal amount of 7.924% secured IPv4 address revenue notes, Series 2024-1 Class A-2 (the “Existing IPv4 Notes”), with an anticipated term ending in May 2029 (such anticipated repayment date, the “ARD”), in an offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”).
We believe that Ethernet is the lowest cost network connection technology and is almost universally used for the local area networks that businesses operate. Carrier Neutral Data Centers. Our network is collocated in and can provide connectivity to customers in 1,646 CNDCs located in 1,478 buildings across our footprint.
We believe that Ethernet is the lowest cost network connection technology and is almost universally used for the local area networks that businesses operate. Carrier Neutral Data Centers. Our IP Network collocated in and can provide connectivity to customers in 1,715 CNDCs located in 1,511 buildings across our footprint.
In addition to contractual capacity, certain net-centric customers also purchase metered service that enables customers to pay for actual volume of bits delivered on a per bit per second basis. We also offer a burst product that allows net-centric customers to utilize Page 11 of 96 Table of Contents capacity when they exceed their contractual capacity.
In addition to contractual capacity, certain net-centric customers also purchase metered service that enables customers to pay for actual volume of bits delivered on a per bit per second basis. We also offer a burst product that allows net-centric customers to utilize capacity when they exceed their contractual capacity.
Our fiber network connects directly to our on-net customers’ premises and we pay no local access (“last mile”) charges to other carriers to provide our on-net services. Continue to Improve our Sales Efforts and Productivity. A critical factor in our success has been our investment and focus on our sales and marketing efforts.
Our networks connect directly to our on-net customers’ premises and we pay no local access (“last mile”) charges to other carriers to provide our on-net services. Continue to Improve our Sales Efforts and Productivity. A critical factor in our success has been our investment and focus on our sales and marketing efforts.
Page 4 of 96 Table of Contents Corporate Structure after the Closing Date The Company operates through its two direct, wholly owned subsidiaries, Cogent Infrastructure and Cogent Communications Group, LLC (“Cogent Group”). Cogent Infrastructure holds the Sprint Business operations.
Page 4 of 104 Table of Contents Corporate Structure after the Closing Date The Company operates through its two direct, wholly owned subsidiaries, Cogent Infrastructure and Cogent Communications Group, LLC (“Cogent Group”). Cogent Infrastructure holds the Cogent Fiber Business assets and operations.
Peering agreements between ISPs enable them to exchange traffic.Without settlement-free peering agreements, each ISP backbone would have to buy Internet access from every other ISP backbone in order for its customer’s traffic to reach and be received from customers of other ISP backbones.
Without settlement-free peering agreements, each ISP backbone would have to buy Internet access from every other ISP backbone in order for its customer’s traffic to reach and be received from customers of other ISP backbones.
We believe the vast majority of our competitors currently operate their networks with multiple protocols and we believe that attempts to upgrade their networks to one protocol would be operationally challenging and costly. Page 5 of 96 Table of Contents ● Our IP Network .
We believe the vast majority of our competitors currently operate their networks with multiple protocols, and we believe that attempts to upgrade their networks to one protocol would be operationally challenging and costly. ● Our IP Network .
We continue to negotiate reduced pricing under our numerous carrier agreements that enable us to reduce our cost of off-net services, which enhances our competitive position in the marketplace. Page 8 of 96 Table of Contents Expand our Product Offerings to Include Wavelength - Optical Transport Services .
We continue to negotiate reduced pricing under our numerous carrier agreements that enable us to reduce our cost of off-net services, which enhances our competitive position in the marketplace. Expand our Product Offerings to Include Wavelength and Optical Transport Services .
The breadth of our network, extensive size of our customer base, and the volume of our traffic enables us to be one of a handful of Tier 1 networks that are interconnected on a settlement-free basis. This Tier 1 network peering status broadens our geographic delivery capability and materially reduces our network costs. Proven and Experienced Management Team .
The breadth of our IP Network, extensive size of our customer base, and the volume of our traffic enables us to be one of a handful of Tier 1 networks that are interconnected with other Tier 1 networks on a settlement-free basis. This Tier 1 network peering status broadens our geographic delivery capability and materially reduces our network costs.
Typically, these circuits are aggregated at various locations in those cities onto higher-capacity leased circuits that ultimately connect the local aggregation router to our network. Multi-Tenant Office Buildings. We have network access to a portfolio of 1,871 MTOBs which provide us access to a highly attractive base of bandwidth intensive tenants.
Typically, these circuits are aggregated at various locations in those cities onto higher-capacity leased circuits that ultimately connect the local aggregation router to our network. Multi-Tenant Office Buildings. Our IP Network is directly connected to a portfolio of 1,881 MTOBs which provide us access to a highly attractive base of bandwidth intensive tenants.
We have moved and may continue to move, to the extent permitted by and in compliance with the indentures governing our 2026 Notes, 2027 Notes, 2027 Mirror Notes and IPv4 Notes, certain assets and obligations between the companies owned by Cogent Infrastructure and Cogent Group to better align these assets and obligations with our business and operations and for general corporate purposes.
Page 5 of 104 Table of Contents We have moved and may continue to move, to the extent permitted by and in compliance with the indentures governing our 2027 Notes, 2027 Mirror Notes, 2032 Notes and our IPv4 Notes, certain assets and obligations between the companies owned by Cogent Infrastructure and Cogent Group to better align these assets and obligations with our business and operations and for general corporate purposes.
Our corporate customers primarily purchase our services from us on-net in MTOBs and CNDCs or off-net through other carriers’ “last mile” connections to those customer facilities in metropolitan markets in North America.
Page 13 of 104 Table of Contents Our corporate customers primarily purchase our services from us on-net in MTOBs and CNDCs or off-net through other carriers’ “last mile” connections to those customer facilities in metropolitan markets in North America.
Page 9 of 96 Table of Contents Inter-city Network. Our inter-city network consists of optical fiber, including transoceanic capacity circuits for undersea portions, connecting major cities in North America, Europe, South America, Oceania and Africa.
Page 11 of 104 Table of Contents Inter-city IP Network. Our inter-city IP network consists of optical fiber, including transoceanic capacity circuits for undersea portions, connecting major cities in North America, Europe, South America, Asia, Oceania and Africa.
From the Closing Date through December 31, 2024,624 of these employees remained - we terminated 151 of these employees and 167 voluntarily resigned after a material reduction in their job duties. We paid approximately $28.6 million in severance costs, to qualifying employees, in accordance with the terms of the Purchase Agreement.
From the Closing Date through December 31, 2025, 569 of these employees remained - we terminated 168 of these employees and 205 voluntarily resigned after a material reduction in their job duties. We paid approximately $28.6 million in severance costs, to qualifying employees, in accordance with the terms of the Purchase Agreement.
We believe our standing as a Tier 1 ISP provides us with a reputation for size, breadth and reliability. These relationships also reduce our cost of operating the network versus non-Tier 1 ISP peer networks who must compensate other networks in order to deliver a significant portion of their traffic.
We believe our standing as a Tier 1 ISP provides us with a reputation for size, breadth and reliability. These relationships also reduce our cost of operating our IP Network versus non-Tier 1 ISP peer networks who must compensate other networks in order to deliver a significant portion of their traffic. Peering agreements between ISPs enable them to exchange traffic.
There are significant cost advantages because of this narrow product set. We believe that the relative size of our salesforce training, support and overhead is lower than comparable telecom providers that tend to offer a broader, one-stop shop product set to their client base. ● Scalable Network Equipment and Hub Configurations .
We believe that the relative size of our salesforce training, support and overhead is lower than comparable telecom providers that tend to offer a broader, one-stop shop product set to their client base. ● Scalable Network Equipment and Hub Configurations .
For the year ended December 31, 2024, our ratio of sales representatives with less than 12 months of tenure to regional learning managers was 20 to 1.
For the year ended December 31, 2025, our ratio of sales representatives with less than 12 months of tenure to regional learning managers was 16.7 to 1.
We have developed several training programs that are directed toward increasing our sales representative tenure and increasing our sales representative productivity. In addition, we have required all of our employees to work in the office on a full-time basis, thereby providing additional opportunities for management coaching and oversight in order to increase productivity.
We have developed several training programs that are directed toward increasing our sales representative tenure and increasing our sales representative productivity. In addition, when consistent with their job description and responsibilities, we require all of our employees to work in the office on a full-time basis, thereby providing additional opportunities for management coaching and oversight in order to increase productivity.
Network Management and Customer Care. Following our acquisition of the Sprint Business, our primary network operations centers are located in Washington, D.C., Herndon, Virginia, Overland Park, Kansas and Madrid, Spain. These facilities provide continuous operational support for our network. Our network operations centers are designed to immediately respond to any problems in our network.
Network Management and Customer Care. Our primary network operations centers are located in Washington, D.C., Herndon, Virginia, Overland Park, Kansas and Madrid, Spain. These facilities provide continuous operational support for both of our networks. Our network operations centers are designed to immediately respond to any problems in either network.
Our corporate customers are located in multi-tenant office buildings that typically include law firms, financial services firms, advertising and marketing firms, as well as health care providers, educational institutions and other professional services businesses.
Our corporate customers are typically located in multi-tenant office buildings and consist of law firms, financial services firms, advertising and marketing firms, health care providers, educational institutions and other professional services businesses.
We are able to offer high-quality Internet service due to our network design and composition. We believe that we deliver a high level of technical performance because our network is optimized for packet routed traffic. Its design increases the speed and throughput of our network and reduces the number of data packets dropped during transmission compared to traditional circuit-switched networks.
We believe that we deliver a high level of technical performance because our IP Network is optimized for packet routed traffic. Its design increases the speed and throughput of our IP Network and reduces the number of data packets dropped during transmission compared to traditional circuit-switched networks.
CNDCs offer highly reliable, secure, cost effective and convenient space for these operators to access important services including connectivity, power, rack space and security all on a 24-hour basis in order to support their Internet activities, and after our acquisition of the Sprint Business, wavelength services.
CNDCs offer highly reliable, secure, cost effective and convenient space for these operators to access important services including connectivity, power, rack space and security all on a 24-hour basis in order to support their Internet and wavelength services.
Following the Closing Date, Cogent Infrastructure, through its subsidiaries, owned, among other things, the Sprint Network (as defined below), consisting of approximately 20,800 route miles of owned fiber optic cable in the continental United States, a portfolio of owned and leased properties totaling approximately 1.9 million square feet, Sprint operating subsidiaries in over 30 countries worldwide, approximately 1,300 Sprint customers, both enterprise and net-centric, vendor and supply agreements and 9.9 million IPv4 addresses.
Following the Closing Date, Cogent Infrastructure, through its subsidiaries, owned, among other things, the Sprint Network (as defined below), consisting of approximately 23,500 route miles of owned fiber optic cable in the continental United States, a portfolio of owned and leased properties totaling approximately 1.9 million square feet, Sprint operating subsidiaries in approximately 10 countries worldwide, vendor and supply agreements and 9.9 million IPv4 addresses.
Cogent Group is the parent of Cogent Communications, LLC (formerly Cogent Communications, Inc.), which was our sole operating company prior to the Closing Date, and Cogent Group is the issuer of our $500.0 million of 3.50% senior secured notes due in May 2026 (“2026 Notes”) and our $750.0 million of 7.00% senior unsecured notes due in June 2027 of which $450.0 million were issued in June 2022 (“2027 Notes”) and $300.0 million were issued in June 2024 (“2027 Mirror Notes”).
Cogent Group is the parent of Cogent Communications, LLC (formerly Cogent Communications, Inc.), which was our sole operating company prior to the Closing Date, and Cogent Group is the issuer of our $750.0 million of 7.00% senior unsecured notes due in June 2027 of which $450.0 million were issued in June 2022 (“2027 Notes”) and $300.0 million were issued in June 2024 (“2027 Mirror Notes”) and our $600.0 million of 6.50% senior secured notes due July 2032 (“2032 Notes”) that were issued in June 2025.
We intend to increase usage of our network and operational infrastructure by adding customers in our existing on-net buildings, as well as developing additional markets and connecting more MTOBs and CNDCs to our network. We are also upgrading our network and operational infrastructure to provide wave and optical transport services in more of our on - net buildings.
We intend to increase usage of our networks and operational infrastructure by adding customers in our existing on-net buildings, as well as developing additional markets and connecting more MTOBs and CNDCs to our IP Network and connecting more CNDCs to our Optical Wave Network.
This strategic combination of owned and leased dark fiber will help to ensure a robust and reliable network and enables us to connect via dark fiber to virtually any geographic route or facility we require on a long-term, cost-effective basis. ● Optical Wave Network - Acquiring the Sprint Network has also allowed us to construct a wavelength network using the predominantly owned fiber.
This strategic combination of owned and leased dark fiber will help to ensure a robust and reliable network and enables us to connect via dark fiber to virtually any geographic route or facility we require on a long-term, cost-effective basis. ● Optical Wave Network.
As of December 31, 2024, 34% of our employees were quota-bearing sales representatives, 10% were in sales management or sales support roles and 56% were in operational or administrative functions. Unions represent 30 of our employees in France and 4 of our employees in Sweden.
As of December 31, 2025, 32% of our employees were quota-bearing sales representatives, 10% were in sales management or sales support roles and 58% were in operational or administrative functions. Unions represent 35 of our employees in France and 4 of our employees in Sweden.
Our ability to recruit and retain all of our employees depends on a number of factors, including professional development, compensation and benefits, and employee engagement. Page 12 of 96 Table of Contents A total of 942 employees transitioned to the Company on the Closing Date in connection with the acquisition of the Sprint Business.
Our ability to recruit and retain all of our employees depends on a number of factors, including professional development, compensation and benefits, and employee engagement. A total of 942 employees joined the Company on the Closing Date in connection with the acquisition of the Cogent Fiber Business.
Our network consists of owned optical fiber in the Sprint Network and leased optical fiber on a long-term basis from carriers with large amounts of unused fiber to which we directly connect our own optical equipment and Internet routers to form our optical fiber national backbone.
Our IP Network consists of owned optical fiber in the Sprint Network that is leased to our operating subsidiary, Cogent Communications LLC, on an inter-company basis and leased optical fiber on a long-term basis from carriers with large amounts of unused fiber to which we directly connect our own optical equipment and Internet routers to form our optical fiber national backbone.
In connection with our acquisition of the Sprint Business, we expanded our offerings of optical wavelength - optical transport services over our fiber network.
In connection with our acquisition of the Cogent Fiber Business, we expanded our offerings to include optical wavelength and optical transport services over our Optical Wave Network.
During the year ended December 31, 2024, we hired 443 new sales representatives and ended the year with 650 sales representatives, a net decrease of 7 sales representatives from our total sales representatives at December 31, 2023.
During the year ended December 31, 2025, we hired 414 new sales representatives and ended the year with 590 sales representatives, a net decrease of 60 sales representatives from our total sales representatives at December 31, 2024.
As of December 31, 2024, our sales force included 843 full-time employees. Our quota-bearing sales force includes 650 employees with 347 employees focused primarily on the corporate market, 288 employees focused primarily on the net-centric market and 15 employees focused primarily on the enterprise market. As of December 31, 2023, our sales force included 847 full-time employees.
As of December 31, 2025, our quota-bearing sales force includes 590 employees with 289 employees focused primarily on the corporate market, 289 employees focused primarily on the net-centric market and 12 employees focused primarily on the enterprise market. As of December 31, 2024, our sales force included 843 full-time employees.
In addition to providing on-net services, we provide Internet access and private network services to customers that are not located in buildings directly connected to our network. We provide these off-net services primarily to corporate customers using other carriers’ circuits to provide the “last mile” portion of the link from the customers’ premises to our network.
In addition to on-net services delivered via our own facilities, we provide Internet access and private network services to customers not located in buildings directly connected to our network. We provide these “off-net” services primarily to corporate customers using third-party carriers’ circuits to provide the “last mile” portion of the link from the customers’ premises to our network.
This service offers Internet access combined with rack space and power in our facilities, allowing the customer to locate a server or other equipment at that location and connect to our Internet access service. We currently offer wavelength services in 808 CNDCs, in the United States and Mexico.
This service offers Internet access combined with rack space and power in our facilities, allowing the customer to locate a server or other equipment at that location and connect to our Internet access service. We currently offer wavelength services in 1,068 locations, in the United States, Canada and Mexico. Many of our net-centric customers also purchase our optical wavelength services.
As a provider of only Internet access and private networks to businesses, regulation is generally not significant. This benefits us in that we have flexibility in offering our services and ease of entry into new markets.
Regulation Our network services are subject to the regulatory authority of various agencies in the jurisdictions in which we operate. As a provider of only Internet access, private networks and optical wavelengths to businesses, regulation is generally not significant. This benefits us in that we have flexibility in offering our services and ease of entry into new markets.
While we are in the process of terminating certain non-core services to these customers at the end of their current term, we have continued to provide our core services to enterprise customers and elected to provide MPLS based VPN as well as VPLS services, a new service for the Company, as well.
We have continued to provide our core services to enterprise customers and elected to provide MPLS based VPN as well as VPLS services, a new service for these customers, but continue to terminate unprofitable services to these customers at the end of their current term.
We compete in an industry that is highly competitive for talent. Attracting, developing and retaining skilled people in sales, technical and other positions is crucial to executing our strategy and our ability to compete effectively.
Attracting, developing and retaining skilled people in sales, technical and other positions is crucial to executing our strategy and our ability to compete effectively.
Pursue On-net Customer Growth. Our high-capacity network provides us with the ability to add a significant number of customers to our network with minimal direct incremental costs.
Pursue On-net Customer Growth to Corporate and Net - centric Customers. Our high-capacity networks provide us with the ability to add a significant number of customers to either network, depending on the service offering, with minimal direct incremental costs.
We have not previously focused our sales efforts on larger enterprise customers. Since the acquisition of the Sprint Business, we have formed dedicated sales teams who are tasked with preserving existing business with and seeking new sales from enterprise customers. Increase our Share of the Net-Centric Market .
Since the acquisition of the Cogent Fiber Business, we have formed dedicated sales personnel who are tasked with preserving existing business with and seeking new sales from enterprise customers. Increase our Share of the Net-Centric IP Market .
Our sales and marketing organization comprises 45% of our employees and our sales representatives comprise 34% of our employees. For the year ended December 31, 2024, we averaged a 5.7% monthly churn rate within our sales representatives.
Our sales and marketing organization comprises 43% of our employees and our sales representatives comprise 32% of our employees. For the year ended December 31, 2025, we averaged a 6.4% monthly churn rate within our sales representatives.
Within the cities where we offer our off-net Internet access services, we lease lit circuits from telecommunications carriers, primarily local telephone companies and cable TV companies, to provide the “last mile” connection to our customer’s premises.
The optical equipment in the building enables us to provide services to each of our optical wavelength service customers. Off-Net Last Mile Connections. Within the cities where we offer our off-net Internet access services, we lease lit circuits from telecommunications carriers, primarily local telephone companies and cable TV companies, to provide the “last mile” connection to our customer’s premises.
Our net-centric customers purchase our services in our 1,646 CNDCs as well as our 104 data centers and 55 Cogent edge data centers for a total of 1,805 data centers. We support these services in 264 metropolitan markets in 56 countries across the world.
Our net-centric customers purchase our IP services in our 1,715 CNDCs as well as our 100 Cogent data centers and 87 Cogent edge data centers for a total of 1,902 data centers. We support these services in 305 metropolitan markets in 57 countries across the world.
The addition of optical wave and optical transport services, our direct, VPN connection to cloud providers services and our decision to continue to support MPLS virtual private network (“VPN”) services for our acquired customers are consistent with this strategy. Consistent with this strategy, we have pared, and continue to pare, non-core services acquired with the Sprint Business.
The addition of optical Page 6 of 104 Table of Contents wave and optical transport services, our direct, virtual private network (“VPN”) connection to cloud providers services and our decision to continue to support MPLS based VPN services for our acquired customers are consistent with this strategy.
As of December 31, 2024, we had 1,916 employees located in 25 different countries in a variety of different roles. Approximately 88% of our employees are located in the United States, Canada and Mexico, 11% are located in Europe, 2% are located in Oceania and 0.2% in South America.
Page 14 of 104 Table of Contents Workforce. As of December 31, 2025, we had 1,833 employees located in 24 different countries in a variety of different roles. Approximately 87% of our employees are located in the United States, Canada and Mexico, 11% are located in Europe, 2% are located in Oceania and 0.2% in South America.
We are selling these wavelength services to our existing customers, customers of Sprint Communications and to new customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating network infrastructure.
We offer these wavelength and optical transport services to customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating their own network infrastructure.
Our net-centric customers include bandwidth-intensive users that leverage our network either to deliver content to end users or to provide access to residential or commercial Internet users. Content delivery customers include over the top media service providers, content delivery networks, web hosting companies, and commercial content and application software providers.
Our net-centric customers include access networks comprised of other internet service providers (“ISPs”), telephone companies, mobile operators and cable television companies as well as bandwidth-intensive users that leverage our network to deliver content to end users. Content delivery customers include over the top media service providers, content delivery networks, web hosting companies, and commercial content and application software providers.
We believe that our organization has the following competitive advantages: Low Cost of Operation: We believe that the wireline telecom industry is undergoing, and will continue to face, significant price deflation for its applications and services.
We believe that the wireline telecom industry is undergoing, and will continue to face, significant price deflation for its applications and services.
Since our initiation of operations, this strategy has resulted in a rapid decline in our cost to transmit bits, which has increased our margins and decreased our capital intensity as measured by our capital expenditures per total revenues. Important components of our low-cost operating strategy include: ● One Network Protocol .
Since our initiation of operations, this strategy has resulted in a rapid decline in our cost to transmit bits, which has increased our margins and decreased our capital intensity, excluding capital expenditures for the repurposing of acquired Sprint assets, as measured by our capital expenditures per total revenues.
Our inter-city network is comprised of the approximately 19,000-mile inter-city portion of the Sprint Network and long-term, leased strands of optical fiber, typically two to four, out of the multiple fibers owned from various dark fiber vendors. We install the optical and electronic equipment necessary to amplify, regenerate, and route the optical signals along this network.
Our inter-city Optical Wave Network is comprised primarily of the approximately 19,000-mile inter-city portion of the Sprint Network, augmented by long-term, leased strands of optical fiber, typically two to four strands, out of the multiple fibers owned from various dark fiber vendors.
Our customer care call centers are located in Washington, D.C., Herndon, Virginia, Atlanta, Georgia, and Madrid, Spain. To ensure the quick replacement of faulty equipment in the intra-city and long-haul networks, we have deployed field engineers across North America and Europe. In addition, we have maintenance contracts with third-party vendors that specialize in maintaining optical and routed networks. Field Services.
Our customer care call centers are located in Washington, D.C., Herndon, Virginia, Atlanta, Georgia, and Madrid, Spain. To ensure the quick replacement of faulty equipment in the intra-city and long-haul portions of both the IP Network and the Optical Wave Network, we have deployed field engineers across North America, Europe, South America and Asia.
By December 31, 2024, we had converted the former Sprint facilities into 48 Cogent data centers and 55 Cogent edge data centers. In connection with this conversion process, we expect to decommission certain legacy Cogent data centers. Increase our Leasing of IPv4 Address Space .
By December 31, 2025, we had converted the former Sprint facilities into 52 Cogent data centers and 87 Cogent edge data centers. In connection with this conversion process, we also decommissioned certain legacy Cogent data centers. Page 10 of 104 Table of Contents Increase our Leasing of IPv4 Address Space .
Additional factors relevant to our pursuit of new buildings include the willingness of building owners to grant us access rights, the availability of optical fiber networks to serve those buildings, the costs to connect buildings to our network and equipment availability.
Additional factors relevant to our pursuit of new buildings include the willingness of building owners to grant us access rights, the availability of optical fiber networks to serve those buildings, the costs to connect buildings to our network and equipment availability. Our IP Network is connected to a total of 3,579 buildings that are located in 305 metropolitan markets globally.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks include: ● inability to achieve the financial and strategic goals for the Sprint Business and the combined businesses; ● inability to achieve the projected cost savings for the Sprint Business and the combined businesses and the resulting impact on profitability; ● difficulty in, and the cost of, effectively integrating the operations, technologies, products or services, and personnel of the Sprint Business; ● entry into markets in which we have minimal prior experience and where competitors in such markets have stronger market positions; ● disruption of our ongoing business and distraction of our management and other employees from other opportunities and challenges; ● inability to retain key personnel of the Sprint Business; ● inability to retain key customers, vendors and other business partners of the Sprint Business or to migrate customers from legacy the Sprint Business services; ● any non-occurrence of anticipated tax benefits or potential for adverse tax consequences; ● the effects of complex accounting requirements on our reported results; ● incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results; ● elevated delinquency or bad debt write-offs related to receivables of the Sprint Business; ● impairment of our relationships with employees, customers, partners, distributors or third-party providers of our technologies, products or services; ● failure of our due diligence processes to identify significant problems, liabilities or other challenges of the Sprint Business or technology; ● exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, the Transaction, such as claims from terminated employees, customers, or other third parties; ● delay in customer purchasing decisions due to uncertainty about the direction of our product and service offerings; Page 16 of 96 Table of Contents ● Transition Services (as defined below) costs for longer than anticipated; ● increased accounts receivables collection times and working capital requirements associated with business models of the Sprint Business; and ● incompatibility of business cultures.
Biggest changeThe integration process involves numerous risks, including: ● inability to achieve the financial and strategic goals for the Cogent Fiber Business and the combined businesses; Page 18 of 104 Table of Contents ● inability to achieve the projected cost savings for the Cogent Fiber Business and the combined businesses and the resulting impact on profitability; ● difficulty in, and the cost of, effectively integrating the operations, technologies, products, services, and personnel of the Cogent Fiber Business; ● entry into markets in which we have minimal prior experience and where competitors have stronger market positions; ● disruption of our ongoing business and distraction of management and other employees from other opportunities and challenges; ● inability to retain key personnel; ● inability to retain key customers, vendors and other business partners or to successfully migrate customers from legacy Cogent Fiber Business services; ● any non-occurrence of anticipated tax benefits or potential for adverse tax consequences; ● the effects of complex accounting requirements on our reported results; ● incurring acquisition-related costs or amortization or impairment costs for acquired intangible assets that could impact our operating results; ● elevated delinquency or bad debt write-offs related to the acquired customers of the Cogent Fiber Business; ● impairment of relationships with employees, customers, partners, distributors or third-party providers of our technologies, products or services; ● failure of due diligence processes to identify significant problems, liabilities or other challenges of the Cogent Fiber Business or technology; ● exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, the Transaction, such as claims from terminated employees, customers, or other third parties; ● delay in customer purchasing decisions due to uncertainty about the direction of our product and service offerings; ● increased accounts receivables collection times and working capital requirements associated with business model of the Cogent Fiber Business; and ● incompatibility of business cultures.
Our historical reductions in our prices are expected to continue in an inflationary economy even as our costs may increase. Many of the regions in which we operate continue to experience an increase in or elevated inflation rates.
Historical reductions in our prices are expected to continue in an inflationary economy even as our costs may increase. Many of the regions in which we operate continue to experience an increase in or elevated inflation rates.
Our business is premised on the idea that customers want simple Internet access and private networks rather than a combination of such services with other services such as voice services and complex managed services. Our competitors offer such services. Should the market come to favor such services our ability to acquire and keep customers would be impaired.
Our Internet business is premised on the idea that customers want simple Internet access and private networks rather than a combination of such services with other services such as voice services and complex managed services. Our competitors offer such services. Should the market come to favor such services our ability to acquire and keep customers would be impaired.
All of these matters could inhibit our ability to remain a low-cost carrier and could have a material adverse effect on our business, financial condition and our results of operations.
All of these matters could inhibit our ability to remain a low-cost carrier and could have a material adverse effect on our business, financial condition and results of operations.
They could have a material adverse effect on our business, financial condition and our results of operations. Changes in laws, rules and enforcement may also adversely affect our customers. For example, a possible repeal or curtailing of Section 230 of the Communications Decency Act in the United States could have an adverse impact on our customers and, consequently, on us.
They could have a material adverse effect on our business, financial condition and results of operations. Changes in laws, rules and enforcement may also adversely affect our customers. For example, a possible repeal or curtailing of Section 230 of the Communications Decency Act in the United States could have an adverse impact on our customers and, consequently, on us.
In order to obtain Internet connectivity for our network, we must establish and maintain relationships with other ISPs and certain of our larger customers. These providers may be customers (who connect their network to ours by buying Internet access from us) or other large ISPs to whom we connect on a settlement-free peering basis as described below.
In order to obtain Internet connectivity for our IP Network, we must establish and maintain relationships with other ISPs and certain of our larger customers. These providers may be customers (who connect their network to ours by buying Internet access from us) or other large ISPs to whom we connect on a settlement-free peering basis as described below.
Further, if the United States imposes tariffs on other countries in which we operate, those countries may respond by imposing tariffs on imports from the United States. Any such tariffs may be applied to our equipment shipments from our US operating company to our international subsidiaries, increasing our costs and impacting our financial condition and results of operations.
Further, if the United States imposes additional tariffs on other countries in which we operate, those countries may respond by imposing tariffs on imports from the United States. Any such tariffs may be applied to our equipment shipments from our US operating company to our international subsidiaries, increasing our costs and impacting our financial condition and results of operations.
Competitive Risks Our connections to the Internet require us to establish and maintain relationships with other providers, which we may not be able to maintain. The Internet is composed of various network providers who operate their own networks that interconnect at public and private interconnection points. Our network is one such network.
Competitive Risks Our connections to the Internet require us to establish and maintain relationships with other providers, which we may not be able to maintain. The Internet is composed of various network providers who operate their own networks that interconnect at public and private interconnection points. Our IP Network is one such network.
An economic downturn could impact the Internet business more significantly than other businesses that are less dependent on new applications and growth in the use of those applications and less susceptible to increases in office vacancy rates resulting from the retrenchment by consumers and businesses that typically occurs in an economic downturn.
An economic downturn could impact the Internet business more significantly than other businesses that are less dependent on new Internet-based applications and growth in the use of those applications and less susceptible to increases in office vacancy rates resulting from the retrenchment by consumers and businesses that typically occurs in an economic downturn.
In most acquisitions, we have been successful in renegotiating the agreements that we have acquired. If we are unable to satisfactorily renegotiate such agreements in the future or with respect to future acquisitions, we may be exposed to large claims for payment for services and facilities we do not need.
In most acquisitions, we have been successful in renegotiating the agreements that we have acquired. However, if we are unable to satisfactorily renegotiate such agreements in the future or with respect to future acquisitions, we may be exposed to large claims for payment for services and facilities we do not need.
As we did not own a fiber network historically, the new responsibility necessitates an adjustment in our operational approach and poses challenges affecting the efficiency of maintenance activities.
As historically we did not own a fiber network, this new responsibility necessitates an adjustment in our operational approach and poses challenges affecting the efficiency of maintenance activities.
For instance, it could: ● make it more difficult for us to satisfy our financial obligations, including those relating to our debt; ● require us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, which will reduce funds available for other business purposes, including the growth of our operations, integration of the Sprint Business, capital expenditures, dividends, purchases of our common stock and acquisitions; ● place us at a competitive disadvantage compared with some of our competitors that may have less debt and better access to capital resources; and ● limit our ability to obtain additional financing required to fund working capital and capital expenditures, for strategic acquisitions and for other general corporate purposes.
For instance, it could: ● make it more difficult for us to satisfy our financial obligations, including those relating to our debt; ● require us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, which will reduce funds available for other business purposes, including the growth of our operations, integration of the Cogent Fiber Business, capital expenditures, dividends, purchases of our common stock and acquisitions; ● place us at a competitive disadvantage compared with some of our competitors that may have less debt and better access to capital resources; and ● limit our ability to obtain additional financing required to fund working capital and capital expenditures, for strategic acquisitions and for other general corporate purposes.
A migration of a few very large Internet users to their own networks, or to closed networks that may be offered by major telephone and cable providers of last mile broadband connections to consumers, or the loss or reduced purchases from several significant customers could impair our growth, cash flow and profitability.
A migration of a few very large customers to their own networks, or to closed networks that may be offered by major telephone and cable providers of last mile broadband connections to consumers, or the loss or reduced purchases from several significant customers could impair our growth, cash flow and profitability.
We also do not know the extent to which the providers of broadband Internet access to consumers may favor certain content or providers in ways that may disadvantage us. Operational Risks Our network may be the target of potential cyber-attacks and other security breaches that could have significant negative consequences.
We also do not know the extent to which the providers of broadband Internet access to consumers may favor certain content or providers in ways that may disadvantage us. Operational Risks Our networks may be the target of potential cyber-attacks and other security breaches that could have significant negative consequences.
We have historically experienced installation and maintenance delays when the network provider is devoting resources to other services, such as traditional telephony, cable TV services and private network services. We have also experienced pricing problems when a lack of alternatives allows a provider to charge high prices for capacity in a particular area or to a particular building.
We have historically experienced installation and maintenance delays when the network provider is devoting resources to other services, such as traditional telephony, cable TV services and private network services. We have also experienced pricing difficulties when a lack of alternatives allows a provider to charge high prices for capacity in a particular area or to a particular building.
Failure to acquire new facilities to augment our network could keep us from adding new markets, capacity or buildings to our network and negatively impact our growth opportunities. Our off-net business could suffer delays and problems due to the actions of “last mile” providers on whom we are partially dependent.
Failure to acquire new facilities to augment our networks could keep us from adding new markets, capacity or buildings to our networks and negatively impact our growth opportunities. Our off-net business could suffer delays and problems due to the actions of “last mile” providers on whom we are partially dependent.
We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services, including but not limited to cloud computing services. Our business depends on our ability to limit and mitigate interruptions to or degradation of the security of our network.
We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services, including but not limited to cloud computing services. Our business depends on our ability to limit and mitigate interruptions to or degradation of the security of our networks.
In addition, our IPv4 address securitization facility requires us to maintain a specified debt service coverage ratio. Failure to maintain the debt service coverage ratio at a specified triggered level could adversely affect our business, including full or partial amortization or an event of default, as applicable.
In addition, our IPv4 address securitization facility requires us to maintain a specified debt service coverage ratio. Failure to maintain the debt service coverage ratio at a specified triggered level could adversely affect our business, including full or partial amortization of the principal amount or an event of default, as applicable.
We are responsible for maintenance and repair of our owned fiber network. With the acquisition of the Sprint Business, our operations now include the ownership of a substantial fiber network. With this ownership, we assume the critical responsibility for the maintenance and repair of the entire fiber infrastructure. This introduces inherent risks that could impact our operational continuity.
We are responsible for maintenance and repair of our owned fiber network. With the acquisition of the Cogent Fiber Business, our operations now include the ownership of a substantial fiber network. With this ownership, we assume the critical responsibility for the maintenance and repair of the entire fiber infrastructure. This introduces inherent risks that could impact our operational continuity.
While we have negotiated contracts that cap price increases due to inflation or that have fixed the price of electricity, we have experienced and may continue to experience increases in the costs of electricity and other services that we cannot pass on to our customers or may only be able to pass on partially to our customers.
While, in certain cases, we have negotiated contracts that cap price increases due to inflation or that have fixed the price of electricity, we have experienced and may continue to experience increases in the costs of electricity and other services that we cannot pass on to our customers or may only be able to pass on partially to our customers.
Demand from certain employees to work remotely may reduce the attractiveness of our business as an employer versus some competitors who are allowing employees to work remotely. In the fall of 2021, we began to implement an in-office work policy designed to return the vast majority of our employees to an in-office work environment.
Demand from certain employees to work remotely may reduce the attractiveness of our business as an employer versus some competitors who are allowing employees to work remotely. In the fall of 2021, we began to implement a policy designed to return the vast majority of our employees to the office.
Throughout the year ended December 31, 2024, we observed a gradual reduction in vacancy rates and an upward trend in office occupancy rates but elevated vacancy rates remain in a number of markets, predominantly in California, Washington D.C. and the Pacific Northwest. Concurrently, there were encouraging developments in our corporate business.
Throughout the year ended December 31, 2025, we observed a gradual reduction in vacancy rates and an upward trend in office occupancy rates in certain markets but elevated vacancy rates remain in a number of markets, predominantly in California, Washington D.C. and the Pacific Northwest. Concurrently, there were encouraging developments in our corporate business.
While our top 25 customers represented approximately 17.6% of our revenue for the year ended December 31, 2024, several large net-centric customers are or may be the subject of increased regulatory scrutiny, which may impact their businesses and, consequently, their use of our services in unknown ways.
While our top 25 customers represented approximately 17% of our revenue for the year ended December 31, 2025, several large net-centric customers are or may be the subject of increased regulatory scrutiny, which may impact their businesses and, consequently, their use of our services in unknown ways.
A deterioration in our existing relationship with these operators could impact our network, harm our sales and marketing efforts and could substantially reduce our potential customer base. In addition, portions of our long-haul optical fiber and metro optical fiber are nearing the end of their original projected useful life.
A deterioration in our existing relationship with these counterparties could impact either network, harm our sales and marketing efforts and could substantially reduce our potential customer base. In addition, portions of our long-haul optical fiber and metro optical fiber are nearing the end of their original projected useful life.
The optical fiber cable owners from whom we have obtained our inter-city and intra-city dark fiber maintain that dark fiber. We are contractually obligated under the agreements with these carriers to pay maintenance fees, and if we are unable to continue to pay such fees, we would be in default under these agreements.
The optical fiber cable owners from whom we have leased inter-city and intra-city dark fiber maintain that dark fiber. We are contractually obligated under the agreements with these carriers to pay maintenance fees, and if we are unable to continue to pay such fees, we would be in default under these agreements.
Our inability to retain or attract such customers or to convert them to our services, could impair our growth, cash flow and profitability. The elimination of non-core and low margin products also has a negative impact on our enterprise revenue results.
Our inability to retain or attract such customers or to convert them to our services, could adversely affect our growth, cash flow and profitability. The elimination of non-core and low-margin products also has a negative impact on our enterprise revenue results.
If we are not able to maintain or increase our settlement-free peering relationships in all of our markets on favorable terms or to upgrade the capacity of our existing settlement-free peering relationships, customers may not upgrade their connections with us or we may not be able to provide our customers with high performance, affordable or reliable services, which could cause us to lose existing and potential customers, damage our reputation and have a material adverse effect on our business.
If we are not able to maintain or increase our settlement-free peering relationships in all of our markets on favorable terms or to upgrade the capacity of our existing settlement-free peering relationships, customers may not upgrade their Page 23 of 104 Table of Contents connections with us or we may not be able to provide our customers with high performance, affordable or reliable services, which could cause us to lose existing and potential customers, damage our reputation and have a material adverse effect on our business.
Even if we enter into these transactions, we may experience: ● delays in realizing or a failure to realize the benefits we anticipate; ● difficulties or higher-than-anticipated costs associated with integrating any acquired companies, products or services into our existing business; Page 18 of 96 Table of Contents ● attrition of key personnel from acquired businesses; ● additional costs or charges associated with the repurposing or retirement of acquired assets or the elimination of acquired non-core products and services; ● unexpected costs or charges; ● unforeseen operating difficulties that require significant financial and managerial resources that would otherwise be available for the ongoing development or expansion of our existing operations; and ● unforeseen difficulties or costs associated with the repurposing of the Sprint Network and buildings acquired with the Sprint Business.
Even if we enter into these transactions, we may experience: ● delays in realizing or a failure to realize the benefits we anticipate; ● difficulties or higher-than-anticipated costs associated with integrating any acquired companies, products or services into our existing business; ● attrition of key personnel from acquired businesses; ● additional costs or charges associated with the repurposing or retirement of acquired assets or the elimination of acquired non-core products and services; ● unexpected costs or charges; ● unforeseen operating difficulties that require significant financial and managerial resources that would otherwise be available for the ongoing development or expansion of our existing operations; and ● unforeseen difficulties or costs associated with the repurposing of the Sprint Network and buildings acquired with the Cogent Fiber Business.
We may incur significant delays and costs in restoring service to our customers in connection with future service interruptions, and as a result we may lose customers. With the Sprint Business acquisition, our reliance on agreements with landowners has increased.
We may incur significant delays and costs in restoring service to our customers in connection with future service interruptions, and as a result we may lose customers. With the Cogent Fiber Business acquisition, our reliance on agreements with landowners has increased.
Any adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs.
Any adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information can result in legal claims Page 25 of 104 Table of Contents or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs.
Our ability to manage our growth will be particularly dependent upon our ability to: ● expand, develop and retain an effective sales force and qualified personnel; ● maintain the quality of our operations and our service offerings; ● maintain and enhance our system of internal controls to ensure timely and accurate compliance with our financial and regulatory reporting requirements; and ● expand our accounting and operational information systems in order to support our growth.
Our ability to manage our growth will be particularly dependent upon our ability to: ● expand, develop and retain an effective sales force and qualified personnel; ● maintain the quality of our operations and our service offerings; ● maintain and enhance our system of internal controls to ensure timely and accurate compliance with our financial and regulatory reporting requirements; ● expand our accounting and operational information systems in order to support our growth; and ● successfully develop, market and support our optical wavelength services.
The FCC had promulgated rules that would have banned practices such as blocking and throttling of Internet traffic, but those rules were rescinded by the FCC in December 2017. A subsequent attempt to reintroduce these rules in 2024 was overturned by the U.S. Court of Appeals for the Sixth Circuit in 2025.
The FCC had promulgated rules that would have banned practices such as blocking and throttling of Internet traffic, but Page 24 of 104 Table of Contents those rules were rescinded by the FCC in December 2017. A subsequent attempt to reintroduce these rules in 2024 was overturned by the U.S. Court of Appeals for the Sixth Circuit in 2025.
Page 26 of 96 Table of Contents We may be required to censor content on the Internet, which we may find difficult to do and which may impact our ability to provide our services in some countries as well as impact the growth of Internet usage, upon which we depend.
Page 30 of 104 Table of Contents We may be required to censor content on the Internet, which we may find difficult to do and which may impact our ability to provide our services in some countries as well as impact the growth of Internet usage, upon which we depend.
To address these challenges, we may need to invest significantly in enhancing the climate resilience of our infrastructure and undertaking preparations, responses, and mitigation measures for the physical impacts of climate change. Despite these considerations, accurately predicting the materiality of potential losses or costs associated with these effects remains challenging.
To address these challenges, we may need to invest significantly in enhancing the climate resilience of our infrastructure and Page 27 of 104 Table of Contents undertaking preparations, responses, and mitigation measures for the physical impacts of climate change. Despite these considerations, accurately predicting the materiality of potential losses or costs associated with these effects remains challenging.
As with the privacy laws described earlier, much of the law related to the liability of Internet service providers for content on the network and the behavior of our customers and their end users remains unsettled. Some jurisdictions have laws, regulations, or court decisions that impose obligations upon ISPs to restrict access to certain content.
As with the privacy laws described above, much of the law related to the liability of ISPs for content on the network and the behavior of our customers and their end users remains unsettled. Some jurisdictions have laws, regulations, or court decisions that impose obligations upon ISPs to restrict access to certain content.
In the past, our acquisitions have often included assets, service offerings and financial obligations that are not compatible with our core business strategy. We have expended management attention and other resources to the divestiture of assets, modification of products and systems as well as restructuring financial obligations of acquired operations.
In the past, our acquisitions have often included assets, service offerings and financial obligations that are not compatible with our core business strategy. We have expended management attention and other resources to the divestiture of assets, modification of Page 21 of 104 Table of Contents products and systems as well as restructuring financial obligations of acquired operations.
We purchase our network infrastructure equipment from a small circle of vendors. Historically, we purchased from Cisco Systems, Inc. (“Cisco”) all of the routers and transmission equipment used in our network. We have expanded our suppliers of routers, added Arista Networks, Inc. (‘Arista”) as a provider for certain types of routers but Cisco remains our primary vendor for routers.
We purchase our network infrastructure equipment from a small number of vendors. Historically, we purchased from Cisco Systems, Inc. (“Cisco”) all of the routers and transmission equipment used in our IP Network. We have expanded our suppliers of routers, adding Arista Networks, Inc. (“Arista”) as a provider for certain types of routers but Cisco remains our primary vendor for routers.
In order to be consistently profitable and consistently cash flow positive, we need to both retain existing customers and continue to add a large number of new customers.
Business Risks We need to retain profitable existing customers and continue to add new customers in order to become consistently profitable and cash flow positive. In order to be consistently profitable and cash flow positive, we need to both retain existing profitable customers and continue to add a large number of new customers.
Additionally, these providers are often competing with us for the same customers and have marketed their own service to our off-net customers when our initial contract with our customer nears the end of its term. Page 23 of 96 Table of Contents Our business could suffer from an interruption of service from our fiber providers.
Additionally, these providers are often competing with us for the same customers and have marketed their own service to our off-net customers when our initial contract with our customer nears the end of its term. Our business could suffer from an interruption of service from our fiber providers.
All of our noteholders have the right to be paid the principal and any applicable premium upon an event of default and upon certain designated events, such as certain changes of control. Our total indebtedness at December 31, 2024 includes $538.4 million of finance lease obligations for dark fiber primarily under 15 to 42-year IRUs.
All of our noteholders have the right to be paid the principal and any applicable premium upon an event of default and upon certain designated events, such as certain changes of control. Our total indebtedness at December 31, 2025 includes $623.4 million of finance lease obligations for dark fiber primarily under 15 to 20-year IRUs.
In addition, the acquisition of the Sprint Business has made us subject to additional or duplicate regulatory obligations, particularly in the countries where the Sprint Business has subsidiaries and related to the Sprint Business.
In addition, the acquisition of the Cogent Fiber Business has made us subject to additional or duplicate regulatory obligations, particularly in the countries where the Cogent Fiber Business has subsidiaries and related to the Cogent Fiber Business.
Since the acquisition of the Sprint Business, our reliance on rights-of-way, license agreements, franchises, and authorizations from governmental bodies, railway companies, utilities, carriers, and other third parties has increased. These permissions allow us to place a portion of our network equipment on, over, or under their respective properties.
Since the acquisition of the Cogent Fiber Business, our reliance on rights-of-way, license agreements, franchises, and authorizations from landowners, governmental bodies, railway companies, utilities, carriers, and other third parties have increased. These permissions allow us to place a portion of our network equipment on, over, or under their respective properties.
We may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations, including our obligations under our notes. We maintain our cash and cash equivalents at financial institutions in amounts in excess of insured limits.
We may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations, including our obligations under our notes. Page 33 of 104 Table of Contents We maintain our cash and cash equivalents at financial institutions in amounts in excess of insured limits.
Our total indebtedness at December 31, 2024 excludes $359.2 million of operating lease liabilities, which were required to be recorded as right-to-use assets and operating lease liabilities. The amount of our IRU finance lease obligations may be impacted due to our expansion activities, the timing of payments and fluctuations in foreign currency rates.
Our total indebtedness at December 31, 2025 excludes $324.3 million of operating lease liabilities, which were required to be recorded as right-to-use assets and operating lease liabilities. The amount of our IRU finance lease obligations may be impacted due to our expansion activities, the timing of payments and fluctuations in foreign currency rates.
The elimination of non-core and low margin products also has a negative impact on our corporate revenue results. Page 17 of 96 Table of Contents Our business and operations are growing rapidly, and we may not be able to efficiently manage our growth.
The elimination of non-core and low margin products also has a negative impact on our corporate revenue results. Our business and operations are growing rapidly, and we may not be able to efficiently manage our growth.
As the law in this area develops and as we expand our international operations, the potential imposition of liabilities upon us for the behavior of our customers or the information carried on and disseminated through our network could require us to implement measures to Page 25 of 96 Table of Contents reduce our exposure to such liabilities, which may require the expenditure of substantial resources or the discontinuation of certain products or service offerings.
As the law in this area develops and as we expand our international operations, the potential imposition of liabilities upon us for the behavior of our customers or the information carried on and disseminated through our networks could require us to implement measures to reduce our exposure to such liabilities, which may require the expenditure of substantial resources or the discontinuation of certain products or service offerings.
A number of our acquired enterprise customers purchased non-core services that we are in the process of eliminating, and this may cause such customers to look to other providers who offer a broader set of services. We may encounter difficulties retaining such customers, in converting such customers from their legacy services to newer technologies or in attracting new enterprise customers.
A number of our acquired enterprise customers purchased non-core services that we have eliminated, and this may cause such customers to look to other providers who offer a broader set of services. We may encounter difficulties retaining such customers, in converting such customers from their legacy services to newer technologies or in attracting new enterprise customers.
Risks Relating to Our Acquisition of the Sprint Business We may not realize the anticipated benefits of the acquisition of the Sprint Business, and the integration of the Sprint Business may disrupt our business and management.
Risks Relating to Our Acquisition of the Cogent Fiber Business We may not realize the anticipated benefits of the acquisition of the Cogent Fiber Business, and the integration of the Cogent Fiber Business may disrupt our business and management.
If we fail to implement these measures successfully, our ability to manage our growth will be impaired. We may be unable to retain existing enterprise customers, maintain the level of services provided to enterprise customers or attract new enterprise customers.
If we fail to implement these measures successfully, our ability to manage our growth will be impaired. Page 20 of 104 Table of Contents We may be unable to retain existing enterprise customers, maintain the level of services provided to enterprise customers or attract new enterprise customers.
Page 24 of 96 Table of Contents If Cisco, Ciena or Arista fail to provide equipment on a timely basis or fails to meet our performance expectations, including in the event that either vendor fails to enhance, maintain, upgrade or improve the hardware or software products we purchase from them when and how we need them, we may be delayed or unable to provide services as and when requested by our customers.
If Cisco, Ciena or Arista fail to provide equipment on a timely basis or fail to meet our performance expectations, including in the event that any vendor fails to enhance, maintain, upgrade or improve the hardware or software products we purchase from them when and how we need them, we may be delayed or unable to provide services as and when requested by our customers.
We maintain the majority of our cash and cash equivalents in accounts with U.S. and multi-national financial institutions, and our deposits at certain of these institutions, including the counterparty to our Swap Agreement, exceed insured limits. Market conditions can affect the viability of these institutions.
We maintain the majority of our cash and cash equivalents in accounts with U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions can affect the viability of these institutions.
Our international operations involve a number of risks, including: ● fluctuations in currency exchange rates, particularly those involving the Euro as we are required to fund certain of our cash flow requirements of our operations outside of the United States; ● exposure to additional regulatory and legal requirements, including laws that may make it difficult or costly to enforce our contracts, import restrictions and controls, exchange controls, tariffs and other trade barriers, increase the regulatory approvals of or otherwise delay the expansion of our network, impose new obligations on us with respect to legal enforcement and monitoring, and privacy and data protection regulations; ● compliance with laws regarding privacy, trade restrictions, economic sanctions, and corruption and bribery, including the United States Foreign Corrupt Practices Act; ● difficulties in staffing and managing our foreign operations; ● changes in political and economic conditions; and ● exposure to additional and potentially adverse tax regimes.
Our international operations involve a number of risks, including: ● fluctuations in currency exchange rates, particularly those involving the Euro as we are required to fund certain of our cash flow requirements of our operations outside of the United States; ● exposure to additional regulatory and legal requirements, including laws that may make it difficult or costly to enforce our contracts, import restrictions and controls, exchange controls, tariffs and other trade barriers and privacy and data protection regulations; ● compliance with laws regarding privacy, trade restrictions, economic sanctions, and corruption and bribery, including the United States Foreign Corrupt Practices Act; ● difficulties in staffing and managing our foreign operations; ● changes in political and economic conditions; and ● exposure to additional and potentially adverse tax regimes.
Enterprise customers differ from our existing corporate and net-centric customers in that they have larger, more geographically diverse operations that require a greater percentage of off-net services from us. In addition, enterprise customers are more likely to require customized solutions and processes and to look for a single provider to meet their connectivity needs.
Enterprise customers differ from our traditional corporate and net-centric customers in that they typically have larger, more geographically diverse operations that require a greater percentage of off-net services from us. In addition, enterprise customers are more likely to require customized solutions and processes and prefer a single provider to meet all of their connectivity needs.
Our net-centric business would be particularly impacted by a decline in the development of new applications and businesses that make use of the Internet. Our corporate business would be particularly impacted by an increase in vacancy rates in the MTOBs that we serve.
Our net-centric business would be particularly impacted by a decline in the development of new Internet-based applications and Page 17 of 104 Table of Contents businesses that make use of the Internet. Our corporate business would be particularly impacted by an increase in vacancy rates in the MTOBs that we serve.
A failure of such programs to continue could result in a loss of customers and impair our growth, cash flow and profitability. A substantial and long-term shift to remote work may impact our ability to add new customers and to retain existing customers.
Any expiration, reduction or restructuring of such programs to continue could result in a loss of customers and impair our growth, cash flow and profitability. A substantial and long-term shift to remote work may impact our ability to add new customers and to retain existing customers.
Despite these positive indicators, the precise timing and trajectory of these trends remain uncertain. The lingering effects of the pandemic introduce an element of unpredictability, and we may continue to see increased corporate customer turnover, fewer upgrades of existing corporate customer configurations and fewer new tenant opportunities, which would negatively affect our corporate revenue growth.
Despite these positive indicators, the precise timing and trajectory of these trends remain uncertain. We may continue to see increased corporate customer turnover, fewer upgrades of existing corporate customer configurations and fewer new tenant opportunities, which would negatively affect our corporate revenue growth.
We could also be subject to penalties if we fail to implement the censorship. The imposition of tariffs may increase our costs of purchasing equipment or shipping equipment to our international subsidiaries. On February 3, 2025, President Trump announced new tariffs of 25% for most imports from Canada and Mexico and 10% for imports from China.
We could also be subject to penalties if we fail to implement the censorship. The imposition of tariffs may increase our costs of purchasing equipment or shipping equipment to our international subsidiaries. In 2025, President Trump announced new and additional tariffs for most imports, including imports from Canada, Mexico and China.
Page 27 of 96 Table of Contents Risk Factors Related to Our Indebtedness Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our notes and our other indebtedness.
Risk Factors Related to Our Indebtedness Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our notes and our other indebtedness.
Page 28 of 96 Table of Contents The agreements governing our various debt obligations impose restrictions on our business and could adversely affect our ability to undertake certain corporate actions. The agreements governing our various debt obligations include covenants imposing significant restrictions on our business.
The agreements governing our various debt obligations impose restrictions on our business and could adversely affect our ability to undertake certain corporate actions. The agreements governing our various debt obligations include covenants imposing significant restrictions on our business.
Catastrophic events, such as major natural disasters, extreme weather, fire, flooding, pandemics such as the COVID-19 pandemic or similar events as well as the continued threat of terrorist activity and other acts of war or hostility have had, and may continue to have, an adverse effect on our headquarters, other offices, our network, infrastructure or equipment or our customers and prospective customers, which could adversely affect our business.
Catastrophic events, such as major natural disasters, extreme weather events (including those exacerbated by climate change), fire, flooding, public health crises such as the COVID-19 pandemic or similar events as well as the continued threat of terrorist activity and other acts of war or hostility have had, and may continue to have, an adverse effect on our headquarters, other offices, our networks, infrastructure or equipment or our customers and prospective customers, which could adversely affect our business.
We both own and lease portions of our optical fiber and obtain access to the buildings on our network, both CNDCs and MTOBs, from a number of vendors. A number of our leases, both for fiber and building access, are up for renewal in any given year.
We both own and lease portions of our optical fiber and obtain access to the buildings on our networks, both CNDCs and MTOBs, from a number of vendors, including intra - company leases. A number of our leases, both for fiber and building access, and right-of-way agreements are up for renewal in any given year.
The 2026 Notes are due in March 2026 and require interest payments of $17.5 million per year, the 2027 Notes are due in June 2027 and require interest payments of $31.5 million per year, and the 2027 Mirror Notes are due in June 2027 and require interest payments of $21.0 million per year, each paid semi-annually.
The 2027 Notes are due in June 2027 and require interest payments of $31.5 million per year, the 2027 Mirror Notes are due in June 2027 and require interest payments of $21.0 million per year and the 2032 Notes are due in July 2032 and require interest payments of $39.0 million per year, each paid semi-annually.
Despite our leverage, we may still be able to incur more debt. This could further exacerbate the risks that we and our subsidiaries face. We and our subsidiaries may incur additional indebtedness, including additional secured indebtedness, in the future. The terms of our debt indentures restrict, but do not completely prohibit, us from doing so.
This could further exacerbate the risks that we and our subsidiaries face. We and our subsidiaries may incur additional indebtedness, including additional secured indebtedness, in the future. The terms of our debt indentures restrict, but do not completely prohibit, us from doing so. Subsidiaries not subject to our debt indentures, for example, may incur additional indebtedness.
We are subject to value-added taxes and other taxes in many jurisdictions outside of the United States. We are also subject to audit of our tax compliance in numerous jurisdictions. These may result in the assessment of amounts due that are material and therefore would have an adverse effect on us.
We are also subject to audit of our tax compliance in numerous jurisdictions. These may result in the assessment of amounts due that are material and therefore would have an adverse effect on us.
We have grown our Company rapidly through network expansion, by obtaining new customers through our sales efforts and by our acquisition of the Sprint Business. Our expansion places significant strains on our management, operational and financial infrastructure.
We have grown our Company rapidly through expansion of our IP Network, obtaining new customers through our sales efforts, the acquisition of the Cogent Fiber Business and the expansion of our Optical Wave Network. Our expansion places significant strains on our management, operational and financial infrastructure.
There can be no assurance that such non-infringing technology or licenses will be available on acceptable terms and conditions, if at all. International Operations Risks Our international operations expose us to numerous risks. We have expanded our network into 56 countries worldwide on every continent other than Antarctica. We continue to explore expansion opportunities.
There can be no assurance that such non-infringing technology or licenses will be available on acceptable terms and conditions, if at all. International Operations Risks Our international operations expose us to numerous risks. We have expanded our IP Network into 57 countries worldwide on every continent, other than Antarctica, and our Optical Wave Network into Canada and Mexico.
In addition, many of our targeted customers are businesses that are already purchasing Internet access services from one or more providers, often under a contractual commitment. It has been our experience that such targeted customers are often reluctant to switch providers due to costs and effort associated with switching providers.
In addition, many of our targeted customers are businesses that are already purchasing the services we offer from one or more providers, often under a contractual commitment. It has been our experience that such targeted customers are often reluctant to switch providers due to costs and effort associated with Page 19 of 104 Table of Contents switching providers.
In connection with the acquisition of the Sprint Business, we acquired an enterprise customer base, a type of customer that we have not traditionally served. We have established an enterprise sales team within our sales force to focus on retaining these customers and attracting new enterprise customers.
In connection with the acquisition of the Cogent Fiber Business, we acquired an enterprise customer base, a type of customer that we have not traditionally served. To manage this transition, we established a dedicated enterprise sales team within our sales force focused on retaining these customers and attracting new enterprise customers.
In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all.
In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.
We expect to enter additional agreements with carriers and operators to obtain additional facilities, whether optical fiber, leased transoceanic capacity or buildings, for our network in order to add capacity to our network and to expand our addressable market.
Page 26 of 104 Table of Contents We expect to enter additional agreements with carriers and operators to obtain additional facilities, whether optical fiber, leased transoceanic capacity or buildings, for each network in order to add capacity to such network and to expand our addressable market.
We are particularly vulnerable to acts of terrorism because our largest customer concentration is Page 15 of 96 Table of Contents located in New York, our headquarters is located in Washington, D.C., and we have significant operations in Paris, Madrid and London, cities that have historically been targets for terrorist attacks and may be vulnerable to pandemics.
We are particularly vulnerable to acts of terrorism because our largest customer concentration is located in New York, our headquarters is located in Washington, D.C., and we have significant operations in Paris, Madrid and London, cities that have historically been targets for terrorist attacks and may be vulnerable to extreme weather and public health crises.
Due to the nature of our product offerings and the industry in which we operate, which is deflationary, we may be unable to raise our prices. We expect that our historical pricing patterns will continue for the foreseeable future. These historical pricing patterns are occurring against the backdrop of a general increase in prices due to inflation.
Due to the nature of our product offerings and the industry in which we operate, which is deflationary, we may be unable to raise our prices. We expect that our historical pricing patterns will continue for the foreseeable future.
Page 19 of 96 Table of Contents Construction projects are dependent on receiving permits from public agencies and utility companies. Any delay in receiving permits could delay our construction projects and affect our growth.
Construction projects are dependent on receiving permits from public agencies and utility companies. Any delay in receiving permits could delay our construction projects and affect our growth.
If such a disruption occurs, our reputation could be negatively impacted, which may cause us to lose customers and adversely affect our ability to attract new customers, resulting in an adverse effect on our business and operating results.
Such disruptions may also increase our vulnerability to cybersecurity attacks, further complicating recovery efforts. If such a disruption occurs, our reputation could be negatively impacted, which may cause us to lose customers and adversely affect our ability to attract new customers, resulting in an adverse effect on our business and operating results.
Further, as some of our customers grow larger, they may decide to build their own Internet backbone networks or enter into direct connection agreements with telephone and cable companies that provide Internet service to consumers.
Further, as some of our customers grow larger, they may decide to build their own telecommunications backbone networks or enter into direct connection agreements with telephone and cable companies that provide Internet service to consumers or to lease dark fiber in lieu of purchasing optical wavelength services.
However, a significant challenge is that some of these authorizations have set expiration dates within the next five to ten years, and renewing or extending them is essential. The potential adverse impact on our operations looms if any of these authorizations are canceled, terminated, or allowed to lapse, or if landowners request price increases.
Many of these authorizations have set expiration dates within the next five to ten years, and renewing or extending them on favorable terms is not guaranteed. The potential adverse impact on our operations looms if any of these authorizations are canceled, terminated, or allowed to lapse, or if landowners request price increases.
Our network is primarily composed of (i) leased capacity on transoceanic optical fiber; (ii) terrestrial inter-city dark optical fiber; (iii) intra-city dark optical fiber; (iv) right-of-way agreements; and (v) the buildings that we serve and the associated optical fiber connecting those buildings.
Both our IP Network and Optical Wave Network are composed of some or all of the following components: (i) leased capacity on transoceanic optical fiber; (ii) terrestrial inter-city dark optical fiber; (iii) intra-city dark optical fiber; (iv) right-of-way agreements; and (v) the buildings that we serve and the associated optical fiber connecting those buildings.
If we are unable to maintain our fiber or adequately and efficiently manage disruptions to our fiber network, our ability to provide services in the affected markets or parts of markets would be impaired unless we have or can obtain alternative fiber routes.
If we are unable to maintain our owned fiber or adequately and efficiently manage disruptions to our owned fiber network, our ability to provide services in the affected markets or parts of markets would be impaired unless we have or can obtain alternative fiber routes. Our new wavelength service is delivered as specific wavelengths on defined physical routes.
As the applicability of privacy regulations to the types of services we provide remains unsettled, we may be required to adopt additional measures in the future. Privacy regulations, such as the General Data Protection Regulation in the European Union and the California Consumer Privacy Act in California vary in scope and in the obligations they impose on us.
As the applicability of privacy regulations to the types of services we provide remains unsettled, we may be required to adopt additional measures in the future. Page 29 of 104 Table of Contents Privacy regulations, such as the GDPR and the California Consumer Privacy Act in California vary in scope and in the obligations, they impose on us.
Page 20 of 96 Table of Contents The sector in which we operate is highly competitive, and we may not be able to compete effectively. We face significant competition from incumbent carriers, Internet service providers and facilities-based network operators.
The sector in which we operate is highly competitive, and we may not be able to compete effectively. We face significant competition from incumbent carriers, ISPs and facilities-based network operators.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not identified risks from known cybersecurity threats , including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Biggest changePage 34 of 104 Table of Contents We have not identified risks from known cybersecurity threats , including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
The Chief Legal Officer, Vice President of Network Strategy and VP of Network Engineering may also be involved, as necessary. Our CIO’s experience includes over twenty years of experience in risk management and compliance, incident response, crisis management and security architecture and technology integration.
The Chief Legal Officer, Vice President of Network Strategy and VP of Network Engineering may also be involved, as necessary. Our CIO’s experience includes over 20 of experience in risk management and compliance, incident response, crisis management and security architecture and technology integration.
Our Cybersecurity Operations Team includes three certified information systems security professionals and their experience includes cybersecurity architecture, engineering and administration together with the development of cybersecurity policies, practices and training. Page 30 of 96 Table of Contents
Our Cybersecurity Operations Team includes three certified information systems security professionals and their experience includes cybersecurity architecture, engineering and administration together with the development of cybersecurity policies, practices and training.
Added
Our Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies.
Added
Our Cybersecurity Operations Team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include: briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our information technology environment.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe first of the New Leases is with Thorium for approximately 54,803 square feet of office space, which serves as office space replacing a portion of its office space in the Northern Virginia area..
Biggest changeThe first of the New Leases is with Thorium for approximately 54,803 square feet of office space, which serves as office space replacing a portion of Page 35 of 104 Table of Contents its office space in the Northern Virginia area.
The second of the New Leases is with Germanium LLC for approximately 1,587 square feet of technical space which serves as network operations space (“Network Operations Lease”). The term for each of the New Leases is five years beginning on April 1, 2023. Both of the New Leases are cancellable by us without penalty upon 60 days written notice.
The second of the New Leases is with Germanium LLC for approximately 1,587 square feet of technical space which serves as network operations space (“Network Operations Lease”). The term for each of the New Leases is five years beginning on April 1, 2023. Both of the New Leases are cancellable by us without penalty upon 60 days’ written notice.
This included 4,987 square feet for an auditorium suitable for training and 2,382 square feet for the data center in the building. The amended Network Operations Lease remains cancellable by us without penalty upon 60 days written notice.
This included 4,987 square feet for an auditorium suitable for training and 2,382 square feet for the data center in the building. The amended Network Operations Lease remains cancellable by us without penalty upon 60 days’ written notice.
We have also added 3 office buildings, 5 Carrier Neutral Data Centers and converted 36 nodes located in Carrier Neutral Data Centers to the Cogent network. We lease space for offices, data centers, colocation facilities, and PoPs. We lease a total of approximately 1.0 million square feet of space for our data centers, offices and operations centers.
We have also added 3 office buildings, and converted 39 nodes located in Carrier Neutral Data Centers to the Cogent network. We lease space for offices, data centers, colocation facilities, and PoPs. We lease a total of approximately 1.0 million square feet of space for our data centers, offices and operations centers.
Our headquarters facility consists of 43,117 square feet located in Washington, D.C. The lease for our headquarters is with an entity controlled by our Chief Executive Officer and expires in May 2025. The lease may be cancelled by us upon 60 days’ notice.
Our headquarters facility consists of 43,117 square feet located in Washington, D.C. The lease for our headquarters is with an entity controlled by our Chief Executive Officer and expires in May 2030. The lease may be cancelled by us upon 60 days’ written notice.
ITEM 2. PROPERTIES As part of the acquisition of the Sprint Business, we acquired a portfolio of owned and leased properties totaling approximately 1.9 million square feet.
ITEM 2. PROPERTIES As part of the acquisition of the Cogent Fiber Business, we acquired a portfolio of owned and leased properties totaling approximately 1.9 million square feet.
Since the acquisition closing, we have added 52 major Sprint Data Centers and 55 smaller Edge Data Centers to our existing 52 Cogent Data Center portfolio (down from 55 at close); growing our data center portfolio to 159 buildings.
Since the closing of the acquisition, we have added 52 major Sprint Data Centers and 87 smaller Edge Data Centers to our existing 48 Cogent Data Center portfolio (down from 55 at close); growing our data center portfolio to 187 buildings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−1 removed1 unchanged
Biggest changeThe comparison below assumes $100 was invested on December 31, 2019 in our common stock, the S&P 500 Index and the NASDAQ Telecommunications Index, with dividends, if any, reinvested. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/19 12/20 12/21 12/22 12/23 12/24 Cogent Communications Holdings $ 100.00 $ 94.72 $ 120.98 $ 100.20 $ 141.50 ​ $ 151.75 S&P 500 ​ 100.00 ​ 118.40 ​ 152.39 ​ 124.79 ​ ​ 157.59 ​ ​ 197.02 NASDAQ Telecommunications ​ 100.00 ​ 110.08 ​ 112.44 ​ 82.71 ​ 90.96 ​ ​ 103.21 ​ The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Biggest changeThe graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2020 to 12/31/2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/20 ​ ​ ​ 12/21 ​ ​ ​ 12/22 ​ ​ ​ 12/23 ​ ​ ​ 12/24 ​ ​ ​ 12/25 Cogent Communications Holdings $ 100.00 $ 127.72 $ 105.78 $ 149.38 $ 160.20 ​ $ 47.80 S&P 500 ​ 100.00 ​ 128.71 ​ 105.40 ​ 133.10 ​ ​ 166.40 ​ ​ 196.16 NASDAQ Telecommunications ​ 100.00 ​ 102.14 ​ 74.69 ​ 82.63 ​ 93.76 ​ ​ 107.59 ​ The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Issuer Purchases of Equity Securities Our Board of Directors authorized a plan to permit the repurchase of up to $50.0 million of our common stock in negotiated and open market transactions through December 31, 2025. As of December 31, 2024, $22.4 million remained available for such negotiated and open market transactions concerning our common stock.
Issuer Purchases of Equity Securities On August 6, 2025, our Board of Directors authorized a plan to permit the repurchase of up to $100.0 million of our common stock in negotiated and open market transactions through December 31, 2026.
We may purchase shares from time to time depending on market, economic, and other factors. We did not purchase shares of our common stock during the three months ended December 31, 2024. ​ Page 32 of 96 Table of Contents
We may purchase shares Page 37 of 104 Table of Contents from time to time depending on market, economic, and other factors. We did not purchase any shares of our common stock during the fourth quarter of 2025. ​
As of February 1, 2025, there were 103 holders of record of shares of our common stock holding 47,650,780 shares of our common stock. Performance Graph Our common stock currently trades on the NASDAQ Global Select Market.
As of February 1, 2026, there were 106 holders of record of shares of our common stock holding 47,650,780 shares of our common stock. Performance Graph The graph below matches Cogent Communications Holdings’ cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the S&P 500 index and the NASDAQ Telecommunications index.
Removed
The chart below compares the relative changes in the cumulative total return of our common stock for the period from December 31, 2019 to December 31, 2024, against the cumulative total return for the same period of the (1) The Standard & Poor’s 500 (S&P 500) Index and (2) the NASDAQ Telecommunications Index.
Added
This authorization replaced the previous authorization to purchase up to $50.0 million shares during fiscal 2025, which expired on December 31, 2025. As of December 31, 2025, $105.8 million remained available for such negotiated and open market transactions concerning our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

125 edited+27 added−87 removed45 unchanged
Biggest changeOur $206.0 million of IPv4 Notes effectively mature in May 2029 and include annual interest payments of $16.3 million until maturity (which amount increases if the IPv4 Notes are not repaid prior to May 2029).
Biggest changeOur long-term debt interest obligations and maturity dates of our long-term debt obligations are as follows: ● Our $600.0 million 2032 Notes mature in July 2032 and include annual interest payments of $39.0 million until maturity, ● Our $450.0 million 2027 Notes mature in June 2027 and include annual interest payments of $31.5 million until maturity, ● Our $300.0 million 2027 Mirror Notes mature in June 2027 and include annual interest payments of $21.0 million until maturity, Page 46 of 104 Table of Contents ● Our $206.0 million Existing IPv4 Notes effectively mature in May 2029 (i.e., the interest rate will significantly increase if we do not pay them on the monthly payment date in May of 2029) and include annual interest payments of $16.3 million until such date (which amount increases if the Existing IPv4 Notes are not repaid prior to May 2029) and ● Our $174.4 million New IPv4 Notes effectively mature in April 2030 (i.e., the interest rate will significantly increase if we do not pay them on the monthly payment date in April of 2030) and include annual interest payments of $11.6 million until such date (which amount increases if the New IPv4 Notes are not repaid prior to April 2030).
As our business has grown as a result of an increasing customer base, the Transaction, broader geographic coverage and increased traffic on our network, we have historically produced a growing level of cash provided by operating activities. Since we closed the Transaction, we experienced a reduction of cash provided by operating activities from the impact of the Transaction.
As our business has grown as a result of an increasing customer base, the Transaction, broader geographic coverage and increased traffic on our network, we have historically produced a growing level of cash provided by operating activities. Since we closed the Transaction, we have experienced a reduction of cash provided by operating activities from the impact of the Transaction.
In assessing our liquidity, management reviews and analyzes our current cash balances, payments under the IP Transit Services Agreement, accounts receivable, accounts payable, accrued liabilities, capital expenditure commitments, and required finance lease and debt payments and other obligations.
Liquidity and cash obligations In assessing our liquidity, management reviews and analyzes our current cash balances, payments under the IP Transit Services Agreement, accounts receivable, accounts payable, accrued liabilities, capital expenditure commitments, and required finance lease and debt payments and other obligations.
We will continue to assess our capital and liquidity needs and, where appropriate, return capital to stockholders.
We will continue to assess our capital and liquidity needs and, where appropriate, return capital to our stockholders.
At the payment date, the present value of the IRU finance lease liability was $117.9 million and the remaining thirty-one $4.2 million monthly principal payments totaled $130.2 million. The prepayment resulted in a gain on lease termination of $3.3 million related to the difference between the book value of $117.9 million and the cash payment of $114.6 million.
At the payment date, the present value of the IRU finance lease liability was $117.9 million, and the remaining thirty-one $4.2 million monthly principal payments totaled $130.2 million. The prepayment resulted in a gain on lease termination of $3.3 million related to the difference between the book value of $117.9 million and the cash payment of $114.6 million.
In addition, we may elect to secure additional capital in the future, at acceptable terms, to improve our liquidity or fund acquisitions or for general corporate purposes.
In addition, we may elect to secure additional capital in the future, at acceptable terms, to improve our liquidity or fund acquisitions or for general corporate purposes.
We will evaluate any such transactions in light of the existing market conditions. The amounts involved in any such transaction, individually or in the aggregate, may be material.
We will evaluate any such transactions in light of the existing market conditions. The amounts involved in any such transaction, individually or in the aggregate, may be material.
In performing our impairment assessment, we first evaluated qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. The factors we evaluated include market data for sales and leases of IPv4 addresses and cash flows associated with the asset.
In performing our impairment assessment, we first evaluated qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than the carrying amount. The factors we evaluated include market data for sales and leases of IPv4 addresses and cash flows associated with the asset.
(now Cogent Infrastructure, LLC), a Delaware corporation and our direct wholly owned subsidiary (the “Buyer” or “Cogent Infrastructure”), closed on its acquisition of the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications and its subsidiaries (the “Sprint Business”) in accordance with the terms and conditions of the Membership Interest Purchase Agreement (the “Purchase Agreement”), dated September 6, 2022, by and among us, Sprint Communications LLC, a Kansas limited liability company (“Sprint Communications”) and an indirect wholly owned subsidiary of T-Mobile US, Inc., a Delaware corporation (“T-Mobile”), and Sprint LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of T-Mobile (the “Seller”).
(now Cogent Infrastructure, LLC), a Delaware corporation and our direct wholly owned subsidiary (the “Buyer”, “Cogent Infrastructure”, “we” or “us”), closed on its acquisition of the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications and its subsidiaries (the “Cogent Fiber Business”) in accordance with the terms and conditions of the Membership Interest Purchase Agreement (the “Purchase Agreement”), dated September 6, 2022, by and among us, Sprint Communications LLC, a Kansas limited liability company (“Sprint Communications”) and an indirect wholly owned subsidiary of T-Mobile US, Inc., a Delaware corporation (“T-Mobile”), and Sprint LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of T-Mobile (the “Seller”).
We record these taxes billed to our customers on a gross basis (as service revenue and network operations expense) in our consolidated statements of comprehensive income.
We record these taxes billed to our customers on a gross basis (as service revenue and network operations expense) in our consolidated statements of comprehensive income (loss).
On the Closing Date, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) of Wireline Network Holdings LLC, a Delaware limited liability company that, following an internal restructuring and divisive merger, held Sprint Communications’ assets and liabilities relating to the Sprint Business (such transactions contemplated by the Purchase Agreement, collectively, the “Transaction”).
On the Closing Date, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) of Wireline Network Holdings LLC, a Delaware limited liability company that, following an internal restructuring and divisive merger, held Sprint Communications’ assets and liabilities relating to the Cogent Fiber Business (such transactions contemplated by the Purchase Agreement, collectively, the “Transaction”).
As a result, and considering statements made by T-Mobile, the IP Transit Services Agreement was recorded in connection with the Transaction at its discounted present value resulting in a discount of $79.6 million. The interest rate used in determining the present value was derived considering rates on similar issued debt instruments with comparable durations, amongst other market factors.
As a result, and considering statements made by T-Mobile, the IP Transit Services Agreement was recorded in connection with the Transaction at its discounted present value resulting in a discount of $79.6 million. The interest rate used in determining the present value was derived considering rates on similar issued debt instruments with comparable durations, among other market factors.
Severance reimbursement The Purchase Agreement also provides for reimbursement from the Seller to the Buyer for qualifying severance expenses incurred. Total qualifying severance expenses were $28.6 million of which $12.3 million and $16.2 million were recorded during the years ended December 31, 2024 and 2023, respectively, and fully reimbursed by the Seller.
Severance reimbursement The Purchase Agreement also provides for reimbursement from the Seller to us for qualifying severance expenses incurred. Total qualifying severance expenses were $28.6 million of which $12.3 million and $16.2 million were recorded during the years ended December 31, 2024 and 2023, respectively, and fully reimbursed by the Seller.
We do this by investing capital to expand the geographic footprint of our network, increasing the number of buildings that we are connected to, including CNDCs and MTOBs, and increasing our penetration rate into our existing buildings. These efforts broaden the global reach of our network and increase the size of our potential addressable market.
We do this by investing capital to expand the geographic footprint of our networks, increasing the number of buildings that we are connected to, including CNDCs and MTOBs, and increasing our penetration rate into our existing buildings. These efforts broaden the global reach of our networks and increase the size of our potential addressable market.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.
The services provided by the Seller to the Buyer include, among others, information technology support, back office and finance, real estate and facilities, vendor and supply chain management, including the payment and processing of vendor invoices for the Company and human resources.
The services provided by the Seller to us include, among others, information technology support, back office and finance, real estate and facilities, vendor and supply chain management, including the payment and processing of vendor invoices for the Company and human resources.
Amounts paid for the Sprint Business by T-Mobile are reimbursed at cost. Either party to the TSA may terminate the agreement with respect to any individual service in full for convenience upon 30 days’ prior written notice for certain services and reduced for other services after a 90-day period.
Amounts paid for the Cogent Fiber Business by T-Mobile are reimbursed at cost. Either party to the TSA may terminate the agreement with respect to any individual service in full for convenience upon 30 days’ prior written notice for certain services and reduced for other services after a 90-day period.
The net-centric market exhibits significant pricing pressure due to the continued introduction of new technology, which lowers the marginal cost of transmission and routing, and the commodity nature of the service where price is typically the only differentiating factor for these customers.
The net-centric market exhibits significant pricing pressure on IP services due to the continued introduction of new technology, which lowers the marginal cost of transmission and routing, and the commodity nature of the service where price is typically the only differentiating factor for these customers.
Due to the dire financial condition of the Sprint Business, it was understood that a payment from T-Mobile to any potential buyer would be required to execute a transaction to give a buyer sufficient cash inflow to offset losses that would be expected until a buyer could optimize the business.
Due to the dire financial condition of the Cogent Fiber Business, it was understood that a payment from T-Mobile to any potential buyer would be required to execute a transaction to give a buyer sufficient cash inflow to offset losses that would be expected until a buyer could optimize the business.
The changes in purchases of property and equipment were primarily due to the timing and scope of our network expansion activities including geographic expansion, purchases related to our acquisition of the Sprint Business, costs associated with providing wave services, conversion costs related to acquired data centers and adding buildings to our network.
The changes in purchases of property and equipment were primarily due to the timing and scope of our network expansion activities including geographic expansion, purchases related to our acquisition of the Cogent Fiber Business, costs associated with providing wave services, conversion costs related to acquired data centers and adding buildings to our network.
The other changes in our principal payments under our finance lease obligations were primarily due to the timing and extent of our network expansion activities including geographic expansion, purchases related to our acquisition of the Sprint Business, purchases associated with providing wave services and adding buildings to our network.
The other changes in our principal payments under our finance lease obligations were primarily due to the timing and extent of our network expansion activities including geographic expansion, purchases related to our acquisition of the Cogent Fiber Business, purchases associated with providing wave services and adding buildings to our network.
In June 2024, we elected to exercise a contractual option to prepay in full at a 12.0% discounted rate an IRU finance lease agreement between us and a vendor we assumed with the Sprint Business for $114.6 million.
In June 2024, we elected to exercise a contractual option to prepay in full at a 12.0% discounted rate an IRU finance lease agreement between us and a vendor we assumed with the Cogent Fiber Business for $114.6 million.
During the years ended December 31, 2024 and 2023, we paid to the Seller $93.8 million and $217.2 million, respectively, under the TSA. Amounts billed under the TSA are due 30 days from receipt of the related invoice.
During the years ended December 31, 2025, 2024 and 2023, we paid to the Seller $1.0 million, $93.8 million and $217.2 million, respectively, under the TSA. Amounts billed under the TSA are due 30 days from receipt of the related invoice.
Our cash flow requirements related to the acquisition of the Sprint Business will be dependent upon our ability to reduce the acquired operating costs, our success in retaining the acquired customers and our ability to sell optical wavelength and optical transport services over our fiber network.
Our cash flow requirements related to the acquisition of the Cogent Fiber Business will be dependent upon our ability to reduce the acquired operating costs, our success in retaining the acquired customers and our ability to sell optical wavelength and optical transport services over our Optical Wave Network.
The services provided by the Buyer to the Seller include, among others, information technology and network support, finance and back office and other wireless business support.
The services provided by us to the Seller include, among others, information technology and network support, finance and back office and other wireless business support.
Risk Factors ” and “Special Note Regarding Forward-Looking Statements. ” Our actual results could differ materially from those discussed here.
Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those discussed here.
All foreign currency comparisons herein reflect results for the year ended December 31, 2024 translated at the average foreign currency exchange rates for the year ended December 31, 2023.
All foreign currency comparisons herein reflect results for the year ended December 31, 2025 translated at the average foreign currency exchange rates for the year ended December 31, 2024.
While we believe that demand for office space in the buildings in which we operate will remain among the strongest in the markets in which they are located, and that most employers will eventually require their employees to return to their offices on at least a hybrid basis, the timing and scope of a return to office, particularly in a number of key markets we serve, remains uncertain.
Continued Impact of Changing Office Occupancy Rates While we believe that demand for office space in the buildings in which we operate will remain among the strongest in the markets in which they are located, and that most employers will eventually require their employees to return to their offices on at least a hybrid basis, the timing and scope of a return to office, particularly in a number of key markets we serve, remains uncertain.
Results of Operations Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 In this section, we discuss the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Results of Operations Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 In this section, we discuss the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Under the CSA, we recorded service revenue of $14.7 million and $23.9 million during the years ended December 31, 2024 and 2023, respectively.
Under the CSA, we recorded service revenue of $2.6 million, $14.7 million and $23.9 million during the years ended December 31, 2025, 2024 and 2023, respectively.
Through December 31, 2024, we received monthly payments totaling $408.3 million under the IP Transit Services Agreement, reflected as cash flows from investing activities in our consolidated statements of cash flows.
Through December 31, 2025, we received monthly payments totaling $508.3 million under the IP Transit Services Agreement, reflected as cash flows from investing activities in our consolidated statements of cash flows.
Page 47 of 96 Table of Contents Future Capital Requirements We believe that our cash on hand and cash generated from our operating activities and cash from the IP Transit Services Agreement will be adequate to meet our working capital, capital expenditure, debt service, dividend payments and other cash requirements for the next 12 months and beyond the next 12 months if we execute our business plan.
Future Capital Requirements We believe that our cash on hand and cash generated from our operating activities and cash from the IP Transit Services Agreement will be adequate to meet our working capital, capital expenditure, debt service, dividend payments and other cash requirements for the next 12 months and beyond the next 12 months if we execute our business plan.
Revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, gross receipts taxes, Universal Service Fund fees and certain state regulatory fees.
Page 41 of 104 Table of Contents Revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, gross receipts taxes, Universal Service Fund fees and certain state regulatory fees.
During 2024 and 2023 we were paid $204.2 million and $204.2 million under the IP Transit Services Agreement, respectively. In May 2023 we paid $61.1 million and acquired $47.1 million of cash and in 2023 we paid $5.0 million related to our acquisition of the Sprint Business.
During 2025, 2024 and 2023 we were paid $100.0 million, $204.2 million and $204.2 million under the IP Transit Services Agreement, respectively. In May 2023, we paid $61.1 million and acquired $47.1 million of cash and in 2023 we paid $5.0 million related to our acquisition of the Cogent Fiber Business.
Over the next several years, we have significant contractual and anticipated cash outlays, including our indicative dividend payments on our common stock, our maturing debt obligations, interest payments on our debt obligations and Swap Agreement and our projected capital expenditure requirements in order to help execute our business plan, including the integration of Sprint Business.
Over the next several years, we have significant contractual and anticipated cash outlays including our indicative dividend payments on our common stock, our maturing debt obligations, interest payments on our debt obligations and our projected capital expenditure requirements in order to help execute our business plan including the continued integration of the Cogent Fiber Business.
Principal payments under our finance lease obligations were $74.6 million, $77.4 million and $45.5 million, respectively, In June 2024, we elected to exercise a contractual option to prepay in full at a 12.0% discount rate an IRU finance lease agreement between us and a vendor we assumed with the Sprint Business for $114.6 million.
Principal payments under our finance lease obligations were $33.8 million, $74.6 million and $77.4 million, respectively. In June 2024, we elected to exercise a contractual option to prepay in full at a 12.0% discount rate an IRU finance lease agreement between us and a vendor we assumed with the Cogent Fiber Business for $114.6 million.
Amounts billed under the TSA are due 30 days from receipt of the related invoice. During 2024 and 2023, we were billed $27.2 million and $284.1 million, respectively, under the TSA, primarily for reimbursement at cost of payments to vendors of the Sprint Business.
Amounts billed under the TSA are due 30 days from receipt of the related invoice. During 2025, 2024 and 2023, we were billed $0.4 million, $27.2 million and $284.1 million, respectively, under the TSA, primarily for reimbursement at cost of payments to vendors of the Cogent Fiber Business.
Transition Services Agreement On the Closing Date, the Buyer entered into a transition services agreement (the “TSA”) with the Seller, pursuant to which the Seller provides to the Buyer, and the Buyer provides to the Seller on an interim basis following the Closing Date, certain specified services (the “Transition Services”) to ensure an orderly transition following the separation of the Sprint Business from Sprint Communications.
Transition Services Agreement On the Closing Date, we entered into a transition services agreement (the “TSA”) with the Seller, pursuant to which the Seller provides to us, and we provide to the Seller on an interim basis following the Closing Date, certain specified services (the “Transition Services”) to ensure an orderly transition following the separation of the Cogent Fiber Business from Sprint Communications.
Factors that could cause or contribute to these differences include, but are not limited to: Our acquisition of Sprint Communications (as defined below), including difficulties integrating our business with the Sprint Business, which may result in the combined company not operating as effectively and efficiently as expected; transition services required to support the Sprint Business and the related costs continuing for a period longer than expected, the COVID-19 pandemic and accompanying government policies worldwide; vaccination and in-office requirements, delays in the delivery of network equipment or optical fiber, loss of key right-of-way agreements, future economic instability in the global economy, including the risk of economic recession and recent bank failures and liquidity concerns at certain other banks, which could affect spending on Internet services; the impact of changing foreign exchange rates (in particular the Euro to US dollar and Canadian dollar to US dollar exchange rates) on the translation of our non-US dollar denominated revenues, expenses, assets and liabilities into US dollars; legal and operational difficulties in new markets; the imposition of a requirement that we contribute to the US Universal Service Fund on the basis of our Internet revenue; changes in government policy and/or regulation, including rules regarding data protection, cyber security and net neutrality; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering and right-of-way arrangements on favorable terms; our ability to renew our long-term leases of optical fiber and right-of-way agreements that comprise our network; our reliance on a limited number of equipment vendors, and the potential for hardware or software problems associated with such equipment; tariffs imposed on equipment we purchase for our network; the dependence of our network on the quality and dependability of third-party fiber and right-of-way providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; our ability to make payments on our indebtedness as they become due and outcomes in litigation, risks associated with variable interest rates under our Swap Agreement as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, this Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.
Factors that could cause or contribute to these differences include, but are not limited to: Our acquisition of Sprint Communications, now called Cogent Fiber, LLC, including difficulties integrating our business with the Cogent Fiber Business, which may result in the combined company not operating as effectively and efficiently as expected; government policies worldwide; vaccination and in-office requirements, delays in the delivery of network equipment or optical fiber, loss of key right-of-way agreements, future economic instability in the global economy, including the risk of economic recession and bank failures and liquidity concerns at certain other banks, which could affect spending on Internet services; the impact of changing foreign exchange rates (in particular the Euro to US dollar and Canadian dollar to US dollar exchange rates) on the translation of our non-US dollar denominated revenues, expenses, assets and liabilities into US dollars; legal and operational difficulties in new markets; our ability to maintain our regulatory licenses that are required in the markets in which we operate; the imposition of a requirement that we contribute to the US Universal Service Fund on the basis of our Internet revenue; changes in government policy and/or regulation, including rules regarding data protection, cyber security and net neutrality; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering and right-of-way arrangements on favorable terms; our ability to renew our long-term leases of optical fiber and right-of-way agreements that comprise our network; our reliance on a limited number of equipment vendors, and the potential for hardware or software problems associated with such equipment; our inability to obtain the equipment necessary for our expansion plans and customer requirements; tariffs imposed on equipment we purchase for our network or other similar government-imposed fees and charges; the dependence of our network on the quality and dependability of third-party fiber and right-of-way providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; our ability to make payments on our indebtedness as they become due and outcomes in litigation, risks associated with variable interest rates under our Swap Agreement as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, this Annual Report on Form 10-K for the year ended December 31, 2025 and our Quarterly Reports on Form 10-Q.
As of December 31, 2023, the fair value of the identifiable assets acquired was $1.9 billion (including amounts due under the IP Transit Services Agreement) and was in excess of the $0.9 billion liabilities assumed and the $0.6 billion net consideration to be received from the Seller resulting in a gain on bargain purchase of $1.4 billion.
As of December 31, 2024, the fair value of the identifiable assets acquired was $1.9 billion (including Page 44 of 104 Table of Contents amounts due under the IP Transit Services Agreement) and was in excess of the $0.9 billion liabilities assumed and the $0.6 billion net consideration to be received from the Seller, resulting in a total gain on bargain purchase of $1.4 billion.
Our average price per megabit of our installed base of customers decreased by 14.2% from the year ended December 31, 2023 to the year ended December 31, 2024. The impact of foreign exchange rates has a more significant impact on our net-centric revenues.
Our average price per megabit of our installed base of customers decreased by 29.7% from the year ended December 31, 2024 to the year ended December 31, 2025. The impact of foreign exchange rates has a more significant impact on our net-centric revenues.
As consideration for the Purchased Interests, the Working Capital Adjustment (primarily related to acquired cash and cash equivalents of an estimated $43.4 million at the Closing Date in order to fund the international operations of the Sprint Business) resulted in us making a payment to the Seller of $61.1 million on the Closing Date.
As consideration for the Purchased Interests, the Working Capital Adjustment (primarily related to acquired cash and cash equivalents of an estimated $43.4 million at the Closing Date in order Page 38 of 104 Table of Contents to fund the international operations of the Cogent Fiber Business) resulted in us making a payment to the Seller of $61.1 million on the Closing Date.
In connection with the Transaction and negotiation of the Purchase Agreement, we incurred professional fees, and other acquisition related costs totaling $42.1 million, including $28.6 million of reimbursed severance costs. Such fees totaled $21.4 million for the year ended December 31, 2024 and $18.5 million for the year ended December 31, 2023. Depreciation and Amortization Expenses.
In connection with the Transaction and negotiation of the Purchase Agreement, we incurred professional fees, and other acquisition related costs totaling $42.1 million, including $28.6 million of reimbursed severance costs. Such fees totaled $21.4 million for the year ended December 31, 2024. There were no acquisition related costs recorded in the year ended December 31, 2025. Depreciation and Amortization Expenses.
Page 38 of 96 Table of Contents Interest Income - IP Transit Services Agreement. Under the IP Transit Services Agreement, TMUSA will pay us an aggregate of $700.0 million, consisting of (i) $350.0 million in equal monthly installments during the first year after the Closing Date and (ii) $350.0 million in equal monthly installments over the subsequent 42 months.
Under the IP Transit Services Agreement, TMUSA will pay us an aggregate of $700.0 million, consisting of (i) $350.0 million in equal monthly installments during the first year after the Closing Date and (ii) $350.0 million in equal monthly installments over the subsequent 42 months.
Upon consideration of these factors we determined that it was not more-likely-than-not that the asset was impaired, and that a quantitative impairment assessment was not required. ​ Page 49 of 96 Table of Contents
Upon consideration of these factors, we determined that it was not more-likely-than-not that the asset was impaired, and that a quantitative impairment assessment was not required.
Revenues from our on-net, off-net, wavelength and non-core customers represented 52.6%, 43.8%, 1.9% and 1.7% of total service revenue, respectively, for the year ended December 31, 2024 and represented 54.5%, 41.8%, 0.6% and 3.1% of total service revenue, respectively, for the year ended December 31, 2023.
Page 43 of 104 Table of Contents Revenues from our on-net, off-net, wavelength and non-core customers represented 54.5%, 40.7%, 3.9% and 0.9% of total service revenue, respectively, for the year ended December 31, 2025 and represented 52.6%, 43.8%, 1.9% and 1.7% of total service revenue, respectively, for the year ended December 31, 2024.
Our total indebtedness at December 31, 2024, at par value, was $2.0 billion. Our total indebtedness at December 31, 2024 includes $538.4 million of finance lease obligations for dark fiber under long-term IRU agreements.
Our total indebtedness at December 31, 2025, at par value, was $2.4 billion, which includes $623.4 million of finance lease obligations for dark fiber under long-term IRU agreements.
We believe this level of liquidity reduces our exposure to refinancing risk, potential underperformance of the business or other unforeseen challenges and enhances our ability to pursue acquisitions or operating opportunities. We intend to hold levels of cash and cash equivalents sufficient to maintain our ability to fund operations and make dividend payments to our stockholders.
We believe this level of liquidity reduces our exposure to refinancing risk, potential underperformance of the business or other unforeseen challenges. We intend to hold levels of cash and cash equivalents sufficient to maintain our ability to fund our operations and to fund our reduced dividend payments.
As of December 31, 2024 and 2023, we had a total of 3,453 and 3,277 on-net buildings connected to our network, respectively. The increase in our on-net buildings was a result of our disciplined network expansion program. We anticipate adding a similar number of buildings to our network for the next several years.
As of December 31, 2025 and 2024, we had a total of 3,579 and 3,453 on-net buildings connected to one or both of our networks, respectively. The increase of 126 buildings in our on-net buildings was a result of our disciplined network expansion program. We anticipate adding a similar number of buildings to our networks for the next several years.
During 2024, we purchased 153,322 shares of our common stock for $8.0 million. There were no purchases of our common stock in 2023 or 2022. We completed a series of debt issuances and redemptions in 2024 and 2022.
During 2025, we purchased 341,818 shares of our common stock for $16.7 million. During 2024, we purchased 153,322 shares of our common stock for $8.0 million. There were no purchases of our common stock in 2023. We completed a series of debt issuances and redemptions in 2025 and 2024.
Under the CSA with TMUSA, we recorded on-net service revenue of $14.0 million and $21.6 million during the years ended December 31, 2024 and 2023, respectively.
Under the CSA with TMUSA, we recorded on-net service revenue of $2.6 million and $14.7 million during the years ended December 31, 2025 and 2024, respectively.
In 2024 and 2023 we received $12.3 million and $16.2 million of reimbursed severance payments, respectively, related to our acquisition of the Sprint Business. We received a combined net total of $14.5 million of cash received (including reimbursed severance payments) related to our acquisition of the Sprint Business. Net Cash Provided by (Used in) Financing Activities.
In 2024 and 2023 we received $12.3 million and $16.2 million of reimbursed severance payments, respectively, related to our acquisition of the Cogent Fiber Business. We received a combined net total of $14.5 million of cash received (including reimbursed severance payments) related to our acquisition of the Cogent Fiber Business.
(2) Includes non-cash equity-based compensation expense of $24,057 and $25,855 for 2024 and 2023, respectively. NM - not meaningful Page 35 of 96 Table of Contents Service Revenue . We continually work to grow our total service revenue by increasing the number of potential customers that we can reach on our network.
Page 40 of 104 Table of Contents (2) Includes non-cash equity-based compensation expense of $24,532 and $24,057 for 2025 and 2024, respectively. NM - not meaningful Service Revenue . We continually work to grow our total service revenue by increasing the number of potential customers that we can reach on our IP Network and our Optical Wave Network.
On May 2, 2024, we issued $206.0 million aggregate principal amount of our IPv4 Notes, with an anticipated term ending in May 2029. The net proceeds from the offering, after debt offering costs, were $198.4 million. Interest on the IPv4 Notes is paid on a monthly basis.
On May 2, 2024, we issued $206.0 million of our Existing IPv4 Notes, with an anticipated repayment date in May 2029. The net proceeds from the offering, after debt offering costs, were $198.4 million. Interest on the Existing IPv4 Notes is paid monthly.
Acquisition of Sprint Communications On May 1, 2023 (the “Closing Date”), Cogent Infrastructure, Inc.
Acquisition of Cogent Fiber Business On May 1, 2023 (the “Closing Date”), Cogent Infrastructure, Inc.
As of December 31, 2024, $22.3 million of our cash and cash equivalents are restricted for use under our Swap Agreement. We have made a $23.4 million deposit with the counterparty to the Swap Agreement.
As of December 31, 2025, $4.1 million of our cash and cash equivalents are restricted for use under our Swap Agreement. We have made a $4.3 million deposit with the counterparty to the Swap Agreement. The Swap Agreement expired in February 2026.
We evaluated what elements were part of the business combination and the consideration exchanged to complete the Transaction. We concluded that the payments to be made represent consideration received from T-Mobile to complete the acquisition of a distressed business.
We evaluated what elements are part of the business combination and the consideration exchanged to complete the acquisition. Under ASC 805, we concluded that the $700.0 million of payments to be made represent consideration received from T-Mobile to complete the acquisition of a distressed business.
We are continuing to use the related IRU asset. Gain on Bargain Purchase. We accounted for our acquisition of the Sprint Business as a business combination. The identifiable assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date.
Gain on Bargain Purchase. We accounted for our acquisition of the Cogent Fiber Business as a business combination. The identifiable assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date.
We are selling these services to our existing customers, customers we acquired with the Sprint Business and to new customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating network infrastructure. As part of the Transaction, we began incurring costs associated with the TSA.
We are selling these services to our existing customers, customers we acquired with the Cogent Fiber Business and to new customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating network infrastructure.
We evaluate the IPv4 intangible asset for impairment on the first day of the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable.
We believe that the IPv4 address asset has an indefinite useful life and is not being amortized. We evaluate the IPv4 address intangible asset for impairment on the first day of the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable.
During the year ended December 31, 2024, we made certain adjustments to our estimates of the fair market value of the assets acquired and liabilities assumed resulting in an increase to the gain on bargain purchase of $22.2 million for the year ended December 31, 2024. The total bargain purchase gain from the Transaction was $1.4 billion.
During the year ended December 31, 2024, we made certain adjustments to our estimates of the fair market value of the assets acquired and liabilities assumed resulting in an increase to the gain on bargain purchase of $22.2 million for the year ended December 31, 2024. Interest Income - IP Transit Services Agreement.
We define “enterprise” customers as large corporations (typically, Fortune 500 companies with greater than $5 billion in annual revenue) running Wide Area Networks (“WAN”) with several dozen to several hundred sites.
We began to serve enterprise customers in connection with our acquisition of the Cogent Fiber Business. We define “enterprise” customers as large corporations (typically, Fortune 500 companies with greater than $5 billion in annual revenue) running Wide Area Networks (“WAN”) with several dozen to several hundred sites.
Cash Flows The following table sets forth our consolidated cash flows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 ​ ​ (in thousands) Net cash (used in) provided by operating activities ​ $ (8,645) ​ $ 17,345 ​ $ 173,707 Net cash provided by (used in) investing activities ​ 21,492 ​ 76,726 ​ ​ (78,971) Net cash provided by (used in) financing activities ​ 105,925 ​ (257,851) ​ ​ (144,849) Effect of exchange rates on cash ​ (4,637) ​ 1,649 ​ ​ (2,599) Net increase (decrease) in cash, cash equivalents and restricted cash during the year ​ $ 114,135 ​ $ (162,131) ​ $ (52,712) ​ Net Cash (Used in) Provided by Operating Activities.
Cash Flows The following table sets forth our consolidated cash flows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ (in thousands) Net cash (used in) provided by operating activities ​ $ (10,579) ​ $ (8,645) ​ $ 17,345 Net cash (used in) provided by investing activities ​ (87,569) ​ 21,492 ​ ​ 76,726 Net cash provided by (used in) financing activities ​ 62,904 ​ 105,925 ​ ​ (257,851) Effect of exchange rates on cash ​ 12,440 ​ (4,637) ​ ​ 1,649 Net (decrease) increase in cash, cash equivalents and restricted cash during the year ​ $ (22,804) ​ $ 114,135 ​ $ (162,131) ​ Net Cash (Used in) Provided by Operating Activities.
Under the IP Transit Services Agreement., TMUSA paid us $204.2 million and $204.2 million during the years ended December 31, 2024 and 2023, respectively. We accounted for the Transaction as a business combination under ASC Topic 805 Business Combinations (“ASC 805”). We evaluated what elements are part of the business combination and the consideration exchanged to complete the acquisition.
Under the IP Transit Services Agreement., TMUSA paid us $100.0 million, $204.2 million and $204.2 million during the years ended December 31, 2025, 2024 and 2023, respectively. We accounted for the Transaction as a business combination under ASC Topic 805 Business Combinations (“ASC 805”).
The combination of this improved operating performance and access to capital has preserved our financial flexibility and buttressed our ability to make distributions to stockholders in the form of cash dividends or through share repurchases. We have returned $1.6 billion to our stockholders through share repurchases and dividends.
The combination of our operating performance and access to capital has enhanced our financial flexibility and increased our ability to make distributions to stockholders in the form of cash dividends or through share repurchases. Since our initial public offering, we have returned $1.8 billion to our stockholders through share repurchases and dividends.
During 2024 and 2023 we paid $93.8 million and $217.2 million to the Seller under the TSA, respectively. Amounts recorded and paid as due to the Seller under the TSA resulted in a use of cash in operating activities of $66.4 million for 2024 and contributed $66.9 million to net cash provided by operating activities for 2023.
Amounts recorded and paid as due to the Seller under the TSA resulted in a use of cash in operating activities of $0.5 million for 2025 and $66.4 million for 2024 and contributed $66.9 million to net cash provided by operating activities for 2023. Net Cash Provided by (Used in) Investing Activities.
Net Cash Provided by (Used in) Investing Activities. Our primary use of cash for investing activities is for purchases of property and equipment. Purchases of property and equipment were $195.0 million, $129.6 million and $79.0 million for 2024, 2023 and 2022, respectively.
Our primary use of cash for investing activities is for purchases of property and equipment. Purchases of property and equipment were $187.6 million, $195.0 million and $129.6 million for 2025, 2024 and 2023, respectively.
Summarized Financial Information of Holdings Neither Holdings nor any of its subsidiaries that is not also a subsidiary of Group is a “Restricted Subsidiary” as defined under the Indentures. Holdings is a guarantor under these notes, but none of its subsidiaries that is not also a subsidiary of Group is a guarantor under these notes.
Page 50 of 104 Table of Contents Summarized Financial Information of Holdings Neither Holdings nor any of its subsidiaries that is not also a subsidiary of Group is a “Restricted Subsidiary” as defined under the Indentures.
Our income tax benefit was $55.6 million for the year ended December 31, 2024 and $54.0 million for the year ended December 31, 2023. The change in our income tax benefit was primarily related to projected operating results related to the Sprint Business acquisition and the reversal of deferred tax liabilities acquired with the Sprint Business. Buildings On-net.
Income Tax Benefit. Our income tax benefit was $62.8 million for the year ended December 31, 2025 and $55.6 million for the year ended December 31, 2024. The change in our income tax benefit was primarily related to the reversal of deferred tax liabilities acquired with the Cogent Fiber Business. Buildings On-net.
In the net-centric market, we offer comparable services in terms of capacity but typically at significantly lower prices. Our service revenue increased by 10.1% from the year ended December 31, 2023 to the year ended December 31, 2024. Exchange rates negatively impacted our service revenue by $0.3 million.
In the net-centric market, we offer comparable services in terms of capacity but typically at significantly lower prices. Our service revenue decreased by 5.8% from the year ended December 31, 2024 to the year ended December 31, 2025. Exchange rates positively impacted our service revenue by $4.6 million.
As of December 31, 2024 and December 31, 2023, we owed $0.5 million and $66.9 million, respectively, to the Seller under the TSA. During the years ended December 31, 2024 and 2023, we billed the Seller $1.1 million and $6.2 million, respectively, as due from the Seller under the TSA.
During the years ended December 31, 2025, 2024 and 2023, we billed the Seller $0.2 million, $1.1 million and $6.2 million, respectively, as due from the Seller under the TSA. During the years ended December 31, 2025, 2024 and 2023, the Seller paid us $0.2 million, $1.3 million and $6.0 million, respectively, under the TSA.
The IP Transit Services Agreement was recorded in connection with the Transaction at its discounted present value resulting in a discount of $79.6 million. The amortization of the discount is recorded as interest income. Interest Expense - Including Change in Valuation of Swap Agreement.
The IP Transit Services Agreement was recorded in connection with the Transaction at its discounted present value resulting in a discount of $79.6 million. The amortization of the discount is recorded as interest income. Loss on Debt Extinguishment and Redemption – 2026 Notes .
Other markets, particularly those in California, Washington D.C. and the Pacific Northwest, continue to see markedly higher vacancy rates. These higher vacancy rates may represent a long-term change in office attendance and occupancy rates in these markets. Despite this overall environment, we are seeing some positive trends in our corporate business.
These higher vacancy rates may represent a long-term change in office attendance and occupancy rates in these markets. Despite this overall environment, we are seeing some positive trends in our corporate business.
On the Closing Date, we classified the total $39.4 million of monthly Sprint Business revenue as $2.5 million of on-net revenue, $32.2 million of off-net revenue and $4.7 million of non-core revenue. Additionally, on the Closing Date, we classified the total 46,743 Sprint Business customer connections as 1,560 on-net customer connections, 24,667 off-net customer connections and 20,516 non-core customer connections.
Additionally, on the Closing Date, we classified the total 46,743 Cogent Fiber Business customer connections as: ● 1,560 on-net customer connections, ● 24,667 off-net customer connections and ● 20,516 non-core customer connections.
We classified the total $39.4 million of May 2023 Sprint Business monthly recurring revenue as $20.0 million of enterprise revenue, $12.9 million of corporate revenue and $6.5 million of net-centric revenue.
Page 42 of 104 Table of Contents We classified the $39.5 million of May 2023 Cogent Fiber Business monthly revenue as: ● $20.1 million of monthly recurring revenue as enterprise revenue, ● $12.9 million of monthly recurring revenue as corporate revenue and ● $6.5 million of monthly recurring revenue as net-centric revenue.
Liquidity and Capital Resources Acquisition of Sprint Communications The Sprint Business’s cash flow was negative at the time of negotiations and during its recent history.
Page 45 of 104 Table of Contents Liquidity and Capital Resources Acquisition of Cogent Fiber Business Acquisition of Cogent Fiber Business – Cash Flow The Cogent Fiber Business’s cash flow was negative at the time of negotiations and during its recent history.
Increasing our cash provided by operating activities, is in part, dependent upon our ability to reduce the operating costs of the Sprint Business while retaining its profitable revenue.
Increasing our cash provided by operating activities is, in part, dependent upon our ability to reduce the operating costs of the Cogent Fiber Business while retaining its profitable revenue, expanding our geographic footprint and increasing our revenues from our wavelength and optical network services.
If issuing equity securities raises additional funds, substantial dilution to existing stockholders may result. We may need to, or elect to, refinance all or a portion of our indebtedness at or before maturity and we cannot provide assurances that we will be able to refinance any such indebtedness on commercially reasonable terms or at all.
Page 52 of 104 Table of Contents We may need to, or elect to, refinance all or a portion of our indebtedness at or before maturity, and we cannot provide assurances that we will be able to refinance any such indebtedness on commercially reasonable terms or at all.
Acquisition-Related Costs In connection with the Transaction and negotiation of the Purchase Agreement, we incurred a total of $13.6 million of professional fees and other acquisition related costs (not including severance costs). Acquisition related costs (not including severance costs) were $9.1 million, $2.3 million and $2.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.
These severance payments ended in the second quarter of 2024. Acquisition-Related Costs In connection with the Transaction and negotiation of the Purchase Agreement, we incurred a total of $13.6 million of professional fees and other acquisition related costs (not including severance costs).
Page 33 of 96 Table of Contents Short-term Lease Payment The Purchase Agreement provides for a payment of $28.1 million ($19.8 million net of discount) from the Seller to us related to acquired short - term operating lease obligations (the “Short - term Lease Payment”).
In April 2024, an additional Working Capital Adjustment of $5.0 million was paid to the Seller. Short-term Lease Payment The Purchase Agreement provides for a payment of $28.1 million ($19.8 million net of discount) from the Seller to us related to acquired short - term operating lease obligations (the “Short - term Lease Payment”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+2 added−2 removed2 unchanged
Biggest changeAs of December 31, 2024, the fair value of the Swap Agreement was a liability of $22.3 million, and as a result, $22.3 million of the deposit was restricted and $1.1 million was unrestricted. A 1.0% change in interest rates as of December 31, 2024 would impact the change in the valuation of our Swap Agreement by approximately $6.2 million.
Biggest changeWe have a $4.4 million interest-bearing deposit with the counterparty to our Swap Agreement. As of December 31, 2025, the fair value of the Swap Agreement was a liability of $4.1 million, and as a result, $4.1 million of the deposit was restricted and $0.3 million was unrestricted.
By entering into this Swap Agreement, we have assumed the risk associated with variable interest rates based upon SOFR related to our 2026 Notes. We have not entered into hedge agreements related to our IPv4 Notes, 2027 Mirror Notes or 2027 Notes, and we do not use derivative financial instruments for trading purposes.
By entering into this Swap Agreement, we have assumed the risk associated with variable interest rates based upon SOFR related to our 2026 Notes. We have not entered into hedge agreements related to our 2032 Notes, IPv4 Notes, 2027 Mirror Notes or 2027 Notes, and we do not use derivative financial instruments for trading purposes.
The values that we report for the Swap Agreement as of each reporting date are recognized as an additional non-cash interest expense or a reduction to interest expense with the corresponding amount included in liabilities or assets, respectively, in our consolidated balance sheets.
The values that we report for the Swap Agreement as of each reporting date are recognized as an additional interest expense or a reduction to interest expense with the corresponding amount included in liabilities or assets, respectively, in our consolidated balance sheets.
Accordingly, in the event that the local currencies strengthen versus the US dollar to a greater extent than planned, the revenues, expenses and cash flow requirements associated with our international operations may be significantly higher in US-dollar terms than planned. During the year ended December 31, 2024, our foreign activities accounted for 17.4% of our consolidated revenue.
Accordingly, in the event that the local currencies strengthen versus the US dollar to a greater extent than planned, the revenues, expenses and cash flow requirements associated with our international operations may be significantly higher in US-dollar terms than planned. During the year ended December 31, 2025, our foreign activities accounted for 19.4% of our consolidated revenue.
A 1.0% change in foreign exchange rates would impact our consolidated annual revenue by approximately $1.4 million. Changes in foreign currency rates could adversely and materially affect our operating results and cash flow. ​ Page 50 of 96 Table of Contents
A 1.0% change in foreign exchange rates would impact our consolidated annual revenue by approximately $1.3 million. Changes in foreign currency rates could adversely and materially affect our operating results and cash flow. ​ Page 54 of 104 Table of Contents
While we record financial results and assets and liabilities from our international operations in the functional currency, which is generally the local currency, these results are reflected in our consolidated financial statements in US dollars.
We have not entered into forward exchange contracts related to our foreign currency exposure. While we record financial results and assets and liabilities from our international operations in the functional currency, which is generally the local currency, these results are reflected in our consolidated financial statements in US dollars.
Interest Rate Risk Interest Expense and Restricted Cash Our cash flow exposure due to changes in interest rates related to our IPv4 Notes, 2027 Mirror Notes and 2027 Notes is limited as these notes have fixed interest rates. Beginning in August 2021, we used a swap agreement to manage our interest rate risk on our 2026 Notes.
Interest Rate Risk Interest Expense and Restricted Cash Our cash flow exposure due to changes in interest rates related to our 2032 Notes, IPv4 Notes, 2027 Mirror Notes and 2027 Notes is limited as these notes have fixed interest rates.
Interest Income Our interest income is sensitive to changes in the general level of interest rates. However, based upon the nature and current level of our investments, which consist of cash, cash equivalents and restricted cash, we believe that there is no material interest rate exposure related to our investments.
However, based upon the nature and current level of our investments, which consist of cash, cash equivalents and restricted cash, we believe that there is no material interest rate exposure related to our investments. Foreign Currency Exchange Risk Our operations outside of the United States expose us to potentially unfavorable adverse movements in foreign currency rate changes.
Our Swap Agreement has the economic effect of modifying our fixed-interest rate obligation associated with our 2026 Notes to a variable interest rate obligation based on SOFR. The Swap Agreement is recorded at its fair value at each reporting period and we incur gains and losses due to changes in market interest rates.
The Swap Agreement is recorded at its fair value at each reporting period and we incur gains and losses due to changes in market interest rates.
Removed
We have a $23.4 million interest-bearing deposit with the counterparty to our Swap Agreement. If the fair value of the Swap Agreement exceeds a net liability of $23.4 million, we will be required to deposit additional funds with the counterparty equal to the net liability that is in excess of the deposit.
Added
Beginning in August 2021, we used a swap agreement to manage our interest rate Page 53 of 104 Table of Contents risk on our 2026 Notes. Our Swap Agreement has the economic effect of modifying our fixed-interest rate obligation associated with our now extinguished 2026 Notes to a variable interest rate obligation based on SOFR.
Removed
Foreign Currency Exchange Risk Our operations outside of the United States expose us to potentially unfavorable adverse movements in foreign currency rate changes. We have not entered into forward exchange contracts related to our foreign currency exposure.
Added
A 1.0% change in interest rates as of December 31, 2025 would not materially impact the valuation of our Swap Agreement since it expired in February 2026. Interest Income Our interest income is sensitive to changes in the general level of interest rates.

Other CCOI 10-K year-over-year comparisons