Cogent Communications Holdings Inc (CCOI) 2022 Q3 法說會逐字稿

Good morning, and welcome to the Cogent Communications Holdings Third Quarter 2022 Earnings Conference Call. As a reminder, this call is being recorded, and it will be available for replay at www.cogentco.com. A transcript of this conference call will be posted on the same website when it becomes available. [Cogent's] summary of financial and operational results attached to its press release can be downloaded from the Cogent website. I would now like to turn the call over to Mr. David Schaeffer, Chairman and Chief Executive Officer of Cogent Communications Holdings.

早上好，歡迎參加 Cogent Communications Holdings 2022 年第三季度收益電話會議。提醒一下，此電話正在錄音中，可在 www.cogentco.com 上重播。本次電話會議的記錄將在可用時發佈在同一網站上。可從 Cogent 網站下載附在其新聞稿中的 [Cogent's] 財務和運營結果摘要。我現在想將電話轉給 Cogent Communications Holdings 董事長兼首席執行官 David Schaeffer 先生。

Thank you, and good morning, everyone. Welcome to our third quarter 2022 earnings conference call. I'm David Schaeffer, Cogent's CEO. And with me on this morning's call is Tad Weed, our Chief Financial Officer. Hopefully, you've had a chance to review our earnings press release. Our press release includes a number of historical metrics that we present in a consistent manner for every quarter. Our revenue growth accelerated this quarter and our corporate revenues increased sequentially by 0.4% from the first quarter, the first time since the beginning of the pandemic and is in part due to the increase in USF revenues. Excluding the $670,000 sequential increase in USF revenues, our corporate revenues were essentially flat sequentially for the quarter.

謝謝大家，大家早上好。歡迎參加我們的 2022 年第三季度收益電話會議。我是 Cogent 的首席執行官 David Schaeffer。今天早上與我通話的是我們的首席財務官 Tad Weed。希望您有機會查看我們的收益新聞稿。我們的新聞稿包括我們在每個季度以一致的方式呈現的一些歷史指標。本季度我們的收入增長加速，我們的公司收入比第一季度環比增長 0.4%，這是自大流行開始以來的首次，部分原因是 USF 收入的增加。不計 USF 收入連續增長 670,000 美元，本季度我們的企業收入基本持平。

Our total revenues increased sequentially by 1% to exactly $150 million, an increase of 1.4% year-over-year. Our total revenues and our NetCentric revenues were materially impacted by the negative impact of foreign exchange in the quarter and the continuing strengthening of the U.S. dollar. For the quarter, the sequential negative impact of foreign exchange was $1.5 million and was negative $4.2 million on a year-over-year basis.

我們的總收入環比增長 1%，達到 1.5 億美元，同比增長 1.4%。我們的總收入和 NetCentric 收入受到本季度外匯負面影響和美元持續走強的重大影響。本季度，外彙的連續負面影響為 150 萬美元，同比為負 420 萬美元。

On a constant currency basis, our revenues grew sequentially by 2% and grew by 4 corporate business continues to be influenced by real estate activities in the central business districts of major North American cities. Two key statistics, including the level of security cards, wipes and buildings and leasing activities indicate that year-to-date, the real estate market and leasing activities in the central business districts have seen some improvement but have not yet returned to their pre-pandemic levels. Leasing activity across major markets and workers return to offices continue to improve, albeit slowly.

按固定匯率計算，我們的收入環比增長 2%，增長 4 倍。公司業務繼續受到北美主要城市中央商務區房地產活動的影響。安全卡、擦拭樓、租賃活動等兩項關鍵數據表明，今年以來，中央商務區房地產市場和租賃活動有所改善，但尚未恢復到前期的水平。流行病水平。主要市場的租賃活動和返回辦公室的工人繼續改善，儘管速度緩慢。

On a U.S. GAAP basis, our corporate revenues increased sequentially 0.4% for the first time since the second quarter of 2020. We continue to remain cautiously optimistic in these uncertain economic times and continuing to deal with the challenges of COVID-19. Our NetCentric business continues to benefit from continued growth in video traffic and streaming. For the quarter, our network traffic was up to a year-over-year growth rate of 21% in the third quarter.

根據美國公認會計原則，我們的企業收入自 2020 年第二季度以來首次環比增長 0.4%。在這些不確定的經濟時期，我們繼續保持謹慎樂觀，並繼續應對 COVID-19 的挑戰。我們的 NetCentric 業務繼續受益於視頻流量和流媒體的持續增長。本季度，我們的網絡流量在第三季度實現了 21% 的同比增長率。

On a U.S. GAAP basis, our NetCentric revenues grew sequentially by 1.9% and grew by 9.6% on a year-over-year basis. On a constant [sequentially] 4.3%, an increase up by 16.8% from the third quarter of 2021. For EBITDA margins as adjusted for the $2 million extraordinary expense associated with the acquisition of T-Mobile Wireline or known as the Sprint CMG business that were incurred in the quarter increased sequentially by the year-over-year basis to 39.9%. This EBITDA margin represents the highest adjusted EBITDA margin in the company's 23-year history.

根據美國公認會計原則，我們的 NetCentric 收入環比增長 1.9%，同比增長 9.6%。 [連續] 4.3% 不變，比 2021 年第三季度增長 16.8%。EBITDA 利潤率根據與收購 T-Mobile Wireline 或被稱為 Sprint CMG 業務相關的 200 萬美元特別費用進行調整本季度發生的環比同比增長至 39.9%。這一 EBITDA 利潤率是該公司 23 年曆史上最高的調整後 EBITDA 利潤率。

Our sales force rep productivity was 4.6 units per rep per full-time equivalent as compared to 4.9 in the last quarter. While this is a decline of 6.1%, it still represents a 7% year-over-year improvement. We significantly increased the size of our sales force by adding 45 sales reps, a 9.4% sequential increase, representing the largest ever net increase in sales force and Cogent's history. This did impact our rep productivity. We ended the quarter with 522 reps and 465 full-time equivalents, a 3.6% increase in full-time equivalent sales reps.

我們的銷售團隊代表生產力為每位全職代表 4.6 個單位，而上一季度為 4.9 個單位。雖然下降了 6.1%，但仍比去年同期增長了 7%。我們通過增加 45 名銷售代表，顯著增加了我們的銷售隊伍規模，環比增長 9.4%，這是銷售隊伍和 Cogent 歷史上有史以來最大的淨增長。這確實影響了我們的代表生產力。我們在本季度結束時有 522 名代表和 465 名全職等效人員，全職等效銷售代表增加了 3.6%。

Now for a couple of words on the acquisition of the Sprint Wireline business. We are diligently working through the approval process to complete our acquisition of Sprint's Wireline business in conjunction with T-Mobile and numerous various regulatory agencies around the world. We anticipate the acquisition will close in the second half of 2023. We incurred $2 million of professional fees in the third quarter in conjunction with the acquisition. We anticipate those professional fees to be dramatically reduced in the subsequent quarters.

現在談談收購 Sprint 有線業務。我們正在與 T-Mobile 和世界各地的眾多監管機構一起努力完成審批流程，以完成對 Sprint 有線業務的收購。我們預計此次收購將在 2023 年下半年完成。我們在第三季度與收購相關的專業費用為 200 萬美元。我們預計這些專業費用將在隨後的幾個季度大幅減少。

We anticipate that the Sprint Wireline revenues that were approximately $560 million for fiscal year 2021 will be approximately $450 million annual run rate at the close date. We expect that the number of Sprint Wireline products will be reduced dramatically from the approximately 30 products offered today down to 4 by closing. Over the next 3 years, we anticipate annualized savings of $180 million on the North American network, primarily by utilizing the Cogent metro footprint and our on-net building portfolio. We also anticipate $25 million of annual savings on the international network by migrating off of a lease network onto the owned Cogent network globally. And we thirdly, expect about a $15 million in maintenance expenses associated with an IRU that we will be abandoning. There will be additional SG&A savings that include headcount reduction and other general operating cost synergies.

我們預計 Sprint Wireline 在 2021 財年的收入約為 5.6 億美元，截至收盤日的年運營率約為 4.5 億美元。我們預計 Sprint Wireline 產品的數量將從目前提供的大約 30 種產品大幅減少到關閉時的 4 種。在接下來的 3 年中，我們預計北美網絡每年可節省 1.8 億美元，主要是通過利用 Cogent 地鐵足跡和我們的在線建築產品組合。我們還預計，通過從租賃網絡遷移到全球擁有的 Cogent 網絡，國際網絡每年可節省 2500 萬美元。第三，我們預計與我們將放棄的 IRU 相關的維護費用約為 1500 萬美元。將有額外的 SG&A 節省，包括裁員和其他一般運營成本協同效應。

During the quarter, we returned $42.7 million to our shareholders through our regular dividend program. We did not purchase any stock during the quarter and have $30.4 million available under our buyback program, which the Board extended to 2023. Our Board of Directors reflecting on the strong cash flow in front of the company decided to increase our quarterly dividend sequentially by $0.01 per share, raising our quarterly dividend from $0.95 per share to 91.5% per share. This increase represents the 41st consecutive sequential increase in our regular quarterly dividend. A 4.4% annualized dividend growth rate is now in line with our growth rate and free cash flow generation.

在本季度，我們通過定期股息計劃向股東返還了 4270 萬美元。我們在本季度沒有購買任何股票，並且根據我們的回購計劃有 3040 萬美元可用，董事會將該計劃延長至 2023 年。我們的董事會反映了公司面前強勁的現金流，決定將我們的季度股息依次增加 0.01 美元每股，將我們的季度股息從每股 0.95 美元提高到每股 91.5%。這一增長是我們定期季度股息連續第 41 次連續增長。 4.4% 的年化股息增長率現在與我們的增長率和自由現金流的產生一致。

And for a couple of comments around long-term expectations. [Our talk to] long-term EBITDA margin expansion and guidance is for approximately 200 basis points per year. Our targeted multiyear constant currency growth rate is targeted to be 10%. Once our entities that is Cogent and Sprint are combined, we anticipate that for the combined entity, the annual revenue growth rate will be between 5% and 7% and the EBITDA margin expansion annually after initial synergies are achieved, will be about 100 basis points per year. Our revenue and EBITDA guidance targets are intended to be multiyear targets and are not intended to be used for either quarterly or even specific annual guidance. Now Tad would like to add additional operating performance data. And then after that, we will open the call for questions and answers.

關於長期預期的一些評論。 [我們的談話]長期 EBITDA 利潤率擴張和指導是每年大約 200 個基點。我們的目標多年不變貨幣增長率為 10%。一旦我們的 Cogent 和 Sprint 實體合併，我們預計合併後的實體的年收入增長率將在 5% 至 7% 之間，並且在實現初始協同效應後，EBITDA 利潤率每年將增長約 100 個基點每年。我們的收入和 EBITDA 指導目標旨在成為多年目標，不打算用於季度甚至特定的年度指導。現在 Tad 想添加額外的運營績效數據。在那之後，我們將打開問題和答案的電話。

Thank you, Dave, and good morning to everyone. This earnings conference call includes forward-looking statements. These forward-looking statements are based upon our current intent, belief and expectations. These forward-looking statements and all other statements that may be made on this call that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Please refer to our SEC filings for more information on the factors that could cause actual results to differ.

謝謝你，戴夫，大家早上好。本次財報電話會議包括前瞻性陳述。這些前瞻性陳述基於我們當前的意圖、信念和期望。這些前瞻性陳述和可能在本次電話會議上做出的所有其他非歷史事實的陳述受到許多風險和不確定性的影響，實際結果可能存在重大差異。有關可能導致實際結果不同的因素的更多信息，請參閱我們的 SEC 文件。

Cogent undertakes no obligation to update or revise our forward-looking statements. If we use non-GAAP financial measures during this call, you will find these reconciled to the corresponding GAAP measurement in our earnings releases, which are posted on our website at cogentco.com. Comment on COVID-19 and risk updates, like many companies, we continue to be impacted by the COVID-19 pandemic, and our risk related to COVID-19 and other risks are described in more detail in our annual report on Form 10-K for 2021 and in our quarterly reports on Form 10-Q for the first and second quarter and this quarter's report, which will be filed Friday.

Cogent 不承擔更新或修改我們的前瞻性陳述的義務。如果我們在本次電話會議期間使用非 GAAP 財務指標，您會發現這些指標與我們發佈在我們網站 cogentco.com 上的收益報告中相應的 GAAP 指標一致。評論 COVID-19 和風險更新，像許多公司一樣，我們繼續受到 COVID-19 大流行的影響，我們與 COVID-19 和其他風險相關的風險在我們的 10-K 表格年度報告中進行了更詳細的描述2021 年的季度報告以及第一季度和第二季度的 10-Q 表格季度報告以及將於週五提交的本季度報告。

Corporate and NetCentric revenue and customer connections. We analyze our revenues based upon network connection type, which is on-net, off-net and noncore, and we also analyze our revenues based upon customer type. We classify all of our customers into 2 types, NetCentric customers and corporate customers. Our corporate customers buy bandwidth from us in large multi-tenant office buildings or in carrier-neutral data centers. These customers are typically professional service firms, financial service firms, educational institutions located in multi-tenant office buildings or connected to our network through our carrier-neutral data center footprint.

企業和 NetCentric 收入和客戶聯繫。我們根據網絡連接類型（在線、離線和非核心）分析我們的收入，我們還根據客戶類型分析我們的收入。我們將所有客戶分為兩類，NetCentric 客戶和企業客戶。我們的企業客戶在大型多租戶辦公樓或運營商中立的數據中心向我們購買帶寬。這些客戶通常是位於多租戶辦公樓或通過我們的運營商中立數據中心足跡連接到我們網絡的專業服務公司、金融服務公司、教育機構。

Our NetCentric customers buy significant amounts of bandwidth from us in carrier-neutral data centers and include streaming companies and content distribution service providers as well as access networks who serve consumers and business customers. Our corporate business represented 57% of our revenues this quarter, our corporate revenue declined year-over-year by 4% to $85.5 million from the third quarter of last year, but as Dave mentioned, increased sequentially by 0.4% for the first time since the second quarter of 2020. We had 45,176 corporate customer connections on our network at quarter end, which was a sequential increase of 0.2% and a year-over-year decline of 1.8%.

我們的 NetCentric 客戶在運營商中立的數據中心從我們那裡購買大量帶寬，包括流媒體公司和內容分發服務提供商以及為消費者和企業客戶提供服務的接入網絡。本季度我們的企業業務占我們收入的 57%，我們的企業收入較去年第三季度同比下降 4% 至 8550 萬美元，但正如戴夫所說，自去年第三季度以來首次環比增長 0.4% 2020 年第二季度。截至季度末，我們的網絡上有 45,176 個企業客戶連接，環比增長 0.2%，同比下降 1.8%。

Our total revenues and our corporate revenues are impacted by changes in the USF tax rates, which are updated quarterly. For the quarter, the impact of USF on our revenues was a positive $0.7 million and the impact was negative year-over-year by the same amount of $0.7 million, 3% of our revenues this quarter. And despite material FX headwinds had another solid quarter and grew by 1.9% to $64.5 million sequentially and grew by 9.6% on a U.S. GAAP and a year-over-year basis. Volatility in foreign exchange rates primarily impact our NetCentric revenue and the impact was materially negative both sequentially and year-over-year.

我們的總收入和公司收入受到 USF 稅率變化的影響，該稅率每季度更新一次。在本季度，USF 對我們收入的影響為正 70 萬美元，而同比影響為負 70 萬美元，占我們本季度收入的 3%。儘管存在重大的外匯逆風，但該季度又一個穩健的季度增長 1.9% 至 6450 萬美元，按美國公認會計原則和同比增長 9.6%。外匯匯率的波動主要影響我們的 NetCentric 收入，並且這種影響在環比和同比方面都是實質性的負面影響。

On a constant currency basis, our NetCentric revenue increased year-over-year by 16.8%, which was an increase from the constant currency revenue increase last quarter of 16.2% and grew sequentially by 4.3%, which also was an increase from last quarter, which was 2.5%. We had 51,145 NetCentric customer connections on our network at quarter end. That was a sequential increase of 0.9% and a year-over-year increase of 7.8%. On revenue and customer connections by network type. Our on-net revenue was $113.2 million for the quarter, which was a sequential increase of 1.1% and a year-over-year increase of 1.9%.

按固定貨幣計算，我們的 NetCentric 收入同比增長 16.8%，高於上一季度 16.2% 的固定貨幣收入增長，環比增長 4.3%，也比上一季度有所增長，為 2.5%。季度末，我們的網絡上有 51,145 個 NetCentric 客戶連接。環比增長 0.9%，同比增長 7.8%。按網絡類型劃分的收入和客戶連接。我們本季度的淨收入為 1.132 億美元，環比增長 1.1%，同比增長 1.9%。

Our on-net customer connections increased by 0.4% sequentially to 82,614 and increased by 3.1% year-over-year. We serve our on-net customers in our 3,126 total on-net multi-tenant office care-neutral data center buildings. We continue to succeed in selling larger connections, 100-gigabit connections and 400-gigabit connections in selected locations, and that has had the impact of increasing our on-net ARPU. Our off-net revenue was $36.6 million for the quarter, a sequential increase of 0.9% and a small year-over-year decrease of 0.1x incorporating the cost savings we obtained from lower local loop prices into our pricing.

我們的在線客戶連接數環比增長 0.4% 至 82,614，同比增長 3.1%。我們在總共 3,126 座在線多租戶辦公室中立數據中心大樓中為我們的在線客戶提供服務。我們繼續在選定地點成功銷售更大的連接、100 Gb 連接和 400 Gb 連接，這對提高我們的在線 ARPU 產生了影響。本季度我們的網外收入為 3660 萬美元，環比增長 0.9%，同比小幅下降 0.1 倍，將我們從較低的本地環路價格中獲得的成本節約納入我們的定價。

The introduction of these customers and to our off-net revenue base lowers our off-net ARPU. Our off-net customer connections increased sequentially by 1.5% to 13,359 off-net connections. That was a 6.9% year-over-year increase. And we ended the quarter serving our off-net customers and about 8,100 off-net buildings. These off-net buildings are primarily located in North America. Our average price per megabit of our installed customer base decreased for the quarter, and our average price per megabit for our new customer contracts was flat. The average price per megabit for our installed base declined sequentially by 6.3% to $0.27 and declined year-over-year by 20.8%. The annual rate of this annual rate of decline was better than our historical long-term rate of decline for our installed base of 21.5%. The average price per megabit for our new customer contracts for the quarter was $0.15. That was the same as last quarter and a year-over-year decline of 24.2%.

這些客戶的引入和我們的網外收入基礎降低了我們的網外 ARPU。我們的網外客戶連接數環比增長 1.5%，達到 13,359 個網外連接。同比增長 6.9%。我們在本季度結束時為我們的網外客戶和大約 8,100 座網外建築物提供服務。這些離網建築主要位於北美。本季度，我們已安裝客戶群的每兆比特平均價格下降，而新客戶合同的每兆比特平均價格持平。我們安裝基礎的每兆平均價格環比下降 6.3% 至 0.27 美元，同比下降 20.8%。這種年下降率的年率好於我們安裝基數 21.5% 的歷史長期下降率。本季度我們新客戶合同的每兆比特平均價格為 0.15 美元。這與上一季度相同，同比下降 24.2%。

This annual rate of decline was compared to our long-term rate of decline of 22.1%. Selling larger connections results in a change in our connection mix and has the effect of lowering our average price per megabit at a greater rate than changes in our ARPU. Our on-net ARPU slightly increased, and our off-net ARPU continued to decline but at a slight rate from lower pricing we are obtaining from our off-net circuit vendors that we pass on to our off-net customers. Our on-net ARPU, which includes both corporate and NetCentric customers increased sequentially by 0.5% from $455 to $458. Our off-net ARPU, which is predominantly comprised of corporate customers climbed sequentially by 0.8% from $927 to $920.

與我們的長期下降率 22.1% 相比，這一年下降率。出售更大的連接會導致我們的連接組合發生變化，並且會以比我們的 ARPU 變化更大的速度降低我們每兆比特的平均價格。我們的網內 ARPU 略有增加，我們的網外 ARPU 繼續下降，但我們從網外電路供應商那裡獲得的較低價格略有下降，我們將這些價格傳遞給了我們的網外客戶。我們的在線 ARPU（包括企業和 NetCentric 客戶）從 455 美元到 458 美元環比增長 0.5%。我們主要由企業客戶組成的網外 ARPU 從 927 美元上升到 920 美元，環比增長 0.8%。

Some comments on churn. Our sequential quarterly churn rates for both on-net and off-net connections were relatively stable and they continue to hover around 1%. Our on-net unit churn rate was 1.1% this quarter compared to 1% last quarter, and our off-net unit churn rate was 1% this quarter and 1.1% last quarter. In order to reduce our customer turnover, we employ a dedicated sales group that works to retain customers who have indicated that they are considering terminating their service with us.

關於流失的一些評論。我們的在線和離線連接的連續季度流失率相對穩定，並繼續徘徊在 1% 左右。本季度我們的網內單位流失率為 1.1%，上一季度為 1%，本季度我們的網外單位流失率為 1%，上一季度為 1.1%。為了減少我們的客戶流失率，我們聘請了一個專門的銷售團隊來留住那些表示他們正在考慮終止與我們服務的客戶。

We may offer pricing discounts to these customers in order to induce them to reverse their termination decision to purchase additional services from us and/or extend the term of their Cogent contract. During the quarter, certain of our on-net customers, NetCentric customers took advantage of our volume and contract term discounts and entered into long-term contracts with us for over 2,350 customer connections and that increased their total revenue commitment to Cogent by over $21.5 million.

我們可能會向這些客戶提供定價折扣，以誘使他們撤銷終止向我們購買額外服務的決定和/或延長他們的 Cogent 合同期限。在本季度，我們的某些在線客戶、NetCentric 客戶利用我們的數量和合同期限折扣，並與我們簽訂了超過 2,350 個客戶連接的長期合同，這使他們對 Cogent 的總收入承諾增加了超過 2150 萬美元.

Some comments on EBITDA and EBITDA margin. We reconcile our EBITDA to our cash flow from operations in each of our quarterly earnings releases. Seasonal factors that typically impact our EBITDA and our SG&A expenses, in particular, include the resetting of payroll taxes in the United States at the beginning of each year, annual cost of living or CPI increases, seasonal vacation periods, the timing level of our audit and tax services and more recently, Sprint acquisition costs and our annual benefit plan cost increases. Our EBITDA, if you include the $2 million of Sprint acquisition professional fee costs decreased sequentially by $0.6 million and increased slightly year-over-year by $0.1 million. Our EBITDA, excluding these Sprint acquisition costs, increased sequentially by $1.4 million and $2.1 million year-over-year.

關於 EBITDA 和 EBITDA 利潤率的一些評論。我們在每個季度收益發布中將我們的 EBITDA 與我們的運營現金流進行了核對。通常會影響我們的 EBITDA 和我們的 SG&A 費用的季節性因素，特別是包括每年年初在美國重置工資稅、年度生活成本或 CPI 增加、季節性假期、我們審計的時間水平和稅務服務，最近，Sprint 購置成本和我們的年度福利計劃成本增加。我們的 EBITDA，如果包括 200 萬美元的 Sprint 收購專業費用成本，環比減少了 60 萬美元，同比略有增加 10 萬美元。我們的 EBITDA（不包括這些 Sprint 收購成本）環比增長 140 萬美元和 210 萬美元。

The negative impact of foreign exchange reduced our year-over-year EBITDA growth by $1.8 million. Our quarterly EBITDA margin, including the Sprint acquisition cost decreased sequentially by 80 basis points to 38.6% and year-over-year by 40 basis points. Our quarterly EBITDA margin, excluding the $2 million of Sprint acquisition costs, increased sequentially by 50 basis points to 39.9% and increased year-over-year by 90 basis points.

外彙的負面影響使我們的 EBITDA 同比增長減少了 180 萬美元。我們的季度 EBITDA 利潤率（包括 Sprint 收購成本）環比下降 80 個基點至 38.6%，同比下降 40 個基點。我們的季度 EBITDA 利潤率（不包括 200 萬美元的 Sprint 收購成本）環比增長 50 個基點至 39.9%，同比增長 90 個基點。

Comments on earnings per share. We did incur a net loss this quarter due to the $16.9 million noncash increase in the valuation of our swap agreement, and our basic and diluted loss per share was $0.17 on the translation of our 2024 euro notes into USD until we extinguished them in June 30, 2022, losses on the extinguishment of debt and the noncash changes in the valuation of our interest rate swap agreement have been the primary contributors to the variability in our net income and consequently, our per share results. Further comments on foreign currency. Our revenue earned outside of the United States is reported in U.S. dollars and was approximately 24% of our total quarterly revenues this quarter.

對每股收益的評論。由於我們的掉期協議估值增加了 1690 萬美元的非現金，我們確實在本季度產生了淨虧損，在我們將 2024 年歐元票據轉換為美元之前，我們的每股基本和攤薄虧損為 0.17 美元，直到我們在 6 月 30 日將其消滅, 2022 年，債務清償損失和我們的利率互換協議估值的非現金變化一直是我們淨收入波動的主要原因，因此也是我們每股業績的主要貢獻者。關於外幣的進一步評論。我們在美國以外的收入以美元報告，約佔本季度季度總收入的 24%。

About 16% of our revenues this quarter were based in Europe, and 8% of our revenues were related to our Canadian, Mexican, Asia Pacific and South American and African operations. As we experienced again this quarter, volatility in foreign exchange rates can materially impact our quarterly reported U.S. GAAP results. The foreign exchange impact on our revenue this quarter was materially negative both sequentially and year-over-year and is expected again to be materially negative in the fourth quarter. The average euro to $0.08 and the average Canadian dollar exchange rate is $0.73.

本季度我們約 16% 的收入來自歐洲，8% 的收入與我們的加拿大、墨西哥、亞太地區以及南美和非洲的業務有關。正如我們本季度再次經歷的那樣，外匯匯率的波動可能會對我們季度報告的美國公認會計準則結果產生重大影響。外匯對我們本季度收入的影響在環比和同比方面都產生了重大負面影響，預計第四季度將再次產生重大負面影響。歐元平均為 0.08 美元，加元平均匯率為 0.73 美元。

Should these average foreign exchange rates remain at the current levels for the remainder of the fourth quarter of this year, we estimate that the FX conversion impact on our sequentially quarterly revenues for the fourth quarter would be a negative $1 million and the year-over-year conversion impact on our quarterly revenues will be a negative $4.3 million. We believe that our revenue and customer base is not highly concentrated, and our top 25 customers represent about 6% of our revenues for the quarter, consistent with the past.

如果這些平均外匯匯率在今年第四季度剩餘時間內保持在當前水平，我們估計外匯轉換對我們第四季度連續季度收入的影響將為負 100 萬美元，同比年轉換對我們季度收入的影響將為負 430 萬美元。我們認為我們的收入和客戶群並不高度集中，我們的前 25 名客戶占我們本季度收入的 6% 左右，與過去一致。

Some comments on CapEx. Our quarterly capital expenditures did increase sequentially to $24 million. Supply chain uncertainty and purchases in anticipation in the closing of our Sprint acquisition have caused us to shift our typical purchasing schedule for network equipment. These anticipatory investments are designed to ensure that we have satisfactory inventory levels of network equipment to accommodate our growth plans, and that includes our new wavelength product offering as a result of the Sprint Wireline acquisition and the interconnection of our 2 networks together in multiple locations and to meet our Cogent customer needs.

關於資本支出的一些評論。我們的季度資本支出確實連續增加至 2400 萬美元。供應鏈的不確定性和我們對完成 Sprint 收購的預期採購導致我們改變了我們對網絡設備的典型採購計劃。這些預期投資旨在確保我們擁有令人滿意的網絡設備庫存水平以適應我們的增長計劃，其中包括我們通過收購 Sprint Wireline 以及我們在多個地點和我們的 2 個網絡互連在一起而提供的新波長產品以滿足我們有說服力的客戶需求。

Finance leases and finance lease payments, our finance lease IRU obligations are for long-term dark fiber leases and typically have initial terms of 15 to 20 years or longer and often include multiple renewal options after the initial term. Our IRU finance lease obligations were $287.9 million at quarter end. We have a very diverse set of IRU suppliers and have IRU contracts with 306 different dark fire suppliers across the world.

融資租賃和融資租賃付款，我們的融資租賃 IRU 義務適用於長期暗纖維租賃，初始期限通常為 15 至 20 年或更長，並且通常包括初始期限後的多個續約選項。我們的 IRU 融資租賃義務在季度末為 2.879 億美元。我們擁有非常多樣化的 IRU 供應商，並與全球 306 家不同的暗火供應商簽訂了 IRU 合同。

Cash and operating cash flow. At quarter end, our cash and cash equivalents and restricted cash was $323.7 million. Our $54.7 million of restricted cash is directly tied to the estimated fair value of our interest rate swap agreement as collateral. Our cash flow from operations was $53.6 million this quarter, a Cogent record and an increase of $6.2 million from the third quarter of last year and a significant increase of $19.2 million from last quarter. Some comments on debt and ratios. Our total gross debt at par, including finance IRU lease obligations was $1.2 billion at quarter end, and our net debt was $914.2 million. Our total gross debt to trailing last 12 months EBITDA as adjusted for our Sprint acquisition costs ratio was 5.31% at quarter end and our net debt ratio was 3.93%.

現金和經營現金流。在季度末，我們的現金和現金等價物以及受限現金為 3.237 億美元。我們的 5470 萬美元受限制現金直接與我們的利率互換協議的估計公允價值作為抵押品。本季度我們的運營現金流為 5360 萬美元，創下了令人信服的記錄，比去年第三季度增加了 620 萬美元，比上一季度顯著增加了 1920 萬美元。關於債務和比率的一些評論。截至季度末，我們的總債務總額（包括融資 IRU 租賃義務）為 12 億美元，淨債務為 9.142 億美元。在季度末，根據我們的 Sprint 收購成本比率調整後的過去 12 個月 EBITDA 的總債務總額為 5.31%，我們的淨債務比率為 3.93%。

Our consolidated leverage ratio, as calculated under the note indentures was slightly different 5.30%, and our secured leverage ratio was 3.37%. Our fixed coverage ratio as calculated under our note indentures was 3.93%. Some comments on the swap. We are party to an interest rate swap agreement that modifies our fixed interest rate obligation associated with our $500 million 2026 notes to a variable interest rate obligation based on the secured overnight financing rate or SOFR for the remaining term on the value of the swap agreement reporting period, and we incur corresponding noncash gains and losses due to changes in market interest rates.

根據票據契約計算，我們的綜合槓桿率略有不同，為 5.30%，我們的擔保槓桿率為 3.37%。根據我們的票據契約計算，我們的固定覆蓋率為 3.93%。關於交換的一些評論。我們是利率互換協議的一方，該協議將我們與我們的 5 億美元 2026 年票據相關的固定利率義務修改為基於有擔保隔夜融資利率或 SOFR 的浮動利率義務，剩餘期限根據互換協議的價值報告期間，我們因市場利率的變化而產生相應的非現金損益。

At quarter end, the fair value of the swap agreement increased by $16.9 million from last quarter to a net estimated liability of $54.7 million. We are required to maintain a restricted cash balance with the counterparty equal to the net estimated liability. The settlement payments under our swap agreement are made in November and May. Our initial settlement payment, which we made in November of last year was a net cash savings of $[1.6] million. Under the settlement payment we made in May of last year, we achieved a net cash savings of $1.2 million for the period from November 2021 to April 30, 2022.

在季度末，互換協議的公允價值比上一季度增加了 1690 萬美元，預計負債淨額為 5470 萬美元。我們需要與交易對手保持相等於估計負債淨額的受限現金餘額。我們的掉期協議下的結算付款是在 11 月和 5 月支付的。我們在去年 11 月支付的初始結算付款是淨現金節省 [1.6] 萬美元。根據我們在去年 5 月支付的結算付款，我們在 2021 年 11 月至 2022 年 4 月 30 日期間實現了 120 萬美元的淨現金節省。

That was a total combined savings allotment that we are making on November 3rd, will be a net cash interest expense of $3.4 million for the period from May 1 through October 31st. The Lastly, some comments on bad debt and DSO, which both improved. Our bad debt expense was only 0% of our revenues for the quarter, unchanged from last quarter but a significant improvement from 0.7% in the third quarter of last year, and our days sales outstanding, or DSO, for worldwide accounts receivable improved almost 21 days improved by 1 day from 22 days last quarter. Again, excellent collection activity results. and we want to thank and recognize our worldwide billing and collection team members for continuing to do just a fantastic job serving our customers and collecting from our customers.

這是我們在 11 月 3 日進行的總儲蓄分配，將是從 5 月 1 日到 10 月 31 日期間的 340 萬美元的淨現金利息支出。最後，關於壞賬和 DSO 的一些評論，兩者都有所改善。本季度我們的壞賬費用僅占我們收入的 0%，與上一季度相比沒有變化，但與去年第三季度的 0.7% 相比有了顯著改善，我們的全球應收賬款的未償銷售額或 DSO 改善了近 21天數比上一季度的 22 天減少了 1 天。再次，優秀的收藏活動成果。我們要感謝和認可我們的全球計費和收款團隊成員，他們繼續出色地為我們的客戶提供服務並從我們的客戶那裡收款。

And with that, I will turn the call back over to Dave.

有了這個，我會把電話轉回給戴夫。

Okay. Thanks, Tad. I'd like to highlight a few of the strengths of our network, our customer base and our sales force. Now for a couple of comments on our NetCentric performance. We achieved excellent revenue growth in our NetCentric business, where year-over-year NetCentric revenue growth was 9.6% and was 16.8% on a constant currency basis, an acceleration from the 16.2% constant currency growth that we delivered in Q2. We are direct beneficiaries of an increasing trend of over-the-top video and streaming, particularly in international markets. At quarter's end, there were 1,433 carrier-neutral data centers connected to our network, 54 Cogent data centers for a grand total of 1,487 data centers.

好的。謝謝，泰德。我想強調我們網絡、客戶群和銷售隊伍的一些優勢。現在對我們的 NetCentric 性能發表一些評論。我們在 NetCentric 業務中實現了出色的收入增長，NetCentric 收入同比增長 9.6%，按固定匯率計算為 16.8%，比我們在第二季度實現的 16.2% 的固定匯率增長有所加快。我們是頂級視頻和流媒體日益增長的趨勢的直接受益者，尤其是在國際市場。在本季度末，有 1,433 個運營商中立數據中心連接到我們的網絡，54 個 Cogent 數據中心，總計 1,487 個數據中心。

More than any other carrier as measured by independent third-party research. The breadth of our coverage enables our NetCentric customers to better optimize their networks and reduce latency. We expect that we will continue to widen our lead in this market as we project to add over an additional 100 carrier-neutral data centers to our network each year for the next several years. At quarter's end, we were directly connected to 7,766 networks that comprise the majority of the Internet. This collection of ISP's telephone companies, cable companies, mobile operators and other carriers provide us access to the vast majority of the world's broadband and subscriber and mobile subscriber customers. At quarter's end, we had a sales force of 208 sales professionals who focused exclusively on the NetCentric market. We believe that this sales force is one of the largest and most sophisticated sales teams for this market segment in the industry.

根據獨立第三方研究衡量，超過任何其他運營商。我們覆蓋的廣度使我們的 NetCentric 客戶能夠更好地優化他們的網絡並減少延遲。我們預計我們將繼續擴大我們在這個市場的領先地位，因為我們計劃在未來幾年內每年為我們的網絡增加超過 100 個運營商中立的數據中心。在季度末，我們直接連接到構成 Internet 大部分的 7,766 個網絡。這些 ISP 的電話公司、有線電視公司、移動運營商和其他運營商的集合使我們能夠接觸到世界上絕大多數的寬帶和訂戶以及移動訂戶客戶。在季度末，我們擁有一支由 208 名銷售專業人員組成的銷售隊伍，他們專門專注於 NetCentric 市場。我們相信，這支銷售隊伍是業內該細分市場規模最大、最成熟的銷售團隊之一。

Now for a couple of comments on our corporate business. We are seeing some positive trends in our corporate business. As work from home environment becomes established as part of people's normal work routines, we see many of our corporate customers looking to upgrade their Internet access infrastructure to larger capacity connections.

現在對我們的公司業務發表一些評論。我們在公司業務中看到了一些積極的趨勢。隨著在家辦公成為人們日常工作的一部分，我們看到許多企業客戶希望將其互聯網訪問基礎設施升級為更大容量的連接。

Our corporate customers are aggressively integrating new applications, which have become part of the work-from-home environment, including video conferencing. This usage will require higher capacity connections, both inside and outside of the premise. Our aggressive push to lower cost of bandwidth and provide greater coverage has begun to boost demand for our corporate product, which is a robust bidirectional symmetric either 1 gig or 10 gig interface. Corporate customers are increasingly buying connections in cilia-neutral data centers for redundancy to support their users ad hoc VPNs and a hybrid work environment.

我們的企業客戶正在積極集成新應用程序，這些應用程序已成為在家工作環境的一部分，包括視頻會議。這種使用將需要更高容量的連接，包括場所內部和外部。我們對降低帶寬成本和提供更大覆蓋範圍的積極推動已經開始增加對我們公司產品的需求，這是一種強大的雙向對稱 1 gig 或 10 gig 接口。企業客戶越來越多地購買纖毛中立數據中心的連接以獲得冗餘，以支持他們的用戶臨時 VPN 和混合工作環境。

We remain focused on our sales force productivity and continue to improve our sales training program and manage out underperformers. On a sequential basis, our sales rep headcount increased significantly by 45 quota-bearing reps and 1.2% year-over-year to a turn of 522 reps. Our number of full-time equivalent reps also increased to $465 from $449. Our sales force turnover rate continued to improve and was reduced to 5.5% per month from the 5.9% we reported in Q2 and from the peak rate of turnover during the pandemic of 8.7% per month. This is a direct result of having our sales force back in the office and having our ability to do in-person training.

我們仍然專注於我們的銷售人員生產力，並繼續改進我們的銷售培訓計劃並管理表現不佳的人。在連續的基礎上，我們的銷售代表人數顯著增加了 45 名配額代表，同比增長 1.2%，達到 522 名代表。我們的全職等效代表人數也從 449 美元增加到 465 美元。我們的銷售人員流動率繼續提高，從我們在第二季度報告的 5.9% 和大流行期間的每月 8.7% 的最高流動率降至每月 5.5%。這是讓我們的銷售人員回到辦公室並有能力進行面對面培訓的直接結果。

Now for a few summary remarks. We remain optimistic about our unique position in serving small and mid-sized businesses that are located in the central business districts of major cities and 1,832 large multi-tenant office buildings on our network, representing nearly 1 billion square feet of office space. We are excited about adding a new customer segment that is large enterprise customers and also adding optical transport network and OTN services are commonly known as wavelength services to our product portfolio as a result of our acquisition of the Sprint business. Currently, key indicators for office activity, including workplace reentry and leasing remained below pre-pandemic levels.

現在做一些總結性的評論。我們仍然看好我們在服務於主要城市中央商務區的中小型企業和我們網絡上的 1,832 座大型多租戶辦公樓（代表近 10 億平方英尺的辦公空間）方面的獨特地位。由於我們收購了 Sprint 業務，我們很高興能夠增加一個新的客戶群，即大型企業客戶，並且還將光傳輸網絡和 OTN 服務（通常稱為波長服務）添加到我們的產品組合中。目前，包括工作場所重新進入和租賃在內的辦公室活動的關鍵指標仍低於大流行前的水平。

However, we are encouraged that many tenants have indicated that a return to office in 2022 is going to continue, and recent activities for [current] commercial office space have begun to rebound. We are optimistic that with the combination of our sales team being in office and the return of our customers to a more normalized work environment, we will benefit from selling tenants who have deferred or delayed network upgrade decisions due to the pandemic.

然而，令我們感到鼓舞的是，許多租戶表示 2022 年將繼續恢復辦公，並且 [當前] 商業辦公空間的近期活動已開始反彈。我們樂觀地認為，隨著我們的銷售團隊在辦公室以及我們的客戶恢復到更加正常的工作環境，我們將從出售因大流行而推遲或延遲網絡升級決定的租戶中受益。

Many companies are establishing long-term network architectures that will support a permanent hybrid work policy as certain corporations elect to downsize our office requirements in multi-tenant buildings, the number of tenants per building will actually increase in Cogent's on-net corporate opportunity. We also will benefit from selling our services to new tenants who are occupying these buildings as a direct result of the aggressive leasing that is being done by landlords across the U.S. and Canada. Our targeted multiyear constant currency revenue growth rate remains 10% and our long-term EBITDA margin expansion rates will be approximately 200 basis points per year. However, once we have combined with Sprint, our revenue scale increases by nearly 90%, our growth rate will decelerate to between 5% and 7% and our EBITDA margins, once we have completed the network synergies will be consistently (technical difficulty).

許多公司正在建立長期的網絡架構，以支持永久混合工作政策，因為某些公司選擇縮小我們在多租戶建築中的辦公需求，每棟建築的租戶數量實際上會增加 Cogent 的在線公司機會。由於美國和加拿大的房東正在積極進行租賃，直接導致我們將服務出售給佔用這些建築物的新租戶，我們也將從中受益。我們的目標多年不變貨幣收入增長率保持在 10%，我們的長期 EBITDA 利潤率擴張率將約為每年 200 個基點。然而，一旦我們與 Sprint 合併，我們的收入規模將增加近 90%，我們的增長率將減速至 5% 至 7% 之間，我們的 EBITDA 利潤率，一旦我們完成網絡協同效應將始終如一（技術難度）。

At quarter end, cash held at Cogent Holdings was $84.6 million, and we had an additional $122.8 million at Cogent Group, which is freely transferable to holdings, giving us $207.4 million of unrestricted cash available for either dividends or buybacks. Our Board of Directors once again proved a sequential increase in our dividend. This is the 41st consecutive sequential increase in our dividend increasing our dividend at $0.01 per share to $0.915 per share. This represents a 4.4% annualized dividend growth rate, which is in line with our current growth rate and free cash flow. Our consistent dividend increase demonstrates our continued optimism about our business' ability to generate increasing amounts of free cash flow. We are diligently working through the approval process to complete the acquisition of the Sprint Wireline business. We are excited and optimistic about the improved cash flow generating opportunities that we will have with a larger and more globally diverse product and customer base. We anticipate the acquisition to close by mid to end of year 2023.

在季度末，Cogent Holdings 持有的現金為 8460 萬美元，我們在 Cogent Group 持有額外的 1.228 億美元，可自由轉讓給控股公司，為我們提供了 2.074 億美元的無限制現金，可用於股息或回購。我們的董事會再次證明我們的股息連續增加。這是我們的股息連續第 41 次連續增加，將我們的股息從每股 0.01 美元增加到每股 0.915 美元。這代表 4.4% 的年化股息增長率，與我們目前的增長率和自由現金流一致。我們持續增加股息表明我們對我們的業務產生越來越多的自由現金流的能力持持續樂觀態度。我們正在努力通過審批程序，以完成對 Sprint 有線業務的收購。我們對更大、更全球化的產品和客戶群將擁有更好的現金流產生機會感到興奮和樂觀。我們預計此次收購將於 2023 年年中至年底完成。

With that, I'd now like to open the floor for questions.

有了這個，我現在想請大家提問。

(Operator Instructions). (inaudible) from Walter with LightShed.

（操作員說明）。 （聽不清）來自 Walter 和 LightShed。

Dave, can you just take us through the conversation with the Board to that led to the reduction in your sequential increase in the dividend, what the thought process was there and how we should think about that going forward, especially post Sprint closing?

戴夫，您能否帶我們完成與董事會的對話，了解導致您的股息連續增長減少的情況，那裡的思考過程是什麼，以及我們應該如何考慮未來，尤其是在 Sprint 結束後？

Right. So Walt, as I reiterated on last earnings call and in numerous public venues over the last quarter, it is necessary for the growth rate in the dividend and the growth rate and free cash flow to come into alignment. I think the Board looked at our current rate of growth in cash flow they were encouraged by the underlying improvements in our corporate business, but are also realistic that the improvements in the corporate environment are going to take some time. So in order to mitigate the increase in net leverage, the Board decided to moderate the rate of dividend growth to that 1% or $0.01 per share or 4.4% annually.

正確的。因此，沃爾特，正如我在上一季度財報電話會議和許多公共場所重申的那樣，股息增長率、增長率和自由現金流必須保持一致。我認為董事會查看了我們目前的現金流增長率，他們對我們公司業務的潛在改善感到鼓舞，但也很現實的是，公司環境的改善需要一些時間。因此，為了減輕淨槓桿的增加，董事會決定將股息增長率降低至 1% 或每股 0.01 美元或每年 4.4%。

We will continue to monitor the improvements in our business and its free cash flow generation. We are committed to being efficient stewards of capital and returning that capital to shareholders through either dividends or buybacks. And it is our expectation that our growth rate and free cash flow will reaccelerate in conjunction with the improvement in our corporate business, but we're uncertain how quickly that improvement will occur. So it seems more prudent to the Board to take this more moderate rate of increase in the dividend.

我們將繼續監控我們業務的改善及其自由現金流的產生。我們致力於成為有效的資本管家，並通過股息或回購將資本返還給股東。我們預計，隨著公司業務的改善，我們的增長率和自由現金流將重新加速，但我們不確定這種改善會以多快的速度發生。因此，董事會採取這種更溫和的股息增長率似乎更為謹慎。

Got it. And then just one follow-up is seeing how the swap has performed for you guys over the past year or so. And just looking -- given your outlook for your company, the macro, the new mix of business, any change or any thought on what might change your target leverage ratios for the company? Or are you satisfied with the current targets?

知道了。然後只是一個後續行動，看看交換在過去一年左右的時間裡對你們的表現如何。只是看看——考慮到你對公司的前景、宏觀、新的業務組合，任何改變或任何想法可能會改變你公司的目標槓桿率？或者您對目前的目標滿意嗎？

Yes. So you are absolutely correct. The swap has not worked out as well as we had hoped. While we had initial cash savings of $1.8 million, as Tad indicated, we will be in a cash deficit this interest payment that will be made today of $3.4 million. So a net economic loss on the swap of about $1.6 million. We did not anticipate the velocity and magnitude of interest rate increases. While we anticipated some the increase in the Fed's fund rate has been more accelerated than we had forecast. We also think that the underlying rate of inflation will continue to moderate, and therefore, that rate of increase and interest will moderate and may even decline and most likely will decline during the swap period.

是的。所以你是絕對正確的。交換並沒有像我們希望的那樣順利。正如 Tad 所說，雖然我們最初節省了 180 萬美元的現金，但今天將支付 340 萬美元的利息，我們將出現現金赤字。因此，掉期的淨經濟損失約為 160 萬美元。我們沒有預料到加息的速度和幅度。雖然我們預計美聯儲基金利率的上升速度比我們預期的要快。我們還認為，基礎通脹率將繼續放緩，因此，在掉期期間，通脹率和利率將放緩，甚至可能下降，很可能會下降。

So I think the jury is out, but between now and 2026, we still think that the swap was the right decision, and we will be better off because we will have diversified our borrowings to about 50% fixed and 50% variable. Now to the second part of your second question, which is the ultimate leverage target. Our range is 2.5 to 3.5x on a net basis. We're at 3.93 today, which is above that range. We do have excess cash on the balance sheet. And as we have communicated to investors consistently actually over the past decade, our goal has been to disgorge cash and return more than 100% of free cash flow to our equity holders. That policy remains in place. We think with the more moderate rate of increase in the dividend, we should expect to see the net leverage relatively peak where it is now and begin to decline. So we're going to take a measured approach. We will look at the growth in our free cash flow and remain committed to returning that cash flow to equity.

所以我認為陪審團已經出局了，但從現在到 2026 年，我們仍然認為掉期是正確的決定，我們的情況會更好，因為我們將把我們的借款多元化到大約 50% 的固定和 50% 的可變借款。現在到第二個問題的第二部分，即最終的槓桿目標。我們的範圍是淨值的 2.5 到 3.5 倍。我們今天處於 3.93，高於該範圍。我們的資產負債表上確實有多餘的現金。正如我們在過去十年中一直與投資者進行的實際溝通一樣，我們的目標是釋放現金並將超過 100% 的自由現金流返還給我們的股東。該政策仍然有效。我們認為，隨著股息增長率較為溫和，我們應該預計淨槓桿率會在現在的水平上相對達到頂峰並開始下降。因此，我們將採取一種衡量的方法。我們將關注自由現金流的增長，並繼續致力於將現金流返還給股本。

And our next question will come from James Breen with William Blair.

我們的下一個問題將來自 James Breen 和 William Blair。

Dave, you talked about some of the long-term targets for the business once the acquisition closes from a growth perspective. Can you just talk about how it might change the absolute EBITDA levels and CapEx levels? And then also seem like CapEx jumped quite a bit this quarter sequentially. Can you just talk about some of the puts and takes there?

戴夫，您從增長的角度談到了收購完成後公司的一些長期目標。你能談談它如何改變絕對 EBITDA 水平和資本支出水平嗎？然後似乎本季度的資本支出也連續增長了很多。你能談談那裡的一些看跌期權嗎？

Yes. I'm going to take the CapEx one first and then talk about the long-term targets secondly. Our CapEx has been elevated for 2 -- well up to this quarter for one reason and now for 2. The first reason, which still exists is we are ordering excess equipment because of supply chain constraints from our vendors. The equipment that we order is modular. We order a complete hit of configuration and find ourselves receiving maybe only 70% or 80% of what we had ordered and then miscellaneous and somewhat random components ship much later. That has forced us to carry much higher levels of equipment and inventory than we are accustomed to.

是的。我將首先討論資本支出，然後再談長期目標。我們的資本支出已經增加了 2 次——一直到本季度有一個原因，現在又增加了 2 次。第一個仍然存在的原因是，由於供應商的供應鏈限制，我們訂購了多餘的設備。我們訂購的設備是模塊化的。我們訂購了完整的配置，發現自己可能只收到了我們訂購的產品的 70% 或 80%，然後很晚才發貨雜項和有些隨機的組件。這迫使我們攜帶比我們習慣的更高水平的設備和庫存。

We believe -- and this is in discussions with Cisco, our main vendor that we have passed the worst of these component shortages. And the ability to ship in a more normalized schedule will continue to improve over the next 6 to 12 months, and we'll be back to a more normalized order-to-delivery cycle, and we'll be able to draw down on those inventories.

我們相信——這是在與我們的主要供應商思科進行的討論中，我們已經度過了這些組件短缺中最糟糕的時期。在接下來的 6 到 12 個月內，以更規範的時間表發貨的能力將繼續提高，我們將回到更規範的訂單到交付週期，我們將能夠利用這些庫存。

The second expenditure, which was unique to this quarter was the beginning of spending monies to interconnect our network with the Sprint network in multiple locations around the world. We had told investors that there would be a one-time expenditure of about $15 million to achieve those interconnections. Some of the CapEx that we spent is as a result of these one-time expenses, and they will continue for the next several quarters. We can actually do this work anticipatory and in advance of getting the regulatory approvals. Now we do run the risk of not getting regulatory approvals, but we view that risk as de minimis. Our purchase agreement does include a traditional Helen high water provision. So both sides will do what it takes to get this deal through the regulatory approval process. On a going-forward basis, the combined company will have a revenue scale at close of about $1.1 billion, up from Cogent's roughly $650 million scale.

本季度獨有的第二項支出是開始花錢將我們的網絡與全球多個地點的 Sprint 網絡互連。我們曾告訴投資者，將一次性支出約 1500 萬美元來實現這些互連。我們花費的一些資本支出是這些一次性支出的結果，它們將在接下來的幾個季度中持續存在。我們實際上可以在獲得監管批准之前提前完成這項工作。現在我們確實冒著無法獲得監管批准的風險，但我們認為這種風險微乎其微。我們的購買協議確實包括傳統的海倫高水位條款。因此，雙方將盡一切努力通過監管審批程序達成這筆交易。展望未來，合併後的公司的收入規模將接近 11 億美元，高於 Cogent 約 6.5 億美元的規模。

As a result of that larger scale and our new product wavelengths, we anticipate that the going-forward annual capital expenditures for the larger combined company will be about $30 million higher than they would have been for Cogent stand-alone. So 2 things. The one-time $50 million set of extraordinary expenses and then two, the recurring (technical difficulty). Now for the long-term targets, both around revenue growth and EBITDA. Cogent's core business has been tremendously negatively impacted by the pandemic. We are seeing that negative impact subside and our growth rate is returning. That's encouraging to us, and we think that trend will continue, but we also are not comfortable in predicting exactly when we will return to that historic average organic growth rate for Cogent's business of 10% per year, but we feel comfortable we will.

由於更大的規模和我們的新產品波長，我們預計合併後的更大公司未來的年度資本支出將比 Cogent 獨立時高出約 3000 萬美元。所以2件事。一次性 5000 萬美元的特殊費用，然後是兩次，經常性（技術難度）。現在是圍繞收入增長和 EBITDA 的長期目標。 Cogent 的核心業務受到大流行的巨大負面影響。我們看到負面影響消退，我們的增長率正在恢復。這對我們來說是令人鼓舞的，我們認為這種趨勢將繼續下去，但我們也不能準確地預測 Cogent 業務何時會恢復到每年 10% 的歷史平均有機增長率，但我們感到很自在。

We also know that of the $450 million of revenue that we are acquiring from T-Mobile, the Sprint business. Most of that is concentrated in large enterprise customers that generate about $442 million of that $50 $450 million in revenue. And because these are very long-term agreements, and these companies have already configured their networks, we do not anticipate material growth out of that revenue stream, probably in the order of 1% to 2% annually. But the real meteoric growth in the combined business will come from our ability to sell the optical transport products or wavelengths. Today, that is only an $8 million business.

我們還知道，我們從 Sprint 業務 T-Mobile 獲得的 4.5 億美元收入中。其中大部分集中在大型企業客戶中，在這 50 美元的 4.5 億美元收入中，這些客戶產生了約 4.42 億美元。而且因為這些是非常長期的協議，而且這些公司已經配置了他們的網絡，我們預計該收入流不會有實質性的增長，可能每年大約 1% 到 2%。但合併後業務的真正飛速增長將來自我們銷售光傳輸產品或波長的能力。今天，這只是一項價值 800 萬美元的業務。

At Sprint, we anticipate that within 5 years of closing, we can grow that to a $400 million business. So when we add these 3 legs of growth together on a more normalized basis, getting past this initial ramp-up in the wavelength business, we should find the combined company with EBITDA margins in the low to mid-30s and the ability to grow top line 5% to 7% and the ability to expand margins consistently at about 100 basis points a year. The slower margin expansion is a result of those relatively static, large enterprise customer revenue streams and the lower margin associated with them while in absolute dollars, they produce cash flow, they are not growing at the same pace as the other products in the company. But when we look at the ability to delever to Walt's question and return cash to shareholders, the combined company is in a much more sustainable and scalable position than Cogent independently would have been.

在 Sprint，我們預計在關閉後的 5 年內，我們可以將其發展到 4 億美元的業務。因此，當我們在更正常的基礎上將這 3 條增長腿加在一起，克服波長業務的最初增長時，我們應該會發現合併後的公司的 EBITDA 利潤率在 30 多歲到 30 年代中期，並且有能力實現最高增長線 5% 至 7%，並且能夠以每年約 100 個基點的速度持續擴大利潤率。較慢的利潤率擴張是由於那些相對靜態的大型企業客戶收入流以及與之相關的較低利潤率，而以絕對美元計算，它們產生現金流，它們的增長速度與公司其他產品的增長速度不同。但是，當我們考慮解決沃爾特的問題並向股東返還現金的能力時，合併後的公司處於比 Cogent 獨立時更具可持續性和可擴展性的地位。

Just a quick follow-up to that. So as you look at the combined company, revenue obviously a lot larger, but you're not taking on incremental debt. So does that mean off of that low to mid-30s EBITDA margin combined, you'll have a higher free cash flow yield because the interest expense will be small relative to the revenue that you have now?

只是對此的快速跟進。因此，當您查看合併後的公司時，收入顯然要大得多，但您並沒有承擔增量債務。那麼，這是否意味著從低到 30 年代中期的 EBITDA 利潤率加起來，您將擁有更高的自由現金流收益率，因為相對於您現在擁有的收入而言，利息支出會很小？

That is absolutely correct, James. We will absolutely be producing significantly more free cash flow per share. Things may actually even be better than what we are forecasting. And again, we've tried to be transparent with investors. We are getting $700 million in cash over 54 months from T-Mobile. In our forecast of revenue growth and margin, we are taking the most conservative approach and not counting any of that as revenue. it is highly likely that we can count some possibly even all. I think that's unlikely of that as revenue. If that is the case, our revenue growth will actually have a material step function up with those payments, and our margins will be much better than what we are predicting.

這是絕對正確的，詹姆斯。我們絕對會產生更多的每股自由現金流。事情實際上甚至可能比我們預測的要好。再一次，我們試圖對投資者保持透明。我們在 54 個月內從 T-Mobile 獲得了 7 億美元的現金。在我們對收入增長和利潤率的預測中，我們採取了最保守的方法，不將其中任何一項計入收入。我們很有可能可以數出一些甚至全部。我認為這不太可能作為收入。如果是這樣的話，我們的收入增長實際上將隨著這些付款而大幅增加，我們的利潤率將比我們預測的要好得多。

Our next question will come from Frank Louthan with Raymond James.

我們的下一個問題將來自 Frank Louthan 和 Raymond James。

When will you know what that status is with what you're able to recognize? And then is the Sprint network on the same pace that it was in some of the business declining and so forth. Is that still on the same pace that it was when you announced the deal?

你什麼時候才能知道你能識別的狀態是什麼？然後是 Sprint 網絡以與某些業務相同的速度下降等等。這是否仍與您宣布交易時的步伐相同？

Yes. First of all, let me take the rate of decline. It's actually accelerating, Frank. And the reason is, in our agreement with T-Mobile, these subscale and unprofitable products are being [end-device], there are customer contractual obligations, so we can't turn off the switch. We are working with the engineering teams at Sprint and also the sales teams to give customers alternatives. But by design, we expect the revenue stream to decrease by close to 25% from $560 million down to $450 million and about the 1-year period from announcement to closing. That's actually about twice as fast as the rate of decline had historically been. However, once that set of unprofitable products is purged from the network, we expect the remaining products to remain stable and our ability to increase throughput by bringing those customers on-net using our metro footprint not only improves margin but it allows the customer to get a 10x increase in their ultimate services. Tad?

是的。首先，讓我看一下下降的速度。它實際上在加速，弗蘭克。原因是，在我們與 T-Mobile 的協議中，這些小規模且無利可圖的產品是 [終端設備]，存在客戶合同義務，因此我們無法關閉開關。我們正在與 Sprint 的工程團隊以及銷售團隊合作，為客戶提供替代方案。但按照設計，我們預計收入流將減少近 25%，從 5.6 億美元降至 4.5 億美元，從宣佈到結束的時間約為 1 年。這實際上是歷史上下降速度的兩倍左右。但是，一旦從網絡中清除了這組無利可圖的產品，我們預計剩餘產品將保持穩定，並且我們通過使用我們的 Metro 足跡將這些客戶帶到網上來增加吞吐量的能力不僅可以提高利潤，而且還可以讓客戶獲得他們的終極服務增加了 10 倍。泰德？

Yes. With respect to the accounting for the contract -- IP transit contracts with T-Mobile, the accounting for that will be combined with the acquisitions since that contract is entered into at the same time as the acquisition. And the final determination will be made once the appraisal is performed of the acquired business, we would expect that to be performed at the same time in the second half of next year. I will say, on a preliminary basis, it appears that the majority of the IP transit payments would be straight-line revenue over the term. I think 54 months.

是的。關於合同的會計處理——與 T-Mobile 簽訂的 IP 傳輸合同，會計處理將與收購相結合，因為該合同與收購同時簽訂。最終確定將在對被收購業務進行評估後作出，我們預計將在明年下半年同時進行。我會說，在初步基礎上，似乎大部分 IP 過境付款將是整個期限內的直線收入。我想54個月。

Yes. And we're going to ultimately need that appraisal and work with our auditors, Ernst & Young before we're comfortable in reporting that exact number to investors.

是的。我們最終需要進行評估並與我們的審計師安永合作，然後我們才能放心地向投資者報告這個確切的數字。

Our next question will come from Nick Del Deo from MoffettNathanson. Your line is muted.

我們的下一個問題將來自 MoffettNathanson 的 Nick Del Deo。您的線路已靜音。

Sorry. Sorry about that.

對不起。對於那個很抱歉。

That's okay, Nick.

沒關係，尼克。

Figured 2.5 years in, you remember to unmute. But first, one quick clarification and then 2 more substantive ones. I didn't write the numbers down fast enough as you were speaking. Were the total expected savings you articulated for the Sprint deal in your prepared remarks, the same as what you shared at recent investor conferences?

算上 2.5 年，你記得取消靜音。但首先，一個快速的澄清，然後是兩個更實質性的澄清。當你說話的時候，我沒有足夠快地寫下數字。您在準備好的評論中為 Sprint 交易闡明的總預期節省是否與您在最近的投資者會議上分享的相同？

The answer is yes, they were identical. And absent SG&A and headcount numbers, we're anticipating an aggregate set of savings of about $220 million a year, that being $180 million of North American Sprint network savings about $25 million of International Sprint network savings and approximately $15 million of North American Cogent network savings.

答案是肯定的，它們是相同的。在沒有 SG&A 和員工人數的情況下，我們預計每年總共可節省約 2.2 億美元，即北美 Sprint 網絡節省 1.8 億美元，國際 Sprint 網絡節省約 2500 萬美元，北美 Cogent 網絡節省約 1500 萬美元儲蓄。

Okay. Great. So the first real question. Your principal payments on capital leases were at a record level and your capital lease obligations were up about $34 million sequentially, which is pretty meaningful. But what's behind that? Was there any ROU or reclass like you had a couple of years ago? Or is it something else?

好的。偉大的。所以第一個真正的問題。您的資本租賃本金支付達到創紀錄水平，您的資本租賃義務連續增加約 3400 萬美元，這非常有意義。但這背後是什麼？有沒有像幾年前那樣有任何 ROU 或重新分類？或者是別的什麼？

So 2 very different things. The first point is we began to acquire IRUs for fiber to physically interconnect the 2 networks. And when we do that, there's both a cash payment upfront, which was relatively modest, but we also have to reflect in the lease balance, all of the O&M over that term. And actually for some of those new fiber routes, the term is actually 44 years. So that number could be pretty large. The second thing that happened in the quarter is a major IRU in France ended. There was no upfront payment, but we elected to extend that for another 20 years and then have to reflect that obligation for O&M over that 20-year period. So those are the 2 reasons why both the balance and the initial payments increase.

所以2個非常不同的東西。第一點是我們開始為光纖購買 IRU，以在物理上互連 2 個網絡。當我們這樣做時，既要預先支付現金，這相對適度，但我們還必須在租賃餘額中反映該期限內的所有 O&M。實際上，對於其中一些新的光纖線路，這個期限實際上是 44 年。所以這個數字可能非常大。本季度發生的第二件事是法國的主要 IRU 結束。沒有預付款，但我們選擇將其再延長 20 年，然後必須在 20 年期間反映 O&M 的義務。因此，這就是餘額和初始付款都增加的兩個原因。

Okay. Was there any OpEx impact to the extension in France?

好的。對法國的擴展有任何 OpEx 影響嗎？

No, because it already was a capital lease when reclassification occurred 3 years, 4 years ago, the remaining several years of that move from OpEx to CapEx, but just until that period, then we had this one-time window that we could have walked away and elected to extend. And part of our extension was a negotiation with the counterparty for a lower CPI adjustment, which sounds counterintuitive in this market, why they would lower the CPI rate of increase, but it's better to get something than nothing because what we can [really] send off.

不，因為在 3 年、4 年前發生重新分類時，它已經是資本租賃，剩下的幾年從 OpEx 轉移到 CapEx，但是直到那個時期，我們才有了這個我們可以走過的一次性窗口離開並選擇延長。我們延期的一部分是與交易對手就較低的 CPI 調整進行談判，這在這個市場上聽起來違反直覺，為什麼他們會降低 CPI 增長率，但得到總比沒有好，因為我們可以 [真的] 發送離開。

And what happened really with the transaction in France, as we had a number of individual leases that were all aggregated and made coterminous under one long-term lease. So both extended the term and simplified really the accounting for it and the contract.

在法國的交易中真正發生了什麼，因為我們有許多單獨的租約，這些租約都匯總在一起，並在一個長期租約下連在一起。因此，雙方都延長了期限，並真正簡化了對它和合同的會計處理。

Okay. Makes sense. Last question. Dave, can you give us any updates on customer feedback or early expressions of interest you're getting regarding the potential to sell dark fiber or wavelengths post-Sprint [close]?

好的。說得通。最後一個問題。戴夫，您能否向我們提供有關客戶反饋的任何最新信息或您對 Sprint 後銷售暗光纖或波長的潛力的早期興趣表達 [關閉]？

Yes. So NANOG, the North American Network Operators Group, which is an engineering forum held its quarterly conference in Los Angeles about a month ago. I was not initially attending -- or planning to attend that conference, but I chose to do so after we announced the Sprint deal, just so I could sit down with the engineering teams of many of our key customers is being folks like Amazon, Microsoft, Facebook, Charter, Cox, some of our larger NetCentric customers and really understand their wish list of what they would like to be able to purchase. And I left those meetings not able to sign any orders because I can't until the deal closes, but very, very encouraged that there was a significant pool of demand for these services. And it was surprising to me that many customers have actually done their homework, came to meetings with shopping list of very specific routes and city payers that they were interested in. And we told them we can provide these services day 1 at closing, but we could not take those orders yet.

是的。因此，北美網絡運營商集團（NANOG）是一個工程論壇，大約一個月前在洛杉磯舉行了季度會議。我最初並沒有參加或計劃參加那個會議，但在我們宣布 Sprint 交易後我選擇參加，這樣我就可以與我們的許多主要客戶的工程團隊坐下來，他們是亞馬遜、微軟等人，Facebook，Charter，Cox，我們的一些較大的 NetCentric 客戶，並真正了解他們希望能夠購買什麼的願望清單。我讓那些會議無法簽署任何訂單，因為在交易完成之前我不能簽署任何訂單，但非常非常鼓舞的是，對這些服務有大量需求。令我驚訝的是，許多客戶實際上已經完成了他們的功課，與他們感興趣的非常具體的路線和城市付款人的購物清單進行了會議。我們告訴他們我們可以在結束的第一天提供這些服務，但我們還不能接受這些命令。

Our next question will come from David Barden with Bank of America.

我們的下一個問題將來自美國銀行的大衛巴登。

Just on that point, so I guess as we followed the company, we've got the NetCentric business where you've had this very marginal cost strategy on pricing, which I think was really geared towards scaling up your relevance to the industry. And then we've got the corporate side where you've been making the money really focused on a very simple, low-cost broadband strategy. And as we think about this path between the $8 million and the $400 million that you're trying to get to in the wavelength services, which of these two strategies is it? Is it mercilessly lower price to win incremental share and figure out the profit later? Or is it -- is there something more like the corporate strategy where there's real money to be made in the nearer term? And then the second piece, I guess, is related to the $700 million that you're going to get, I know that there's a tax potential piece -- a taxable piece of this, I guess that goes along with the audit that will happen alongside closing. But would it be your intention to take that cash flow and apply it to your dividend thought process with the Board on the far side of the closing?

就在這一點上，所以我想當我們關注公司時，我們已經有了 NetCentric 業務，您在定價方面有這種非常邊際成本策略，我認為這真的是為了擴大您與行業的相關性。然後我們有企業方面，你一直在賺錢，真正專注於一個非常簡單、低成本的寬帶戰略。當我們考慮您試圖在波長服務中達到的 800 萬美元和 4 億美元之間的路徑時，這兩種策略中的哪一種？是無情地壓低價格來贏得增量份額，然後再計算利潤嗎？或者是不是——是否有更像是在短期內可以賺到真錢的公司戰略？然後第二部分，我想，與你將要獲得的 7 億美元有關，我知道有一個潛在的稅收部分——我想這與將要進行的審計有關在關閉的同時。但是，您是否打算利用該現金流並將其應用於您的股息思考過程，而董事會則處於收盤的另一端？

Yes. So I'm going to take your first question first, and I'm going to actually disagree slightly with the premise of the question, which is that we don't make money on the NetCentric business. The most profitable business at Cogent is our on-net services. In our corporate product mix, 60% of revenues come from on-net and 40% come from off-net. In our NetCentric business, 90% of revenues come on-net and 10% off-net. In the wavelength products, it will be virtually a 100% on-net offering. So really the only practical way to sell it and is part of the reason why Sprint has struggled in the market. We also have a network with initially day 1, a negative cost basis.

是的。所以我要先回答你的第一個問題，實際上我會稍微不同意這個問題的前提，即我們不會在 NetCentric 業務上賺錢。 Cogent 最賺錢的業務是我們的在線服務。在我們的企業產品組合中，60% 的收入來自網內，40% 來自網外。在我們的 NetCentric 業務中，90% 的收入來自網內，10% 來自網外。在波長產品中，它將幾乎是 100% 的在線產品。所以真的是唯一可行的銷售方式，也是 Sprint 在市場上苦苦掙扎的部分原因。我們還有一個網絡，最初是第 1 天，一個負成本基礎。

There is about a $2 billion addressable market that's dominated by 2 major players, Lumen and Zayo. We will be as aggressive in that market as we have been in the transit market. We rose out of a pool of 200 transfer providers 20 years ago to now carrying nearly 24% of the world's traffic being #2 and literally within a couple of percentage points of being #1. We have the same ambitions for our wavelength business. So we will be aggressive. We don't want to destroy the market, but we will capture share through the breadth of locations that we can offer and our pricing model. We will be profitable in doing this. Now to the tax consequence of the payments from T-Mobile.

有大約 20 億美元的潛在市場，由 Lumen 和 Zayo 這兩個主要參與者主導。我們將在該市場上像在過境市場上一樣積極進取。 20 年前，我們從 200 家傳輸提供商中脫穎而出，現在承載著全球近 24% 的流量，排名第二，距離第一名只有幾個百分點。我們對波長業務有著同樣的抱負。所以我們會積極進取。我們不想破壞市場，但我們將通過我們可以提供的廣泛地點和我們的定價模式來獲取份額。我們這樣做是有利可圖的。現在來談談 T-Mobile 付款的稅收後果。

The more of it that is recognized as revenue, and you heard Tad say the majority, we think will be. We will still pay taxes, but we pay them [rapidly] as opposed to upfront. If a portion of that is ascribed to the assumption of uneconomic contracts, we have to recognize that gain upfront and pay upfront. So we're going to work with our tax advisers, with our auditor to come to the best answer we can for Cogent to be compliant with the law. We look at the total fungibility of cash, and we are committed to returning an ever-increasing amount of cash to shareholders, whether that's through dividends, buybacks or a combination is measured by the Board each and every quarter. You saw that dynamic process play out this quarter where we decelerated the rate of growth.

被確認為收入的越多，你聽到泰德說大多數，我們認為會是。我們仍然會繳稅，但我們會[迅速]繳稅，而不是預先繳稅。如果其中一部分歸因於非經濟合同的假設，我們必須預先認識到這一收益並預先支付。因此，我們將與我們的稅務顧問和審計師合作，為 Cogent 遵守法律做出我們所能提供的最佳答案。我們著眼於現金的總體可替代性，我們致力於向股東返還越來越多的現金，無論是通過股息、回購還是董事會每個季度衡量的組合。您看到本季度出現了動態過程，我們降低了增長率。

But that's not a lack of commitment and growth in dividend. It's just a reflection of what 2 years of COVID it done to our corporate business. But we think that business is going to improve the underlying acquired Sprint business is going to improve, and we will have $700 million in advance of our need to reduce the cost. So when we put all of that together, we believe that on a combined company basis, we will be in a position every quarter post-closing, to return more cash to shareholders than we would have as a stand-alone Cogent. Now whether that is dividends or buybacks is something that the Board will determine each and every quarter.

但這並不是缺乏承諾和股息增長。這只是 2 年 COVID 對我們公司業務的影響的反映。但我們認為業務將會改善，收購的 Sprint 業務將會改善，我們將提前 7 億美元來降低成本。因此，當我們將所有這些放在一起時，我們相信，在合併後的公司的基礎上，我們將能夠在交易結束後的每個季度向股東返還比作為獨立 Cogent 更多的現金。現在，無論是股息還是回購，董事會將在每個季度確定。

Our next question will come from Brett Feldman with Goldman Sachs.

我們的下一個問題將來自高盛的布雷特費爾德曼。

And 2 follow-up questions, if you don't mind. So you were just talking about how you're going to be aggressive in the wavelength market when the deal closes. And I think the point here is you're acquiring assets have a low, I think you said negative cost basis means it's the assets you're acquiring that you intend to leverage in the market. I don't think it's your intent to start deploying new capital because you could be doing that now. So I want to clarify that because the question I really have is, what portion of the wavelength market do you think you can actually address with the assets you're acquiring?

如果您不介意，還有 2 個後續問題。所以你只是在談論當交易完成時你將如何在波長市場上積極進取。而且我認為這裡的重點是您要收購的資產較低，我認為您所說的負成本基礎意味著您打算在市場上利用的資產是您要收購的資產。我不認為您打算開始部署新資本，因為您現在可以這樣做。所以我想澄清一下，因為我真正的問題是，你認為你可以用你所收購的資產實際解決波長市場的哪一部分？

And then the second question, I'm sorry if I got that wrong, but I think you said you're going to see this asset transition from 30 products today to 4 at close. And so it's a 2-part question. One is the accountability of winding down all those businesses. Like are there mechanisms to make sure that when you get the asset, not only the revenue, but the expenses are gone, so it's actually a clean asset? And then the fourth, revenue streams that you're going to be taking on, are they actually growing today? Or does something have to happen to turn those into growth businesses at the close?

然後是第二個問題，如果我弄錯了，我很抱歉，但我想你說過你會看到這種資產從今天的 30 種產品過渡到即將結束的 4 種產品。所以這是一個兩部分的問題。一是關閉所有這些業務的責任。有沒有機制可以確保當你獲得資產時，不僅收入，而且費用都消失了，所以它實際上是一個乾淨的資產？然後是第四個，你將要承擔的收入流，它們今天真的在增長嗎？還是必鬚髮生一些事情才能在收盤時將它們轉變為增長型業務？

Yes. So let's start with the wavelength business and dark fiber, which we haven't mentioned because we haven't totally sized that market. Dark fiber would be 100% margin, and there's no incremental capital needed, it's just selling inventory. On wavelengths, it's a slightly more subtle answer in that when we're spending the money upfront to tie the networks together, so we have a maximum number of endpoints that we could sell. That's a onetime expense, but we need to do that for the IP and for the VPN business anyhow.

是的。所以讓我們從波長業務和暗光纖開始，我們沒有提到，因為我們還沒有完全確定那個市場的規模。深色纖維將是 100% 的利潤，並且不需要增量資本，它只是出售庫存。在波長方面，這是一個稍微微妙的答案，因為當我們預先花錢將網絡連接在一起時，我們可以銷售的端點數量最多。這是一次性費用，但無論如何我們都需要為 IP 和 VPN 業務這樣做。

So it's not an incremental expense. We also know that on a going forward basis, the optical transport technology will continue to improve. The pluggable optics, the CR optics and the transponder cards will continue to improve. While we will be inheriting a large inventory of that equipment, we will be spending capital to continue to modernize that wavelength portfolio to remain at the cutting edge of technology. And that is embedded in our expectation of $30 million of incremental capital for the combined business. So we think that we can eventually get to 25% to 30% of this market. Maybe better, but we prefer to set our sites realistically and then raise our targets. And we'll have to see how our competitors react.

因此，這不是增量費用。我們也知道，在未來的基礎上，光傳輸技術將繼續改進。可插拔光學器件、CR 光學器件和轉發器卡將繼續改進。雖然我們將繼承該設備的大量庫存，但我們將投入資金繼續對該波長組合進行現代化改造，以保持技術前沿。這包含在我們對合併後業務的 3000 萬美元增量資本的預期中。所以我們認為我們最終可以佔據這個市場的 25% 到 30%。也許更好，但我們更喜歡現實地設置我們的網站，然後提高我們的目標。我們將不得不看看我們的競爭對手如何反應。

But so far, what appears to be happening is our competitors are going in different directions and focusing on different customer segments, much as they have ceded share in transit to us I think they will see share in this product segment that will be very profitable for Cogent and may be less profitable for them. Now to the product part of your question, Brett. The answer is most of these products will end of life prior to closing. But there are customer relationships that extend beyond our expected close date and some of these products, while end-of-life will still be supported. So part of the $700 million payment from T-Mobile is to help us cover those negative costs while we honor those contracts, we will not dishonor any contract to any customer that we are acquiring. What we will do, however, is go to those customers and most likely try to find an alternate provider. So we will provide the connectivity and they will provide the underlying service on top of that connectivity. Now to the revenue growth rates within the business.

但到目前為止，似乎正在發生的事情是我們的競爭對手正朝著不同的方向發展，並專注於不同的客戶群，就像他們在運輸過程中將市場份額讓給了我們一樣，我認為他們將在這個產品領域中看到對我們來說非常有利可圖的份額有說服力，可能對他們來說利潤較低。現在到你問題的產品部分，布雷特。答案是這些產品中的大多數將在關閉之前結束生命週期。但是有些客戶關係超出了我們的預期關閉日期，其中一些產品仍將得到支持。因此，T-Mobile 支付的 7 億美元中的一部分是為了幫助我們在履行這些合同的同時支付這些負面成本，我們不會向我們獲得的任何客戶拒付任何合同。然而，我們要做的是找到這些客戶，並且很可能會嘗試尋找替代供應商。所以我們將提供連接，他們將在連接之上提供底層服務。現在來看看業務內的收入增長率。

Basically, there are 2 major products that are being required, Internet access and VPNs based on MPLS. Both of those products are about $220 million of revenues. So $440 million of the $450 million come from those 2 products. They have been relatively stable inside of Sprint for a number of years, but both of those would decline without us improving the service. So what we will be doing is bringing the customers on-net increasing the bandwidth per port by 10x and converting the back end of that VPN technology from a MPLS to VPLS service.

基本上，需要兩種主要產品，互聯網接入和基於 MPLS 的 VPN。這兩種產品的收入都約為 2.2 億美元。因此，4.5 億美元中的 4.4 億美元來自這兩種產品。多年來，它們在 Sprint 內部一直相對穩定，但如果我們不改進服務，這兩者都會下降。所以我們要做的是讓客戶上網，將每個端口的帶寬增加 10 倍，並將 VPN 技術的後端從 MPLS 轉換為 VPLS 服務。

I actually reviewed the customer contract that was looking for an extension yesterday, and the customer pointed out that they have an over 40-year almost exclusive relationship with Sprint and Sprint had previously migrated them from x 25 to frame relay and then free relay to MPLS, and they wanted a timeline for this -- what they hope to be their last migration from MPLS to VPLS. So that will happen. We believe that large embedded base of revenue is basically flat. Maybe we can grow at 1% to 2% a year, but we do not anticipate material growth or material revenue attrition. The attrition is coming through these end-of-life products and the growth is coming through the optical transport products.

實際上，我昨天查看了正在尋找延期的客戶合同，客戶指出他們與 Sprint 有超過 40 年的幾乎獨家合作關係，而 Sprint 之前已將它們從 x 25 遷移到幀中繼，然後免費中繼到 MPLS ，他們想要一個時間表——他們希望這是他們從 MPLS 到 VPLS 的最後一次遷移。所以這會發生。我們認為大型嵌入式收入基數基本持平。也許我們可以以每年 1% 到 2% 的速度增長，但我們預計不會出現實質性增長或實質性收入減損。損耗來自這些報廢產品，增長來自光傳輸產品。

Great. A quick point of clarification, the 25% to 30% of the wavelength market do you think you can address? Is that the U.S. wavelength market? Or is there an international component to that?

偉大的。快速澄清一下，您認為您可以解決 25% 到 30% 的波長市場嗎？那是美國波長市場嗎？或者這其中有國際成分嗎？

It's North American, so it's U.S. and Canada, which is basically where we can utilize the Sprint network. We currently have no plans to expand that in Europe, LatAm, Africa or Asia Pac. Obviously, if there were other acquisitions, we would look at that. But at this point, this is a North American product.

它是北美，所以它是美國和加拿大，這基本上是我們可以利用 Sprint 網絡的地方。我們目前沒有計劃在歐洲、拉丁美洲、非洲或亞太地區擴展它。顯然，如果有其他收購，我們會考慮的。但在這一點上，這是一款北美產品。

Our next question will come from Sami Badri with Crédit Suisse.

我們的下一個問題將來自瑞士信貸銀行的 Sami Badri。

Dave, this is George Engroff on for Sami. Yes, just touching on something that you mentioned last quarter, where you noted that the corporate growth rate was not materially impacted in prior recessions outside of the 2008-2009 period. Has anything changed your view on a potential recessions impact to today's corporate growth rate? Or should we think about the dividend deceleration and free cash flow alignment as just a normalization from the COVID period?

戴夫，這是喬治·恩格羅夫為薩米代言的。是的，只是談到你上個季度提到的一些事情，你注意到公司增長率在 2008-2009 年期間以外的先前衰退中沒有受到實質性影響。有什麼事情改變了您對潛在衰退對當今企業增長率的影響的看法嗎？還是我們應該將股息減速和自由現金流調整視為 COVID 時期的正常化？

So I'll take those in reverse order. I think the dividend growth rate moderation is just a recognition that the impact of COVID on our corporate business was longer and deeper than any of us anticipated. And the recovery while occurring is slower than expected. And it just seemed prudent to be able to align the growth in free cash flow to the growth and the dividend. To the recession part of the question, the buildings that we serve tend to be the most desirable in every market. The tenants tend to be more recession-proof than the general business population. The only time we saw a negative impact from a recession was a 2-quarter period at the end of '08, beginning of '09 in our corporate business in the great recession. Other recessions have not negatively impacted our corporate business.

所以我會以相反的順序來處理。我認為股息增長率放緩只是承認 COVID 對我們公司業務的影響比我們任何人預期的都要長和深。並且發生時的恢復比預期的要慢。能夠使自由現金流的增長與增長和股息保持一致似乎是謹慎的。對於問題的衰退部分，我們服務的建築物往往是每個市場中最理想的。租戶往往比一般商業人口更能抵禦經濟衰退。我們唯一一次看到經濟衰退帶來的負面影響是在 08 年末的兩個季度，也就是 09 年年初，我們公司業務處於大衰退中。其他經濟衰退並未對我們的公司業務產生負面影響。

And the fact that there is so much talk of recession and we're seeing continued improvement, albeit slow in our corporate business. we don't think there is a material risk to either our revenue streams or our ability to continue to grow the dividend. We also have been extremely fortunate that our NetCentric business is somewhat countercyclical. And that's actually been a historic pattern, not just COVID that when there's a recession, people stream more video and therefore, they actually end up consuming more bits and generating more revenue for us. I think these trends are in place and independent of what happens in the macro environment, absent some major depression, we feel comfortable in our ability to grow the dividend.

事實上，有很多關於衰退的討論，我們看到持續改善，儘管我們的企業業務進展緩慢。我們不認為我們的收入流或我們繼續增加股息的能力存在重大風險。我們也非常幸運，我們的 NetCentric 業務在某種程度上是反週期的。這實際上是一種歷史模式，不僅僅是 COVID，當經濟衰退時，人們會播放更多視頻，因此，他們實際上最終會消耗更多比特並為我們創造更多收入。我認為這些趨勢已經存在並且獨立於宏觀環境中發生的事情，沒有一些嚴重的蕭條，我們對增加紅利的能力感到滿意。

Got it. That's helpful. And then just as a follow-up, I know in the past, the Board of Directors have been sort of hesitant to change the dividend growth rate. And so I guess adding on to that, if the growth rate in free cash flow does reaccelerate at a certain point in time. Is there going to be a similar lag where you -- the Board of Directors wants to see and make sure that it is going to be a sustained reacceleration, I guess, what sort of way should we be thinking about that?

知道了。這很有幫助。然後作為後續行動，我知道過去，董事會在改變股息增長率方面一直猶豫不決。所以我想再加上一點，如果自由現金流的增長率確實在某個時間點重新加速。是否會出現類似的滯後——董事會希望看到並確保這將是一個持續的重新加速，我猜，我們應該以什麼樣的方式考慮這個問題？

Yes. So first of all, the Board has improved the growth rate in the dividend multiple times. It initially was $0.01 a share, $0.01 to $0.02 and then $0.025 a share. So the Board has looked at the underlying performance and [responsive]. This response was basically the recognition that the corporate improvement is slower and less linear than we expected even 6 months ago. I think the Board would react pretty quickly to reaccelerating the rate of dividend growth if cash flows continue to improve. Also, if interest rates moderate, the ability to use the balance sheet and take on leverage makes more sense. So we would look at both of those factors.

是的。因此，首先，董事會多次提高了股息的增長率。最初是每股 0.01 美元，從 0.01 美元到 0.02 美元，然後是每股 0.025 美元。因此，董事會已經研究了基本績效和[響應]。這種反應基本上是承認企業的改善比我們在 6 個月前的預期更慢且線性度更低。我認為，如果現金流繼續改善，董事會將對重新加快股息增長率做出相當快的反應。此外，如果利率放緩，使用資產負債表和利用槓桿的能力更有意義。所以我們會考慮這兩個因素。

Our next question will come from Michael Rollins from Citi.

我們的下一個問題將來自花旗的邁克爾羅林斯。

Two, if I could. First, if you look at the market share that you have currently in corporate buildings today of about 14%, Dave, what's the range of outcomes you're seeing in buildings or you've been operating in them for more than a year or 2? And what do you think is the path for just pushing that higher? Is it just simply the return to office? Or are there some other steps that the company is taking to push the share up? And then just separately also in these corporate buildings, are you seeing any significant interest or demand for private wireless networks? And is Cogent a natural partner to either provide the fiber connectivity for those networks or to actually provide and enable those private networks with DAS and small cells and just make that open to whichever carrier wants to join into that?

二，如果可以的話。首先，如果你看看你目前在企業建築中擁有的大約 14% 的市場份額，Dave，你在建築物中看到的結果範圍是什麼，或者你已經在建築物中運營了一年或 2 年以上?您認為將其推高的路徑是什麼？僅僅是回到辦公室嗎？還是公司正在採取其他措施來推動股價上漲？然後在這些公司大樓中，您是否看到對專用無線網絡的任何重大興趣或需求？ Cogent 是否是一個天然的合作夥伴，要么為這些網絡提供光纖連接，要么實際提供和啟用具有 DAS 和小型蜂窩的私有網絡，並讓任何想要加入的運營商開放？

Yes. So first of all, the best buildings that we are in, we have some buildings that we have 90-plus percent market share. That is not normal. And those are buildings where the tenants tend to be the most levered to bandwidth and therefore, are more interested in Cogent's products. I think what hurt Cogent's corporate business is 3 factors: one, very obvious increase in vacancy rate. That's easy to understand. There's just less people to sell to in the building. Two, many customers basically stopped making changes because of the uncertainty of COVID and the uncertainty around work from home versus return to office.

是的。所以首先，我們所在的最好的建築，我們有一些建築，我們擁有 90% 以上的市場份額。這是不正常的。在這些建築物中，租戶往往最容易利用帶寬，因此對 Cogent 的產品更感興趣。我認為損害 Cogent 公司業務的因素有 3 個：一、空置率上升非常明顯。這很容易理解。大樓裡賣東西的人少了。第二，由於 COVID 的不確定性以及在家工作與返回辦公室的不確定性，許多客戶基本上停止了更改。

And I think that picture is still not perfectly clear to every company, but it's increasingly coming into focus and things are improving. And that improvement and clarity is allowing customers to now place orders and it's helped us improve our corporate growth rate. And the third factor is we had a sales force that was remote. And while we tried as hard as we could to make them as productive as they could be when they work from home because of our high turnover in a direct sales position that's [telemarketed].

我認為這對每家公司來說仍然不是很清楚，但它越來越成為人們關注的焦點，事情正在改善。這種改進和清晰使客戶現在可以下訂單，這幫助我們提高了企業增長率。第三個因素是我們有一支遠程的銷售隊伍。雖然我們盡我們所能努力讓他們在在家工作時盡可能高效，因為我們在 [電話銷售] 的直銷職位上的營業額很高。

We saw a decline in rep productivity. Now that we've brought reps back to the office, our trainers are there in person, we have seen productivity improve and rep turnover decline. Again, we can't predict the pandemic, but we sincerely hope that with the vaccine policy that we've implemented that will not ever be forced to send our people home again. I think this was a once-in-a-lifetime event, maybe hopefully, once and hundreds of years. And as a result of that, all 3 of these factors, I think, will help us improve our productivity. Now to your second question about WiFi networks, DAS networks, and small cell. We have worked very limitedly with some wireless carriers to provide all 3 of those different solutions. And the vast majority of our buildings, we have the right to do that.

我們看到代表生產力下降。現在我們已經將代錶帶回辦公室，我們的培訓師親自到場，我們已經看到生產力提高和代表流失率下降。同樣，我們無法預測大流行，但我們真誠地希望通過我們實施的疫苗政策，不會被迫再次將我們的人民送回家。我認為這是一個千載難逢的事件，也許希望，一次和數百年。因此，我認為所有這三個因素都將幫助我們提高生產力。現在回答關於 WiFi 網絡、DAS 網絡和小型蜂窩的第二個問題。我們與一些無線運營商進行了非常有限的合作，以提供所有這三種不同的解決方案。我們的絕大多數建築物，我們都有權這樣做。

There are a small percentage of our buildings where we would have to go back to the landlord to get an additional right, but that would not significantly impact our ability to participate in this segment. So far, all 3 of these technologies, I would say, are limited and how widely they're being deployed. So the answer is, yes, it's an opportunity. Yes, we're talking to the right players. But today, it's not a meaningful contributor to our revenues.

在我們的一小部分建築物中，我們必須回到房東那裡才能獲得額外的權利，但這不會顯著影響我們參與這一領域的能力。到目前為止，我想說，所有這 3 種技術都是有限的，而且它們的部署範圍也有限。所以答案是，是的，這是一個機會。是的，我們正在與合適的玩家交談。但今天，它對我們的收入沒有有意義的貢獻。

:p id="-1" name="Operator"

:p id="-1" name="操作員"

Just one question from my side. Historically, you've spoken about CapEx declining over time. Given the international markets expansion, and you've indicated that you're interested in actually expanding internationally further, given the opportunity provided by the Sprint assets, how should we be thinking about CapEx? Would it be elevated for like 3 to 5 years or X number of years before it starts returning -- resuming a downward trajectory? Or are those -- is that international market expansion actually included in that $30 million Sprint CapEx figure you cited earlier?

我這邊只有一個問題。從歷史上看，您曾談到資本支出隨著時間的推移而下降。鑑於國際市場的擴張，並且您已表示您有興趣在國際上進一步擴張，鑑於 Sprint 資產提供的機會，我們應該如何考慮資本支出？在它開始回歸之前，它會升高 3 到 5 年還是 X 年——恢復下降軌跡？還是那些——你之前提到的 3000 萬美元的 Sprint 資本支出數據中是否真的包括國際市場擴張？

Yes. So the answer is it does include our international expansion. We, again, have tried to be very transparent. There's going to be this $50 million that we need to spend initially to harmonize the networks and/or connect them. That's a one-timer. We also, quite honestly, did not anticipate the equipment supply chain issues that we've had to face for the past 1.5 years. For the first 6 months of the pandemic, that was not an issue. But it probably peaked a couple of quarters ago, and it is improving, but there are still chip shortages of key components. And as a result, we've had to spend more capital and over-inventory gear.

是的。所以答案是它確實包括我們的國際擴張。我們再次嘗試做到非常透明。我們最初需要花費 5000 萬美元來協調網絡和/或連接它們。那是一次性的。老實說，我們也沒有預料到過去 1.5 年來我們不得不面對的設備供應鏈問題。在大流行的前 6 個月，這不是問題。但它可能在幾個季度前達到頂峰，並且正在改善，但仍然存在關鍵組件的芯片短缺。結果，我們不得不花費更多的資金和過度庫存的裝備。

That should go away as a percentage of revenue, our CapEx should decline and even on an absolute basis, it should decline. But because we are picking up the wavelength product, the revenue scale is larger, rather than get to a non-expansion CapEx number of $35 million, which was our maintenance number for Cogent, I think that number will be closer to $65 million for the combined company. And we do think there will still be some additional expansion CapEx spent every year for the foreseeable future. I outlined the 100-plus data centers a year that we will be adding. So I think for the next several years, investors should expect much more than $65 million. And remember, each data center is about a $120,000 expense roughly, and we're going to add 100 of those. We are going to still add a handful of MTOBs. So our CapEx will go down, but it won't get to that maintenance level for several more years.

這應該作為收入的百分比消失，我們的資本支出應該下降，甚至在絕對基礎上，它應該下降。但是因為我們正在拿起波長產品，收入規模更大，而不是達到 3500 萬美元的非擴展資本支出數字，這是我們對 Cogent 的維護數字，我認為這個數字將接近 6500 萬美元合併的公司。而且我們確實認為，在可預見的未來，每年仍會花費一些額外的擴張資本支出。我概述了我們每年將增加的 100 多個數據中心。所以我認為在接下來的幾年裡，投資者的預期應該遠遠超過 6500 萬美元。請記住，每個數據中心的費用大約為 120,000 美元，我們將增加其中的 100 個。我們仍將添加一些 MTOB。因此，我們的資本支出會下降，但要再過幾年都不會達到那個維護水平。

And that will come to today's question-and-answer session. I'd like to turn the call back to Mr. David Schaeffer for closing remarks.

這將進入今天的問答環節。我想把電話轉回給 David Schaeffer 先生做結束語。

I'd like to thank everyone. I know our calls go long, but we try to answer all of the questions. I appreciate everyone's support, and we will talk soon. Take care. Bye-bye.

我要感謝大家。我知道我們的電話很長，但我們會盡力回答所有問題。感謝大家的支持，我們會盡快談。小心。再見。

And this will conclude today's conference. Thank you for your participation, and you may now disconnect.

今天的會議到此結束。感謝您的參與，您現在可以斷開連接。